NASDAQ:EQIX Equinix Q4 2021 Earnings Report $838.10 +20.91 (+2.56%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$864.30 +26.19 (+3.13%) As of 04/25/2025 07:33 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Equinix EPS ResultsActual EPS$1.36Consensus EPS $5.63Beat/MissMissed by -$4.27One Year Ago EPS$5.76Equinix Revenue ResultsActual Revenue$1.71 billionExpected Revenue$1.70 billionBeat/MissBeat by +$9.21 millionYoY Revenue Growth+9.10%Equinix Announcement DetailsQuarterQ4 2021Date2/15/2022TimeAfter Market ClosesConference Call DateWednesday, February 16, 2022Conference Call Time9:29AM ETUpcoming EarningsEquinix's Q1 2025 earnings is scheduled for Wednesday, April 30, 2025, with a conference call scheduled at 5:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Equinix Q4 2021 Earnings Call TranscriptProvided by QuartrFebruary 16, 2022 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Good afternoon, and welcome to the Equinix 4th Quarter Earnings Conference Call. All lines will be on listen only until we open for questions. Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I'd like to now turn the call over to Katrina Rymill, Senior Vice President of Corporate Finance and Sustainability, you may begin. Speaker 100:00:25Good afternoon, and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we make 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 identified in today's press release And those identified in our filings with the SEC, including our most recent Form 10 ks filed on February 19, 2021, and 10 Q Filed on November 4, 2021. 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 the financial guidance during the quarter unless it is done through an explicit public disclosure. Speaker 100:01:14In addition, we will provide non GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures Today's press release on the Equinix IR page at www.equinix.com. We have made available on the IR page of our website A presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We'd also like to remind you that we post important information about Equinixna IR page from time to time and encourage you to check our website regularly for the most current available information. With us today are Charles Meyers, Equinix's CEO and President and Keith Taylor, Chief Financial Officer. Speaker 100:02:00Following our prepared remarks, we'll be taking questions from sell side analysts. In the interest of wrapping this call up in an hour, We'd like to ask these analysts to limit any follow on questions to just one. At this time, I'll turn the call over to Charles. Speaker 200:02:14Thanks, Katrina. Afternoon, everybody, and welcome to our Q4 earnings call. We had a great finish to the year with our best bookings performance ever driven by an exceptional demand backdrop for our business With continued strength across our platform, but more specifically in the Americas, low churn and continued momentum Speaker 300:02:31in our digital services portfolio. Speaker 200:02:34For the full year, we achieved over $6,600,000,000 of revenue, marking our 76th consecutive quarter of top line increases, An amazing 19 years of continuous revenue growth, while driving attractive AFFO per share to the bottom line. Amidst the dynamic and complex global landscape, we continue to deliver against our vision and our fiscal year results demonstrate both the increasing relevance of our platform And our uniquely differentiated value proposition. Businesses globally continue to prioritize digital transformation as a foundational source of competitive advantage And the secular drivers for our business have never been stronger as digital leaders demand infrastructure that's more distributed, more ecosystem powered, more flexible, more Sustainable and more interconnected than ever before. Increasingly, Equinix represents a critical point of nexus as customers implement hybrid and multi cloud As a clear architecture of choice. And as a global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands And capture the enormous opportunity ahead. Speaker 200:03:37As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong With solid demand pipeline, stable churn and a rising price trend, resulting in a revenue outlook for the year that is at or above the high end of our long term guidance range And AFFO per share outlook is still within our long term guidance range despite pressure at the gross margin line associated with power price volatility in Singapore. Absent these specific dynamics, our underlying business performance will be Speaker 300:04:07producing AFFO per share growth towards Speaker 200:04:09the high end of our Analyst Day guidance, Well ahead of our expectations. We have a robust global power hedging program that has been and we expect will continue to be highly effective at Smoothing utility price volatility over the years, providing predictability and value across markets for Equinix and our customers. We believe the current dislocation in Singapore is transitory with power prices showing signs of moderating in the second half of the year. Bottom line, the business is performing very well And we remain on track to meeting or exceeding our Analyst Day objectives for both top line revenue and AFFO per share growth. And as we see these temporary headwinds moderate And continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin to 50% by 2025. Speaker 200:04:58Turning to our results as depicted on Slide 3, revenues for the full year were $6,600,000,000 Up 8% year over year. Adjusted EBITDA was also up 8% year over year and AFFO per share grew 9% year over year. Interconnection revenues for the quarter grew 12% year over year with solid unit adds, reflecting strong momentum with Equinix Fabric As expanding use cases drive connections to more locations and more counterparties, these growth rates are all on a normalized and constant currency basis. Our global reach remains as important as ever. IEC predicts that by 2025, more than 50% of enterprise data will be generated at the edge And customers continue to see Equinix as the best manifestation of the digital edge. Speaker 200:05:43This competitive differentiation continues to drive our business With revenues from multi region customers increasing 1% quarter over quarter to an impressive 75%. In December, we announced our long awaited entry into Africa with our intended acquisition of MainOne, a leading West African data center and connectivity solution provider With the presence in Nigeria, Ghana and the Ivory Coast, set to close in early Q2. This acquisition will mark 1st step in Equinix's long term strategy to become one of Africa's leading digital infrastructure providers and will position us well in the continent's largest economy. To fuel our ongoing global interconnection leadership, we're also targeting strategic Internet traffic flows by supporting and winning subsea cables such as ELLA Link, The first ever subsea cable between Europe and Latin America, which recently went into operation with POPs in our South Hollow IV, Lisbon 1 and Midyear II IVXs. And by entering new markets like our recently completed Genoa Italy IBX and our newly announced IBX in Salalah, Oman. Speaker 200:06:46Our data center services portfolio remains the bedrock of platform Equinix. And we're excited about the recent appointment of John Lin The position of EBP and General Manager for Data Center Services. John has delivered extraordinary results as the President of our Americas business And it's a great choice to implement our strategy and extend our global market leadership and interconnected colocation. To that end, we continue to expand on our global footprint, 41 major projects underway across 28 metros in 19 countries, representing over 20,000 cabinets of retail And over 80 megawatts of ex scale capacity. We remain focused on simplifying, automating and digitizing our services, Allowing us to scale our business and enhance operating leverage and we're already seeing the results of these efforts. Speaker 200:07:33For example, We recently launched our new Secure Cab Xpress product, leveraging pre deployed capacity to dramatically reduce cycle times And enable online quoting and ordering for our most commonly requested configurations. We expect to roll this new service out to customers in the coming quarters, Driving increased customer responsiveness while simultaneously enhancing margin. Our global interconnection franchise continues to perform well And we now have over 419,000 interconnections on our industry leading platform. In Q4, we added an incremental 7,500 organic interconnections As enterprises drive growth and further enhance our ecosystem density. Internet Exchange saw peak traffic up 6% quarter over quarter and 27% year Over year, with peak traffic in APAC surpassing 10 terabits per second for the first time as service providers increasingly look to IX To improve Internet traffic delivery. Speaker 200:08:30Turning to digital infrastructure services, cloud computing has permanently reshaped customer expectations for speed and simplicity. Customers want to deploy infrastructure where they want it, when they want it. Seamlessly integrating cloud based workloads and private infrastructure And enabling agility and performance between the 2. As a result, customers are embracing a broader set of our services, Combining fabric, metal and network edge to build virtual points presence and our planned expansions will fully enable this capability across 30 markets by the end of 2022. For the quarter, Equinix Fabric saw excellent growth, eclipsing $150,000,000 in revenue run rate with a third of our customers now using fabric For a variety of use cases across a broad set of destinations. Speaker 200:09:18Our Equinix Metal business delivered strong results With a great mix of wins and new logos across verticals and a healthy backlog. And Network Edge saw continued traction with growth from new and existing customers As they use the service to implement WAN optimization and cloud to cloud routing. Shifting to Excale, in January, we announced plans to Standex Gale into South Korea with an agreement to establish a $525,000,000 joint venture with GIC to develop 2 data centers in Seoul. Total investment in our various hyperscale joint ventures when closed and fully built out is now expected to be more than $8,000,000,000 across 36 facilities globally, With more than 7 20 megawatts of power capacity. We currently have 9 ex scale builds under development and during the quarter We fully leased the first phase of our Frankfort 11 asset and the first and second phases of our Sao Paulo 5 asset representing approximately 20 megawatts of capacity. Speaker 200:10:14Total Xscale Leasing is now over 130 Megawatts and our initial JV in EMEA is over 80% leased. Now let me cover some of the highlights from our verticals. Our network vertical had solid bookings quarter with healthy new logo activity led by the Americas As companies expand and optimize digital capabilities to support both the delivery and consumption of data at the edge. New wins and expansions included a Fortune 200 Telecom Company deploying infrastructure to support the U. S. Speaker 200:10:45First cloud native open RAN based 5 gs network. Inligo Networks, an Australian cable systems operator deploying digital infrastructure to support a new subsea cable Across Southeast Asia, Australia and the U. S. And African local telco deploying a network hub in Lisbon to improve pairing and performance. Our enterprise vertical saw another quarter of record bookings as IDC predicts almost half of the global economy Will be based on or influenced by digital in 2022, fueling strong demand for hybrid infrastructure. Speaker 200:11:18Q4 had particular strength FinTech, Industrial Services and Energy subsegments with wins and expansions including NASDAQ, a Fortune 500 Technology Company Scaling its cloud enabled infrastructure to deliver ultra low latency edge compute capabilities from our NY11 data center in Carteret. Avaya, a cloud communications and work stream collaboration company implementing an edge data center strategy on platform Equinix to Streamline product connectivity for its customers and ADT, U. S. Leading smart home security provider in breaking the cloud with an infrastructure modernization effort spanning multiple geographies. Our Cloud and IT Services vertical also had solid bookings this quarter led by the Software and Infrastructure sub segments With good momentum in EMEA and APAC, expansions included Zscaler, a leading Global 2,000 secondurity cloud provider, Upgrading capacity for sustainable enterprise cloud transformations and growing network traffic at the edge. Speaker 200:12:17Wizz Technologies, a Singaporean full suite IT service provider deploying on Equinix metal and upgrading fabric services to support quick and seamless business expansion. And Oracle, a top 5 mobile software provider deploying FastConnect cloud on ramps to support new regions in Singapore, Milan and Stockholm, Bringing their total number of on ramps available at Equinix to 24, more than any of their other partners. Our content digital media vertical had strong book led by the Publishing and Digital Media sub segments and record channel activity. Expansions included Cloudflare, the U. S.