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Request-EquinixAnalyst(2) Request-EquinixAnalyst(2) Presentation Transcript

  • Analyst Day Presented on November 11, 2010
  • Today’s Agenda 12:00 – 1:00 Luncheon (optional) 1:00 – 1:15 Welcome and introduction, Steve Smith 1:15 – 1:45 Financial perspectives, Keith Taylor 1:45 – 2:15 Platform Equinix and go-to-market strategy, Jarrett Appleby 2:15 – 2:40 Global sales strategy, Pete Ferris 2:40 – 3:00 BREAK 3:00 – 3:25 North America regional update, Charles Meyers 3:25 – 3:50 Europe regional update, Eric Schwartz 3:50 – 4:10 Asia-Pacific regional update, Samuel Lee 4:10 – 4:25 Financial ecosystems, John Knuff 4:25 – 4:40 Network, mobility and content ecosystems, Jim Poole 4:40 – 5:00 Closing comments and Q&A, Steve Smith (joined by Keith and others) 5:00 – 7:00 Cocktail reception (optional) 2
  • Public Disclosure Statement Forward-Looking Statements Except for historical information, our presentation today contains forward-looking statements which include words such as “believe,” “anticipate” and “expect.” These forward-looking statements involve risks and uncertainties that may cause Equinix‟s actual results to differ materially from those expressed or implied by these statements. Factors that may affect Equinix‟s results are summarized in our annual report on Form 10-K filed on February 22, 2010 as well as our quarterly reports on Form 10-Q filed on April 28, 2010, August 4, 2010 and October 29, 2010. Equinix assumes no obligation and does not intend to update forward-looking statements made in this presentation. Selected results within this presentation include results from the Switch and Data acquisition, which closed on April 30, 2010. Non-GAAP Information This presentation contains references to certain non-GAAP financial measures. For definitions of the non-GAAP terms and a detailed reconciliation between the non-GAAP financial results presented in these slides and the corresponding GAAP measures, please refer to the appendix at the end of this presentation. In addition, for a detailed discussion as to why Equinix uses these non-GAAP financial measures, please see Equinix‟s Form 8-K filed with the SEC on October 26, 2010. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward- looking data. 3
  • Analyst Day Steve Smith, CEO Presented on November 11, 2010
  • The MarketKey Business Drivers Supporting Growth to $2B 39x IMPACT BY 2014* MOBILE TRAFFIC: Double every year through 2014 5x VIDEO: >90% of consumer traffic 4x IP TRAFFIC: 12B 3x DVDs/month SOCIAL NETWORKING: ‟08 ‟09 ‟10 ‟11 ‟12 „13 Twitter and Facebook get more searches per dayMobile platform usage skyrocketing – 39x than GoogleVideo and real-time applications growth - 5x GLOBALIZATION: NAIP traffic growth – 4x business IP traffic 2.3 exabytes/month. WesternMassive Shift to Virtualization and the cloud – 3x Europe business IP trafficData Center Power requirements 2.2 exabytes/month.Globalization of business CLOUD**: 3X revenue growth * Cisco VNI, June 2010 ** Gartner, 2009 5
  • Global Partner For GrowthServe Customers Around The Globe Deliver Customer Value Business Strategy At-A-Glance• Drive • Accelerate Global Reach and Scale – Global Strategy • Improve Customer Performance• Accelerate – Business Performance Through Interconnection• Boost • Deepen Existing and Grow New – Revenue Growth Ecosystems• Simplify • Streamline Ease of Doing Business – Infrastructure Management with Equinix Globally• Enable • Expand Vertical Go-To-Market – Business Expansion Plan CONFIDENTIAL 6
  • Accelerate Global Reach and ScaleBroadest and Deepest Coverage in the Industry IMPACT SINGLE GLOBAL PARTNER for consistency and simplicity THE RIGHT NETWORKS in the right markets for performance GLOBAL EXPANSION to meet market demand LEGEND: EQUINIX METROASIA-PACIFIC NORTH AMERICA EUROPE• 5 Metros • 22 Metros • 8 Metros• 250+ Available Networks • 450+ Available Networks • 175+ Available Networks• 700+ Customers • 2,200+ Customers • 800+ Customers CONFIDENTIAL 7
  • Improve Customer PerformanceThrough InterconnectionCollaborate Under One Roof IMPACT FINANCIAL CLOUD SERVICE PROVIDERS PROVIDERS CHOICE facilitates competitive advantage in innovation PROXIMITY to partners CONTENT and suppliers improves ENTERPRISE PROVIDERS performance CROSS CONNECTS accelerate deployments and reduce cost NETWORK SERVICE MOBILE PROVIDERS CONFIDENTIAL 8
  • Deepen Existing and GrowNew EcosystemsInnovative Exchanges Accelerate Commercial Growth Business Exchanges IMPACT Cloud and SaaS Providers IDENTIFY partners with Electronic Trading the right assets in 35 global markets Mobile App Exchange ENGAGE 3,700 customers and suppliers with a trusted introduction EXCHANGE physical traffic on one platform to remove barriers Traffic Exchanges Internet Exchange Carrier Ethernet Exchange Mobility Exchange CONFIDENTIAL 9
  • Streamline Ease of Doing BusinessGloballyConsistency of Experience Working with Equinix EUROPE IMPACT NORTH AMERICA DEPLOY in global locations with certified technical support ASIA-PACIFIC MANAGE global infrastructure with a single online portal MONITOR traffic and equipment from a central location DEEPEN relationships with customers: consistent, SmartHands® intentional, differentiated Portal Monitoring CONFIDENTIAL 10
  • Expand Vertical Go-to-Market PlanLeverage Benefits of Platform Equinix NETWORK FINANCIAL PROVIDERS SERVICES IMPACT Expand salesforce globally Increase coverage of global accounts Deepen penetration of ecosystems Focus on applications that take advantage of network density and global platform CONTENT, GAMING CLOUD ENTERPRISE & VIDEO COMPUTING CONFIDENTIAL 11
  • Business Strategy-at-a-Glance 5 Expand vertical go-to-market plan Focus on applications that value EQIX Driving the Next differentiation: interconnection, global, reliability Wave of Growth 4 Streamline ease of doing business globally Global product, pricing and contracts harmonization 3 Deepen existing & grow new ecosystems Innovative exchanges to accelerate commercial growth 2 Improve customer performance through interconnection Proximity to partners and suppliers1 Accelerate global reach & scale Build an unrivaled global data center footprint Targeting $2B+ to power the interconnected world in Revenues. CONFIDENTIAL 12
  • Analyst Day Keith Taylor, CFO Presented on November 11, 2010
  • Robust Growth & Profit Story Global historical and projected financials 2,000+ 1,500 2007 – 2011E CAGR Revenues: 38% 50% Adjusted EBITDA: 44% 46% 1,217 45% 45% Impacted by FX volatility 42% 37% 1,000+ 2011E YOY REVENUE($M) 883 GROWTH 23% AND 705 ADJUSTED EBITDA 675 GROWTH 25% 542 Revenue growth 419 409 pro-forma for SDXC for full year 2010 16% 292 155 TARGETING $2B+ REVENUE AND $1B+ ADJUSTED EBITDA (1) (1) (2) 2007 2008 2009 2010E 2011E Target Revenue Adjusted EBITDA Adjusted EBITDA Margin(1) 2010E and 2011E based on guidance announced on 10/26/10. Guidance for 2011 is >$1.5B revenue and >$675M Adjusted EBITDA(2) Target = LTOP (Revenue capacity assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing) + $200M in incremental capex to create capacity for $100M incremental revenues to meet $2B+ target revenue opportunity 14
