Equinix, Inc.

Good afternoon and welcome to the Equinix Fourth Quarter Earnings Conference Call. All lines will be able to listen only until we open for questions. Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I would now like to turn the call over to Katrina Reimel, Vice President of Investor Relations and Sustainability. You may begin.

Good afternoon and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we're making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks identified in today's press release and those identified in the filings of the SEC, including our most recent Form 10-K, filed on February 21, 2020, and 10-Q, filed on October 30, 2020. Equinix assumes no obligation and does not intend to update or comment on fully looking statements made on this call. In addition, in light of regulation and fair disclosure, it is Equinix's policy not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. In addition, we will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and the list of the reasons why the company uses these measures and today's press release from the Equinix IR page at www.equinix.com. We have made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We'd also like to remind you that we post important information about Equinix on the IR page from time to time and encourage you to check our website regularly for the most current available information. With us today are Charles Myers, Equinix's CEO and President, and Keith Taylor, Chief Financial Officer. Following our prepared remarks, we'll be taking questions from sell-side analysts. In the interest of wrapping this call up in an hour, we'd like to ask these analysts to limit any following questions to just one. At this time, I'll turn the call over to Charles.

Thank you, Katrina. Good afternoon and welcome to our fourth quarter earnings call. I hope that 2021 is off to a great start for all of you. and that you and your loved ones are safe, healthy, and ready for an exciting year ahead. As I reflect on the extraordinary events of 2020, it's clear we're living in a time unlike any other in our history. Without question, the COVID-19 pandemic changed nearly every aspect of our lives. For some, the impact has been and continues to be devastating. Our hearts and our support continue to go out to those suffering or facing great loss. Despite the rapidly changing landscape, our focus has remained clear. ensuring the health, safety, and well-being of our employees, customers, and partners, keeping our data centers safely operating around the world, and continuing to be a source of strength for our communities. I'd like to take a moment here to thank our employees for not only enduring, but excelling in the face of adversity, and for powerfully demonstrating our commitment to be in service to, in service to each other, to our customers, to our shareholders, and to the communities in which we live and operate. In the midst of all that has transpired, our business model has proven resilient and we continue to innovate, execute, and deliver for our customers. We closed over 17,500 deals in 2020, reflecting the strength of our value proposition and highlighting the tremendous scale and momentum of our go-to-market engine. We expanded our scale and reach both organically and through M&A, solidifying our position as a leading digital infrastructure provider in Canada, entering the Mexico market, and announcing our GPX transaction in India which we believe will be an ideal springboard in this large and growing market. We completed 16 new expansions, our most active build year ever, and have a sizable construction roadmap still ahead to support our backlog and healthy pipeline. We've introduced transformative capabilities on Equinix Fabric and Network Edge, revolutionizing the way enterprises connect digital infrastructure. And we launched Equinix Metal, a fully automated and interconnected bare metal as a service offering that provides even greater flexibility for customers to place their digital infrastructure where they need it, when they need it. We also had a very active year in the capital markets, leveraging our investment-grade ratings to refinance our debt, driving substantial interest savings into the business as reflected in our ASFO per share metric. For the year, we delivered $6 billion in revenue, completing our 72nd consecutive quarterly top-line increase and amazing 18 years of continuous revenue growth. In terms of the road ahead, one post-pandemic reality is already clear. Our world is increasingly and inescapably more digital. Digital is reshaping our everyday lives and is impacting every element of our customers' businesses. Not just how they interact with their customers, but how they interact with their data, how they collaborate and innovate, how they support their employees, how they engage partners, how they architect their network. Everything is changing. Digital transformation is reshaping the competitive landscape across every sector of the global economy and is fueling demand for a new generation of digital infrastructure, infrastructure that is more distributed, more cloud-connected, and more flexible, characteristics that represent the hallmarks of platform Equinix. As service providers build out their infrastructure to capture burgeoning digital demand and enterprise customers embrace hybrid and multi-cloud as the architecture of choice, Equinix continues to play a key role as a nexus for advancing their digital transformation journeys. We believe that the overall market for digital infrastructure will continue to expand significantly, creating a massive long-term opportunity for those providers able to adapt to the evolving needs of digital buyers. We believe Equinix is uniquely positioned to capture this expanding address market, and we entered 2021 with a clear set of priorities to build on our market leadership, reinforce our competitive advantage, and invest in targeted ways to position us for sustained value creation. First, supporting our people and strengthening our extraordinary culture will continue to be at the center of our strategy. People are foundational to how we will navigate the challenges and opportunities ahead. And our goal is to ensure that our culture creates a sense of opportunity and belonging for all our employees, affording us a durable source of competitive advantage. This year, we're expanding our award-winning sustainability ambitions, a priority that has resonated with both employees and customers, as diversity, inclusion, social justice, and climate change all remain front and center on the global stage. Equinix is an important component of greening digital infrastructure, and we have seen a significant increase in customer interest in this area. We continue to expand our efforts around renewables coverage, energy efficiency projects, green building certifications, as well as our pursuit of science-based targets and