Equinix Inc Citis 2024 Global Property CEO Conference.pdf

FINAL TRANSCRIPT 2024-03-04
Equinix Inc (EQIX US Equity)
Page 1 of 14
, President and Chief Executive Officer
, Senior Director, Investor Relations
Analyst
, Citi
, Citi
Nicholas Joseph
Charles J. Meyers
Citis 2024 Global Property CEO Conference
Company Participants
Charles J. Meyers
Chip Newcom
Other Participants
Michael Rollins
Nicholas Joseph
Presentation
{BIO 20091867 <GO>}
Welcome to Citi's 2024 Global Property CEO Conference. I'm Nick Joseph, with
Mike Rollins, with Citi Research.
We're pleased to have with us Equinix and CEO, Charles Meyers. This session is for
Citi clients only. If media or other individuals are on the line, please disconnect now.
Disclosures are available on the webcast and at the AV desk. For those in the room
or the webcast, you can go to liveqa.com and enter code GPC24 to submit any
questions if you do not wish to raise your hand.
Charles, I'm going to hand it over to you to introduce the company and team,
provide any opening remarks, tell the audience the top reasons an investor should
buy your stock today, and then we can get into Q&A.
{BIO 6981441 <GO>}
Great. Thank you. Chip informs me that I need to read this disclosure first. Some of
what I will talk about today contains forward-looking statements. Please read our
SEC filings, riveting as they are, for more information about factors that could affect
these statements.
So Chip Newcom from the IR team, Charles Meyers, CEO and President, and
delighted to be here. So look, we continue to feel really good about Equinix and our
value proposition as the world's digital infrastructure company. I think the
opportunity that we see in front of us in terms of evolving our global platform to be
adaptive to helping people build and deploy hybrid infrastructures where they want
it, when they want it, and through an ecosystem of partners continues to be
exceptionally compelling, particularly in an environment where I think digital

Page 2 of 14
Q - Nicholas Joseph
Q - Michael Rollins
A - Charles J. Meyers
transformation and sort of the emergent set of AI requirements are as important as
ever to competitive advantage in industries around the world. So excited about what
we have in front of us and happy to answer any questions about that.
Questions And Answers
{BIO 20091867 <GO>}
(Question And Answer)
{BIO 1959059 <GO>}
Great, thanks. Charles, to get us started, can you just review for us the strategic and
operating priorities for Equinix for this year?
{BIO 6981441 <GO>}
Sure. Yeah, I think they fall into several categories. One, just continuing to press our
advantage in sort of our business where we maintain a very significant and
differentiated leadership position around the globe. Our sort of traditional
interconnected co-location business continues to thrive. So I think we're going to
continue to invest in that position, both in terms of our global reach. So we now
operate, or by the end of the year, we'll be operating in 76 metros across 35
countries. So we're going to continue to invest in the reach.
Our interconnection portfolio, which I think has always been a bit of our, quote,
secret sauce, I think is something we'll continue to invest in. Fabric, Equinix Fabric,
has been perhaps our most successful new product offering ever over the last
several years. We just recently announced our Fabric Cloud Router, which I think is
particularly relevant to how people are using digital infrastructure in the modern
age. And then we think there's a really big opportunity around multi-cloud
networking that we can talk further about.
So reach, interconnection, sustainability, also sort of a key part of pressing our
advantage. We think that that is going to continue to be an important sort of factor in
customer buying behavior. And we think investing in a differentiated position to
deliver sustainable solutions and sort of grow data center capacity around the world
responsibly is something that will continue to differentiate that us.
And then, lastly, in the topic of -- on the topic of pressing our advantages margin
expansion. I think you saw in our recent guide a pretty, what we think is, impressive
sort of amount of margin expansion that we're guiding to in the year ahead. And we
think that it has to be continued fuel for our lighthouse metric of AFFO per share
growth, which we know is so important to all of you. And so those are the really key
dimensions around pressing our advantage.
Then, secondly, I think enabling our platform to move beyond its traditional
strengths in the Colo business. And I think that means really continuing to invest in