  • Disciplined Expansion Strategy Revenue and cabinet capacity MAINTAIN OUR Revenue DISCIPLINED Capacity $935 $1,200 $1,450 $1,800 $1,900 EXPANSION STRATEGY ($M)(2) CONTINUALLY ASSESS 94,000 Announced COMPETITIVE AND 85,100 8,900 (+10% vs. Q310) MARKET DYNAMICS 10,500 AP DELIVER INVENTORY “JUST-IN-TIME” 61,700 60,800 28,100 EU 53,500 73% MARKETS TARGETED 44,200 47,900 FOR FUTURE 42,800Cabinet (1) 79% EXPANSION:Capacity 34,200 80% NA: Toronto, Philadelphia, 77% Seattle Cabinets 46,500 NA Billing EU: Amsterdam, Frankfurt OWNED IBXs (11)Utilization REPRESENT 22% OF REVENUES AND 23% 2007 2008 2009 Q310 2011 E OF CASH GROSS Annual Exp (3) (4) PROFIT IN Q3 2010 CapEx $333 $380 $306 $460 $300+ ($M) Future phases contemplated in owned IBXs Cab Capacity 9,300 7,300 10,300(5) 8,900 Adds(1) Cabinet capacity includes cabinets added through acquisitions in addition to organic expansions(2) Revenue capacity assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing(3) Mid-point of expansion capex for FY10 announced on October 26, 2010(4) ~$400M of capex for FY11 announced on October 26, 2010, of which $300M+ estimated to be expansion capex(5) Excludes SDXC cabinets of 14,000 15
  • Attractive Unit Economics US “same IBX” (1) Q3 annualized INCLUDES ALL EQUINIX ORGANIC IBXS OPENED PRIOR TO Q3 2009(1) 620 461 SAME IBX PORTFOLIO OPERATING WITHIN LTOP(2) MODEL ASSUMPTIONS (17) 19 US IBX data centers with($M) an average age of 6.1 years ~33% Annual cash Current average utilization of 86% generation on investment(4) TRACKING AGAINTS OUR IRR PROJECTIONS (1,420) STRONG DEMAND AND RESULTS FOR “LEGACY” Invested Revenues 74% Ongoing IBXs DUE TO NETWORK Capital 44% of Cash CapEx DENSITY AND ROBUST (Gross Investment Gross 3% of ECOSYSTEMS PP&E) (3) Profit Revenues Margin First 8 US IBXs at ~90% utilized with nearly 7% year- over-year revenue growth in Q3(1) Includes the following IBXs: LA1, LA2, LA3, NY1, NY2, NY4, SV1, SV2, SV3, SV4, CH1, CH2, CH3, DA1, DC1, DC2, DC3, DC4, DC5; Includes capital and revenues from 200 cabinet expansion in Chicago 2 IBX and excludes capital from LA1 phase II and NY 4 phase III and IV; Switch and Data locations also excluded(2) LTOP = Long-term operating plan: Assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing(3) Investment (Gross PP&E) includes real estate acquisition costs, capitalized leases and all ongoing capex associated with same IBXs since opening(4) Cash generation on gross investment calculated as Q3‟10 Cash Gross Profit annualized divided by Gross PP&E as of Q3 balance sheet 16
  • Proven IBX Development Profile NY4 annualized financial performance PHASED INVESTMENT $280M investment over 4 ($M) 53% phases; phase 4 currently under construction 41% 74 CASH FLOW BREAK- EVEN 55 Cash-flow break-even 26% 47 within 3 quarters and at ~15% utilization 33 26 MARGIN EXPANSION 12 Q3 Annualized Revenues of 0% ~$74M Q3 Annualized Cash Gross Profit of $55M or 74% Q3 07 Q308 Q309 Q310 (5) (1) Revenue Cash Gross Profit Utilization(1) Utilization calculation assumes full cabinet capacity for Phases I, II, III and IV from opening 17
  • Fixed and Predictable Cost Model PREDOMINANTLY Consumables FIXED COST and Other STRUCTURE 12% Maintenance Labor REASONABLY 4% 33% PREDICTABLE Outside VARIABLE COSTSCash ServicesOperating 6% Power and variableCosts (Q310) compensation POWER COST Power MANAGEMENT: 24% Rent Drive towards energy efficiency 19% Deregulated energy market costs proactively managed Risk managed via customer contract 16% 15% LOW ONGOING 14% 14% 14% 14% 15% MAINTENANCE OPEXPower Cost 13% 13% AND CAPEXas a % of 13% 12% REQUIREMENTSRevenues Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 18
  • Low Ongoing CapEx Requirements 110 <100 ONGOING CAPEX (INCLUDING($M) INSTALLATION AND < MAINTENANCE) 68 63 EXPECTED TO TREND DOWN TO 5% OF 44Ongoing REVENUES OVER TIME 31CapEx Trend 20 ASSET USEFUL LIFE EXPECTED TO BE 2005 2006 2007 2008 2009 2010E 2011E GREATER THAN 20 YEARS WITH LOW REINVESTMENT RATE REQUIRED Maintenance & SPOF 27% Installation MAINTENANCE PORTION 37% OF ONGOING CAPEX2010E CONTINUES TOOngoing CapEx DECREASE AS ABreakdown PERCENTAGE OF REVENUES (PREDOMINANTLY S&D Ongoing SINGLE POINTS OF 18% FAILURE – SPOF) IT New Product 9% Innovation 9% 19
  • Improving Discretionary Cash Flow Discretionary free cash flow(1) 400 2008 – 2011E DFCF >$1.1B ($M) 292 200 250 68% 72% 2011E DFCF >25% OF PROJECTED 49% 68% 43% 59% REVENUES 46% 76 48 44 DFCF PROVIDES CASH FLOW TO RE- 2005 2006 2007 2008 2009 2010E (2) 2011E (3) INVEST IN GROWTH OF THE BUSINESS Discretionary Free Cash Flow Discretionary Free Cash Flow as a % of Adjusted EBITDA FEDERAL NOLs OF DFCF Per Share(4) ~$300M, PLUS $2.00 $1.54 $2.34 $4.81 $7.37 $5.35 $8.56 SUBSTANTIAL STATE AND FOREIGN TAX LOSS BALANCES(1) Discretionary Free Cash Flow is defined as “Cash Generated from Operating Activities” less “Ongoing CapEx”(2) 2010E includes cash interest from HY debt financing and increased investment in ongoing CapEx(3) 2011E based on 2011 guidance for Adjusted EBITDA less estimated cash interest, working capital, other costs and ongoing CapEx(4) Based on Weighted Average Shares Outstanding of: 24.0M in 2005; 28.8M in 2006; 32.6M in 2007; 41.6M in 2008; 39.7M in 2009; and 46.7M in 2010E and 2011E 20
  • Favorable Comparison With REITs Q3 2010 annualized($M) Cash Flow Cash Flow Per Share Net Leverage(3) 5.0x 586 $12.54 528 3.5x 440 $9.42 367 2.4x $5.85 151 121 $3.24 $1.83 $1.48 (1) (2) (1) (4) (2) (4) (3)Adjusted EBITDA FFO Adj. EBITDA /Share FFO /Share Net Leverage EQIX DLR DFT EQIX DLR DFT EQIX DLR DFT • Strong cash flow metrics • Meaningful value creation for • Substantial capacity to scale regardless of methodology investor – expect adjusted with leverage - benefit EBITDA and FFO to scale accreting to equity holders • Favorable profile relative to with growth REITs in data center space • DFCF generation augments ability to scale(1) Adjusted EBITDA for EQIX is defined as income from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges and acquisition costs. Adjusted EBITDA for DLR as reported in Q3 2010 press release. Adjusted EBITDA for DFT calculated as “Operating Income” before “Depreciation and Amortization.”(2) Funds from Operations (FFO) for EQIX is defined as income or loss before income taxes plus depreciation, amortization, accretion, stock-based compensation, restructuring charges and acquisition costs and further adjustments for other unusual items, such as gains on asset sales, other than temporary impairment losses or recoveries on investments and losses on debt extinguishment and interest rate swaps, net. FFO for DLR and DFT are as reported in the respective Q3 2010 press releases(3) Net Leverage = Total Debt Less Cash / Annualized Adjusted EBITDA for Q3 2010(4) Per share data for EQIX calculated from weighted average diluted shares as of Q3 2010 of 46.7M diluted shares. Per share data for DLR and DFT are as reported for “Weighted averaged common stock and units outstanding – diluted” and “Total Common Shares and Units – diluted” in the Q3 2010 press releases, respectively.Sources: EQIX – Internal calculations; DLR – Q3 2010 Press Release dated November 4, 2010; DFT - Q3 2010 Press Release dated November 3, 2010 21
