Equinix Reports Fourth-Quarter and Full-Year 2023 Results

REDWOOD CITY, Calif., Feb. 14, 2024 /PRNewswire/ —

• 2023 annual revenues increased 13% year-over-year on an as-reported basis and 15% on a normalized and constant currency basis to $8.2 billion
• Closed nearly 17,000 deals across more than 5,900 customers in 2023
• Record 90 megawatts (“MW”) of xScale^® leasing, the result of increased hyperscale demand to support artificial intelligence (AI) and cloud deployments

Revenues

• $8.188 billion, a 13% increase over the previous year on an as-reported basis or 15% on a normalized and constant currency basis

• Given the strong underlying demand for digital infrastructure, Equinix continues to invest broadly across its global footprint, which now includes 260 data centers across 71 metropolitan areas in 33 countries. There are 49 major builds underway in 35 markets, across 21 countries including 11 xScale builds representing nearly 20,000 cabinets of retail and more than 50 megawatts of xScale capacity through 2024.
  
  
  
  
  • Equinix opened 14 new data centers in 12 metros including Dublin, Frankfurt, Kuala Lumpur, Madrid, Milan, Montreal, Paris, São Paulo, Seattle, Seoul, Tokyo and Washington, D.C. In addition, the company added seven new projects in Dallas, Lagos, Madrid, Milan, Warsaw and Washington, D.C.
    
    
    
    
  • In December, Equinix announced plans to expand support for advanced liquid cooling technologies—including direct-to-chip—to more than 100 of its International Business Exchange^TM (IBX^®) data centers in more than 45 metros around the world. This will enable more businesses to use the most performant cooling technologies for the powerful, high-density hardware that supports compute-intensive workloads such as AI.
    
    
    
    
  • The surge in demand for hyperscale infrastructure to support AI and cloud initiatives is resulting in strong demand and significant leasing activity for Equinix’s global xScale data center portfolio. Since the last earnings call, the company leased a record 90 megawatts of capacity across six assets in EMEA and APAC, including approximately 32 megawatts leased at the start of the year. This brings total xScale leasing to 300 megawatts globally.
    
    
    
    
  • In Q4, Equinix purchased the company’s London 8 IBX data center. Revenues from owned assets increased to 66% of recurring revenues, stepping up 2%, as the company continues to progress on ownership and long-term control of assets.
    
    
    
    
• Last month Equinix launched a fully managed private cloud service that enables enterprises to easily acquire and manage their own NVIDIA DGX AI supercomputing infrastructure for building and running custom generative AI models. The service includes NVIDIA DGX systems, NVIDIA networking and the NVIDIA AI Enterprise software platform. Equinix installs and operates each customer’s privately owned NVIDIA infrastructure and can deploy services on their behalf in key IBX data centers globally.
  
  
  
  
  • Equinix continues to gain traction as a preferred location for deploying private AI infrastructure with both enterprises and service providers. In December, the company announced that customers, including Continental AG, i3D.net and Harrison.ai, are leveraging the cloud adjacency, global reach, robust ecosystems and low-latency interconnection of Platform Equinix^® to deploy private AI infrastructure.
    
    
    
    
• Equinix’s industry-leading global interconnection franchise continues to perform with over 462,000 total interconnections deployed on its platform. In Q4, interconnection revenues stepped up 10% year-over-year on an as reported basis or 8% year-over-year on a normalized and constant currency basis, and the company added an incremental 4,300 organic interconnections in the quarter.
  
  
  
  
  • In Q4, Equinix added four new native cloud on-ramps in Bogotá, Calgary and Zurich, further strengthening its cloud ecosystem. Equinix customers can now enjoy low-latency access to multiple native cloud on-ramps in 37 metros, including eight out of the world’s 10 largest metros by GDP. Equinix has nearly 40% market share of the on-ramps to the major cloud service providers—key players in the AI ecosystem.
    
    
    
    
  • The company recently launched Equinix Fabric Cloud Router, a virtual routing service designed to simplify networking challenges for enterprises in cloud-to-cloud and hybrid cloud environments. This service provides an easy-to-configure, enterprise-grade, multicloud routing solution that can be deployed within minutes. Customers can utilize Equinix Fabric Cloud Router in all 58 Equinix Fabric^®-enabled metros globally, ensuring low-latency connectivity to major cloud providers and a wide range of service providers.
    
    
    
    
• Equinix’s Channel program continued to see strong momentum, contributing to 35% of bookings and over 50% of new customers in Q4. The company saw growth from partners, including Avant, HCL, HPE, NVIDIA and WWT, with wins across a wide range of industry verticals and digital-first use cases.
  
  
  
  
• Equinix remains committed to advancing its Future First Sustainability strategy and has continued to make significant progress in this area.
  
  
  
  
  • In December, Equinix announced the full allocation of proceeds from $4.9 billion in investment-grade green bonds to advance toward its near-term science-based target to become climate neutral by 2030 and improve the operational eco-efficiency of its business. As one of the top ten largest green bond issuers in the U.S., Equinix used the net proceeds to support 172 green building projects across 105 sites, 33 energy-efficiency projects, and two Power Purchase Agreements (“PPAs”).
    
    
    
    
  • Earlier this month Equinix executed a new PPA in Australia, signaling a broader industry goal of bringing additional clean power to a region where conditions have traditionally been more challenging for executing renewable energy projects. To date, Equinix has executed 21 PPAs across Australia, France, Iberia, the Nordics and the U.S., representing more than one gigawatt of clean energy once operational.
    