-based global web infrastructure and security company, Upgrading and expanding their footprint in over 40 markets. Speaker 200:13:00Index Exchange, a global ad tech marketplace, Expanding compute nodes in APAC to manage traffic growth and a top 3 global credit agency deploying regional network and cloud hubs in APAC To support its operations. Speaker 400:13:14Our Speaker 200:13:14channel program delivered a record quarter to close the year, accounting for 40% of bookings and nearly 60% of new logos. And we have line of sight for channel to grow to 50% of our bookings in the coming years as we enhance our systems and processes And leverage our diverse set of partners to scale our reach. Wins were across a wide range of industry verticals and used cases with continued strength from strategic partners Like Microsoft, Dell, Cisco, Google and BT, including a significant win with Wipro and AT and T helping a utility company Modernize its IP infrastructure in Europe and the U. S. So now, it will be time to call over to Keith and cover the results for the quarter. Speaker 300:13:55Thanks, Charles. Good afternoon to everyone. I'll start my prepared remarks by saying our business is performing exceedingly well, Frankly, better than our expectations for both the quarter year, and we're bringing our momentum into 2022. We had a great end to the year, delivering record gross and net bookings with very strong channel activity, while recording our highest ever recurring revenue step up in the quarter. For the year, without any major acquisitions, revenues were up over $600,000,000 We closed over 17,500 deals in 2021, highlighting the tremendous scale and reach of our business The velocity of our go to market engine. Speaker 300:14:36The Americas region continues to pick up steam growing 10% over the prior year, effectively double the rate of growth from last year, Benefiting from strong leadership and a distributed portfolio of highly interconnected IBX assets resulting in record bookings and lower churn. For the company, our churn settled at the lower end of our guided range of 2% to 2.5% per quarter for an average of 2.1% per quarter for the year, Our lowest level since 2016, which is highly reflective of our strategy to put the right customer with the right application into the right IVX. Quite simply, the decisions we're making are strengthening and extending our leadership position as the world's digital infrastructure company. Now as previously discussed and perhaps top of mind for you, there are a number of macroeconomic factors that we continue to proactively manage, Such as supply chain, power costs, interest rates and inflation. As it relates to power costs, we're seeing Approximately 130 basis points of in year margin pressure due to the temporarily inflated power rates in Singapore And the lapping of the favorable BPPA settlements from Texas last February. Speaker 300:15:50For 2022, we're predominantly hedged to meet our global You can layer in additional hedges for the remaining 2022 exposure and to meet the demand for future periods as we navigate past this unusually volatile period. As Charles noted, we expect the market dislocation in Singapore to be transitory, largely given that current prices are Typically higher than any other markets that we operate in and the spot market rates appear to be trending down, although they do remain volatile. As reflected in our guidance, we expect second half margins to improve over the first half and we remain on our path to deliver against our Analyst Day adjusted EBITDA And AFFO margin expectations. As it relates to the rising interest rate environment, our balance sheet is very well positioned. We have minimal near term exposure to rising interest rates with 95% of our debt fixed across the weighted average maturity period of over 9 years. Speaker 300:16:48Despite the recent increase in interest rate, the cost of borrow remains at historically low levels, while we enjoy returns substantially higher than Our multiples of our cost to borrow and WACC. Our financial strength continues to feel significant and our balance sheet Fueled by our strong cash generation capabilities has great flexibility. Lastly, with regards to supply chain The inflationary pressures in the marketplace, we've invested heavily in a sophisticated and forward leaning procurement and strategic sourcing organization, Allowing us to execute against a robust development pipeline across our platform, while continuing to deliver against our return expectations. This is not to say there isn't congestion in the supply chain, but we feel very well placed with our partners And suppliers resulting in limited delays against our expectations. To highlight that point, in the Q4 alone, we added 17 new projects to our IBX and XScale build program across 14 separate markets, while we completed 7 projects across 6 markets. Speaker 300:17:56Now let me cover the highlights for the quarter. Note that all growth rates in this section are on a normalized and constant currency basis. As depicted on Slide 4, global Q4 revenues were $1,706,000,000 up 10% over the same quarter last And above the top end of our guidance range due to strong business performance led by the Americas. Consistent with our expectation, Non recurring revenue stepped down to 6% of total revenues in the quarter due to timing of large customer installations. Interconnection revenues were 19% of recurring revenues with strong growth across all three regions, reflecting the continued benefit of our global platform And diversified product portfolio. Speaker 300:18:37Q4 revenues net of our FX hedges included a $5,000,000 headwind when compared to our prior guidance rates. Global Q4 adjusted EBITDA was $7.88 or 46 percent of revenues, Up 11% over the same quarter last year and above the top end of our guidance range due to strong operating performance and timing of spend. Q4 adjusted EBITDA, net of our FX hedges included a $3,000,000 headwind when compared to our prior guidance rates and $5,000,000 of integration costs. Global Q4 AFFO was $564,000,000 in line with our expectations while absorbing the anticipated And seasonally higher recurring CapEx investments similar to prior years. Q4 global MR churn was 2% Speaker 400:19:30At the bottom end of our targeted Speaker 300:19:302% to 2.5% range. Turning to our regional highlights, whose full results were covered on slides 5 through 7. ABAC and the Americas were the fastest MRR growing regions on a year over year normalized basis at 11% and 10%, respectively, Followed by the EMEA region, which stepped back up to 9% year over year growth as expected. The Americas region had another outstanding quarter delivering record With robust channel activity, strong net positive pricing actions and lower churn. The Americas momentum is broad based with 24 of our 27 Metros increasing gross bookings year over year led by our Boston, Denver, Mexico City, Los Angeles and Toronto markets. Speaker 300:20:11The former Bell Canada assets continue to perform better than expected, in part due to increasing carrier and cloud deployments in our key Canadian markets. Our EMEA region had a solid quarter with strong retail bookings led by our U. K, Dutch and German businesses. Interestingly, we're seeing growing customer interest in this region given our sustainability efforts, including the recently signed DPPA with a wind farm developer in Finland To cover over 30 megawatts of capacity. And finally, the Asia Pacific region had a solid quarter with strong pricing And new local activity. Speaker 300:20:48We're experiencing good momentum in India with the GPX assets performing well above plan. Although Singapore remains capacity constrained, we welcome the government's recent decision to lift the moratorium on new data center builds. Going forward, new construction will need to deliver strategic value and international connectivity for Singapore's digital economy, But it also needs to be at the forefront of sustainability. We feel extremely well positioned to deliver against the government's criteria. Now looking at our capital structure, please refer to Slide 8. Speaker 300:21:23At the year end, We had unrestricted cash of approximately $1,500,000,000 a step up from last quarter due to strong operating cash flow Approximately $400,000,000 of ATM funding, offset by our investments and the dividend payment. In early January, we renegotiated our line of credit, Providing us access to $4,000,000,000 of additional liquidity, while also increasing our financial flexibility under our new revised covenant package. Looking forward, we'll continue to take a balanced approach to fund yard growth consistent with our investment grade rating, while staying focused on creating long term value for our shareholders. Turning to Slide 9 for the quarter. Capital expenditures were approximately 817,000,000 recurring CapEx of $86,000,000 a meaningful increase over the prior quarter as expected. Speaker 300:22:13We opened 7 major projects Since our last call, including new IVXs in general, Munich and Perth and a new ex scale asset in Osaka. We also purchased land for development in Dublin and Istanbul. Revenues from owned assets represent 59% of our recurring revenues. Our capital investments delivered strong returns as shown on Slide 10. Our now 158 stabilized assets increased revenues by 5% year over year on a constant currency basis, the top end of our growth range as expected due to strong Americas growth. Speaker 300:22:50These stabilized assets are collectively 86% utilized and generate a 27% cash on cash return on the growth PPE invested. And please refer to Slides 11 through 16 for our updated summary 2022 guidance and bridges. Do note, all growth rates are on a normalized and constant currency basis and our guidance does not include the anticipated results from the pending close of the MainOne acquisition or any potential future capital market activities. Starting with revenues. For 2022, we expect top line growth of 9% to 10%, above the top end of our long term range, reflecting the continued momentum in the business. Speaker 300:23:32MRR is expected to remain within our targeted range of 2% to 2.5% per quarter. We expect 2022 adjusted EBITDA margins of approximately 46 percent excluding integration costs, the result of strong operating leverage and efficiency initiatives in the business, temporarily muted by the higher utility expenses. We expect to incur $20,000,000 of integration costs in 2022 for our various acquisitions. 2022 AFFO is expected to grow 8% to 10% compared to the previous year and AFFO per share is expected to grow 7% to 8%. 2022 CapEx is expected to be approximately $2,300,000,000 to $2,600,000,000 including approximately $100,000,000 of on balance sheet ex which we expect to be reimbursed as we transfer these assets into the JVs and about $160,000,000 of recurring CapEx spend. Speaker 300:24:27And finally, we expect our 2022 cash dividends to increase to slightly greater than $1,100,000,000 a 10% increase over the prior year or an 8% increase on a per share basis. So I'll stop here and let me turn the call back to Charles. Speaker 200:24:41Thanks, Keith. In closing, we're immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us. Although the transitory effects from power pricing impact elements of our 2022 guide, our normalized results would indicate a business trajectory that puts us meaningfully ahead of our We continue to work hard to further mitigate the in year impacts of the Singapore power volatility and in parallel Intent to continue to strengthen our market leading position as the world's digital infrastructure company by scaling and transforming our data center business, while also accelerating our digital services business to deliver on the promise of physical infrastructure at software speed. And we intend to continue to advance a bold ESG agenda, addressing the urgency of climate change with a commitment to climate neutrality by 2,030 And fostering a culture in workplace where every person, every day can confidently say, I'm safe, I belong and I matter. Of note, we Speaker 300:25:38were thrilled to recently receive a Speaker 200:25:40perfect score from the Human Rights Campaign and be recognized as a best place to work for LGBTQ plus quality And are proud to be ranked number 1 in real estate in Just Capital's 2022 rankings of America's Most Just Companies. Over our nearly 25 year history, we have created and cultivated a foundational set of advantages, superior global reach Now spanning 66 metros in 27 countries, advantaged access to the world's most powerful digital ecosystems with more than 10,000 customers And over half the Fortune 500, the world's most comprehensive and advanced interconnection platform and a track record of service excellence It gives our customers the peace of mind they deserve. These advantages are strongly aligned to market trends and nearly impossible to duplicate, A dynamic that continues to fuel strong growth in a rapidly expanding addressable market that we are confident will translate to compelling long term value creation. As we strive to fulfill our purpose to be a platform where the world comes together, enabling the innovations that enrich our work, our life and our planet, We will continue to show up every day remaining in service to our stakeholders, to each other, to our customers, Operator00:27:02Our first question comes from Jordan Sadler, KeyBanc Capital Markets. Your line is open. Speaker 300:27:10Thank you and good afternoon. Speaker 500:27:13First, I'd like to just touch on maybe some of the macro factors that you identified, Keith, in your prepared remarks, first, just maybe on the margin impact Related to the power costs that you're seeing in Singapore, I think you said there was 130 basis points Impact year over year, but what specifically was the impact that you're seeing within the 46% margin Related to Singapore and then separately, can you maybe discuss how you might be dealing with any other exposures, For example, in Europe, and if you were able to push through price increases To customers there to offset some of the exposure you might have had? Speaker 200:28:08Sure. Hey, Jordan, it's Charles. Let me step back and give you some additional color on the power pricing And then Keith can add in both on that. We can sort of tag team discussion on The broader inflationary aspects of the business as well. There's aspects of the power dynamic that are quite complex, But the net of it all is pretty easy to summarize. Speaker 200:28:34So other than Singapore, which I'll talk about, we continue to be really well hedged around the world. And as our bridges show, You'll see there the impact of really the 130 bps, which I'll touch on here in a minute. Other than that, we're really seeing limited margin impact from that. In In markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, Which as we've talked about in the past, we have the contractual ability to pass through and offset in part also by strong operating leverage in the business, which we're very Trends in that market and other factors, we alongside our power advisers decided that we were going to defer unlocking in Singapore. And we were pressing 1, given the rates where the rates were set at that time and 2, given an ongoing negotiation Trying to get to a multiyear sort of hedged or locked position. Speaker 200:29:38Then the really the Fundamentals of the Singapore power market just dislocated, really driving an unprecedented level of volatility. And so counterparties were Really able to offer rate locks and that's exposed us temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So That's where the that exposure through the course of the year is what we're estimating at about 100 bps. Then there's an additional 30 bps On a year over year compare basis, there are an impact of favorable dynamics from our Texas VPPA last year. And so the combination of those factors account for about the 130 bps on margin. Speaker 200:30:24So again, absent that, you'd be talking about a margin guide that'd be 47% and change. And I think in the broader context, would really Reflect the tremendous health of the business. So that's where we are on the margin issue. Across The rest of Europe, yes, there's volatility. As I said, we would sort of manage that