Equinix, Inc.

Good afternoon and welcome to the Equinix Second Corner 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 any objections, please disconnect at this time. I would now like to turn the call over to Chip Newcomb, Senior Director of Investor Relations. Thank you, sir. You may begin.

Good afternoon and welcome to today's conference call. Before we get started, I would like to remind everyone that some of the statements that we will 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've identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K, filed February 17, 2023, and 10-Q, filed May 5, 2023. 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's 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 Investor Relations page at www.equinix.com. We've 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 would 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 one hour, we'd like to ask these analysts to limit any follow-on questions to one. At this time, I'll turn the call over to Charles.

Thank you, Chip. Good afternoon, and welcome to our second quarter earnings call. As reflected in our results, Equinix continues to enjoy momentum in our business as digital transformation accelerates the pace of innovation and changes the way business is done. By 2026, IDC is forecasting that 40% of revenue from G2000 companies will come from digital products, services, and experiences, a dynamic that is reshaping the basis of competition in nearly every industry and making digital an unprecedented force for economic growth. These secular drivers, combined with an accelerating appetite for companies to rapidly integrate AI into their operations, are driving increased demand for data center capacity as a broad range of service providers extend and scale their global infrastructure to support the clear enterprise commitment to hybrid and multi-cloud as the IT architecture of choice. Equinix remains exceptionally well-positioned to respond to this demand environment, delivering against the need for infrastructure that is more distributed, more cloud-connected, more sustainable, and more ecosystem-centric than ever before. Against this backdrop, we had a great second quarter with solid growth in net bookings, very strong pricing dynamics, excellent pipeline conversion, and healthy new logo growth. We continue to drive disciplined sales execution at scale. with more than 4,100 deals in the quarter across more than 3,100 customers, demonstrating the continued strength of our unmatched go-to-market machine and approach. Turning to our results as depicted on slide three, revenues for Q2 were $2.02 billion, up 14% year-over-year, driven by strong recurring revenue growth, power price increases, and timing of X-scale fees. Adjusted EBITDA was up 7% year over year, and AFFO was again better than our expectations due to strong operating performance. These growth rates are all on a normalized and constant currency basis. With customers deployed in all three regions now representing approximately two-thirds of our recurring revenues, we continue to invest behind the scale and reach of our data center services portfolio. We now have 53 major projects underway across 40 metros in 24 countries. including 11 next-scale builds that we expect will deliver approximately 90 megawatts of capacity once opened. This quarter, we added 12 new projects, including new data center builds in Lisbon, Monterey, Mumbai, and our first build in Kuala Lumpur, Malaysia. Over the past several years, we have seen Malaysia emerge as an increasingly important location for digital infrastructure. By expanding platform Equinix and Johor and Kuala Lumpur, the two most strategic markets in Malaysia, we will enable local and global businesses to leverage our trusted platform to bring together and interconnect the foundational digital infrastructure that will power their success. Additionally, we are delighted with the recently announced results of Singapore's data center call for application, where Equinix was one of a very limited set of participants selected to build incremental data center capacity in the critical Singaporean market. Equinix is honored to have this opportunity to strengthen Singapore's digital capabilities, delivering sustainable infrastructure that will fuel the economy, cultivate critical ecosystems, and align to Singapore's green plan. Multi-region customer wins this quarter included Cogent Communications, a U.S. multinational ISP, using Equinix's robust ecosystem and interconnection platform to optimize and enhance their global services, and Appsella, a provider of software-defined cloud-optimized networks for digitally transforming global enterprises, as they leverage Equinix Fabric and other digital services for low-latency network and cloud connectivity. Our global interconnection franchise continues to thrive, with over 456,000 total interconnections on our platform. In Q2, interconnection revenues stepped up 11% year-over-year on a normalized and constant currency basis. driven by healthy pricing, increasing traffic levels, and strong gross ads. Net interconnection ads remain on the lower side at 4,100 due to continued grooming activity and consolidation into higher bandwidth connections. But the number of unique interconnection relationships across our platform continues to expand, with over 110,000 unique pairs reflecting the exceptional value of our scaled digital ecosystems. Equinix Fabric had another strong quarter, with total virtual connections passing 50,000 for the first time, and the addition of new capabilities to support data-intensive workloads like AI and cloud migration. Beginning in the third quarter, Fabric customers will be able to provision virtual connections to cloud providers with bandwidth up to 50 gig per second, with Google Cloud as the first cloud partner to support this capability. Internet exchange saw strength in our EMEA and APAC markets, with peak traffic up 4% quarter-over-quarter and 25% year-over-year, to nearly 32 terabits per second. Key interconnection customer wins this quarter included a gaming and entertainment company, expanding interconnection across all three regions to optimize the gamer experience, and PierOne, a Brazilian telco leveraging platform mechanics to establish its digital presence through network hubs beginning with South America and Miami. Turning to our X-scale portfolio, we continue to see strong overall demand as cloud adoption remains a driving force in digital transformation. In Q2, we leased 10 megawatts of capacity in our Osaka 2 asset, with cumulative X-scale leasing now over 200 megawatts globally. And we have a strong funnel of additional X-scale opportunities for the back half of the year. We also won three new native cloud on-ramps this quarter in Bogota, Madrid, and Toronto, further strengthening our cloud ecosystem. which represents nearly 15% of total interconnection on our platform. Key enterprise cloud ecosystem wins this quarter included one of the largest auto insurers in the U.S., continuing to expand interconnections on our platform to optimize its networks and multi-cloud connectivity, and a leading European automotive company deploying at Equinix to support reliable and scalable connectivity to the cloud worldwide. As businesses increasingly look to consume their digital infrastructure at software speed, we're continuing to enhance our platform strategy and expand our partnerships. In Q2, we announced our expanded partnership with Hewlett Packard Enterprise for pre-provisioned HPE GreenLake for Private Cloud Enterprise and HPE GreenLake for Private Cloud Business Edition, both available on demand at select Equinix IBX data centers. These new offerings in seven metros around the globe will help businesses expand their hybrid multi-cloud strategies while providing greater agility, control, and predictability of workload costs and data. Additional key digital services wins this quarter included Bionexo to Brazil, a health tech company that offers digital solutions for managing healthcare processes using Fabric and Network Edge for seamless connections with partners and customers while reducing complexity and cost. and Telna, a global mobile network infrastructure provider using platform equinix to facilitate its marketplace for cellular connectivity among its customers. Our channel program delivered another strong quarter, accounting for 40% of bookings and nearly 60% of new logos. We continue to see growth from partners like Accenture, Avant, Dell, Cisco, and HPE, with wins across a wide range of industry verticals and digital-first use cases. Key wins this quarter included partnering with Kindrel to support a large American health insurance provider with their network and application modernization efforts, featuring the deployment of cloud-adjacent infrastructure and interconnection to the healthcare ecosystem. Now let me turn the call over to Keith to cover the results for the quarter. Thanks, Charles.