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Equinix Inc. (EQIX - Analyst Report) has successfully secured a deal from an over-the counter (OTC) electronic trade processing service provider MarkitSERV, under which the latter deployed its Credit Center in Equinix International Business Exchange (IBX) data centers in New York and Chicago.

The Equinix data center enables direct access between MarkitSERV as well as the ecosystem of major players and new entrants in the OTC market. Earlier, Equinix was instrumental in solving the problems of different stock exchanges and financial institutions.

Two weeks ago, Equinix had signed another deal with the Canadian National Stock Exchange (CNSX) – under which CNSX placed its Point Of Presence (PoP) center in Equinix’s TR1 International Business Exchange (IBX) data center in Toronto.

Placing a PoP has helped CNSX to improve the efficiency of its trading platform. It has also helped in auctioning the securities of other Canadian stock exchanges conducted through this exchange.  

The data center business is thriving across geographies and Equinix is trying to capture a large part of this market. Consequently, it is now exploring opportunities in both developed and emerging economies. Earlier this year, Equinix opened new data centers in Seattle and Singapore.

While its plans of expansion remain in place, the consolidation of existing facilities forms part of Equinix’s core strategy. The company has also been striving to boost its revenue base and profitability, by improving its technology to attract more clients. Moreover, the recurring revenue model has provided much-needed support to Equinix, augmenting its revenue stream over the years.

Moreover, Equinix has been able to reduce its turnaround time. Earlier, the company was not very quick to close sales after customers agreed to license cabinet space at any of its IBX centers. Though the company had been regular in inking deals, its sales suffered due to the delay in making service renewal decisions.

While the various deals have boosted the company’s revenues, its high debt level has resulted in higher interest costs. Additionally, rising competition from rivals such as AT&T Inc. (T - Analyst Report) remains a concern.

Equinix currently carries a Zacks Rank #3 (Hold). Other stocks worth a look include Calix Inc. (CALX - Snapshot Report) and Adtran Inc. (ADTN - Analyst Report), both of which have a Zacks Rank #2 (Buy).

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