through increasing targeted price increases. Speaker 200:30:51In some cases, those price increases, we're going to phase them over a couple of years because we feel like they're just too Too big to roll through in one plug. But again, the pressure that we any pressure that we are seeing from that is being offset by nice Operating leverage in the business. Keith, maybe you can comment on broader inflationary sort of factors in Europe and elsewhere. Speaker 300:31:15Yes. Jordan, when it comes to the inflation aspect, I just said, we've invested heavily over the last couple of years in, as I said, a procurement The strategic sourcing team and so we're getting ahead of many of the inflationary issues. In some cases, we've lost substantial inventory that we're housing At the supplier, the partner's location and then we draw down on that over time. And so by locking in that commitment, we've been able to mitigate Some of the inflationary risks that others might be experiencing. Not to mention that we've got the supply available where in some cases others will not have the supply available. Speaker 300:31:51I think we've done a real good job locking it in. We're working on an extended basis over many years. We look forward with what our buying And that's another aspect of our again, our increased sophistication around what we're doing When and where and what we need when and where. And so the team is doing a good job of sourcing the larger material items for that. I was going to say though the other area that is probably a little bit more difficult is just the human capital side. Speaker 300:32:23And that's one of the greatest risks that you see all across the world and just sourcing humans not only to do the construction, but all the manufacturing. And so Getting ahead of all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing cycles. All that to say is, I think we're in a really good spot. We're seeing limited delays thus far. Certainly, prices I've gone up in different sets of circumstances. Speaker 300:32:55As Charles sort of alluded to on his prior comment, We're putting through appropriate price increases into the marketplace. And it will depend certainly on the market, but we're putting appropriate price increase Into the market accordingly. And one of the things you've heard us say and maybe I didn't just to repeat it. This quarter again, we had meaningful net pricing Positive pricing action. And I can't even think of the last time we talked about flat to negative pricing increases. Speaker 300:33:25So as an organization, our prices increases are more than offsetting our price decreases, which has served us very well in our operating plan. Speaker 200:33:37Thank you. Operator00:33:42Our next question comes from Michael Rollins. Your line is open. Speaker 200:33:56Mike, you there? Operator00:34:03We may have lost Michael. Thank you. Our next question comes from David Barden, Bank of America. Your line is open. Speaker 600:34:19Hey, guys. Thanks so much for taking the questions. Appreciate it. I guess I have 2 if I could. The first one, maybe Charles or Keith, you kind of highlighted some of the vertical Strength that we're seeing across different markets. Speaker 600:34:34I think what we're trying to get our arms around is, as we kind of come out post pandemic, and You've got this kind of global vision of where people who are still mired in COVID Are doing one thing and maybe other economies are doing a new thing. Could you kind of elaborate a little bit on how we're watching The vertical demand evolves, what's going up, what's going down. And I guess the second question is, now that we've got the Singapore moratorium lifted, It did kind of put a spotlight on this progression towards kind of green power. Could you kind of comment on What if any other geographies you see are kind of concerned about this issue? And obviously, you've been a leader in this, but I'd be interested to see what that leadership might be getting you from a demand standpoint. Speaker 600:35:27Thanks. Speaker 200:35:29Sure. Yes, I'll take the first one and then I think Keith and maybe Cat can weigh in on the sustainability side as well, given that she's so close to that. I will tell you that we're seeing just tremendous strength across the board really in our verticals essentially because as I've The last few scripts, it seems like every time we say we have strength somewhere else. So it's not like we're saying And as it relates to and I think that's really driven by this Really strong movement towards digital transformation and people saying, hey, that is a critical source of competitive advantage or at least keeping up. And they're making investments accordingly. Speaker 200:36:17And how they think about their infrastructure, how they think about the mix between cloud based workloads and Private infrastructure, I think is really moving in ways that the wind is at our back. And I think the team has done A great job articulating our relevance to those buyers. And frankly, sales execution has been super strong. As it relates to COVID, I would tell you that we're not really it is obviously, as you've seen, we're having ups and downs and they're operationally challenging To be constantly dealing with sort of different mandates and mask mandates and when we have to be doing Sort of testing people and when we're in the facilities, when we get an exposure, dealing with that, etcetera. But the team has just done an amazing job on that. Speaker 200:37:10And I wouldn't say that I think we're seeing anywhere around the world that says, oh, they're kind of Stuck in a pause mode due to COVID. People seem to be powering through that and saying, We got to move forward regardless. And so I think we've seen really broad strength. Keith, Keith, you want to take the Singapore moratorium and sustainability questions? Speaker 100:37:34Yes, I'll kick that off. I'll tell you, David, we're very excited to see the moratorium listed over in Singapore. That is absolutely one of our strongest markets and it is a chance to highlight our focus on sustainability. You're seeing us really try to get in front of this. We're actually the 1st data center to announce the commitment to climate neutrality by 2,030. Speaker 100:37:54We rolled out science based targets. Now underlying that is a very deep green program, whether it's enhancing our renewable energy coverage, It includes looking at areas like energy efficiency, which I am certain our investors are going to love as well because there's returns around those projects, As well as just broadening our commitments in talking with customers, we've seen a huge uptick in customer outreach around this. We used to talk to about 50 customers a year. We're now up to a run rate of 1,000 customers reaching out asking for all sorts of data to help them really green their supply chain. So while it certainly is getting a lot of focus around the world, I do believe it's an opportunity. Speaker 100:38:35And there's markets whether The European markets are heavily focused on this and you're seeing us react in certain areas like in Germany. Germany is If you go to any of our new German sites, they all have green facades on front of them, as well as implementing new renewable energy coverage. So I think you'll see us continue to lean in heavily around this. Speaker 200:38:55One more comment interestingly is, it is a big deal for Talent as well. Talent wants To be working for companies that they believe are committed to sustainability and are doing the right things. And so And I think maybe that's particularly true in EMEA, but we're seeing that across the board. Speaker 600:39:18Awesome. All right. Thank you guys. Really appreciate it. Operator00:39:23Our next question comes from Michael Rollins Citi, your line is open. Speaker 700:39:28Thanks. Can you hear me now? Speaker 200:39:30We can. Speaker 700:39:33Great. Well, thanks for taking the 2, if I could. First, going back to the organic constant currency revenue guidance, I'm curious if you could just unpack some of the relative strength To the annual target, how much might be coming from some of the pricing actions versus the pickup in demand Services or if there's any other areas of strength that we should be mindful of. And then the second question is, For a number of quarters now, you've been discussing the evolution in the contribution to logos and bookings from the indirect Channel. And as you've had more experience with that channel, I'm curious, once the customers come in through that channel, how do they look relative to the that you get from your direct sales force. Speaker 700:40:21Are they adding services, expanding Or are there different characteristics of their revenue life cycle versus an indirect versus direct? Speaker 200:40:34Thanks, Mike. So on the organic constant currency guide, I would say it's a combination of factors. Obviously, There is a we did say we're in a rising sort of price environment, but that's not a major factor. There's actually not a ton of that also that is Associated with price increases on the power front. There's some in there, but that's not a major factor. Speaker 200:40:55We are seeing obviously digital services out pace the broader business, but it's a small portion, right? I mean the broader and traditional core business is so big That's really the driving force. And so I point mostly to just momentum in the core business. I think we just continue to Geographic expansion is going well. Our acquisition assets are outperforming without exception. Speaker 200:41:22GPX BX is doing great, Bell is doing great, XL is doing great. We're when we're building on that geographic advantage, we're Selling into the hybrid and multi cloud opportunity, and again both customer demand is strong and sales execution That's been excellent. So I think it's driven mostly by, I think, the core, but we really are but we're also excited about the trajectory and the momentum that we see And in digital services and how that's going to allow us to really respond to the evolving needs of the customer. In terms of channel, I would not say off the top of my head that a channel acquired customer is meaningfully different. They often come in with a very solution oriented mindset because typically it's we're working with a channel partner who's already selling to that Customer something that is done better at Equinix. Speaker 200:42:17And so they it's Yes. I would say that the mix of business through the channel is quite good. So it's really in that sweet spot. And but they don't I don't think they look meaningfully different. They all I think they grow at newly acquired customers You know writ large grow faster, but that's true of both channel as well as non channel customers. Speaker 200:42:42I don't think they differ dramatically, but those we're going to continue to really look at that. In fact, it's one of the priorities for the year ahead is Continuing to refine our segmentation and make sure that we're delivering the right services to the right segments through the right channels. And I think increased sort of The implication on that front is going to continue to pay dividends both on the revenue line and the margin line. Speaker 700:43:08Thanks. Operator00:43:10Our next question comes from Colby Synesael, Cowen and Company. Your line is open. Speaker 800:43:17Hi, this is Michael on for Colby. Two questions if I may. First, we've seen key interconnect assets in Africa, namely Teraco, I get acquired by one of your peers and there's also another large global data center company that's reportedly for sale. Given you still have that incremental Current leverage that you can deploy opportunistically. And just wanted to get your latest thoughts on how you're thinking about M and A? Speaker 800:43:43And then also, I'd add as a second question, you did 10% year over year Americas growth in the 4th Quarter, real acceleration there. Just wondering what you would expect to see from that business in 2022? Thank you. Speaker 200:44:01Sure. On the M and A front, I guess what I'd say is, we continue to believe M and A is A very appropriate and powerful tool in the kit. We've been very successful at it. We're going to continue Look at it as an opportunity to extend our reach, scale our business in key markets and bring in critical interconnection assets. And so yes, we're actively involved in those processes. Speaker 200:44:27We're going to maintain a level of discipline on that As we always do, and that means we're probably not going to win every deal. But that's it's really important, I think, particularly in markets with Multiples that you could argue are overheated in the private markets to maintain that discipline. And in terms of the leverage, yes, we do we have that Turn of leverage available, that's a lot of balance sheet flexibility. It's not burning a hole in our pocket. So we're happy to continue to have it And use it to drive the best returns in the business and that's our capital allocation strategy is always to put it Where we think we can generate the best returns. Speaker 200:45:07So but I do expect M and A will be a piece of that puzzle, and I'm sure you'll hear more from over the course of the year on that front. And as to the Americas, we don't guide on a regional basis, but What an incredible sort of momentum from that business over the last 5 or 6 quarters. And As we said, John Lennon team, our sales team and our ops team and really the entire team just really strong execution, super excited Take John's immense capabilities and apply them more broadly across the business. But I think you're going to see I do think that this digital transformation demand is following sort of a typical pattern, really strong demand in America and then Emerging in other areas across the world and we see that profile. And so but as you look at it this quarter, it's pretty 10% in the Americas, 11% in APAC, 9% in Europe. Speaker 200:46:06Pretty darn strong across the board and nice rebound in Europe. And we're beginning to lap some of the prior year increases that we saw there. And so I think that I think we're really seeing strong across the board, but I do expect continued momentum in the Americas. Speaker 400:46:25Great. Thanks for the color. Operator00:46:29Our next question comes from Nick Del Deo, MoffettNathanson. Your line is open. Speaker 400:46:35Hey, thanks for taking my question guys. 2 for you, maybe one for Charles and one for Keith. First, Yes. As alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you buying MainOne and digital buying Teraco. I'm sure you looked at all of them, maybe some that didn't even trade. Speaker 400:46:54Why was MainOne the best asset for Equinix? And is there a path for catching up with Teraco in South Africa over time? And then for Keith, on recurring