Yahoo Finance Equinix's (EQIX) Q4 AFFO & Revenues Top, Dividend Hiked
Equinix Inc.’s EQIX fourth-quarter 2022 adjusted funds from operations (AFFO) per share of $7.09 surpassed the Zacks Consensus Estimate of $6.82. The figure grew 13.9% from the prior-year quarter’s $6.22. Our AFFO per share estimate was $6.74.
EQIX’s results reflect steady growth in colocation and inter-connection revenues. During the fourth quarter, Equinix’s total interconnections reached 446,900, rising nearly 1% sequentially and 6.6% year over year. It increased its dividend payment by 10% on solid operating performance. The company issued an upbeat outlook for 2023.
Total quarterly revenues came in at $1.87 billion, beating the Zacks Consensus Estimate of $1.86 billion. Moreover, the top line improved 9.6% year over year, marking the 80th consecutive quarter of top-line growth. Our estimate for quarterly revenues was pegged at $1.85 billion.
In 2022, AFFO per share came in at $29.55, higher than the prior-year tally of $27.11. Moreover, the figure outpaced the Zacks Consensus Estimate of $29.25. We estimated the same to be $29.21. This was backed by 9.5% growth in total revenues of $7.26 billion, which too beat the consensus mark of $7.25 billion. Our estimate for total revenues for 2022 was $7.25 billion.
Quarter in Detail
Recurring revenues were $1.77 billion, up 10.6% from the year-ago quarter. Our projection for the same was $1.76 billion. However, non-recurring revenues fell 5.3% to $97.5 million. We estimated the same to be $98.6 million.
Revenues from the three regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and the Asia Pacific rose 11.5%, 8.9% and 7% to $871.8 million, $601.7 million and $397.4 million, respectively.
The adjusted EBITDA came in at $838.7 million, up 6.5% year over year. Adjusted EBITDA margin was reported at 44.8%. We projected the same to be $835.1 million.
AFFO increased 16.6% to $657.8 million year over year.
EQIX spent $80 million on recurring capital expenditure in the fourth quarter, down 6.6% on a year-over-year basis. However, the figure climbed 59.5% sequentially. Recurring capital expenditure was 4.3% of revenues in fourth-quarter 2022. Non-recurring was $748 million, up 2.2% year over year.
Balance Sheet
Equinix had $5.8 billion of available liquidity as of Dec 31, 2022. This comprised cash, cash equivalents and its undrawn revolver and excludes restricted cash.
Its net leverage ratio was 3.8 and the weighted average maturity was 8.4 years as of Dec 31, 2022.
Dividend Update
Concurrent with the fourth-quarter 2022 earnings release, Equinix’s board of directors announced a 10% sequential hike in its quarterly cash dividend from $3.10 per share to $3.41. The increased dividend will be paid out on Mar 22, 2023, to its shareholders on record as of Mar 7, 2023.
2023 Guidance
For first-quarter 2023, Equinix projects revenues between $1.965 billion and $1.995 billion, implying a 5-7% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $891-$921 million.
For the current year, AFFO per share is estimated between $30.79 and $31.64, suggesting a 4-7% increase from the prior year on an as-reported basis. The Zacks Consensus Estimate for the same is currently pegged at $31.55, which lies within the guided range.
For 2023, Equinix estimates generating total revenues of $8.145-$8.245 billion, indicating growth of 12-14% from 2022 on an as-reported basis. The company expects to incur $35 million of acquisition-related integration costs.
Management predicts an adjusted EBITDA of $3.615-$3.695 billion and an adjusted EBITDA margin of 45%.
Equinix carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equinix, Inc. Price, Consensus and EPS Surprise
Equinix, Inc. price-consensus-eps-surprise-chart | Equinix, Inc. Quote
Performance of Other REITs
Crown Castle Inc. CCI reported fourth-quarter 2022 AFFO per share of $1.85, beating the Zacks Consensus Estimate of $1.83. Reported AFFO per share compared favorably with the year-ago period’s $1.77.
The rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. It maintained its outlook for 2023.
Boston Properties Inc.’s BXP fourth-quarter 2022 FFO per share of $1.86 outpaced the Zacks Consensus Estimate of $1.84. The figure increased 18.7% year over year.
The quarterly figure also exceeded the mid-point of the company’s fourth-quarter guidance by a cent, reflecting portfolio outperformance. In addition, BXP experienced solid leasing activity in the quarter. The company revised its 2023 outlook for FFO per share.
Highwoods Properties Inc. HIW reported fourth-quarter 2022 FFO per share of 96 cents, in line with the Zacks Consensus Estimate. The figure compared unfavorably with the prior-year quarter’s $1.06. We estimated FFO per share for fourth-quarter 2022 to be 96 cents.
HIW’s quarterly results reflect better-than-anticipated revenues on robust leasing activity and improvement in rents. However, higher operating expenses were a headwind in the quarter.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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