Equinix Reports Fourth Quarter and Year End 2007 Results-- Increased 2007 annual revenues to $419.4 million, a 46% increase over the previous year -- Increased 2007 annual EBITDA to $155.4 million, a 52% increase over the previous year -- Raised 2008 annual revenue guidance to $650.0 to $665.0 million and EBITDA guidance to $251.0 million to $257.0 million
FOSTER CITY, Calif., Feb 13, 2008 (BUSINESS WIRE) -- Equinix, Inc. (Nasdaq:EQIX), the leading provider of
network-neutral data centers and Internet exchange services, today
reported quarterly and year-end results for the period ended December
31, 2007.
Revenues were $138.7 million for the fourth quarter, a 34%
increase over the previous quarter, and $419.4 million for the
year-ended December 31, 2007, a 46% increase over 2006 revenues.
Recurring revenues, consisting primarily of colocation,
interconnection and managed services, were $131.6 million for the
fourth quarter, a 33% increase over the previous quarter, and $399.6
million for the year-ended December 31, 2007, a 46% increase over
2006. Non-recurring revenues were $7.1 million in the quarter and
$19.8 million for the year-ended December 31, 2007.
Cost of revenues were $92.5 million for the fourth quarter and
$263.7 million for the year-ended December 31, 2007, a 40% increase
over cost of revenues for 2006. Cost of revenues, excluding
depreciation, amortization, accretion and stock-based compensation of
$33.0 million for the fourth quarter and $98.3 million for the year,
were $59.5 million for the fourth quarter, a 48% increase over the
previous quarter, and $165.4 million for the year-ended 2007, a 48%
increase over 2006. Cash gross margins, defined as gross profit less
depreciation, amortization, accretion and stock-based compensation,
divided by revenues, for the quarter were 57%, down from 61% the
previous quarter and 63% the same quarter last year. The reduction in
cash gross margins reflects the first full quarter's results from the
company's operations in Europe. Cash gross margins were 61% for the
full year of 2007, the same as in the prior year.
Selling, general and administrative expenses were $46.8 million
for the fourth quarter and $146.5 million for the year-ended December
31, 2007. Selling, general and administrative expenses, excluding
depreciation, amortization and stock-based compensation of $14.6
million for the fourth quarter and $47.9 million for the year, were
$32.2 million for the fourth quarter, a 40% increase over the previous
quarter, and $98.6 million for 2007, a 34% increase over 2006.
Net loss for the fourth quarter was $6.1 million, including
stock-based compensation expense of $11.7 million. This represents a
basic and diluted net loss per share of $0.17 based on a weighted
average share count of 36.0 million. Net loss for the year-ended
December 31, 2007 was $5.2 million, including stock-based compensation
expense of $42.7 million, or a basic and diluted net loss per share of
$0.16 based on a weighted average share count of 32.1 million.
EBITDA, defined as income or loss from operations before
depreciation, amortization, accretion, stock-based compensation
expense, restructuring charges and any gains or losses from asset
sales, for the fourth quarter was $47.1 million, an increase of 16%
from the previous quarter, and $155.4 million for the year-ended 2007,
up 52% from 2006.
"Equinix delivered exceptional results in 2007, creating a strong
platform for growth in 2008," said Steve Smith, CEO of
Equinix. "Although we continue to closely monitor our leading
indicators, we continue to see no let up in demand. Strong day-to-day
execution, a fully funded expansion plan, and a continued focus on
customer requirements will accelerate our market leadership in 2008."
Capital expenditures in the fourth quarter were $121.0 million, of
which $17.9 million was attributed to ongoing capital expenditures and
$103.1 million was attributed to expansion capital expenditures.
Capital expenditures for the year-ended December 31, 2007, excluding
purchases of real estate and the IXEurope acquisition, were $416.8
million, of which $43.6 million was attributed to ongoing capital
expenditures and $373.2 million was attributed to expansion capital
expenditures. In addition, the Company invested $120.5 million to
acquire properties in the Los Angeles and Silicon Valley markets in
2007.
The Company generated cash from operating activities of $14.0
million for the fourth quarter as compared to $48.7 million in the
previous quarter, as the Company settled outstanding obligations
related to the IXEurope acquisition. Cash generated from operating
activities for the year-ended December 31, 2007 was $121.0 million as
compared to $75.9 million in the previous year. Cash used in investing
activities was $103.4 million in the fourth quarter as compared to
$718.2 million in the previous quarter. Cash used in investing
activities for the year was $1.0 billion as compared to $155.0 million
in the previous year.
As of December 31, 2007, the Company's cash, cash equivalents and
investments were $383.9 million, as compared to $156.5 million as of
December 31, 2006.
