In May, when Equinix reported its first-quarter earnings, just a few weeks after California became the first state to issue wide-ranging lockdown orders in response to the pandemic, the company’s executives estimated that the crisis would add up to $50 million in costs for the full year. That estimate resulted from an exercise in “scenario planning,” Equinix CFO, Keith Taylor, said at the time.
Now that the scenario has played out over six more months, the company’s executives expect the impact to be in the $20 million to $30 million range, Taylor said on Equinix’s third-quarter earnings call Wednesday.
“Clearly, we’ve done meaningfully better than we originally anticipated,” he said.
The pandemic’s negative business impact appears to have been relatively limited for the largest publicly traded US-based data center providers overall. All have cited low “exposure” to the worst-hit industries, such as travel, hospitality, and retail, and the impact has come primarily as a combination of delayed payments by some of the hard-hit customers, some customers going out of business, additional remote-hands expenses to help customers who couldn’t physically get to their data center sites, and assistance for the data center providers’ own employees.
Revenue from Equinix’s colocation, interconnection, and managed infrastructure services grew in the third quarter, both sequentially and as compared to the same period last year. The company reported $1.52 billion in revenue for the quarter – up from $1.47 billion in the third quarter of 2019.
The shift to remote work and entertainment has driven massive spikes in traffic on the Equinix Internet Exchange, its global peering exchanges in data centers across 30-plus markets, and in the amount of network interconnections among the company’s customers customers.
Peak traffic on the IX has been up 43 percent year over year and 7 percent up from quarter to quarter, Equinix said. The company added 8,500 interconnections in the third quarter.
On the earnings call, its executives highlighted Equinix’s entry into India through the acquisition of GPX India, a data center provider with two sites in Mumbai, for $161 million. The deal was announced in August and is expected to close in the first quarter of 2021.
Taylor said Equinix has seen interest across all customer verticals it serves in the Mumbai market. Those verticals are network providers (24 percent of revenue), cloud and IT service providers (28 percent), content and digital media companies (14 percent), financial services (16 percent), and enterprises (18 percent).
Equinix president and CEO Charles Meyers said a single hyperscale client has agreed to lease the first phase of a data center in Japan that’s part of its joint venture with GIC, Singapore’s state-owned investment fund. The data center is part of xScale, Equinix’s program to build data centers specifically for hyperscale clients.
Other big developments in the third quarter were closing of Equinix’s acquisition of 12 Bell Canada data centers (acquisition of the 13th one in the $750 million deal is expected to close in December), and the launch of Equinix Metal, a bare-metal Infrastructure-as-a-Service offering built on technology developed by Packet, a startup Equinix acquired for $335 million at the start of the year.
Equinix has raised its full-year revenue guidance by $39 million at the midpoint of the forecasted range from its second-quarter guidance. The company now expects to drive between $5.99 billion and $6 billion in revenue for this year – an 8 percent increase from 2019.