Q4 2021 Equinix Inc Earnings Call

February 16, 2022

Good afternoon, and welcome to the Equinix fourth quarter earnings Conference call all lines will be on listen only until we open for questions also today's conference is being recorded.

Good afternoon and welcome to the Equinix fourth quarter earnings conference call. All lines will be on, listen up.

Also, today's conference is being recorded. If anyone has objections, please disconnect at this time.

Has objections. Please disconnect at this time.

Now I'll turn the call over to Katrina, Ryan Mills, Senior Vice President of corporate Finance and sustainability you may begin.

Katrina Rimel, Senior Vice President of Corporate Finance and Sustainability, you may begin.

Good afternoon, and welcome to today's conference call before we get started I'd like to remind everyone that some of the statements. We're making today are forward looking nature.

Good afternoon and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we're making today are forward-looking in nature and involve risk and uncertainty.

And involve risks and uncertainties.

Actual results may vary significantly from those statements may be affected by the risks we identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed on February 19, 2021, and 10-Q filed on November four 2021.

and may be affected by the risks we identified in today's press release and those identified in our filing with the FCC, including our most recent Form 10-K , filed on February 19, 2021, and 10-2, filed on November 4, 2021.

Equinix assumes no obligation and does not intend to update or comment on forward looking statements made on this call. In addition in light of regulation fair disclosure, it's equinix policy not to comment on the financial guidance during the quarter unless it is done through an explicit public disclosure.

Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair disclosure, is Equinix's policy not to comment on the financial guidance during the quarter unless it is done through an explicit public disclosure?

In addition, we will provide non- GAAP measures on today's conference call. We provide a reconciliation of those measures through the most directly comparable GAP measure

In addition, we'll provide non-GAAP measures on today's conference call.

We provide a reconciliation of those measures to the most directly comparable GAAP measures.

and a list of the reasons why the company uses these measures in today's press release on the Equinix.ir page at www.equinix.com.

And a list of the reasons why the company uses these measures in today's press release on the Equinix IR page at Www Equinix Dot com.

We have made available on the IR page of our website a presentation designed to accompany this discussion along with certain supplemental financial information and other data we'd all.

along with certain supplemental financial information and other data.

We'd also like to remind you that we post important information about Equinex on the IR page from time to time, and encourage you to check our website regularly for the most current available information.

Also like to remind you that we post important information about Equinix IR page from time to time and encourage you to check our website regularly for the most current available information.

With us today are Charles Meyers, Equinix's CEO and President, and Keith Taylor, Chief Financial Officer.

With us today are Charles Meyers, Equinix in CEO , and President and Keith Taylor Chief Financial Officer.

Following our prepared remarks, we'll be taking questions from sell side analysts.

Following our prepared remarks, we'll be taking questions from Southside AML.

In the interest of wrapping this call up in an hour, we'd like to ask these analysts to limit any following questions to just one. At this time, all...

In the interest of wrapping this up in an hour we'd like to ask these analysts to limit any follow on questions to just one.

At this time I'll turn the call over to Charles Thanks.

Thanks, Katrina. Good afternoon, everybody, and welcome to our fourth quarter call. We had a great finish to the year with our best booking performance ever driven by an exceptional demand backdrop for our business with continued strength across our platform, but more specifically in the Americas, low turn and continued momentum in our digital services portfolio.

Thanks Katrina good afternoon, everybody and welcome to our fourth quarter earnings call. We had a great finish to the year with our best bookings performance ever driven by an exceptional demand backdrop for our business with continued strength across our platform and more specifically in the Americas low churn and continued momentum in our digital services portfolio for the full year, we achieved.

For the full year, we achieved over $6.6 billion of revenue, marking our 76th consecutive quarter of top lining.

Over $6 $6 billion of revenue, marking our 17th consecutive quarter of top line increases and amazing 19 years of continuous revenue growth, while driving attractive <unk> per share to the bottom line.

an amazing 19 years of continuous revenue growth. While driving a tractor, the FFO could share to the bottom line.

Amidst the dynamic and complex global landscape, we continue to deliver against our vision and our fiscal year results demonstrate both the increasing relevance of our platform and our uniquely differentiated value proposition.