    
    
    
  • For the second year in a row, Equinix achieved the highest-ranking score of the CDP’s prestigious 2023 “Climate Change A List,” a leading environmental rating system focused on climate-related transparency and action. Equinix was also named as a leader in the IDC MarketScape: Worldwide Datacenter Services 2023 Vendor Assessment, recognized for its sustainability advancements, innovative platform capabilities, and global expansion and ecosystem growth.¹

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1.	IDC, “IDC MarketScape: Worldwide Datacenter Services 2023 Vendor Assessment,” Doc # US49435022e, October 2023

Business Outlook

For the first quarter of 2024, Equinix expects revenues to range between $2.127 and $2.147 billion, an increase of 1 – 2% over the previous quarter, or flat on a normalized and constant currency basis. This guidance includes lower non-recurring revenues related to significant xScale activity in Q4 2023 partly offset by a foreign currency benefit of $38 million when compared to the average FX rates in Q4 2023. Adjusted EBITDA is expected to range between $960 and $980 million, which includes a foreign currency benefit of $18 million when compared to the average FX rates in Q4 2023. Adjusted EBITDA includes $5 million of integration costs related to acquisitions. Recurring capital expenditures are expected to range between $14 and $34 million.

For the full year of 2024, total revenues are expected to range between $8.793 and $8.893 billion, a 7 – 9% increase over the previous year on an as-reported basis, or a 7 – 8% increase on a normalized and constant currency basis excluding the year-over-year impact of the power pass-through, and includes a foreign currency benefit of $127 million when compared to the prior Equinix guidance FX rates. Adjusted EBITDA is expected to range between $4.089 and $4.169 billion, an adjusted EBITDA margin of 47%. This adjusted EBITDA includes approximately 160 basis points of margin benefit from improving operating leverage and power cost decreases, as well as a foreign currency benefit of $67 million when compared to the prior Equinix guidance FX rates. For the year, the company expects to incur $25 million in integration costs related to acquisitions. AFFO is expected to range between $3.306 and $3.376 billion, a 9 – 12% increase over the previous year on both an as-reported and normalized and constant currency basis. This AFFO guidance includes $25 million in integration costs related to acquisitions. AFFO per share is expected to range between $34.58 and $35.31, an 8 – 10% increase over the previous year on both an as-reported and normalized and constant currency basis. This guidance excludes any capital market activities the company may undertake in the future. Non-recurring capital expenditures, including xScale-related costs, are expected to range between $2.570 and $2.800 billion, and recurring capital expenditures are expected to range between $210 and $230 million. xScale-related on-balance sheet capital expenditures are expected to range between $50 and $90 million, which we anticipate will be reimbursed from both the current and future xScale JVs.

The U.S. dollar exchange rates used for 2024 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.10 to the Euro, $1.24 to the Pound, S$1.32 to the U.S. dollar, ¥141 to the U.S. dollar and A$1.47 to the U.S. dollar. The Q4 2023 global revenue breakdown by currency for the Euro, British Pound, Singapore Dollar, Japanese Yen and Australian Dollar is 21%, 10%, 8%, 5% and 3%, respectively.

The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), gains (losses) on disposition of real estate property, and adjustments for unconsolidated joint ventures’ and non-controlling interests’ share of these items.

Q4 2023 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended December 31, 2023, along with its future outlook, in its quarterly conference call on Wednesday, February 14, 2024, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live webcast of the call will be available on the company’s Investor Relations website at www.equinix.com/investors. To hear the conference call live, please dial 1-517-308-9482 (domestic and international) and reference the passcode EQIX.

A replay of the call will be available one hour after the call through Wednesday, May 1, 2024, by dialing 1-800-568-3705 and referencing the passcode 2024. In addition, the webcast will be available at www.equinix.com/investors (no password required).

Investor Presentation and Supplemental Financial Information

Equinix has made available on its website a presentation designed to accompany the discussion of Equinix’s results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through the Equinix Investor Relations website at www.equinix.com/investors.

Additional Resources

• Equinix Investor Relations Resources

About Equinix

Equinix (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. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

Non-GAAP Financial Measures

Equinix provides 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 to evaluate its operations.

Equinix provides normalized and constant currency growth rates, which are calculated to adjust for acquisitions, dispositions, integration costs, changes in accounting principles and foreign currency.

Equinix presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA represents net income excluding income tax expense, interest income, interest expense, other income or expense, gain or loss on debt extinguishment, depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales.

In presenting non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow, Equinix excludes certain items that it believes are not good indicators of Equinix’s current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales. Equinix excludes these items in order for its lenders, investors and the industry analysts who review and report on Equinix to better evaluate Equinix’s operating performance and cash spending levels relative to its industry sector and competitors.

Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of a data center, and do not reflect its current or future cash spending levels to support its business. Its data centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of an IBX data center do not recur with respect to such data center, and future capital expenditures remain minor relative to our initial investment throughout its useful life. Construction costs in future periods are primarily incurred with respect to additional IBX data centers. This is a trend we expect to continue. In addition, depreciation is also based on the estimated useful lives of the data centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our data 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 also excludes amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of acquisitions, and these charges may vary in amount from period to period. We exclude amortization expense to facilitate a more meaningful evaluation of our current operating performance and comparisons to our prior periods. Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which Equinix also believes are not meaningful in evaluating Equinix’s current operations. Equinix excludes stock-based compensation expense, as it can vary significantly from period to period based on share price and the timing, size and nature of equity awards. As such, Equinix and many investors and analysts exclude stock-based compensation expense to compare its operating results with those of other companies. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to Equinix’s decision to exit leases for excess space adjacent to several of its IBX^® data centers, which it did not intend to build out, or its decision to reverse such restructuring charges. Equinix also excludes impairment charges generally related to certain long-lived assets. The impairment charges are related to expense recognized whenever events or changes in circumstances indicate that the carrying amount of assets are not recoverable. Equinix also excludes gain or loss on asset sales as it represents profit or loss that is not meaningful in evaluating the current or future operating performance. Finally, Equinix excludes transaction costs from its non-GAAP financial measures to allow more comparable comparisons of the financial results to the historical operations. The transaction costs relate to costs Equinix incurs in connection with business combinations and the formation of joint ventures, including advisory, legal, accounting, valuation and other professional or consulting fees. Such charges generally are not relevant to assessing the long-term performance of Equinix. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as restructuring charges, impairment charges, transaction costs and gain or loss on asset sales are non-core transactions; however, these types of costs may occur in future periods.