CapEx, Speaker 500:47:04it seems like it's going Speaker 400:47:04to be at the very low end of your target range in 2022. It's been towards the lower end for a few years now. Should we expect that to tick up in coming years? Or is this kind of a new normal for recurring CapEx? Speaker 200:47:20So let me take Africa and then I'll hand it over to Keith on the recurring CapEx side. Look, we continue to believe Africa is a very attractive long term market. It is definitely more it is one that's going to evolve over many years. And we're active in that market as you know. And I wouldn't draw any specific comparisons between deals because I think they provide different value, but we're I will say we're very excited about MainOne, and we think it's a great Sort of cornerstone to build from. Speaker 200:47:54Teraco is a great asset. It's a great team and a good business. And we're going to and South Africa is an important market. And so that one didn't go our way and we're going to find we're going to continue to We're committed to competing in that market. South Africa has to be a part of any thoughtful African strategy. Speaker 200:48:14And there's a variety of other paths For us in that market and we're hard at work at them. And then Keith will take Speaker 300:48:23the recurring CapEx. And so it's just on the recurring CapEx. We are at we tend to we are at the sort of lower end of the range for fiscal year 2022. Quite a bit just timing, Nick. Recognizing that depending on what we have coming into the portfolio, It's going to dictate sort of the timing of CapEx. Speaker 300:48:42So that'd be one thing. And so you saw an elevated Q4 number at roughly 5% Recurring CapEx relative to revenue. It steps down, of course, in Q1. And then as we look through the year, It is roughly somewhere between 2% and 3%. But I think the biggest thing is really about timing and the number of new assets We're bringing into the portfolio. Speaker 300:49:04And as a result, when you think about the level of recurring CapEx that has to be made, the newer the The better the position you have on recurring CapEx. I would continue to model 2% to 3%. It feels like a reasonable approach. We'll continue to guide you accordingly. But in fairness to your long term model, I think that would be a fair point. Speaker 400:49:25Okay, great. Thank you, guys. Operator00:49:28Our next question comes from Jon Atkin, RBC Capital Markets. Your line is open. Speaker 200:49:35Yes, a couple of kind Speaker 400:49:36of EBITDA questions or related questions, and then one on Excale. So I was just interested in what are the churn expectations that are embedded in your 2022 guidance? And then noting the drop in Europe and EBITDA, what are some of the factors that drove that? And how can we think about the margin Developments by region and what are the special items to kind of keep be mindful of? Speaker 200:50:07Sure. Speaker 300:50:08Well, I think as it relates to churn, 1st and foremost, as I said in the prepared remarks, Churn for the business was 2.1% on average per quarter for 2021, 2% in the 4th quarter, which was great. In many ways, as Charles sort of alluded to in his comments on revenue, part of the reason the revenues were so strong is I'd like to say there's no faster way to revenue dollar than merely eliminating churn. And churn was at a very, very low level. As we look into 2022, there's not going to be a meaningful shift. We've guided you to sort of the range of 2% to 2.5%. Speaker 300:50:48That's indicative of what we think will happen. I think being the midpoint is probably a fair approach At this stage, I will continue to update you on it. But there's nothing meaningful that we would guide you differently at this point, John. As it relates to European EBITDA, there's a number of things that are going on in Q3. One example is It's just the timing of cost more specifically, but if you look at the implications of Q4 relative to Q3, there is German power rebate in the Q3. Speaker 300:51:23And so you lap that into the Q4 and then you've got higher seasonal costs In Q4, particularly with the winter months in Europe, you've got higher utility consumption. And so as a result, it has an impact on the margin when you look at it more And then there was just some outside services and increased hiring costs in the quarter. But there was nothing fundamentally different about Europe, what's going on? And overall, our belief is the trajectory to our target of 50% EBITDA margins. Yes, we're still well on that path, notwithstanding the comments that Charles made related to Asian power. Speaker 300:52:00That's going to be very much a transitory matter and we'll get the other side of that probably by the second half of the year. Speaker 400:52:09And then on Excale, just curious any update on your kind of CapEx and growth assumptions, pricing assumptions as well given The hyperscale demand that we've seen in the sector as well as the high level of investment seen by a number of competing platforms, just curious how you Few hyperscale demand pricing and then your level of participation in terms of CapEx? Speaker 200:52:34Yes. John, we've seen some increases in build costs, but we're striving to offset those, 1, by Continuing to be creative on the design front and continuing to sort of design try to get some of those out from a design perspective and then also on the sourcing front and Really working on the strategic sourcing side. So we're and I think by the way, I think we're seeing returns relatively stable. I think pricing is aggressive, but stable. I think that there is yes, there is Plenty of supply in the market, but there's even more demand. Speaker 200:53:12So I would say, I think supply demand is quite balanced in the ex scale realm right now. It's very chunky and very market specific and so it's a little bit different than our retail business. But as you've seen, our uptake And lease up has been super strong thus far. I think teams executed really well and we feel good about that. And so There's a lot of Megawatch coming down the road and a lot of customer demand. Speaker 200:53:39So it's an exciting time, I think, for Excale and we're pleased with the And it's important to just remind everybody that our exposure to the capital side is we have gearing of 10 to 1 on that CapEx, right? So because we're only 20% of it and there's always leverage involved there. And so it really Allows us to have a relatively modest overall exposure to that capital. And so we're putting the bulk of our capital to work on the retail side with really strong returns. Speaker 600:54:13Thank you. Operator00:54:15Our next question comes from Simon Flannery, Morgan Stanley. Your line is open. Speaker 900:54:21Great. Thank you very much. Good evening. I wonder if I could come back to the margin question. You talked a couple of times about margin trends improving in the second half 22, perhaps just help us with what gives you the visibility into that. Speaker 900:54:33Is that mostly Singapore? And how much clarity do you have there? And then You reiterated the 50% from by 2025. So given the move here on 2022, Do we see it going up fairly linearly from 'twenty three through to 'twenty five? Are there other puts and takes there as we think about that long term goal? Speaker 400:54:54Yes. Speaker 200:54:56Well, what I'd say is, yes, the big factor on the margin profile in 2022 is Singapore, as we said, 100 bps of that and you have 30 bps associated with the year over year compare on the benefits we got from the DPPA last year. And so that's the bulk of it. I mean, you can see in the bridge, there's 1.4 there, a margin in the step down, 1.3 of that is explained between those two factors. And so there's not the rest is a series of puts and takes with some expenses, some investments and really solid operating leverage in the business. And so I would say it is mitigating the Samport impact, it is operating driving operating leverage in the business, which is going to be A key focus for John and the team and continue to drive the scale in the business, and then a strong pricing environment. Speaker 200:55:50So I think we're continuing to see a solid pricing environment. We've demonstrated our ability to deliver distinctive value to our customers. And so as the prices grow I mean, as some of the in place goes, we're going to go ahead and offset that at some I agree on the pricing. So I think all those factors sort of will lead us to some solid progression there from a margin standpoint. And I wouldn't guide on where it goes from there and how linear it is or not. Speaker 200:56:20I think it's going to we're going to make judgments in the business as we always do about investments And how to maximize long term value creation. But I think what you heard loud and clear is the level of confidence on our part about the 50% target. And again, as we really dug in hard, which to some degree, the Samford dynamic was a real catalyst for us to do, It gave us, I think, an increased level of confidence about how operating leverage is materializing, and that gives us confidence to sort of reiterate that 50 Operator00:56:56Our next question comes from Sami Badri, Credit Suisse, your line is open. Speaker 400:57:02Hi, thank you very much for the question. I'm looking at your Same store growth and that definitely came in a little bit above people's expectations. And I'm trying to take some of your prior Comments where you talked about if there was no Singapore utility impact, you would probably grow or be able to come in adjusted EBITDA margins of 47% Change. And this is making me think about the long term picture and the road to 50%. Does same store have to grow 5% plus For you to get to 50% adjusted EBITDA margin long term by 2025? Speaker 400:57:39Or could you just maybe unpack that growth rate or that vector for us? Sure. Speaker 200:57:45Yes, I don't think the short answer is no. We said we typically guided at 3% to 5% on the Current revenue range, obviously really pleased with 5%, top end of that range for the stabilized assets. They move around a little bit depending on a variety of factors, but I think overall, we're continuing as business churns in those markets. We're replacing it with a strong sort of sweet spot business, Continuing to drive interconnection, continuing to expand fabric into more locations that drives more interconnection. And so I think that's going to drive good results. Speaker 200:58:18But I don't think that's I don't think it's incumbent on us to have that happen to get to the 50. I think there's a variety of sources of operating leverage in our business as we examine our ability to simplify, automate, digitize our business That I think will give us the trajectory that we need to get to that 50%. Speaker 400:58:41Got it. Thank you. Operator00:58:45Our last question comes from Ari Klein, BM Capital Markets. Your line is open. Speaker 400:58:51Thank you. Charles, you mentioned some of the challenges in hedging in Singapore. As you look at other markets where energy prices are elevated and Hedges roll off, are you hedging at these higher prices? And just you also mentioned passing on some of those costs. What has been the response on the customer side from that? Speaker 200:59:11Yes. Look, I mean, undoubtedly customers aren't excited about it, but it is the reality that and it's different. The reality is in deregulated markets, everybody is in the same boat. We're all exposed to the regulated rate. And if the rate rises more than a certain Our contracts allow us to pass that through and that's the baseline expectation of the customer. Speaker 200:59:34And so while they may not love it, that's just an expectation. I think in deregulated markets, it's a little more complex. We have these multiyear hedges, which essentially allow you to dampen volatility And adapt to in a rising rate environment more gradually. And so that's typically what we've seen. That's the way hedging works You're either you're kind of chasing it down or following it up because your hedges work either a plus or minus around a range. Speaker 201:00:05And So I think we're going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those And it's important to remember, we've been doing this for many, many years. And so it's not really a new dynamic. There are definitely some markets that were more volatile and more spiky, and then you have to make a judgment about if that if your Rate increase in your and the potential price increase that if the price increase reflects something that doesn't feel right from a long term customer relationship stand And we always take the long lens on our customer relationships, then we'll adjust accordingly. And that could mean that we have some pressure from that. But as you see in the bridges, we've been able to offset that with other operating leverage. Speaker 201:00:57And so we expect that to continue to be the case. This is an area where the scope and the scale of our business really helps us. And so yes, there are factors out there that we have to deal with and we deal with them carefully and with the customer in mind. And I think that as you can see, We feel confident we'll be able to manage through it. Speaker 401:01:21Got it. And are those price increases permanent? I guess if Pricing or energy costs normalized, can that turn into a tailwind from your standpoint? Speaker 201:01:33Yes, very good question. Here's what I would say. There are different types of price increases. We're actually implementing Baseline sort of new pricing for new deals because of a broader set of inflationary characteristics And a deep confidence in the value that we deliver to customers. Those I view as more structural. Speaker 201:01:57Yes. But then in other markets, there are more temporal pricing adjustments associated directly with the utility volatility. And I wouldn't expect those to be permanent. If it retrenches, then we would want to give that back to the customer. So we are but we've been hedged. Speaker 201:02:19Our hedging strategy allows us to really dampen that volatility out typically. We have definitely seen more volatility. So I wouldn't say we're going to just bank them regardless of what happens in to power prices in the future. But I do think that for all those but I do think there's a level of them that are more a level of those that are more structural in terms of New price points, new deals. Speaker 401:02:44Got it. Thank you. Speaker 301:02:46You bet. Speaker 101:02:48Thank you. That concludes our Q4 call. Thank you for joining us.