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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."

Posted by Rich Miller April 24, 2008 | Permalink | Newsletter

March 16, 2008

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.

Posted by Rich Miller March 16, 2008 | Permalink | Newsletter

March 10, 2008

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.

Posted by Rich Miller March 10, 2008 | Permalink | Newsletter

February 14, 2008

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.

Posted by Rich Miller February 14, 2008 | Permalink | Newsletter

February 06, 2008

Equinix Buys Provider in Netherlands

Equinix, Inc. (EQIX) continues to expand into the European market, announcing today that it has bought Virtu Secure Webservices B.V., a provider of network-neutral data center services in the Netherlands. The deal will immediately provide Equinix with data center operations in the cities of Enschede and Zwolle, as well as expansion space in Amsterdam by mid-year. Equinix said it will spend $48 million to buy Virtu and complete the buildout of the Amsterdam site.

The acquisition follows Equinix' acquisition of IXEurope, which gave the interconnection specialist a foothold in the European market and boosted the company's revenue and stock price.

Virtu has more than 400 enterprise, systems integrator and government customers include IBM, TUI/Thomson, Netherlands Department of Finance and Ten Cate. The company operates data centers in Enschede (13,000 square feet) and Zwolle (5,400 square feet), and it is currently building out a 32,000 square foot data center in Amsterdam. The Enschede facility is 40 percent full, while the data center in Zwolle just opened but will be at 80 percent occupancy once all signed contracts are fully installed.

Posted by Rich Miller February 06, 2008 | Permalink | Newsletter

December 27, 2007

Equinix Opens New London Data Center

Equinix Inc. (EQIX) has completed the phase 1 build out of its London Slough (LD4) data center. The first customers moving into the new site include "a leading global financial services firm and one of the world's top five providers of IT services," according to Equinix. The Slough site is the largest of Equinix's four data centers in London, with a first phase featuring 5,000 square meters (53,800 square feet) of technical space. Phase 2 of LD4 is scheduled to come online in summer 2008, adding an additional 53,800 square feet of data center space.

"The opening of the site represents a significant increase in our capacity and allows us to maintain our momentum in this important market," said Russell Poole, General Manager - United Kingdom for Equinix. "We are able to meet increasing demand from organizations seeking to leverage Equinix's secure and robust colocation facilities, as well as the multitude of carriers offering network services at Equinix."

Posted by Rich Miller December 27, 2007 | Permalink | Newsletter

November 07, 2007

Finance Firms Filling Equinix NJ Data Center

Equinix (EQIX) today announced the opening of its huge new data center in Secaucus, New Jersey, known as NY4. The company said it has already sold 50 percent of the finished space in the 340,000 square foot facility, with a "leading global investment bank" as the primary anchor customer. Equinix also said that ICAP, an interdealer broker for financial trading, would be among the center's tenants. The strong demand has prompted Equinix to begin design and planning for a second phase expansion of NY4.

"Today’s grand opening of our NY4 center provides further proof of Equinix’s ability to execute on large-scale builds and fill them quickly with strong customer demand, especially from the financial services market," said Steve Smith, president and CEO of Equinix. "We look forward to continuing this brisk pace of growth as the global market demand for premium data center and colocation services continues to outpace supply."

Posted by Rich Miller November 07, 2007 | Permalink | Newsletter

November 01, 2007

Equinix Shares Surge 17% In One Day

Shares of Equinix (EQIX) surged 17 percent Wednesday after several analysts raised their ratings on the stock after a conference call with management Tuesday afternoon. Equinix rose $17.04, or 17.1 percent, to close at $116.66 Wednesday. At one point, the stock traded as high as $121.13.

Equinix reported a profit of $4.1 million, or 12 cents per share, versus a loss of $5.2 million, or 18 cents per share, in the year-ago period. The company also raised its revenue guidance, projecting 2007 revenue of $$416 million to $417.5 million, compared with its previous view of $413 million to $415 million. Beyond the performance, analysts were encouraged by reports of strong demand in both the U.S. and Europe, a market Equinix just entered with its acquisition of IXEurope.

"Our pipeline remains extremely strong with another record bookings quarter," Equinix president and CEO Stephen Smith told analysts on the conference call. "Importantly, we've seen our investments in our systems and processes start to pay off." Equinix said revenues at a new data center in northern Virginia were running ahead of schedule, as were bookings for a new facility in Chicago. The company also announced expansions of data centers in Paris and Sydney, and said demand in Paris and London remains strong.

Posted by Rich Miller November 01, 2007 | Permalink | Newsletter

October 31, 2007

Equinix Building in Europe, Australia

As it begins to fill its newly-built data centers in the U.S., Equinix (EQIX) is boosting its new construction in its European and Asia-Pacific operations, the company said yesterday. Equinix will double the size of its Paris data center, which is at 90 percent of capacity, by adding 26,910 square feet of space. Equinix expects to spend $17 million on the additional space, which will open in the second quarter of 2008.