Other Company Developments & Metrics
-- On February 6, 2008, Equinix acquired Virtu Secure Webservices
B.V., a provider of network-neutral data center services in
the Netherlands
-- On a weighted average basis, excluding approximately 14,100
available cabinet equivalents attributed to the Europe region
at the end of 2007, the number of cabinets billing was
approximately 21,400 representing an approximate utilization
rate of 76%
-- U.S. interconnection service revenues were 20% of U.S.
revenues for the quarter and 21% for the year-ended December
31, 2007. Interconnection services represented approximately
15% of total worldwide revenues for the quarter and 18% for
the year-ended December 31, 2007
Business Outlook
For the first quarter of 2008, the Company expects revenues to be
in the range of $151.0 to $152.0 million. Cash gross margins are
expected to be approximately 58%. Cash selling, general and
administrative expenses are expected to be approximately $34.0
million. EBITDA for the quarter is expected to be between $53.0 and
$54.0 million. Capital expenditures for the first quarter of 2008 are
expected to be $110.0 to $115.0 million, comprised of approximately
$20.0 million of ongoing capital expenditures and $90.0 to $95.0
million of expansion capital expenditures.
For the full year of 2008, total revenues are expected to be in
the range of $650.0 to $665.0 million, including approximately $10.0
million attributed to the Virtu acquisition. Total year cash gross
margins are expected to be approximately 60%. Cash selling, general
and administrative expenses are expected to be approximately $135.0
million. EBITDA for the year is expected to be between $251.0 and
$257.0 million, including approximately $1.0 million attributed to the
Virtu acquisition. Capital expenditures for 2008 are expected to be in
the range of $335.0 to $340.0 million, comprised of approximately
$50.0 million of ongoing capital expenditures and $285.0 to $290.0
million of expansion capital expenditures. Expansion capital
expenditures are for the announced expansions in Amsterdam, Frankfurt,
Hong Kong, London, Los Angeles, Paris, Silicon Valley, Singapore,
Sydney, Tokyo and Washington, D.C. markets.
The Company will discuss its results and guidance on its quarterly
conference call on Wednesday, February 13, 2008, at 5:30 p.m. ET (2:30
p.m. PT). To hear the conference call live, please dial 210-839-8500
(domestic and international) and reference the passcode (EQIX). A
simultaneous live Webcast of the call will be available over the
Internet at www.equinix.com, under the Investor Relations heading.
A replay of the call will be available beginning on Wednesday,
February 13, 2008 at 7:30 p.m. (ET) through March 12, 2008 by dialing
203-369-1627. In addition, the Webcast will be available on the
company's Web site at www.equinix.com. No password is required for
either method of replay.
About Equinix
Equinix is the leading global provider of network-neutral data
center and interconnection services, offering premium colocation,
traffic exchange and outsourced IT infrastructure solutions. Global
enterprises, content companies, systems integrators and network
service providers look to Equinix Internet Business Exchange (IBX(R))
centers for world-class reliability and network diversity. Equinix IBX
centers serve as critical, core hubs for IP networks and Internet
operations worldwide. With 39 IBX centers located in 18 strategic
markets across North America, Europe and Asia-Pacific, Equinix enables
customers to reliably operate their mission-critical infrastructure on
a global basis.
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from expectations discussed in such forward-looking statements.
Factors that might cause such differences include, but are not limited
to, the challenges of acquiring, operating and constructing IBX
centers and developing, deploying and delivering Equinix services;
unanticipated costs or difficulties relating to the integration
of companies we have or will acquire into Equinix; a failure to
receive significant revenue from customers in recently built out or
acquired data centers; failure to complete any financing arrangements
contemplated from time to time; competition from existing and new
competitors; the ability to generate sufficient cash flow or otherwise
obtain funds to repay new or outstanding indebtedness; the loss or
decline in business from our key customers; the results of any
litigation relating to past stock option grants and practices; and
other risks described from time to time in Equinix's filings with the
Securities and Exchange Commission. In particular, see Equinix's
recent quarterly and annual reports filed with the Securities and
Exchange Commission, copies of which are available upon request from
Equinix. Equinix does not assume any obligation to update the
forward-looking information contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc.
Internet Business Exchange is a trademark of Equinix, Inc.
Non-GAAP Financial Measures
Equinix continues to provide all information required in
accordance with generally accepted accounting principles (GAAP), but
it believes that evaluating its ongoing operating results may be
difficult if limited to reviewing only GAAP financial measures.
