Equinix, Inc. (Nasdaq: EQIX), a provider of global data center services, today reported quarterly and year-end results for the period ended December 31, 2010. Revenues were $345.2 million for the fourth quarter, a 5% increase over the previous quarter and 42% over the same quarter last year. Revenues for the year ended December 31, 2010, were $1,220.3 million, a 38% increase over 2009 revenues. This result included $57.9 million in revenues from Switch and Data for the quarter and $153.0 million in revenues from Switch and Data for the year ended December 31, 2010. Recurring revenues, consisting primarily of colocation, interconnection and managed services were $326.3 million for the fourth quarter, a 4% increase over the previous quarter and $1,160.4 million for the year ended December 31, 2010, a 38% increase over 2009. Non-recurring revenues were $18.9 million in the quarter and $59.9 million for the year ended December 31, 2010. “Equinix delivered strong financial results in 2010, surpassing $1 billion in annual revenues and expanding our global reach to 11 countries and 35 global markets,” said Steve Smith, CEO and President of Equinix. “With our focus on ecosystems, critical mass of customers, operational reliability and global footprint, Equinix is uniquely positioned to capture the strong demand for our services in 2011.” Cost of revenues were $193.6 million for the fourth quarter, a 4% increase from the previous quarter, and $674.7 million for the year ended December 31, 2010, a 40% increase over 2009. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $68.1 million for the fourth quarter and $243.7 million for the year, were $125.5 million for the fourth quarter, a 8% increase over the previous quarter, and $431.0 million for the year ended December 31, 2010, a 37% increase over 2009. Cash gross margins, defined as gross profit before depreciation, amortization, accretion and stock-based compensation, divided by revenues, for the quarter were 64%, down from 65% for both the previous quarter and the same quarter last year. Cash gross margins were 65% for the full year of 2010, up from 64% for the prior year. Selling, general and administrative expenses were $96.3 million for the fourth quarter, a 7% increase over the previous quarter and $331.9 million for the year ended December 31, 2010, a 52% increase over 2009. Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation of $25.5 million for the fourth quarter and $87.4 million for the year, were $70.8 million for the fourth quarter, a 5% increase over the previous quarter, and $244.5 million for 2010, a 53% increase over 2009. Restructuring charges were $0.5 million for the fourth quarter and $6.7 million for the year ended December 31, 2010, which were primarily related to both Switch and Data and an excess space lease in the New York metro area. Acquisition costs were $0.4 million for the fourth quarter and $12.3 million for the year ended December 31, 2010, which were primarily related to Switch and Data. Interest expense was $38.8 million for the fourth quarter, flat over last quarter, and $140.5 million for the year ended December 31, 2010, an 89% increase over 2009. The Company recorded a loss on debt extinguishment of $5.4 million for the fourth quarter and a loss on debt extinguishment and interest rate swaps, net, of $10.2 million for the year ended December 31, 2010. The Company had no such debt extinguishment activity during 2009. The Company recorded an income tax benefit of $2.8 million for the fourth quarter as compared to income tax expense of $4.6 million in the prior quarter and income tax expense of $13.0 million for the year ended December 31, 2010 as compared to income tax expense of $39.6 million in the prior year. Net income for the fourth quarter was $13.8 million. This represents a basic net income per share of $0.30 and diluted net income per share of $0.29 based on a weighted average share count of 46.1 million and 46.9 million, respectively, for the fourth quarter of 2010. Net income for the year ended December 31, 2010 was $36.9 million. This represents a basic net income per share of $0.84 and diluted net income per share of $0.82 based on a weighted share count of 43.7 million and 44.8 million, respectively, for the year ended December 31, 2010. Adjusted EBITDA, defined as income or loss from operations before depreciation, amortization, accretion, stock-based compensation, restructuring charges and acquisition costs for the fourth quarter was $148.9 million, an increase of 2% over the previous quarter and $544.8 million for the year ended December 31, 2010, a 33% increase over 2009. Capital expenditures, defined as gross capital expenditures less the net change in accrued property, plant and equipment in the fourth quarter were $143.4 million, of which $111.0 million was attributed to expansion capital expenditures and $32.4 million was attributed to ongoing capital expenditures. In addition, the Company purchased two buildings in Amsterdam for cash in December 2010 totaling $14.9 million. Capital expenditures for the year ended December 31, 2010 were $579.4 million, of which $464.8 million was attributed to expansion capital expenditures and $114.6 million was attributed to ongoing capital expenditures. The Company generated cash from operating activities of $122.9 million for the fourth quarter as compared to $113.3 million in the previous quarter. Cash generated from operating activities for the year ended December 31, 2010 was $392.9 million as compared to $355.5 million in the previous year. Cash provided by investing activities was $17.5 million in the fourth quarter as compared to cash used in investing activities of $259.5 million in the previous quarter. Cash used in investing activities for the year was $601.0 million as compared to $558.2 million in the previous year. Cash used in financing activities was $86.0 million for the fourth quarter, which was primarily related to the repayment of the Ashburn mortgage, and cash provided by financing activities was $309.7 million for the year ended December 31, 2010. As of December 31, 2010, the Company’s cash, cash equivalents and investments were $592.8 million, as compared to $604.4 million as of December 31, 2009. Company Metrics and Q4 Results Presentation Business Outlook For the first quarter of 2011, the Company expects revenues to be in the range of $354.0 to $356.0 million. Cash gross margins are expected to be approximately 64%. Cash selling, general and administrative expenses are expected to be approximately $75.0 million. Adjusted EBITDA is expected to be between $151.0 and $153.0 million. Capital expenditures are expected to be approximately $185.0 million, comprised of approximately $25.0 million of ongoing capital expenditures and $160.0 million of expansion capital expenditures. For the full year of 2011, total revenues are expected to be greater than $1,500.0 million. Total year cash gross margins are expected to be 65%. Cash selling, general and administrative expenses are expected to be approximately $300.0 million. Adjusted EBITDA for the year is expected to be greater than $675.0 million. Capital expenditures for 2011 are expected to be in the range of $400.0 and $500.0 million, comprised of approximately $100.0 million of ongoing capital expenditures and $300.0 to $400.0 million for expansion capital expenditures. The Company will discuss its results and guidance on its quarterly conference call on Wednesday, February 9, 2011, at 5:30 p.m. ET (2:30 p.m. PT). A presentation to accompany the call will be available on the Company’s website atwww.equinix.com/investors. To hear the conference call live, please dial 210-234-8004 (domestic and international) and reference the passcode (EQIX). A simultaneous live Webcast of the call will also be available atwww.equinix.com/investors. A replay of the call will be available beginning on Wednesday, February 9, 2011 at 7:30 p.m. (ET) through March 10, 2011 by dialing 203-369-1420 and referencing the passcode (2011). In addition, the webcast will be available on the Company's web site at www.equinix.com/investors. No password is required for the webcast. About Equinix Equinix, Inc. (Nasdaq: EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. More than 3,100 enterprises, cloud, digital content and financial companies connect to more than 625 network service providers and rely on Platform Equinix to grow their business, improve application performance and protect their vital digital assets. Equinix operates in 35 strategic markets across North America, Europe and Asia-Pacific and continually invests in expanding its platform to power customer growth.
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Equinix Reports Fourth Quarter And Year End 2010 Results
Date 10/02/2011