Equinix Raises 2008 Guidance (Again)

Equinix (EQIX) has once again exceeded Wall Street’s revenue expectations and raised its guidance for the third quarter and full year 2008. That’s a repeat of the first quarter, when the company’s earnings were followed by similar strength from other colocation and interconnection specialists.

Equinix also announced that it is moving ahead with phase 2 of its NY4 data center in Secaucus, New Jersey, which will add space for another 1,100 cabinets with a density of 5 kilowatts apiece.

Equinix added 144 new customers in the quarter, including NASDAQ, bringing the total number of customers worldwide to 2,090. Equinix executives said they continue to see strong demand for data center space in major markets, a trend which includes financial companies. As a result, the company once again raised its revenue guidance and now expects total revenues in the range of $700 to $710 million for 2008. In April Equinix raised its guidance to $685 million to $700 million, up from its prior view of $650 million to $665 million. The company also projects third quarter revenues of $180 to 184 million, compared to the Wall Street consensus of $178.5 million. UPDATE: In early trading Thursday, shares of Equinix declined more than $6 a share to $86.54, a drop of 6 percent.

“Equinix delivered another strong quarter and, as demonstrated by our increased guidance, is positioned for a very strong second half,” said Steve Smith, president and CEO of Equinix. “With our continued focus on business execution and delivering on customer needs, we have a solid foundation to fully capitalize on our market leadership position.”

Meebo Leases Space With Equinix

Equinix, Inc. (EQIX) said today that it has added another major customer from the social media sector. Instant messaging provider Meebo has established operations at an Equinix data center in the Silicon Valley. Meebo provides instant messaging and group chat to over 35 million people and partner sites across the Web. The average person at Meebo.com spends over two hours on the site per day, and Meebo handles more than 5 billion messages per month.

“As Meebo continues to grow, we need a data center that can meet our ever-growing demands to scale,” said Sandy Jen, co-founder and vice president of engineering of Meebo. “Equinix is a great partner and ensures that our users all around the world experience great reliability and uptime from Meebo.”

“Meebo’s platform is another example of an innovative solution thatharnesses live interactive technology to enhance communications,” said Margie Backaus, chief business officer of Equinix. “At Equinix, Meebo can operate within a high-reliability environment that ensures the most streamlined delivery of these services to end-users.”

Equinix also provides peering services to MySpace.

Equinix Expands Peering in Zurich

Equinix, Inc. (EQIX) is expanding its Equinix Exchange service to its Zurich data center, creating a peering environment with more than 60 members. The Zurich facility is among the 14 European data centers Equinix acquired last year with its $55 million purchase of IXEurope.

Peering allows two providers exchanging large volumes of traffic to save money by connecting directly, rather than routing traffic through their paid Internet connections. Peering is often free as long as the amount of traffic exchanged is not out of balance, providing substantial cost savings for bandwidth for high-traffic sites and networks. Public peering exchanges allow participants to peer with other providers connected to the exchange.

“The growth of video and other low-latency applications is placing increasing demands on network infrastructure and requires that data be exchanged between networks as quickly and efficiently as possible,” said Eric Schwartz, president of Equinix Europe. “Equinix Exchange provides a platform for ISPs, content companies and enterprises to implement a high-performance, highly versatile, yet low cost IP interconnection infrastructure within a secure, network-neutral environment.”

Logicworks Expands in Equinix Centers

Managed hosting specialist Logicworks has expanded into the Equinix NY4 Internet Business Exchange center in Secaucus, New Jersey, the company said today. The new NY4 Secaucus data center is Equinix’s largest facility in the United States at 340,000 square feet.

“Equinix’s facility includes the most modern design, power, cooling and security provisioning, all of which were deciding factors in our facilities expansion,” said Kenneth Ziegler, president and COO of Logicworks. “Our clients require the highest level of system availability. Equinix understands facility management and capacity planning at a level we can appreciate given our experience utilizing these services.”

Equinix Earnings Soar on Strong Demand

Revenue and new contracts surged at Equinix (EQIX) in the first quarter of 2008, defying concerns that the slowing economy might impact demand for data center space. The colocation and interconnection company said it added 1,500 billing cabinets in the first quarter, and that leasing at its newest data centers in northern Virginia, New Jersey and Chicago was stronger than anticipated. Equinix gained 160 new customers during the quarter, and now has 1,994.

“We continue to see a very strong pipeline across all our regions, and expect pricing to remain intact,” said Equinix CFO Keith Taylor. “We saw a strong uplift in all of our key markets across all three regions (the US, Asia-Pacific and Europe).”

For the first quarter, Equinix posted net income of $5.4 million, or 15 cents a share, compared with a loss of $4.5 million, or 15 cents a share, a year earlier. Revenue rose 86 percent to $158.2 million. Analysts had been expecting a loss of 13 cents a share on revenue of $151.3 million, according to estimates by Reuters.

Equinix shares, which closed at $81 yesterday, traded 6 percent higher in after-hours trading.

“Clearly this reflects a great deal of momentum in the business and the impact of an outstanding first quarter,” said Equinix CEO Steve Smith. “We are still being mindful of the economic environment that we’re operating in … (but) the accelerated momentum of the business in the first quarter has increased the fill rate of certain IBXs and presents some pressure on our availability of inventory in the latter half of the year. As you can imagine, we’re very excited about the state of the business today.”

Equinix Peering Powers Hulu Streaming Video

The network-backed video hub Hulu is leasing space in data centers operated by Equinix (EQIX) to speed delivery of its free streaming service, which opened in beta last week. Hulu will use Equinix peering centers to make direct peering connections with major network service providers.

Hulu is a highly-anticipated online video service featuring programs from Fox, NBC Universal, MGM, Sony Pictures Television and Warner Bros. Television Group. The content will appear at Hulu.com as well as web properties from AOL, Comcast, MSN, MySpace and Yahoo.

Equinix Terminates Credit Line

Equinix (EQIX) said its data center construction schedule will not be affected by its recent termination of a $75 million credit line with Silicon Valley Bank and General Electric Capital Corporation. The company said in an SEC filing Friday that it had terminated the credit line on Feb. 29. The company had no borrowings under the agreement, and didn’t incur any penalties. “The termination of the Agreement will not impact Equinix’ expansion plans as a drawdown under this Agreement was not anticipated under its current operating plan,” the company said in its filing. “Equinix anticipates it will replace this line of credit during 2008.”

The termination comes at a time of tightening credit in the U.S. financial markets. Equinix is among the data center specialists who have said they are fully funded to complete their data center expansions.

Equinix: Strong 4Q Revenue, Expansion in Asia

Equinix (EQIX) has announced expansions of its data centers in Hong Kong and Singapore, citing strong growth in the Asian market for mission-critical space and interconnections. The company also reported strong revenue growth for the fourth quarter of 2007 and raised its revenue guidance for 2008. Shares of Equinix are up $5.05 to $77.80 in early trading, a gain of about 7 percent.

Equinix said it plans to expand its Hong Kong data center from 38,000 square feet to about 70,000 square feet, adding 550 sellable cabinets. The Hong Kong facility houses Equinix’s Business Continuity Trading Room (BCTR), a specialized disaster recovery site for financial institutions. Equinix will spend $17 million on the Hong Kong expansion.

The planned 17,000 square foot expansion in Singapore is Equinix’s third expansion of that data center, which will reach 105,000 square feet upon completion. The extra space will allow Equinix to accommodate an additional 300 cabinets in the Singapore site, which is currently about 65 percent full. Equinix expects to invest $14 million in the Singapore expansion in 2008.