  • Flexible Capital Structure ($M) Cash, Cash Equivalents & Investments $ 715 Total Debt $ 2,132 STRONG BALANCE SHEET – CASH & Total Stockholders Equity 1,854 CAPITALIZATION(1)Capitalization Total Capitalization $ 3,986 FAVORABLETable (Q310) LIQUIDITY PROFILE Total Debt / Total Capitalization 53% DEBT Net Debt / LQA Adjusted EBITDA 2.4x RESTRUCTURING TO BE CONSIDERED: Ashburn mortgage repayment (LTV 12% High Yield Debt and inflexible debt ($M) 998 structure) Convertible Debt 2012 2.5% Convertible Mortgage, Bank Facilities & Capital Leases cash settlement (future dilution)Debt Maturity 451 408 304 Other convertible debtProfile (Q310) 25 52 58 45 35(1) Blended cash interest rate of 5.8% 22
  • Growth Enabling Debt Capacity Net leverage(1) & debt capacity MANAGE LEVERAGE 1,911 TO MAXIMIZE SHAREHOLDER 3.6x VALUE WHILE DRIVING DOWN COST OF CAPITAL. CONSIDER: 2.6x 2.1x Asset purchases where appropriate($Millions) 947 951 Look to extend term of customer contracts 675 1.5x Continue to educate credit 550 542 rating agencies 481 409 DEBT CAPACITY CAN FUND FUTURE (2) GROWTH 2009 2010E 2011E LTOP Adjusted EBITDA MAINTAIN HIGHLY Incremental Debt Capacity @ 3.5x Net Debt to Adjusted EBITDA FLEXIBLE CAPITAL Current Net Debt / Projected Adjusted EBITDA STRUCTURE (1) Net Leverage = Total Debt Less Cash / Annualized Adjusted EBITDA for Q3 2010; LTOP; 2011E and LTOP Net Debt as at Q3 2010 (2) LTOP = Long-term operating plan: Assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing 23
  • Emphasis on Creating ShareholderValue ORGANIC EXPANSION IBX footprint growth Organic Product innovation Expansion / Product Innovation M&A New markets expansion Strategic fit and complementary to existing portfolio Capital DEBT REPAYMENT Shareholder Allocation M&A Repatriation Debt repayment Choices Improve flexibility and lower cost SHAREHOLDER REPATRIATION Share repurchase (within terms Debt of HY indenture) Repayment Drive EPS growth 24
  • Platform Jarrett Appleby, CMO Presented on November 11, 2010
  • Global Digital Economy Entering the Zettabyte Era 2020 GARTNER FORECAST: HYPERDIGITIZATION OF THE ECONOMY 2009 WILL REACH ~25% 0.8 ZB OF GDP BY 2020 35 ZB* TB = Terabyte (1000 GB) PB = Petabyte (1000 TB) EB = Exabyte (1000 PB) ZB = Zettabyte (1000 EB) The Digital Universe will grow 44x by 2020 IDCSources: IDC, May 2010; The Digital Universe Decade – Are You Ready?,*Gartner, Aug 2010: Hyperdigitization Creates Major Opportunity for IT Service Providers 26
  • The Network Effect 70 Mobile GLOBAL IP 60 Managed IP traffic increases 4x 50 Internet MOBILE DATA traffic increases 39x EB/Month 40 BUSINESS IP 30 traffic grows 21% ETHERNET SERVICES 20 market will nearly double to $41B by 10 2014 Ovum 0 2009 2010 2011 2012 2013 2014Massive increase in network traffic reflects customer needs to use, share and distribute content, applications and data.Sources: Cisco VNI June 2010; Ovum, Sep 2010: Ethernet service volumes, revenue history and forecast, 2008-2015 27
  • The Mobile Data EffectImpact of 3G and 4G/LTE traffic 25 200 3G 180 4G/LTE 20 2G 160 3G 140 2G Mbps in Millions Mbps in Millions 15 120 100 10 80 60 5 40 20 0 0 Significant growth in 3G mobile data. Immense growth in 4G/LTE network traffic.Source: Ovum, March 2010: How will mobile backhaul evolve with move to higher radio access speeds? 28
  • The Application Effect BUSINESS CRITICALITY Best Effort Priority Real-Time Proximity >100ms <100ms < 50ms < 5ms >2000km < 2000km < 500km < 50km LATENCY SENSITIVITY Performance matters for end user experience 29
  • Supply and Demand Imbalance 16% 15% DESPITE NEW 14% CONSTRUCTION, 13% CAPACITY HAS BECOME MORE CONSTRAINED IN 2010 9% 7.5% “Through 2013, 7% data center Power, 6.5% Cooling and Space problems will 4.5% Demand Delta increase rapidly as 3.5% a result of new Supply Delta high-density infrastructure deployments”. 2009 2010 2011 2012 2013 Gartner March 2010Source: Tier 1 Research: Multi-Tenant DataCenter Supply September 2010; Telegeography Colocation Survey Report October 2010 30
  • Equinix Market Opportunity Gartner Retail Colocation Market(1) Tier 1 Research Internet Infrastructure Market(2) 9000 8% North America CAGR 8000 EMEA 60000 Rest of Internet ($32B) Infrastructure Market AP 7000 Interconnection ($0.6B) 50000Revenue $M Revenue $M 6000 Colocation ($18B) 40000 5000 4000 30000 3000 20000 2000 19% 10000 CAGR 1000 0 0 2009 2010 2011 2012 2008 2009 2010 2011 2012 Equinix estimates its target market to be growing 12-14% reaching $19B in 2013 Sources: Gartner, Colocation Market Numbers October 2010 (unpublished). Tier 1 Research: Internet Infrastructure Market Overview Spring 2010 (1) Asia-Pacific market only includes China, Singapore and Australia; (2) Rest of Infrastructure includes CDN, Cloud and Hosting 31
  • Global Competitive Capabilities 90 9 95 7 27 24 30 15 10 28 +6m +1m +16m +1.9m +1.4m +1.6m +1.9m ~530k ~1.8m ~1.8m 3,700+ ~1,400 ~350 26 ~1,100 ~3,500 ~1,100 ~760 ~600 ~2,500 35 Cities # of Data Centers Capacity (sf) # of customers 11 Cities 11 Countries 11 Countries 9 Countries 13 Cities 12 Cities 13 Cities 12 Cities 8 Countries 7 Countries 7 Countries 9 Cities4 Continents 4 Continents 4 Continents 8 Cities 4 Continents 4 Countries 7 Cities 2 Continents 1 Continent 1 Continent 1 Continent 1 Continent 1 Continent 1 Country 1 Country 1 Country 2 Cities Leading global footprint in 35 markets and capacity with over 90 data centers located in strategic network, financial and business hubs around the world Source: Company reports 32
  • Platform EquinixSM 35 markets ECOSYSTEMS 11 countries Collaborate to accelerate 6M+ square feet 3,700 customers growth 600+ carriers strategic ecosystems GLOBAL REACH Reach your customers around the world DATA CENTERS Ample room for growth in reliable, network-rich sites Unique combination of data center capacity,global footprint, interconnections, and vertical ecosystems 33
  • Equinix IBX® Data CentersThe foundation of Platform Equinixsm IBX Capacity IBX IBX IMPACT Reliability –VIRTUAL CAMPUS Capacity to secure growth Reliability to protect customer experience Bandwidth choice for capacity and IBX performanceBandwidth Security for complete integrity of critical data IBX Security 34
  • Reach Customers Around the World MARKET CHALLENGE Expanding addressable market; ensuring consistent performance for global customers EQUINIX ADVANTAGE Asia Pacific 5 metros 250+ available networks North AmericaLEGEND: 22 metros EQUINIX METRO 450+ available networks Europe 8 Metros 175+ available networks 35
  • Deploy for Performance and SavingsMulti-Tiered Architecture Server Farms Best Effort Apps MARKET CHALLENGE Achieving high performance while optimizing investment Network Hubs IMPACT Priority Apps Network performance Reduced network cost 25% average cost Application Nodes reduction Reduced deployment risk Proximity Apps Application performance Proximity for real-time Real-Time Apps apps 15% faster page load times 80% less downtime End Users 36
  • IBXInternational Business ExchangeAccess a wide choiceof service providers,partners, andcustomers within anyone of Equinix‟s 90data centers Unique ecosystems in each IBX: replicating 35x in each market 37
  • Customer Segmentation ChangesWorldwide revenue base (Q2 2010) 100% 90% 25% 21% 80% 70% 16% 21% % of Revenue 60% Network 50% Content/Digital Media 22% 22% Financial Services 40% Cloud/IT Services 30% Enterprise/Reseller 25% 20% 37% 10% 11% 0% Old New 38
