Resultados 1 a 5 de 5
  1. #1
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010
    Posts
    15,042

    [EN] Equinix (EQIX) Stephen M. Smith on Q4 2015 Results

    Earnings Call Transcript
    Feb. 18, 2016

    ...


    Stephen M. Smith - Chief Executive Officer & President

    ...

    Before I turn to the quarterly results, I'd like to reflect on a few of the meaningful milestones we achieved in 2015, starting with financial performance on slide three. With another year of record bookings activity in 2015, we generated over $2.7 billion of revenue, up 16% year-over-year on a normalized and constant currency basis.

    We delivered over $1.27 billion of adjusted EBITDA or a 47% margin and over 100 basis point improvement over last year while continuing to invest in the business. This drove AFFO growth of 25% on a normalized and constant currency basis, exceeding our prior guidance after adjusting for the Telecity transaction-related FX loss.

    Second, it was a phenomenal year for our interconnection solutions. Interconnection revenue continues to outpace overall revenue, growing 20% year-over-year on a constant currency organic basis. That's over 171,000 cross-connects, 3,300 ports on our Internet Exchange, and dramatic growth on our Cloud Exchange we are benefiting from the strong secular trends that are driving businesses to become increasingly interconnected.

    Third, we significantly expanded our global platform, both organically and inorganically. Equinix completed 20 major IBX expansions in 2015, creating the needed capacity to support strong fill rates in high demand markets. Overall, our development activity continues to generate highly attractive returns and healthy yield on our sizeable base of stabilized assets.

    With the Telecity and Bit-isle acquisitions, we further expanded Platform Equinix, which now spans 145 data centers across 40 metros in 21 countries. Combined, Equinix now operates over 14 million gross square feet of colocation space, enhancing our position as the largest retail data center footprint in the world.

    Fourth, we continue to establish Equinix as the home of the interconnected cloud, which in turn, is attracting enterprises that are adopting hybrid and multi-cloud as their IT architecture of choice. Key cloud customers including Amazon, Cisco, IBM, Microsoft, and Oracle to mention a few, are all using Equinix to scale their infrastructure globally and are now deployed across an average of 17 markets.

    And finally, we successfully completed our first year operating as a REIT and returned $394 million back to our shareholders. We were included in the S&P 500, the MSCI RMZ and the FTSE NAREIT indices, a reflection of our position as both a technology leader and as the largest data center REIT. We continue to strengthen our balance sheet raising $2.6 billion in debt and equity in the fourth quarter fortifying our capital structure while providing a strong liquidity position.

    Now turning to the quarter, we had a great finish to the year delivering record bookings in the fourth quarter with particular strength in the Americas and robust metrics including our highest ever interconnection activity, and very firm yield per cabinet. We continue to take market share, capturing outsized portion of the new infrastructure deployments from both clouds and enterprises.

    The quality and scale of our wins continues to increase and we are proud that over 140 of the Fortune 500 are Equinix customers. Our geographic reach remains critical to customers with over 55% of our revenue coming from customers deployed globally across all three regions, and over 84% from customers deployed across multiple metros.

    Our global platform is increasingly defensible, durable and hard to replicate with regards to reaching capacity as well as performance. With the addition of the Telecity and Bit-isle acquisitions, we added 40 data centers and 1,100 people across Europe and Japan. This scale positions us well to build market leadership, increase capacity, enhance cloud and network density and grow customer ecosystems for years to come. With Telecity, we've added seven new metro markets to our portfolio creating a large opportunity for current Equinix customers to expand further north and east across EMEA.

    Additionally, there are over 500 customers of former Telecity that have business presence in another country where Platform Equinix resides, creating a potential for powerful cross-selling opportunities as we integrate. We are confident both these transactions will drive significant long-term value creation for our customers and our partners.

    Now let me cover quarterly highlights from our industry verticals, starting with the network vertical. This customer base customer continues to grow as we enhance ecosystems in which networks and mobile providers can participate and grow their businesses. Strong global bandwidth demand is driving a resurgence of subsea cable projects, creating new opportunities for Equinix. These service providers are accelerating returns by terminating cables directly into our IBXs where they can further benefit by gaining access to key business ecosystems.

