Equinix (EQIX) 3 May 232023 Q1 Earnings call transcript

Good afternoon, and welcome to today's conference call.

Before we get started, I would like to remind everyone that some of the statements that we will be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we've identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed February 17, 2023.

The Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call.

In addition, in light of Regulation Fair Disclosure, it is Equinix's policy not to comment on its financial guidance during the quarter unless it's done through an explicit public disclosure.

provide on will conference we addition, non-GAAP today's measures call. In why measures a a most reasons Equinix these Investor reconciliation on provide at press to in list company today's measures of the Relations and We the measures those the release uses GAAP directly of www.equinix.com. page the comparable on information page accompany of available along with and discussion, this data. certain website a made We've financial our the IR supplemental other to presentation designed important to and remind the Equinix you check We information would post from time about available the we to our also encourage page IR information. like most current for on that to website time regularly you are Chief and Charles today CEO Equinix's Keith us Financial and Taylor, President; With Officer. Meyers,

analysts. one interest up time, call limit At Following Charles. this call I'll we'd wrapping hour, any In one. the the these we'll our follow-on from prepared remarks, analysts in of this turn to be like ask taking to to to questions sell-side over questions

digital environment, broad-based demand in that Good journeys, Thank at customers $X our start and delivering macro our X,XXX right go-to-market revenues and the to afternoon, scale our expectations. engine had end first business. quarterly their top to with the remain quarter and committed continues Despite X,XXX you, the challenging propel deals adjusted strong across highlighting driving transformation the the We customers, than more diversity call. and AFFO billion EBITDA the a Chip. of earnings of to year, quarter to above a welcome

and Equinix. And distributed, is build ever IT enterprises providers on out more more Platform to before. than more see continue We infrastructure hybrid their and cloud connected service that infrastructure

advance conditions, be about customers given hybrid are cloud architectures, of performance continues and spend. digital to in optimize appropriately and a to And Equinix timing gains their investments the efforts network partner while unlock some cautious their critical macro

pricing a continue and our compared As environment regions. to steady trends, see a deal result, three to historical across robust win we all remain rates

to and has business how pleased We're impacts position, the energy volatile customers. and market remain power. our we a volatility the our very for strong organization Turning for this mitigating with in of navigated a significantly

X,XXX As in historical countries, costs. outstanding transparent incremental previously disputes the quarter, power $XX communications, fully XX trends. more and approximately generating in revenue and than discussed, of raised impact of across sales of million and in January timely customers days our line to Thanks pricing the we concessions with are low offsetting to remain higher

to and seek to sustainability we'll vendors will future organizations On that don't. and those increase issue the growth continue committed by XXXX, bold is becoming have and with business goals advance to seek increasingly first estimates responsible sustainability our agenda. and timelines, front, of to Sustainability sustainability XX% who board-level we are Gartner that demonstrable IT a replace

Scope X published report. coverage. with recently our renewable annual our leadership XXXX, emissions XXXX CSR making and XX% also industry on our over We in fifth a with across XX% And operational X science-based energy reduction our year eighth with in consecutive well XX% our targets we progressing from extended baseline. Scope We're coverage,

once projects portfolio its evolve Equinix's purchase to bringing globally contracted of to power capacity, This megawatts signed new XXX we purchases. of continues portfolio energy to Equinix operational. megawatts for fully renewable long-term its Additionally, increase energy the agreements quality year, solar renewable XXX Spain PPA procurement power totaling in

a operate continue and feasible, grids that support where sources to Looking healthy in we we'll coverage create clean forward, where mix. new energy renewable directly energy projects of the prioritize

Turning to results. our

normalized growth by XX% As strong rates due Adjusted our recurring performance. AFFO a strong XX% EBITDA currency operating expectations and depicted $X basis. on to up X, up growth. Slide was on than was constant revenues QX billion, were and These driven year-over-year, for better are revenue all year-over-year,

Our a underway us the positions investment more metros and XX balance sustain robust tremendous continues scale XXx XX of that in than sheet currently including our strength projects reach our unmatched our portfolio will countries, of deliver support differentiate to services to XX once center new demand data and capacity across scale have in major XX We capacity projects environment. megawatts to opened.

conglomerate, wins XXX quarter, three impressive de cybersecurity its all customers quarter region in to all in added Metal data Native from regions Trust a manufacturing and business XX% company included expand to new Key This divestiture in Rio and quarter-over-quarter Revenues with and Lagos, Zero and using XX%, Performance Equinix we across X% across an three expanding center Frankfurt regions. builds increased deployments Fortune Cloud to unit three respectively. Hub Janeiro. assist its multi-region multi-region a the business

Our and provider and a infrastructure remains continue of the multi-cloud Nexus platform Equinix partner. for hybrid logical as hyperscalers and point to look to a critical deployments go-to-market valued

and and platform. Tokyo xScale quarters our as and services are to multi-cloud several This we closest from growing pipeline the training unique partners across key opportunities customers retail position multi-cloud new five we that strongly in continue and inference directly compared embrace performance they closed AI. portfolio cloud the past quarter, leadership across with rapidly use interconnection product benefit opportunities strong our a We're key seeing Warsaw AI over Milan, with connectivity emerging to few resonate on-ramps of our colo, won wins of enjoy and breadth cases competitors. both proximity Mumbai, in seeing as digital Muscat, also of new unique the for We've and a characteristics services,

megawatts we facilities. asset overall XX us to XX capacity of pre-leased coming taking quarters. in xScale demand. to Frankfurt XXX the megawatts continue representing xScale or over xScale we funnel XX% leased across of opportunities of our pre-leased nearly our strong In we In QX, have strong and announced a additional portfolio, entire our operational see And

platform needs wins its execute leveraging strategy, Corporation, network cloud and included connectivity on media for edge quarter deployment multi-cloud Enterprise Equinix of network a ecosystems this Hearst including cloud to the products private first leading their for company diversified aggregation. a robust to the consumer company deploying Equinix’s their

