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Equinix's (EQIX) Q4 AFFO Beat on Solid Demand, Revenues Rise
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Equinix Inc.’s (EQIX - Free Report) fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $7.30 surpassed the Zacks Consensus Estimate of $7.25. The figure improved nearly 3% from the prior-year quarter.
EQIX’s results reflect steady growth in colocation and inter-connection revenues on the back of strong demand for digital infrastructure. During the quarter, Equinix’s total interconnections reached 462,200, rising 3% year over year. The company also issued an outlook for 2024.
Total quarterly revenues came in at $2.11 billion, in line with the Zacks Consensus Estimate. Moreover, the top line increased 12.8% year over year.
In 2023, AFFO per share came in at $32.11, higher than the prior-year tally of $29.55. Moreover, the figure outpaced the Zacks Consensus Estimate of $32.07. This was backed by a 12.7% increase in total revenues of $8.19 billion, which was in line with the consensus mark.
Quarter in Detail
Recurring revenues were $1.98 billion, up 11.4% from the year-ago quarter. Our projection was pegged at $2 billion. Non-recurring revenues rose 37.9% to $134.5 million. We estimated the metric at $101.4 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 6.9%, 24.8% and 7.6% to $931.7 million, $751.2 million and $427.6 million, year over year, respectively.
The adjusted EBITDA came in at $920.5 million, up 9.7% year over year. We projected the metric at $924.2 million. Adjusted EBITDA margin was reported at 44%.
AFFO rose 5% to $690.8 million from the year-ago period.
EQIX spent $105.2 million on recurring capital expenditure in the fourth quarter, up 31.4% on a year-over-year basis. Recurring capital expenditure was 5% of revenues in the reported quarter. Non-recurring was $891 million, up 19.1% year over year.
Balance Sheet
Equinix had $6.5 billion of available liquidity as of Dec 31, 2023. This comprised cash, cash equivalents, its undrawn revolver and $500 million of unsettled at-the-market proceeds. It excludes restricted cash.
Its net leverage ratio was 3.7, and the weighted average maturity was 7.6 years as of Dec 31, 2023.
Dividend Update
Concurrently, Equinix’s board of directors announced a quarterly cash dividend of $4.26 per share. The dividend will be paid out on Mar 20 to shareholders on record as of Feb 28, 2024.
2024 Guidance
For the first quarter of 2024, Equinix projects revenues between $2.127 billion and $2.147 billion, implying a 1-2% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $960-$980 million.
For the current year, AFFO per share is estimated between $34.58 and $35.31. This suggests an 8-10% increase from the previous year. This is higher than the Zacks Consensus Estimate of $34.55.
For 2024, Equinix estimates generating total revenues of $8.793-$8.893 billion, indicating growth of 7-9% from 2023 on an as-reported basis. The company expects to incur $25 million of integration costs.
Management predicts an adjusted EBITDA of $4.089-$4.169 billion and an adjusted EBITDA margin of 47%.
Healthpeak Properties, Inc. reported fourth-quarter 2023 FFO as adjusted per share of 46 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure rose 4.5% from the prior-year quarter.
Results reflect better-than-anticipated revenues. Moreover, growth in same-store portfolio cash (adjusted) NOI was witnessed across the portfolio. PEAK also issued its 2024 outlook.
Highwoods Properties Inc. (HIW - Free Report) reported fourth-quarter 2023 FFO per share of 99 cents, outpacing the Zacks Consensus Estimate of 91 cents. The figure was also above the prior-year quarter’s 96 cents.
HIW’s quarterly results reflect rent growth. However, a fall in occupancy and higher operating expenses acted as dampeners. It also issued its outlook for 2024.
Cousins Properties’ (CUZ - Free Report) fourth-quarter 2023 FFO per share of 65 cents was in line with the Zacks Consensus Estimate.
Results reflect year-over-year growth in the top line, aided by healthy leasing activity, a rise in occupancy levels, and a decent improvement in second-generation net rent per square foot. However, higher same-property rental property operating expenses are a headwind in the quarter. CUZ also issued its 2024 outlook for FFO per share.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Equinix's (EQIX) Q4 AFFO Beat on Solid Demand, Revenues Rise
Equinix Inc.’s (EQIX - Free Report) fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $7.30 surpassed the Zacks Consensus Estimate of $7.25. The figure improved nearly 3% from the prior-year quarter.