Amidst the dynamic and complex global landscape, we continue to deliver against our vision, and our fiscal year results demonstrate both the increasing relevance of our platform and our uniquely differentiated value proposition.

Businesses globally continue to prioritize digital transformation as a foundational source of competitive advantage. And the secular drivers for our business have never been stronger as digital leaders demand infrastructure that is more distributed, more ecosystem powered, more flexible, more sustainable, and more interconnected than ever before. Increasingly, Equinix represents a critical point of nexus as customers implement hybrid and multi-cloud as the clear architecture of choice.

And this is globally continue to prioritize digital transformation as a foundational source of competitive advantage and the secular drivers for our business have never been stronger as digital leaders demand infrastructure that is more distributed more ecosystem powered more flexible more sustainable and more interconnected than ever before increase.

Increasingly equinix represents a critical point of Nexus customers implement hybrid and multi cloud as the clear architecture of choice.

And as a global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands and capture the enormous opportunity ahead.

As the global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands and capture the enormous opportunity ahead.

As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong, with a solid demand pipeline, stable churn, and a rising price trend, resulting in a revenue outlet for the year that is at or above the high end of our long-term guidance range, and an AFFO per share outlet that is still within our long-term guidance range, despite pressure at the gross margin line associated with power price volatility in Singapore.

As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong with a solid demand pipeline stable churn in a rising price trends, resulting in our revenue outlook for the year that is at or above the high end of our long term guidance range and an <unk> share outlook is still within our long term guidance range despite pressure.

The gross margin line associated with power price volatility in Singapore.

absentee-specific dynamics, our underlying business performance would be producing AFFO for shared growth towards the high end of our analyst-aid guidance, well ahead of our expectations.

Absent these specific dynamics, our underlying business performance will be producing <unk> per share growth towards the high end of our analyst day guidance well ahead of our expectations.

We have a robust global power hedging program that has been, and we expect will continue to be, highly effective at smoothing utility price volatility over the years, providing predictability and value across markets for Equinix and our customers.

We have a robust global power hedging program has been and we expect will continue to be highly effective at smoothing utility price volatility over the years, providing predictability and value across markets for equinix and our customers.

We believe the current dislocation in Singapore is transitory with power prices showing signs of moderating in the second half of the year.

Bottom line the business is performing very well and we remain on track to meeting or exceeding our analyst day objectives for both top line revenues and <unk> per share growth and as we see these temporary headwinds moderate and continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin.

Bottom line, the business is performing very well, and we remain on track to meeting or exceeding our Analyst Day objectives for both top-line revenues and AFFO per share growth. And as we see temporary headwinds moderate and continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin to 50 percent by 2025.

<unk> to 50% by 2025.

According to our results as depicted on slide three, revenues for the full year were $6.6 billion, up 8% year-over-year. Adjusted EBITDA was also up 8% year-over-year, and ASFO per share grew 9%.

Turning to our results as depicted on slide three revenues for the full year were $6 6 billion up 8% year over year. Adjusted EBITDA was also up 8% year over year and <unk> per share grew 9% year over year.

Interconnection revenues for the quarter grew 12% year-over-year with solid unit ads, reflecting strong momentum with Equinix Fabric as expanding use cases drive connections to more locations and more counterparts. These growth rates are all on a normalized and constant current.

<unk> revenues for the quarter grew 12% year over year with solid unit at reflecting strong momentum with Equinix fabric is expanding use cases drive connections to more locations and more counterparties. These growth rates are all on a normalized and constant currency basis.

Our global reach remains as important as ever. IEC predicts that by 2025, more than 50% of enterprise data will be generated at the edge. And customers continue to see Equinix as the best manifestation of the digital edge.

Our global reach remains as important as ever.

IDC predicts that by 2025 more than 50% of enterprise data will be generated at the edge and customers continue to see equinix as the best manifestation of the digital edge.

This competitive differentiation continues to drive our business with revenues for multi-region customers increasing 1% quarter over quarter to an impressive 75%.

This competitive differentiation continues to drive our business with revenues from multi region customers, increasing 1% quarter over quarter to an impressive 75%.

