The carrier neutral data center giant Equinix (NASDAQ:EQIX, news, filings) is taking it on the chin again after hours following its Q2 earnings report. Eating into their usually rock-steady growth profile were a change to the accounting of non-recurring revenues, the costs involved in the REIT conversion they are pursuing, and some foreign exchange effects.
|$ in millions
for continuing operations
|Revenues||457.2||488.7||506.5||519.8||525.7||Q3: 538-542, 2013:2135-2145|
|Cash SG&A||97.8||102.4||108.3||113.2||112.4||Q3:126-130, 2013:465-475|
|Adjusted EBITDA||217.5||228.3||239.3||243.5||244.2||Q3:236-240, 2013:985-990|
|Earnings Per Share||0.73||0.58||0.68||0.71||0.58|
|Ongoing Capex||37.5||37.6||43.5||34.0||40.2||Q3:50, 2013:165|
|Expansion Capex||158.9||174.5||166.9||41.7||82.7||Q3:130-150, 2013:410-460|
That combination of headwinds brought their revenue, earnings, and EBITDA all in below expectations, and led to a lowering of forward guidance for both Q3 and the full year 2013. Since such things don’t happen too often to Equinix, the market is understandably not too happy. However, it doesn’t appear anything structural has changed all that much.
Operationally, Equinix passed the 120,000 mark on a strong quarter for cross connects. I suspect that’s an industry-wide trend, although there aren’t many other public numbers to follow for it. They saw growth across all three regions, with particular (albeit unsurprising) strength in the cloud vertical.
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