  • Global Vertical Segment TrendingMonthly recurring revenues by vertical SDXC close Network Financial Services Enterprise Content & Digital Media Cloud & IT Services Consistent, positive growth across all five verticalsCAGR is calculated based on September 2008, September 2009, and September 2010 MRR values 39
  • Business ObjectivesMulti-year business plan by vertical customer 6,000 Cloud & IT Services Content & Digital Media 5,000 Enterprise 1,000+ VERTICAL GROWTH Financial Services is based on winning Customers 4,000 Network & Mobility 600+ new customers and developing deeper, 897 1,200+ more global 3,000 partnerships with 453 existing accounts 2,000 965 1,500+ 369 241 662 1,000 451 316 1,000+ 790 461 - Long-Term Sep-08 Sep-10 Business Plan 1,950 customers 3,700 customers 5,300+ customers $578M Rev $1.2B Rev $2B+ RevCustomer counts are based on September 2008 and 2010. CAGR is based on year-end revenue values 40
  • Platform EquinixEcosystems Networks Financial Exchanges Content & Digital Media Cloud & IT Services Multi-National Enterprises Access to industry communities & partners 41
  • Measuring the Platform EffectInterconnection business trends 90,000 7000 GLOBAL CROSS- CONNECT AND 80,000 Global CC 6000 INTERNET EXCHANGE 70,000 GROWTH Global IX Capacity 5000 26% quarterly cross- IX Capacity (Gbps) Cross-connects 60,000 connect growth 50,000 4000 39% IX capacity 40,000 3000 growth 30,000 1 TB of traffic 2000 20,000 >6 TB capacity 1000 10,000 - 0 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Includes Switch and Data Metrics 42
  • Equinix MarketplaceConnecting buyers & sellers Enhances ease of doing business: Provides services transparency 43
  • Analyst Day Pete Ferris, CSO Presented on November 11, 2010
  • CSO Mission 1 Build a strong team to sell and serve customers globally IMPACT DRIVE REVENUE: large addressable 2 Add salespeople around the world market and differentiated model GLOBAL Hire with a focus on vertical market CUSTOMERS: 3 targets leverage benefits of Platform Equinix CUSTOMER 4 Achieve continuity and consistency SATISFACTION: loyalty through a across three regions seamless experience 5 Execute aggressively to a $2B+ plan 45
  • The Value of Platform Equinix All Equinix Customers Deployed in 18% of customers Multiple Metros 71% of revenue Deployed in 10% of customers Multiple Countries 54% of revenue Deployed in 8% of customers Multiple Regions 51% of revenue Multi-national customers generate more revenue and are more likely to renew Percentages are as of September 30, 2010 46
  • The Value of Ecosystems Interconnection Revenue By Region $50,000 $45,000 $40,000 $35,000 IMPACT $30,000 INTERCONNECTION: $25,000 15% of Global $20,000 revenue and growing $15,000 LOWER CHURN: $10,000 Customers with $5,000 higher interconnection are $- more loyal (000s) 2009 Q4 2010 Q1 2010 Q2 2010 Q3 North America Asia-Pacific EuropeSDXC consolidated as of 2010 Q2 (May) 47
  • The Broadest and Deepest Coverage in the IndustryAccelerate Through Platform Equinix ASIA-PACIFIC NORTH AMERICA EUROPE 5 Metros 22 Metros 8 Metros 250+ Networks 450+ Networks 175+ Networks In the Digital Economy, this is the territory of every global business LEGEND:IMPACT EQUINIX METRO In the Digital Economy, time and distance are measured by the speed of light … milliseconds matter Customers want to deploy in 10 markets without needing to use 10 vendors 48
  • Business Applications:Latency Matters Latency Typical Compuware ValidatesLatency Class Platform Equinix Tolerance Applications/Services Performance Financial applicationsProximity Primary/transactional storage MORE PREDICTABILITY < 5ms Real-time medical imagingCritical vs. Non-Critical < 50km radius Real-time analytics LESS VARIABILITY of High performance computing network performance Virtual desktop Network storage 27% MORE DIRECTReal-time < 50ms Transactional applications CONNECTIONSCentral vs. Distributed < 500km radius Private cloud (fewer network hops) Public cloud 17% FASTER global Enterprise applicationsPriority performance < 100ms Network backupsCore vs. Edge < 2000km radius Collaboration VoIPBest Effort Low-priority Web/HTTPPerformance vs. Best >100ms Email (Non-Cloud) >2000km radius Batch data archivalEffort Grid computing 49
  • Critical/Real-time ApplicationsDrive Distributed ArchitecturePerformance Requires Proximity to Major Population Centers IMPACTLEGEND Reliability and Coverage Real-time Workload < 50ms Satisfied End Users Priority Workload < 100ms Secure Revenue Streams 50
  • Bechtel Leverages Platform EquinixReduce Cost, Improve Performance for Employees IMPACT COST REDUCTION 25X for storage; 10X for network CONSOLIDATION 30+ private data centers to 3 EQIX sites PRIVATE CLOUD deployment eliminated software on individual servers “We decided we better bring the data to the network, rather than bring the network to the data.” Geir Ramleth, CIO of Bechtel 51
  • Facebook Leverages Platform EquinixFacebook and Zynga Interconnect to “Sell Pigs Faster” IMPACT PERFORMANCE faster page download due to global deployment INTERCONNECTIONS enable developers to cost-effectively deliver applications on Facebook NETWORK DENSITY AND CHOICE deliver content to consumers fast and inexpensively 52
  • Regional Overview Charles Meyers, President North America Presented on November 11, 2010
  • North America Performance Strong improvements across key performance indicators Cabs Billing & Revenues & Adjusted Weighted Avg. MRR per Interconnection (2) EBITDA (1) Cab (2)($M) Revenues Adjusted EBITDA Cabinets Billing Wt. Avg. MRR / Cab Cross-connects 52,723 50,764 $215.3 $2,004 $2,023 $2,048 $ 2,061 $191.6 $1,910 33,325 33,883 $144.5 $148.6$136.3 25,888 26,673 24,688 $97.9 $89.5 23,231 23,581 23,594 $75.5 $73.8 $68.0 Q309 Q409 Q110 Q210 Q310 Q309 Q409 Q110 Q210 Q310 Q309 Q409 Q110 Q210 Q310 1)Q2 financial results include Switch & Data Facilities Company, Inc. beginning May 1, 2010 2)Note Switch & Data Facilities Company, Inc. cabinet count and cross-connect count methodology not completely consistent with EQIX 55
  • StrengthsMarket Leader in North AmericaInterconnection • Interconnection leader in North America – 52,723 cross connects – Equinix organic growing at 20%; added 23,198 from SDXC acq. • Ashburn IBX is the most interconnected site in North America generating over $100M of adjusted EBITDA Q310 annualized • Interconnection revenue greater than all major competitors combined Ecosystems • Highest network density – >450 networks – >50 Points of Interconnection with major NA Mobile networks • Leading FX community in North America • Home to key magnet customers in Cloud Computing, SaaS, Social Networking and other high-value segments Infrastructure • 22 metros across the US & Canada • 57 IBXs with market leading reliability • Over $2B invested in top quality assets Growth • Investment in proven sales engine • Targeted capital outlays to maintain strategic inventory levels 56
  • Footprint Fueling GrowthUnmatched reach and strategic capacity in keymetros are driving success across target verticals 57 SITES 2,218 CUSTOMERS 22 METROS 46,500 SELLABLE CABS >90% OF THE US POPULATION WITHIN 10 MS LEGEND: EQUINIX METRO 57