Equinix also presents funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), both commonly used in the REIT industry, as supplemental performance measures. Additionally, Equinix presents AFFO per share, which is also commonly used in the REIT industry. AFFO per share offers investors and industry analysts a perspective of Equinix’s underlying operating performance when compared to other REIT companies. FFO is calculated in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income or loss, excluding gain or loss from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures’ and non-controlling interests’ share of these items. AFFO represents FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, stock-based charitable contributions, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income or loss from discontinued operations, net of tax, and adjustments from FFO to AFFO for unconsolidated joint ventures’ and non-controlling interests’ share of these items. Equinix excludes depreciation expense, amortization expense, accretion, stock-based compensation, restructuring charges, impairment charges and transaction costs for the same reasons that they are excluded from the other non-GAAP financial measures mentioned above.

Equinix includes an adjustment for revenues from installation fees, since installation fees are deferred and recognized ratably over the period of contract term, although the fees are generally paid in a lump sum upon installation. Equinix includes an adjustment for straight-line rent expense on its operating leases, since the total minimum lease payments are recognized ratably over the lease term, although the lease payments generally increase over the lease term. Equinix also includes an adjustment to contract costs incurred to obtain contracts, since contract costs are capitalized and amortized over the estimated period of benefit on a straight-line basis, although costs of obtaining contracts are generally incurred and paid during the period of obtaining the contracts. The adjustments for installation revenues, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the consolidated statement of operations. Equinix excludes the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with its debt financings that have no current or future cash obligations. Equinix excludes gain or loss on debt extinguishment since it represents a cost that is not a good indicator of Equinix’s current or future operating performance. Equinix includes an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances and uncertain tax positions that do not relate to the current period’s operations. Equinix deducts recurring capital expenditures, which represent expenditures to extend the useful life of its IBX and xScale data centers or other assets that are required to support current revenues. Equinix excludes net income or loss from discontinued operations, net of tax, which represents results that are not a good indicator of our current or future operating performance.

Equinix presents constant currency results of operations, which is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, Equinix has presented this non-GAAP financial measure to provide investors with an additional tool to evaluate its operating results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Equinix’s business performance. To present this information, Equinix’s current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.

Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Equinix presents such non-GAAP financial measures to provide investors with an additional tool to evaluate its operating results in a manner that focuses on what management believes to be its core, ongoing business operations. Management believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides 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 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 those of other companies. Investors should, therefore, exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income or 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 without unreasonable effort. The impact of such adjustments could be significant. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how they were calculated for the periods presented within this press release.

Forward-Looking Statements

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, risks to our business and operating results related to the current inflationary environment; foreign currency exchange rate fluctuations; increased costs and increased challenges to procure power and the general volatility in the global energy market; the challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues 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; risks related to potential cybersecurity breaches; risks related to our taxation as a REIT and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent and upcoming Equinix 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, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
	Three Months Ended						Twelve Months Ended
	December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Recurring revenues	$      1,976,038		$      1,961,043		$      1,773,380		$      7,744,731		$      6,871,287
Non-recurring revenues	134,451		99,987		97,465		443,405		391,818
Revenues	2,110,489		2,061,030		1,870,845		8,188,136		7,263,105
Cost of revenues	1,091,776		1,068,991		970,700		4,227,658		3,751,501
Gross profit	1,018,713		992,039		900,145		3,960,478		3,511,604
Operating expenses:
Sales and marketing	217,603		212,506		207,233		855,796		786,560
General and administrative	448,849		403,890		400,183		1,654,042		1,498,701
Transaction costs	5,869		(775)		10,529		12,412		21,839
(Gain) loss on asset sales	(24)		(3,933)		—		(5,046)		3,976
Total operating expenses	672,297		611,688		617,945		2,517,204		2,311,076
Income from operations	346,416		380,351		282,200		1,443,274		1,200,528
Interest and other expense:
Interest income	28,225		23,111		18,462		94,227		36,268
Interest expense	(103,183)		(101,385)		(94,200)		(402,022)		(356,337)
Other expense	(1,227)		(5,972)		(28,895)		(11,214)		(51,417)
Gain (loss) on debt extinguishment	71		(360)		143		(35)		327
Total interest and other, net	(76,114)		(84,606)		(104,490)		(319,044)		(371,159)
Income before income taxes	270,302		295,745		177,710		1,124,230		829,369
Income tax expense	(42,825)		(19,985)		(48,807)		(155,250)		(124,792)
Net income	227,477		275,760		128,903		968,980		704,577
Net (income) loss attributable to non-controlling interests	91		34		(140)		198		(232)
Net income attributable to common shareholders	$         227,568		$         275,794		$         128,763		$         969,178		$         704,345
Net income per share attributable to common shareholders:
Basic net income per share	$               2.41		$               2.94		$               1.39		$             10.35		$               7.69
Diluted net income per share	$               2.40		$               2.93		$               1.39		$             10.31		$               7.67
Shares used in computing basic net income per share	94,268		93,683		92,573		93,615		91,569
Shares used in computing diluted net income per share	94,667		94,168		92,752		94,009		91,828