Accordingly, Equinix uses non-GAAP financial measures, such as
non-GAAP revenues, EBITDA, cash cost of revenues, cash gross margins,
cash operating expenses (also known as cash selling, general and
administrative expenses or cash SG&A), non-GAAP net income (loss),
free cash flow and adjusted free cash flow to evaluate its operations.
In presenting these non-GAAP financial measures, Equinix excludes
certain non-cash or non-recurring items that it believes are not good
indicators of the Company's current or future operating performance.
These non-cash or non-recurring items are a non-recurring revenue
adjustment with respect to 2006 results, depreciation, amortization,
accretion, stock-based compensation, restructuring charges and, with
respect to 2006 results, the gain on Honolulu IBX sale, and with
respect to 2007 results, the loss from conversion and extinguishment
of debt and gain on EMS sale. Recent legislative and regulatory
changes encourage use of and emphasis on GAAP financial metrics and
require companies to explain why non-GAAP financial metrics are
relevant to management and investors. Equinix excludes these non-cash
or non-recurring items in order for Equinix's lenders, investors, and
industry analysts who review and report on the Company, to better
evaluate the Company's operating performance and cash spending levels
relative to its industry sector and competitor base.
Equinix excludes depreciation expense as these charges primarily
relate to the initial construction costs of our IBX centers and do not
reflect our current or future cash spending levels to support our
business. Our IBX centers are long-lived assets, and have an economic
life greater than ten years. The construction costs of our IBX centers
do not recur and future capital expenditures remain minor relative to
our initial investment. This is a trend we expect to continue. In
addition, depreciation is also based on the estimated useful lives of
our IBX centers. These estimates could vary from actual performance of
the asset, are based on historic costs incurred to build out our IBX
centers, and are not indicative of current or expected future capital
expenditures. Therefore, Equinix excludes depreciation from its
operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures,
Equinix excludes amortization expense related to certain intangible
assets, as it represents a cost that may not recur and is not a good
indicator of the Company's current or future operating performance.
Equinix excludes accretion expense, both as it relates to its asset
retirement obligations as well as its accrued restructuring charge
liabilities, as these expenses represent costs, which Equinix believes
are not meaningful in evaluating the Company's current operations.
Equinix excludes non-cash stock-based compensation expense as it
represents expense attributed to stock awards that have no current or
future cash obligations. As such, we, and our investors and analysts,
exclude this stock-based compensation expense when assessing the cash
generating performance of our operations. Equinix excludes
restructuring charges from its non-GAAP financial measures. The
restructuring charges relate to the Company's decision to exit leases
for excess space adjacent to several of our IBX centers, which we do
not intend to build out now or in the future. With respect to its 2006
results, Equinix reports non-GAAP revenues and excludes the gain on
Honolulu IBX sale. Non-GAAP revenues exclude a revenue adjustment
recorded in the fourth quarter of 2006 in connection with our adoption
of Staff Accounting Bulletin No. 108, which is a one-time adjustment
and will not recur. The gain on Honolulu IBX sale represents a unique
transaction for the Company and future sales of IBX centers are not
expected. The Honolulu market was not considered a core, strategic
market for the Company. With respect to its 2007 results, Equinix
excludes the loss from conversion and extinguishment of debt and the
gain from EMS sale. The loss from conversion and extinguishment of
debt represents activity that is not typical for the company. The gain
on EMS sale represents a unique transaction for the Company and future
sales of other service offerings are not expected. Management believes
such items as restructuring charges, the gain on the sale of an IBX
center and a service offering and the loss from conversion and
extinguishment of debt are unique transactions that are not expected
to recur, and consequently, does not consider these items as a normal
component of expenses or income related to current and ongoing
operations.
Our management does not itself, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. However, we have presented such non-GAAP financial measures
to provide investors with an additional tool to evaluate our operating
results in a manner that focuses on what management believes to be our
core, ongoing business operations. Management believes that the
inclusion of these non-GAAP financial measures provide consistency and
comparability with past reports and provide a better understanding of
the overall performance of the business and its ability to perform in
subsequent periods. Equinix believes that if it did not provide such
non-GAAP financial information, investors would not have all the
necessary data to analyze Equinix effectively.
Investors should note, however, that the non-GAAP financial
measures used by Equinix may not be the same non-GAAP financial
measures, and may not be calculated in the same manner, as that of
other companies. In addition, whenever Equinix uses such non-GAAP
financial measures, it provides a reconciliation of non-GAAP financial
measures to the most closely applicable GAAP financial measure.
Investors are encouraged to review the related GAAP financial measures
and the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measure.
