Equinix marks 7% rise in net income in Q1 2019

Maria Nikolova

For the full year of 2019, total revenues are expected to range between $5.545 and $5.595 billion, a 9-10% increase over the previous year.

Global interconnection and data center company Equinix Inc (NASDAQ:EQIX) has reported its key financial metrics for the quarter to end-March 2019, with the data revealing a rise in revenues and net income.

The company registered revenues of $1.363 billion in the first quarter of 2019, a 4% increase over the previous quarter. Operating income amounted to $280 million, a 3% increase over the previous quarter. Net income reached $118 million, a 7% increase over the previous quarter, whereas Net Income per Share attributable to Equinix was $1.44 per share, a 6% increase over the previous quarter.

With the completion of the most recent phase of the ECX Fabric build-out, Equinix continued its vision to evolve Platform Equinix® into a global platform that interconnects and integrates global businesses at the digital edge. ECX Fabric, an SDN-enabled interconnection service, now allows customers for the first time to establish on-demand network connections between the Americas, Europe and Asia-Pacific.

In March, Equinix announced adjustments to its organizational structure to globalize the company’s operating model, scale the business and address the growing opportunity for Equinix as a strategic platform on which customers architect their digital business. This included moving three company veterans into new roles and concentrating all customer-facing functions into a single global organization. The moves are set to enable Equinix to deliver increasing value as a trusted advisor to businesses undergoing digital transformation.

Equinix continued the growth of its indirect selling initiatives, with channel sales delivering more than 20% of the bookings for the quarter. This accounted for half of the new logos acquired in the quarter, driven by accelerated success in selling with key cloud and technology partners, including Cisco, Google, Microsoft and Oracle. Additional channel wins in Q1 came from AT&T and Anixter, an Equinix referral partner.

In terms of outlook, for the second quarter of 2019, Equinix expects revenues to range between $1.381 and $1.391 billion, an increase of 2% quarter-over-quarter, at the mid-point on both an as-reported and a normalized and constant currency basis. This guidance includes a positive foreign currency benefit of $1 million when compared to the average FX rates in Q1 2019. Adjusted EBITDA is expected to range between $649 and $659 million, which includes a minimal positive foreign currency benefit when compared to the average FX rates in Q1 2019 and $5 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $37 and $47 million.

For the full year of 2019, total revenues are expected to range between $5.545 and $5.595 billion, a 9-10% increase over the previous year or a normalized and constant currency increase of 9% at the mid-point. This $25 million increase from previously issued guidance is due to better than expected operating business performance of $24 million, partly due to elevated Q1 levels of non-recurring revenues and includes a $1 million positive foreign currency benefit when compared to prior guidance rates. Adjusted EBITDA is expected to range between $2.640 and $2.680 billion, an adjusted EBITDA margin of 47 – 48%. This $30 million increase from previously issued guidance is due to better than expected revenues and lower operating costs, and as a result, stronger than originally planned operating performance of $26 million, a $2 million reduction of integration costs and a $2 million positive foreign currency benefit when compared to prior guidance rates.

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