http://www.carrierhotels.com/news/2005/Aug/08/equinix_reports_second_quarter_2005_results_print.html
EQUINIX REPORTS SECOND QUARTER 2005 RESULTS
By Rich Miller
Carrier Hotels Editor
Posted Aug 8, 2005
- Increased revenues by 33% over same quarter 2004
- Increased EBITDA to $16.1 million, up from $7.5 million in same quarter 2004
- Continues expansion efforts with acquisitions of centers in Silicon Valley and recently announced Chicago center
- Added 70 customers including D.E. Shaw, Fox Sports Interactive Media, Merrill Lynch Asia Pacific Ltd, NASA and Salesforce.com
FOSTER CITY, CA, July 27, 2005 — Equinix, Inc. (Nasdaq: EQIX), the leading provider of network-neutral data centers and Internet exchange services, today reported its quarterly results for the period ended June 30, 2005.
Revenues were $52.5 million for the second quarter, a 33% increase over the same quarter last year and an 8% increase over the previous quarter. Recurring revenues, consisting of colocation, interconnection and managed services, were $49.4 million, a 33% increase over the same quarter last year and an 8% increase over the previous quarter. Non-recurring revenues, consisting primarily of professional services and installation fees, were $3.1 million for the quarter, as compared to $2.1 million in the same quarter last year and $2.8 million the previous quarter.
Cost of revenues were $38.8 million for the second quarter, a 14% increase over the same quarter last year and a 5% increase over the previous quarter. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $15.5 million, were $23.3 million for the second quarter, a 13% increase over same quarter last year and a 6% increase over the previous quarter. Cash gross margins, defined as gross profit less depreciation, amortization, accretion and stock-based compensation, divided by revenues, for the quarter were 56%, up from 48% the same quarter last year and 55% the previous quarter.
Selling, general and administrative expenses, including stock-based compensation of $2.5 million, were $16.2 million for the second quarter, a 30% increase over the same quarter last year and a 6% increase over the previous quarter. Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation of $3.1 million, were $13.1 million for the second quarter, a 16% increase over same quarter last year and a 6% increase over the previous quarter.
Net loss for the second quarter, including stock-based compensation expense of $2.5 million, was $3.4 million. This represents a basic and diluted net loss per share of $0.14 based on a weighted average share count of 23.7 million or a pro forma net loss per share of $0.04 excluding the stock-based compensation expense. The Company’s cash net income, defined as net income (loss) less depreciation, amortization, accretion, stock-based compensation expense, restructuring charges and non-cash interest expense for the quarter was $15.4 million, a 19% improvement over the previous quarter.
EBITDA, defined as loss from operations less depreciation, amortization, accretion, stock-based compensation expense and restructuring charges, for the second quarter was $16.1 million, up 12% over the previous quarter and up from $7.5 million the same quarter 2004.
Capital expenditures in the quarter were $9.9 million, of which $5.4 million was attributed to ongoing capital expenditures and $4.5 million was attributed to expansion capital expenditures.
The company generated cash from operating activities of $18.1 million, a $2.8 million or 18% increase over the previous quarter. Cash used in investing activities was $6.7 million, an increase of $0.6 million over the previous quarter. As a result, the company generated $11.4 million in free cash flow, a $2.2 million increase over the previous quarter. Free cash flow is defined as net cash generated from operating activities less net cash used in investing activities (excluding the purchases, sales and maturities of short-term and long-term investments).
As of June 30, 2005, the company’s cash, cash equivalents and investments were $132.0 million, an increase of $13.9 million over the previous quarter.
"Equinix delivered strong results in the second quarter contributing to a solid first half for the company," said Peter Van Camp, CEO of Equinix. "Significant in this was the level of our bookings and the quality of our new customers. This was a new high for the company, setting up a second half of continued strong growth."