XXX,XXX have interconnections on saw for platform. stepped added normalized And interconnection over the Fabric, quarter. the basis. Turning we interconnections QX, continued we prior higher but We into grooming and an both to a year-over-year our BCs our currency revenue total industry XX% X,XXX incremental and interconnection bandwidth up some constant consolidation leading now on business, activity from In quarter. moderated on

customer pricing remain interconnection ads gross the of strong, to While continues diversity our and expand. firm is

services volumes As continue and to to multi-cloud the as for hybrid terabits saw as accelerate, convenience across peak exchange destinations quarter-over-quarter to per than seeking time. Equinix One connect increasingly And broader architecture the up choice and Fabric. leading to Cisco to among security embrace of their choice, is performance enterprises the example whose they're cloud ecosystem. greater second X% rank edge end internet digital XX of global traffic the Fabric delivered on multiple year-over-year now and and their services XX% of data continue first IT

partnering Caixa, core wins Equinix securing financial optimizing business services by its accelerate company Brazil's Customer to with included network via federal and Fabric. its

edge Wins and continue Japanese for digital as to cultivate new offering services portfolio managed to three Equinix user their integrator saw Fabric our enhance a a strong in services Metal and like We new utilizing our video a to we and this Equinix solution our an Metal growth. with services Equinix Australian launch product support product growth provider restack platform our offerings. included regions all utilizing optimize quarter also company and game SaaS

hyperscalers industry range another Our strong of continued HPE, Dell, were and logos. new for delivered a strong channel wide partners the and Cisco, program quarter across XX% with and bookings first-use Zenlayer. of with digital like Orange roughly verticals business Wins accounting cases of across momentum XX% engagement AT&T, and

based on partner of Chile largest Empresa company. with and Nacional Key new how a [indiscernible] value data clients and fully Equinix Entel, local Entel Chile, center managed interconnection leveraging is [ph] wins Equinix modernization included behalf can SDYM in Cisco services partners help to upon digital a while oil and in markets. win technology demonstrating delivering deliver gas our local solution at

the the let call Now to the for results me cover turn quarter. and Keith over

to afternoon Thanks Charles, everyone. and good

outstanding we the had by year. to As highlighted start Charles, an

As price results, including had quarter. delivered you the our from bookings We can financial power net team fronts the in on increases. multiple see record

increases, was per pricing actions result MRR yield each regions by increase again, across of and per positive reported per one-offs. an per our cabinet increases The prior $XXX solid. net Excluding lower prior price on of, about cabinet performance those bookings $XX as net cabinet are churn. price our another Global MRR basis adjusting

to earnings we future meet the call, well we our both efforts growth our raising the completed equity in And debt balance highlighted our funded to and remain quarter sheet strengthen and last expectations. as on

as given digital our customers of Equinix environment business, to a critical we've before, come we they quality landing set place Now, the thrives buy driven high continued current disruption, and a as quarterly it move those the be bookings markets on trading strength remember you a more customers focused But as despite XX% expect, simply or broader a whether more services. periods to highly Equinix their as during or market view ecosystem cable networking their partner station, who remain on-ramp, of node, of I cloud platform. infrastructure, dynamics. or our do from would stated existing a diverse expand maybe mission our of

and flexibility scale and us meet to reduce invest expand Finally, strong, maintaining position, and growth. allowing cases allows our product payout operational business. financial liquidity and footprint portfolio position fully top continue to to AFFO meets the we our in expand our global strong all line put, Simply ratio us we're our to need grow the both low in driving funded dividend, while debt strategic capital a of to leverage

are from constant in Now normalizing on let cover the this section me that all Know quarter. comments an the currency basis. highlights

billion, recurring on depicted over the last quarter above , QX to global timing the and and fees. $X.XXX of end were non-recurring our a range due the top revenues revenues year, guidance XX% up xScale X strong Slide same As of

installation As and we've given the inherently momentum quarters non-recurring regions. and revenues year. meaningfully to attributed the seeing of fluctuate are across our all business noted three revenues over next could business the before, xScale custom works xScale particularly those our three Non-recurring in we're lumpy revenues,

up revenues including and our in our revenues due to QX year, FX our spent. our of flat of due to range was included the to prior when above $XXX net adjusted same strong million QX operating last hedges quarter-by-quarter XX% quarter U.S. a guidance of EBITDA Global compared guidance again tailwind end $X range the over quarter. XX% weaker our the or top SG&A million performance dollar

seasonal expected, our over to the the As of consumption resulting EBITDA a favorable reset compared included benefited hedge rates, in costs. $X net as from higher utility QX which starting QX and adjusted adjusted spend integration will prior anticipated, power quarters $X rates in lower hedges EBITDA, net QX and energy three guidance million of FX next year. benefit FX million our of when increased

business expectations QX Global AFFO strong net million, income and $XXX our expense due was lower interest performance, including taxes. above to

As Global prior guidance reflection expected, QX years. million seasonally recurring we of spend to FX strategy. had sales continued compared benefit our was MRR CapEx consistent included when X%, $X disciplined a with a lower prior AFFO rates. term our QX

low year, For we to expect to the our X% end of of the X.X% churn full MRR range. average quarterly at

Turning results regional our fastest-growing on basis, On power due our whose XX% highlights, X to X. our through normalized Slides to covered region EMEA a at increases. are significant was year-over-year full

attributed was XX%. the growth EMEA those benefit to price increases, Excluding

quarter Americas business. Americas public Seattle and pricing team continued our region solid from saw APAC in growth region favorable and Our respectively. The trends. were Brazilian had strong metros a our another momentum strong sector and XX% X%, and Culpeper, We with rates Chicago, performance

our seeing also delivered price EMEA increase a program churn. Our executing lower-than-expected while great on quarter, business MRR successfully

