We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Equinix's (EQIX) Q2 AFFO Beats on Solid Demand, '23 View Up
Read MoreHide Full Article
Equinix Inc.’s (EQIX - Free Report) second-quarter 2023 adjusted funds from operations (AFFO) per share of $8.04 surpassed the Zacks Consensus Estimate of $7.51. The figure improved 6.1% 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 456,300, rising 1% sequentially and 5% year over year. The company also raised its AFFO per share guidance for 2023.
Total quarterly revenues came in at $2.02 billion, beating the Zacks Consensus Estimate marginally. Moreover, the top line increased 11.1% year over year.
Quarter in Detail
Recurring revenues were $1.92 billion, up 12.3% from the year-ago quarter. Our projection for the same was $1.91 billion. However, non-recurring revenues fell 8.1% to $100.8 million. We estimated the same to be $100.9 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 7.1%, 14.6% and 14.2% to $889.7 million, $686.8 million and $441.9 million, year over year, respectively.
The adjusted EBITDA came in at $901.2 million, up 4.7% year over year. We projected the same to be $892.7 million. Adjusted EBITDA margin was reported at 45%.
AFFO rose 9.1% to $754.3 million from the year-ago period.
EQIX spent $39.7 million on recurring capital expenditure in the second quarter, up 14.1% on a year-over-year basis. Recurring capital expenditure was 2% of revenues in the reported quarter. Non-recurring was $599 million, up 33.1% year over year.
Balance Sheet
Equinix had $6.5 billion of available liquidity as of Jun 30, 2023. This comprised cash, cash equivalents, its undrawn revolver and unsettled at-the-market (ATM) proceeds. It excludes restricted cash.
Its net leverage ratio was 3.6, and the weighted average maturity was 8.1 years as of Jun 30, 2023.
Dividend Update
Concurrently, Equinix’s board of directors announced a quarterly cash dividend of $3.41 per share. The dividend will be paid out on Sep 20, 2023, to its shareholders on record as of Aug 23, 2023.
Upbeat 2023 Guidance
For third-quarter 2023, Equinix projects revenues between $2.039 billion and $2.069 billion, implying a 1-3% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $908-$938 million.
For the current year, AFFO per share is estimated between $31.51 and $32.15, revised upward from the prior-guided range of $31.15-$32.00. This suggests a 7-9% increase from the previous year. The Zacks Consensus Estimate for the same is currently pegged at $31.02.
Considering a $14 million negative foreign currency impact, Equinix now estimates generating total revenues of $8.171-$8.251 billion, indicating year-over-year growth of 12-14%. Earlier, the company had guided total revenues of $8.175-$8.275 billion. The company expects to incur $23 million of acquisition-related integration costs.
Management predicts an adjusted EBITDA of $3.660-$3.720 billion, raised from $3.635-$3.715 billion projected earlier. Expectations for adjusted EBITDA margin were maintained at 45%.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
Results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, Crown Castle lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
American Tower Corporation (AMT - Free Report) reported second-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.46, beating the Zacks Consensus Estimate of $2.36.
Results reflected better-than-anticipated revenues, aided by improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.2% and total tenant billings growth of 7.2%. It also revised its 2023 outlook.
Digital Realty Trust (DLR - Free Report) reported second-quarter 2023 core FFO per share of $1.68, beating the Zacks Consensus Estimate of $1.65. However, the figure witnessed a decline of 2.3% on a year-over-year basis.
Results reflected better-than-anticipated revenues, aided by strong enterprise leasing activity, robust renewal spreads and healthy organic growth. However, rise in rental property operating expenses was a concern. DLR also lowered its guidance for 2023 core FFO per share but maintained its expectations for full-year revenues.
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.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Equinix's (EQIX) Q2 AFFO Beats on Solid Demand, '23 View Up
Equinix Inc.’s (EQIX - Free Report) second-quarter 2023 adjusted funds from operations (AFFO) per share of $8.04 surpassed the Zacks Consensus Estimate of $7.51. The figure improved 6.1% 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 456,300, rising 1% sequentially and 5% year over year. The company also raised its AFFO per share guidance for 2023.
Total quarterly revenues came in at $2.02 billion, beating the Zacks Consensus Estimate marginally. Moreover, the top line increased 11.1% year over year.
Quarter in Detail
Recurring revenues were $1.92 billion, up 12.3% from the year-ago quarter. Our projection for the same was $1.91 billion. However, non-recurring revenues fell 8.1% to $100.8 million. We estimated the same to be $100.9 million.
Revenues from the Americas, EMEA and the Asia Pacific rose 7.1%, 14.6% and 14.2% to $889.7 million, $686.8 million and $441.9 million, year over year, respectively.
The adjusted EBITDA came in at $901.2 million, up 4.7% year over year. We projected the same to be $892.7 million. Adjusted EBITDA margin was reported at 45%.
AFFO rose 9.1% to $754.3 million from the year-ago period.
EQIX spent $39.7 million on recurring capital expenditure in the second quarter, up 14.1% on a year-over-year basis. Recurring capital expenditure was 2% of revenues in the reported quarter. Non-recurring was $599 million, up 33.1% year over year.
Balance Sheet
Equinix had $6.5 billion of available liquidity as of Jun 30, 2023. This comprised cash, cash equivalents, its undrawn revolver and unsettled at-the-market (ATM) proceeds. It excludes restricted cash.
Its net leverage ratio was 3.6, and the weighted average maturity was 8.1 years as of Jun 30, 2023.
Dividend Update
Concurrently, Equinix’s board of directors announced a quarterly cash dividend of $3.41 per share. The dividend will be paid out on Sep 20, 2023, to its shareholders on record as of Aug 23, 2023.
Upbeat 2023 Guidance
For third-quarter 2023, Equinix projects revenues between $2.039 billion and $2.069 billion, implying a 1-3% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $908-$938 million.
For the current year, AFFO per share is estimated between $31.51 and $32.15, revised upward from the prior-guided range of $31.15-$32.00. This suggests a 7-9% increase from the previous year. The Zacks Consensus Estimate for the same is currently pegged at $31.02.
Considering a $14 million negative foreign currency impact, Equinix now estimates generating total revenues of $8.171-$8.251 billion, indicating year-over-year growth of 12-14%. Earlier, the company had guided total revenues of $8.175-$8.275 billion. The company expects to incur $23 million of acquisition-related integration costs.
Management predicts an adjusted EBITDA of $3.660-$3.720 billion, raised from $3.635-$3.715 billion projected earlier. Expectations for adjusted EBITDA margin were maintained at 45%.
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
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
Results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, Crown Castle lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
American Tower Corporation (AMT - Free Report) reported second-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.46, beating the Zacks Consensus Estimate of $2.36.
Results reflected better-than-anticipated revenues, aided by improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.2% and total tenant billings growth of 7.2%. It also revised its 2023 outlook.
Digital Realty Trust (DLR - Free Report) reported second-quarter 2023 core FFO per share of $1.68, beating the Zacks Consensus Estimate of $1.65. However, the figure witnessed a decline of 2.3% on a year-over-year basis.
Results reflected better-than-anticipated revenues, aided by strong enterprise leasing activity, robust renewal spreads and healthy organic growth. However, rise in rental property operating expenses was a concern. DLR also lowered its guidance for 2023 core FFO per share but maintained its expectations for full-year revenues.
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.