Page 3 of 14
Q - Michael Rollins
the digital ecosystems that drive buyers towards Equinix, and delivering in the range
of services that enable them to reach that ecosystem and combine Equinix value
with the value of our partners to really solve their customer problems. And so I think
that enabling the platform and delivering that range of services is critically
important.
And then, finally, I think continuing to invest in ensuring that we can be responsive to
the rapidly emerging demands of our customers from an AI perspective. We talk
about Equinix being the place where private AI happens. We are seeing real
demand from customers in terms of thinking about Equinix as a point of nexus for
hybrid AI architectures in very much the same way they've thought about it for
hybrid cloud architectures.
And so we've seen great momentum in our business there and in our partnership
with NVIDIA has announced some really compelling wins in Q4 and are seeing a
strong pipeline of opportunities building around that. So those are our key priorities
for the year ahead.
{BIO 1959059 <GO>}
And so when you think about the demand opportunity for Equinix, can you help just
contextualize how the size of this demand opportunity maybe compares to past
years? And as you look at your customers that are going through some of the
optimization, what percent of the customers are spending more, the same, or maybe
less with you over the coming year?
{BIO 6981441 <GO>}
Yeah. Look, I think that in terms of the aggregate opportunity, it's as big as it's ever
been and I think getting even bigger, right? And I think so the demand for digital
transformation and digital investment across the world, and I think that partially
being fueled by a wave of AI demand as well, again, creates, I think, an addressable
market that's much bigger than what we would have given credit for or thought of,
even just a few years ago.
And so I think the overall addressable market demand, and I think the portion of it
where we enjoy distinctive advantages, is very large, over the long term. It will
require, or untapping it or tapping into that, I think will require adaptation of our
capabilities and our go-to-market motion and various other things that I think we
need to continue to focus on, but I think the overall opportunity, the size of that
opportunity is huge.
In terms of -- we talked to the optimization and the sort of what we characterized in
the last earnings call as cross-currents in the business, I do think that we, while that
backdrop of, I think, macro, or the overall level of demand and the long-term
opportunity continues to be huge, I do think we are seeing -- we saw over the course
of '23 and in our Q4 results in particular a continued level of customer caution
around the macro environment. And I think a little bit of a delay in terms of people
optimizing their footprints in a post-COVID era.

Page 4 of 14
Q - Michael Rollins
Q - Michael Rollins
And so I think we're seeing some of that. I think we've got a good visibility to what
that looks like, as we indicated, that probably, sort of is somewhat elevated in the first
half of this year, and then I think, as that tapers, I think really our guide really shows
some inflection in the back half of 2024.
{BIO 1959059 <GO>}
And so from a numbers perspective, at the Analyst Day about eight months ago, I
think the annual organic revenue growth target is 8% to 10%. Guidance for '24 is 7%
to 8%. So as you were describing, does the management team have conviction that
in the back half of '24 and in future years you get back to that 8% to 10%?
{BIO 6981441 <GO>}
Yeah, I mean, again, I think that we will have to see how the dynamics of the market
continue to play out from a macro, because I think macro was the really contributing
factor that led to us being in a guide that was below what the Analyst Day range was.
And so -- and I think that customer caution and a bit of elevated churn, if you really, if
you break it down, you say, look, the net bookings is the fuel for any business, right?
And for us, that means gross production. How much gross bookings are you putting
into the system in a quarterly basis? Pricing, which continues to be very firm, and
then churn.
And, as we said, we saw a Q4 that looked a little more like our prior Q1, which saw
some deal slippage as people, I think, have sorted through how they're trying to
make sense of their budgets and the sort of various demands on those budgets. And
so gross activity continues to be really solid, but I think some slippage that we saw
there which impacted our '24. And then on the churn side, I think I just explained
that. And so I think it's really the macro environment and a bit of caution there that
led to being slightly below on the revenue guide.
Having said that, of course, the margin expansion and then the derivative effects of
that into our AFFO per share, which is fundamentally what we view as our lighthouse
metric. And, again, we were 7% to 10% on the AFFO per share guide, and we actually
reported -- we guided 8% to 10%, so actually with a slight bias to the high side on
AFFO per share, which we think that, combined with dividend yield, continues to
make us a very attractive overall value story.
{BIO 1959059 <GO>}
And you mentioned pricing. Can you share more of the pricing dynamics that you're
seeing ex the power ask-throughs and the sustainability of pricing on a go-forward
basis?
{BIO 6981441 <GO>}
Sure. But I think, maybe we touch on both of them because it is useful to look at it
outside of the PPI context, but the PPI has, I think, had some effect in terms of the
thinking of customers around the overall envelope of budget in which they operate.