innovative techniques to push sustainability forward in all three regions. We will focus on simplifying and scaling our business to drive long-term operating leverage and enhance our customer experience. This will include targeted efforts aimed at streamlining and automating ordering and billing, enabling channel self-service and delivering enhanced digital engagement options for our customers. In parallel, we'll continue to evolve and scale our highly productive go-to-market engine, investing in more quarter bearing headcount and leveraging our growing channel to amplify our reach to prosecute the opportunity in front of us. Third, We'll continue to expand our global reach with an ambitious plan across both retail and X scale in direct response to customer demand. And fourth, we'll accelerate our digital services business, adding new product capabilities, expanding market availability, and augmenting our go-to-market motion, all aimed at accelerating new customer acquisition and positioning us for future growth as we drive attach rate across our expansive customer base. Turning to our results, as depicted on slide three, revenues for the full year were $6 billion, up 8% year-over-year. Adjusted EBITDA was up 8% year-over-year, and AFFO per share grew 12% year-over-year. Interconnection revenues grew 14% year-over-year, driven by strong adoption of Equinix Fabric and solid interconnection ads. These growth rates are all on a normalized and constant currency basis. Our longer-term product roadmap and platform vision continue to advance to support our position as the world's digital infrastructure company. We now have over 392,000 interconnections and continue to build out ecosystem density across our metros. In Q4, we added an incremental 7,700 interconnections, more than our top 15 competitors combined, fueled by continued strength in network and cloud connectivity. Internet exchange saw significant increases both in port capacity and traffic growth, with peak traffic up 8% quarter over quarter and 43% year over year, driven by cloud, content, and gaming segments. Equinix Fabric also saw strong growth, driven by port additions as well as existing customers upgrading to higher speed connections and increasing their use of our inter-metro offering. We also launched a new capability that allows Equinix Fabric users to quickly and easily connect to any other customer on platform Equinix, unlocking the full value of our scaled digital ecosystems. And with Equinix Fabric integration built into both Network Edge and Equinix Metal, digital leaders are finding it easier than ever to use Equinix to create and connect their foundational infrastructure. In its first quarter as an Equinix branded product, Equinix Metal demonstrated solid momentum and is now available in eight global metros with plans for an additional 10 markets early this year. On the X-scale side of our business, we continue to be very pleased with our JV strategy and are making significant progress expanding the reach and scale of that business. As planned, X-scale is enabling us to extend our product set, capture hyperscale demand, and deepen cloud density while leveraging our balance sheet with the JV structure. We have an ambitious plan for 2021 and are resourcing X-scale to accelerate growth. Plans include incrementing our existing JVs, entering new markets such as Australia, and evaluating new options to broaden our reach and leverage our existing land bank. We currently have eight X scale builds underway spanning all three regions and are moving forward with the second phase of Tokyo 12 given early success in this market. Now let me cover highlights from the verticals. Our network vertical again achieved record bookings driven by carriers upgrading core, edge, and mobile networks to address shifting traffic patterns resulting from the pandemic, as well as continued strength in enterprise resale. Network service providers have proven to be some of our most productive channel partners, which has led to sustained momentum in this vertical. New wins and expansions included Senia Networks, a Danish network provider, connecting to partners in Amsterdam, Frankfurt, Hong Kong, and London, as well as a Fortune 500 cable operator, leveraging Equinix to re-architect core infrastructure for cloud access to support video-on-demand caching and delivery. Our financial services vertical also had a record quarter, led by multinational financial services firms with particular strength in the Americas. Expansions included a global 2000 FinTech player expanding their equity options presence to access our dense financial ecosystem and a Fortune 500 insurance company implementing a hybrid cloud strategy on Platform Equinix. Our content and digital media vertical saw particular strength in video and digital advertising as companies are investing to bring their services directly to consumers. New wins included one of the largest shopping and e-commerce retail groups, deploying infrastructure to support digital e-commerce activities, and Index Exchange, a top independent global ad tech marketplace, expanding compute nodes to manage increasing traffic from customers. Our cloud and IT vertical delivered solid bookings, increasing density and coverage of software as a service providers, and winning new cloud on-ramps in smaller markets, including Dubai and Melbourne. Expansions included Fortinet, a global cybersecurity platform provider, expanding to support scale and user experience, and ServiceNow, deploying infrastructure closer to users in Europe to optimize performance, enhance user experience, and support their rapid growth. Our enterprise vertical had a strong quarter, driven by healthcare and retail, as telehealth and digital initiatives see continued momentum. Work from home and collaboration-related use cases remain active, although less than peak pandemic levels, as enterprises shift their focus back to broader digital transformation initiatives. New enterprise wins included Atrium Health, the largest health system in the southeastern U.S., deploying digital infrastructure to enable compliant multi-cloud and business partner interconnection, as well as a Fortune 500 manufacturing company deploying digital infrastructure at Equinix to facilitate cloud connection. And our channel program had another great quarter, accounting for 35% of bookings. We saw particular strength with our hyperscale and technology alliance partners, capturing wins across a wide range of industry segments, focused on digital transformation efforts as well as pandemic response. New partner wins included a Canadian automobile parts manufacturer accessing our network and cloud density to interconnect to the connected car and broader automotive ecosystems. We continue to expect channel bookings to be the important pillar of our go-to-market strategy in 2021 and beyond. Now, let me turn the call over to Keith to cover the results for the quarter.