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Equinix (EQIX) to Post Q4 Earnings: What's in the Offing?
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Equinix, Inc. (EQIX - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 14 after market close. The company’s quarterly results are likely to reflect year-over-year growth in revenues and adjusted funds from operations (FFO) per share.
In the previous quarter, this Redwood City, CA-based data center real estate investment trust (REIT) reported a surprise of 5.13% in terms of AFFO per share. Its quarterly results reflected steady growth in colocation and inter-connection revenues due to the strong demand for digital infrastructure.
Over the preceding four quarters, EQIX’s AFFO per share surpassed the consensus estimate on all occasions, the average beat being 6.15%. This is depicted in the graph below:
Equinix’s geographically diverse portfolio of International Business Exchanges data centers is expected to have benefited from enterprises’ growing reliance on technology and acceleration in digital transformation strategies.
Data center infrastructure demand has remained robust amid growth in cloud computing, the Internet of Things and Big Data and elevated demand for third-party IT infrastructure. Moreover, the growth in artificial intelligence, autonomous vehicles and virtual/augmented reality markets has created solid demand for data centers.
The company’s recurring revenue model, which comprises colocation, related interconnection and managed IT infrastructure services, is expected to have supported stable cash flows in the to-be-reported quarter, boosting the data center REIT’s top line. Also, solid demand for Equinix’s interconnected ecosystem in the to-be-reported quarter is likely to have given it an edge.
The Zacks Consensus Estimate for colocation revenues is pegged at $1.48 billion, suggesting growth from $1.31 billion in the prior-year period. The consensus mark for interconnection revenues is pegged at $361.94 million, indicating growth from $325.62 million in the prior-year period.
For the fourth quarter of 2023, Equinix projected revenues between $2.088 billion and $2.128 billion, implying a 1-3% increase over the prior quarter. The Zacks Consensus Estimate stands at $2.11 billion, calling for a rise of 12.8% from the year-ago period’s reported figure.
EQIX estimated adjusted EBITDA in the range of $899-$929 million. Our estimate is pegged at $924.2 million, implying a year-over-year increase of 10.2%.
Equinix is expected to have continued with its asset-based expansion during the quarter through acquisitions and development activities. Its robust balance sheet position is likely to have enabled it to capitalize on long-term growth opportunities.
EQIX’s activities during the to-be-reported were not adequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has been revised five cents downward over the past month to $7.25. However, it suggests a 2.26% increase from the prior-year quarter’s reported figure.
Higher interest expenses and adverse foreign currency fluctuations might have partly impeded the company’s quarterly performance. Our estimate for 2023 interest expenses implies a year-over-year increase of 6.4%.
For 2023, Equinix projected AFFO per share between $31.87 and $32.19, suggesting an 8-9% increase from the previous year. Considering a $25 million negative foreign currency impact, Equinix estimated generating total revenues in the band of $8.166-$8.206 billion, indicating year-over-year growth of 12-13%. The company projected an adjusted EBITDA in the range of $3.680-$3.710 billion. Expectations for the adjusted EBITDA margin were maintained at 45%.
For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $32.07. The figure indicates an 8.53% increase year over year on 12.73% year-over-year growth in revenues to $8.19 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Equinix this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Equinix currently carries a Zacks Rank of 2 and has an Earnings ESP of -0.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage Inc. (EXR - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
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 (EQIX) to Post Q4 Earnings: What's in the Offing?
Equinix, Inc. (EQIX - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 14 after market close. The company’s quarterly results are likely to reflect year-over-year growth in revenues and adjusted funds from operations (FFO) per share.
In the previous quarter, this Redwood City, CA-based data center real estate investment trust (REIT) reported a surprise of 5.13% in terms of AFFO per share. Its quarterly results reflected steady growth in colocation and inter-connection revenues due to the strong demand for digital infrastructure.
Over the preceding four quarters, EQIX’s AFFO per share surpassed the consensus estimate on all occasions, the average beat being 6.15%. This is depicted in the graph below:
Equinix, Inc. Price and EPS Surprise
Equinix, Inc. price-eps-surprise | Equinix, Inc. Quote
Factors at Play
Equinix’s geographically diverse portfolio of International Business Exchanges data centers is expected to have benefited from enterprises’ growing reliance on technology and acceleration in digital transformation strategies.
Data center infrastructure demand has remained robust amid growth in cloud computing, the Internet of Things and Big Data and elevated demand for third-party IT infrastructure. Moreover, the growth in artificial intelligence, autonomous vehicles and virtual/augmented reality markets has created solid demand for data centers.
The company’s recurring revenue model, which comprises colocation, related interconnection and managed IT infrastructure services, is expected to have supported stable cash flows in the to-be-reported quarter, boosting the data center REIT’s top line. Also, solid demand for Equinix’s interconnected ecosystem in the to-be-reported quarter is likely to have given it an edge.
The Zacks Consensus Estimate for colocation revenues is pegged at $1.48 billion, suggesting growth from $1.31 billion in the prior-year period. The consensus mark for interconnection revenues is pegged at $361.94 million, indicating growth from $325.62 million in the prior-year period.
For the fourth quarter of 2023, Equinix projected revenues between $2.088 billion and $2.128 billion, implying a 1-3% increase over the prior quarter. The Zacks Consensus Estimate stands at $2.11 billion, calling for a rise of 12.8% from the year-ago period’s reported figure.
EQIX estimated adjusted EBITDA in the range of $899-$929 million. Our estimate is pegged at $924.2 million, implying a year-over-year increase of 10.2%.
Equinix is expected to have continued with its asset-based expansion during the quarter through acquisitions and development activities. Its robust balance sheet position is likely to have enabled it to capitalize on long-term growth opportunities.
EQIX’s activities during the to-be-reported were not adequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has been revised five cents downward over the past month to $7.25. However, it suggests a 2.26% increase from the prior-year quarter’s reported figure.
Higher interest expenses and adverse foreign currency fluctuations might have partly impeded the company’s quarterly performance. Our estimate for 2023 interest expenses implies a year-over-year increase of 6.4%.
For 2023, Equinix projected AFFO per share between $31.87 and $32.19, suggesting an 8-9% increase from the previous year. Considering a $25 million negative foreign currency impact, Equinix estimated generating total revenues in the band of $8.166-$8.206 billion, indicating year-over-year growth of 12-13%. The company projected an adjusted EBITDA in the range of $3.680-$3.710 billion. Expectations for the adjusted EBITDA margin were maintained at 45%.
For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $32.07. The figure indicates an 8.53% increase year over year on 12.73% year-over-year growth in revenues to $8.19 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Equinix this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Equinix currently carries a Zacks Rank of 2 and has an Earnings ESP of -0.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage Inc. (EXR - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Extra Space Storage, scheduled to report quarterly numbers on Feb 27, has an Earnings ESP of +1.08% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Homes 4 Rent, slated to release quarterly numbers on Feb 22, has an Earnings ESP of +1.68% and carries a Zacks Rank of 3 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.