Public disclosure statement

Transcription

1 Public disclosure statement Forward-Looking statements Except for historical information, these presentation slides and related webcast contain forward-looking statements, which include words such as believe, anticipate, and expect. These forward-looking statements involve risks and uncertainties that may cause Equinix s actual results to differ materially from those expressed or implied by these statements. Factors that may affect Equinix s results are summarized in our annual report on Form 10-K filed on February 26, 2018 and in our quarterly report on Form 10-Q filed on May 4, 2018 with the Securities and Exchange Commission. All statements contained in these presentations and related webcast are made only as of the date set forth at the beginning of this presentation. Equinix undertakes no obligation to update the information contained in these presentation slides and related webcast in the event facts or circumstances subsequently change. Non-GAAP information This presentation contains references to certain non-gaap financial measures. For definitions of terms including, but not limited to, Cash Gross Profit, Cash Gross Margins, Cash SG&A, Adjusted EBITDA, Funds From Operations, Adjusted Funds From Operations, and Adjusted Net Operating Income, and a detailed reconciliation between the non- GAAP financial results presented in this presentation and the corresponding GAAP measures, please refer to the appendix that accompanies these presentation slides and related webcast. 1

2 20 Years of Growth and Differentiation Peter Van Camp Chief Executive Officer June 20, Equinix Inc

3 283,000 IL2 5,082 5,122 $M - as-reported Cross connect counts at the end of Q1 49,500 4,368 APAC revenues EMEA revenues 3,612 AMER revenues 1,566 1,887 2,153 2,444 2, , E (1) 2022E (1) FY 2018 Guidance as announced on Form 8-K filed May 2, This does not constitute an update or reiteration of such guidance. Figures represent guidance range 2

4 Resulting in Platform Equinix The place Where Opportunity Connects 5 Continents 24 Countries 52 Metro areas 200 Data centers 18 metros 87 IBXs 22 metros 73 IBXs 12 metros 40 IBXs >9,800 customers >7,000 employees % availability 283k cross connects 100% renewable power pledge Based on Q Top 10 customers (on average) are deployed in 60+ IBX s, and make up 19 percent of recurring revenues 3

5 Cultivating and curating ecosystem growth Resulting in diverse revenue mix Interconnection density and growth Revenue mix 17% Peering Financial services 2018 (1) 17% Interconnection density 12% E-Trading 178% Cloud Digital Ad-IX payments IoT Individual 19% Networking Clusters Community Number of cross connects year over year growth Enterprise 16% 14% 13% 14% 2016 (1) 20% 28% 25% 23% Network Conceive Capture Cluster Curate Diversity of participants Based on YE 17 data Content and digital media 30% Cloud and IT services (1) 2016 and 2018 data based on Q and Q1 2018, respectively 4

6 Our interconnection strategy is working +55% +1.6x +2x $126M (16%) (3) $195M (17%) (3) 177K 283K 29K 64K Interconnection revenues Cross connects IX provisioned capacity (2) FY16 Analyst Day (1) (1) FY18 Analyst Day (1) Based on Q and Q (2) IX provisioned capacity is the sum of all ports provisioned to customers multiplied by the gigabit bandwidth capacity of each port (3) Represents percent of recurring revenues 5

7 Our global scale and reach is unmatched Broad geographic reach and significant scale within each region 17% K 283K +9.8K Share of retail colocation revenues Countries Metros Employees Cross connects Customers Equinix Digital Realty Coresite CyrusOne Interxion Source of Retail Colocation Revenues is Synergy Research, as at Q All other data obtained from public filings. 6

8 Unrivaled go-to-market strength 1,000+ sales professionals enabling us to capture customers Opportunity development team Channel sales Sales engineers 116 Customer 227 Customer success managers Global account management and strategic alliances Field and corporate sales Solution architects and professional services 100 7

9 Committed to the future Customer-led, theme-based innovation Themes 1 Data center of the future Description Data center infrastructure, business model and services innovation 2 Next-generation interconnection Differentiated physical and new virtual connectivity services enabled by SDN/NFV 3 Security 4 Data 5 Apps infrastructure 6 Evolving edge Security visibility and control applied to but separate from public multicloud Performant, simultaneous use of services at intersection of multicloud Core application infrastructure services to enable distributed cloud apps Infrastructure and services for performant service delivery at the edge 8