 

EQUINIX, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
	Three Months Ended						Twelve Months Ended
	December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Net income	$       227,477		$       275,760		$       128,903		$       968,980		$       704,577
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment (“CTA”) gain (loss)	479,754		(412,910)		796,716		249,981		(769,886)
Unrealized gain (loss) on cash flow hedges	(26,382)		25,685		(50,231)		(18,370)		40,543
Net investment hedge CTA gain (loss)	(217,345)		149,608		(379,960)		(131,883)		425,701
Net actuarial loss on defined benefit plans	(112)		(119)		(42)		(462)		(101)
Total other comprehensive income (loss), net of tax	235,915		(237,736)		366,483		99,266		(303,743)
Comprehensive income, net of tax	463,392		38,024		495,386		1,068,246		400,834
Net (income) loss attributable to non-controlling interests	91		34		(140)		198		(232)
Other comprehensive (income) loss attributable to non-controlling interests	(22)		182		(12)		63		48
Comprehensive income attributable to common shareholders	$       463,461		$         38,240		$       495,234		$    1,068,507		$       400,650

 

EQUINIX, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	December 31, 2023		December 31, 2022
Assets
Cash and cash equivalents	$               2,095,712		$               1,906,421
Accounts receivable, net	1,003,792		855,380
Other current assets	468,193		459,138
Assets held for sale	—		84,316
Total current assets	3,567,697		3,305,255
Property, plant and equipment, net	18,600,833		16,649,534
Operating lease right-of-use assets	1,448,890		1,427,950
Goodwill	5,737,122		5,654,217
Intangible assets, net	1,704,870		1,897,649
Other assets	1,591,312		1,376,137
Total assets	$             32,650,724		$             30,310,742
Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity
Accounts payable and accrued expenses	$               1,186,618		$               1,004,800
Accrued property, plant and equipment	398,216		281,347
Current portion of operating lease liabilities	130,745		139,538
Current portion of finance lease liabilities	138,657		151,420
Current portion of mortgage and loans payable	7,705		9,847
Current portion of senior notes	998,580		—
Other current liabilities	301,729		251,346
Total current liabilities	3,162,250		1,838,298
Operating lease liabilities, less current portion	1,331,333		1,272,812
Finance lease liabilities, less current portion	2,122,484		2,143,690
Mortgage and loans payable, less current portion	663,263		642,708
Senior notes, less current portion	12,062,346		12,109,539
Other liabilities	795,549		797,863
Total liabilities	20,137,225		18,804,910
Redeemable non-controlling interest	25,000		—
Common stockholders’ equity:
Common stock	95		93
Additional paid-in capital	18,595,664		17,320,017
Treasury stock	(56,117)		(71,966)
Accumulated dividends	(8,694,647)		(7,317,570)
Accumulated other comprehensive loss	(1,290,117)		(1,389,446)
Retained earnings	3,934,016		2,964,838
Total common stockholders’ equity	12,488,894		11,505,966
Non-controlling interests	(395)		(134)
Total stockholders’ equity	12,488,499		11,505,832
Total liabilities, redeemable non-controlling interest and stockholders’ equity	$             32,650,724		$             30,310,742
Ending headcount by geographic region is as follows:
Americas headcount	5,953		5,493
EMEA headcount	4,267		3,936
Asia-Pacific headcount	2,931		2,668
Total headcount	13,151		12,097

 

EQUINIX, INC.
Summary of Debt Principal Outstanding
(in thousands)
(unaudited)
	December 31, 2023		December 31, 2022
Finance lease liabilities	$                         2,261,141		$                          2,295,110
Term loans	641,931		618,028
Mortgage payable and other loans payable	29,037		34,527
Plus: debt discount and issuance costs, net	726		1,062
Total mortgage and loans payable principal	671,694		653,617
Senior notes	13,060,926		12,109,539
Plus: debt discount and issuance costs	108,026		117,351
Total senior notes principal	13,168,952		12,226,890
Total debt principal outstanding	$                       16,101,787		$                        15,175,617

 

