Equinix (EQIX) continued its steady performance, posting strong results and announcing several new data center expansions. The company also trimmed its revenue guidance for 2009, citing economic conditions and slightly longer sales cycles for new customers.
"In the U.S. market, our overall demand in this region remains strong, with the size of our pipeline in the later stages of the sales cycle as high as it's historically been," said Equinix CEO Steve Smith. "Yet, despite the size of this pipeline and in this economy, we did see slowdown in decision-making, particularly from new customers, as the fourth quarter progressed."
For 2009, the company cut its revenue outlook to $855 million to $875 million, compared with its prior outlook of $870 million to $892 million. For the fourth-quarter, net income was $116.5 million, compared with a net loss of $6.1 million a year earlier. Revenue rose 37 percent to $190.7 million, in line with analysts estimates.
Equinix said it will continue to invest in data center infrastructure in key global markets. On Thursday it announced plans to invest $35 million in incremental expansions to its Los Angeles 1 and Chicago 2 data centers increasing the net cabinets by approximately 700. Equinix also said it will build out space for an additional 200 cabinets in its Hong Kong 1 data center, spending about $7.5 million for the expansion.
Equinix added 110 new customers in the fourth quarter to finish the year with 2,272, with a total of 27,320 cabinets. The company's data center utilization rate was 79 percent in the U.S. and 85 percent in Asia-Pacific. Average monthly revenue per cabinet at year-end was $1,689 (excluding Europe), an improvement of 7 percent from a year earlier.
Smith said economic conditions led the company to take a conservative approach to revenue guidance. "As the broader economy continues to contract, we've slowed down our bookings assumptions to factor in some level of softness in the decision-making that we now expect to experience in this type of environment," he said.
But Smith said that Equinix stood ready to expand its data center capacity if conditions improve, and has set aside money for this purpose. "There's approximately $40 to $90 million in our guidance for potential expansion projects that we're contemplating but have not yet committed to," said Smith. "As we deliver on Q1 and have better visibility into Q2 bookings, additional expansion decisions will be made. This also is a built-in circuit breaker should the first half of the year not develop as anticipated."