Equinix (EQIX) FFO Misses the Boat, Revenue Beaten in Q4 – February 17, 2022

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Equinine Inc.it’s (EQIX Free Report) in the fourth quarter of 2021, adjusted funds from operations (AFFO) per share lagged the Zacks consensus estimate while revenue topped the Zacks consensus estimate. However, both figures have seen year-over-year growth.

EQIX’s quarterly AFFO per share was $6.22, missing Zacks consensus estimate of $6.27. However, the figure improved 8% from $5.76 in the year-ago quarter.

This increase is mainly due to the regular growth of interconnection revenues. During the fourth quarter, Equinix added an additional 7,500 interconnects, bringing its total interconnects to 419,300.

For the full year, AFFO per share came in at $27.11, higher than the prior year’s tally of $24.76. However, the figure was below Zacks consensus estimate of $27.20. This was supported by a 10.6% growth in total revenue to $6.64 billion.

Quarter in detail

Total quarterly revenue was $1.71 billion, beating Zacks’ consensus estimate of $1.7 billion. Additionally, revenue improved 9.1% year over year, marking the 76th consecutive quarter of revenue growth.

Recurring revenue was $1.6 billion, up 9.4% from the year-ago quarter figure. One-time revenue increased 5% from the year-ago quarter level to $102.9 million.

Revenues from all three geographic regions also increased year over year. Revenue from the Americas, EMEA and Asia Pacific jumped 9.8%, 8.2% and 8.9% to $782.1 million, $553.3 million and 370 .9 million, respectively.

Adjusted EBITDA was $787.6 million, up 10.7% year-over-year.
AFFO jumped 9.1% year-over-year to $564.2 million in the December quarter.

Adjusted EBITDA margin was 46%, up from 45% in the prior year quarter.

Balance sheet

Equinix ended the fourth quarter of 2021 with cash and cash equivalents of $1.54 billion, compared to $1.6 billion at the end of 2020. EQIX’s total debt principal outstanding was $13.9 billion as of December 31, 2021, compared to $12.5 billion at the end of 2020. 2020.

Dividend Update

Concurrent with the release of fourth quarter 2021 results, on February 16, Equinix’s board of directors approved a quarterly cash dividend of $3.10 per share. This dividend will be paid on March 23 to its shareholders of record on March 7, 2022.

Advice

For the first quarter of 2022, Equinix forecasts revenue of $1.726 billion to $1.746 billion, a 2% quarter-over-quarter increase at the midpoint. Adjusted EBITDA is expected to be between $781 million and $801 million.

For 2022, Equinix estimates to generate revenue of $7.202 billion to $7.252 billion, indicating 9% growth from the figure reported a year ago. EQIX expects to incur $20 million in integration costs related to the acquisition. Management expects adjusted EBITDA of $3.307 billion to $3.337 billion.

For the full year, the AFFO per share is estimated to be between $28.87 and $29.20, suggesting a 6-8% increase over the number reported in the prior year quarter. The Zacks consensus estimate for the same is pegged at $29.45.

Equinix currently wears a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of other REITs

Alexandria Real Estate Equities, Inc. (ARE Free Report) reported adjusted FFO of $1.97 per share for the fourth quarter of 2021, up 7.1% from the prior year quarter of $1.84. The figure topped Zacks’ consensus estimate of $1.96.

ARE’s year-over-year improvement in FFO resulted from revenue growth of 24.4% to $576.9 million. The results reflect decent internal growth. Alexandria saw continued healthy rental activity and rental rate growth during the quarter.

Mid-America Apartment Communities, Inc. (MAA Free Report), commonly referred to as MAA, reported Q4 2021 basic FFO per share of $1.90, beating Zacks’ consensus estimate of $1.87. The reported number was up 15.2% from the year-ago quarter figure of $1.57.

MAA’s quarterly results were driven by higher average effective rent per unit for the comparable store portfolio. The average physical occupancy rate of the comparable store portfolio also increased year-on-year.

Residential Equityit’s (QRA Free Report) in the fourth quarter of 2021, the normalized FFO per share of 82 cents exceeded the Zacks consensus estimate of 80 cents. Rental revenue of $645.1 million also beat the consensus mark of $628.6 million.

On an annual basis, Equity Residential’s normalized FFO per share improved by 7.9%, while rental income increased by 5.2%. EQR’s results were boosted by strong physical occupancy, significantly improved pricing power and higher non-residential income.

To note: Everything related to earnings presented in this article represents funds from operations (FFO) – a metric widely used to assess the performance of REITs.

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