Mumbai, And the region quarter, markets our Pacific bookings and Singapore quarter firm with pricing. new and strength metros. a Asia Tokyo Manchester solid in by logo saw led our additions had finally, strong we the In and Dublin Amsterdam,

although as capacity larger it Now metric. while could recover and which be churn negotiate billing with CapEx efforts, anticipate affect Singapore higher we deployments much MRR our capacity certain our optimization backfilled net in-quarter we remains at of continue part with customers constrained rates, to to proactively IBX to

And capital now please refer the X. looking to at structure, Slide

billion. Our sheet $X.X to of $XX.X billion, increased approximately including unrestricted balance an cash balance

at increased strong operating balance while flow prior our also due to cash yen-denominated the program. and ATM cash we approximately of forward raised year's closed million sales from Our $XXX debt quarter-over-quarter

being Our fixed X.X times with of near-term net maturities. adjusted debt our EBITDA our at leverage no low outstanding remains XX% with

hedges fund Given we into placing to these additional we the our incremental global to raise reduce look to and natural growth rate capital capital expand, nature to continue debt of our debt countries and markets. creating business, both intend where

Turning to Slide X.

and opened For the last earnings lower we were our seasonally Paris, Singapore four Since million, $XXX in of including expenditures Frankfurt, retail call, projects million. CapEx quarter, capital recurring $XX Sydney.

XX% land Revenues recurring revenues for our purchased quarter. also development owned Calgary Madrid. and were We from the of assets in for

Our assets Consistent capital investments benefit a Slide constant currency on with increased attributed completed XX, are XX% Taking categorization by returns, now power revenues increased strong IBX our XXX the of basis. prior stabilized QX, to shown delivered we year-over-year. price as increases, the in out X% on annual year-over-year exercise. refresh years, assets stabilized

Our stabilized a by count asset increased XX IBXs. net

on and are stabilized the Now assets generate return gross collectively PP&E utilized XX% invested. XX% a cash-on-cash

Do a refer And for XX please normalized and to Slides of rates constant basis. guidance through all are our and currency finally, summary XXXX on bridges. XX updated note, growth

we're and million, million to inclusive pass-through rates million the to rate margins integration XX%, integration adjusted costs. power integration increases EBITDA a And by of between AFFO expected guidance and $XX For costs reimbursed AFFO year, now of $XXX primarily costs. of now [ph] This XXXX. to the and billion million guidance and sheet XX%, cost we into xScale XXXX XX%. raising XX%, to which million excluding guidance assets share in grow million year, is revenue to adjusted growth recurring expect of about including $X.X full power due per XX% to revenue X% expected or we to of price incur of We expect by $XX and raising now FX excluding the EBITDA by guidance our between to transfer JVs is lower CapEx $XX the to CapEx and favorable we're implies $XX compared billion, XX% be range XXXX of to spend. spend, on-balance $XXX X% approximately grow previous $X.X XX% as

to going Charles. stop I'm call me back here. let the to So turn

to solid Thanks, year. Keith. In start had a the closing, we

the While we remain vigilant to the broader macro in challenges economy.

in our demand to fueling Our forward our QX positive with long-term transformation, of Analyst remains the around drivers results business. overall strongly partners position June our access outlook discuss enable our the look our to and our were where possibilities. the strong conviction in as opportunity digital capturing this upcoming significant for secular outline we Day places, further We the differentiated and opportunity will customers and we ahead all right

translate industry-leading and for of all go-to-market into and We our evolving also investors, our capabilities, customers look into of more diving sharing communities durable platform creation differentiated and our forward expectations deeply to engine how our in value this operate. will the which we

me let stop and there open for So up questions. it

Instructions] Deutsche [Operator Our is caller Niknam you. Matt Thank first Bank. with

You may go ahead.

for Thanks guys. Hey taking the questions.

quick ones, I two could. if Just

inorganic First, to whether maybe potential linearity at the just slowdown all going picked March. the on others just macro allocation, then potential opportunities. heard saw comment on We've up cap terms across some in you in Can second theme of related and that any choppiness some trends. you specifically a from And one of similar tech. bookings really to

terms Just reasonable in have just X.X domestically context opportunities abroad sitting of just and expectations of become of wondering leverage Thanks. what both now more you're whether seeing seller turns. the shy in

script, as Thanks, in Yes. we said demand level. to good Look, think we Matt. I about I overall, feel think continue the the

of areas. looking And I think think savings customers strong. to us And their are variety to long-term budgets, are commitment dollars. pretty is feeling in they're in activity digital their digital transformation solid definitely, how levels. to using a think tighter terms I I But stretch driving capture equipments of looking again,

of much of think quarters. kind in in we've I the line X,XXX in X,XXX prior was the overall, deals very done pretty what about customers, good. Linearity we quarter So did with

the about about point quarter this deals we about slip than in XX% into to XX%. sales have probably saw to quarter the hat following on our XX% And give a extend we I'm so rose quarters. previous would your data just to hang few last concrete on, And see cycle, a then beyond deals in usually sales we you of more And sorry, more XX-day cycle. - of that

actually but So of a linearity is And not we pretty an little already looking a in bit slippage, of bit saw increase, as our little good. material. particularly QX

richer we're in QX. with little funnel started so start to bit we So a off and a good

that So good think in a overall the people Equinix market, clearly, are how continue but macro think context, of – a in bit overall, caution you're again, I how about about digital, little they're pretty see of feeling what thinking terms I in that thinking environment. to they're we

our And question thanks said team's do in going allocation, opportunities there's settings, I good second capital to really a our balance on look, efforts, sheet, I've think place. to in number your is be as to a us, and of sort think, thing. for inorganic, I dynamics think softening of I in to think of sort kind and recessionary overall to we're that's likely that continue starting see, don't both on some And of organically of I depending multiples. kind Relative

think keep record we'll I value track to come unlock positioned eye so if things right got And from do of that. able an definitely as we're M&A, on being market we've the long leader a along. that and a do and to

