Equinix guidance, given on its last conference call, was forecasting revenues in the range of $ 198.0 to $ 200.0 million (consensus is at $ 198.91 million), and EBITDA is expected to be between $ 86.0 and $ 88.0 million, with cash gross margins at 63%. The Company doesn't usually issue outlook for EPS, while analysts expect Equinix to earn $ 0.18, with a wide bracket between their numbers, ranging from $ 0.06 to $ 0.29.
The Company is also expected to spend a large part of its forecasted 2009 CAPEX in the quarter, with capital expenditures expected to be between $ 100.0 and $ 110.0 million, including $ 20.0 million of ongoing CAPEX.
This quarter should not see a strong impact from currency fluctuations (which we expect just slightly negative for the Euro and the British Pound) like in the 4Q 2008, when the European subsidiary grew on a same currency basis 11%, although it showed a 4.6% decline in US currency.
We also take the opportunity to resume the guidance issued for the whole year, as the wording of the P/R announcing the conference call (The company will discuss first quarter results ... and outlook for the second quarter and full year 2009) seems to suggest the intention to update or narrow full year outlook:
For the full year of 2009, total revenues are expected to be in the range of $855.0 to $875.0 million. Total year cash gross margins are expected to be approximately 63%. Cash selling, general and administrative expenses are expected to be in the range of $160.0 to $170.0 million. Adjusted EBITDA for the year is expected to be between $365.0 and $385.0 million. Capital expenditures for 2009 are expected to be in the range of $325.0 to $375.0 million, comprised of approximately $60.0 million of ongoing capital expenditures and $265.0 to $315.0 million of expansion capital expenditures.
To give a better sense of how some data are trending, we will include in this article some charts, courtesy of Gridstone Research, related to some of the metrics discussed (click on the charts to enlarge):
As usual in preparation for the earnings, we will go through some of the numbers that will help give some insight into the Company's performance: Cabinets and customers addition
Although these numbers see some kind of fluctuation between quarters (ranging from 1,250 to 1,600 cabinets added per quarter and 110 to 178 new customers per quarter in 2008), it will be interesting to monitor the data to get a feeling of how customers are behaving in this new economic climate. Given Equinix comments last quarter (slowdown in decision making for new customers), the analysis of these two numbers combined will help understand where the Company will get its growth drivers in 2009.
Interconnection business This is the latest chart, taken from the Equinix site, showing the amount of traffic being exchanged on the common switch (GigE Exchange). This is just a small part of what is happening inside the Equinix US data centers, as most traffic is still exchanged through private cross connections, but both metrics, usually given as number of GigE ports and number of cross connects, will give insight into Equinix financial performance, especially as this business is extremely margin rich for the Company.
Further expansion You can find an updated IBX center expansion chart at this link.
It is useful to remember that Equinix has room to add up to 90 million of expansion CAPEX without increasing the announced capital expenditure guidance for 2009.
As we noticed on our blog, the Loudoun's Board of Supervisors recently approved plans for construction of a data center in Ashburn, which could be one the next moves for the Company.
MRR per cabinet (Monthly Recurring Revenue)
Here is an updated chart showing the steady increase of this metric. The latest data centers, which are usually sold at a higher price per cabinet, because of their power density, should contribute to strengthening this metric.
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