In December , we announced our long-awaited entry into Africa with our intended acquisition of MaineOne, a leading West African data center and connectivity solution provider with a presence in Nigeria, Ghana, and the Ivory Coast. Set to close in early Q2.

In December we announced our long awaited entry into Africa with our intended acquisition of main one a leading west African data center and connectivity solution provider with a presence in Nigeria, Ghana, and Ivory Coast set to close in early Q2.

This acquisition will mark the first step in Equinx's long-term strategy to become one of Africa's leading digital infrastructure providers and will position us well in the continent's largest economy.

This acquisition will Mark the first step in Equinix as long term strategy to become one of Africa's leading digital infrastructure providers and will position us well in the continent's largest economy.

If you will our ongoing global Air connection leadership, we're also targeting strategic Internet traffic flows by supporting and winning subsea cables, such as <unk>. The first ever subsea cable between Europe , and Latin America, which recently went into operation with Pops in our soft power or lived in one in Madrid, two IVF and by entering new markets.

To fuel our ongoing global interconnection leadership, we're also targeting strategic internet traffic flows by supporting and winning subsea cables, such as Ellalink, the first-ever subsea cable between Europe and Latin America, which recently went into operation with Pops in our South Hollow 4, Libyan 1, and Madrid 2 IVXs, and by entering new markets, like our recently completed Genoa, Italy IVX and our newly announced IVX in Salalah, Oman.

Like our recently completed general, Italy, AVX, and our newly announced <unk> and Salalah Omar.

Our data center services portfolio remains the bedrock of platform Equinix and we're excited about the recent appointment of John and led to the position of EVP EVP and general manager for datacenter services.

Our data center services portfolio remains the bedrock of Platform Equinix. And we're excited about the recent appointment of John Lin to the position of EVP and general manager for data center services.

Don has delivered extraordinary results of the president of our Americas business and is a great choice to implement our strategy and extend our global market leadership and interconnected co location.

John has delivered extraordinary results as the president of our America's business and is a great choice to implement our strategy and extend our global market leadership and interconnected co-location.

To that end, we continue to expand on our global footprint with 41 major projects underway across 28 metros in 19 countries. Representing over 20,000 cabinets of retail and over 80 megawatts of scale capacity.

To that end, we continue to expand on our global footprint 41 major projects underway across 28 metros in 19 countries, representing over 20000 cabinets of retail and over 80 megawatts of X scale capacity.

We remain focused on simplifying, automating, and digitizing our services, allowing us to scale our business and enhance operating leverage, and we're already seeing the results of these efforts. For example, we recently launched our new Secure Cab Express product, leveraging pre-deployed capacity to dramatically reduce cycle times and enable online quoting and ordering for our most commonly requested configuration.

We remain focused on simplifying and automating and digitizing our services, allowing us to scale, our business and enhanced operating leverage and we're already seeing the results of these efforts. For example, we recently launched our new secure cab express product leveraging pre deploy capacity dramatically reduced cycle times and enable online quote.

And ordering for our most commonly requested configuration.

We expect to roll this new service out to customers in the coming quarters, driving increased customer responsiveness while simultaneously enhancing market.

We expect to roll this new service out to customers in the coming quarters, driving increased customer responsiveness of simultaneously enhancing margins.

Our global interconnection franchise continues to perform well and we now have over 419000 interconnections on our industry leading platform in.

Our global interconnection franchise continues to perform well, and we now have over 419,000 interconnections on our industry-leading platform.

In Q4, we added an incremental 7500 organic interconnections as enterprises drive growth and further enhance our ecosystem density.

We added an incremental 7,500 organic interconnections as enterprises drive growth and further enhance our ecosystem density.

Internet Exchange saw peak traffic up 6% quarter-over-quarter and 27% year-over-year, with peak traffic in APAC surpassing 10 terabits per second for the first time as service providers increasingly look to IACS to improve internet traffic.

Internet exchange saw peak traffic up 6% quarter over quarter, and 27% year over year with peak traffic in APAC, surpassing 10 Terabits per second for the first time as service providers increasingly look to IX to improve internet traffic delivery.