Equinix does not provide forward-looking guidance for certain
financial data, such as depreciation, amortization, accretion, net
income (loss) from operations, cash generated from operating
activities and cash used in investing activities, and as a result, is
not able to provide a reconciliation of GAAP to non-GAAP financial
measures for forward-looking data. Equinix intends to calculate the
various non-GAAP financial measures in future periods consistent with
how it was calculated for the three and twelve months ended December
31, 2007 and 2006, presented within this press release.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION
(in thousands, except per share detail)
(unaudited)
Three Months Ended Twelve Months Ended
--------------------------- -------------------
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
-------- --------- -------- --------- ---------
Recurring revenues $131,578 $99,288 $76,401 $399,656 $273,160
Non-recurring revenues 7,136 4,494 3,371 19,786 13,755
-------- --------- -------- --------- ---------
Revenues 138,714 103,782 79,772 419,442 286,915
Cost of revenues 92,480 62,891 50,334 263,745 188,379
-------- --------- -------- --------- ---------
Gross profit 46,234 40,891 29,438 155,697 98,536
-------- --------- -------- --------- ---------
Operating expenses:
Sales and marketing 13,117 9,630 9,439 40,719 32,619
General and
administrative 33,672 25,182 18,637 105,794 72,123
Restructuring
charges - - - 407 1,527
Gains on asset sales (1,338) - (9,647) (1,338) (9,647)
-------- --------- -------- --------- ---------
Total operating
expenses 45,451 34,812 18,429 145,582 96,622
-------- --------- -------- --------- ---------
Income (loss) from
operations 783 6,079 11,009 10,115 1,914
-------- --------- -------- --------- ---------
Interest and other
income (expense):
Interest income 5,066 3,309 1,562 15,406 6,627
Interest expense (12,094) (5,662) (3,810) (27,334) (14,630)
Other income
(expense) (121) 3,167 (81) 3,047 (245)
Loss on conversion
and extinguishment
of debt - (2,554) - (5,949) -
-------- --------- -------- --------- ---------
Total interest and
other, net (7,149) (1,740) (2,329) (14,830) (8,248)
-------- --------- -------- --------- ---------
Net income (loss)
before income taxes
and cumulative effect
of a change in
accounting principle (6,366) 4,339 8,680 (4,715) (6,334)
Income taxes 293 (215) 431 (473) (439)
-------- --------- -------- --------- ---------
Net income (loss)
before cumulative
effect of a change in
accounting principle (6,073) 4,124 9,111 (5,188) (6,773)
Cumulative effect of
a change in
accounting
principle - - - - 376
-------- --------- -------- --------- ---------
Net income (loss) $(6,073) $4,124 $9,111 $(5,188) $(6,397)
======== ========= ======== ========= =========
Net income (loss) per
share:
Basic net income
(loss) per share $(0.17) $0.13 $0.31 $(0.16) $(0.22)
======== ========= ======== ========= =========
Diluted net income
(loss) per share $(0.17) $0.12 $0.28 $(0.16) $(0.22)
======== ========= ======== ========= =========
Shares used in
computing basic net
income (loss) per
share 36,003 31,683 29,131 32,136 28,551
======== ========= ======== ========= =========
Shares used in
computing diluted
net income (loss)
per share 36,003 33,112 32,700 32,136 28,551
======== ========= ======== ========= =========
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
PRESENTATION
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
--------------------------- -------------------
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
-------- --------- -------- --------- ---------
Recurring revenues $131,578 $99,288 $76,401 $399,656 $273,160
Non-recurring revenues 7,136 4,494 3,371 19,786 13,755
-------- --------- -------- --------- ---------
Revenues (1) 138,714 103,782 79,772 419,442 286,915
Non-GAAP revenue
adjustment (1) - - 1,179 - 1,179
-------- --------- -------- --------- ---------
Non-GAAP revenues
(2) 138,714 103,782 80,951 419,442 288,094
Cash cost of revenues
(3) 59,501 40,240 30,287 165,411 112,142
-------- --------- -------- --------- ---------
Cash gross profit
(4) 79,213 63,542 50,664 254,031 175,952
-------- --------- -------- --------- ---------
Cash operating
expenses (5):
Cash sales and
marketing
expenses(6) 9,079 7,283 7,622 29,913 25,110
Cash general and
administrative
expenses (7) 23,072 15,620 12,770 68,728 48,770
-------- --------- -------- --------- ---------
Total cash
operating
expenses (8) 32,151 22,903 20,392 98,641 73,880
-------- --------- -------- --------- ---------
EBITDA (9) $47,062 $40,639 $30,272 $155,390 $102,072
======== ========= ======== ========= =========
Cash gross margins
(10) 57% 61% 63% 61% 61%
======== ========= ======== ========= =========
EBITDA flow-through
rate (11) 18% 45% 74% 41% 48%
======== ========= ======== ========= =========
----------------------
(1) This adjustment represents the impact of the Company's adoption
of Staff Accounting Bulletin No. 108, which was issued in
September 2006.