  • North American Competitive SegmentationEquinix is increasing distance from competitionEquinix Advantage: NETWORK-NEUTRAL COLOCATION• Low latency Access to multiple• Network reach networks• Global footprint Deep technical MANAGED services SERVICES• Superior reliability• Ecosystem access Outsourced solutions for hosting/utility IN-SOURCING computing Commodity server farms at local power sources REITS Wholesale large tenants with limited services 58
  • IBXs are Rich Interconnected Communities 59
  • Large and Diverse Customer Base Primary Buying Criteria Key Sub Low Global Network Superior Ecosystem Customers % ofVertical Segments Latency Reach Density Reliability Access End of Q3 Revenue Carrier, Mobile,Network ISP, Carrier Svcs √ √ √ 501 30% Brokerage, Trading, √Financial Clearing, √ √ √ √ 382 17% Extranets, Market Data SaaS, MSPs, SIsCloud/IT √ √ √ √ √ 505 22% CDN, Gaming,Content Digital Media, √ √ √ √ √ 328 22% Messaging Business and ProfessionalEnterprise Services, √ √ √ 502 9% Healthcare, Government Vertical focus targets “value aware” buyers 60
  • Ecosystem Focus Delivers Price Stability Cross-connect density and MRR/Cab trend up over time 2,500 25 2,000 500 20 1,500 15 1,000 550+ 10 500 5 650+ 0 0 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 500+ Wt Ave MRR/Cab Cross-connects/Customer 61
  • IBX Lifecycle Typical site lifestyle (Illustrative) 62
  • IBX Lifecycle – Example Managed to deliver a compelling ROI IMPACT EQUINIX DATA CENTERS: generate outstanding returns ADJUSTED EBITDA: 34% higher than targeted CAPEX approvals CASH FLOW BY SITE: accelerates dramatically with utilization NY4 – still in “Ramp” phaseBased on an analysis of data centers from 2004 to 2009 based on original investment analysis completed in Q12010 63
  • Contract Renewal Strategy Focused onLong-Term ValueOptimization of Large Footprint customers–600 Cabs in SV Metro• As we experienced in Q3, renewals of large footprint customers MRR/KVA represent a key decision point up >100%• “Magnet Customers” – Seek creative approaches to lock in value – Willing to trade price for term to maximize lifetime customer return – Aggressive but still maintaining a healthy premium versus wholesale competitors• Large non-Magnet Customers – Don‟t seek to compete on price for “server farm applications” – Seek to bifurcate customer applications and target “value driven” footprint – Aggressively, re-sell strategic Renewal decisions are made to capacity for superior long-term maximize long-term value return 64
  • Switch & Data Acquisition on TrackPositive Bookings MomentumSDXC Strategic RationaleNEW MARKETS: Presence in Top 10North American internet hubs e.g.Atlanta, Denver, Miami, Seattle &TorontoIBX CAPACITY: Incremental capacity inconstrained overlap markets e.g.Dallas, New York, and Silicon ValleyINTERCONNECTION: Increased networkdensity in key North American metrosSYNERGIES: Annual run rate operatingsynergies estimated at approximately$20MFINANCIAL BENEFITS: Potential tax SDXC on track to deliver against(NOLs) and interest (re-financing) strategic & financial expectationsefficiencies 65
  • Increasing Sales ProductivityEQIX Organic (e) Increasingly effective sales engine warrants increased investment for 2011 66
  • Compelling Growth Opportunity North America revenues, adjusted FUNDAMENTAL EBITDA & adjusted EBITDA margins STRENGTH CREATES A COMPELLING GROWTH OPPORTUNITY Currently a $861 million revenue run rate business with 45% adjusted EBITDA margins Opportunity to get to >$600 million in adjusted EBITDA with existing and announced (fully funded) IBX expansions Further room to grow given our visibility into customer demand* Note: Current footprint + announced expansions at full capacity (~95%) at current pricing (fully funded) 67
  • Looking Forward Disciplined Execution to Drive GrowthMarket Trends • Continued hyper-digitalization of global economy • Rapid network growth – increasing value of deep interconnection – Global – Mobile • Accelerating cloud and SaaS adoptionVertical Focus • Clear focus on highly differentiated network neutral colo – Network density – Low latency – Global reach – Superior reliability – Unmatched Ecosystem access • Targeting “value aware” segments and applications – Improve price yield – Increase already high customer retention rates Growth • Investment in proven sales engine • Targeted capital outlays to maintain strategic inventory levels 68
  • Regional Overview Eric Schwartz, President Europe Presented on November 11, 2010
  • Europe Financial OverviewFinancial Performance ($M) 32% EUROPE ENTRY YoY $410 STRATEGY Growth(2) Acquire a solid platform $291 Integrate into the 43% global platform and invest in capacity $228 40% $178 36% $176 29% $116 $82 $51 2008 2009 Q3 2010 LTOP(1) (Annualized) Revenue Adjusted EBITDA Adjusted EBITDA Margin(1) Current footprint & announced expansions at full capacity (~95%) at current pricing.(2) CAGR calculated on constant currency basis. CONFIDENTIAL 70
  • Europe Customer BaseBy Revenue 100% 90% 19% 80% 13% Network 70% 60% Content & Digital Media 29% 50% Financial Services 40% 30% Cloud & IT Services 27% 20% Enterprise 10% 12% 0% Q3 2010 (Sept) CONFIDENTIAL 71
  • European Market Coverage TOP GLOBAL AND18% of EU 14% of EU 14% of EU 4% of EU REGIONAL FINANCIAL GDP GDP GDP GDP MARKETS Electronic trading 50% of EU GDP Banking Payment processing TOP INTERNET/ MARKETS TELECOMMUNICATIONS MARKETSFrankfurt London Paris Amsterdam Zurich PRIMARY IT MARKETSMunich Geneva FOR EUROPEDusseldorf PREFERRED LOCATIONS FOR MULTINATIONALS CONFIDENTIAL 72
  • Regional Competitive Environment - EuropeEurope Market Segmentation Network Neutral Access to multiple COMPETITIVE Colocation • Telecity networks POSITION • Interxion • Telehouse Trusted provider with deep resources Superior reliability, service, and Outsourced execution Managed • IBM, HP, T-Systems solutions for hosting Enabler of customers‟ Services • Rackspace, Savvis / utility computing businesses through ecosystems • BT, Telefonica and joint marketing Current/ Potential Extend North America & Asia Customers customer relationships In-Sourcing • Google Commodity • Yahoo server farms at local power sources Real • Digital Realty Trust Wholesale offers for Estate • Sentrum large tenants with • E-Shelter limited services CONFIDENTIAL 73
  • Extending the Equinix Platform to EuropeSignificant step up in cab capacity (000s) OPENED NEW CAPACITY In every market over past CABE Booked 12 months 28 CABE Capacity 2011 EXPANSION FINANCIAL Announced for Paris CLOUD SERVICE PROVIDERS 23 20 PROVIDERS 80%+ CAPACITY INCREASE Since acquisition 20 18 __________________ 17 CONTENT PROVIDERS EXCHANGE PLATFORMS Equinix Exchange Paris, Zurich, Geneva 81% 76% 72% Partnerships EXCHANGES AMS-IX, LINX, DECIX, ECIX, NL- ENTERPRISE IX, ALPIX, Swiss-IX Equinix Carrier Ethernet Exchange London, Paris, Frankfurt, Amsterdam 2008 2009 2010 Q3 (Zurich planned 2011) (Annualized) CONFIDENTIAL 74
  • Future Expansion Europe 2010 AdditionalMarket Expansion Phases POWER OF PHASEDAmsterdam AM2 – Phase 1 1 EXPANSIONS*Dusseldorf DU2 - Incremental CAPEX 10%+Frankfurt FR2 – Phase 2C 4 lower than Phase 1 Cash Gross Margin on FR4 – Phase 1 1 Phase 2 and beyond is 10+ margin points higher than Phase 1 due to rent and staffingGeneva GV2 – Phase 1 1 efficienciesLondon LD5 – Phase 1 3Munich MU3 – Phase 1 1Paris PA3 – Phase 1 1 *Based on estimates for individual projects. ActualZurich ZH4 - differences vary by project and execution. CONFIDENTIAL 75
