• Revenue: $8.7 billion for the full year 2024, up 8% year over year.
• Adjusted EBITDA: $4.1 billion, with a 160-basis-point improvement in margins year over year.
• AFFO per Share: Grew 10% year over year.
• Gross Bookings: Best performance in company history, with over 16,200 deals across more than 6,000 customers in 2024.
• xScale Capacity Leased: Approximately 150 megawatts in 2024.
• Operating Costs Reduction: Decreased PUE by more than 6%, lowering costs by $18 million for 2024.
• Interconnection Revenue: Increased 9% year over year, representing 19% of recurring revenues.
• Net Leverage: 3.4 times, with cash and short-term investments of $3.6 billion.
• Capital Expenditures: Approximately $1 billion for the quarter.
• 2025 Revenue Growth Guidance: Expected 7% to 8% growth on a normalized and constant currency basis.
• 2025 Adjusted EBITDA Margin Guidance: Approximately 49%, a 190-basis-point improvement over last year.
• 2025 AFFO Growth Guidance: Expected to grow between 9% and 12%.
• 2025 CapEx Guidance: Expected to range between $3.2 billion and $3.5 billion.
• 2025 Cash Dividend Increase: 10% increase, totaling approximately $1.8 billion.

• Warning! GuruFocus has detected 9 Warning Signs with EQIX.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Equinix Inc (NASDAQ:EQIX) reported a full-year revenue of $8.7 billion, marking an 8% year-over-year increase and achieving 22 years of consecutive quarterly revenue growth.
• Adjusted EBITDA improved by 160 basis points year-over-year, reaching $4.1 billion, indicating strong operational efficiency.
• The company achieved record gross bookings in both Q4 and the full year, with over 16,200 deals across more than 6,000 customers.
• Equinix's xScale business leased approximately 150 megawatts of capacity in 2024, nearly tripling the investment capital of the program.
• The company continues to see strong demand for AI and high-performance compute workloads, with over half of the volume of its top 25 deals in Q4 related to these areas.

Negative Points

• The company's as-reported numbers and outlook were negatively impacted by a significantly stronger US dollar during Q4.
• Equinix faced capacity constraints in Tier 1 metros, which limited its ability to meet customer demand fully.
• A $160 million impairment charge was booked due to the end-of-sale of the Equinix Metal product offering.
• The company recorded a $73 million impairment charge related to its Hong Kong 4 asset.
• A $31 million restructuring charge was incurred, primarily related to a reduction in force during the quarter.

Q & A Highlights

Q: Adaire, can you provide insights on the growing importance of AI inference relative to training, and how this impacts Equinix's business in the coming years? A: Adaire Fox-Martin, CEO, explained that the drop in inferencing costs, as highlighted by recent developments like DeepSeek, makes AI transformation more feasible for a broader range of organizations. Equinix is well-positioned to capitalize on this trend, with 50% of their top 25 deals in Q4 related to high-performance compute and AI workloads. The multi-cloud nature of the market enhances Equinix's value proposition, given their interconnection density and connectivity heritage.

Q: Can you update us on the progress of the US xScale JV and the identification of markets and build programs? A: Keith Taylor, CFO, noted that Equinix has 16 xScale projects underway, with 87% of these either leased or pre-leased. The Hampton site is a focus, with efforts to secure power and infrastructure for a 2027 launch. Equinix is also exploring three additional US sites and investing heavily in the xScale business, with $40 million in operating expenses allocated for expansion.

Q: How is Equinix addressing capacity constraints in key markets, and when do you expect to be unconstrained? A: Adaire Fox-Martin, CEO, acknowledged capacity constraints in Tier 1 metros and emphasized the "build bolder" strategy to address these. Equinix is accelerating projects like NY3, DC16, and LD4 by at least a year to meet demand. They have 62 major projects underway, aiming to streamline build cycles and deliver larger retail capacity efficiently.

Q: What are the expectations for churn in 2025, and how does Equinix plan to manage it? A: Adaire Fox-Martin, CEO, stated that churn is expected to remain within the 2% to 2.5% range. Equinix plans to focus on increasing interconnection rates, as customers with higher interconnection have a lower propensity to churn. The company will leverage data to manage churn effectively and aim for the lower end of the range.

Q: Can you discuss the impact of fiber market activity on Equinix's business, particularly with partnerships like Zayo? A: Adaire Fox-Martin, CEO, highlighted the importance of Equinix's global reach and dense interconnection with network service providers. The partnership with Zayo and similar activities are expected to be significant drivers of business, as they align with Equinix's strengths in connectivity and interconnection.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.