(2) The geographic split of our revenues is presented below:
U.S. revenues $90,417 $83,685 $68,851 $324,878 $247,245
Asia-Pacific
revenues 16,261 14,643 12,100 57,074 40,849
Europe revenues 32,036 5,454 - 37,490 -
--------- -------- -------- --------- ---------
Revenues $138,714 $103,782 $80,951 $419,442 $288,094
========= ======== ======== ========= =========
Revenues on a services basis is presented below:
Colocation $104,533 $75,282 $56,537 $305,215 $201,772
Interconnection 20,514 18,798 15,501 73,685 53,811
Managed
infrastructure 6,305 4,830 4,152 19,519 16,197
Rental 226 378 211 1,237 1,380
--------- -------- -------- --------- ---------
Recurring
revenues 131,578 99,288 76,401 399,656 273,160
Non-recurring
revenues 7,136 4,494 4,550 19,786 14,934
--------- -------- -------- --------- ---------
Revenues $138,714 $103,782 $80,951 $419,442 $288,094
========= ======== ======== ========= =========
(3) We define cash cost of revenues as cost of revenues less
depreciation, amortization, accretion and stock-based
compensation as presented below:
Cost of revenues $92,480 $62,891 $50,334 $263,745 $188,379
Depreciation,
amortization and
accretion
expense (31,870) (21,773) (19,194) (94,206) (72,999)
Stock-based
compensation
expense (1,109) (878) (853) (4,128) (3,238)
--------- -------- -------- --------- ---------
Cash cost of
revenues $59,501 $40,240 $30,287 $165,411 $112,142
========= ======== ======== ========= =========
The geographic split of our cash cost of revenues is presented
below:
U.S. cash cost of
revenues $32,970 $30,677 $25,019 $118,044 $93,436
Asia-Pacific cash
cost of revenues 7,105 6,536 5,268 24,914 18,706
Europe cash cost
of revenues 19,426 3,027 - 22,453 -
--------- -------- -------- --------- ---------
Cash cost of
revenues $59,501 $40,240 $30,287 $165,411 $112,142
========= ======== ======== ========= =========
(4) We define cash gross profit as revenues less cash cost of
revenues (as defined above).
(5) We define cash operating expenses as operating expenses less
depreciation, amortization, stock-based compensation,
restructuring charges and gains on asset sales. We also refer to
cash operating expenses as cash selling, general and
administrative expenses or "cash SG&A".
(6) We define cash sales and marketing expenses as sales and
marketing expenses less depreciation, amortization and stock-
based compensation as presented below:
Sales and
marketing
expenses $13,117 $9,630 $9,439 $40,719 $32,619
Depreciation and
amortization
expense (1,553) (298) (15) (1,881) (60)
Stock-based
compensation
expense (2,485) (2,049) (1,802) (8,925) (7,449)
--------- -------- -------- --------- ---------
Cash sales and
marketing
expenses $9,079 $7,283 $7,622 $29,913 $25,110
========= ======== ======== ========= =========
(7) We define cash general and administrative expenses as general and
administrative expenses less depreciation, amortization and
stock-based compensation as presented below:
General and
administrative
expenses $33,672 $25,182 $18,637 $105,794 $72,123
Depreciation and
amortization
expense (2,495) (2,000) (1,295) (7,388) (3,273)
Stock-based
compensation
expense (8,105) (7,562) (4,572) (29,678) (20,080)
--------- -------- -------- --------- ---------
Cash general
and
administrative
expenses $23,072 $15,620 $12,770 $68,728 $48,770
========= ======== ======== ========= =========
(8) Our cash operating expenses, or cash SG&A, as defined above, is
presented below:
Cash sales and
marketing
expenses $9,079 $7,283 $7,622 $29,913 $25,110
Cash general and
administrative
expenses 23,072 15,620 12,770 68,728 48,770
--------- -------- -------- --------- ---------
Cash SG&A $32,151 $22,903 $20,392 $98,641 $73,880
========= ======== ======== ========= =========
The geographic split of our cash operating expenses, or cash
SG&A, is presented below:
U.S. cash SG&A $20,508 $17,565 $16,899 $74,472 $61,086
Asia-Pacific cash
SG&A 4,693 3,953 3,493 15,834 12,794
Europe cash SG&A 6,950 1,385 - 8,335 -
--------- -------- -------- --------- ---------
Cash SG&A $32,151 $22,903 $20,392 $98,641 $73,880
========= ======== ======== ========= =========
(9) We define EBITDA as income (loss) from operations less
depreciation, amortization, accretion, stock-based compensation
expense, restructuring charges and gains on asset sales as
presented below:
Income (loss)
from operations $783 $6,079 $11,009 $10,115 $1,914
Depreciation,
amortization and
accretion
expense 35,918 24,071 20,504 103,475 76,332
Stock-based
compensation
expense 11,699 10,489 7,227 42,731 30,767
Restructuring
charges - - - 407 1,527
Gains on asset
sales (1,338) - (9,647) (1,338) (9,647)
--------- -------- -------- --------- ---------
EBITDA $47,062 $40,639 $30,272 $155,390 $102,072
========= ======== ======== ========= =========
The geographic split of our EBITDA is presented below:
U.S. income
(loss) from
operations $3,533 $6,386 $9,695 $11,533 $76
U.S.