EQIX’s results reflect steady growth in colocation and inter-connection revenues on the back of strong demand for digital infrastructure. During the quarter, Equinix’s total interconnections reached 462,200, rising 3% year over year. The company also issued an outlook for 2024.
Total quarterly revenues came in at $2.11 billion, in line with the Zacks Consensus Estimate. Moreover, the top line increased 12.8% year over year.
In 2023, AFFO per share came in at $32.11, higher than the prior-year tally of $29.55. Moreover, the figure outpaced the Zacks Consensus Estimate of $32.07. This was backed by a 12.7% increase in total revenues of $8.19 billion, which was in line with the consensus mark.
Quarter in Detail
Recurring revenues were $1.98 billion, up 11.4% from the year-ago quarter. Our projection was pegged at $2 billion. Non-recurring revenues rose 37.9% to $134.5 million. We estimated the metric at $101.4 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 6.9%, 24.8% and 7.6% to $931.7 million, $751.2 million and $427.6 million, year over year, respectively.
The adjusted EBITDA came in at $920.5 million, up 9.7% year over year. We projected the metric at $924.2 million. Adjusted EBITDA margin was reported at 44%.
AFFO rose 5% to $690.8 million from the year-ago period.
EQIX spent $105.2 million on recurring capital expenditure in the fourth quarter, up 31.4% on a year-over-year basis. Recurring capital expenditure was 5% of revenues in the reported quarter. Non-recurring was $891 million, up 19.1% year over year.
Balance Sheet
Equinix had $6.5 billion of available liquidity as of Dec 31, 2023. This comprised cash, cash equivalents, its undrawn revolver and $500 million of unsettled at-the-market proceeds. It excludes restricted cash.
Its net leverage ratio was 3.7, and the weighted average maturity was 7.6 years as of Dec 31, 2023.
Dividend Update
Concurrently, Equinix’s board of directors announced a quarterly cash dividend of $4.26 per share. The dividend will be paid out on Mar 20 to shareholders on record as of Feb 28, 2024.
2024 Guidance
For the first quarter of 2024, Equinix projects revenues between $2.127 billion and $2.147 billion, implying a 1-2% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $960-$980 million.
For the current year, AFFO per share is estimated between $34.58 and $35.31. This suggests an 8-10% increase from the previous year. This is higher than the Zacks Consensus Estimate of $34.55.
For 2024, Equinix estimates generating total revenues of $8.793-$8.893 billion, indicating growth of 7-9% from 2023 on an as-reported basis. The company expects to incur $25 million of integration costs.
Management predicts an adjusted EBITDA of $4.089-$4.169 billion and an adjusted EBITDA margin of 47%.
Equinix carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equinix, Inc. Price, Consensus and EPS Surprise
Equinix, Inc. price-consensus-eps-surprise-chart | Equinix, Inc. Quote
Performance of Other REITs
Healthpeak Properties, Inc. reported fourth-quarter 2023 FFO as adjusted per share of 46 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure rose 4.5% from the prior-year quarter.
Results reflect better-than-anticipated revenues. Moreover, growth in same-store portfolio cash (adjusted) NOI was witnessed across the portfolio. PEAK also issued its 2024 outlook.
Highwoods Properties Inc. (HIW - Free Report) reported fourth-quarter 2023 FFO per share of 99 cents, outpacing the Zacks Consensus Estimate of 91 cents. The figure was also above the prior-year quarter’s 96 cents.
HIW’s quarterly results reflect rent growth. However, a fall in occupancy and higher operating expenses acted as dampeners. It also issued its outlook for 2024.
Cousins Properties’ (CUZ - Free Report) fourth-quarter 2023 FFO per share of 65 cents was in line with the Zacks Consensus Estimate.
Results reflect year-over-year growth in the top line, aided by healthy leasing activity, a rise in occupancy levels, and a decent improvement in second-generation net rent per square foot. However, higher same-property rental property operating expenses are a headwind in the quarter. CUZ also issued its 2024 outlook for FFO per share.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.