According to Digital Infrastructure Services, cloud computing has permanently reshaped customer expectations for speed and simplicity.

Turning to digital infrastructure services cloud computing has permanently reshape customer expectations for speed and simplicity.

Customers want to deploy infrastructure where they want it, when they want it. Seamlessly integrating cloud-based workloads and private infrastructure and enabling agility and performance between the two.

Customers want to deploy infrastructure, where they want it when they want it seamlessly seamlessly integrating cloud based workloads and private infrastructure and enabling agility in performance between the two.

As a result customers are embracing a broader set of our services combining fabric metal and network edge to build virtual points presence and our plant expansions will fully enable this capability across 30 markets by the end of 2022.

As a result, customers are embracing a broader set of our services, combining fabric, metal, and network edge to build virtual points of presence. And our planned expansions will fully enable this capability across 30 markets by the end of 2020.

For the quarter, Equinix Fabric saw excellent growth, eclipsing $150 million in revenue run rate with a third of our customers now using Fabric for a variety of use cases across a broad set of destinations.

For the quarter Equinix fabric saw excellent growth eclipsing $150 million in revenue run rate with a third of our customers now using fabric for a variety of use cases across a broad set of destinations.

Our equinix metal business delivered strong results with a great mix of wins and new logos across verticals and a healthy backlog.

Our acrylic metal business delivered strong results with a great mix of wins and new logos across verticals and a healthy back.

And Network Edge saw continued traction with growth from new and existing customers as they used the service to implement WAN optimization and cloud-to-cloud routing.

The network edge saw continued traction with growth from new and existing customers as they use the service to implement Wan optimization and cloud to cloud routing.

Shifting to X scale in January we announced plans to expand our scale in South Korea with an agreement to establish a $525 million joint venture with GIC to develop two data centers in salt.

Shifting to XScale, in January we announced plans to expand XScale into South Korea with an agreement to establish a $525 million joint venture with GIC to develop two data centers in Seoul.

Total investment in our various hyper-scale joint ventures, when closed and fully built out, is now expected to be more than 8 billion dollars across 36 facilities globally, with more than 720 megawatts of power capacity.

<unk> investment in our various Hyperscale joint ventures, when closed and fully built out is now expected to be more than $8 billion across 36 facilities globally with more than 720 megawatts of power capacity.

We currently have nine X scale builds under development and during the quarter, we fully leased the first phase of our Frankfurt 11 assets in the first and second phases of our soft power five asset representing approximately 20 megawatts of capacity.

We currently have nine X-scale builds under development, and during the quarter, we fully leased the first phase of our Frankfurt 11 asset, and the first and second phases of our Sao Paulo 5 asset, representing approximately 20 megawatts of capacity.

Total X-scale leasing is now over 130 megawatts, and our initial JV and EMEA is over 80% leased.

<unk> scale leasing is now over 130 megawatts and our initial JV in EMEA is over 80% leased.

Now let me cover some of the highlights from our verticals.

Our network vertical had solid bookings quarter with healthy new logo activity led by the Americas as companies expand and optimize digital capabilities to support both the delivery and consumption of data at the edge.

Our network vertical had solid bookings quarter with healthy new logo activity led by the Americas as companies expand and optimize digital capabilities to support with the delivery and consumption of data at the edge.

New wins and expansions included a fortune 200 Telecom company deploying infrastructure to support the U S is first cloud Native open ran based <unk> network.

New wins and expansions included a Fortune 200 telecom company deploying infrastructure to support the U.S.'s first cloud-native, open-RAN-based 5G network.

in Lego Networks, an Australian cable systems operator deploying digital infrastructure to support a new subsea cable across Southeast Asia, Australia, and the U.S.

In Lugo networks in Australia in cable systems, operator, deploying digital infrastructure to support a new subsea cable across Southeast Asia, Australia, and the U S.

And an African local telco deploying a network hub in Lisbon to improve pairing and performance.

and an African local telco deploying a network hub in Lisbon to improve peering and performance.

Our enterprise vertical saw another quarter of record bookings as IDC predicts almost half of the global economy will be based on are influenced by digital in 2022.