depreciation,
amortization and
accretion
expense 23,630 20,175 19,448 83,870 72,340
U.S. stock-based
compensation
expense 9,776 8,882 6,258 36,552 27,248
U.S.
restructuring
charges - - - 407 1,527
U.S. gain on
asset sale - - (9,647) - (9,647)
--------- -------- -------- --------- ---------
U.S. EBITDA 36,939 35,443 26,933 132,362 92,723
--------- -------- -------- --------- ---------
Asia-Pacific
income (loss)
from operations 665 312 1,314 2,616 1,838
Asia-Pacific
depreciation,
amortization and
accretion
expense 3,763 2,584 1,056 9,768 3,992
Asia-Pacific
stock-based
compensation
expense 1,373 1,258 969 5,280 3,519
Asia-Pacific
restructuring
charges - - - - -
Asia-Pacific gain
on asset sale (1,338) - - (1,338) -
--------- -------- -------- --------- ---------
Asia-Pacific
EBITDA 4,463 4,154 3,339 16,326 9,349
--------- -------- -------- --------- ---------
Europe income
(loss) from
operations (3,415) (619) - (4,034) -
Europe
depreciation,
amortization and
accretion
expense 8,525 1,312 - 9,837 -
Europe stock-
based
compensation
expense 550 349 - 899 -
Europe
restructuring
charges - - - - -
Europe gain on
asset sale - - - - -
--------- -------- -------- --------- ---------
Europe EBITDA 5,660 1,042 - 6,702 -
--------- -------- -------- --------- ---------
EBITDA $47,062 $40,639 $30,272 $155,390 $102,072
========= ======== ======== ========= =========
(10) We define cash gross margins as cash gross profit divided by
revenues.
Our cash gross margins by geographic region is presented below:
U.S. cash gross
margins 64% 63% 64% 64% 62%
========= ======== ======== ========= =========
Asia-Pacific cash
gross margins 56% 55% 56% 56% 54%
========= ======== ======== ========= =========
Europe cash gross
margins 39% 44% n/a 40% n/a
========= ======== ======== ========= =========
(11) We define EBITDA flow-through rate as incremental EBITDA growth
divided by incremental revenue growth as follows:
EBITDA - current
period $47,062 $40,639 $30,272 $155,390 $102,072
Less EBITDA -
prior period (40,639) (35,311) (24,927) (102,072) (70,139)
--------- -------- -------- --------- ---------
EBITDA growth $6,423 $5,328 $5,345 $53,318 $31,933
========= ======== ======== ========= =========
Revenues -
current period $138,714 $103,782 $80,951 $419,442 $288,094
Less Non-GAAP
revenues - prior
period (103,782) (91,837) (73,726) (288,094) (221,057)
--------- -------- -------- --------- ---------
Non-GAAP
revenue growth $34,932 $11,945 $7,225 $131,348 $67,037
========= ======== ======== ========= =========
EBITDA flow-
through rate 18% 45% 74% 41% 48%
========= ======== ======== ========= =========
EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Assets December 31, December 31,
2007 2006
------------ ------------
Cash, cash equivalents and investments $383,900 $156,481
Accounts receivable, net 60,089 26,864
Property and equipment, net 1,162,720 546,395
Goodwill and other intangible assets, net 510,133 17,441
Debt issuance costs, net 21,333 3,006
Prepaid expenses 11,070 7,160
Deposits 16,731 3,932
Taxes receivable 3,437 5
Deferred tax assets 6,404 6,910
Other assets 6,051 3,638
------------ ------------
Total assets $2,181,868 $771,832
============ ============
Liabilities and Stockholders' Equity
Accounts payable $14,816 $4,515
Accrued expenses 50,280 22,754
Accrued property and equipment 76,504 23,337
Accrued restructuring charges 12,140 41,572
Capital lease and other financing
obligations 97,412 94,699
Mortgage and loan payable 330,496 98,896
Convertible debt 678,236 86,250
Deferred rent 26,912 20,924
Deferred installation revenue 26,537 11,694
Deferred recurring revenue 9,556 6,732
Asset retirement obligations 8,759 3,985
Customer deposits 8,844 910
Deferred tax liabilities 25,955 -
Other liabilities 989 536
------------ ------------
Total liabilities 1,367,436 416,804
------------ ------------
Common stock 37 29
Additional paid-in capital 1,376,915 904,573
Accumulated other comprehensive income (3,888) 3,870
Accumulated deficit (558,632) (553,444)
------------ ------------
Total stockholders' equity 814,432 355,028
------------ ------------
Total liabilities and stockholders'
equity $2,181,868 $771,832