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallEquinix Q4 202100:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Equinix Earnings HeadlinesEquinix (EQIX) Gains But Lags Market: What You Should KnowApril 25 at 6:12 AM | msn.comEquinix Inc. stock rises Tuesday, still underperforms marketApril 24 at 2:33 AM | marketwatch.com2025 could be "worse than the dot-com bust", says man who predicted 2008 banking crisisWhat's coming next to the U.S. market could be worse than anything we've ever seen before – worse than the dot-com bust, worse than the COVID crash, and even worse than the Great Depression. What's coming, he says, could soon crash the market by 50% or more – and keep it down for 10, 20, or even 30 years. April 26, 2025 | Stansberry Research (Ad)Equinix, Inc. (EQIX) Stock ForecastsApril 24 at 2:33 AM | finance.yahoo.comCitigroup Cuts Equinix (NASDAQ:EQIX) Price Target to $970.00April 20, 2025 | americanbankingnews.comEquinix price target lowered to $970 from $1,020 at CitiApril 17, 2025 | markets.businessinsider.comSee More Equinix Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Equinix? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Equinix and other key companies, straight to your email. Email Address About EquinixEquinix (NASDAQ:EQIX) (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. 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There are 10 speakers on the call. Operator00:00:00Good afternoon, and welcome to the Equinix 4th Quarter Earnings Conference Call. All lines will be on listen only until we open for questions. Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I'd like to now turn the call over to Katrina Rymill, Senior Vice President of Corporate Finance and Sustainability, you may begin. Speaker 100:00:25Good afternoon, and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we make 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 identified in today's press release And those identified in our filings with the SEC, including our most recent Form 10 ks filed on February 19, 2021, and 10 Q Filed on November 4, 2021. 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 the financial guidance during the quarter unless it is done through an explicit public disclosure. Speaker 100:01:14In addition, we will provide non GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures Today's press release on the Equinix IR page at www.equinix.com. We have made available on the IR page of our website A presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We'd also like to remind you that we post important information about Equinixna IR page from time to time and encourage you to check our website regularly for the most current available information. With us today are Charles Meyers, Equinix's CEO and President and Keith Taylor, Chief Financial Officer. Speaker 100:02:00Following our prepared remarks, we'll be taking questions from sell side analysts. In the interest of wrapping this call up in an hour, We'd like to ask these analysts to limit any follow on questions to just one. At this time, I'll turn the call over to Charles. Speaker 200:02:14Thanks, Katrina. Afternoon, everybody, and welcome to our Q4 earnings call. We had a great finish to the year with our best bookings performance ever driven by an exceptional demand backdrop for our business With continued strength across our platform, but more specifically in the Americas, low churn and continued momentum Speaker 300:02:31in our digital services portfolio. Speaker 200:02:34For the full year, we achieved over $6,600,000,000 of revenue, marking our 76th consecutive quarter of top line increases, An amazing 19 years of continuous revenue growth, while driving attractive AFFO per share to the bottom line. Amidst the dynamic and complex global landscape, we continue to deliver against our vision and our fiscal year results demonstrate both the increasing relevance of our platform And our uniquely differentiated value proposition. Businesses globally continue to prioritize digital transformation as a foundational source of competitive advantage And the secular drivers for our business have never been stronger as digital leaders demand infrastructure that's more distributed, more ecosystem powered, more flexible, more Sustainable and more interconnected than ever before. Increasingly, Equinix represents a critical point of nexus as customers implement hybrid and multi cloud As a clear architecture of choice. And as a global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands And capture the enormous opportunity ahead. Speaker 200:03:37As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong With solid demand pipeline, stable churn and a rising price trend, resulting in a revenue outlook for the year that is at or above the high end of our long term guidance range And AFFO per share outlook is still within our long term guidance range despite pressure at the gross margin line associated with power price volatility in Singapore. Absent these specific dynamics, our underlying business performance will be Speaker 300:04:07producing AFFO per share growth towards Speaker 200:04:09the high end of our Analyst Day guidance, Well ahead of our expectations. We have a robust global power hedging program that has been and we expect will continue to be highly effective at Smoothing utility price volatility over the years, providing predictability and value across markets for Equinix and our customers. We believe the current dislocation in Singapore is transitory with power prices showing signs of moderating in the second half of the year. Bottom line, the business is performing very well And we remain on track to meeting or exceeding our Analyst Day objectives for both top line revenue and AFFO per share growth. And as we see these temporary headwinds moderate And continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin to 50% by 2025. Speaker 200:04:58Turning to our results as depicted on Slide 3, revenues for the full year were $6,600,000,000 Up 8% year over year. Adjusted EBITDA was also up 8% year over year and AFFO per share grew 9% year over year. Interconnection revenues for the quarter grew 12% year over year with solid unit adds, reflecting strong momentum with Equinix Fabric As expanding use cases drive connections to more locations and more counterparties, these growth rates are all on a normalized and constant currency basis. Our global reach remains as important as ever. IEC predicts that by 2025, more than 50% of enterprise data will be generated at the edge And customers continue to see Equinix as the best manifestation of the digital edge. Speaker 200:05:43This competitive differentiation continues to drive our business With revenues from multi region customers increasing 1% quarter over quarter to an impressive 75%. In December, we announced our long awaited entry into Africa with our intended acquisition of MainOne, a leading West African data center and connectivity solution provider With the presence in Nigeria, Ghana and the Ivory Coast, set to close in early Q2. This acquisition will mark 1st step in Equinix's long term strategy to become one of Africa's leading digital infrastructure providers and will position us well in the continent's largest economy. To fuel our ongoing global interconnection leadership, we're also targeting strategic Internet traffic flows by supporting and winning subsea cables such as ELLA Link, The first ever subsea cable between Europe and Latin America, which recently went into operation with POPs in our South Hollow IV, Lisbon 1 and Midyear II IVXs. And by entering new markets like our recently completed Genoa Italy IBX and our newly announced IBX in Salalah, Oman. Speaker 200:06:46Our data center services portfolio remains the bedrock of platform Equinix. And we're excited about the recent appointment of John Lin The position of EBP and General Manager for Data Center Services. John has delivered extraordinary results as the President of our Americas business And it's a great choice to implement our strategy and extend our global market leadership and interconnected colocation. To that end, we continue to expand on our global footprint, 41 major projects underway across 28 metros in 19 countries, representing over 20,000 cabinets of retail And over 80 megawatts of ex scale capacity. We remain focused on simplifying, automating and digitizing our services, Allowing us to scale our business and enhance operating leverage and we're already seeing the results of these efforts. Speaker 200:07:33For example, We recently launched our new Secure Cab Xpress product, leveraging pre deployed capacity to dramatically reduce cycle times And enable online quoting and ordering for our most commonly requested configurations. We expect to roll this new service out to customers in the coming quarters, Driving increased customer responsiveness while simultaneously enhancing margin. Our global interconnection franchise continues to perform well And we now have over 419,000 interconnections on our industry leading platform. In Q4, we added an incremental 7,500 organic interconnections As enterprises drive growth and further enhance our ecosystem density. Internet Exchange saw peak traffic up 6% quarter over quarter and 27% year Over year, with peak traffic in APAC surpassing 10 terabits per second for the first time as service providers increasingly look to IX To improve Internet traffic delivery. Speaker 200:08:30Turning to digital infrastructure services, cloud computing has permanently reshaped customer expectations for speed and simplicity. Customers want to deploy infrastructure where they want it, when they want it. Seamlessly integrating cloud based workloads and private infrastructure And enabling agility and performance between the 2. As a result, customers are embracing a broader set of our services, Combining fabric, metal and network edge to build virtual points presence and our planned expansions will fully enable this capability across 30 markets by the end of 2022. For the quarter, Equinix Fabric saw excellent growth, eclipsing $150,000,000 in revenue run rate with a third of our customers now using fabric For a variety of use cases across a broad set of destinations. Speaker 200:09:18Our Equinix Metal business delivered strong results With a great mix of wins and new logos across verticals and a healthy backlog. And Network Edge saw continued traction with growth from new and existing customers As they use the service to implement WAN optimization and cloud to cloud routing. Shifting to Excale, in January, we announced plans to Standex Gale into South Korea with an agreement to establish a $525,000,000 joint venture with GIC to develop 2 data centers in Seoul. Total investment in our various hyperscale joint ventures when closed and fully built out is now expected to be more than $8,000,000,000 across 36 facilities globally, With more than 7 20 megawatts of power capacity. We currently have 9 ex scale builds under development and during the quarter We fully leased the first phase of our Frankfort 11 asset and the first and second phases of our Sao Paulo 5 asset representing approximately 20 megawatts of capacity. Speaker 200:10:14Total Xscale Leasing is now over 130 Megawatts and our initial JV in EMEA is over 80% leased. Now let me cover some of the highlights from our verticals. Our network vertical had solid bookings quarter with healthy new logo activity led by the Americas As companies expand and optimize digital capabilities to support both the delivery and consumption of data at the edge. New wins and expansions included a Fortune 200 Telecom Company deploying infrastructure to support the U. S. Speaker 200:10:45First cloud native open RAN based 5 gs network. Inligo Networks, an Australian cable systems operator deploying digital infrastructure to support a new subsea cable Across Southeast Asia, Australia and the U. S. And African local telco deploying a network hub in Lisbon to improve pairing and performance. Our enterprise vertical saw another quarter of record bookings as IDC predicts almost half of the global economy Will be based on or influenced by digital in 2022, fueling strong demand for hybrid infrastructure. Speaker 200:11:18Q4 had particular strength FinTech, Industrial Services and Energy subsegments with wins and expansions including NASDAQ, a Fortune 500 Technology Company Scaling its cloud enabled infrastructure to deliver ultra low latency edge compute capabilities from our NY11 data center in Carteret. Avaya, a cloud communications and work stream collaboration company implementing an edge data center strategy on platform Equinix to Streamline product connectivity for its customers and ADT, U. S. Leading smart home security provider in breaking the cloud with an infrastructure modernization effort spanning multiple geographies. Our Cloud and IT Services vertical also had solid bookings this quarter led by the Software and Infrastructure sub segments With good momentum in EMEA and APAC, expansions included Zscaler, a leading Global 2,000 secondurity cloud provider, Upgrading capacity for sustainable enterprise cloud transformations and growing network traffic at the edge. Speaker 200:12:17Wizz Technologies, a Singaporean full suite IT service provider deploying on Equinix metal and upgrading fabric services to support quick and seamless business expansion. And Oracle, a top 5 mobile software provider deploying FastConnect cloud on ramps to support new regions in Singapore, Milan and Stockholm, Bringing their total number of on ramps available at Equinix to 24, more than any of their other partners. Our content digital media vertical had strong book led by the Publishing and Digital Media sub segments and record channel activity. Expansions included Cloudflare, the U. S.