Our enterprise vertical saw another quarter of record bookings, as IDC predicts almost half of the global economy will be based on or influenced by digital in 2022, fueling strong demand for hybrid infrastructure.

Fueling strong demand for hybrid infrastructure.

Q4 had particular strength in fintech, industrial services, and energy sub-segments with wins and expansions, including NASDAQ, a Fortune 500 technology company, scaling its cloud-enabled infrastructure to deliver ultra-low latency edge compute capabilities from our NY11 data center in Carteret.

<unk> had particular strength in Fintech industrial services, and energy sub segments with wins and expansions, including NASDAQ a fortune 500 technology company scaling its cloud enabled infrastructure to deliver ultra low latency edge compute capabilities from our NY 11 data center and Carter at.

Avaya cloud communications and worsening collaboration company implementing an edge data center strategy on platform Equinix to streamline private connectivity for its customers and ADT U S is leading smart home security provider embracing the cloud with an infrastructure modernization effort spanning multiple geographies.

Avaya, a cloud communications and workstream collaboration company implementing an edge data center strategy on platform equinix to streamline private connectivity for its customers, and ADT, U.S.'s leading smart home security provider embracing the cloud with an infrastructure modernization effort spanning multiple geographies.

Our cloud and IT services vertical also had solid bookings this quarter, led by the software and infrastructure subsegments, with good momentum in EMEA and APAC. Expansions included Zscaler, a leading Global 2000 security cloud provider, upgrading capacity for sustainable enterprise cloud transformation and growing network traffic at the edge.

Our cloud and it services vertical also had solid bookings this quarter led by the software and infrastructure sub segments with good momentum in EMEA and APAC expansions included Zee scalar a leading global two thousands security cloud provider upgrading capacity for sustainable enterprise cloud transformation and growing network traffic at the edge.

With technology, the Singaporean full suite IP service provider deploying an equinix metal and upgrading fabric services to support quick and seamless business expansion.

Wiz Technologies, a Singaporean full suite IT service provider, deploying on Equinix Metal and upgrading Fabric services to support quick and seamless business expansion.

and Oracle, a top five mobile software provider deploying FastConnect cloud on-ramps to support new regions in Singapore, Milan, and Stockholm, bringing their total number of on-ramps available at Equinix to 24, more than any of their other partners.

And Oracle a top five global software provider deploying fast connect cloud on ramps to support new regions and Singapore, Milan in Stockholm, bringing their total number of on ramps available at Equinix to 'twenty four more than any of their other partners.

Our content digital media vertical had strong bookings led by the publishing and digital media sub segments and record channel activity.

Our content and digital media vertical had strong movements led by the publishing and digital media subsegments and record channel activity. Expansions included Cloudflare, the U.S.-based global web infrastructure and security company, upgrading and expanding their footprint in over 40 markets. Index Exchange, a global ad tech marketplace, expanding compute nodes in APAC to manage traffic growth, and a top three global credit agency deploying regional network and cloud hubs in APAC to support its operations.

Spansion included cloud player the U S based global web infrastructure and security company upgrading and expanding their footprint in over 40 markets Index exchange Global AD Tech marketplace, expanding compute nodes in APAC demanded traffic growth and a top three global credit agency deploying regional network and cloud hubs in APAC.

To support its operations.

Our channel program delivered a record quarter to close the year accounting for 40% of bookings and nearly 60% of new logos and we have line of sight for channel to grow to 50% of our bookings in the coming years, as we enhance our systems and processes and leverage our diverse set of partners to scale our reach.

Our channel program delivered a record quarter to close the year, accounting for 40% of bookings and nearly 60% of new logos. And we have line of sight for channels to grow to 50% of our bookings in the coming years as we enhance our systems and processes and leverage our diverse set of partners to scale our reach.

Wins were across a wide range of industry verticals and use cases with continued strength from strategic partners like Microsoft Dell, Cisco, Google and BT, including a significant win with Wipro and AT&T, helping a utility company modernize its IP infrastructure in Europe , and the U S. So now let me turn.

