Equinix, Inc.

Good afternoon and welcome to the Equin Next Third Quarter Earnings Conference Call. All lines will be able to listen only until we open for questions. So today's conference is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the conference over to Katrina Reimel, Senior Vice President of Corporate Finance 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 18, 2022, and 10-Q, filed on July 29, 2022. 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, 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 gap measures and a list of 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 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 rapidness, call up 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 thanks katrina good afternoon and welcome to our third quarter earnings call we had another outstanding quarter as global demand for digital infrastructure continues to grow and customer preferences trend convincingly toward architectures that are highly distributed persistently hybrid deeply cloud connected and increasingly on demand all factors fueling the equinix position as a trusted partner in digital transformation This vigorous demand backdrop fueled another great quarter, delivering record growth in net bookings with strong demand across all three regions, resulting in our 79th quarter of consecutive revenue growth and further demonstrating the resiliency and durability of our business, even in the face of a complex and challenging macro environment. It is increasingly evident that the global pandemic has been a catalyst for a fundamental shift in how customers view digital transformation and its importance as a strategic imperative. And this commitment to digital transformation continues even in the face of a broader dynamic of belt tightening, as companies look to do more with less and see digital as a catalyst to both maximize revenues and optimize costs. While we continue to closely monitor macro conditions and adapt our execution accordingly, the fundamentals of our business remain exceptionally strong. Our expansive global reach and robust interconnected ecosystems continue to attract a wide and diverse customer set as they prioritize digital investments and embrace platform mechanics as a point of nexus to support hybrid and multi-cloud. This wave of digital infrastructure demand and our highly differentiated value proposition are translating to a robust pipeline, a highly favorable pricing environment, and low churn, all fueling record performance across the business year to date and setting us up for a strong trajectory as we look to 2023 and beyond. As customers navigate rising interest rates and broad-based inflation, they're benefiting from our scaled purchasing power and our sophisticated capabilities in hedging, risk management, and sustainability. Our operating scale and scope give us a variety of levers to manage an increasingly dynamic environment. Hedging currency, power, and interest rates, investing in advanced procurement teams, expanding renewables coverage, and taking a programmatic approach to improving the efficiency of our world-class data centers. An advanced set of capabilities supported by a strong and flexible balance sheet. Specifically, on power, we have had a keen focus in this area and continue to feel confident in our position. Our approach to multi-year hedging is affording Equinix the visibility and predictability to communicate to customers in advance of expected power price increases and is allowing us to deliver cost points to customers that remain highly favorable against spot rates in many markets as volatility persists. While our aim remains to dampen this volatility for our customers through hedging, we do expect meaningful increases in power costs in many markets. And per our contracts, the full impact of these additional power costs will be passed on to customers. Overall, we believe we remain in a good position relative to competitors and the broader market. Turning to our results as depicted on slide three, revenues for Q3 were $1.84 billion, up 11% over the same quarter last year, driven by strong recurring revenue growth. Adjusted EBITDA was up 11% year over year, with AFFO meaningfully ahead of our expectations due to strong operating performance. Interconnection revenues continue to outpace the broader business, growing 13% year over year. These growth rates are all on a normalized and constant currency basis. Equinix continues to extend its leadership as the most interconnected platform, with four on-ramp wins this quarter, bringing the total in our portfolio to more than 200 on-ramps across 44 markets. We now have 11 metros across platform Equinix, enabled with on-ramps from all five of the leading cloud providers. No other competitor has more than one. In addition to placing critical networking nodes and on-ramps at Equinix, hyperscalers are also integral to our go-to-market motion as customers continue to aggressively migrate workloads to the cloud and demand cloud proximity for their own private cloud implementations. As indicated in our recently published Global Interconnection Index, current trend lines indicate that more than 80% of Global 2000 companies will be interconnecting with more than four hyperscale providers and over 30 SaaS providers or other business partners on average by 2026. We're continuing to invest behind the momentum we're seeing in our data center services business with 46 major projects underway across 31 markets in 21 countries. We continue to build capacity under our X-scale offering, including 10 ongoing X-scale projects that we expect will deliver another 80 megawatts of capacity once opened. This quarter, we added six new projects, including new data center builds in Barcelona, Tokyo, and our first organic build in Jakarta, Indonesia. Our new IVX in Jakarta will add a strategically important high-growth market to our platform as we look to enable local businesses and global organizations to unleash Indonesia's digital potential. This commitment to market-leading reach continues to drive our business, with customers operating in all three regions now accounting for an amazing 64% of our recurring revenues. Key customer expansions this quarter included StackPath, a leading edge computing platform provider which expanded into Dubai and Mumbai to support the growth of its worldwide edge compute delivery and security offerings. A win with a global multinational airline leveraging Equinix to connect to their federated ecosystem of partner airlines. as well as a significant multi-metro expansion with one of the world's largest custodian banks, deploying across all three regions and utilizing the full suite of Equinix digital services. On that note, our digital services portfolio saw continued momentum as companies increasingly demand infrastructure and interconnection services that can be delivered as a service and on demand. Equinix Metal had a strong bookings quarter as customers leveraged flexibility and agility across multiple metros. Wins this quarter included a major design win with a global SaaS provider and a significant expansion with a leading pediatric treatment and research facility, using Network Edge and Equinix Fabric to create an edge hosting environment in key U.S. metros and enable seamless and high-performance connectivity to their cloud partners. In Q3, we added an incremental 7,300 interconnections and now have over 443,000 total interconnections on our platform. Equinix Fabric had another strong quarter as interconnection diversity continues to increase. Expansions this quarter included cold technology services, further expanding its footprint in Europe and interconnectivity with Equinix Fabric to optimize performance for its customers, as well as a financial software tools and enterprise applications provider implementing a global network optimization project leveraging Equinix Fabric. Internet Exchange saw peak traffic up 8% quarter-over-quarter and 28% year-over-year to greater than 27 terabits per second, representing the largest peak traffic growth since prior to the pandemic. Our channel program delivered a sixth consecutive record quarter, accounting for 37% of bookings and approximately 60% of new logos. It remains a critical vector in how we are expanding our reach and scaling our go-to-market engine. We continue to see particular strength from strategic cloud technology and systems integrator partners like AWS, Cisco, Dell, Google, HPE, Infosys, and Microsoft. This segment accounted for approximately half of our channel bookings and continues to grow in both deal and dollar volumes. With these partners, we jointly offer a blend of IT and networking technologies that allow customers to interconnect seamlessly with hyperscale cloud and other as-a-service providers and benefit from solutions that deliver optimal performance, cost, security, agility, and scale across our global platform. ChannelWinds included a UK insurance firm with Equinix partner Softcat for a data center consolidation and modernization project at our London campus, where technology elements from HPE, Cisco, and Palo Alto networks are being brought together in a cloud-adjacent architecture, all directly interconnected to Microsoft and AWS. Now, let me turn the call over to Keith and cover the results for the court.