I really do sheet that think anything balance us think we position. probably to add a And Keith, I there? so capital towards our expect And some that. good puts in allocation

Charles maybe quick Matt, of points what add a if can I to said. Yes, couple just

than we us we money opportunity to and in capital draw more the debt Japan, The leverage other the balance on cash typically and that it, for part that a the into some market because our bit being go part of on the on about – raised the we run little put sort lower just of went particularly at sheet.

one certainly cash. have to wanted walk is of but going rest of the that with to cash we to away and the so listeners the consumed, that do you things get the And is I

going see, XXXX. structurally, in we're we consume are in for look going are to say, fully operationally the forward the what in and going we're XXXX And you but flexibility do funded many we time we're in ways, have paying today all do we to both We for cash. to and but one, that what well, and

if dividend already to you're dividend, continue spend my capital so know to to capital ahead grow. certainly – things we're And like. a the we're Charles And that we because sort us, already know to going balance to hence need strike, we and then want and when would for alludes good going thinking to free, our to have raise strong we our we we that makes want and continue flexibility that themselves We sense shake of it sheet. comments is

that net consume at use on I up to the we a consume said, our all flexibility go our All as leverage basis. cycles. cash, a just measuring day, the of because to it have And can it that and we're growth debt the actually end again, liquidity the into the going our we're going advantage we're forward. to going going And fullest company, think we to we like and is

both. you Thank great. That’s

Thanks, Matt.

is RBC. next with caller Jon Atkin Our

ahead. go may You

on XX, the Thanks. growth, stabilized top XX% One Got where couple a you have line. of questions. Slide

down gift a that's you APAC kind and I just cabinets bit. timing churn I then down drill the and Thanks. think and if on question, in was of that record. of the another installs cabinet that and EMEA, sense And billing driving what referenced equivalents I actually get can didn't to number grow as at the sequentially just and wonder bid all, was footnote Americas in MRR a wanted [ph] to to a metrics

Jon. question, Great Yes.

increase. So power in part PPI incredible fueled, on by on stabilized the price growth, obviously, results obviously,

is really XX% definitely high. So

that X%, than of price If probably about take out from faster portfolio less new obviously takes we And take are of you take the attractive. and down X% of growing stabilized about the you assets. which effects power so previous assets, really out – to others, mature the it you to take increase, down if stabilized still sort

sort growth of But that And very well of high we've new assets stabilized at is a to you you the set still add that's been ROIC the of [indiscernible] and of a tend of down dynamic pretty as talking a So little but tend of And rise might think that little then utilization in sort bit sort know, we fact opposite this a back. then out I up. increase bit. about. less the growth, X% would that then tap impaired typical by it goes the you direction. little X% It's of when as end sort come to mature, the these sort back the bit to in are of

stabilized are the overall, so model. feel I about business the of of And we good strength And a they think reflection really assets.

important flat for know so a that see little sort no solid good quarter quarter sure, that Billable as definitely EMEA to meaningful coming And quarters had of it last one, of for But billable couple think of dynamics is in really distance the and I remember mental the cabs, a a cabs. without I business actually sort couple to Americas. yes, this off quarters. such. really was creates quarter people adds it's APAC strong of last the of

clearly will the need cabs to And of caps. billable And we size always we spots, development churn you less happen. across that will EMEA, a start trend, pipeline actually high billable you to of essentially really probably three eight In cycle Therefore, can a a actually some think, make situation look XX footprint of kind in that of there then terms adds looking longer-term to But start a going I little get you strength try look markets see from to encourage – at the certain and a have, sort We utilization if trend. room. lot you're flat large regions. into in lead for and quarter that quarter, to cabinet people to you had good all where seeing will of actually, with rates and grow of we've grow can at

happened reinforce data and turn hang in it's sort But point me a discipline why maintaining about Europe, your things could because – Europe, strategy hat we something just talk fingers and what on – that's of think we in and want. gives give one you strategy much let our to on this cabinet I ourselves of it we not so really our really into and the

And XXX if from is a was a cabs. that really market that this tight Europe, well actually And churn low at pretty power look we very was implementation a density standpoint so it dense you and a quarter had in about – not interconnected.

so there a were our cabinet we yield And well getting average. below

we deals yield look the more XX% likely small therefore, cabs, when density When those go and increase when there, is will probably revenue significantly resell than point, going and price that interconnection, cabinet, midsized big we happen what's a get increase that, revenue resell you capacity XXX and to from from likely the the of per we're to one said higher sort in more all probably power done. you footprint. that to we'll higher And at when to

billable And cabs increase billable so and the significant incremental growth with no – in no CapEx. essentially zero

than a hear you us right constantly about is of right assets. call. that's the thing a just when for customer, right earnings more application, this why sort talk And so And clever

how That's of in gives a a we good team. drive I And of sales kind life you reflection. think way that our of terms here

point, think power every those think health So driving think growth, because cab across billable but lever, it's and you're we're price right density, the good healthy now, I in playing seeing really the business. you see I growth interconnection, will I

AI. And then if follow on can up I

or AI what be rich qualify they of – connect to seeing terms you And what Are are characterize demand rough very cost there. wins tend how you're some or do sizes? more the so and in of kind seeing they far? we density mentioned You rich

Yes.

frenzy a ChatGPT interesting to And that it's is investor typically, several have that. people of how little data the of you've to And place – sort our out story saying, is is We want to years. me cloud. use and I data. AI. their take place want data where what we we're with towards it want move but to our with the actually and to out with circuit and last want I think think And familiar control seen their heard about We have seeing things. it on most to we it the and trend a inter talk that thinking reality able into But to pipeline us, in it's data and are the be tell, for people other these that for intersect as we've we appropriate AI-related of media data. created to has opportunities sources a seen because early around for it clouds those about

Those of dedicated we seen have sort so just And economically partially do model training some cheaper to it's training on large opportunities. driven actually are hardware.

sort commitment of If you sustained have AI a doing to training.