EQUINIX, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended						Twelve Months Ended
		December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Cash flows from operating activities:
	Net income	$       227,477		$       275,760		$       128,903		$       968,980		$       704,577
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation, amortization and accretion	462,367		466,613		438,492		1,843,665		1,739,374
	Stock-based compensation	105,829		98,446		107,519		407,536		403,983
	Amortization of debt issuance costs and debt discounts and premiums	4,791		4,684		4,553		18,718		17,826
	(Gain) loss on debt extinguishment	(71)		360		(143)		35		(327)
	Loss (gain) on asset sales	(24)		(3,933)		—		(5,046)		3,976
	Other items	15,788		12,776		44,880		58,030		67,298
	Changes in operating assets and liabilities:
	Accounts receivable	49,358		(47,147)		(56,209)		(150,345)		(153,415)
	Income taxes, net	10,692		(14,530)		(17,701)		4,107		(7,827)
	Accounts payable and accrued expenses	76,351		69,082		31,511		161,300		114,600
	Operating lease right-of-use assets	21,624		39,977		36,171		138,704		149,094
	Operating lease liabilities	(27,575)		(33,654)		(34,586)		(126,539)		(132,831)
	Other assets and liabilities	52,107		(83,259)		76,799		(102,550)		56,854
Net cash provided by operating activities		998,714		785,175		760,189		3,216,595		2,963,182
Cash flows from investing activities:
	Purchases, sales and maturities of investments, net	(54,534)		(26,664)		(35,222)		(135,881)		(122,569)
	Business acquisitions, net of cash and restricted cash acquired	—		—		—		—		(964,010)
	Real estate acquisitions	(231,108)		(112,896)		(208,377)		(384,401)		(248,276)
	Purchases of other property, plant and equipment	(995,720)		(617,539)		(827,927)		(2,781,018)		(2,278,004)
	Proceeds from asset sales	—		4,682		—		76,936		249,906
Net cash used in investing activities		(1,281,362)		(752,417)		(1,071,526)		(3,224,364)		(3,362,953)
Cash flows from financing activities:
	Proceeds from employee equity awards	(115)		42,420		—		86,848		81,543
	Proceeds from redeemable non-controlling interest	—		—		—		25,000		—
	Payment of dividend distributions	(403,176)		(324,587)		(287,573)		(1,374,168)		(1,151,459)
	Proceeds from public offering of common stock, net of offering costs	432,876		—		—		733,651		796,018
	Proceeds from mortgage and loans payable	—		—		—		—		676,850
	Proceeds from senior notes, net of debt discounts	—		336,853		—		902,092		1,193,688
	Repayment of finance lease liabilities	(50,822)		(31,629)		(36,394)		(148,913)		(134,202)
	Repayment of mortgage and loans payable	(576)		(2,133)		(1,714)		(6,132)		(587,941)
	Repayment of senior notes	—		—		—		—		—
	Debt extinguishment costs	—		—		—		—		—
	Debt issuance costs	307		(2,982)		—		(6,932)		(17,731)
Net cash provided by (used in) financing activities		(21,506)		17,942		(325,681)		211,446		856,766
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash		42,209		(35,027)		37,398		(15,616)		(98,201)
Net increase (decrease) in cash, cash equivalents and restricted cash		(261,945)		15,673		(599,620)		188,061		358,794
Cash, cash equivalents and restricted cash at beginning of period		2,358,254		2,342,581		2,507,868		1,908,248		1,549,454
Cash, cash equivalents and restricted cash at end of period		$    2,096,309		$    2,358,254		$    1,908,248		$    2,096,309		$    1,908,248
Supplemental cash flow information:
Cash paid for taxes		$         26,662		$         42,021		$         44,091		$       152,988		$       140,312
Cash paid for interest		$       136,224		$         97,152		$       128,511		$       471,456		$       430,217
Free cash flow (negative free cash flow)(1)		$     (228,114)		$         59,422		$     (276,115)		$       128,112		$     (277,202)
Adjusted free cash flow (2)		$           2,994		$       172,318		$       (67,738)		$       512,513		$      935,084
(1)	We define free cash flow (negative free cash flow) as net cash provided by operating activities plus net cash provided by (used in) investing activities (excluding the net purchases, sales and maturities of investments) as presented below:
	Net cash provided by operating activities as presented above	$       998,714		$       785,175		$       760,189		$    3,216,595		$    2,963,182
	Net cash used in investing activities as presented above	(1,281,362)		(752,417)		(1,071,526)		(3,224,364)		(3,362,953)
	Purchases, sales and maturities of investments, net	54,534		26,664		35,222		135,881		122,569
	Free cash flow (negative free cash flow)	$     (228,114)		$         59,422		$     (276,115)		$       128,112		$     (277,202)
(2)	We define adjusted free cash flow as free cash flow (negative free cash flow) as defined above, excluding any real estate and business acquisitions, net of cash and restricted cash acquired as presented below:
	Free cash flow (negative free cash flow) as defined above	$     (228,114)		$         59,422		$     (276,115)		$       128,112		$     (277,202)
	Less business acquisitions, net of cash and restricted cash acquired	—		—		—		—		964,010
	Less real estate acquisitions	231,108		112,896		208,377		384,401		248,276
	Adjusted free cash flow	$           2,994		$       172,318		$        (67,738)		$       512,513		$       935,084

 

