Equinix (NASDAQ: EQIX) reported Q2 FFO of $7.01, versus $6.35 reported last year. Revenue for the quarter came in at $1.66 billion versus the consensus estimate of $1.64 billion.

GUIDANCE:

Equinix sees FY2021 revenue of $6.62-6.66 billion, versus the consensus of $6.62 billion.

Equinix sees Q3 2021 revenue of $1.668-1.688 billion, versus the consensus of $1.67 billion.

For the third quarter of 2021, the Company expects revenues to range between $1.668 and $1.688 billion, an increase of 1 - 2% compared to the prior quarter on both an as-reported and on a normalized and constant currency basis. This guidance includes a $6 million negative foreign currency impact when compared to the average FX rates in Q2 2021. Adjusted EBITDA is expected to range between $766 and $786 million. Adjusted EBITDA includes a $4 million negative foreign currency impact when compared to the average FX rates in Q2 2021 and $7 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $50 and $60 million.

For the full year of 2021, total revenues are expected to range between $6.619 and $6.659 billion, a 10 - 11% increase over the previous year, or a normalized and constant currency increase of approximately 8%. This $50 million increase from previously issued guidance is due to $25 million of better-than-expected operating performance and a $25 million positive foreign currency benefit when compared to the prior guidance FX rates. Adjusted EBITDA is expected to range between $3.108 and $3.148 billion, an adjusted EBITDA margin of 47%. This $27 million increase from previously issued guidance is due to $11 million of better-than-expected operating performance, a $5 million reduction of integration costs and an $11 million positive foreign currency benefit when compared to the prior guidance FX rates. AFFO is expected to range between $2.434 and $2.474 billion, an increase of 11 - 13% over the previous year, or a normalized and constant currency increase of 10 - 12%. This $15 million increase over the previously issued guidance is due to $4 million of better-than-expected operating performance, a $5 million reduction of integration costs and a $6 million foreign currency benefit when compared to the prior guidance FX rates. AFFO per share is expected to range between $26.92 and $27.36, an increase of 9 - 11% over the previous year, both as-reported and on a normalized and constant currency basis. Total capital expenditures are expected to range between $2.738 and $2.988 billion. Non-recurring capital expenditures, including xScale-related costs, are expected to range between $2.550 and $2.790 billion, and recurring capital expenditures are expected to range between $188 and $198 million. xScale-related on-balance sheet capital expenditures are expected to range between $425 and $475 million, which we anticipate will be reimbursed from both the current and future xScale JVs.

The U.S. dollar exchange rates used for 2021 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.17 to the Euro, $1.33 to the Pound, S$1.35 to the U.S. dollar, ¥111 to the U.S. dollar, and R$4.99 to the U.S. dollar. The Q2 2021 global revenue breakdown by currency for the Euro, British Pound, Singapore Dollar, Japanese Yen and Brazilian Real is 20%, 10%, 7%, 7% and 3%, respectively.

The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), (gains) losses on disposition of real estate property, and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.

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