  • Evolving Strategy – Europe GLOBAL STRATEGY EUROPE FOCUS • Global footprint • Local focus • Superior technical performance – • Support customer ecosystems with design and operations joint go-to-market efforts • Interconnection oriented customers • Deep in-house technical resources – financial and network • Improving awareness of green • Established member of the investments that we already make technical community – Equinix Exchange in Paris and Switzerland • Certified operations and processes and growing deployment of Equinix – ISO 9001, ISO 18001, and ISO Carrier Ethernet Exchange 27001 (UK, Germany, Netherlands) • Recognized thought leadership in the industry Deliver unique value to customers with Equinix global scale CONFIDENTIAL 76
  • Regional Overview Samuel Lee, President Asia-Pacific Presented on November 11, 2010
  • Asia-Pacific Performance High Growth Market with Improving Margins A-P annual results Colo, interconnection & Cabs billing & weighted managed services revenue avg. MRR per cab Revenue Adjusted EBITDA Adj EBITDA % Non-recurring Managed Svrc Rev 350 60% Interconnection Rev Colo Rev 300 46% 47% 48% 50% CAGR 200 37% 250 37% 180 169 40% 160 29%US$M 200 30% 140 122 US$M 150 310 120 96 75% 100 20% 100 80 65 74% 169 149 60 67% 50 96 122 10% 60% 65 16 30 54 77 40 8% 9% 9% 10% - 0% 20 19% 17% 12% 10% - 2007 2008 2009 Q310 LTOP (1) 2007 2008 2009 Q310 Annualized Annualized Q310 annualized revenue is Q310 annualized Interconnection Approx. 8,000 cabinets billed $169M. YoY 39% growth revenue YoY growth ~55% at end of Q310, 18% growth constant currency constant currency YoY vs. Q309 Adjusted EBITDA margin YoY Inbound bookings is ~20% of 6% pt growth constant Q310 Annualized with YoY Wt. Ave. MRR per Cab $1,595 currency growth of ~80% for Q310, 11% growth YoY vs. Q309 Revenue is projected to be Outbound bookings is ~2% but ~16% of the $2B target YoY growth of ~220% IBX utilization at 76% at end revenue in 3 – 5 yrs of Q310 (1): Current footprint + announced expansions at full capacity (~95%) at current pricing 79
  • Equinix Asia-Pacific Customer BaseSignificant growth in every vertical segment Content / Financial Cloud / IT Network Digital Enterprise Services Services Media ~760 CUSTOMERS AS OF Q3 2010 ~80% OF A-P REVENUE ARE FROM MULTI NATIONAL CORPORATIONS 30% OF CUSTOMERS ARE DEPLOYED INUS$M MORE THAN 1 REGIONVerticals Q310 % YoY growth ANNUALIZEDCloud/IT $42 27% 36%Content/Digital Media $28 18% 39%Enterprise $15 10% 19%Financial Services $33 21% 39%Network $40 25% 36%Total Verticals $158 100% 35% 80
  • Asia-Pacific Internet & Mobile Landscape • China has outgrown the US in internet and mobile users; tops Asia and US in broadband subscribers • India surpassing US in mobile users as well • S. Korea the most wired country surpassing all of Asia and the US in broadband penetrationSource: Internet Statistics Strategy Analytics and Cisco Visual Networking Index 81
  • Strength in Asia-Pacific A-P market 20% of world‟s GDP and projected to grow to 33% by 2015 Key Drivers for Demand• The fastest growing economy in the world• Global companies are targeting A-P for growth• Asia-Pacific based mega size enterprises targeting global expansion ONLY GLOBAL• Government push to make A-P into leading digital and networks market NETWORK NEUTRAL• Local data security regulations COLOCATION PROVIDER WITH THE NETWORK-NEUTRAL HIGHEST NETWORK COLOCATION DENSITY Access to multiple MANAGED ACCESS TO 250+ networks SERVICES NETWORKS IN ASIA- @ Tokyo, Global Switch, i-Advantage Outsourced 1-Net PACIFIC* solutions for Fujitsu TELCO-BASED hosting/utility IBM TRACK RECORD OF DATA CENTER computing HIGH AVAILABILITY: NTT Communications Connectively SIX 9s PCCW bundled hosting SingTel and colocation Telstra solutions REITS Wholesale large JDDC tenants with limited services * Network & Voice 82
  • Emerging Regional Powerhouse Significant players in their respective vertical segments Manufacturing • Tata Motors/Steel – Market Cap (MCAP) $28.6B • Samsung (MCAP $84.4B) • LG (MCAP $11.9B) Telecom • China Mobile – MCAP $211.4B • Tata Communications – MCAP $2.0B • China Telecom – MCAP $39.1B • HuaweiBanking & Finance • ICBC – MCAP $244.8B • China Construction Bank – MCAP $163.2B • Temasek Holdings Shipping & Logistics • Hutchison Whampoa – MCAP $34.5B • COSCO (MCAP $4.4B) Internet Portal • Tencent – MCAP $43.8B • Alibaba – MCAP $9.7BSource: Yahoo Finance, Investor Desk, MCAP as of Oct 2010 83
  • Asia-Pacific Markets Today One region, four countries, five cities Equinix A-P • Major landing port for sub-sea cables Platform • Key Financial Hub • Heavy demand from multi national corporations (MNCs) Singapore • Largest business in Equinix A-P with 2 IBXs • Highest network density with nearly 130 networks* (26) • One of the Top 3 interconnect rich IBXs Tokyo, Japan • One of the Top 3 colocation markets • 2 IBXs; TY2 has the best IP connectivity with the presence of 3 Top IP Exchanges (12) • Largest share of the Equinix A-P peering platformHong Kong, China • Highest density of international financial institutions (19) • Market leader in financial ecosystems Shanghai, China • Partnership arrangement to enter China‟s largest commercial & financial center (46) • Strong demand from Financial & Enterprise customersSydney, Australia • 2 IBXs; the most network dense datacenter (42) • Largest customer base in A-P with good mix of local & MNCs(Internet traffic global ranking) * Network & Voice 84
  • Asia-Pacific Case Study VALUE PROPOSITION Equinix‟s financial ecosystem Hong Kong, Singapore, Tokyo allows IPC to directly connect to source of liquidity, market data and execution venues Other Markets: Our high network density enables IPC to build optimal Frankfurt, Toronto, New York, Chicago, London low latency network connecting to their clients Global MSA and SLA allows IPC to develop a consistent Who is IPC? service • #1 position globally in the market on voice Capacity for expansion on demand turret and dealerboard solutions • Developed new technologies to host turret equipment remotely in data centers and also to facilitate business continuity plans 85
  • IBX Capacity Significant step up in capacity and capital investment CABINET EQUIVALENT CAPACITY YOY 18% INCREASE TOTAL CAPITAL INVESTMENT FOR EXPANSION PROJECTS APPROVED IN 2010 $250M CAPITAL INVESTMENT FOR EXPANSION PROJECTS COMMITTED IN 2010 $71M 2010 EXPANSIONS: HK1- VI, SG2-II, TY2-II 2011 EXPANSIONS ANNOUNCED FOR CABS (JUST IN TIME): HK2, SG2-III, SY3, TY3 LTOP existing + expansions: Rev ~$310M CGM ~$210M Adjusted EBITDA ~$149M2010 (e) indicates projections by end of Q4 2010 86
  • Evolving Strategy Past Today • We Make Asia Easy • We make Global Business – Targeting inbound Easy – Platform Equinix opportunities – Address both inbound & – Bilingual language support outbound opportunities – New market development & • Higher quality data center Just-in-Time service – World class design & • Expanding Go-to-Market construction quality Strategy – Operational reliability & SLA – Vertically aligned organization to deepen • Network Density existing ecosystems and – 250+ services provides seed new ones networks in Asia-Pacific – Expand from local country – Equinix Exchange / Peering focus to Platform Equinix platform 87