And so some we've seen of those.

frequently, use And a then one, think new of are dynamic actually people inference sets we're that going I in more taking inference a to and lot think data. to when both, updated are deploying cases they're be be where which they're and inference bit are uniquely well I are AI suited deals, going insights interconnected, is data when are are sort of and –

And mission-critical. and secondly, real-time where are insights

of build opportunities. to of are be doesn't top do cases to that of vertically some think oriented large But sort and I happen AI are foundational what's sort think to responding profile those really used. think be to I – models we're sort we ChatGPT well going is to going people language going like models the of on that the of going being to way current that of are that And use cloud-centric. suited fit

some the training Jonathan, going actually to it's be I suited portfolio. think a to be is more stuff, xScale think our mix. going I to So of

at the And edge. I think stuff inference the land of digital retail the some to in portfolio is probably going

exciting going Analyst I incremental bit that's an but dynamic, And that the of so about think to early more sort little Day. and talk current days, a but we're opportunity, at

Thank you.

Nick next MoffettNathanson. Del caller Deo The is with

ahead. go may You

my thanks Hi, for questions. taking

space Singapore the are comments move that some or other Johor monetize First, Keith, the the is about are to or across opportunities some plan interesting. straight pretty I to I mean your of market and when and thought to situation? do just those it this let going And come go? might How might play kind this results? is they impactful Singapore markets be of into are might unique you other there or time think over to be where your customers

European dovetails move really you about talking large in deployments. what the some about out sometimes Well, tight customers nicely the with where environment. market, it looking theater, optimize Charles first, decisions to into some of And that, the was you have make a

no relates related than see Charles But is specifically installation to my opportunity. different There it to to be Singapore, about. we reference talking a an customer. was what happens As larger again, do really

would at end an when the market on impact is that course, the at And And it maybe the Charles of price be different upsized. metric. is that real now on we in getting is cabinets do for that be going of a looking to Singapore crumbs churn maintain that about, we're see that getting us, and are year. to and focus the be And impact an bread it lower our net something going capacity what with to back of we billing. has again, sort going we for market, a talked fine. that, course, churn range word the has right maybe of does to it uplift the move it the I But our

we're the we're it us of that. this unfairly to But and is business worried that discomfort us. – presents causes we itself the not little little know metric yet looking about for cab X sort thing doing a bit because right of bit billing cabinet billing at, maybe the I'm So always a

an that upon. Any I line that's initiative the that again, will And we place back opportunity. the get comment, – need the to work market. don't is Singapore value driving an an so have uplift and capital bottom is can put – the of you're more we embark would where optimization that see to don't asset. We refer only Charles' to we not And we And but equation. into

it. sure so make outcome places, good for we And just us. and tight in are we we'll that there can that's demand, that a the we is do And real if do

really facilities had Yes. we we been a we footprints of where footprint. saying, Nick, that in saying, – of really would sort to few them suited capacity Singapore, think now concern, examples that bit fuel the we And probably we time that capacity recapture would that have for have sort constraint a little there's that I'd hey, critical had broader retail xScale the a in that to those. more obviously, at took better I color we that are it's have need we them offer

– come see some so we of which are – constraints these And capacity some but think there and other that markets where in markets other into might opportunity I of play. other

manage on make I connection the sustainability. the is, one continue think, also why sure in think It's have between reasons to to be we're at to I capacity And in to to how looking needed, us line get markets in the lean to reasonably for where et to allocations permits continue things power cetera, of those drive we their needs. are to energy needed, the jurisdictions going quite

a be with going it's to continue think we in really be say, to able party but I that responsible are be responsible that we're to a the important way. to digital leader to partner hey,

a So thoughts of between those sort threats. of and various interconnections lot

I one that Charles, That's can great. Thanks interconnection. great. on ask That's color. for

should about how back that when though. Can came in and any get below abate more updated adds levels? we back still You QX growing regarding see adds dynamic QX, talked to versus expectations normal you share trend,

last continue in interconnection. that factors few noted, is I few the a be one and to traffic Overall, a really script, as say attractive. Yes, call Absolutely. I'd play there's there's thing on out the levels

in seeing exchange. You're that

a capacity. overall And trend in provision to we that exactly a to the higher we I things. think for You're like don't But and higher significantly is support fabric those higher on fire. traffic is us flowing going seeing add because – tougher the seeing think to is that much cross-connects, electronics you're on don't physical I fair towards speeds in tell terms what little traffic. – how to of fuel say by only it's to AI that It's way,

So gross adds have been strong.

very many how are gross line we there. the averages. four look adds is much of that of I been primary think things quarter And There the one have That's really some indicator say, with health, grooming that's and is those a activity. in at

run some it level. but that said to was moderate moderate quarter, fruit thought would of there going an out people on I at last I did are we think degree, As one. still do elevated – to low-hanging that

there, we'll that help and eventually the And adds more will moderation see think further. net so I that

trend. towards speeds, sustained more trend this think is I a higher though

And so I how at of have kind settle things think look to out. we're just to going – where

We've in little catching seen bit. a to up this provision is the capacity past where of traffic sort

higher trend diversity interconnection. degrees system And of and is traffic in here – increasingly we're very ecosystem seeing again, degrees the interconnection the is but so of The rich. flow, long-term high think I

overall, So more strength the connections. sort [indiscernible] good. unique a is And just of

So a some offset we'll fewer be side. see in more higher se, but do the little think still unit the bit of I little we'll on that per do a I growth circuits. grooming more revenue XX% lighter that that moderation will think speed terms of see

the we'll here. – that. give we'll track just to punch so I'll And you line But continue

very is that part we And XX% that business that billion at think the in be what of north at story. the returns role us, bigger Interconnection continue opportunity sort as of a to networking as is attractive about big continues I very, us business, capital. into particularly lean grow for we $X – to well for think And our Equinix like the and to growing of looks opportunity fabric. what it on and grow cloud