-based global web infrastructure and security company, Upgrading and expanding their footprint in over 40 markets. Speaker 200:13:00Index Exchange, a global ad tech marketplace, Expanding compute nodes in APAC to manage traffic growth and a top 3 global credit agency deploying regional network and cloud hubs in APAC To support its operations. Speaker 400:13:14Our Speaker 200:13:14channel program delivered a record quarter to close the year, accounting for 40% of bookings and nearly 60% of new logos. And we have line of sight for channel to grow to 50% of our bookings in the coming years as we enhance our systems and processes And leverage our diverse set of partners to scale our reach. Wins were across a wide range of industry verticals and used cases with continued strength from strategic partners Like Microsoft, Dell, Cisco, Google and BT, including a significant win with Wipro and AT and T helping a utility company Modernize its IP infrastructure in Europe and the U. S. So now, it will be time to call over to Keith and cover the results for the quarter. Speaker 300:13:55Thanks, Charles. Good afternoon to everyone. I'll start my prepared remarks by saying our business is performing exceedingly well, Frankly, better than our expectations for both the quarter year, and we're bringing our momentum into 2022. We had a great end to the year, delivering record gross and net bookings with very strong channel activity, while recording our highest ever recurring revenue step up in the quarter. For the year, without any major acquisitions, revenues were up over $600,000,000 We closed over 17,500 deals in 2021, highlighting the tremendous scale and reach of our business The velocity of our go to market engine. Speaker 300:14:36The Americas region continues to pick up steam growing 10% over the prior year, effectively double the rate of growth from last year, Benefiting from strong leadership and a distributed portfolio of highly interconnected IBX assets resulting in record bookings and lower churn. For the company, our churn settled at the lower end of our guided range of 2% to 2.5% per quarter for an average of 2.1% per quarter for the year, Our lowest level since 2016, which is highly reflective of our strategy to put the right customer with the right application into the right IVX. Quite simply, the decisions we're making are strengthening and extending our leadership position as the world's digital infrastructure company. Now as previously discussed and perhaps top of mind for you, there are a number of macroeconomic factors that we continue to proactively manage, Such as supply chain, power costs, interest rates and inflation. As it relates to power costs, we're seeing Approximately 130 basis points of in year margin pressure due to the temporarily inflated power rates in Singapore And the lapping of the favorable BPPA settlements from Texas last February. Speaker 300:15:50For 2022, we're predominantly hedged to meet our global You can layer in additional hedges for the remaining 2022 exposure and to meet the demand for future periods as we navigate past this unusually volatile period. As Charles noted, we expect the market dislocation in Singapore to be transitory, largely given that current prices are Typically higher than any other markets that we operate in and the spot market rates appear to be trending down, although they do remain volatile. As reflected in our guidance, we expect second half margins to improve over the first half and we remain on our path to deliver against our Analyst Day adjusted EBITDA And AFFO margin expectations. As it relates to the rising interest rate environment, our balance sheet is very well positioned. We have minimal near term exposure to rising interest rates with 95% of our debt fixed across the weighted average maturity period of over 9 years. Speaker 300:16:48Despite the recent increase in interest rate, the cost of borrow remains at historically low levels, while we enjoy returns substantially higher than Our multiples of our cost to borrow and WACC. Our financial strength continues to feel significant and our balance sheet Fueled by our strong cash generation capabilities has great flexibility. Lastly, with regards to supply chain The inflationary pressures in the marketplace, we've invested heavily in a sophisticated and forward leaning procurement and strategic sourcing organization, Allowing us to execute against a robust development pipeline across our platform, while continuing to deliver against our return expectations. This is not to say there isn't congestion in the supply chain, but we feel very well placed with our partners And suppliers resulting in limited delays against our expectations. To highlight that point, in the Q4 alone, we added 17 new projects to our IBX and XScale build program across 14 separate markets, while we completed 7 projects across 6 markets. Speaker 300:17:56Now let me cover the highlights for the quarter. Note that all growth rates in this section are on a normalized and constant currency basis. As depicted on Slide 4, global Q4 revenues were $1,706,000,000 up 10% over the same quarter last And above the top end of our guidance range due to strong business performance led by the Americas. Consistent with our expectation, Non recurring revenue stepped down to 6% of total revenues in the quarter due to timing of large customer installations. Interconnection revenues were 19% of recurring revenues with strong growth across all three regions, reflecting the continued benefit of our global platform And diversified product portfolio. Speaker 300:18:37Q4 revenues net of our FX hedges included a $5,000,000 headwind when compared to our prior guidance rates. Global Q4 adjusted EBITDA was $7.88 or 46 percent of revenues, Up 11% over the same quarter last year and above the top end of our guidance range due to strong operating performance and timing of spend. Q4 adjusted EBITDA, net of our FX hedges included a $3,000,000 headwind when compared to our prior guidance rates and $5,000,000 of integration costs. Global Q4 AFFO was $564,000,000 in line with our expectations while absorbing the anticipated And seasonally higher recurring CapEx investments similar to prior years. Q4 global MR churn was 2% Speaker 400:19:30At the bottom end of our targeted Speaker 300:19:302% to 2.5% range. Turning to our regional highlights, whose full results were covered on slides 5 through 7. ABAC and the Americas were the fastest MRR growing regions on a year over year normalized basis at 11% and 10%, respectively, Followed by the EMEA region, which stepped back up to 9% year over year growth as expected. The Americas region had another outstanding quarter delivering record With robust channel activity, strong net positive pricing actions and lower churn. The Americas momentum is broad based with 24 of our 27 Metros increasing gross bookings year over year led by our Boston, Denver, Mexico City, Los Angeles and Toronto markets. Speaker 300:20:11The former Bell Canada assets continue to perform better than expected, in part due to increasing carrier and cloud deployments in our key Canadian markets. Our EMEA region had a solid quarter with strong retail bookings led by our U. K, Dutch and German businesses. Interestingly, we're seeing growing customer interest in this region given our sustainability efforts, including the recently signed DPPA with a wind farm developer in Finland To cover over 30 megawatts of capacity. And finally, the Asia Pacific region had a solid quarter with strong pricing And new local activity. Speaker 300:20:48We're experiencing good momentum in India with the GPX assets performing well above plan. Although Singapore remains capacity constrained, we welcome the government's recent decision to lift the moratorium on new data center builds. Going forward, new construction will need to deliver strategic value and international connectivity for Singapore's digital economy, But it also needs to be at the forefront of sustainability. We feel extremely well positioned to deliver against the government's criteria. Now looking at our capital structure, please refer to Slide 8. Speaker 300:21:23At the year end, We had unrestricted cash of approximately $1,500,000,000 a step up from last quarter due to strong operating cash flow Approximately $400,000,000 of ATM funding, offset by our investments and the dividend payment. In early January, we renegotiated our line of credit, Providing us access to $4,000,000,000 of additional liquidity, while also increasing our financial flexibility under our new revised covenant package. Looking forward, we'll continue to take a balanced approach to fund yard growth consistent with our investment grade rating, while staying focused on creating long term value for our shareholders. Turning to Slide 9 for the quarter. Capital expenditures were approximately 817,000,000 recurring CapEx of $86,000,000 a meaningful increase over the prior quarter as expected. Speaker 300:22:13We opened 7 major projects Since our last call, including new IVXs in general, Munich and Perth and a new ex scale asset in Osaka. We also purchased land for development in Dublin and Istanbul. Revenues from owned assets represent 59% of our recurring revenues. Our capital investments delivered strong returns as shown on Slide 10. Our now 158 stabilized assets increased revenues by 5% year over year on a constant currency basis, the top end of our growth range as expected due to strong Americas growth. Speaker 300:22:50These stabilized assets are collectively 86% utilized and generate a 27% cash on cash return on the growth PPE invested. And please refer to Slides 11 through 16 for our updated summary 2022 guidance and bridges. Do note, all growth rates are on a normalized and constant currency basis and our guidance does not include the anticipated results from the pending close of the MainOne acquisition or any potential future capital market activities. Starting with revenues. For 2022, we expect top line growth of 9% to 10%, above the top end of our long term range, reflecting the continued momentum in the business. Speaker 300:23:32MRR is expected to remain within our targeted range of 2% to 2.5% per quarter. We expect 2022 adjusted EBITDA margins of approximately 46 percent excluding integration costs, the result of strong operating leverage and efficiency initiatives in the business, temporarily muted by the higher utility expenses. We expect to incur $20,000,000 of integration costs in 2022 for our various acquisitions. 2022 AFFO is expected to grow 8% to 10% compared to the previous year and AFFO per share is expected to grow 7% to 8%. 2022 CapEx is expected to be approximately $2,300,000,000 to $2,600,000,000 including approximately $100,000,000 of on balance sheet ex which we expect to be reimbursed as we transfer these assets into the JVs and about $160,000,000 of recurring CapEx spend. Speaker 300:24:27And finally, we expect our 2022 cash dividends to increase to slightly greater than $1,100,000,000 a 10% increase over the prior year or an 8% increase on a per share basis. So I'll stop here and let me turn the call back to Charles. Speaker 200:24:41Thanks, Keith. In closing, we're immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us. Although the transitory effects from power pricing impact elements of our 2022 guide, our normalized results would indicate a business trajectory that puts us meaningfully ahead of our We continue to work hard to further mitigate the in year impacts of the Singapore power volatility and in parallel Intent to continue to strengthen our market leading position as the world's digital infrastructure company by scaling and transforming our data center business, while also accelerating our digital services business to deliver on the promise of physical infrastructure at software speed. And we intend to continue to advance a bold ESG agenda, addressing the urgency of climate change with a commitment to climate neutrality by 2,030 And fostering a culture in workplace where every person, every day can confidently say, I'm safe, I belong and I matter. Of note, we Speaker 300:25:38were thrilled to recently receive a Speaker 200:25:40perfect score from the Human Rights Campaign and be recognized as a best place to work for LGBTQ plus quality And are proud to be ranked number 1 in real estate in Just Capital's 2022 rankings of America's Most Just Companies. Over our nearly 25 year history, we have created and cultivated a foundational set of advantages, superior global reach Now spanning 66 metros in 27 countries, advantaged access to the world's most powerful digital ecosystems with more than 10,000 customers And over half the Fortune 500, the world's most comprehensive and advanced interconnection platform and a track record of service excellence It gives our customers the peace of mind they deserve. These advantages are strongly aligned to market trends and nearly impossible to duplicate, A dynamic that continues to fuel strong growth in a rapidly expanding addressable market that we are confident will translate to compelling long term value creation. As we strive to fulfill our purpose to be a platform where the world comes together, enabling the innovations that enrich our work, our life and our planet, We will continue to show up every day remaining in service to our stakeholders, to each other, to our customers, Operator00:27:02Our first question comes from Jordan Sadler, KeyBanc Capital Markets. Your line is open. Speaker 300:27:10Thank you and good afternoon. Speaker 500:27:13First, I'd like to just touch on maybe some of the macro factors that you identified, Keith, in your prepared remarks, first, just maybe on the margin impact Related to the power costs that you're seeing in Singapore, I think you said there was 130 basis points Impact year over year, but what specifically was the impact that you're seeing within the 46% margin Related to Singapore and then separately, can you maybe discuss how you might be dealing with any other exposures, For example, in Europe, and if you were able to push through price increases To customers there to offset some of the exposure you might have had? Speaker 200:28:08Sure. Hey, Jordan, it's Charles. Let me step back and give you some additional color on the power pricing And then Keith can add in both on that. We can sort of tag team discussion on The broader inflationary aspects of the business as well. There's aspects of the power dynamic that are quite complex, But the net of it all is pretty easy to summarize. Speaker 200:28:34So other than Singapore, which I'll talk about, we continue to be really well hedged around the world. And as our bridges show, You'll see there the impact of really the 130 bps, which I'll touch on here in a minute. Other than that, we're really seeing limited margin impact from that. In In markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, Which as we've talked about in the past, we have the contractual ability to pass through and offset in part also by strong operating leverage in the business, which we're very Trends in that market and other factors, we alongside our power advisers decided that we were going to defer unlocking in Singapore. And we were pressing 1, given the rates where the rates were set at that time and 2, given an ongoing negotiation Trying to get to a multiyear sort of hedged or locked position. Speaker 200:29:38Then the really the Fundamentals of the Singapore power market just dislocated, really driving an unprecedented level of volatility. And so counterparties were Really able to offer rate locks and that's exposed us temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So That's where the that exposure through the course of the year is what we're estimating at about 100 bps. Then there's an additional 30 bps On a year over year compare basis, there are an impact of favorable dynamics from our Texas VPPA last year. And so the combination of those factors account for about the 130 bps on margin. Speaker 200:30:24So again, absent that, you'd be talking about a margin guide