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Q - Michael Rollins
And I think that's been something that we've had to kind of adapt to. But if you take
that out, we've seen meaningful increases in terms of overall new deal pricing over
the last, say, 24 months.
And so as you might imagine, given that environment, which has been fairly steep
over that 24-month period, a meaningful portion of our installed base now sits below
market. And so I think there's going to continue to be a meaningful sort of mark-to-
market opportunity for us that will continue to drive some meaningful opportunity
for us.
But it's -- I think that the -- If I looked at that and said, does -- so does that dynamic of
what we saw in price increases over the last 24 months repeat itself over the next 24,
which may be the essence of your question, I'm not sure about that, because I think
you're going to be looking at a broadly different inflationary environment, and I think
-- so I think that will taper to some degree.
But I think that, overall, the strength of our value proposition, the scale of our
business, and the sort of distributed nature of our business, lack of customer
concentration and those kind of things, are all things that contribute to us having a
greater degree of pricing power, and I think that will be a driving force in our overall
results.
{BIO 1959059 <GO>}
And can you further unpack the ways in which Equinix and the platform can benefit
from the broadening of GenAI deployments?
{BIO 6981441 <GO>}
Sure. I think that, we're seeing that a lot of the attention revolves primarily around
what we would sort of refer to as foundational AI, training of large-scale LLMs and
then the subsequent sort of deployment of inference against those models to
generate value. But interestingly, I think what we're seeing right now is more around
consumer applications, chatbots, those kind of things as a driving force that's in this
sort of public mindset.
Again, that's a real opportunity. I think there it is right now stimulating demand
mostly for large-scale training. I think in our business that translates to xScale
demand. And you saw that, by the way, show up in our results. We had a record
leasing quarter for xScale in Q4 of last year. And we're going to continue to invest
through our joint ventures in the xScale business, because we do think it's a robust
area of demand and we think it is strategically accretive to our retail story.
And so I think we'll invest there and continue to be. But I think we're not going to be
a -- look, it's a different business, it's a more -- it's a less differentiated business. It's a
more competitive business. I could reel off for you, and you know who they are, six
or seven different competitors that are now mostly in private hands that are shooting
at that same target.

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Q - Michael Rollins
And it's not that I'm not bullish about that opportunity. It's just that there's going to
be a lot more players, and we're not going to be a broad scale share -- market share
capture player. We're going to be a targeted player. I think if we were could get a
reasonable level of that demand, I think we'd be happy campers. And so -- but I
think you'll continue to hear more from us about that on the xScale side.
But outside of that then there are subsequent I think opportunities with there's
regional AI. AI that I think has demands for training and inference that are more
regional and geospecific in nature due to data sovereignty, compliance,
performance, et cetera.
You have Edge AI, and I think we're working with people with substantially more
distributed, both training and inference requirements, people like Continental on the
automotive side, in Europe, which is a joint customer of ours and NVIDIA's that I
think is doing some incredibly interesting things there around their supply chain and
then this bigger hybrid AI opportunity, or private AI.
And as I said on the call, on the last call, I pointed to a study that was recently done
that said about 32% of respondents were doing, their AI strategies were currently
pivoting around public clouds and hyperscalers. About 32% was on private cloud
only, and about 36% was a mix of those two.
We think that third slice of that pie is going to rapidly eat up most of the rest,
meaning that the vast majority of people are going to find themselves, much as they
did in the cloud, in an end state that looks hybrid in nature. And we think our cloud
adjacency, or more, I think more accurately, ecosystem adjacency for the broader AI
ecosystem, our global reach and our scale, I think are going to be contributing
factors to really making Equinix a preferred partner run as people think through their
AI strategies.
{BIO 1959059 <GO>}
If you look back to the 2023 results, it may be segmented between xScale and the
retail business. Is there a way to assess or estimate the percent that you feel was
driven by AI workloads in terms of the bookings? And then what that might be
based on the midpoint of the 2024 guidance?
{BIO 6981441 <GO>}
Yeah, well, that percentage would look very different for the xScale side, which I think
it's a meaningful contributor. It's not the only one. By the way, traditional cloud AZ
deployments are still a major factor driving hyperscaler demand, right? So it's not
just AI training, for example. But we're seeing, I would say, a much more meaningful
percentage of the xScale demand is AI-related.
On the retail business, we've had some really good wins. We talked about a
particular biopharma deal, which I hope will become more public as we go towards
GTC with NVIDIA. In terms of that deal, we talked about Continental, we talked about
Harrison.ai, a number of AI-related wins that we've had. And so we're seeing not only