Wins were across a wide range of industry verticals and use cases with continued strength from strategic partners like Microsoft, Dell, Cisco, Google, and BT, including a significant win with Wipro and AT&T, helping a utility company modernize its IT infrastructure in Europe and the U.S. So now I'm going to be turning the call over to Keith and cover the results for the rest of the day.

On the call over to Keith and cover the results for the quarter.

Thanks, Charles Good afternoon to everyone I'll start my prepared remarks by saying our business is performing exceedingly well.

Thank you, Charles. Good afternoon to everyone. I'll start my prepared remarks by saying our business is performing exceedingly well.

frankly better than our expectations for both the quarter and year and we're bringing our momentum into 2022.

And frankly better than our expectations for both the quarter and year and we're bringing our momentum into 2022.

We had a great end to the year delivering record gross and net bookings are very strong channel activity, while recording our highest ever recurring revenue step up in the quarter.

We had a great end to the year, delivering record growth in net bookings with very strong channel activity, while recording our highest ever recurring revenue step up in a quarter.

For the year, without any major acquisitions, revenues were up over $600 million.

For the year without any major acquisitions revenues were up over $600 million.

Well, it's over 17500 deals into 2021, highlighting the tremendous scale and reach of our business.

We closed over 17,500 deals in 2021, highlighting the tremendous scale and reach of our business.

<unk> of our go to market engine.

The Americas region continues to pick up steam growing 10% over the prior year effects, a double the rate approvals from last year benefiting.

America's region continues to pick up steam, growing 10% over the prior year, effectively double the rate of growth from last year. Benefiting from strong leadership and a distributed portfolio of highly interconnected IBX assets, resulting in record bookings and lower churn.

From strong leadership and its distributed portfolio are highly interconnected IPX assets, resulting in record bookings and lower churn.

For the company our churn settled at the lower end of our guidance range of two to two 5% per quarter.

For the company, our churn settled at the lower end of our guided range of 2 to 2.5% per quarter, for an average of 2.1% per quarter for the year, our lowest level since 2016.

For an average of two 1% per quarter for the year, our lowest level since 2016.

Which is highly reflective of our strategy to put the right customers with the right application into the right Ibs.

which is highly reflective of our strategy to put the right customer with the right application into the right IVF.

Quite simply that the changes, we're making are strengthening and extending our leadership position as the world's digital infrastructure company.

Quite simply, the decisions we're making are strengthening and extending our leadership position as the world's digital infrastructure company.

Now, as previously discussed, perhaps top of mind for you, there are a number of macroeconomic factors that we continue to proactively manage, such as supply chain, power costs, interest rates, and inflation.

As previously discussed perhaps chocolate line for you there are a number of macroeconomic factors that we continue to proactively manage such as supply chain.

Higher costs interest rates and inflation.

As it relates to product costs, we're seeing approximately 130 basis points of in your margin pressures due to the temporarily inflated prior rates in Singapore, and the lapping of the favorable PPA settlements from Texas last February .

As it relates to power costs, we're seeing approximately 130 basis points of in-year margin pressure due to the temporarily inflated power rates in Singapore and the lapping of the favorable VBPA settlements from Texas last February .

For 2022 were predominantly hedged to meet our global car leads but intend to continue to layer in additional hedges for the remaining 22 exposure and to meet the demand for future periods as we navigate past unusually volatile period.

For 2022, we're predominantly hedged to meet our global priorities but intend to continue to layer in additional hedges for the remaining 2022 exposure and to meet the demands for future periods as we navigate past this unusually volatile period.

As Charles noted, we expect the market dislocation in Singapore to be transitory.

As Charles noted, we expect the market dislocation in Singapore to be transitory, largely given that current prices are significantly higher than any other markets that we operate in.

Given the current prices are significantly higher than any other markets that we operated in the spot market rates appear to be trending down although they do remain volatile.

The spot market rates appear to be trending down, although they do remain volatile.

As reflected in our guidance, we expect second half margins to improve over the first half and we remain on our path to deliver against our analyst day, adjusted EBITDA and <unk> margin expectations.

As reflected in our guidance, we expect second half margins to improve over the first half and we remain on our path to deliver against our endless day adjusted EBITDA and AFFO margin expectations.