10 Our balance sheet is a strategic weapon Equinix will continue to demonstrate growth with prudent management of its balance sheet x Net leverage target $2B / $1B Credit facility/cash on balance sheet (1) 4.07% 86% / 14% $750M ATM equity program (3) Blended borrowing rate (2) Fixed/floating rate debt (2) Conservative leverage level Significant access to capital Steadily reducing cost of capital Positioned for rising interest rate environment Equity balances leverage and growth (1) Pro forma for $750M of debt and $835M of cash payments related to the acquisitions of Infomart Dallas on April 2, 2018 and Metronode on April 18, (2) Pro forma for $750M notes related to Infomart Dallas acquisition. Excludes capital leases, other financing obligations, mortgage payable and other loans payable. (3) Under our at-the-market stock offering program, we may sell common stock having an aggregate gross sales price of up to $750M. In Q we sold approximately $355M of stock net of commissions. 9

11 Living by our values for our employees and customers Be an energy supplier Speak up, step up Serve others Open your mind, open your heart Put we before me Find a better way Keep your promises Keep growing 10

12 Enabling digital transformation Press our advantage Focus on revenue and AFFO growth Deliver a truly differentiated customer experience Accelerate ecosystem growth Seed and curate new high-value ecosystems Launch hyperscale infrastructure business Drive next-generation interconnection roadmap Foster customer-inspired innovation, culture, and processes Catch the next wave Customer Scale people and organization Focus on financial leverage Prioritize strategic talent planning Streamline systems and processes 11

13 Expanding capabilities adds more business value REACH EVERYWHERE INTERCONNECT EVERYONE INTEGRATE EVERYTHING Deploy digital infrastructure anywhere you need to be Discover and reach anyone on demand, through one connection to the world Activate your digital edge through leading technology tools, partners and services 12

14 Revenue growth delivering long-term value ($M - as-reported) 5,082-5,122 >$7B 8-10% per year, outpacing the market (2) 3,612 4,368 Favorable secular trends play to our strengths Winning the enterprise shift to the cloud 1,566 1,887 2,153 2,444 2,726 Interconnection continues to outpace colocation revenues Customer-inspired innovation supports continued revenue growth and future relevance Dedicated HIT builds are expected to be off-balance and therefore excluded from our growth projections E 2022E (1) (1) FY18 Guidance as announced on Form 8-K filed May 2, This does not constitute an update or reiteration of such guidance. Figures represent our guidance range (2) Represents range of average growth rates each year through Assumes average currency rates used in our financial results remained the same over comparative periods. Includes previously announced acquisitions (Infomart and Metronode) but excludes any future M&A activity. Excludes the impact of Hyperscaler initiative 13

15 Key themes and takeaways Winning the enterprise shift to the cloud Interconnection is the secret sauce Unmatched global scale and reach Customer-inspired innovation 5 Delivering durable and growing AFFO per share Still early in the total addressable market (TAM) expansion opportunity Favorable secular trends play to our strengths Unmatched go-tomarket scale to land and expand customers Most complete portfolio in market Equinix Cloud Exchange Fabric is a value multiplier Outpacing colocation growth Customer needs evolving to be global, hybrid and multicloud Increasingly leverage diverse ecosystems Proven track record of operational excellence Investing in new services to enable and accelerate enterprise adoption HIT investments enhance ecosystems while using some third party capital Enabling the data center of the future Revenue growth focused on delivering long-term value creation Driving operating leverage into the business Utilizing our balance sheet as a strategic weapon 14

16

17 Becoming the Trusted Center of a Cloud-First World Charles Meyers President, Strategy, Services and Innovation June 20, Equinix Inc

18 Agenda 1 Demand drivers are strong 2 Customer needs are evolving and reshaping the market 3 Targeting the most attractive pieces of the market 4 Capturing the enterprise and seeing momentum 5 Delivering a hyperscale capability with attractive returns and upside 6 Equinix is uniquely positioned to win 2

19 Underlying secular trends continue to drive demand for digital infrastructure Trend Digital technology use Urbanization Cyber security and data sovereignty Digital trade Need Forces the need to support real-time interactions Need for digital services within proximity Need to bypass the internet and deploy data and security locally Need to support global business processes connecting customers, partners and employees $1.36T 50 metro hubs 60% / 18+ 9x Impact In additional economic output in the world s top 10 economies by 2020, per Accenture (1) Over two billion people are expected to migrate to major cities by 2035, creating 50 metro hubs, per Connectography by Parag Khanna (2) Suffer major service failures by 2020, due to inability to manage digital risk, per Gartner (3) Major countries block certain data transfers out of country, per ITIF (4) Increase in total services exports delivered digitally by 2020, per McKinsey (5) (1) Accenture Strategy -- Digital Density Index: Guiding Digital Transformation (2) "Connectography" by Parag Khanna, April 19, 2016 (3) Gartner -- Special Report: Cybersecurity at the Speed of Digital Business, August 30, 2016 (ID: G ) (4) ITIF Cross-Border Data Flows: Where Are the Barriers, and What Do They Cost (5) McKinsey Global Institute -- Digital Globalization: The New Era of Global Flows, March

