Image source: Equinix.

Shares of data-center operator Equinix (NASDAQ:EQIX)are down just over 1% since the company reported year-over-year declines in net income, earnings per share, and cash from operations on Wednesday after the bell. Here's a closer look at the company's third quarter performance:

MetricQ3 2015Q3 2014YOY Growth
Revenue  $686.65 million  $620.44 million   10.7%
GAAP net income  $41.13 million  $42.84 million  (3.9%)
Earnings per share  $0.71  $0.79  (10.1%)
Cash from operations   $214.4 million  $216.44 million  (0.9%) 

Data sources: S&P Capital IQ and Equinix press release. 

Commenting on the results, CEO Steve Smith said in a press release:

We delivered another strong quarter as Platform Equinix and our digital ecosystems continue to drive sustainable growth. Cloud service providers are choosing Equinix to scale their infrastructure globally, and enterprises are increasingly turning to us to implement hybrid and multi-cloud as part of next-generation IT architectures. These trends are transformational for Equinix and we will continue to invest in this significant opportunity.

What went right: Equinix organizes itself as a real estate investment trust for tax purposes, and as a result, reports funds from operations, or FFO, as its key measure of profitability. Adjusted FFO, which excludes stock-based compensation and depreciation and amoritzation on non-real estate assets, among other charges, rose 2% year over year to $210.4 million. Equinix operates data centers, but clients are shifting roles in how they use the space, as Smith notes above. The transition may be having an impact on how quickly Equinix closes deals.

What went wrong: Diluted AFFO per share fell from $3.64 to $3.55, a 2.5% decline. Equinix's total share count rose 4.5% over the same period. More troubling is cash from operations, which declined about 1% year over year. Taxes played a role in that: Equinix paid $18.4 million in cash taxes in the third quarter after collecting $23.3 million in credits last year. Debt also appears to have dampened results as interest expense rose 20% year over year to $76.3 million.

What's next: Investors should keep a close eye on how well AFFO and cash flow match up. If all goes well, sharp increases in the former will flow all the way to the latter as Equinix signs bigger contracts with clients who need its data centers to connect to the cloud. Financially, Equnix expects $701 million to $705 million in fourth quarter revenue. For the year, Equnix now expects between $2,696 million and $2,700 million in revenue -- up slightly from management's earlier forecast of $2,685 million to $2,695 million.