    In the content and digital media vertical, content customers are expanding across our global platform to meet the continued explosion of consumer demand for digital content and applications. The advertising sub segment remains the fastest growth driver in this vertical as digital advertising takes share from traditional channels. Customers expanding this quarter include AppNexus which optimizes programmatic digital advertising; AudienceScience, a global advertising technology and services company; and Créteil, a French company specializing in performance marketing.

    Turning to the financial services vertical, in addition to our strong electronic trading ecosystem, we continue to diversify across sub-segments including insurance, wealth management, and banking which contributed to record bookings for the quarter. New wins include a top 20 private wealth management firm initiating a multi-cloud strategy to speed to market. A Fortune 500 asset management company that is connecting to clouds over our Equinix Cloud Exchange and a partner-led deal with a top 10 insurance firm based in Europe.

    In cloud and IT services, the cloud ecosystem delivered strong growth this quarter driven by key infrastructure-as-a-service providers such as AWS and Microsoft, as well as momentum with Software-as-a-Service providers who represent the fastest growing sub-segment of this vertical. SaaS customer expansions include ServiceNow, an IT service management provider; and Shape Security, an advanced application defense provider that offer security services for Cloud Exchange clients. We continue to see momentum on our Cloud Exchange and have over 300 enterprises, clouds, IT service providers, and networks interconnecting using this solution.

    Turning to the enterprise. The enterprise vertical delivered strong bookings as businesses seek to re-architect IT to adapt to rapidly changing business requirements. By leveraging an interconnection-oriented architecture, enterprises can address multiple IT challenges and solve for the cost, scaling and performance needs of today's digital world.

    For the second quarter, enterprise was the largest source of new customer adds with particular traction in manufacturing and professional services. New wins include Polo Ralph Laurent, a premium clothing and lifestyle brand; Granite Construction, an S&P 500 civil general contractor and construction material producer; and Oriflame Cosmetics, a Swedish cosmetic manufacturer.

    Over 300 customers have deployed our Performance Hub solution, which is an extremely attractive entry point for enterprise customers who seek to optimize network architectures, and also access the cloud and drive application performance, and we are already enjoying significant upsell and cross-sell traction with these customers.

    ...

    Our strategic priorities remains centered on driving growth by pressing our competitive advantage and investing to capture significant opportunities such as the cloud-enabled enterprise. We will allocate capital towards these high-value opportunities and internal strength in our economic model. In the near term, we will focus our energy on successfully integrating Telecity and Bit-isle and growing our market leadership globally. Organically our efforts will be focused on capturing the enterprise through a series of initiatives to build cloud density, create and deploy innovative product solutions, generate demand in targeted segments, and provide professional services focused on enabling the adoption of hybrid and multi-cloud.

    We will also continue to ramp our channel program to enhance our reach into the enterprise through agents, resellers, systems integrators and key platform partners. Over the longer term, interconnection will continue to be the essence of our advantage, and Equinix is well-positioned to become the intersection point between the Internet of Things, clouds, networks and the enterprises. We are making meaningful investments to foster new ecosystems to capture this opportunity. And we'll continue to invest in scaling our systems and processes and evolving our capabilities in response to these customer needs. Based on what we see in the market and the steps we are taking at Equinix to capitalize on these opportunities, I continue to be very optimistic about our future.

    ...

  2. #2
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010
    Posts
    15,042
    ... we're prosecuting a dozen-plus other industry verticals that we refer to as the enterprise outside of our core five industry verticals that we've been focused on. And it goes to this hundreds of thousands of customers, prospects, I should say, that we are knocking on their door now via the channel or via the direct sales engine to talk to them about helping them enable them to get to the multi-cloud and get to the Hybrid Cloud environment.

    So the cloud enterprise, the simple answer, the reason why we're a cloud enabling these data centers, is to replicate the network density that we achieved the first 16 years, 17 years of this company to make it easy for any CIO of an enterprise, to look inside these facilities and see that they can publically, privately move their traffic, certain applications that are mission critical, revenue facing, customer-focused applications that they can get them to the multi-cloud and get them to take advantage of the performance, the costs, and the IT transformation that's taking place. So we're seeing uplift across all three of these things generally because of the uptake in cloud. And cloud is driving most of this.