that'd be 47% and change. And I think in the broader context, would really Reflect the tremendous health of the business. So that's where we are on the margin issue. Across The rest of Europe, yes, there's volatility. As I said, we would sort of manage that through increasing targeted price increases. Speaker 200:30:51In some cases, those price increases, we're going to phase them over a couple of years because we feel like they're just too Too big to roll through in one plug. But again, the pressure that we any pressure that we are seeing from that is being offset by nice Operating leverage in the business. Keith, maybe you can comment on broader inflationary sort of factors in Europe and elsewhere. Speaker 300:31:15Yes. Jordan, when it comes to the inflation aspect, I just said, we've invested heavily over the last couple of years in, as I said, a procurement The strategic sourcing team and so we're getting ahead of many of the inflationary issues. In some cases, we've lost substantial inventory that we're housing At the supplier, the partner's location and then we draw down on that over time. And so by locking in that commitment, we've been able to mitigate Some of the inflationary risks that others might be experiencing. Not to mention that we've got the supply available where in some cases others will not have the supply available. Speaker 300:31:51I think we've done a real good job locking it in. We're working on an extended basis over many years. We look forward with what our buying And that's another aspect of our again, our increased sophistication around what we're doing When and where and what we need when and where. And so the team is doing a good job of sourcing the larger material items for that. I was going to say though the other area that is probably a little bit more difficult is just the human capital side. Speaker 300:32:23And that's one of the greatest risks that you see all across the world and just sourcing humans not only to do the construction, but all the manufacturing. And so Getting ahead of all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing cycles. All that to say is, I think we're in a really good spot. We're seeing limited delays thus far. Certainly, prices I've gone up in different sets of circumstances. Speaker 300:32:55As Charles sort of alluded to on his prior comment, We're putting through appropriate price increases into the marketplace. And it will depend certainly on the market, but we're putting appropriate price increase Into the market accordingly. And one of the things you've heard us say and maybe I didn't just to repeat it. This quarter again, we had meaningful net pricing Positive pricing action. And I can't even think of the last time we talked about flat to negative pricing increases. Speaker 300:33:25So as an organization, our prices increases are more than offsetting our price decreases, which has served us very well in our operating plan. Speaker 200:33:37Thank you. Operator00:33:42Our next question comes from Michael Rollins. Your line is open. Speaker 200:33:56Mike, you there? Operator00:34:03We may have lost Michael. Thank you. Our next question comes from David Barden, Bank of America. Your line is open. Speaker 600:34:19Hey, guys. Thanks so much for taking the questions. Appreciate it. I guess I have 2 if I could. The first one, maybe Charles or Keith, you kind of highlighted some of the vertical Strength that we're seeing across different markets. Speaker 600:34:34I think what we're trying to get our arms around is, as we kind of come out post pandemic, and You've got this kind of global vision of where people who are still mired in COVID Are doing one thing and maybe other economies are doing a new thing. Could you kind of elaborate a little bit on how we're watching The vertical demand evolves, what's going up, what's going down. And I guess the second question is, now that we've got the Singapore moratorium lifted, It did kind of put a spotlight on this progression towards kind of green power. Could you kind of comment on What if any other geographies you see are kind of concerned about this issue? And obviously, you've been a leader in this, but I'd be interested to see what that leadership might be getting you from a demand standpoint. Speaker 600:35:27Thanks. Speaker 200:35:29Sure. Yes, I'll take the first one and then I think Keith and maybe Cat can weigh in on the sustainability side as well, given that she's so close to that. I will tell you that we're seeing just tremendous strength across the board really in our verticals essentially because as I've The last few scripts, it seems like every time we say we have strength somewhere else. So it's not like we're saying And as it relates to and I think that's really driven by this Really strong movement towards digital transformation and people saying, hey, that is a critical source of competitive advantage or at least keeping up. And they're making investments accordingly. Speaker 200:36:17And how they think about their infrastructure, how they think about the mix between cloud based workloads and Private infrastructure, I think is really moving in ways that the wind is at our back. And I think the team has done A great job articulating our relevance to those buyers. And frankly, sales execution has been super strong. As it relates to COVID, I would tell you that we're not really it is obviously, as you've seen, we're having ups and downs and they're operationally challenging To be constantly dealing with sort of different mandates and mask mandates and when we have to be doing Sort of testing people and when we're in the facilities, when we get an exposure, dealing with that, etcetera. But the team has just done an amazing job on that. Speaker 200:37:10And I wouldn't say that I think we're seeing anywhere around the world that says, oh, they're kind of Stuck in a pause mode due to COVID. People seem to be powering through that and saying, We got to move forward regardless. And so I think we've seen really broad strength. Keith, Keith, you want to take the Singapore moratorium and sustainability questions? Speaker 100:37:34Yes, I'll kick that off. I'll tell you, David, we're very excited to see the moratorium listed over in Singapore. That is absolutely one of our strongest markets and it is a chance to highlight our focus on sustainability. You're seeing us really try to get in front of this. We're actually the 1st data center to announce the commitment to climate neutrality by 2,030. Speaker 100:37:54We rolled out science based targets. Now underlying that is a very deep green program, whether it's enhancing our renewable energy coverage, It includes looking at areas like energy efficiency, which I am certain our investors are going to love as well because there's returns around those projects, As well as just broadening our commitments in talking with customers, we've seen a huge uptick in customer outreach around this. We used to talk to about 50 customers a year. We're now up to a run rate of 1,000 customers reaching out asking for all sorts of data to help them really green their supply chain. So while it certainly is getting a lot of focus around the world, I do believe it's an opportunity. Speaker 100:38:35And there's markets whether The European markets are heavily focused on this and you're seeing us react in certain areas like in Germany. Germany is If you go to any of our new German sites, they all have green facades on front of them, as well as implementing new renewable energy coverage. So I think you'll see us continue to lean in heavily around this. Speaker 200:38:55One more comment interestingly is, it is a big deal for Talent as well. Talent wants To be working for companies that they believe are committed to sustainability and are doing the right things. And so And I think maybe that's particularly true in EMEA, but we're seeing that across the board. Speaker 600:39:18Awesome. All right. Thank you guys. Really appreciate it. Operator00:39:23Our next question comes from Michael Rollins Citi, your line is open. Speaker 700:39:28Thanks. Can you hear me now? Speaker 200:39:30We can. Speaker 700:39:33Great. Well, thanks for taking the 2, if I could. First, going back to the organic constant currency revenue guidance, I'm curious if you could just unpack some of the relative strength To the annual target, how much might be coming from some of the pricing actions versus the pickup in demand Services or if there's any other areas of strength that we should be mindful of. And then the second question is, For a number of quarters now, you've been discussing the evolution in the contribution to logos and bookings from the indirect Channel. And as you've had more experience with that channel, I'm curious, once the customers come in through that channel, how do they look relative to the that you get from your direct sales force. Speaker 700:40:21Are they adding services, expanding Or are there different characteristics of their revenue life cycle versus an indirect versus direct? Speaker 200:40:34Thanks, Mike. So on the organic constant currency guide, I would say it's a combination of factors. Obviously, There is a we did say we're in a rising sort of price environment, but that's not a major factor. There's actually not a ton of that also that is Associated with price increases on the power front. There's some in there, but that's not a major factor. Speaker 200:40:55We are seeing obviously digital services out pace the broader business, but it's a small portion, right? I mean the broader and traditional core business is so big That's really the driving force. And so I point mostly to just momentum in the core business. I think we just continue to Geographic expansion is going well. Our acquisition assets are outperforming without exception. Speaker 200:41:22GPX BX is doing great, Bell is doing great, XL is doing great. We're when we're building on that geographic advantage, we're Selling into the hybrid and multi cloud opportunity, and again both customer demand is strong and sales execution That's been excellent. So I think it's driven mostly by, I think, the core, but we really are but we're also excited about the trajectory and the momentum that we see And in digital services and how that's going to allow us to really respond to the evolving needs of the customer. In terms of channel, I would not say off the top of my head that a channel acquired customer is meaningfully different. They often come in with a very solution oriented mindset because typically it's we're working with a channel partner who's already selling to that Customer something that is done better at Equinix. Speaker 200:42:17And so they it's Yes. I would say that the mix of business through the channel is quite good. So it's really in that sweet spot. And but they don't I don't think they look meaningfully different. They all I think they grow at newly acquired customers You know writ large grow faster, but that's true of both channel as well as non channel customers. Speaker 200:42:42I don't think they differ dramatically, but those we're going to continue to really look at that. In fact, it's one of the priorities for the year ahead is Continuing to refine our segmentation and make sure that we're delivering the right services to the right segments through the right channels. And I think increased sort of The implication on that front is going to continue to pay dividends both on the revenue line and the margin line. Speaker 700:43:08Thanks. Operator00:43:10Our next question comes from Colby Synesael, Cowen and Company. Your line is open. Speaker 800:43:17Hi, this is Michael on for Colby. Two questions if I may. First, we've seen key interconnect assets in Africa, namely Teraco, I get acquired by one of your peers and there's also another large global data center company that's reportedly for sale. Given you still have that incremental Current leverage that you can deploy opportunistically. And just wanted to get your latest thoughts on how you're thinking about M and A? Speaker 800:43:43And then also, I'd add as a second question, you did 10% year over year Americas growth in the 4th Quarter, real acceleration there. Just wondering what you would expect to see from that business in 2022? Thank you. Speaker 200:44:01Sure. On the M and A front, I guess what I'd say is, we continue to believe M and A is A very appropriate and powerful tool in the kit. We've been very successful at it. We're going to continue Look at it as an opportunity to extend our reach, scale our business in key markets and bring in critical interconnection assets. And so yes, we're actively involved in those processes. Speaker 200:44:27We're going to maintain a level of discipline on that As we always do, and that means we're probably not going to win every deal. But that's it's really important, I think, particularly in markets with Multiples that you could argue are overheated in the private markets to maintain that discipline. And in terms of the leverage, yes, we do we have that Turn of leverage available, that's a lot of balance sheet flexibility. It's not burning a hole in our pocket. So we're happy to continue to have it And use it to drive the best returns in the business and that's our capital allocation strategy is always to put it Where we think we can generate the best returns. Speaker 200:45:07So but I do expect M and A will be a piece of that puzzle, and I'm sure you'll hear more from over the course of the year on that front. And as to the Americas, we don't guide on a regional basis, but What an incredible sort of momentum from that business over the last 5 or 6 quarters. And As we said, John Lennon team, our sales team and our ops team and really the entire team just really strong execution, super excited Take John's immense capabilities and apply them more broadly across the business. But I think you're going to see I do think that this digital transformation demand is following sort of a typical pattern, really strong demand in America and then Emerging in other areas across the world and we see that profile. And so but as you look at it this quarter, it's pretty 10% in the Americas, 11% in APAC, 9% in Europe. Speaker 200:46:06Pretty darn strong across the board and nice rebound in Europe. And we're beginning to lap some of the prior year increases that we saw there. And so I think that I think we're really seeing strong across the board, but I do expect continued momentum in the Americas. Speaker 400:46:25Great. Thanks for the color. Operator00:46:29Our next question comes from Nick Del Deo, MoffettNathanson. Your line is open. Speaker 400:46:35Hey, thanks for taking my question guys. 2 for you, maybe one for Charles and one for Keith. First, Yes. As alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you buying MainOne and digital