Equinix Achieves Record Revenue, Signals Growth Ahead

Equinix ((EQIX)) has held its Q4 earnings call. Read on for the main highlights of the call.

Equinix Reports Record-Breaking Revenue and Optimistic Future Outlook

The recent earnings call for Equinix painted an optimistic picture of the company’s financial health and strategic direction. While the company celebrated record-breaking revenue and growth in key areas such as adjusted EBITDA and AFFO, it also acknowledged challenges including currency impacts and capacity constraints. Despite these hurdles, Equinix remains optimistic about future growth, particularly in the areas of AI and interconnection services.

Record-Breaking Revenue and Growth

Revenues for Equinix reached an impressive $8.7 billion for the full year, marking an 8% increase year-over-year. This achievement underscores 22 years of consecutive quarterly revenue growth, showcasing the company’s resilience and robust business model.

Improved Adjusted EBITDA Margins

Equinix reported an adjusted EBITDA of $4.1 billion, with a notable 160 basis point improvement in margins from the previous year. This improvement signals efficient operational management and strategic cost controls.

Strong AFFO Growth

AFFO per share increased by 10% year-over-year, reaching the top end of long-term expectations. This growth highlights Equinix’s strong financial performance and its ability to deliver consistent returns to shareholders.

Record Gross Bookings

The company achieved its best gross bookings performance in its 26-year history, closing over 16,200 deals with more than 6,000 customers in 2024. This milestone reflects Equinix’s effective market strategies and customer engagement.

xScale Business Expansion

Equinix significantly expanded its xScale business, leasing approximately 150 megawatts of capacity and nearly tripling its investment capital in 2024. This expansion is a testament to the growing demand for scalable data center solutions.

Sustainability Achievements

The company was recognized on CDP’s Climate Change A List for the third consecutive year and received an AAA rating from MSCI for the first time. These accolades reflect Equinix’s commitment to sustainability and responsible business practices.

Currency Impact on Revenue

Despite strong performance, Equinix faced a $22 million FX headwind due to a significantly stronger U.S. dollar during Q4. This currency impact tempered the as-reported numbers and outlook.

End-of-Sale of Equinix Metal

Equinix decided to end-of-sale Equinix Metal to focus on its core interconnection solutions, resulting in a $160 million impairment charge. This strategic move aims to streamline the company’s offerings and enhance core business areas.

Capacity Constraints in Key Markets

The company acknowledged that bookings could have been even stronger if there had been available capacity in Tier 1 metros. Addressing these constraints is crucial for maximizing market opportunities.

Impairment and Restructuring Charges

Equinix recorded a $73 million impairment charge for the Hong Kong 4 asset and a $31 million restructuring charge related to a reduction in force. These charges reflect the company’s ongoing efforts to optimize its asset portfolio and organizational structure.

Guidance

Looking ahead, Equinix forecasts a 7% to 8% revenue growth for 2025 on a normalized and constant currency basis. Adjusted EBITDA margins are expected to improve by 190 basis points, with AFFO per share growth projected between 7% and 9%. The company plans to invest between $3.2 billion and $3.5 billion in capital expenditures, focusing on expanding data center capacity across major metros.

In conclusion, Equinix’s earnings call highlighted a strong financial performance with record-breaking achievements, despite facing certain challenges. The company’s forward-looking guidance suggests continued growth and strategic investments, reinforcing its position as a leader in the data center industry.