    ...

    Paul B. Morgan - Canaccord Genuity, Inc.

    Hi. Good afternoon. Can you maybe just talk a little bit about the external growth opportunity that you're seeing? Obviously, there's a lot of chatter about the telco data center divestures out there. And how you see your appetite for acquisitions, and whether you would consider different structures such as JVs and the like if the opportunity arises, and kind of how you might see that play out in 2016?

    Stephen M. Smith - Chief Executive Officer & President

    ... mostly all of you should be aware that publicly there are a couple of big telcos that are interested and trying to divest some assets, and these are both the big telcos that acquired cloud companies three years, four years, five years ago, and it includes those cloud data centers. It's public, they're positioning them, they're talking to several people. We are one of them. And our position is there are certain assets in those portfolios that we would be interested in, obviously, where there's cloud network density and the power and location, but there's many of those assets that wouldn't make any sense for us. So we're in the early stages, exploratory stages talking to these companies. Those are the two that are public. There's other conversations going on.

    There's plenty of companies that are interested in getting out of the data center business. So it's a very active market on top of the divestiture that Keith mentioned that we're doing in Europe. So there's a lot of activity, mostly pressured and driven by the big infrastructure-as-of-service companies who are going as fast as they are, AWS, Microsoft, Google, et cetera, and they're putting a lot of pressure on companies that decided to get into the infrastructure-as-of-service business, and now they're deciding to get out of it, and their data centers are going with it. The telco is probably aimed – most of the cash that we collect on these will be aimed at, as you all know, aimed at spectrum and aimed at their mobile initiatives, and so it makes sense why they're looking at these. But as I said, there are specific assets that would make sense to us, but it's very early days in the dialog.

    ...


    Paul B. Morgan - Canaccord Genuity, Inc.

    Great. I mean, in Telecity's case, obviously, there's some non-core assets that you're planning to divest. But I guess, in this case would it be fair to say that just because of the scale of what you would classify as non-core, that taking on major portfolios where a majority or a big chunk of the assets are, have to be pegged for sale is not kind of what you're looking for?

    Keith D. Taylor - Chief Financial Officer

    Paul, what I'd like to first say is that, unfortunately, the assets that we're selling they're not non-core. They're effectively mandated through our work with the European regulatory authority. Clearly, to us, we would love to keep all of the assets in our portfolio. But that all said, it goes back to what Charles and Steve alluded to. To the extent that we can acquire assets that are accretive to our overall strategy and they create value for our shareholders, those acquisitions or joint ventures, we absolutely will pursue them. But we are very much focused on, as Steve alluded to, driving investment decisions that support our cloud-enabled strategy, extend our global reach, and enhance our interconnection activities.

    ...

    Michael I. Rollins - Citigroup Global Markets, Inc. (Broker)

    Thanks. Just wondering if you'd give us a bit more of a look into the integration process for the two acquisitions that you've completed, and what are the major milestones that investors should be watching over. Thanks.

    Keith D. Taylor - Chief Financial Officer

    I think we're going to have, Michael, Charles and I will take this one. Let me first start with Bit-isle because I think that's an important one, then Charles perhaps, you can take the Telecity one. I think what's really important to understand about Bit-isle, as we said in our prepared remarks, revenues are essentially flat quarter-over-quarter. And I want certain investors to realize, certainly from a margin perspective, Bit-isle is dilutive to our margins today. It is very clear to us given the inventory capacity they have in the Tokyo market specifically. This was an asset that we bought for sub-10 multiple to EBITDA. We believe upon filling up our assets, we're going to be able to enjoy the ability to fill up their assets over a period of time, while at the same time assessing, if you will, the strategic landscape of the number of operating units that Bit-isle had.

    And so as a company, we fully intend over a reasonable period of time, it will not be over an 18-month or 24-month period. But probably over the next three years to four years that we would be able to capture all the value associated with the Bit-isle acquisition, fill up their assets and get their margins up to, basically, where our Asia Pacific business is running today, which is in the 45% to 50% EBITDA margin basis. But we're being very disciplined about this acquisition.

