Tech Stock Under Pressure: Equinix Inc (NASDAQ: EQIX)

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Equinix Inc (NASDAQ: EQIX) stock fell over 0.12% on 29th April, 2021 (as of 09:35:00 UTC-4 · USD; Source: Google finance) after the company posted lower than expected earnings for the first quarter of FY 21. In the first quarter, the company has added an incremental 6,700 interconnections, fueled by hyperscaler build-outs and strong enterprise demand, offset by a slight seasonal increase in network grooming activity. Internet exchange saw peak traffic up 9% quarter-over-quarter and 28% year-over-year, led by the cloud and network segments. Equinix Fabric also saw strong growth driven by expanded use of the inter-metro offering and continued diversification of end destinations. Interconnection revenues now represent 19% of the recurring revenues, due to the continued interconnection momentum.

EQIX in the first quarter of FY 21 has reported the adjusted funds from operations (FFO) per share of $6.98, beating the analysts’ estimates for the adjusted FFO per share of $6.63, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 10 percent to $1.6 billion in the first quarter of FY 21, which is in line with the analysts’ estimates for revenue of $1.6 billion. The nonrecurring revenue declined quarter-over-quarter to 5% of revenues.

Additionally, EQIX has ended the first quarter with cash of approximately $1.8 billion, which represents an increase over the prior quarter, mainly due to the inaugural euro-denominated green bond refinancing, which raised EUR1.1 billion at a weighted average interest rate of 66 basis points. Therefore, Equinix now has the lowest weighted average cost of debt capital and the longest weighted average maturity of any publicly traded data center company. The company also expects to refinance our remaining U.S. dollar high-yield bond over the near term, further driving down the average cost of debt

In addition, the capital expenditures were approximately $564 million, including recurring capex of $20 million. The company has opened eight new retail projects this quarter, adding 7,400 cabinets, including a new IBX in Milan. On the xScale side of the business, the company opened three new facilities in London, Paris and Tokyo, adding an initial 28 megawatts of capacity in our JVs. All this hyperscale capacity has been presold. The company has also purchased land and buildings for development in Montreal and Mexico City. The revenues from owned assets represent 56% of our total revenues now.

For fiscal 2021, the company expects revenues to be in the range of $6.559 – $6.619 billion, AFFO to be in the range of $2.413 – $2.463 billion and AFFO per share to range between $26.73 – $27.28.

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