20 Digital is becoming the growth engine of the global economy Industry examples of digital transformation Digital as a share of global GDP (1) Manufacturing Transportation Retail Telecommunications Industrial internet Ride share Omnichannel Digital delivery Economy Economy (1) Accenture Strategy -- Digital Disruption: The Growth Multiplier 4

21 New technology trends are fueling massive market opportunity Network functions virtualization (NFV) $15B+ Collected from aircraft 98EB (1) (5) market for hardware, software and services by 2020 By 2026 Artificial intelligence 72% (3) of leaders say it is a business advantage IoT spend $772B (4) Data created and stored 163ZB (2) By 2025 Big data market 15% $48.3B (6) 40% in 2017 (1) Olivery Wyman MRO Survey 2016 (2) IDC - Data Age 2025: The Evolution of Data to Life-Critical Don t Focus on Big Data; Focus on the Data That s Big (3) CMO.com Mind-Blowing Stats About Artificial Intelligence (4) Skyhook Wireless Stats That Show The Massive Opportunities In The Internet of Things (5) IHS Markit-- Network Functions Virtualization Market Worth Over $15 Billion by 2020, Says IHS Markit (6) Cognizant The Way to a True End-to-End Digital Enterprise 5

22 The customer need is changing to be more global Macro trends Global flow of data and communication Manifestation at Equinix Average number of IBX deployments of top 10 customers by vertical (2) 96 1Q16 1Q Used international bandwidth connected between regions (1) (tbps) % % % % 232 Network 39 Cloud and IT Enterprise Content and digital media Financial services (1) Source:Telegeography (2) Excludes Metronode and Informart acquisitions 6

23 The customer need is changing to be more hybrid Macro trends Cloud deployment models (1) Manifestation at Equinix Number of connections to CIT (2) 3X No plans 6% 32, % Both (independently) 10, % Private 25% Public Cloud user 94% 11,600+ 1, , % Hybrid 10,000+ 1Q16 1Q18 Cross connects Virtual connections (1) RightScale 2018 State of the Cloud Report (2) Bit-Isle, Telecity, & EQIX included 7

24 The customer need is changing to be more multicloud Macro trends Average number of cloud providers used (1) 11% 8% Manifestation at Equinix Growth in private cloud connectivity (1Q16-1Q18) (2) 6X 429% 41% 37% 48% 55% 69% Single cloud Multicloud (1) Forrester Research: A Clear Multicloud Strategy Delivers Business Value (2017 & 2018) (2) Enterprise customer count CAGR from 1Q16 to 1Q18 Bit-Isle, Telecity, & EQIX included 8

25 We are targeting the most attractive pieces of the market Colocation market segments 17 market size CAGR Non-hyperscale wholesale colocation Hyperscale colocation Enterprise wholesale facing broad pressures as cloud-first architectures gain momentum Meaningful demand from service providers below hyperscale level Accelerated cloud adoption fueling strong demand pipeline New entrants increasing competitive intensity Top CSPs rapidly expanding geographic coverage $6B (2) $1B (1) $7B (1) 8% (1) 4-5% (1) ~25% (1) Hybrid and multicloud rapidly cementing as IT architecture of choice Carrier neutral retail colocation Digital transformation agenda and regulatory pressures driving increasingly distributed infrastructure Volume, velocity and value of data increasing exponentially, giving rise to large hybrid architectures $ 16.4B (2) 7.5% (2) Lower value workloads increasingly prone to cloud substitution and/or price pressure $24B (2) 5.9% (2) Bandwidth provider colocation Carriers de-emphasizing/exiting the colocation business, blurring segment growth rates $ 7.6B (2) 2.1% (2) (1) Equinix estimates (2) Synergy Research Group Colocation Market Worldwide Revenue Forecast 9

26 We are outgrowing the market and the projected enterprise TAM is materializing Retail colocation supply side TAM (1) Incremental enterprise opportunity (2) ($B) $ % $26 $32 350K Addressable customer universe + 285K 35K Located near an IBX Sales volume over $100M 2017A Carrier neutral colocation 2018E Bandwidth provider colocation 2022E 31K 23K (1) Synergy Research Group (2) Equinix analysis Multi-region presence Using hybrid cloud >$10B Addressable opportunity 10