EQUINIX, INC.
Non-GAAP Measures and Other Supplemental Data
(in thousands)
(unaudited)
		Three Months Ended						Twelve Months Ended
		December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
	Recurring revenues	$ 1,976,038		$ 1,961,043		$ 1,773,380		$ 7,744,731		$ 6,871,287
	Non-recurring revenues	134,451		99,987		97,465		443,405		391,818
	Revenues (1)	2,110,489		2,061,030		1,870,845		8,188,136		7,263,105
	Cash cost of revenues (2)	756,510		725,750		642,176		2,869,034		2,436,074
	Cash gross profit (3)	1,353,979		1,335,280		1,228,669		5,319,102		4,827,031
	Cash operating expenses (4)(7):
	Cash sales and marketing expenses (5)	147,084		138,879		140,697		567,514		506,609
	Cash general and administrative     expenses (6)	286,438		260,470		249,232		1,049,747		950,722
	Total cash operating expenses (4)(7)	433,522		399,349		389,929		1,617,261		1,457,331
	Adjusted EBITDA (8)	$    920,457		$    935,931		$    838,740		$ 3,701,841		$ 3,369,700
	Cash gross margins (9)	64 %		65 %		66 %		65 %		66 %
	Adjusted EBITDA     margins (10)	44 %		45 %		45 %		45 %		46 %
	Adjusted EBITDA flow-through rate (11)	(31) %		82 %		(107) %		36 %		36 %
	FFO (12)	$    524,505		$    562,080		$    406,945		$ 2,129,977		$ 1,826,334
	AFFO (13) (14)	$    690,846		$    771,617		$    657,818		$ 3,018,518		$ 2,713,878
	Basic FFO per share (15)	$           5.56		$           6.00		$           4.40		$         22.75		$         19.94
	Diluted FFO per share (15)	$           5.54		$           5.97		$           4.39		$         22.66		$         19.89
	Basic AFFO per share (15)	$           7.33		$           8.24		$           7.11		$         32.24		$         29.64
	Diluted AFFO per share(15)	$           7.30		$           8.19		$           7.09		$         32.11		$         29.55
(1)	The geographic split of our revenues on a services basis is presented below:
	Americas Revenues:
	Colocation	$    610,512		$    596,871		$    568,240		$ 2,365,049		$ 2,187,751
	Interconnection	210,550		206,552		197,337		820,007		756,214
	Managed infrastructure	65,024		63,356		59,244		249,779		218,499
	Other	6,657		5,503		4,885		22,118		20,727
	Recurring revenues	892,743		872,282		829,706		3,456,953		3,183,191
	Non-recurring revenues	38,968		41,411		42,065		160,539		166,026
	Revenues	$    931,711		$    913,693		$    871,771		$ 3,617,492		$ 3,349,217
	EMEA Revenues:
	Colocation	$    540,935		$    538,256		$    450,480		$ 2,112,168		$ 1,744,121
	Interconnection	79,619		78,795		66,710		307,337		268,398
	Managed infrastructure	32,956		32,790		29,431		130,061		119,361
	Other	23,816		23,283		23,882		98,591		75,449
	Recurring revenues	677,326		673,124		570,503		2,648,157		2,207,329
	Non-recurring revenues	73,840		35,590		31,208		189,697		135,875
	Revenues	$    751,166		$    708,714		$    601,711		$ 2,837,854		$ 2,343,204
	Asia-Pacific Revenues:
	Colocation	$    317,969		$    329,054		$    291,480		$ 1,288,844		$ 1,150,738
	Interconnection	67,538		67,411		61,572		266,966		243,664
	Managed infrastructure	17,191		17,484		17,819		71,833		77,646
	Other	3,271		1,688		2,300		11,978		8,719
	Recurring revenues	405,969		415,637		373,171		1,639,621		1,480,767
	Non-recurring revenues	21,643		22,986		24,192		93,169		89,917
	Revenues	$    427,612		$    438,623		$    397,363		$ 1,732,790		$ 1,570,684
	Worldwide Revenues:
	Colocation	$ 1,469,416		$ 1,464,181		$ 1,310,200		$ 5,766,061		$ 5,082,610
	Interconnection	357,707		352,758		325,619		1,394,310		1,268,276
	Managed infrastructure	115,171		113,630		106,494		451,673		415,506
	Other	33,744		30,474		31,067		132,687		104,895
	Recurring revenues	1,976,038		1,961,043		1,773,380		7,744,731		6,871,287
	Non-recurring revenues	134,451		99,987		97,465		443,405		391,818
	Revenues	$ 2,110,489		$ 2,061,030		$ 1,870,845		$ 8,188,136		$ 7,263,105
(2)	We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below:
	Cost of revenues	$ 1,091,776		$ 1,068,991		$    970,700		$ 4,227,658		$ 3,751,501
	Depreciation, amortization and accretion expense	(322,366)		(330,852)		(316,549)		(1,309,613)		(1,270,399)
	Stock-based compensation expense	(12,900)		(12,389)		(11,975)		(49,011)		(45,028)
	Cash cost of revenues	$    756,510		$    725,750		$    642,176		$ 2,869,034		$ 2,436,074
	The geographic split of our cash cost of revenues is presented below:
	Americas cash cost of revenues	$    263,165		$    270,272		$    263,374		$ 1,045,526		$    994,389
	EMEA cash cost of revenues	326,137		304,345		226,574		1,199,345		866,292
	Asia-Pacific cash cost of revenues	167,208		151,133		152,228		624,163		575,393
	Cash cost of revenues	$    756,510		$    725,750		$    642,176		$ 2,869,034		$ 2,436,074
(3)	We define cash gross profit as revenues less cash cost of revenues (as defined above).
(4)	We define cash operating expense as selling, general, and administrative expense less depreciation, amortization, and stock-based compensation. We also refer to cash operating expense as cash selling, general and administrative expense or “cash SG&A”.
	Selling, general, and administrative expense	$    666,452		$    616,396		$    607,416		$ 2,509,838		$ 2,285,261
	Depreciation and amortization expense	(140,001)		(130,990)		(121,943)		(534,052)		(468,975)
	Stock-based compensation expense	(92,929)		(86,057)		(95,544)		(358,525)		(358,955)
	Cash operating expense	$    433,522		$    399,349		$    389,929		$ 1,617,261		$ 1,457,331
(5)	We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and stock-based compensation as presented below:
	Sales and marketing expense	$    217,603		$    212,506		$    207,233		$    855,796		$    786,560
	Depreciation and amortization expense	(50,632)		(50,989)		(49,604)		(203,698)		(197,157)
