Equinix Delivers Double-Digit Revenue and AFFO Growth

Equinix (EQIX 0.72%) reported second-quarter 2018 results after the market close on Wednesday. 

The market largely shrugged off the earnings release, with the stock moving little on Thursday, closing down 0.6%. 

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

Equinix's results: The raw numbers

Data source: Equinix. *Adjusted funds from operations (AFFO) is a closely watched metric for companies organized as real estate investment trusts, or REITs. It's akin to "earnings" for REITs. 

Equinix's revenue result came in at the midpoint of its guidance range of $1.257 billion to $1.267 billion; the company doesn't provide quarterly AFFO guidance.

Image source: Getty Images.

What happened with Equinix in the quarter?

• Recurring revenue, consisting primarily of colocation, interconnection, and managed services, rose 17.6% over the year-ago period to $1.188 billion. Nonrecurring revenue increased 31.6% to $74.2 million.
• In early April, the company closed on its previously announced acquisition of the Infomart Building in Dallas, which "is one of the largest interconnection hubs in the U.S.," according to the company's press release issued at that time. 
• It also closed in April on its previously announced acquisition of Metronode in Australia.
• Equinix completed expansions in the Amsterdam, Denver, and London metropolitan areas.
• The company has "an active pipeline of 32 expansion projects currently under way, including a partnership with Omantel to enter the new market of Muscat, Oman," according to its earnings press release.

What management had to say

Here's what Peter Van Camp, executive chairman and interim CEO, had to say: 

Equinix delivered another strong quarter with record bookings across all three regions and virtually all key operating metrics showing solid momentum in our go-to-market engine and interconnection strategy. Our unique global platform of 200 data centers, and the customer ecosystems within them, remain at the heart of our strategy, as evidenced by strong cross-regional sales and healthy interconnection activity in Q2. We are looking forward to the second half of the year as we focus on our strategic initiatives, deliver value from our acquisitions and work to convert a healthy customer pipeline.

Van Camp -- who was Equinix's CEO from 2000 to 2007 -- has been running the company since former CEO Steve Smith resigned from his position in late January. Smith's resignation stemmed from his "exercising poor judgment with respect to an employee matter," according to Equinix's press release at the time. 

Looking ahead

Equinix turned in another solid quarter of growth. The company provided third-quarter revenue guidance of $1.272 billion to $1.282 billion, representing growth of 11% year over year at the midpoint. 

The company also revised its previously issued full-year 2018 guidance. It pared back revenue, but that's solely due to it now expecting a greater negative impact from foreign currency than it previously anticipated. In fact, in constant currency, it actually increased its revenue outlook by $10 million. For AFFO, it tweaked guidance slightly upward.

Data source: Equinix.