27 Enterprise momentum is strong and we have only scratched the surface Incremental enterprise opportunity 350K 285K 35K 1.1k Enterprise and Financial multinationals Multinational customers (#) Equinix countries (#) Deployed countries (#) Annual opportunity ($M) G $913 G $117 31K 23K >$10B Addressable opportunity Rest >$1B $153 $100M-1B $30 Total 1, $1,214 11

28 Enterprise tracking at nearly twice the broader business on key dimensions Enterprise revenue growth (1) Enterprise new logos growth (1) Enterprise interconnection growth (1) MRR ($M) +11% (1) New logos growth versus 1Q16 CAGRs Cumulative enterprise interconnection growth versus 1Q16 CAGRs 47% 26% (1) +21% ENT EQIX 28% ENT 14% EQIX 1Q16 1Q18 1Q16 1Q17 1Q18 1Q16 1Q17 1Q18 Enterprise All other segments (1) Equinix organic enterprise segment growth rates are YoY CAGRs from Q to Q and do not include the impact of the Telecity, Bit-Isle, Verizon, Itconic, Metronode or Infomart acquisitions 12

29 Robust interconnection momentum across the business 26% CAGR Private connections 283, %+ CAGR 10,000+ Ecosystem growth Cross connects Virtual connections % of Total Networks and content providers continue to peer (1) 1Q16 to 1Q18 (2) CAGRs 40% 16% 177,000 CDM/NWK à NWK 1,600+ 1Q16 1Q18 1Q16 1Q18 Public connections: IX peak traffic (GBPS) 32% CAGR 8,500 4,900 Growth in customers accessing networks CIT/ENT/FIN à NWK Customers accessing cloud and IT services privately Any à CIT Financial trading ecosystem FIN à FIN Emerging ecosystem around Ad-IX CDM à CDM 29% 19% 15% 76% 8% 13% 0.2% 62% 1Q16 1Q18 (1) Not all ecosystems included in calculating total; total connections include both cross connects and virtual connections; (2) CAGR calculated YoY from 1Q16 to 1Q18 and includes legacy Equinix, Telecity (data available after 3Q16), and Bit-Isle (data available after 4Q16) 13

30 Equinix sees hyperscale as a key strategic imperative Strategic rationale Strengthen ecosystems and extend interconnection leadership Serve as a magnet to attract enterprise deployments Deepen relationships with top CSPs Drive campus data gravity Leading global IaaS providers Chinese cloud providers Top global SaaS providers Right customers Enhance ecosystems Data center core: edge/gateway New platforms (AR/VR/IOT): network node Right deployments Focused execution Right markets Focus where HIT protects and extends interconnection leadership Prioritize large enterprise markets Selective new entry potential 14

31 Leveraging third-party capital to insulate the balance sheet Balancing financial goals Protect balance sheet Deep pool of capital providers aggressively pursuing exposure to hyperscale projects Exploring different fund structures dependent on project life cycle with financing alternatives Capital recycling Limit initial AFFO drag Development fund Maximize return / AFFO accretion Maintain account control and ability to execute Equinix to retain a minority equity share (e.g., 20-49%) Improve returns and AFFO accretion through recurring fee streams Hybrid / mixed fund 15

32 Seeded a robust demand pipeline with initial anchor wins Initial hybrid projects(1) Hyperscale demand pipeline Win initial deals LD9 Leveraging capacity in acquired assets to win initial deals First hyperscale build 2,600 cabs 18 MW LD10 PA8 first dedicated hyperscale build under construction ~60% pre-leased New hyperscale builds Land under control in 10+ metros to support potential hyperscale builds Seed pipeline 2,200 cabs 14 MW Demand pipeline of 400MW+ (1) Hyperscale components of LD9 and LD10 IBXs 16

33 Delivering a hyperscale capability with attractive returns and AFFO per share upside Key parameters of HIT Equinix Impact Dimension Year 5 projection Dimension Year 5 projection (1) Countries Projects $ Implied Equinix investment $0.5B $1.3B $ Total megawatts Total CAPEX $2.5B $5.5B Projected Equinix returns 13% 17% $ Equinix equity Leverage 20% 49% 35% 65% Potential NOI contribution (2) $80M $160M (1) Equinix impact varies based on HIT project parameters; project execution is subject to change and can be influenced by market conditions (2) Potential NOI contribution represents estimated annual run rate at the end of year 5 17

34 HIT will accelerate already strong hyperscale momentum Hyperscalers over-indexing in all three regions demonstrating particular strength in interconnected retail Average quarter over quarter MRR growth rate All sizes > 1MW 250 kw - 1 MW Sub 250 kw Worldwide hyperscale MRR annualized ~$500M (1) CAGR 1Q16-1Q18 (2) 18% 10% 19% 29% WW AMER EMEA APAC Interconnection percent of revenue 10% 2% 7% 22% Total Hyperscaler (1) Only organic Equinix revenue and growth included (2) Based off annualized 1Q18 actuals 18