	Stock-based compensation expense	(19,887)		(22,638)		(16,932)		(84,584)		(82,794)
	Cash sales and marketing expense	$    147,084		$    138,879		$    140,697		$    567,514		$    506,609
(6)	We define cash general and administrative expense as general and administrative expense less depreciation, amortization and stock-based compensation as presented below:
	General and administrative expense	$    448,849		$    403,890		$    400,183		$ 1,654,042		$ 1,498,701
	Depreciation and amortization expense	(89,369)		(80,001)		(72,339)		(330,354)		(271,818)
	Stock-based compensation expense	(73,042)		(63,419)		(78,612)		(273,941)		(276,161)
	Cash general and administrative expense	$    286,438		$    260,470		$    249,232		$ 1,049,747		$    950,722
(7)	The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below:
	Americas cash SG&A	$    257,581		$    238,524		$    214,560		$    958,270		$    833,053
	EMEA cash SG&A	105,253		94,197		104,648		387,233		367,410
	Asia-Pacific cash SG&A	70,688		66,628		70,721		271,758		256,868
	Cash SG&A	$    433,522		$    399,349		$    389,929		$ 1,617,261		$ 1,457,331
(8)	We define adjusted EBITDA as income from operations excluding depreciation, amortization, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales as presented below:
	Net income	$    227,477		$    275,760		$    128,903		$    968,980		$    704,577
	Income tax expense	42,825		19,985		48,807		155,250		124,792
	Interest income	(28,225)		(23,111)		(18,462)		(94,227)		(36,268)
	Interest expense	103,183		101,385		94,200		402,022		356,337
	Other expense	1,227		5,972		28,895		11,214		51,417
	(Gain) loss on debt extinguishment	(71)		360		(143)		35		(327)
	Depreciation, amortization and accretion expense	462,367		461,842		438,492		1,843,665		1,739,374
	Stock-based compensation expense	105,829		98,446		107,519		407,536		403,983
	Transaction costs	5,869		(775)		10,529		12,412		21,839
	(Gain) loss on asset sales	(24)		(3,933)		—		(5,046)		3,976
	Adjusted EBITDA	$    920,457		$    935,931		$    838,740		$ 3,701,841		$ 3,369,700
	The geographic split of our adjusted EBITDA is presented below:
	Americas net income (loss)	$       57,548		$       37,911		$   (67,580)		$       12,703		$         (584)
	Americas income tax expense (benefit)	(89,606)		19,897		(33,279)		22,818		42,587
	Americas interest income	(20,633)		(17,506)		(16,259)		(71,945)		(32,265)
	Americas interest expense	87,827		86,691		83,363		342,690		316,934
	Americas other (income) expense	50,797		(39,137)		104,539		24,752		(42,895)
	Americas loss on debt extinguishment	—		—		—		—		198
	Americas depreciation, amortization and accretion expense	251,276		251,855		237,919		999,832		932,892
	Americas stock-based compensation expense	70,914		64,067		76,131		272,259		282,997
	Americas transaction costs	2,923		1,054		9,003		7,064		17,950
	Americas (gain) loss on asset sales	(82)		65		—		3,523		3,961
	Americas adjusted EBITDA	$    410,964		$    404,897		$    393,837		$ 1,613,696		$ 1,521,775
	EMEA net income	$    174,108		$    125,992		$    195,224		$    651,057		$    477,808
	EMEA income tax expense	49,560		—		16,531		49,560		16,650
	EMEA interest income	(3,903)		(2,730)		(1,251)		(12,045)		(2,530)
	EMEA interest expense	4,530		3,931		2,675		17,167		5,698
	EMEA other (income) expense	(53,621)		42,284		(77,880)		(30,679)		77,705
	EMEA depreciation, amortization and accretion expense	124,536		125,613		116,097		497,924		459,098
	EMEA stock-based compensation expense	21,271		20,958		18,840		82,575		73,294
	EMEA transaction costs	3,238		(1,878)		253		4,286		2,016
	EMEA (gain) loss on asset sales	58		(3,998)		—		(8,569)		(237)
	EMEA adjusted EBITDA	$   319,777		$    310,172		$    270,489		$ 1,251,276		$ 1,109,502
	Asia-Pacific net income (loss)	$     (4,179)		$    111,857		$        1,259		$    305,220		$    227,353
	Asia-Pacific income tax expense	82,871		88		65,555		82,872		65,555
	Asia-Pacific interest income	(3,689)		(2,875)		(952)		(10,237)		(1,473)
	Asia-Pacific interest expense	10,826		10,763		8,162		42,165		33,705
	Asia-Pacific other expense	4,051		2,825		2,236		17,141		16,607
	Asia-Pacific (gain) loss on debt extinguishment	(71)		360		(143)		35		(525)
	Asia-Pacific depreciation, amortization and accretion expense	86,555		84,374		84,476		345,909		347,384
	Asia-Pacific stock-based compensation expense	13,644		13,421		12,548		52,702		47,692
	Asia-Pacific transaction costs	(292)		49		1,273		1,062		1,873
	Asia-Pacific loss on asset sales	—		—		—		—		252
	Asia-Pacific adjusted EBITDA	$    189,716		$    220,862		$    174,414		$    836,869		$    738,423
(9)	We define cash gross margins as cash gross profit divided by revenues.
	Our cash gross margins by geographic region is presented below:
	Americas cash gross margins	72 %		70 %		70 %		71 %		70 %
	EMEA cash gross margins	57 %		57 %		62 %		58 %		63 %
	Asia-Pacific cash gross margins	61 %		66 %		62 %		64 %		63 %
(10)	We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.
	Americas adjusted EBITDA margins	44 %		44 %		45 %		45 %		45 %
	EMEA adjusted EBITDA margins	43 %		44 %		45 %		44 %		47 %
	Asia-Pacific adjusted EBITDA margins	44 %		50 %		44 %		48 %		47 %
(11)	We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:
	Adjusted EBITDA – current period	$    920,457		$    935,931		$    838,740		$ 3,701,841		$ 3,369,700
	Less adjusted EBITDA – prior period	(935,931)		(901,170)		(870,916)		(3,369,700)		(3,144,384)
	Adjusted EBITDA growth	$   (15,474)		$      34,761		$   (32,176)		$   332,141		$    225,316
	Revenues – current period	$ 2,110,489		$ 2,061,030		$ 1,870,845		$ 8,188,136		$ 7,263,105
	Less revenues – prior period	(2,061,030)		(2,018,408)		(1,840,659)		(7,263,105)		(6,635,537)