    Culturally, it's a meaningful acquisition for us, and we're very sensitive to the environment that we're operating in. But we recognize in the investment decision, that over the short-term we weren't going to see any meaningful uplift in the business model and all this will be accretive from day one because we use debt to buy the asset. We're going to be very methodical about how we drive value into that acquisition.


    Charles J. Meyers - Chief Operating Officer

    In terms of process, Mike, I guess I'd make a couple of comments. I think that these are obviously both somewhat localized assets with Telecity being a strictly European platform and Bit-isle really being contained to Japan. So our local teams, both in EMEA region and in Japan, have primary responsibility for driving the integration efforts.

    ...

    That said, we did take an individual from my team who really has been my right hand for quite a while when I ran the Americas business and into my role as the COO who really understands our business deeply, has a deep network across the company. We've actually exported him to – and he's living in Amsterdam now with his family and is leading the integration effort for Telecity and sort of providing overall oversight to our integration activities in terms of aligning them, keeping them consistent in approach, identifying and applying best practices, et cetera. So that's kind of how we're going about it.

    In terms of the metrics, I think, to watch, we're obviously watching them very closely and we will update you as appropriate on these, but I think they are; number one, how are we doing on integrating the sales teams and driving the upsell and the cross-sell activities. And that's one we're probably not going to give a ton of granular insight into publicly, but it's not something that we obviously are watching very, very closely and feel very optimistic about.

    Secondly, the synergy capture. We talked about what we expect in terms of synergies and we're driving the teams to those expectations to meet or exceed our synergy estimates from an expense synergy standpoint. And then we're aligning our capital planning processes to make sure that we are gaining the CapEx synergies where we can and ensuring that we continue to have the capacity to respond to the fill rates in high demand markets. And then lastly, I think, probably keeping an eye on our progress on the divestiture and again we'll report our progress to you on that as we have it.


    ...

  3. #3
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010
    Posts
    15,042
    Jonathan Atkin - RBC Capital Markets LLC

    ... I wondered if you could talk a little bit about the churn expectations. You gave it on a company-wide basis and if there's any regional variation to keep in mind. And then on the interconnects, I just wondered if you could discuss, in a little bit more detail, the growth in interconnect and how much of that is coming from Cloud Exchange versus the conventional cross connect? And then Steve, in response to Jonathan's questions you alluded to the indirect channel and then maybe your or Charles can maybe comment on the portion of new bookings that you had ascribed to are indirect which is a relatively recent initiative of yours? Thanks.


    Keith D. Taylor - Chief Financial Officer

    So why don't I take churn and then I'll past it on to Charles and Steve. I think one thing about churn, let me break down between the organic business or Equinix proper. I would tell you our churn levels are at or near their best in a long, long time. That holds true also for 2016. As I mentioned, churn in Q4 was 2.3%. We telegraphed that it would be slightly higher, it was attributed to a single customer in our UK business that we knew that would be relocating to their own specialty-built data center. That said, as we look forward we see churn to be, again, at one of its lowest levels, I think, we've ever experienced as a company organically.

    As you then go into the two other assets, the Telecity asset and the Bit-isle asset, Telecity is going to be really no different than what you see at the Equinix level. Where you're going to see slightly increased churn is really in Bit-isle. And a lot of reasons for – when you look at how Bit-isle did in 2014 relative to 2015 and what we're guiding to 2016, there's a number of factors. Number one, they've got non-recurring activities that will not repeat themselves. They have an operating unit that has – where they build solar plants, and they've sold off some of those assets. That was sitting in their 2014 results. It's not in 2015.

    Equally so, they've suffered some substantial churn. They have done exactly what we choose not to do, which is effectively fill up a large portion of their inventory with some large customers. And when those customers run into trouble, as you can appreciate, then there's a fairly meaningful churn event. That's what Bit-isle is suffering through not only in 2015, and that's why their value is so low, but also we're still going to feel some of that in 2016. And so from my perspective, churn will be, I think, at a very strong level looking into 2016.