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Q - Michael Rollins
funnel, but real bookings on the AI side. But look, the larger preponderance of our
business by a long shot is still in traditional digital transformation sort of demands
from customers like WAN re-architecture, cloud migration, hybrid cloud
implementations.
The piece that is an interesting crossover between those is what we're seeing as it
relates to where people place data. And the opportunity that we have for cloud-
adjacent storage as a service offering, whether that's delivered through our digital
services portfolio or through people buying sort of traditional co-location and
matching it up with storage, I think that's going to continue to be a significant driver
of our demand that is AI, at least AI-related in its overall profile.
So I think, a lot of runway left, but we're starting to see it. We probably got the
largest multi-quarter funnel, we did see some slippage of our Q4 into Q1 and some
of that dribbled out into later quarters. So as we look at it, and we worked really hard
to have a better longer-term visibility into funnel. And four-quarter funnel I think is
continues to look really healthy as we build demand for some of these key use cases.
{BIO 1959059 <GO>}
And you've referenced, as you're approaching the AI opportunity, some of the
partnerships that you have. Why are these partnerships important for Equinix to
drive the monetization of this? And do you have any exclusivities or uniqueness to
these partnerships that may be underappreciated by the market?
{BIO 6981441 <GO>}
Yeah, I mean, I think partners, broadly speaking, are going to be an increasingly
relevant part of us executing on the strategy of being the platform that we want to
be for our customers. Because rarely do we entirely solve a customer problem, right?
There are probably some very specific use cases like network nodes, or perhaps
electronic trading, some of those things that are pretty isolated, pretty self-
contained, if you will. We can do them, they can come to us, we can meet that need.
But, increasingly, I think when you look at the larger TAM, both service provider and
enterprise, it is typically about sort of unlocking value from this gangly ecosystem
that is the digital world today. And so partners have to be a critical part of that story.
And so -- and I think on the AI side, as we look at it, people are saying, hey, how, like
the hyperscalers themselves are making such massive investments in their AI tools
and capabilities, et cetera, that people say, I have to be able to eat from that whole
buffet.
And so our ability to sort of provide adjacency to all of those tools, I think, is going to
be critically important. And, of course, NVIDIA is, a driving force in the market. They
will be for, I think, a very long time. And it's not -- there are other players, certainly,
that I think are wanting to make sure that they get their share of this over time, but
they've got a lead.