  • PlatformJohn Knuff, General Manager, Financial Services Presented on November 11, 2010
  • Performance Overview Revenue • The financial vertical represents 22% ofContribution Equinix annual sales globally • ~$252m annualized at end of 3Q10 2 Sub- • Corporate data center facilities 556 CUSTOMERS WITH segments • Electronic trading 800 INFRASTRUCTURE DEPLOYMENTS CUSTOMER COUNT REPRESENTS LESS2009 Growth • 2009 growth was 46% YoY THAN 2% OF TARGET • $142m 2008 growing to $208m YE2009 ADDRESSABLE MARKET (TAM)2010 Growth • 3Q10 bookings increased 38% over 3Q09 89
  • Equinix Presence in Key Financial MarketsOur global footprint speaks volumes ONLY COLOCATION PROVIDER IN ALL OF THE TOP 15 GLOBAL FINANCIAL CENTERS THESE ARE THE MOST EXPENSIVE MARKETS IN THE WORLD IN WHICH TO BUILD FACILITIES OUR GROWING BASE OF EXCHANGES AND TRADING PLATFORMS APPRECIATE OUR LOCAL DIALOGUE WITH THEIR MULTINATIONAL CLIENT BASE 90
  • Electronic TradingEcosystemEQUINIX DATA CENTERS HAVE BECOME CROSS-CONNECTS ALLOW 100MB,THE CONNECTION FABRIC FOR 1GB AND 10GB INTERCONNECTIONELECTRONIC TRADING COMMUNITIES. AT A FIXED MONTHLY RATE. (Megabits Per Second mb or mbps and Gigabits Per Second gb or gbps) 91
  • Financial Ecosystem Has Over 550 ParticipantsWith Over 800 Metro Deployments360+ 55+ 130+Asset managers & Exchanges & trading Technology & servicebrokerages platforms providersIncludes 8 of the top 11 exchanges on the FTSE/MV index 92
  • Customers Size Their TradingInfrastructure For Peak Times MESSAGE PER “Flash Crash” Positive Economic Data SECOND (MPS) May 6, 2010 August 31, 2010 2.8 million messages per second 3.7 million messages per second GROWTH IS ACCELERATING FIRMS (AND EXCHANGES) THAT CAN‟T KEEP UP WITH PEAK VOLUMES IMMEDIATELY LOSE BUSINESS Data measured at Equinix NY4 by Exegy, Inc. 93
  • Financial Trading Ecosystem DrivesInterconnection Cross-connects by metro INTERCONNECTION IS AN INDICATOR OF: Ecosystem health Chicago Last mile and local loop cost take out WAN to LAN migrations Cross-connects New York CH NY 94
  • Customers Expand On Platform EquinixSubstantial expansion opportunity for NA and EU single-regiondeployments UNIQUE CUSTOMER GROWTH: – 2008 YE - 341 – 2009 YE – 433 NA – 2010 Q3 - 556 63 EU 271 132 MULTI-REGION DEPLOYMENT GROWTH: 20 16 – 2008 YE – 47 5 – 2009 YE – 82 AP – 2010 Q3 – 104 49 Q3 2010 556 unique customers 104 in 2 or more regions 95
  • Strong Sustained Growth Over the Past 12Quarters NYSE Global Announces NJ Financial Datacenter Crisis Cloud & IT Services Content & Digital Media Enterprise Financial Services Network 96
  • PlatformJim Poole, General Manager, Networks, Mobility & Content Presented on November 11,2010
  • Interconnection Around the World Market Challenge Content and Customers exist everywhere, you‟re network doesn‟t Equinix Customers Global Carriers National/Local Carriers Cable MSOs Mobile Operators Digital Media Outlets Equinix Solutions IP Peering Exchange Carrier Ethernet Exchange Mobility Exchanges LEGEND: Private Interconnection EQUINIX METRO Equinix Advantage 4 Continents 11 Countries 35 Metros 90 IBXs 6M+ sq. ft.Red = current Equinix markets 98
  • Connect to Accelerate Growth Enterprises Financial Services Market Challenge New revenue streams Faster time to market Efficient use of capital Equinix Advantage 600+ networks 550+ financial services 190+ cloud, SaaS, and IT services Content, Gaming 10 of the top 10 web Cloud Computing and Video properties 99
  • Case Study: Wireline: Level(3)Enterprises Financial Services Digital Media CUSTOMER CHALLENGEInternet access; Low latency networking; Social networks, video,Private WAN services Data distribution gaming Scale interconnection necessary to deliver services Broad local access options Robust sales channel Efficient use of deployed capital Traffic Exchange Cloud Services Fastest time to market Internet & Ethernet Exchanges Access to personal & business applications providers EQUINIX ADVANTAGE 1TB+ of IP Peering Traffic 600+ network providers 550+ financial services International Access Local Access New market access Off-net building access 190+ cloud, SaaS, and IT services CUSTOMER ADVANTAGE #1 Network Provider @EQIX 90 IBXs – 100% Coverage One Marketplace for all your Network needs 100
  • Case Study: Mobility: OEM CUSTOMER CHALLENGEService Enablers CDNs Cloud ServicesPayment/settlement/billing Access to video content, and Personal & business Access to social networks &roaming services accelerated web content popular content Access to wired, wireless and CDN distribution networks Access to IP peering platforms Access to cloud services Traffic Exchange Social Media GRX/IPX and Internet ~20% of all users access EQUINIX ADVANTAGE Exchange social network 600+ network services 1TB+ of IP peering traffic 190+ cloud, SaaS, and IT services All major CDN providers Mobile Distribution Wired Distribution Access to mobile distribution Access to wired network assets 4 of the top 5 social networking sites 8 of the top 10 video properties CUSTOMER ADVANTAGE Superior end-user experience Your mobile experience starts at Equinix Lowest TCO 101
  • Case Study: Digital Media: Social NetworksAd Networks Brand Content Virtual Services MARKET CHALLENGEAdvertising-based Corporate brand presence & Virtual goods & paymentsmonetization of content marketing tool Social networks operate as „mash- up‟ business models Reliance on user-generated content Increasingly relevant part of the mobile experience EQUINIX ADVANTAGEIP Exchange Applications 600+ network providersPeering to control cost Embedded social gaming; Personal productivity 1TB+ of IP peering traffic 190+ cloud, SaaS, and IT services 8 of the top 10 ad networks 5 of the top 5 Facebook games 10 of the top 10 web propertiesMobile Distribution Wired Distribution CDNs Application acceleration; 8 of the top 10 video properties Content acceleration CUSTOMER ADVANTAGE Superior site performance Increased ad revenuesSocial Networking requires a robust ecosystem 102
  • Appendix 104
  • Non GAAP ReconciliationEQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited) Nine Months Twelve Months Twelve Months Twelve Months Ending Ending Ending Ending Sep 30, Dec 31, Dec 31, Dec 31, 2010 2009 2008 2007We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-basedcompensation as presented below:Cost of revenues $ 481,108 $ 483,420 $ 414,799 $ 263,768Depreciation, amortization and accretion expense (170,573) (162,932) (145,478) (94,229)Stock-based compensation expense (4,957) (5,908) (4,641) (4,128) Cash cost of revenues $ 305,578 $ 314,580 $ 264,680 $ 165,411The geographic split of our cash cost of revenues is presented below:North America cash cost of revenues $ 177,247 $ 164,491 $ 141,355 $ 118,044Asia-Pacific cash cost of revenues 41,362 43,637 35,006 24,914Europe cash cost of revenues 86,969 106,452 88,319 22,453 Cash cost of revenues $ 305,578 $ 314,580 $ 264,680 $ 165,411We define cash gross profit as revenues less cash cost of revenues (as defined above). 105
