Positive Q4 AFFO Performance
Equinix Inc.’s fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $7.30 exceeded the Zacks Consensus Estimate of $7.25, showcasing a resilient 3% improvement from the previous year. The results reflect a stable increase in colocation and interconnection revenues, driven by robust demand for digital infrastructure. Notably, the company’s total interconnections surged to 462,200, marking a 3% year-over-year rise.
Revenue Growth and Annual Performance
Quarterly revenues amounted to $2.11 billion, aligning with the Zacks Consensus Estimate and exhibiting a substantial 12.8% year-over-year escalation. Equinix’s 2023 AFFO per share stood at $32.11, surpassing the prior-year figure of $29.55. Additionally, the company recorded a 12.7% surge in total revenues, amounting to $8.19 billion, in line with the consensus estimate.
2024 Outlook and Financials
Equinix anticipates a 1-2% increase in first-quarter 2024 revenues, estimating between $2.127 billion and $2.147 billion, with a projected adjusted EBITDA in the range of $960-$980 million. For the entire year, the company projects a robust 7-9% growth in total revenues, which is expected to reach $8.793-$8.893 billion. Management foresees an adjusted EBITDA of $4.089-$4.169 billion and an adjusted EBITDA margin of 47%.
Robust Balance Sheet and Dividend Declaration
As of December 31, 2023, Equinix boasted $6.5 billion in available liquidity. The company declared a quarterly cash dividend of $4.26 per share, scheduled for payment on March 20 to shareholders on record as of February 28, 2024.
Comparative Performance with Other REITs
Compared to other Real Estate Investment Trusts (REITs), Equinix’s performance outshone its competitors. Healthpeak Properties, Inc., Highwoods Properties Inc., and Cousins Properties Incorporated all reported their respective fourth-quarter 2023 figures, with Equinix proving to be the standout based on the AFFO metric.
Analysts’ Recommendations and Market Position
Equinix currently holds a Zacks Rank #2 (Buy). This is a clear indicator that investors are optimistic about the company’s future growth prospects and the potential for further stock price appreciation.
