Equinix has beat analyst estimates for Q3 2020 and has lowered their predicted impact of the COVID-19 pandemic from US$50 million forecast in May to US$20-30 million.
Equinix’s revenue was up 9% to US$1.520 billion compared to the same quarter last year, marking the data center provider’s 71st consecutive quarter revenue growth and beating estimates from Zacks REIT and Equity Trust by 1.14%.
“As businesses navigate the economic, health and societal changes happening in the world, Equinix is in a unique position to help our customers adapt, respond and accelerate their digital transformation – a key driver for economic recovery,” said Charles Meyers, the President and CEO of Equinix.
Equinix has made various advancements this year, including the announcement of Equinix Metal, partnerships with Nokia and Rakuten Mobile, investments in Singapore and Hong Kong, and a significant expansion into India.
“Companies in every sector are embracing digital transformation as a critical business priority, and we are well-positioned to help our customers scale with agility and create digital advantage,” added Mr. Meyers.
For 2020, Equinix expects to incur $20 million in integration costs related to acquisitions.
As a result of their investments, Equinix has over 386,000 physical and virtual interconnections, adding 8,500 net interconnections driven by video conferencing, streaming, enterprise cloud connectivity and work-from-home local aggregation.
“We continue to invest in our strategy, evolving our platform in response to evolving customer needs, expanding our global reach to accelerate digital delivery, committing to a more sustainable future and ensuring that our culture is widely recognised as a place that attracts, embraces, inspires and develops exceptional and diverse talent,” said Mr. Meyers.
Equinix Internet Exchange also experienced peak traffic, up 43% year-over-year, with a 7% increase quarter-over-quarter.
“We delivered another strong quarter … ahead of our expectations. Every key operating metric was positive. Interconnection activity remained healthy with net adds towards the high end of our targeted range,” said Keith Taylor, Equinix CFO.
Many of Equinix’s data centers were identified as essential businesses or critical infrastructure by local governments, with all IBX data centers remaining operational as of publication.
Looking ahead, the full impact of the COVID-19 pandemic on the Company’s financial condition or results of operations remains uncertain and will depend on a number of factors, including its impact on Equinix customers, partners and vendors and the impact on, and functioning of, the global financial markets, Equinix said.
“The things we were most worried about is what customers were going to go out of business, what payments we were not going to receive. It’s hard to quantify, there’s certainly some impact from COVID-19, I think I’d size it in the US$20 to US$30 million range,” said Mr. Taylor.
Mr. Taylor came to this figure by seeing success in bookings, despite some fallout from COVID-19 and making concessions for the pandemic.
“We are delighted with there we are vis a vis of what could have been when we started in Q1 and locking things down. Clearly we have done meaningfully better than we originally anticipated from the original guide. That’s because the company has been running seemingly well and customers have been paying their bills,” said Mr. Taylor.
For Q4 2020, Equinix expects revenues to range between US$1.549 and US$1.569 billion, an increase of between 2% and 3% quarter-over-quarter.
For the full year of 2020, Equinix expects between US$5.983 and US$6.003 billion in revenue, representing approximately 8% increase over 2019.
The Company’s past results may not be indicative of future performance, and historical trends may differ materially, said Equinix.