buying Teraco. I'm sure you looked at all of them, maybe some that didn't even trade. Speaker 400:46:54Why was MainOne the best asset for Equinix? And is there a path for catching up with Teraco in South Africa over time? And then for Keith, on recurring CapEx, Speaker 500:47:04it seems like it's going Speaker 400:47:04to be at the very low end of your target range in 2022. It's been towards the lower end for a few years now. Should we expect that to tick up in coming years? Or is this kind of a new normal for recurring CapEx? Speaker 200:47:20So let me take Africa and then I'll hand it over to Keith on the recurring CapEx side. Look, we continue to believe Africa is a very attractive long term market. It is definitely more it is one that's going to evolve over many years. And we're active in that market as you know. And I wouldn't draw any specific comparisons between deals because I think they provide different value, but we're I will say we're very excited about MainOne, and we think it's a great Sort of cornerstone to build from. Speaker 200:47:54Teraco is a great asset. It's a great team and a good business. And we're going to and South Africa is an important market. And so that one didn't go our way and we're going to find we're going to continue to We're committed to competing in that market. South Africa has to be a part of any thoughtful African strategy. Speaker 200:48:14And there's a variety of other paths For us in that market and we're hard at work at them. And then Keith will take Speaker 300:48:23the recurring CapEx. And so it's just on the recurring CapEx. We are at we tend to we are at the sort of lower end of the range for fiscal year 2022. Quite a bit just timing, Nick. Recognizing that depending on what we have coming into the portfolio, It's going to dictate sort of the timing of CapEx. Speaker 300:48:42So that'd be one thing. And so you saw an elevated Q4 number at roughly 5% Recurring CapEx relative to revenue. It steps down, of course, in Q1. And then as we look through the year, It is roughly somewhere between 2% and 3%. But I think the biggest thing is really about timing and the number of new assets We're bringing into the portfolio. Speaker 300:49:04And as a result, when you think about the level of recurring CapEx that has to be made, the newer the The better the position you have on recurring CapEx. I would continue to model 2% to 3%. It feels like a reasonable approach. We'll continue to guide you accordingly. But in fairness to your long term model, I think that would be a fair point. Speaker 400:49:25Okay, great. Thank you, guys. Operator00:49:28Our next question comes from Jon Atkin, RBC Capital Markets. Your line is open. Speaker 200:49:35Yes, a couple of kind Speaker 400:49:36of EBITDA questions or related questions, and then one on Excale. So I was just interested in what are the churn expectations that are embedded in your 2022 guidance? And then noting the drop in Europe and EBITDA, what are some of the factors that drove that? And how can we think about the margin Developments by region and what are the special items to kind of keep be mindful of? Speaker 200:50:07Sure. Speaker 300:50:08Well, I think as it relates to churn, 1st and foremost, as I said in the prepared remarks, Churn for the business was 2.1% on average per quarter for 2021, 2% in the 4th quarter, which was great. In many ways, as Charles sort of alluded to in his comments on revenue, part of the reason the revenues were so strong is I'd like to say there's no faster way to revenue dollar than merely eliminating churn. And churn was at a very, very low level. As we look into 2022, there's not going to be a meaningful shift. We've guided you to sort of the range of 2% to 2.5%. Speaker 300:50:48That's indicative of what we think will happen. I think being the midpoint is probably a fair approach At this stage, I will continue to update you on it. But there's nothing meaningful that we would guide you differently at this point, John. As it relates to European EBITDA, there's a number of things that are going on in Q3. One example is It's just the timing of cost more specifically, but if you look at the implications of Q4 relative to Q3, there is German power rebate in the Q3. Speaker 300:51:23And so you lap that into the Q4 and then you've got higher seasonal costs In Q4, particularly with the winter months in Europe, you've got higher utility consumption. And so as a result, it has an impact on the margin when you look at it more And then there was just some outside services and increased hiring costs in the quarter. But there was nothing fundamentally different about Europe, what's going on? And overall, our belief is the trajectory to our target of 50% EBITDA margins. Yes, we're still well on that path, notwithstanding the comments that Charles made related to Asian power. Speaker 300:52:00That's going to be very much a transitory matter and we'll get the other side of that probably by the second half of the year. Speaker 400:52:09And then on Excale, just curious any update on your kind of CapEx and growth assumptions, pricing assumptions as well given The hyperscale demand that we've seen in the sector as well as the high level of investment seen by a number of competing platforms, just curious how you Few hyperscale demand pricing and then your level of participation in terms of CapEx? Speaker 200:52:34Yes. John, we've seen some increases in build costs, but we're striving to offset those, 1, by Continuing to be creative on the design front and continuing to sort of design try to get some of those out from a design perspective and then also on the sourcing front and Really working on the strategic sourcing side. So we're and I think by the way, I think we're seeing returns relatively stable. I think pricing is aggressive, but stable. I think that there is yes, there is Plenty of supply in the market, but there's even more demand. Speaker 200:53:12So I would say, I think supply demand is quite balanced in the ex scale realm right now. It's very chunky and very market specific and so it's a little bit different than our retail business. But as you've seen, our uptake And lease up has been super strong thus far. I think teams executed really well and we feel good about that. And so There's a lot of Megawatch coming down the road and a lot of customer demand. Speaker 200:53:39So it's an exciting time, I think, for Excale and we're pleased with the And it's important to just remind everybody that our exposure to the capital side is we have gearing of 10 to 1 on that CapEx, right? So because we're only 20% of it and there's always leverage involved there. And so it really Allows us to have a relatively modest overall exposure to that capital. And so we're putting the bulk of our capital to work on the retail side with really strong returns. Speaker 600:54:13Thank you. Operator00:54:15Our next question comes from Simon Flannery, Morgan Stanley. Your line is open. Speaker 900:54:21Great. Thank you very much. Good evening. I wonder if I could come back to the margin question. You talked a couple of times about margin trends improving in the second half 22, perhaps just help us with what gives you the visibility into that. Speaker 900:54:33Is that mostly Singapore? And how much clarity do you have there? And then You reiterated the 50% from by 2025. So given the move here on 2022, Do we see it going up fairly linearly from 'twenty three through to 'twenty five? Are there other puts and takes there as we think about that long term goal? Speaker 400:54:54Yes. Speaker 200:54:56Well, what I'd say is, yes, the big factor on the margin profile in 2022 is Singapore, as we said, 100 bps of that and you have 30 bps associated with the year over year compare on the benefits we got from the DPPA last year. And so that's the bulk of it. I mean, you can see in the bridge, there's 1.4 there, a margin in the step down, 1.3 of that is explained between those two factors. And so there's not the rest is a series of puts and takes with some expenses, some investments and really solid operating leverage in the business. And so I would say it is mitigating the Samport impact, it is operating driving operating leverage in the business, which is going to be A key focus for John and the team and continue to drive the scale in the business, and then a strong pricing environment. Speaker 200:55:50So I think we're continuing to see a solid pricing environment. We've demonstrated our ability to deliver distinctive value to our customers. And so as the prices grow I mean, as some of the in place goes, we're going to go ahead and offset that at some I agree on the pricing. So I think all those factors sort of will lead us to some solid progression there from a margin standpoint. And I wouldn't guide on where it goes from there and how linear it is or not. Speaker 200:56:20I think it's going to we're going to make judgments in the business as we always do about investments And how to maximize long term value creation. But I think what you heard loud and clear is the level of confidence on our part about the 50% target. And again, as we really dug in hard, which to some degree, the Samford dynamic was a real catalyst for us to do, It gave us, I think, an increased level of confidence about how operating leverage is materializing, and that gives us confidence to sort of reiterate that 50 Operator00:56:56Our next question comes from Sami Badri, Credit Suisse, your line is open. Speaker 400:57:02Hi, thank you very much for the question. I'm looking at your Same store growth and that definitely came in a little bit above people's expectations. And I'm trying to take some of your prior Comments where you talked about if there was no Singapore utility impact, you would probably grow or be able to come in adjusted EBITDA margins of 47% Change. And this is making me think about the long term picture and the road to 50%. Does same store have to grow 5% plus For you to get to 50% adjusted EBITDA margin long term by 2025? Speaker 400:57:39Or could you just maybe unpack that growth rate or that vector for us? Sure. Speaker 200:57:45Yes, I don't think the short answer is no. We said we typically guided at 3% to 5% on the Current revenue range, obviously really pleased with 5%, top end of that range for the stabilized assets. They move around a little bit depending on a variety of factors, but I think overall, we're continuing as business churns in those markets. We're replacing it with a strong sort of sweet spot business, Continuing to drive interconnection, continuing to expand fabric into more locations that drives more interconnection. And so I think that's going to drive good results. Speaker 200:58:18But I don't think that's I don't think it's incumbent on us to have that happen to get to the 50. I think there's a variety of sources of operating leverage in our business as we examine our ability to simplify, automate, digitize our business That I think will give us the trajectory that we need to get to that 50%. Speaker 400:58:41Got it. Thank you. Operator00:58:45Our last question comes from Ari Klein, BM Capital Markets. Your line is open. Speaker 400:58:51Thank you. Charles, you mentioned some of the challenges in hedging in Singapore. As you look at other markets where energy prices are elevated and Hedges roll off, are you hedging at these higher prices? And just you also mentioned passing on some of those costs. What has been the response on the customer side from that? Speaker 200:59:11Yes. Look, I mean, undoubtedly customers aren't excited about it, but it is the reality that and it's different. The reality is in deregulated markets, everybody is in the same boat. We're all exposed to the regulated rate. And if the rate rises more than a certain Our contracts allow us to pass that through and that's the baseline expectation of the customer. Speaker 200:59:34And so while they may not love it, that's just an expectation. I think in deregulated markets, it's a little more complex. We have these multiyear hedges, which essentially allow you to dampen volatility And adapt to in a rising rate environment more gradually. And so that's typically what we've seen. That's the way hedging works You're either you're kind of chasing it down or following it up because your hedges work either a plus or minus around a range. Speaker 201:00:05And So I think we're going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those And it's important to remember, we've been doing this for many, many years. And so it's not really a new dynamic. There are definitely some markets that were more volatile and more spiky, and then you have to make a judgment about if that if your Rate increase in your and the potential price increase that if the price increase reflects something that doesn't feel right from a long term customer relationship stand And we always take the long lens on our customer relationships, then we'll adjust accordingly. And that could mean that we have some pressure from that. But as you see in the bridges, we've been able to offset that with other operating leverage. Speaker 201:00:57And so we expect that to continue to be the case. This is an area where the scope and the scale of our business really helps us. And so yes, there are factors out there that we have to deal with and we deal with them carefully and with the customer in mind. And I think that as you can see, We feel confident we'll be able to manage through it. Speaker 401:01:21Got it. And are those price increases permanent? I guess if Pricing or energy costs normalized, can that turn into a tailwind from your standpoint? Speaker 201:01:33Yes, very good question. Here's what I would say. There are different types of price increases. We're actually implementing Baseline sort of new pricing for new deals because of a broader set of inflationary characteristics And a deep confidence in the value that we deliver to customers. Those I view as more structural. Speaker 201:01:57Yes. But then in other markets, there are more temporal pricing adjustments associated directly with the utility volatility. And I wouldn't expect those to be permanent. If it retrenches, then we would want to give that back to the customer. So we are but we've been hedged. Speaker 201:02:19Our hedging strategy allows us to really dampen that volatility out typically. We have definitely seen more volatility. So I wouldn't say we're going to just bank them regardless of what happens in to power prices in the future. But I do think that for all those but I do think there's a level of them that are more a level of those that are more structural in terms of New price points, new deals. Speaker 401:02:44Got it. Thank you. Speaker 301:02:46You bet. Speaker 101:02:48Thank you. That concludes our Q4 call. Thank you for joining us.Read morePowered by