In a recent announcement, Equinix, Inc. (Nasdaq: EQIX), presented its financial results for the third quarter of 2023 and provided annual guidance for the year. Equinix reported growth across several key financial metrics, showcasing its strong position in the digital infrastructure sector.
Third-Quarter 2023 Highlights
Revenues: Equinix reported revenues of $2.06 billion for the third quarter, marking a substantial surge of 12% when compared to the same quarter in the previous year. Notably, this growth is impressive, especially in the face of a $1 million adverse impact from foreign currency fluctuations compared to prior guidance rates.
Operating Income: Equinix demonstrated solid operational performance, resulting in an operating income of $380 million, which represents an uptick of 14% compared to the same quarter last year. The company achieved an operating margin of 18%.
Net Income and Earnings Per Share (EPS): Net income and EPS attributable to Equinix reached $276 million and $2.93 per share, respectively. This reflects a remarkable upswing of 30% in net income and a 27% rise in EPS compared to the third quarter of the previous year. These increases can be attributed to higher income from operations and a favorable tax settlement.
Adjusted EBITDA: Equinix reported an adjusted EBITDA of $936 million for the third quarter, signifying a 7% growth over the same quarter last year. The adjusted EBITDA margin was 45%. Notably, this figure includes a $1 million adverse impact from foreign currency fluctuations compared to prior guidance rates and $2 million of integration costs.
AFFO and AFFO per Share: The company reported $772 million in Adjusted Funds From Operations (AFFO) for the third quarter, an 8% increase over the same quarter last year. AFFO per share also saw expansion, reaching $8.19 per share, a 6% uplift over the same quarter last year.
#Equinix, the world's digital infrastructure company™, today reported third-quarter 2023 results. Check out today’s earnings press release for all the details. https://t.co/ZkZfE2Cfyn pic.twitter.com/7s1RpNCuJg
— Equinix, Inc. (@Equinix) October 25, 2023
Annual Guidance 2023
Equinix provided its annual guidance for 2023, outlining its expectations for various financial metrics:
Revenues: The company anticipates revenues in the range of $8.166 to $8.206 billion for 2023, representing a 12-13% uptick over the previous year. When considering a normalized and constant currency comparison, the rise is projected to be 14-15%. However, this guidance accounts for a $25 million adverse impact from foreign currency fluctuations compared to prior guidance rates.
Adjusted EBITDA: Equinix expects adjusted EBITDA for the year to range from $3.680 to $3.710 billion, with a target adjusted EBITDA margin of 45%. This projection reflects an increase of $17 million compared to prior guidance, offset by a $12 million negative impact from foreign currency fluctuations. Additionally, it encompasses $15 million of integration costs.
AFFO and AFFO per Share: The company forecasts AFFO ranging from $2.996 to $3.026 billion for 2023, which translates to a 10-12% growth over the previous year. Furthermore, when normalized for constant currency, this increase is projected to be 12-14%. AFFO per share is expected to fall within the range of $31.87 to $32.19 per share, reflecting an 8-9% expansion over the previous year. Consequently, when normalized for constant currency, the rise is expected to be 10-11%.
Charles Meyers, the President and CEO at Equinix, said: "We delivered another solid quarter of results and continue to drive strong value creation on a per share basis, raising both our dividend and AFFO/share outlook for the full year. A recent Gartner poll found 55% of organizations are in pilot or production mode with generative AI.1 “
“We're seeing this manifest in accelerated interest from both enterprise customers and emerging service providers looking to service this demand. We expect Equinix's broad portfolio of offerings, in tandem with our key technology partners, will allow us to capture high-value opportunities across the AI value chain, positioning Platform Equinix to be the place where private AI happens and allowing customers to place compute resources in proximity to data and seamlessly leverage public cloud capabilities while maintaining control of high-value proprietary data."