============ ============
--------------------------------------------------------- ------------
Ending headcount by geographic region is as follows:
U.S. headcount 546 442
Asia-pacific headcount 187 174
Europe headcount 178 -
------------ ------------
Total headcount 911 616
============ ============
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - GAAP PRESENTATION
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
---------------------------- ---------------------
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
--------- --------- -------- ----------- ---------
Net cash provided
by operating
activities $13,881 $48,427 $25,859 $120,020 $75,412
Net cash used in
investing
activities (103,519) (721,257) (36,792) (1,054,725) (158,470)
Net cash provided
by financing
activities 38,001 783,240 8,755 1,145,013 46,107
Effect of foreign
currency exchange
rates on cash and
cash equivalents (1,182) (1,556) 102 (2,238) 247
--------- --------- -------- ----------- ---------
Net increase
(decrease) in cash
and cash
equivalents (52,819) 108,854 (2,076) 208,070 (36,704)
Cash and cash
equivalents at
beginning of
period 343,452 234,598 84,639 82,563 119,267
--------- --------- -------- ----------- ---------
Cash and cash
equivalents at end
of period $290,633 $343,452 $82,563 $290,633 $82,563
========= ========= ======== =========== =========
In addition to the above condensed consolidated statements of cash
flows presented on a GAAP basis, the Company presents non-GAAP
condensed consolidated statements of cash flows which combine the
Company's short-term and long-term investments with our cash and cash
equivalents in an effort to present our total unrestricted cash and
equivalent balances as presented herein in our condensed consolidated
balance sheets.
Following is a reconciliation of our cash and cash equivalents to our
cash, cash equivalents and investments, which is the basis of how our
non-GAAP condensed consolidated statements of cash flows are
presented on the following page:
Cash and cash
equivalents $290,633 $343,452 $82,563 $290,633 $82,563
Short-term
investments 63,301 64,005 48,831 63,301 48,831
Long-term
investments 29,966 28,905 25,087 29,966 25,087
--------- --------- -------- ----------- ---------
Cash, cash
equivalents and
investments as
presented on
condensed balance
sheet presented
herein $383,900 $436,362 $156,481 $383,900 $156,481
========= ========= ======== =========== =========
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - NON-GAAP
PRESENTATION (1)
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
------------------------------ ---------------------
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
--------- ---------- --------- ----------- ---------
Cash flows from
operating
activities:
Net income
(loss) $(6,073) $4,124 $9,111 $(5,188) $(6,397)
Adjustments to
reconcile net
income (loss)
to net cash
provided by
operating
activities:
Depreciation,
amortization
and accretion 35,918 24,071 20,504 103,475 76,332
Stock-based
compensation 11,699 10,489 7,227 42,731 30,767
Debt issuance
costs 1,242 812 237 3,227 880
Gains on asset
sales (1,338) - (9,647) (1,338) (9,647)
Restructuring
charges - - - 407 1,527
Gain on foreign
currency hedge - (1,494) - (1,494) -
Other
reconciling
items 66 (529) 40 (318) (314)
Changes in
operating
assets and
liabilities:
Accounts
receivable (10,929) (5,658) (2,758) (17,997) (9,666)
Accounts
payable and
accrued
expenses (29,761) 17,786 4,286 (6,682) 4,756
Accrued
restructuring
charges (3,569) (3,203) (3,591) (13,669) (12,804)
Other assets
and
liabilities 16,792 2,275 938 17,800 466
--------- ---------- --------- ----------- ---------
Net cash
provided by
operating
activities 14,047 48,673 26,347 120,954 75,900
--------- ---------- --------- ----------- ---------
Cash flows from
investing
activities:
Purchase of
IXEurope, less
cash acquired (63) (541,729) - (541,792) -
Purchase of Los
Angeles IBX
property - (19) - (49,059) -
Purchase of San
Jose IBX
property - (64,971) - (71,471) -
Purchase of
Chicago IBX
property - - - - (9,766)
Purchases of
other property
and equipment (121,002) (88,921) (59,387) (416,811) (162,291)