Page 8 of 14
Q - Michael Rollins
Q - Michael Rollins
I think they're going to continue to sort of maintain that for a period of time. And if
you look at Jensen's been pretty active talking about this notion of AI factories, we
think we have a very relevant play in this sort of notion of building AI factories.
We certainly won't be the only home for them, but I think we can be a really
compelling one. Because if you look at it, and you draw a parallel to the factory of
old, well, why do people place factories where they place them? Proximity to raw
materials, proximity to talent, proximity to distribution, proximity to supply chain, all
of those things are still relevant in an AI context.
And I think, if you look at that, I think that's where we're going to be able to bring
some really compelling value. And so I think AI factories that provide proximity to the
broader digital ecosystem and to distribution in its current form, which is network, I
think makes Equinix very well positioned to be a AI factory sort of landlord of choice.
{BIO 1959059 <GO>}
To take advantage of that, what has to happen to the Equinix portfolio, and do you
need to densify it up from a power perspective differently than the way you've
managed this in the past?
{BIO 6981441 <GO>}
Yeah, over time, yes. And I think that pace will be different for xScale than it is for
retail, right? I think it'll happen more quickly and in ways that can be uniquely use-
case-specific in xScale because you take a, I don't know, you build a 20, 25-
megawatt facility, you sell it to one customer or maybe two, and that's relatively
easily understood.
Maybe even still in the design phase about how you adapt the design to that reality.
Whereas in the retail world, we're world, we're talking about when we build a, let's
say, we build a 5 or 6-megawatt phase, we are looking at typically thousands --
maybe thousands of customers in that phase, and I think with a broad distribution of
density requirements.
And so we have seen sort of density slowly ratcheting up because of this increased
mix of GPU-centric workloads, and look, and I think that might accelerate to some
degree, but I think that our facilities are well positioned, both the ones we have now
and the ones we are building, to be responsive to that.
I think our ability to apply liquid cooling to solve, because cooling is often the
constraint, and because we now have a broad-scale liquids cooling capability across
the footprint, I think we'll be able to continue to respond well to the densification
requirements that our customers are reporting out to us.
{BIO 1959059 <GO>}
What's the risk of certain things standing in the way to capitalize on this opportunity,
whether it's constraints in energy supply, sustainability factors, or just even the

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Q - Michael Rollins
infrastructure that's needed? Can you unpack how Equinix sees that and how you're
approaching that?
{BIO 6981441 <GO>}
Yeah, I think those are things that all of us have to be cognizant of, I think, not only
within the industry, but outside of it, in terms of those relying on the services that we
provide. And I think those things might be even more acute as you think about the
xScale and hyperscale side of things. And so I think access to power and permitting
and sustainability requirements, I think, will continue to be a key area of focus.
I do think that's why we, though, as both a global leader and a scaled sort of
provider, I think have both the capability to invest in those areas and the
commitment to doing so that I think will provide us some level of differentiation
there. And on the retail side, I think so many of our customers are relying heavily on
us to sort of be a partner to them that says, if you're on a trajectory from a
sustainability perspective, we can help you get there, and we're willing to make
those investments and are making those investments and are making those
commitments. I think that's going to position us well.
But I think that it's not going to be without its challenges, and I think that we're better
positioned from a risk mitigation standpoint too because of just the breadth of our
footprint. Because customers, and that's one of the reasons actually customers come
to us, say, look, I can't anticipate everything that's going to happen.
But if something goes bump in the night, your ability to help me respond to that by
helping me navigate to a different location or the confidence that you're going to be
first in line to get something is, I think, are some of the dynamics that are push
business more towards Equinix. And I think that's both a responsibility of market
leadership and also a benefit of it.
{BIO 1959059 <GO>}
Are you seeing the energy constraints in key markets, whether it's Northern Virginia,
Silicon Valley, get worse? In other words, it's going to take even longer to get power
distributed the same? Or is it getting any better?
{BIO 6981441 <GO>}
Yeah, I mean, I think it's -- I think in some places that, again, because there's so much
demand, it may be getting worse in the near term, right? Now the good news is, is
that I think that from our retail business perspective, we have, as we've reported out
in many forums and many times, our visibility to the power requirements that inform
our multi-year plan are pretty much locked and loaded, right?
So now xScale is a bit of a different story, and I think that, that's where -- that's why
when I've responded to this question about how are you thinking about the xScale
opportunity, for example, in the U.S., and is that going to be adjacent to your existing
locations or elsewhere? My answer has been, yes.

