Equinix (NASDAQ:EQIX) reported solid third-quarter 2017 results after the market closed on Wednesday. 

Shares have returned 31.9% in 2017 through Wednesday, versus the S&P 500's 17.1%.

Here's how the quarter worked out for the data center operator and global interconnection specialist that's organized as a real estate investment trust (REIT).

Equinix's results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Change


$1,152 million $924.7 million 25%

Operating income

$224.9 million

$170.0 million


Net income

$79.9 million

$51.5 million


Earnings per share (EPS)




Adjusted funds from operations (AFFO)*

$391.3 million

$284.2 million


AFFO per share




Data source: Equinix. *AFFO is a closely watched metric for companies organized as REITs, as it's a driver of payouts to shareholders. It's akin to "earnings" for REITs.

Reported revenue got a boost from foreign exchange and includes $137 million of revenue from the acquisition of 29 Verizon data centers, which was completed last quarter. On a normalized and constant currency basis, revenue increased 10% year over year -- still quite solid -- and 8% from the previous quarter.

Equinix's revenue came in above its guidance range of $1,133 million to $1,141 million. The company doesn't provide a quarterly AFFO outlook.

Interior view of a data center showing severs.

Image source: Getty Images.

What happened with Equinix in the quarter?

  • Its revenue grew for the 59th consecutive quarter.
  • Recurring revenue, consisting primarily of colocation, interconnection, and managed services, jumped 24% to $1,089 million. Nonrecurring revenue soared 32% -- or 17% on a normalized and constant currency basis -- to $63.2 million.
  • It had a record number of new wins closed across every vertical, including 10 new Fortune 500 wins from the enterprise and financial services verticals.
  • Its network vertical had record bookings with expansions from Charter Communications and with continued momentum in the submarine space from Seaborn Networks and Aqua Comms.
  • Its key customer wins and expansions included Alibaba.com, Baidu, Blade (a French start-up that's launched Shadow, a high-performance, cloud-based computer), Charter Communications, Netflix, Priceline, Oracle, Salesforce.com, SAPTencent, and Wal-Mart.
  • Organic expansion included the opening of locations in the Tseung Kwan O data center area of Hong Kong and at the Equinix Ashburn campus in the Washington, D.C., area. These openings add capacity in two of the company's most interconnection-rich markets.
  • It announced 13 new expansion projects across all three regions totaling $615 million. This brings the total number of expansion projects underway to 22.

What management had to say

Here's what CEO Steve Smith had to say in the press release about the quarter:

Equinix had a strong third quarter as customers continue to adopt interconnection oriented architectures as the preferred platform for their shift to digital. Robust demand is driving higher utilization levels, and we are investing in support of this momentum with expansions, both organically and through strategic acquisitions, to deliver even greater value to customers through our global platform. As customers embrace hybrid and multicloud as the IT architecture of choice, our interconnection strength is resonating, and Equinix continues to outpace market growth and gain market share.

Looking ahead

Equinix increased its full-year 2017 guidance. The company said the $37 million (at midpoint) guidance raise is due to better-than-expected operating performance of $8 million in the third quarter, additional foreign currency benefit of $16 million when compared to the prior guidance, and $13 million in revenue from two acquisitions it made early in the fourth quarter. (Acquisitions were Itconic, which has five data centers in Spain and Portugal and a second data center in Istanbul.) 


Updated 2017 Guidance

Previous 2017 Guidance

Projected Year-Over-Year Change


$4,355 million to $4,363 million

$4,317 million to $4,327 million

21% (11% on normalized and constant currency basis)


$1,411 million to $1,419 million

$1,382 million to $1,392 million

31% (14% on a normalized and constant 
currency basis)

Data source: Equinix.

The AFFO outlook assumes $54 million of integration costs for acquisitions.