All right. guys. That’s Thanks great.

is Our Morgan Stanley. Flannery Simon next caller with

go You may ahead.

the could price the lot little talk power much. pricing Good a a capacity We and of side outside market. you you certainly referenced the if the in constraints some about Great. of wonder firming on I increases. prices heard Thank very more evening. bit hyperscale of you

opportunities a take in terms footprint? adoption to the in and the to maybe across your little continue and seeing on also on roll then you And continuing in business to Thanks. terms are both product core customer what out in and of of xScale on So both new renewals. price both your your around just business metal, then bit

there. in Lots

them So all. hit to let me try

firm. to of perhaps sustain PPIs ability an the have our pricing So lot sort gotten broader power service more portfolio sort even pricing a is on important trend of Obviously, definitely of yes, offerings. think of is airtime, but I

our on and perspective power our markets. across costs all a have list interconnection space, And price so from elevated we

world. think into has the roll sort definitely And going firmed see to of I pricing that you're to in xScale across so the continuing business.

solid got And think we're And seeing we points so cash good I very pre-leasing price and cash we're degree underwriting. a product we there. projects high of as attractive and returns that on the said,

space, and on again, interconnection – on so and retail pricing both power units. the side, raised the And we've

then escalators have our up. escalators – we and going the and – have we So you are also are

higher they And CPI so index-based doing escalators, in escalators, been we're much have broadly, cases, but more some doing we're past. the than fixed or then they are other in if

we're think gave through of dynamic seeing MRR seeing there we cap, that business MRR all roll how script clear I the up a per and cab in so as in is stat And terms in headline you're I keep a it right? about mean, you and of increasing. show per

a is for big cab, absolutely that, absent an due PPI. to our even But metric per Yes, which of to us critical rise. it yield chunk I continues think

a then metal, and really on couple – about nice wins. a talked So of we couple

probably providers. typical more bit what product-led motion We are that's of a more users of really growth SaaS is little in a early cultivating

about to but And we're are on that And service and started cycle it. the large that. of big traditional looking reduce so from hang candid, in teeth to opportunities our metal we more some from technology be we're providers funnel seeing life with developers pretty managing really getting uptake helps enterprises and native pain providers. also some And cutting the or seeing our we're of the digitally service

more of the goes did Analyst we that talk well. first in drivers acquisition to that So we'll as good of kind that underlying the why at probably Day the continue place. But about feel about business and

Thanks lot. a

is of America. David Barden Bank with Our caller next

go may You ahead.

guys. so right I to want the taking Hi much the have we guess, make Thanks all point. Keith, sure off just for I questions. jumping

assuming of this being thank usage the kind And waterfall the hedges of kind you kind guide. are as wanted to together the the then a merge there the a rest to of right of what bit $XX the the the right for will to of So the roll-off little it color going that get EBITDA to the I Any of kind of be kind $XX about And kind the and the about be just would structure midpoint? growth Is the combination create the of steady of you EBITDA of they understand for million impact the with year talk Could helpful. of sequential much volume cost for that's super move pretty point to price increased at It of in XQ jumping full year. midpoint drivers hedges that down these of that the guide. and a levels off XQ million you. look like? of forces implies XQ margin? and drivers you Thank

quarter-over-quarter is quarter-over-quarter movement, one is right laying off first, thanks you increase revenue QX of the And I line a an relative from quarter. such sort coming at my nonrecurring red start the those in the making bit. for look a not the Well. and David, last any into moving you there. it And is to not my in big overly the think, now, first and appreciate if – hands But specific of that substantial was you Sure. and over quite assumption on that notice built Thanks, comments QX hitting you'll number script, things underlying quarter. we're it's around thing

what QX revenue so is a seeing step And meaningful down between and you're in QX. nonrecurring

first the thing. that's So

And on but certainly it so do line different feel as EBITDA well. the ways, you you feel many that in

script, lot three a alluded the of xScale complete – xScale Charles in we asset we to are second across in anticipate more we very is world, out Frankfurt, on to – regions of The and in and activity. thing all are his sold sort as some is attached we that active

the you'll now, or throughout so trends the of rest about year. see into of year the Right And our revenue that year. out play X% MRR for the itself

where. know X% quarters. three probably And think it's to and next of be we be going between the exactly between But is revenue. don't I going roughly X.X% to about range and the X% somewhere

want maybe the So set as we circumstances. as well guided really haven't given to we would of

what fees. conservatism at. And into obvious for we're first I'd the to we model you look, look know reasons. We there's we here of quarter. about built be what's for We're And give game, running bit just an xScale, did then look then we continue the a last piece xScale associated give prudent with wanted say, But element trying at our what very again, was – That the you in going of little the forward, FX just to ahead. the we stage we on at business. look really to again, this as the and

power for no to We've the costs, power about Again, the very and surprise. As the thoughtful power dynamics price year specifically the relates this and increases. been power it

And X, when was exactly we when had the and to factor the May start putting on. including in regulatory did Kong off what other in increases cost the some do environment. going other what's And price going – Hong the year, going we be markets and look hedges and roll then Tokyo. that and are regulated that's through for some the be are And effective to there to on and

up. going of that, our at costs all more specifically, So looking are

going year. into And the the of throughout guide the already that rest feel the original was into baked to you're guide. baked It's so

of the So continued rest year. the shift this a to and you should really what see isn't throughout is EBITDA profitability increase

you we're the our bit So think the holding currency, but we again, one that good working knowing that's got a really of little on year reading is of what really shared a again, when thing. going we sort we're And we but we're making a other firm to all same with hopefully favor sort in thing currency. plan here, of I we've started of – get

and the the next the dollar of consideration before X% have the taking don't as far hedges. XX at out the you our a anywhere X% high as of and U.S. of XX% now are move calling so dollar depreciation XX% reside of do outside we're what or look revenues for is you go XX% into our very is to of could between figure calling implication to revenues depreciation, and XX% months, what If the a U.S. U.S. some that

per basis. have on bottom drives really that value You lot And a a line. substantial move on top a share and line on of

out full really on all sort and So But holding you. coming we're bit just firm little with sort operating FX at a comfortable performance about this of just you share thinking things we felt our you of gives give of and to QX. hopefully, try look that and a point, guide of the at some

on Yes. that a you bit that more every little of focused element Maybe Dave, I we color tell is will business – are think also of I the model.