Page 10 of 14
Q - Nicholas Joseph
Q - Nicholas Joseph
And so I think it's going to have to be a combination of those things, because I think
some of the markets are going to be particularly challenged in terms of getting more
than what we already have to support our retail trajectory. And, as a result, I think we
will look at other locations where we might be able to get access to power in a more
-- in a different way. And so I think it will be a combination of those things. But, again,
I think the confidence that we have in terms of our retail trajectory and what we've
guided to, we feel very good about the confidence there.
{BIO 20091867 <GO>}
Maybe just shifting a bit to development, how many of the current construction
projects are in markets that do have constraints on supply? And if you can touch on
the yields of those projects versus the more stabilized product?
{BIO 6981441 <GO>}
Sure. Yeah, about 50% of our overall capital, I think, is allocated income and going
into markets that are $100 million plus, sort of our really big high-demand campuses,
a few of those being ones where we are seeing constraints. And so I think that, for
the most part, with the exception of Singapore, which we have talked about publicly.
Well, in Singapore, we feel like we're in a great position in that we've gotten an
allocation of capacity. Problem is that it probably isn't going to come online until '26.
And so we're going to continue to navigate a more constrained market there for a
period of time. But I think some of the other markets where I think markets like New
York and even Frankfurt and others, I think we've got -- we've either just delivered or
will be delivering capacity into those markets, which I think will relieve some of those
constraints.
And in terms of development yields, I will say generally, incremental phases in those
markets tend to be on the higher side of things. We've always talked to a sort of mid
to high 20s or even low 30s as a cash-on-cash yield development. That's sort of
consistent with our stabilized asset returns, which are in the 27% range. And so I
would say that those large campus environments, incremental phases tend to be
towards the high side of that.
{BIO 20091867 <GO>}
And then if you don't mind just touching on the size of the xScale pipeline and
where you see regional expansion opportunities there.
{BIO 6981441 <GO>}
Sure. Look, not surprising, there's a lot of demand. So our xScale pipeline has been
strong. We delivered a record quarter in Q4 on xScale leasing. I think that we
continue to see plenty of uptake there in terms of the projects that we have and
plenty of interest in projects that we don't yet have, and a desire to, sort of help, help
us, build and inform a pipeline going forward. So not a lot more to report in terms of,
because, we have -- how many projects do we have underway now on the xScale
side?

Page 11 of 14
A - Chip Newcom
Q - Nicholas Joseph
Q - Michael Rollins
{BIO 19424652 <GO>}
11.
{BIO 6981441 <GO>}
11 new projects. So again, feeling very good about the pipeline to fill those. Our pre-
leasing sort of track record has been exceptionally good, and so has most people's,
and so it's been a really good environment, and I expect that will continue, but,
again, I think that, it's going to -- I do think we'll have a strong demand profile for
xScale.
I do think we have to think in a very wide-eyed and open way, or eyes fully open
about the competitive dynamics of that market and how it works, but I think we feel
good about the pipeline, and I think we're going to continue to invest. We've noted
in several other forums that we're planning to be more aggressive in the U.S. And
you'll see more announcements from us in that regard in the not-too-distant future.
{BIO 20091867 <GO>}
We're going to get a chime in a second here. Maybe not, all right. How does the
future rollout of liquid cooling impact investment and returns?
{BIO 6981441 <GO>}
I think it will just continue to support the investment returns that we have had.
There's not significant incremental costs that isn't recovered in that.
For the most part, basically, when we deploy liquid cooling for a customer to meet a
particular requirement, we'll have certain NRCs, non-recurring costs, that we would
allocate to the customer to support that need, and we would get recovery on those,
but it also generally is means that we're going to be, we're able to be responsive to a
high-value deployment and we're going to be able to price that accordingly.
And so I would say, I don't think any meaningful impact on returns other than
supporting the very attractive return profile that we. There's your channel. A little bit
of delay, a little latency there problem, but yeah.
{BIO 1959059 <GO>}
Moving over to margins, you talked about the significance of the margin
improvement for 2024. What's the sustainability of annual margin improvement now
for Equinix, and what might be driving it differently this year and over the next few
years than maybe over the past couple of years?
{BIO 6981441 <GO>}
Well, I think what's -- I'll get to the last part first. I think what, we have said sometimes
under pressure and with an unpleasant response that we were investing in the
business and people have been like, well, when are you going to stop doing that,

