Equinix, Inc.

Welcome to the Equinix Second 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'd 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'll be 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 we identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K, filed on February 19, 2021, and 10-Q, filed on April 30, 2021. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of regulation fair disclosure, 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'll provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures, the most directly comparable GAAP measures And this is the reasons why the company uses these measures in today's press release on the Equinix IR page at www.equinix.com. We have made available on the IR page for our website presentations 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 follow-up questions to just one. At this time, I'll turn the call over to Charles.

Thanks, Kat. Good afternoon, everybody, and welcome to our second quarter earnings call. As reflected in our results, we are seeing significant momentum in our business as digital transformation outpaces previous expectations. Technology spend is accelerating, and Equinix remains uniquely positioned as traditional technology markets continue to shift to as-a-service consumption models, and hybrid multi-cloud is widely adopted as the architecture of choice. The pandemic has highlighted that digital infrastructure is not just a business enabler, but a primary source of competitive advantage for digital leaders across all industries. and we continue to see a multitude of trends driving infrastructure that is more distributed, more on-demand, and more ecosystem-connected than ever before, playing to our distinctive strengths. Our results reflect strong performance across our geographies, tremendous momentum in our market-leading interconnection franchise, and deep customer demand across our expanding portfolio of services. Against this robust demand backdrop, we had a great second quarter, delivering record bookings fueled by continued momentum in our America's business and a strong quarter from Equinix Metal. We processed more than 4,600 deals in the quarter across more than 3,200 customers, demonstrating both the scale and the consistency of our go-to-market machine. We achieved our 74th consecutive quarter of top-line growth and are pleased to have recently been included in the Fortune 500, an exciting milestone made possible by the confidence our customers place in Equinix and by the incredible commitment and passion of our 10,000-plus employees around the world. And we continue to expand our global platform with 35 projects underway across 25 markets in 19 countries, with Q2 openings in Bordeaux, Helsinki, and Silicon Valley. Aligned with our values and our purpose, we're also proud to share further enhancements to our bold commitments on sustainability, leaning in across all elements of ESG. In early June, we became the first in the data center industry to commit to being climate neutral by 2030, backed by science-based targets, an aggressive green financing plan, and a comprehensive sustainability agenda. Aligned with the Paris Climate Agreement, this commitment is a critical step to ensuring Equinix continues to advance investments and innovations to reduce greenhouse gas emissions and green our customers' digital supply chains. Additionally, as part of our ongoing focus on diversity, inclusion, and belonging, and our commitment to well-being, we recently hosted our second annual We Connect event, a 24-hour virtual gathering led by our employee connection networks and our VIB and well-being teams. This event celebrates equality, diversity, and connection and offers our employees an opportunity to listen, to learn, and to engage in courageous conversations as we build a culture and a community that can have a meaningful, sustainable impact on the future of our world. Turning to our results, as depicted on slide 3, revenues for Q2 were $1.7 billion, up 8% year-over-year. Adjusted EBITDA was up 7% year-over-year, and AFFO was again meaningfully ahead of our expectations. Interconnection revenues grew 12% year-over-year with solid unit ads and healthy pricing. These growth rates are all on a normalized and constant currency basis. Our global interconnection franchise continues to perform well. We now have over 406,000 total interconnections on our industry-leading platform. In Q2, we added an incremental 7,800 interconnections and now have 15 metros with more than 10,000 total interconnections, a reflection of the scaled digital ecosystems that drive our differentiated value proposition. Internet exchange saw peak traffic up 4% quarter over quarter and 31% year over year, and we're seeing IX diversify as large-scale peering expands to a broader base of enterprise customers. Equinix Fabric saw excellent growth across all three regions, driven by healthy unit growth and increasing yields as customers expand usage of higher bandwidth connections to interconnect regional and global footprints. More than 2,600 customers are now on Fabric, and we continue to see strong attach rates as businesses