Equinix - back of the envelope calculation

Just playing a bit with numbers. This small forecast is based on today's footprint plus the already announced expansions (up to Secaucus and L.A. in 2Q 2009), which will give Equinix a total number of cabinets allowing the Company to reach revenue of about $ 1,100,000,000.

Assuming Equinix will hit the mid range of expectations for 2008 ($705 million), and continue to grow at a rate of 20% in 2009 and 15% in 2010 (which I believe can be a kind of conservative forecast, right now...), it is interesting to note that Equinix should reach $ 973.000.000 in revenue already in 2010.

It is even more interesting to forecast EBIDTA. Equinix should be able to improve EBIDTA and probably exceed 40% in 2008, to reach about 41% in 2009. It should be reminded that a long term target is about 48%, as stated in last year's Investor Conference in N.Y.

In 2010, Equinix will stop (wasting) paying $ 10,000,000 a year for S. Jose (old lease), and I assume that in 2009 the Company will acquire the new Secaucus location, saving about $ 4,000,000 a year in rent. Both events might increase EBIDTA to about 43%... bringing in, assuming revenue of $ 973 million, about $ 417 million in EBIDTA in 2010. Long term, exceeding $ 500,000,000...

A brief spreadsheet can be found here.

Note: I believe I've made a mistake assuming that the old S. Jose charge will improve EBIDTA, as there has been a restructuring charge for that - will update/change the post later on... August 15, 2008.