Equinix Caps Off a Good Year With a Solid Quarter

Equinix (NASDAQ:EQIX) reported fourth-quarter and full-year 2018 results after the market close on Wednesday. 

The market’s initial reaction was muted, with shares down by 0.2% in after-hours trading on Wednesday. Shares have returned 11.2% in 2019 through the regular trading session on Wednesday, slightly edging out the S&P 500’s 10.1% return.

Here’s how the quarter worked out for the data center operator — which is organized as a real estate investment trust (REIT) — and its investors.

Equinix’s results: The raw numbers


Q4 2018 

Q4 2017

Year-Over-Year Change


$1.310 billion

$1.200 billion   


Operating income

$270.7 million

$232.0 million


Net income

$110.0 million

$65.2 million


Earnings per share (EPS)




Adjusted funds from operations (AFFO)*

$414.1 million

$381.5 million


AFFO per share




Data source: Equinix. *Adjusted funds from operations (AFFO) is a closely watched metric for companies organized as real estate investment trusts, or REITs. It’s akin to “earnings” for REITs. 

For full-year 2018, revenue grew 16% year over year (9% on a normalized and constant currency basis) to $5.072 billion, operating income jumped 21% to $977.4 million, net income soared 57% to $365.3 million, and AFFO increased 15% to $1.659 billion.

Equinix’s full-year revenue result came in just above its outlook range of $5.060 billion to $5.070 billion and its AFFO also landed somewhat north of its guidance range of $1.619 billion to $1.639 billion.

For context (though long-term investors shouldn’t give too much importance to Wall Street’s near-term estimates), analysts were looking for AFFO per share of $4.92 on revenue of $1.31 billion in the fourth quarter. So Equinix beat the AFFO consensus estimate and came in on target on the top line.

Interior of a blue-lighted data center showing stacks of servers in rows.

Image source: Getty Images.

What happened with Equinix in the quarter?
Recurring revenue, consisting primarily of colocation, interconnection, and managed services revenue, rose 9.6% over the year-ago period to $1.230 billion. Nonrecurring revenue increased 2.8% to $79.8 million. “60% of total recurring revenues came from customers deployed across all three regions, and 86% of total recurring revenues came from customers deployed across multiple metros,” Equinix said in the earnings release.  The “enterprise vertical continues to be [the] fastest-growing segment, led by energy, healthcare and retail sub-segments.”  Two verticals — content and digital media, and cloud and IT — had record bookings.  According to the company, it has now captured 48% of the Fortune 500 and one-third of the Forbes Global 2000 companies. Equinix has 36 organic expansion projects across 25 markets underway, including expansions in three new markets — Hamburg, German; Muscat, Oman; and Seoul, South Korea. While not in the quarter, on the day of the earnings release, Equinix announced new expansions in the Chicago, Dallas, and New York metropolitan areas in the U.S., as well as in the Hong Kong, Melbourne, Paris, Sao Paulo, Singapore, Tokyo, and Zurich metros. 

What management had to say

Here’s what Equinix CEO Charles Meyers (an eight-year veteran of the company who became president and CEO in September) had to say: 

In addition to strong financial performance, we continue to build on our market leadership and cement our position as the trusted center of a cloud-first world. Our reach, scale and innovative product portfolio puts us in a great position to build on our business model that is substantially and durably differentiated from our peers. The market remains in the early innings of the digital transformation journey and our accelerating ability to both land and expand customers on that journey, makes us confident that we are playing the best hand in the business. We continue to have a clear view of our strategy and the opportunities ahead, and we are looking forward to another successful year.

Looking ahead

In short, Equinix capped off a good year with a solid quarter.

The company issued guidance for first-quarter 2019 revenue and full-year 2019 revenue and AFFO as follows: 


Q1 2019 Guidance

Projected Year-Over-Year Change

Full-Year 2019 Guidance

Projected Year-Over-Year Change


$1.342 billion to $1.352 billion

10% to 11% $5.520 billion to $5.570  billion

9% to 10% (8% to 9% on a normalized and constant currency basis)




$1.825 billion to $1.875 billion

10% to 13% on both a reported and constant currency basis 

Data source: Equinix. 

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