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Equinix's Third-Quarter Revenue Grows 11%; AFFO Edges Up

By Beth McKenna – Updated Nov 5, 2018 at 9:09AM

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The world's largest operator of data centers continued to grow all key metrics year over year and got a new CEO.

Equinix (EQIX -1.60%) reported third-quarter 2018 results after the market closed on Thursday. 

Shares closed up 1.5% on Friday. 

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

Equinix's results: The raw numbers


Q3 2018 

Q3 2017

Year-Over-Year Change


$1.284 billion

$1.152 billion   

11% (9% in normalized and constant currency) 

Operating income

$265.8 million

$224.9 million


Net income

$124.8 million

$79.9 million


Earnings per share (EPS)




Adjusted funds from operations (AFFO)*

$402.3 million

$391.3 million


AFFO per share




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 just above its outlook range of $1.272 billion to $1.282 billion. The company doesn't provide quarterly AFFO guidance. 

CFO Keith Taylor said on the earnings call that, excluding acquisition integration costs, AFFO per share would have been $5.12. 

Interior of a blue-lighted data center showing stacks of servers in rows.

Image source: Getty Images.

What happened with Equinix in the quarter?

  • Recurring revenue, consisting primarily of colocation, interconnection, and managed services revenue, rose 11% over the year-ago period to $1.208 billion. Nonrecurring revenue increased 20% to $75.95 million.
  • In September, Charles Meyers became president and CEO. He's an eight-year veteran of the company who has held several top leadership positions, including COO.
  • The company said it had a "significant number" of new wins across verticals, with "notable outperformance from content and digital media and enterprise." The content and digital media vertical "experienced record bookings this quarter led by Asia-Pacific with customer expansions from Alibaba and Tencent," while enterprise "continued to be the company's fastest growing vertical," according to the company's press release.
  • Equinix completed nine expansions, including in Culpeper, Va.; Frankfurt; Houston; Melbourne; Miami; Rio de Janeiro; Singapore; and two in Sao Paulo.
  • It said it has "30 expansion projects currently under way across 21 markets in all three regions, including seven newly announced expansions."

What management had to say

Here's what Equinix's new CEO Meyers was quoted as saying in the company's earnings release: 

I am extremely proud of our track record of success in my eight years as a member of the leadership team, and that track record continues this quarter with our 63rd quarter of consecutive revenue growth. Since 2010, we have more than quadrupled the size of our business, and we have invested $22 billion in capital to build the world's leading interconnection platform, positioning us as the trusted center of a cloud-first world. As CEO I will build on this strong foundation, and we will remain focused on extending our core sources of differentiation: superior global reach; market-leading network and cloud density; the industry's most comprehensive interconnection portfolio; scaled digital ecosystems; and an unwavering commitment to service excellence.

Looking ahead

Overall, Equinix turned in a solid quarter of growth, though AFFO growth was muted, in part due to acquisition integration costs.

The company revised slightly upward its previous full-year 2018 revenue and AFFO guidance as follows:


Current 2018 Guidance

Previous 2018 Guidance 

Projected Year-Over-Year Change


$5.060 billion to $5.070  billion $5.037 billion to $5.077 billion

16% (9% on a normalized and constant currency basis) at midpoint


$1.619 billion to $1.639 billion

$1.596 billion to $1.636 billion

13% at midpoint

Data source: Equinix. 

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool recommends Equinix. The Motley Fool has a disclosure policy.

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