Equinix, Inc.

Good afternoon and 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 would now like to turn the call over to Chip Newcomb, Senior Director of Investor Relations. Thank you. 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 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 16, 2024, and our most recent Form 10-Q. 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 to an explicit public disclosure. In addition, we'll provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP 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 webpage from time to time, and encourage you to check our website regularly for the most current available information. With us today are Adair Fox-Martin, Equinix's CEO and President, and Keith Taylor, Chief Financial Officer. Following our prepared remarks, we will be taking questions from Southside 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 it over to Adair.

Thank you, Chip. Good afternoon and welcome to our second quarter earnings call. I'm honored to be hosting my first earnings call today as CEO and president of Equinix. I'm immensely proud to lead our dedicated team of more than 13,000 employees around the world. I would like to express my gratitude to Charles and the entire Equinix team for the warm welcome and the facilitation of a smooth transition over the past two months. I look forward to the continued partnership with Charles in his role as executive chairman, and I'm excited and optimistic about the road ahead. As a board member for the past four years, I've witnessed many of the unique qualities that have driven Equinix's durable success. Our 25 years of investment has built a business now spanning 264 data centers in 72 metros across six continents. Our focus on customer value and outcomes has created interconnected digital ecosystems unrivaled in our industry. It is a phenomenal foundation to build upon as CEO. As the stewards of some of the most important digital infrastructure in the world, we are exceptionally and uniquely positioned to capitalize on the immense opportunities that lie ahead. Business transformation remains a critical priority for our customers, and the emergence of AI marks a pivotal point for our industry. AI, similar to the growth of cloud technologies a decade ago, will take time to fully develop. In the near term, AI training workloads are driving significant demand, particularly from service providers. Our XScale program continues to be a direct beneficiary of this demand. We intend to build on this momentum, meaningfully augmenting and extending our X-scale portfolio, particularly in North America. This will complement our robust portfolio across Europe and Asia Pacific. We are excited to share that we recently closed on land and power for our first multi-hundred megawatt X-scale campus in Atlanta. We look forward to announcing details of this project and our next XScale joint venture in the coming months. At the operational end of the AI spectrum are network nodes and inference workloads. As with cloud, Equinix continues to be the preferred location for network nodes as customers seek the right connectivity solutions for data ingestion and distribution. We also see inference demand beginning to take shape. We believe the implementation and deployment of these workloads will accelerate over the coming years. The neutrality, global reach, and scale of Platform Equinix can deliver the performance, network density, and cloud adjacency which inference workloads will require. We are already seeing significant enterprise and service provider interest in our deployment capabilities. In Q2, We partnered with WWT to serve Almabic Technologies, an AI-powered marketing analytics platform for enterprise. Almabic Technologies deployed their AI infrastructure at Equinix to run proprietary inference algorithms on massive datasets for predictable cost, privacy, speed, and secure access to data sources in the cloud. InstaDeep, a leading provider of AI decision-making solutions, deployed a NVIDIA AI cluster at our Paris 10 asset to access key ecosystems, optimize their network, and support their growth objectives. Our approach to the market opportunity created by AI is multifaceted, and we believe it will deliver value in the short term and sustainable growth over the medium to long term. Our X-scale offering provides the infrastructure and expertise required for massive, scalable data center operations for our cloud and large-scale technology customers. For our enterprise and mid-market customers, we offer AI-ready data centers and turnkey solutions, enabling them to scale efficiently and effectively as they introduce AI technologies into their business operations. For those who require high performance inferencing, our edge solutions handle the data at the edge where it is generated, ensuring optimal performance for the next generation of business applications. Over the past two months, I have embarked on a listening tour across a number of our locations, meeting with our customers, partners, and employees. And whilst it is still early in my tenure and there is still work that I need to complete, I have noted some areas of opportunity that will underpin our strategy for the company going forward. The opportunity to simplify across numerous aspects of our business. This will allow us to accelerate our pace of execution. The opportunity to drive more focus. Whilst we may do less, the programs of work that we focus on will represent excellence in execution and deliver the highest quality outcomes. The opportunity to amplify our go-to-market efforts, to delight our customers and energize our partners. Equinix has consistently demonstrated discipline and execution. This mantra of discipline allows us to deliver market-leading returns on capital and serves as the underlying fuel for long-term growth in AFFO per share, our core financial metric. Building on this foundation and executing on the opportunities I noted should create a simpler, more focused, and ultimately higher valued company. With all of this in mind, I'll turn to our Q2 performance. Equinix had a great second quarter. We delivered record growth bookings. Our pricing remains strong. We continue to invest broadly across our offerings to further enhance the scale and reach of our industry-leading platform. Our delivery of adjusted EBITDA and AFSO per share continues to run ahead of expectations. As you can see on slide three, Q2 revenues were 2.2 billion, up 8% over the same quarter last year. This represents our 86th consecutive quarter of top line growth. Adjusted EBITDA was up 17% year over year, with strong AFFO per share flow through. Interconnection revenues stepped up to 9% year over year. These growth rates are all on a normalized and constant currency basis. In May, we announced the opening of our first data center in Johor with strong interest from customers across our new Malaysian footprint. In July, we announced our expansion into the Philippines through the planned acquisition of three data centers in Manila from Total Information Management. This transaction, valued at approximately $180 million, is expected to close in the fourth quarter of 2024, adding more than 1,000 cabinets of capacity in addition to land for future development. The combination of our strong leadership position in our Singapore hub and our entries into Malaysia, Indonesia, and the Philippines strategically position Equinix to help our customers capitalize on the expanding digital opportunity in the fast-growing Southeast Asia region. Customers taking advantage of our expanding global footprint include First Digital, an internet and telecommunications provider. First Digital is significantly lowering total cost of ownership by building a multi-cloud network with Equinix Fabrics Cloud Router to connect to Cisco Webex and AWS across all three regions. Our global interconnection franchise continues to perform, with over 472,000 total interconnections now deployed. Growth interconnection additions were at the highest level in two years, and pricing continues to trend favorably. However, net interconnection ads were 3,900 due to grooming activity primarily in our content and networking verticals. We do expect this grooming to lessen over time. Equinix fabric growth was underpinned by 100 gigabit port additions and strong pull-through from other digital services products. Network Edge experienced continued rapid growth with an expansion activity from existing customers. Key recent interconnection and ecosystem wins include Nuum Exchange. This is a new company formed after the integration of the Santiago, Lima, and Columbia stock exchanges. Capital market participants can now benefit from Nuum's extended reach, low latency, and secure connectivity. supported by Equinix and key markets like New York and Sao Paulo. Our channel program delivered another solid quarter, accounting for over 30% of new bookings and 55% of company new logos. We continued to see growth from partners like AT&T, Avant, Dell, HPE, and Orange Business, with wins across a wide range of industry segments and use cases. Notable wins included an AI as a service solution via our distribution partner, TechData, and MSP partner, Asiapack. Leveraging a combination of co-location and Equinix fabric, our partners are delivering an LLM for a high-level learning institution based in Malaysia. Now, before I turn the call over to Keith, I wanted to recognize that we believe we are in a position of strength financially, from both a balance sheet and from an access to capital perspective. Our investment strategy delivers a strong return on invested capital, all of which gives us the flexibility to execute our go-forward strategy. With that, I'll turn it over to Keith to cover the results from the quarter.