"The demand for premium data center and network exchange services in the Paris market continues to outpace supply," said Michel Brignano, Equinix General Manager, France. "A significant driver of today’s expansion is the strong traction Equinix has seen in the Paris market from financial services customers, which rely on Equinix for financial grade security and high-performance services."

Posted by Rich Miller October 31, 2007 | Permalink | Newsletter

October 25, 2007

Extra Power Helps Equinix Expand in London

For major data center providers, more power equals more colo space to sell. That's the case for Equinix (EQIX), which has arranged for additional power from the electric utility serving its London LD2 data center. Power capacity issues in London have limited the growth of a number of providers at a time when colocation space is at a premium.

Equinix also upgraded the building's cooling infrastructure, uninterrupted power supply (UPS) and generator backup systems, allowing it to open additional colocation space to customers in a new suite. The concept was developed in partnership with existing customers who have seen their power requirements increase significantly in recent years.

"This power upgrade has enabled us to help our existing customers grow as they seek to access more computing power," said Wynn McCabe, sales director of Equinix UK Ltd. "It has also allowed Equinix to release more colocation space which has been in demand for some time now. Furthermore, performing a complex upgrade in a live environment is particularly challenging and the team has achieved this while providing seamless power continuity to customers."

Posted by Rich Miller October 25, 2007 | Permalink | Newsletter

October 19, 2007

Equinix Hits $100 A Share

One sign of investor faith in the data center sector is the strong stock market performance of Equinix (EQIX), which topped $100 a share this week. Equinix shares topped the benchmark on Tuesday, and have since moved above $102 before closing Thursday at $101.07. This marks the highest price for Equinix since the company split shares after a merger at the close of 2002.

Shares of Equinix opened 2007 at $75.62 a share, and are now up 33.6 percent on the year to date. That follows on an 85.5 percent gain in 2006, when Equinix was among a field of strong-performing data center stocks along with NaviSite (NAVI), Internap (INAP), Savvis (SVVS) and Akamai (AKAM), which all had percentage gains of between 166 and 475 percent.

Posted by Rich Miller October 19, 2007 | Permalink | Newsletter

October 07, 2007

Equinix Silicon Valley Data Center Profiled

The Equinix SV3 data center in Santa Clara is featured today in the San Francisco Chronicle, which uses a tour of the facility as a jumping-off point to explain Internet infrastructure. Staffers from VeriSign are also interviewed for the article. Here's an excerpt with an interesting visual:

The limiting factor in most data centers is keeping the equipment cool. All those computers, stuffed with microprocessors, churn out enormous amounts of heat - at SV3, the equivalent of 480 barbecues running continuously. Standing behind a bank of servers is like being in front of an open oven. If cooling systems crash, the room would heat up to the point of equipment failure within an hour. To keep the center between 66 and 74 degrees - which to a computer feels like sweater weather - SV3 uses five 500-ton chiller units, enormous machines that circulate cooled water through the building.

How many barbecues can be powered by your data center? I'm not sure if that will catch on as a green metric, but it's an interesting way to quantify data center heat loads. The article includes photos of a diesel generator, chiller plant and Equinix data center engineer Derek Schlecht, who served as tour guide for the Chronicle.

Posted by Rich Miller October 07, 2007 | Permalink | Newsletter

September 14, 2007

Equinix Raises Guidance, Sets Stock Sale

Equinix, Inc. (EQIX) today raised its revenue guidance for Wall Street for the third quarter and the full year of 2007, accounting for additional revenue from its acquisition of IXEurope, which has now closed. The company also said it would issue between 3.6 million and 4.2 million shares of common stock and $300 million of convertible notes to fund the $555 million IXEurope acquisition. In early trading, shares of Equinix surged $2.38 to $84.40 a share, a gain of about 3 percent.

The data center and interconnection service provider said it now expects third-quarter revenue in a range of $101 million to $102 million, up from its previous forecast of $96.5 million to $97.5 million. The increased estimate includes approximately $4 million in revenue from Europe.

Equinix now predicts full-year 2007 sales of $413 million and $415 million, including about $37 million in revenue from Europe. It previously forecast 2007 revenue of $373 million to $377 million. Capital expenditures for this year will range between $405 to $415 million, including approximately $40 million of ongoing capital expenditures and about $25 million of in new capital expenditures related to IXEurope facilities. The expansion capital will fund ongoing data center construction in the Chicago, northern New Jersey, Los Angeles, Silicon Valley and Washington D.C. markets.

Posted by Rich Miller September 14, 2007 | Permalink | Newsletter