diversify their end destinations and evolve their connectivity needs in support of highly distributed infrastructure and the adoption of hybrid multi-cloud. Turning to digital infrastructure services, customers are responding very positively as we augment our portfolio to enable physical infrastructure delivered at software speed. We had strong bookings with Equinix Metal this quarter, including our largest win to date with our channel partner, Avant, for a blockchain company building a network of validation nodes across eight markets. Our network edge offering showed meaningful acceleration with average deal size increasing nicely as enterprise customers are deploying a diverse set of virtualized network functions from our marketplace of vendors. Importantly, and as expected, digital infrastructure services are also driving strong cross-selling activity and interconnection pull-through, with nearly 1,000 virtual connections already provisioned to support these deployments. Shifting to our X-Gale initiative, we continue to expand our plans in light of robust market demand and positive customer feedback. Late in the quarter, we announced agreements for additional joint ventures with GIC, Singapore's sovereign wealth fund, When closed and fully built out, the total investment between Equinix and GIC in our X-scale data center portfolio will be nearly $7 billion across 32 facilities globally with more than 600 megawatts of power capacity. We currently have seven X-scale builds under development across all three regions, and we pre-leased our entire Frankfurt 9 asset in Q2, representing 18 megawatts of capacity fully committed in advance of delivery. With this deal, we now have have now leased more than 100 megawatts of X-scale capacity and 100% of our open capacity at least. We are actively engaged with partners to develop entry plans in other expansion markets globally, including Australia. Now let me cover highlights from our verticals. Our network vertical delivered strong bookings across all three regions, with particular strength in APAC, as traditional carriers continue to invest in specialty telecom firms evolved their portfolios to address demand for cloud, mobile, IP services, and over-the-top delivery. New wins and expansions this quarter included McKay Brothers, a local telecom service provider, leveraging interconnection to better serve low-latency financial customers. Crosslake Fiber, a leading provider of network services, deploying in our London 4 and Paris 7 IDXs to support the first new subsea cable laid across the English Channel in nearly 20 years. and a global telecommunications provider expanding their presence to new locations, including Milan and Bordeaux. Our cloud and IT verticals saw continued momentum over-indexing in Europe as organizations accelerate hybrid multi-cloud adoption. Expansions this quarter included Zoom, a leading video communications platform, expanding coverage and scale to support market demand, and a cloud-delivered enterprise network security provider deploying infrastructure to support offerings in new locations. Our enterprise vertical achieved record bookings with broad global strength punctuated by an exceptionally strong quarter in the Americas across several subsegments, including healthcare, consumer services, business and professional services, and retail. New wins and expansions included Red Bull, a major sports energy drink manufacturer, deploying infrastructure across all three regions to take advantage of Equinix's cloud ecosystem. a leading global cosmetics retailer deploying digital infrastructure to optimize their network, move out of legacy data centers, and locate private infrastructure adjacent to their cloud providers, and a Fortune 500 global insurance provider optimizing their infrastructure to support multi-cloud. Content and digital media also achieved solid bookings led by growth in CDN, publishing and digital media, and gaming, as digital transformation continues to shape this vertical. Expansions include StackPath, a leading-edge computing and services provider, deploying infrastructure across multiple edge locations. Earnest Research, a leading data analytics company, transforming network topology and interconnecting to multiple files across Platform Equinix. And i3d.net, a leading provider of application hosting and infrastructure services, deploying on Platform Equinix to enable a consistent, high-performance gaming experience globally. And our channel program continues to outperform, delivering a record quarter and accounting for over 35% of goods. Wins were across a wide range of industry verticals, and use cases included multiple Equinix metal and network edge deals as the channel embraces our digital infrastructure services. We saw continued strength from alliance partners like AWS, Cisco, Dell, Google, IBM, and Microsoft. And we also had success with key resellers around the world, including a win with HPE, a leading Australian retailer, to modernize and scale their payments platform. which processes over 30 million transactions per day. So now let me turn the call over to Keith and cover the results for the board.