	Revenue growth	$     49,459		$      42,622		$      30,186		$   925,031		$    627,568
	Adjusted EBITDA flow-through rate	(31) %		82 %		(107) %		36 %		36 %
(12)	FFO is defined as net income or loss, excluding gain or loss from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures’ and non-controlling interests’ share of these items.
	Net income	$    227,477		$    275,760		$    128,903		$    968,980		$    704,577
	Net (income) loss attributable to non-controlling interests	91		34		(140)		198		(232)
	Net income attributable to common shareholders	227,568		275,794		128,763		969,178		704,345
	Adjustments:
	Real estate depreciation	289,747		284,760		274,625		1,141,861		1,104,787
	(Gain) loss on disposition of real estate property	1,642		(3,480)		437		1,898		7,134
	Adjustments for FFO from unconsolidated joint ventures	5,548		5,006		3,120		17,040		10,068
	FFO attributable to common shareholders	$    524,505		$    562,080		$    406,945		$ 2,129,977		$ 1,826,334
(13)	AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, stock-based charitable contributions, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, net income or loss from discontinued operations, net of tax, recurring capital expenditures and adjustments from FFO to AFFO for unconsolidated joint ventures’ and non-controlling interests’ share of these items.
	FFO attributable to common shareholders	$    524,505		$    562,080		$    406,945		$ 2,129,977		$ 1,826,334
	Adjustments:
	Installation revenue adjustment	507		(481)		6,975		3,910		17,745
	Straight-line rent expense adjustment	(5,952)		6,323		1,585		12,164		16,263
	Amortization of deferred financing costs and debt discounts	4,792		4,684		4,553		18,719		17,826
	Contract cost adjustment	(16,349)		(9,835)		(17,380)		(46,601)		(52,888)
	Stock-based compensation expense	105,829		98,446		107,519		407,536		403,983
	Stock-based charitable contributions	—		—		34,974		2,543		49,013
	Non-real estate depreciation expense	121,852		125,882		111,342		494,214		426,666
	Amortization expense	51,864		52,297		51,438		209,063		204,755
	Accretion expense	(1,096)		(1,097)		1,086		(1,473)		3,166
	Recurring capital expenditures	(105,150)		(51,736)		(80,047)		(218,287)		(188,885)
	(Gain) loss on debt extinguishment	(71)		360		(143)		35		(327)
	Transaction costs	5,869		(775)		10,529		12,412		21,839
	Impairment charges (1)	—		1,518		—		1,518		1,815
	Income tax expense (benefit) adjustment (1)	1,462		(16,719)		19,806		(12,133)		(31,165)
	Adjustments for AFFO from unconsolidated joint ventures	2,784		670		(1,364)		4,921		(2,262)
	AFFO attributable to common shareholders	$    690,846		$    771,617		$    657,818		$ 3,018,518		$ 2,713,878
	(1)  Impairment charges relate to the impairment of an indemnification asset resulting from the settlement of a pre-acquisition uncertain tax position, which was recorded as Other Income (Expense) on the Condensed Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense adjustment line on the table above.
(14)	Below is how we reconcile from adjusted EBITDA to AFFO:
	Adjusted EBITDA	$    920,457		$    935,931		$    838,740		$ 3,701,841		$ 3,369,700
	Adjustments:
	Interest expense, net of interest income	(74,958)		(78,274)		(75,738)		(307,795)		(320,069)
	Amortization of deferred financing costs and debt discounts	4,792		4,684		4,553		18,719		17,826
	Income tax expense	(42,825)		(19,985)		(48,807)		(155,250)		(124,792)
	Income tax expense (benefit) adjustment (1)	1,462		(16,719)		19,806		(12,133)		(31,165)
	Straight-line rent expense adjustment	(5,952)		6,323		1,585		12,164		16,263
	Stock-based charitable contributions	—		—		34,974		2,543		49,013
	Contract cost adjustment	(16,349)		(9,835)		(17,380)		(46,601)		(52,888)
	Installation revenue adjustment	507		(481)		6,975		3,910		17,745
	Recurring capital expenditures	(105,150)		(51,736)		(80,047)		(218,287)		(188,885)
	Other expense	(1,227)		(5,972)		(28,895)		(11,214)		(51,417)
	(Gain) loss on disposition of real estate property	1,642		(3,480)		437		1,898		7,134
	Adjustments for unconsolidated JVs’ and non-controlling interests	8,423		5,710		1,615		22,159		7,574
	Adjustments for impairment charges (1)	—		1,518		—		1,518		1,815
	Adjustment for gain (loss) on sale of assets	24		3,933		—		5,046		(3,976)
	AFFO attributable to common shareholders	$    690,846		$    771,617		$    657,818		$ 3,018,518		$ 2,713,878
	(1)  Impairment charges relate to the impairment of an indemnification asset resulting from the settlement of a pre-acquisition uncertain tax position, which was recorded as Other Income (Expense) on the Condensed Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense adjustment line on the table above.
(15)	The shares used in the computation of basic and diluted FFO and AFFO per share attributable to common shareholders is presented below:
	Shares used in computing basic net income per share, FFO per share and AFFO per share	94,268		93,683		92,573		93,615		91,569
	Effect of dilutive securities:
	Employee equity awards	399		485		179		394		259
	Shares used in computing diluted net income per share, FFO per share and AFFO per share	94,667		94,168		92,752		94,009		91,828
	Basic FFO per share	$           5.56		$           6.00		$           4.40		$         22.75		$         19.94
	Diluted FFO per share	$           5.54		$           5.97		$           4.39		$         22.66		$         19.89
	Basic AFFO per share	$           7.33		$           8.24		$           7.11		$         32.24		$         29.64
	Diluted AFFO per share	$           7.30		$           8.19		$           7.09		$         32.11		$         29.55

 

 

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SOURCE Equinix, Inc.