Equinix's (EQIX) AFFO & Revenues Surpass Estimates in Q3
Equinix Inc.’s EQIX third-quarter 2022 adjusted funds from operations (AFFO) per share of $7.73 surpassed the Zacks Consensus Estimate of $7.19. The figure grew 11.4% from the prior-year quarter’s $6.94.
EQIX’s results reflect steady growth in colocation and inter-connection revenues. During the third quarter, Equinix’s total inter-connections reached 443,100, rising 1.7% sequentially and 6.9% year over year. It also raises its AFFO per share guidance for 2022.
Total quarterly revenues came in at $1.84 billion, beating the Zacks Consensus Estimate of $1.83 billion. Moreover, the top line improved 9.9% year over year, marking the 79th consecutive quarter of top-line growth.
Per Charles Meyers, president and CEO of the company, “Even in a complex and challenging macro environment, our expansive global reach and robust interconnected ecosystems continue to attract a wide and diverse customer set, as businesses prioritize digital investments and embrace Platform Equinix as a point of nexus to support hybrid and multicloud.”
Quarter in Detail
Recurring revenues were $1.75 billion, up 11.8% from the year-ago quarter. However, non-recurring revenues fell 17.1% to $92.5 million.
Revenues from the three regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and the Asia Pacific rose 10.9%, 8.5% and 9.7% to $846.2 million, $591.8 million and $402.7 million, respectively.
The adjusted EBITDA came in at $870.9 million, up 10.7% year over year. Adjusted EBITDA margin was reported at 47.3%.
AFFO increased 13.3% to $712 million year over year.
EQIX spent $50.2 million on recurring capital expenditure in the third quarter, up 5.1% on a year-over-year basis. Recurring capital expenditure was 2.7% of revenues in third-quarter 2022. Non-recurring was $503 million, shrinking 20.3% year over year. However, the figure climbed 11.7% sequentially.
Balance Sheet
Equinix had $6.4 billion of available liquidity as of Sep 30, 2022. This comprised cash, cash equivalents and $4 billion of its undrawn revolver and excludes restricted cash and outstanding balance of letters of credit.
Its net leverage ratio was 3.5 and the weighted average maturity was 8.6 years as of Sep 30, 2022.
Dividend Update
Concurrent with the third-quarter 2022 earnings release, Equinix’s board of directors approved a quarterly cash dividend of $3.10 per share on its common stock. This dividend will be paid out on Dec 14, 2022, to its shareholders on record as of Nov 16, 2022.
Guidance
For fourth-quarter 2022, Equinix projects revenues between $1.848 billion and $1.868 billion, implying a 1% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $821-$841 million.
For the full year, AFFO per share is estimated between $29.10 and $29.32, suggesting a 7-8% increase from the prior year. Earlier, the guided range was $28.77-$29.10. The Zacks Consensus Estimate for the same is currently pegged at $28.88.
For 2022, Equinix estimates to generate total revenues of $7.240-$7.260 billion, indicating growth of 9% from 2021. The company expects to incur $20 million of acquisition-related integration costs. Management predicts an adjusted EBITDA of $3.352-$3.372 billion and an adjusted EBITDA margin of 46%.
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
Digital Realty Trust DLR delivered third-quarter 2022 core FFO per share of $1.67, up from the $1.65 reported in the year-ago period. The figure also matched the Zacks Consensus Estimate.
DLR registered operating revenues of $1.19 billion in the third quarter, marking a 5.2% year-over-year increase. Operating revenues outpaced the Zacks Consensus Estimate by just 0.3%.
SBA Communications Corporation’s SBAC third-quarter 2022 AFFO per share of $3.10 outpaced the Zacks Consensus Estimate of $3.04. This reflects a rise of 14.4% from the prior-year quarter’s $2.71.
SBAC witnessed an improvement in site-leasing and site-development businesses, which aided the top line. It continues to benefit from the addition of sites to its portfolio. It also raised its 2022 outlook.
Crown Castle Inc. CCI reported third-quarter 2022 AFFO per share of $1.85, beating the Zacks Consensus Estimate of $1.83. Reported AFFO per share compared favorably with the year-ago period’s $1.77.
The rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. It also announced a hike in its quarterly cash dividend payment.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Equinix, Inc. (EQIX) : Free Stock Analysis Report
Crown Castle Inc. (CCI) : Free Stock Analysis Report
Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
SBA Communications Corporation (SBAC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research