    Charles J. Meyers - Chief Operating Officer

    Yeah. And I'll hit the other parts. I'll put a point on the churn and just say that, again, what we continue to see is just the discipline in the business and this commitment to the right customers, right applications, right assets continues to manifest itself, both in terms of the positive price actions, and correspondingly to the moderated churn levels. So I think it's absolutely a reflection of the strategy working as we would expect.

    The other two topics were interconnection. I would say that interconnection obviously an incredibly strong quarter with 7,500 cross connection aggregate. We track that at a very detailed level vertical, essentially on the from and to by every vertical. And every sell in that matrix is growing. The fastest growing are the cloud-related, sort of the cloud ecosystem on a percentage basis, but the most – in absolute terms, the biggest contributor continues to be our mature network ecosystem. And the financial services ecosystem continues to contribute significantly, but on a percentage basis, cloud is over-indexing dramatically like 5X probably its installed base, and that's just a reflection of the early days of that and really starting to sort of take shape and scale as enterprises are adapting Hybrid Cloud.

    I would also say a part of the driver in the network as on cross connect is these 300 customers that have adapted Performance Hub, many of whom are using that for WAN optimization strategies and therefore are driving significant cross connects to network providers. So that's a snapshot on interconnection.

    And then lastly on channel, what I would tell you is that we, over the last couple of quarters, have seen a number of our lighthouse marquee deals in the enterprise come through partners. And I think that's a reflection of that many of those customers are finding that they need some combination of the infrastructure value delivered by Platform Equinix but desire a managed service element of that implementation and our partners are doing that very effectively. And so, we won some very big deals as we referenced in the script from true partners with our enterprise lighthouse wins. And we are seeing in terms of allocation of the percentage of bookings coming through indirect, continue to grow steadily and we're really focusing on a set of high impact partners that we think will help us continue to drive that through 2016.

    Simon Flannery - Morgan Stanley & Co. LLC

    You've talked a lot about the various regions and you really haven't brought up macro at all. We look at the market performance, we look at the headlines, and it really doesn't seem like – it's pretty tough out there particularly in some of the international markets. So, are you seeing anything from your customers or are the secular trends still very healthy at this point? ...

    Stephen M. Smith - Chief Executive Officer & President

    In terms of the market's macro trends, I think we all saw IDC or Gartner tell us that the IT spend globally was slowing down at the end of last year. I think this goes back to what Charles said. Because we're so focused on the type of application workload with our client base that is not considered discretionary and it's more mission-critical, even in volatile times, as Keith alluded to, we tend to perform better than the market because we are dealing with revenue, customer-facing, globally deployed type application workloads that are critical to run these businesses.

    So, because of our discipline and executing in that part of the application workload of our customer base, and that part of the – that's non-back office, non-server farm type workload, we tend to push right through this. And the demand that we see from our customer base today is high, trying to figure out how to take advantage of the cloud computing model.

    And so our pipeline, if you were able to see into our pipeline, which you guys can't, you would see very good coverage ratios and you would see the strongest pipeline in the history of the company. So the signals for us across all the regions emanate themselves in our pipeline and emanate themselves in our coverage ratios, and all I can tell you at this point is they are strong as they've ever been.

    And Charles I don't know what you would add to that.

    Charles J. Meyers - Chief Operating Officer

    Yeah. I guess just countering the macro IT spending environment, which is – I mean that environment is being impacted heavily by public cloud adoption and adoption of hybrid cloud, multi-cloud as the architecture of choice. And so if you really look at the portion that we tend to play in and around, if you look at the growth of AWS, look at Microsoft's Azure revenues and their cloud participation, look at what Oracle is doing in terms of retooling their business into the cloud, those are all significant customers of ours. They're all scaling globally with us. And then we are really leveraging that cloud density with that sort of core group, as well as a very long tail of SaaS to really attract the enterprise customer and seeing some momentum there.

    And it is an environment. Although there's market volatility and pressure, I think, on CIOs to manage spending and reduce expense, et cetera, they're often coming to us as a way to achieve those means. And whether that's reducing network cost, adopting public cloud at an accelerated rate or implementing hybrid cloud and moving it out of their basement and avoiding spending that capital. Those are all things that they can really use us for. So we feel well-positioned even though there's some choppiness in the overall macro environment.