  • Non GAAP ReconciliationEQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited) Nine Months Twelve Months Twelve Months Twelve Months Ending Ending Ending Ending Sep 30, Dec 31, Dec 31, Dec 31, 2010 2009 2008 2007We define cash operating expenses as operating expenses less depreciation, amortization, stock-basedcompensation, restructuring charges and acquisition costs. We also refer to cash operating expenses ascash selling, general and administrative expenses or "cash SG&A".We define cash sales and marketing expenses as sales and marketing expenses less depreciation,amortization and stock-based compensation as presented below:Sales and marketing expenses $ 79,586 $ 63,584 $ 66,913 $ 40,719Depreciation and amortization expense (7,756) (5,380) (6,059) (1,881)Stock-based compensation expense (10,316) (10,329) (10,637) (8,925) Cash sales and marketing expenses $ 61,514 $ 47,875 $ 50,217 $ 29,913We define cash general and administrative expenses as general and administrative expenses less depreciation,amortization and stock-based compensation as presented below:General and administrative expenses $ 155,961 $ 155,324 $ 146,564 $ 105,794Depreciation and amortization expense (9,104) (7,059) (9,450) (7,388)Stock-based compensation expense (34,747) (36,819) (39,807) (29,678) Cash general and administrative expenses $ 112,110 $ 111,446 $ 97,307 $ 68,728Our cash operating expenses, or cash SG&A, as defined above, is presented below:Cash sales and marketing expenses $ 61,514 $ 47,875 $ 50,217 $ 29,913Cash general and administrative expenses 112,110 111,446 97,307 68,728 Cash SG&A $ 173,624 $ 159,321 $ 147,524 $ 98,641The geographic split of our cash operating expenses, or cash SG&A, is presented below:North America cash SG&A $ 117,085 $ 98,503 $ 89,697 $ 74,472Asia-Pacific cash SG&A 18,417 20,987 19,767 15,834Europe cash SG&A 38,122 39,831 38,060 8,335 Cash SG&A $ 173,624 $ 159,321 $ 147,524 $ 98,641 106
  • Non GAAP Reconciliation EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in thousands) (unaudited) Nine Months Twelve Months Twelve Months Twelve Months Ending Ending Ending Ending Sep 30, Dec 31, Dec 31, Dec 31, 2010 2009 2008 2007 We define adjusted EBITDA as income from operations plus depreciation, amortization, accretion, stock- based compensation expense, restructuring charges and acquisition costs as presented below: Income from operations $ 140,235 $ 181,079 $ 73,262 $ 10,092 Depreciation, amortization and accretion expense 187,433 175,371 160,987 103,498 Stock-based compensation expense 50,020 53,056 55,085 42,731 Restructuring charges 6,243 (6,053) 3,142 407 Gain on asset sale - - - (1,338) Acquisition costs 11,957 5,155 - - Adjusted EBITDA $ 395,888 $ 408,608 $ 292,476 $ 155,390 The geographic split of our adjusted EBITDA is presented below: North America income from operations $ 84,051 $ 128,168 $ 66,202 $ 11,510 North America depreciation, amortization and accretion expense 122,363 106,207 101,414 83,893 North America stock-based compensation expense 37,346 40,082 40,993 36,552 North America restructuring charges 6,243 (6,053) 3,142 407 North America acquisition costs 11,192 4,091 - - North Americaadjusted EBITDA 261,195 272,495 211,751 132,362 Asia-Pacific income from operations 29,933 21,709 5,618 2,616 Asia-Pacific depreciation, amortization and accretion expense 21,318 25,420 18,365 9,768 Asia-Pacific stock-based compensation expense 5,491 7,131 5,619 5,280 Asia-Pacific gain on asset sale (1,338) Asia-Pacific adjusted EBITDA 56,742 54,260 29,602 16,326 Europe income from operations 26,251 31,202 1,442 (4,034) Europe depreciation, amortization and accretion expense 43,752 43,744 41,208 9,837 Europe stock-based compensation expense 7,183 5,843 8,473 899 Europe acquisition costs 765 1,064 - - Europe adjusted EBITDA 77,951 81,853 51,123 6,702 Adjusted EBITDA $ 395,888 $ 408,608 $ 292,476 $ 111,660 107
  • Non GAAP ReconciliationEQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited) Nine Months Twelve Months Twelve Months Twelve Months Ending Ending Ending Ending Sep 30, Dec 31, Dec 31, Dec 31, 2010 2009 2008 2007We define cash gross margins as cash gross profit divided by revenues.Our cash gross margins by geographic region is presented below:North America cash gross margins 68% 69% 68% 64%Asia-Pacific cash gross margins 65% 63% 59% 56%Europe cash gross margins 57% 53% 50% 40%We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.North America adjusted EBITDA margins 47% 51% 48% 41%Asia-Pacific adjusted EBITDA margins 49% 46% 35% 29%Europe adjusted EBITDA margins 38% 36% 29% 18% 108
  • Non GAAP ReconciliationEQUINIX, INC.(in thousands)(unaudited) Three Months Nine Months Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Ending Ending Ending Ending Ending Ending Ending Sep 30, Sep 30, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, 2010 2010 2009 2008 2007 2006 2005We define discretionary free cash flow as cash flow from operations less ongoing capital expenditures as presented below:Ongoing capital expenditures $ 40,671 $ 82,101 $ 63,200 $ 67,500 $ 43,600 $ 31,200 $ 19,700Expansion capital expenditures 103,270 353,945 306,342 379,532 333,236 123,537 12,841 Total capital expenditures $ 143,941 $ 436,046 $ 369,542 $ 447,032 $ 376,836 $ 154,737 $ 32,541Cash generated from operating acitivities $ 113,263 $ 269,981 $ 355,492 $ 267,558 $ 120,020 $ 75,412 $ 67,595Ongoing capital expenditures (40,671) (82,101) (63,200) (67,500) (43,600) (31,200) (19,700) Discretionary free cash flow $ 72,592 $ 187,880 $ 292,292 $ 200,058 $ 76,420 $ 44,212 $ 47,895 109
  • Non GAAP ReconciliationEQUINIX, INC.(in thousands)(unaudited) Three Months Nine Months Ending Ending Sep 30, Sep 30, 2010 2010We define funds from operations as income or loss before income taxes plus depreciation, amortization, accretion, stock-basedcompensation, restructuring charges and acquisition costs and further adjustments for other unusual items, such as gains on asset sales,other than temporary impairment losses or recoveries on investments and losses on debt extinguishment and interest rate swaps, net. Aspresented below:Income (loss) before income taxes $ 15,833 $ 38,877Depreciation 68,941 175,359Amortization 4,422 9,573Accretion 1,122 2,501Stock-based compensation 16,950 50,020Restructuring charges 1,886 6,243Acquisition costs 1,114 11,957Gain on asset sale - -Other-than-temporary impairment losses (recovery) on (206) (3,626)Loss on debt extinguishment and interest rate swaps, net - 4,831 Funds from operations $ 110,062 $ 295,735 110
  • Non GAAP ReconciliationEQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited) Three Months Ending Three Months Ending Three Months Ending Sep 30, Sep 30, Sep 30, 2010 2010 2010The following is a further break-out of the North America cash gross profit. We define cash gross profit as revenues less cash cost of revenues (asalready defined). Equinix Same IBX Organic North Equinix North America America Builds Other TotalNorth America revenues $ 154,971 $ 60,354 $ 215,325North America cost of revenues $ 65,518 $ 53,054 $ 118,572North America depreciation, amortization and accretion expense (24,838) (20,719) (45,557)North America stock-based compensation expense (988) (148) (1,136) North America cash cost of revenues $ 39,693 $ 32,186 $ 71,879North America cash gross profit $ 115,278 $ 28,168 $ 143,446North America cash gross margin 74% 47% 67% 111