Accrued property
and equipment 16,035 (23,939) 4,740 39,975 7,554
Proceeds from
asset sales 1,657 - 9,530 1,657 9,530
Other investing
activities - 1,347 - 877 8
--------- ---------- --------- ----------- ---------
Net cash used
in investing
activities (103,373) (718,232) (45,117) (1,036,624) (154,965)
--------- ---------- --------- ----------- ---------
Cash flows from
financing
activities:
Proceeds from
stock options
and employee
stock purchase
plans 8,788 10,406 10,080 36,356 38,836
Proceeds from
follow-on
common stock
offering (38) 339,946 - 339,908 -
Proceeds from
convertible
subordinated
notes - 395,986 - 645,986 -
Proceeds from
mortgage and
loans payable 30,852 49,491 40,000 149,606 40,000
Proceeds from
borrowings
under credit
line - - - - 40,000
Repayment of
borrowings
under credit
line - - (40,000) - (70,000)
Repayment of
capital lease
and other
financing
obligations (961) (500) (376) (2,406) (1,506)
Repayment of
mortgage
payable (577) (543) (269) (2,150) (1,104)
Debt issuance
costs (63) (11,546) (558) (22,287) (811)
Other financing
activities - - (122) - 692
--------- ---------- --------- ----------- ---------
Net cash
provided by
(used in)
financing
activities 38,001 783,240 8,755 1,145,013 46,107
--------- ---------- --------- ----------- ---------
Effect of foreign
currency
exchange rates
on cash and cash
equivalents (1,137) (1,285) 150 (1,924) 584
--------- ---------- --------- ----------- ---------
Net increase
(decrease) in
cash, cash
equivalents and
investments (52,462) 112,396 (9,865) 227,419 (32,374)
Cash, cash
equivalents and
investments at
beginning of
period 436,362 323,966 166,346 156,481 188,855
--------- ---------- --------- ----------- ---------
Cash, cash
equivalents and
investments at
end of period $383,900 $436,362 $156,481 $383,900 $156,481
========= ========== ========= =========== =========
Free cash flow
(2) $(89,326) $(669,559) $(18,770) $(915,670) $(79,065)
========= ========== ========= =========== =========
Adjusted free
cash flow (3) $(90,920) $(62,840) $(28,300) $(255,005) $(78,829)
========= ========== ========= =========== =========
-----------------
(1) The cash flow statements presented herein combine our short-term
and long-term investments with our cash and cash equivalents in
an effort to present our total unrestricted cash and equivalent
balances. In our quarterly filings with the SEC on Forms 10-Q and
10-K, the purchases, sales and maturities of our short-term and
long-term investments will be presented as activities within the
investing activities portion of the cash flow statements.
(2) We define free cash flow as net cash provided by operating
activities plus net cash used in investing activities (excluding
the purchases, sales and maturities of short-term and long-term
investments) as presented below:
Net cash
provided by
operating
activities
as presented
above $14,047 $48,673 $26,347 $120,954 $75,900
Net cash used
in investing
activities
as presented
above (103,373) (718,232) (45,117) (1,036,624) (154,965)
--------- ---------- --------- ----------- ---------
Free cash
flow $(89,326) $(669,559) $(18,770) $(915,670) $(79,065)
========= ========== ========= =========== =========
(3) We define adjusted free cash flow as free cash flow (as defined
above) excluding any purchases or sales of real estate and
acquisitions and proceeds from asset sales as presented below:
Free cash
flow (as
defined
above) $(89,326) $(669,559) $(18,770) $(915,670) $(79,065)
Less purchase
of IXEurope,
less cash
acquired 63 541,729 - 541,792 -
Less purchase
of Los
Angeles IBX
property - 19 - 49,059 -
Less purchase
of San Jose
IBX property - 64,971 - 71,471 -
Less purchase
of Chicago
IBX property - - - - 9,766
Less proceeds
from asset
sales (1,657) - (9,530) (1,657) (9,530)
--------- ---------- --------- ----------- ---------
Adjusted
free cash
flow $(90,920) $(62,840) $(28,300) $(255,005) $(78,829)
========= ========== ========= =========== =========
SOURCE: Equinix, Inc.
Equinix, Inc.
Jason Starr, 650-513-7402 (Investor Relations)
jstarr@equinix.com
or
K/F Communications, Inc.
David Fonkalsrud, 415-255-6506 (Media)
dave@kfcomm.com
|
Equinix