next projects would say we of to try you about at continue that. and across of of P, work a cost to continue the margin. Q, improve and on to line, that of business sort going the goods gross sort the if at down very So click times to drive of to say, look the to good feel efficiency out P Q feel cost we're revenue continuing good I heck we're goods, about

further, productivity the the Then them bring be given also be up bit spent. broader opened SG&A we’re think we to about well. down some spend add to – as to trying a did a we when going up sure that make as quickly more But flat you can as and disciplined possible. and very continue diligent just to you headcount, quarter-over-quarter, going saw to we’re continue wallet look to We on – I spend we’re

try to to to do And so, to continue long-term element of we’re we the work deliver and do model to the performance. going need what every

you Thank great. so both really much. It’s

next is Cowen. with Michael TD caller Our Elias

ahead. go You may

taking questions. for Thanks Great. the

and opportunities. Just organic talked about inorganic you first

recycling on assets. this level, that as that if a you’re press markets regions out us high center perhaps give likely Equinix you’re Hong also, Thanks. is a Kong there prioritizing were And some sense that sale you view or suggesting commenting then prioritizing data year the perspective. that the wondering option? at exploring today of you Maybe of do reports earlier that could capital without Just a from just specifically,

second about think us. on some Hong there’s those first we We’ve take I’ll as Yes. can But Why talked I Keith there comment one of might then don’t Kong. for – the on one do where M&A I and the relative opportunities be. said, markets to

announced that opportunity, opportunity is India, on. to in stay going in open of be We’ve there to in our of already to think and a a and that Asia and we’re we’ve Southeast And sort a of India, of there’s organic a very over for markets could we’ve inorganic. build think believe organic key do combination Indonesia area that an several eyes think time in and us we actually Chennai, over new going lot think I done I continue projects but to of continue in couple there’s eyes be opportunities got time. terms I I of wide area. Malaysia,

one in think xScale on things be lot done it thinking that And of, partnership I but of have think the from we yet, we not or radar, we with done haven’t I partners. could of that also is any I our think a that about opportunities an perspective

market, probably All of as for some in look of level at we some of I and the including represent M&A opportunity AI. think the and opportunities those us dynamics

relevant I that for those could very be be all us. could think

first about let bit I’ll the recycling I’ll Keith the he – and that’s capital can a it question, talk this – kick over So question. then and to

And Yes. Charles. thanks

Michael, So I’ll few things. say a

not a of are foremost, and we First recycler typically assets.

important one, was, and all the something a platform. might basically important to step to been it this, And I important think back are to platform. Kong very assets last that particular, where’re said us our actually we’re platform stay, Hong we’ve to have have you of and one asset the think I in is the analyst is a very and

do is partnership go example innovative don’t ways we that tandem. So where entered conglomerate and to assets, we Jakarta innovative do an – we just, about our it into into it’s market – think the of we ways business, think it in as raise to And about business. so large innovative way an that recently business grow – with And a we our a actually sorry, capital. but us allow is selling the to scale that – to also

the across But different that the assets. assets and the we And critically trying view platform, in selling the optimize figure out important Equinix platform to that all our portfolio. we’re the our our of of how in not we’re to capital reflects overall, so have is always And I business portfolio that think structure. to looking sort best

the Thanks color. Great. for

next Citi. our caller Rollins And with Michael is

ahead. You go may

Thanks. Hi. Couple questions.

bit First, and just trying early market you these forward to but step secondly, are tries as and give and or us the top you’re to the power on maybe a power especially market And somewhat we a the can cohorts, your in of customers? price when vectors, you forward update it what the as the I it’s core manage helpful the what’s of growth three percent of the costs, out take And is, realize past markets, future percentage is an and sense of portfolio position Equinix, where then increases global penetration for for consider see something the XXXX? customer contemplate year, looking to key back you opportunity on from company’s level is where break still wallet XX that decreases heading the that across today? coverage

living anything I hard in jump think Sure. in on in and volatility I’ll volatile than a rather for more We we’re But power. – I predict expect right? world. going say Keith to I obviously here. less, us start to general, that very would would

– still cetera speaking. good dampens really we last energy all things I how think them is predictability, why terms procurement them that go us And I good really lot what could a budget that think and pricing again, and have volatility broadly year the and that’s almost now dynamics for to are in our I of that us. power means about how gives and this at there’s the for why opportunity play it it that about customers think it been news we’ve impact over educate for et good

hedge, going at can deregulated Obviously, to sort you that look markets dampen volatility of we out. in we’re where

markets that in customers months price again, don’t down the XXXX. spot was sort price have than were part so recognize definitely there a have early been over and very what but latter come several enjoying at that with of point different XXXX And last of the in and the we know,

to in sort will a moderate have And and markets to so And huge was Ukraine substantially others we we to that they benefit get in conflict some I some unless But them. some think have volatility. now more Europe, further. continue people the resolution they were particularly predict, really moderated that likely predicted of that

fact is multi-decade any and circumstance expect the that even I is volatility And under in think be long approach I long, benefits. an we’ve more market underway that nature, going real rather And to approached than think cetera hedging, in energy that the et to I’d how less. decade our transformation provides Europe

lower power do So seeing some in places. we’ll continue some that. to of expected I than think benefits sort we being cases some in little prices monitor terms we’re in of a