  4. #4
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010
    Posts
    15,042
    Mike L. McCormack - Jefferies LLC

    Hi, guys. Thanks. Steve, maybe just a follow-up on the undersea piece, sounds like you guys are pretty excited about it. With respect to the sort of types of traffic and the government regulation, are you guys set up better to address that marketplace based upon the geographic locations of your data centers? And then just secondly, maybe one for Keith, you identified some cost savings that are organic. Just trying to get a sense for a little more detail around where you're finding that.

    Stephen M. Smith - Chief Executive Officer & President

    Sure. Let me take the first piece, Mike. There are a lot of new projects, mostly driven by the requirements to help support all this global cloud deployment that's going on around the world in the growth of international traffic. So there really hasn't been any new Transatlantic capacity been added in the last probably dozen years until one of the announcements that came late last year or middle of last year, Hibernia Express which went live at Equinix. So there's a lot of focus out there, some private investment, partially funded by some of the big global – the global cloud providers.

    It's definitely being driven by cloud. We're involved in many more conversations than we ever have in the future – or in the past, I should say. And the advancements in technology today is allowing these operators to bypass the traditional shore-based lending facilities and go all the way to terminating at a data center like Equinix. So we're capturing that volume now. And there's been four to five public announcements that we've made of ones that we've participated in. There's been a couple that had connected U.S., Japan, New York, London and so there's a whole bunch growing on now. We're probably involved in a dozen more projects today that are at different stages of assessment, development and construction. So it is very active. It is driven by the cloud and by the bandwidth, amount of traffic around the world, and they can terminate these cables today very easily into data centers. And so we're front and center on this topic.

    Mike L. McCormack - Jefferies LLC

    ... how's the contract working. Are you directly dealing with undersea folks or is it the end user customers?

    Charles J. Meyers - Chief Operating Officer

    Yeah. Typically, the providers or a consortium of folks that are involved.

    ...

    Keith D. Taylor - Chief Financial Officer

    And then as it relates to basically the question of cost savings, I think what's most important to note Mike is, we're going in and cutting costs. What we're doing today is we're operating more efficiently. And it's important to recognize over the last three to four years, we've made heavy investments across a number of different functional groups to scale the organization to be global, and one of the biggest investments we've made has been in our IT systems and platforms and the people that really continue to work very hard to make them run as efficiently as possible and then we build our processes and structures around them.

    That said, we've made those initial investments. We've been investing in sale and sort of in customer-facing initiatives which, I would argue, is driving a lot of the value that we see today. We're also finding ways to reallocate our costs. And part of our efforts today, not only as it related to 2015, but also as we look to 2016 is how do we run more efficiently and take resources that we're spending money in, run them more efficiently so we can put it back into the business differently.

    And in fact, there's roughly $24 million of costs that we reallocated in our organization to support our investments in 2016. And so we feel very comfortable about that. But quite frankly, it's a work in progress. We have to continue to lever off our systems, our processes and our people and that's something that you'll see in 2016, but you're also going to see us globalize as we bring in Telecity and we bring in Bit-isle over the next – through 2017, 2018 and 2019. We'll continue to make these investments that I would argue that can drive more value into the business.

    ...

    http://seekingalpha.com/article/3909...all-transcript

  5. #5
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010
    Posts
    15,042

    "And I think that's a reflection of that many of those customers are finding that they need some combination of the infrastructure value delivered by Platform Equinix but desire a managed service element of that implementation ..."

    Essencialmente, corrobora a visão da Rackspace.



    "And we are seeing in terms of allocation of the percentage of bookings coming through indirect, continue to grow steadily and we're really focusing on a set of high impact partners that we think will help us continue to drive that through 2016."

    Estratégia (beta) do Google Cloud.



    "Our geographic reach remains critical to customers with over 55% of our revenue coming from customers deployed globally across all three regions, and over 84% from customers deployed across multiple metros."

    E a Brasilbras dedicada a roer o mercado interno ...
    Última edição por 5ms; 19-02-2016 às 09:45.

Permissões de Postagem

  • Você não pode iniciar novos tópicos
  • Você não pode enviar respostas
  • Você não pode enviar anexos
  • Você não pode editar suas mensagens
  •