35 Evolving our platform to seize the opportunity 19

36 Delivering new services and ecosystems to enable hybrid and multicloud Portals APIs Marketplace Developer platform Digital customer experience Self-service commerce Ecosystem Capabilities Network Cloud Security Data Tools/Utilities Equinix enabling services Professional Services Infrastructure Services Managed Services Smart Hands SmartKey Equinix interconnection services Cross Connect Metro Connect Internet Exchange Equinix Connect Equinix Cloud Exchange Fabric Equinix colocation services IBX SmartView 200 Retail IBX s HIT 20

37 Equinix is uniquely positioned to win 5 Continents 52 Metro areas 24 Countries 200 Data centers Global reach Enterprise Go-to-market resources between sales, sales engineering, solutions architecture, customer success, and strategic alliances Go-to-market breadth Ecosystem density Security Cloud Financial Content Network +55% +1.6X 283K 177K $195M $126M Platform capabilities Interconnection revenues Cross connects (1) FY16 Analyst Day FY18 Analyst Day(1) (1) Interconnection revenues as of 1Q16 and 1Q18 respectively $50M+ Estimated FY18 OPEX investment to develop new ecosystems, products, and services 21

38

39 Voice of the Customer Panel Sara Baack Chief Marketing Officer June 20, 2018 Equinix Inc

40 Digital business is changing our customers IT strategy 1. Optimize and transform their network 2. Manage increasing volumes of distributed data IT Platform 3. Expand security perimeter 4. Enable global application workflows 2

41 Leveraging Platform Equinix, customers solve problems and achieve value Building comprehensive solutions Simplify network and reduce costs Achieving significant value 45% application latency reduction Implement secure multicloud connectivity 30% reduction in OPEX implementing Hybrid Cloud Place data next to users and clouds 25x more bandwidth/employee Connect and participate in digital ecosystems Less than five minutes to interconnect a destination Vertical Marketing, IOA Use Case Customer Benchmarking

42 Equinix grows too, delivering outcomes for our shareholders Global manufacturer Retail banking Global transportation Electronic components Financial services Total deployments (1) 134 # of unique IBXs 45 # of unique metros (1) Unique # of IBXs and metros deployed; Includes 2018 Customer Advisory Board members and panel members 4

43 Our customers tell us this is just the beginning (1) Digital transformation has started Plenty of work still remains Need to scale the network Develop better security in the hybrid IT world 82% Less than 20% data migration 20-50% 63% Implementing, but target state is two to three years away Minority of applications and data have been migrated to target state Growth in workloads expected to support digital strategy More preparation needed to support secure data exchange across environments (1) Equinix Customer Advisory Board survey 5

44 Lets hear from a few of them Matthew Douglas Chief Enterprise Architect Kirk Joubert Director, Network Services Robert Hintze Sr. Director, Institutional Retirement Technology 6

45 One of the nation s top integrated healthcare systems based in Virginia. Operations include hospitals, imaging centers, assisted-living, outpatient campuses, home health and hospice. Pioneered award-winning remote monitoring system for intensive care. Deployment with Equinix - Commercial opportunities: a combination of remote and in-hospital operations required distributed applications/ insights/ security, mobile and cloud connectivity Matthew Douglas Chief Enterprise Architect - Interconnecting for network optimization and hybrid multicloud - Deployed in D.C. 7

46 Global leader in marketing and distributing food and non-food products. Supports customers, suppliers, partners and Sysco business groups operating in 90 countries around the world. Deployment with Equinix - Commercial opportunities: IoT and mobile for massive fleet management operation - data access and insights, traffic segmentation and data replication for BCDR Kirk Joubert Director, Network Services - Interconnecting for network optimization and hybrid multicloud - Deployed in Ashburn and Dallas 8

47 Leading financial services provider celebrating 100 years of managing retirement plans, banking and loans, and insurance. Deployment with Equinix - Commercial opportunities: customers showing greater range of engagement modalities (mobile, on-demand, appbased); new channels needed for retirees; service portfolio expansion - Interconnecting for network optimization and hybrid multicloud Robert Hintze Sr. Director, Institutional Retirement Technology - Deployed in five metros 9

48 Matthew Douglas Chief Enterprise Architect Kirk Joubert Director, Network Services Robert Hintze Sr. Director, Institutional Retirement Technology 10

49