Other Company Metrics & Developments
- On a same IBX basis (defined as IBX centers which have been available for new customer installs for at least four full quarters), revenue was $51.3 million; cost of revenues were $35.6 million; cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation, were $21.4 million and cash gross margins for the quarter were 58%. EBITDA on a same IBX basis was $17.0 million.
- Equinix added 70 new customers in the quarter including AON Warranty Group, Coral Wireless, D.E. Shaw, eHarmony.com, Fox Sports Interactive Media, Ikea Asia Pacific Pte Ltd, Merrill Lynch Asia Pacific Ltd, MySpace.com, NASA, Salesforce.com, Samsung Networks and Sandisk.
- Based on a total cabinet capacity of approximately 26,100, the number of cabinets billing at the end of the quarter was approximately 12,400, or 47%, up from approximately 11,700 the previous quarter. On a weighted average basis, the number of cabinets billing was approximately 12,100, which represents 46%.
- U.S. interconnection service revenues were 22% of U.S. recurring revenues for the quarter. Interconnection services represent 20% of total worldwide recurring revenues.
Business Outlook
For the third quarter 2005, the company expects revenues to be in the range of $55.5 to $56.5 million. Cash gross margins are expected to be approximately 56%. Cash selling, general and administrative expenses are expected to be in the range of $13.0 to $14.0 million. EBITDA is expected to be between $17.0 and $18.0 million as the company continues to invest in growing the business. Net loss is expected to be in the range of $2.0 to $3.0 million. This includes approximately $1.8 million of stock-based compensation expense primarily attributed to the restricted stock grants, based on recent stock trading levels of approximately $45.00 per share, and approximately $1.9 million of interest expense. The weighted average shares outstanding will be approximately 24.0 million. Capital expenditures are estimated to be in the range of $8.0 to $10.0 million, including approximately $5.0 million in capital required for improvements to the newly acquired Silicon Valley and Chicago IBX centers.
For the full year of 2005, revenues are expected to be in the range of $216.0 to $219.0 million. Cash gross margins are expected to be in the range of 55-56%. Cash selling, general and administrative expenses are expected to be approximately $53.0 million. EBITDA is expected to be between $66.0 and $68.0 million. Net loss is expected to be in the range of $13.0 to $15.0 million. This includes approximately $8.5 million of stock-based compensation expense primarily attributed to the restricted stock grants, based on recent stock trading levels of approximately $45.00 per share, and $9.0 million of interest expense. The weighted average shares outstanding will be approximately 23.5 million. Capital expenditures for 2005 are expected to be in a range of $40.0 to $45.0 million, comprised of $17.0 to $18.0 million of ongoing capital expenditures and $23.0 to $27.0 million of expansion capital expenditures.
The company will discuss its results and guidance on its quarterly conference call on Wednesday, July 27, 2005, at 5:30 p.m. ET (2:30 p.m. PT). To hear the conference call, please dial 1-773-799-3263 (domestic and international) and reference the passcode (EQIX). A simultaneous live Webcast of the call will be available over the Internet at www.equinix.com, under the Investor Relations heading. A replay of the call will be available beginning on Wednesday, July 27, 2005 at 7:30 p.m. (ET) by dialing 203-369-1928. In addition, the Webcast will be available for replay on the company's Web site at www.equinix.com. No password is required for either method of replay. A reconciliation between GAAP information and non-GAAP information contained in this press release is provided in a table immediately following the Condensed Consolidated Statements of Operations – GAAP Presentation. This reconciliation is also available at www.equinix.com under the Investor Relations heading.
About Equinix
Equinix is the leading global provider of network-neutral data centers and Internet exchange services for enterprises, content companies, systems integrators and network services providers. Through the company’s 15 Internet Business Exchange™ (IBX®) centers in five countries, customers can directly interconnect with every major global network and ISP for their critical peering, transit and traffic exchange requirements. These interconnection points facilitate the highest performance and growth of the Internet by serving as neutral and open marketplaces for Internet infrastructure services, allowing customers to expand their businesses while reducing costs.
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