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Equinix's (EQIX) Q2 AFFO Beat on Solid Demand, Revenues Rise
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Equinix Inc.’s (EQIX - Free Report) second-quarter 2024 adjusted funds from operations (AFFO) per share of $9.22 surpassed the Zacks Consensus Estimate of $8.82. The figure improved nearly 14.7% from the prior-year quarter.
Results displayed 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 472,300, rising 4% year over year. The company also revised its outlook for 2024.
Total quarterly revenues came in at $2.16 billion, in line with the Zacks Consensus Estimate. The top line increased 6.9% year over year.
Quarter in Detail
Recurring revenues were $2.02 billion, up 5.5% from the year-ago quarter. Our projection for the metric was $2.04 billion. Non-recurring revenues rose 33.7% to $135 million. We estimated the metric to be $118.5 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 8.5%, 4.9% and 6.8% to $966 million, $721 million and $472 million, year over year, respectively.
The adjusted EBITDA came in at $1.04 billion, up 15% year over year. We projected the metric at $1.02 billion. Adjusted EBITDA margin was reported at 48%.
AFFO rose 16.3% to $877 million from the year-ago period.
EQIX spent $45 million on recurring capital expenditure in the second quarter, up 12.5% on a year-over-year basis. Recurring capital expenditure was 2.1% of revenues in the reported quarter. Non-recurring capital expenditure was $603 million, marginally up year over year.
Balance Sheet
Equinix had $6.4 billion of available liquidity as of Jun 30, 2024. This comprised cash, cash equivalents, its undrawn revolver and approximately $500 million of unsettled at-the-market proceeds. It excludes restricted cash.
Its net leverage ratio was 3.5, and the weighted average maturity was 7.2 years as of Jun 30, 2024.
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 Sep 18 to shareholders on record as of Aug 21, 2024.
2024 Guidance
For the third quarter of 2024, Equinix projects revenues between $2.190 billion and $2.210 billion, implying a 1-2% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $1.029-$1.049 billion.
For the current year, AFFO per share is estimated between $34.67 and $35.30, revised upward from the prior-guided range of $34.45-$35.29. This suggests an 8-10% increase from the previous year. The Zacks Consensus Estimate for the same is currently pegged at $34.98.
For 2024, Equinix now estimates generating total revenues of $8.692-$8.772 billion, indicating year-over-year growth of 6-7%. Earlier, the company had guided total revenues of $8.692-$8.792 billion.
Management predicts an adjusted EBITDA of $4.066-$4.126 billion, revised from $4.044-$4.124 billion projected earlier. Expectations for adjusted EBITDA margin were maintained at 47%.
Digital Realty Trust (DLR - Free Report) reported second-quarter 2024 core funds from operations (FFO) per share of $1.65, outpacing the Zacks Consensus Estimate of $1.63. However, this compares unfavorably to an FFO of $1.68 per share reported a year ago.
Results reflected healthy leasing activity and an increase in rental rates. However, the company witnessed a rise in rental property expenses and interest expenses in the quarter. DLR maintained its outlook for 2024.
SBA Communications Corporation (SBAC - Free Report) reported second-quarter 2024 AFFO per share of $3.29, beating the Zacks Consensus Estimate by a whisker. Moreover, the figure reflects a rise of 1.5% from the prior-year quarter.
Results reflect a decent improvement in site leasing revenues. It continues to benefit from the addition of sites to its portfolio. However, lower revenues posted by site development hurt the results to some extent. SBAC lowered its 2024 outlook.
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) Q2 AFFO Beat on Solid Demand, Revenues Rise
Equinix Inc.’s (EQIX - Free Report) second-quarter 2024 adjusted funds from operations (AFFO) per share of $9.22 surpassed the Zacks Consensus Estimate of $8.82. The figure improved nearly 14.7% from the prior-year quarter.
Results displayed 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 472,300, rising 4% year over year. The company also revised its outlook for 2024.
Total quarterly revenues came in at $2.16 billion, in line with the Zacks Consensus Estimate. The top line increased 6.9% year over year.
Quarter in Detail
Recurring revenues were $2.02 billion, up 5.5% from the year-ago quarter. Our projection for the metric was $2.04 billion. Non-recurring revenues rose 33.7% to $135 million. We estimated the metric to be $118.5 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 8.5%, 4.9% and 6.8% to $966 million, $721 million and $472 million, year over year, respectively.
The adjusted EBITDA came in at $1.04 billion, up 15% year over year. We projected the metric at $1.02 billion. Adjusted EBITDA margin was reported at 48%.
AFFO rose 16.3% to $877 million from the year-ago period.
EQIX spent $45 million on recurring capital expenditure in the second quarter, up 12.5% on a year-over-year basis. Recurring capital expenditure was 2.1% of revenues in the reported quarter. Non-recurring capital expenditure was $603 million, marginally up year over year.
Balance Sheet
Equinix had $6.4 billion of available liquidity as of Jun 30, 2024. This comprised cash, cash equivalents, its undrawn revolver and approximately $500 million of unsettled at-the-market proceeds. It excludes restricted cash.
Its net leverage ratio was 3.5, and the weighted average maturity was 7.2 years as of Jun 30, 2024.
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 Sep 18 to shareholders on record as of Aug 21, 2024.
2024 Guidance
For the third quarter of 2024, Equinix projects revenues between $2.190 billion and $2.210 billion, implying a 1-2% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $1.029-$1.049 billion.
For the current year, AFFO per share is estimated between $34.67 and $35.30, revised upward from the prior-guided range of $34.45-$35.29. This suggests an 8-10% increase from the previous year. The Zacks Consensus Estimate for the same is currently pegged at $34.98.
For 2024, Equinix now estimates generating total revenues of $8.692-$8.772 billion, indicating year-over-year growth of 6-7%. Earlier, the company had guided total revenues of $8.692-$8.792 billion.
Management predicts an adjusted EBITDA of $4.066-$4.126 billion, revised from $4.044-$4.124 billion projected earlier. Expectations for adjusted EBITDA margin were maintained at 47%.
Equinix carries a Zacks Rank #3 (Hold) 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
Digital Realty Trust (DLR - Free Report) reported second-quarter 2024 core funds from operations (FFO) per share of $1.65, outpacing the Zacks Consensus Estimate of $1.63. However, this compares unfavorably to an FFO of $1.68 per share reported a year ago.
Results reflected healthy leasing activity and an increase in rental rates. However, the company witnessed a rise in rental property expenses and interest expenses in the quarter. DLR maintained its outlook for 2024.
SBA Communications Corporation (SBAC - Free Report) reported second-quarter 2024 AFFO per share of $3.29, beating the Zacks Consensus Estimate by a whisker. Moreover, the figure reflects a rise of 1.5% from the prior-year quarter.
Results reflect a decent improvement in site leasing revenues. It continues to benefit from the addition of sites to its portfolio. However, lower revenues posted by site development hurt the results to some extent. SBAC lowered its 2024 outlook.
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.