Equinix: Strong 4Q Revenue, Expansion in Asia

Equinix (EQIX) has announced expansions of its data centers in Hong Kong and Singapore, citing strong growth in the Asian market for mission-critical space and interconnections. The company also reported strong revenue growth for the fourth quarter of 2007 and raised its revenue guidance for 2008. Shares of Equinix are up $5.05 to $77.80 in early trading, a gain of about 7 percent.

Equinix said it plans to expand its Hong Kong data center from 38,000 square feet to about 70,000 square feet, adding 550 sellable cabinets. The Hong Kong facility houses Equinix's Business Continuity Trading Room (BCTR), a specialized disaster recovery site for financial institutions. Equinix will spend $17 million on the Hong Kong expansion.

The planned 17,000 square foot expansion in Singapore is Equinix's third expansion of that data center, which will reach 105,000 square feet upon completion. The extra space will allow Equinix to accommodate an additional 300 cabinets in the Singapore site, which is currently about 65 percent full. Equinix expects to invest $14 million in the Singapore expansion in 2008.

Equinix reported total revenue of $419.4 million for 2007, with organic revenues at $381.9 million, representing 33 percent growth year-over-year. Fourth quarter revenue was $138.7 million, with $32 million of that from Europe. For the year the company had a net loss of $5.2 million, due primarily to stock-based compensation expenses. Equinix finished the year with 1,881 customers, including 123 customers acquired in the fourth quarter.

"Overall, our operating results were better than planned as we experienced strong bookings and a resulting revenue growth in each of our fourth quarters in the year," said CFO Keith Taylor.

Taylor said the company's average monthly recurring revenue per sellable cabinet increased to $1,581, up from $1,564 in the previous quarter and a 6 percent increase from a year ago. The average in the US was $1,681 (up $20 on the quarter) while the Asia Pacific average was $1,179, up $19.

Equinix also raised its guidance for 2008 to a range of $650 million to $665 million, an increase from its previous guidance of $625 million to $640 million. For the first quarter of 2008, Equinix expects revenue between $151 million and $152 million, compared to Wall Street expectations of $143 million.

"We continue to see no let up in demand," said Equinix CEO Steve Smith. "We had a stronger bookings quarter than we originally anticipated. The book to bill interval continues to remain short, which means we're installing the customers sooner than we expected. We're just seeing great momentum in the business and the price points are firm."