Page 12 of 14
Q - Michael Rollins
right? And I think people were not necessarily thrilled with the margin expansion that
we were putting on the table. I think that -- but I do think we're starting to see the
benefits of that, right?
And so I think that's why you're seeing some inflection. And if you look at it, we see it
at the gross margin line and, obviously, at the EBITDA margin line, some of that
flowing down from the gross, but also some of it happening in between. And so let
me give you a little more color on both of those things.
At the gross line, one, I think we have continued opportunity to be more efficient and
more effective in how we use power. And I think that's both in terms of our PUEs,
which we are aggressively tackling across our footprint. And as we bring those down,
I think that, because of our model and because of how it differs maybe from some
other models, allows us to drive some margin expansion.
And then so that's -- power is a key part of it at the gross line. And then labor, our
largest labor force is actually at the gross margin line. It's in the operations, it's the
frontline personnel that are managing our facilities and taking care of and serving
our customers. And we've invested significantly from a systems and process
standpoint in making that labor more effective and more efficient. And I think we're
starting to see the benefits of that. So that's where I think we're seeing it on the gross
side.
And then on the -- in between the gross and the EBITDA, I think we're seeing it really
on the G&A side of things. And to some degree on the S side of SG&A as well. We
have to continue to be more productive in our go-to-market engine. And I think we
have really seen a flattening of the cost curves from a G&A standpoint, a G&A
investment.
And we've made that very clear to our people. That's going to -- we're going to --
let's continue to reap the investments that we've made in those functions. And let's --
let the business scale around them. And I think that's going to be a key contributor
to our margin expansion. And as people know, we're going to face some level of
interest expense headwind, and the way we're going to sort of accommodate that,
and the reason I think, we're able to support the AFFO-per-share guide that we did is
by ensuring that we continue to drive a level of margin expansion to offset that.
{BIO 1959059 <GO>}
Any questions from the room before we get to maybe one last question in a rapid
fire? So one last question. Can you -- maybe taking a step back, just describe where
Equinix is in continuing to monetize the core workloads from digital transformation
from corporate customers? Is there still significant core opportunity to go, without
even considering what the future benefits from AI will be?
{BIO 6981441 <GO>}
Absolutely. I think that people are still early in digital transformation as a journey. AI,
and even earlier in AI, but I think that -- and I think those will be muddled and

Page 13 of 14
Q - Nicholas Joseph
Q - Nicholas Joseph
Q - Nicholas Joseph
Q - Analyst
Q - Michael Rollins
Q - Nicholas Joseph
Q - Michael Rollins
intermingled over time, but I think the commitment to sort of digital as a means of
differentiation in virtually every industry across the world and sort of foundational
and fundamental workloads like WAN re-architecture and cloud migration and
hybrid cloud, all still plenty of demand for that with a lot of runway left.
{BIO 20091867 <GO>}
Rapid fire, same-store NOI growth for the sector overall next year in '25.
{BIO 6981441 <GO>}
You're going to give me, is it multiple-choice?
{BIO 20091867 <GO>}
The two of you.
{BIO 6981441 <GO>}
We talked about sort of our, for revenues being in the 2% to 5% range.
{BIO 20091867 <GO>}
Revenues 25 to 5%, okay. Will the data center sector have more or fewer of the same
number of public companies a year from now?
{BIO 6981441 <GO>}
It's hard to get fewer, isn't it?
The next session will begin in 10 minutes.
{BIO 6981441 <GO>}
I think I'm going to go with same.
{BIO 1959059 <GO>}
And then best real estate decision today: buy, sell, build, develop, or buy back
shares?
{BIO 6981441 <GO>}
Build.
{BIO 20091867 <GO>}
Thank you.
{BIO 1959059 <GO>}

Page 14 of 14
Thank you.
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