we QX We off roll in are about some the to going talked of script. hedges in have and the that

there. some elevation So see to going you’re

definitely continue quarter. in And overall so, volatile it’s think the next market. I a going But be that shouldn’t to be a to surprise

add question, Before I on power? other anything to go to the wanted you

on of I comments, business operationally The is only it are efficiently. aspect add Michael Charles’ we other thing more focused the highly other would to running the

and very drive overall business, renewable we focused cost business. continue – to want sure down we the sustainability sustainable of the as We’re make and to a

go important and desire with arrangement a market. create and that’s solar aspect it’s contractual into around to also an so or Charles in made our And basis. on capacity going And wind for PPAs comments prepared the forward to go the his whether be remarks developers

bigger that well. part we our going of And a business as as see forward

of tamps a period commitment those that’s the down sort renewable it as over extended things those a it volatility our and combination it at of aspect predictable all overall, time energy critical as some an arrangements of our I it’s because well. of, of XXX% least strategy But are. think just the is to

always think, growth one those. to Mike I about and thunder the but I would for my is I think then want of steal in on expansion business. I other or And Day, any that Yeah. levers our Geographic multiple of one, say we’ve talked drivers don’t revenue Analyst multiple

a market evolves So more time. that changes core markets, covering and what’s over

what continues we drive that. level. And huge to sort continue get of profits a see these of and of a But think break chunk into going you they I markets. mature markets start Obviously, nature bookings to our dynamic. to that to is infrastructure distributed The scaled that from to we’re group, certain continue see to and

They’re hyperscalers a be core. expand edge edge their seeing them or so in to want both their their and And you’re their And we partner presence. that. to

to where And manifestation. us, to us so I our continue think you’ll evolve. to But align you be expect to best with to is should continuing think, the commitment that And edge continued I is see investment expect digital that. do

think we’re But us then, an way. play think capturing wallet new very underlying provider is – to And – as continue to see driver. share, these I net I And significant think a a companies in as markets. they that it’s going expansion scale of one, geographic to of I to we also so we’re in their infrastructure. allowing we’re And then terms are a sort

you small providers, if cycle the the of this is sort provider from of service think to life I providers in changing a service service at example, cloud-centric a number for and world. look provider scaled more service

And line against and product so I growth. to extension have both market think new we’re continue opportunities going expansion, to new customer

All going of to over time. for those us drivers things growth I be think are

Thanks.

Sachs. is with And our Feldman Goldman Brett caller next

go ahead. may You

Thanks for question. for thanks Yes, taking taking the the question.

to the the you’re it of Keith, your targeted. year to continue low So, comments, that hear churn to good expectation your full range end see in was you’ve going that towards

here a pushed price We would pretty increases broadly surprising, down significant you difficult environment. cloud it’s a Because very on about I and talked obviously sound macro casual sort recently. some a through slow that spending think observer and of right? to

hoping then all And on can us you has and shifted is at low churn maybe that just seen? elaborate when continue see what confidence Thanks. you’ve maybe you’re so see and I was from gives historically do it you you what to driving what going to that churn, remind

Yes.

revenues. you XX% great represent really look about our XX does the into our fact The the at deep you, on customers confidence know analysis customers, that I to our top customers. comes represent our and top top a team a And it’s first think, revenues. of when XX again, our XX about the foremost, charts, from it’s question. but XX%, of XX% I surprise

We have a really long tail.

have And our visibility so great doing. larger we into particularly into – customers and they’re what

the that’s thing. So first

second But they majority it’s bifurcate do high had very with of the companies infrastructure or quality is assets not high The consolidation of our to to we’re suggest world, just to very churn financially and level it’s even around growth continuing something thing standard choose struggle previously. or tend or critical to don’t there’s And deliver choose choose that different. overall, same completely operational when the their we base comes suffer to a just not that we install the from the infrastructure.

new into no visibility the say as going we’re experience that alternatives. we’re guided And – more introduce scale? because just customers those goes inside of the to company, we’ve And going we can our the view, churn buy if that service see think that’s gives meaningful exists. the services, offerings, And business a would telegraph services, point the we that amount I what confidence and indication we to last anyway. an is to forward Brett, not grow of we’re just team’s what to deep But it we’re and customer churn then as comes back from it’s I to And enter other and we thing in any beyond that new going continue even that something to doing seeing it’s visibility going there’s just us there’s that analysis fundamentally or provide what a the limiter enhancement see into my the is size, what of to done to. and it

pony. So we’re a one trick not

give, then. overall the sort would gives that sense of, So that I guess, you

Let me there. leave it

Thank Okay. you.

you would anything? add Charles,

their other types. there’s they’re think associated customers. more think, of I that in in and people terms churn, service of mean, I I true No, churn how providers provider the That’s of frictional network particularly is evolving certain character in serving ours footprints, amount some a with

seeing, think is keep to plays of architecture so and to long-term are that, think go are adapted I really you that ought going of think migration towards cloud there. that more level in that, that, level most – well – I strengths. typically some to the I you see of an our I evolution we see sort to workloads but the some hybrid of sort reiterating context are state continue I cloud always multi-cloud of a typical to that

is to the defense regard we against would the begin churn is keep, I say right churn, And comment this that to we with. always getting opportunities last the make best

interestingly, a discipline guess about when our I that. maintaining think to last often comes And in on and sort churn the I’ve And sales category a that tale job different teams give there’s that from that’s that a churn. underwrite so because done I’d you And an and the of really M&A, as approach. great you talked that have earlier central I to executing script, do find we of sort people sort of

of so, of M&A managed And looking that I’ll Verizon you on side And of other – and a that is sort look we’ve the reaping the comes attractive, we saw so of a end some transaction as I through are tell now of back category. super that think you that see you transactions sort in right? at And that. you that’s third

you, Thank call. our everyone. concludes This QX earnings