As it relates to the rising interest rate environment, our balance sheet is very well positioned.

We have minimal near-term exposure to rising interest rates, with 95% of our debt fixed across a weighted average maturity period of over nine years.

We have minimal near term exposure to rising interest rates with 95% of our debt fixed across a weighted average maturity period of over nine years.

And despite the recent increase in interest rate, the cost of borrow remains at historically low levels while we enjoy returns substantially higher than or multiples of our cost of borrow and wax.

Despite the recent increase in interest rates the cost of Boral remains at historically low levels, while we enjoy returns substantially higher than our multiples of our cost of barrel and whack.

Our financial strength continues to feel significant, and our balance sheet, fueled by our strong cash generation capabilities, has great flexibility.

Our financial strength continues to feel significant and our balance sheet fueled by our strong cash generation capabilities is great flexibility.

Lastly, with regards to supply chain and the inflationary pressures in the marketplace. We've invested heavily in a sophisticated and forward leaning procurement and strategic sourcing organization.

Lastly, with regards to supply chain and the inflationary pressures in the marketplace, we've invested heavily in a sophisticated and forward-leaning procurement and strategic sourcing organization, allowing us to execute against a robust development pipeline across our platform while continuing to deliver against our return expectations.

Allowing us to execute against our robust development pipeline across our platform, while continuing to deliver against our return expectations.

This is not to say there isn't a suggestion in the supply chain, but we feel very well placed with our partners and suppliers, resulting in limited delays against our expectations.

This is not to say there isn't congestion in the supply chain, but we feel very well-placed with our partners and suppliers, resulting in limited delays against our expectations.

To highlight that point, in the fourth quarter alone, we added 17 new projects to our IVX and Axial build program.

To highlight that point for the fourth quarter alone. We added 17, new projects to our IV <unk> build program.

<unk> 14 separate markets, while we completed seven projects across six markets.

across 14 separate markets, while we completed seven projects across six markets.

Now let me cover the highlights for the quarter note that all growth rates in this section are on a normalized and constant currency basis.

Now let me cover the highlights for the quarter. Note that all growth rates in this section are on a normalized and constant currency basis.

As depicted on slide 4, global Q4 revenues were $1.706 billion.

As depicted on slide four global Q4 revenues were $1 $706 billion.

Up 10% over the same quarter last year and above the top end of our guidance range due to strong business performance led by the Americas.

up 10% over the same quarter last year and above the top end of our guidance range due to strong business performance led by the Americas.

Consistent with our expectations nonrecurring revenue step down to 6% of total revenues in the quarter due to timing of large customer installations.

Consistent with our expectations, non-recurring revenue stepped down to 6% of total revenues in the quarter due to timing of large customer installations.

Interconnection revenues were 19% of recurring revenues with strong growth across all three regions, reflecting the continued benefit of our global platform and diversified product portfolio.

And our connection revenues were 19% of recurring revenues, but strong growth across all three regions, reflecting the continued benefit of our global platform and diversified product portfolio.

Q4 revenues net of our FX hedges included a $5 million headwind when compared to our prior guidance rates.

Before revenues and out of our FX hedges included a $5 million headwind when compared to our prior guidance rate.

Global Q4, adjusted EBITDA was 788 million or 46% of revenues up 11% over the same quarter last year and above the top end of our guidance range due to strong operating performance and timing of spend.

Global Q4 adjusted EBITDA was $788 million, or 46% of revenues, up 11% over the same quarter last year, and above the top end of our guidance range due to strong operating performance and timing of spend.

Q4, adjusted EBITDA net of our FX hedges included a $3 million headwind when compared to our prior guidance rates.

Before, just to keep it up, one of our FX hedges included a $3 million headwind when compared to our prior guidance rates and $5 million.

At $5 billion of integration costs.

Global Q4, <unk> was $564 million in line with our expectations, while absorbing the anticipated and seasonally higher recurring capex investments similar to prior years.

Global Q4 FFO was $564 million, in line with our expectations while absorbing the anticipated unseemly high recurring CapEx investments, similar to prior years.

<unk> churn was 2% of the bottom end of our targeted two to two 5% range.

You for a goal, I am our turn was 2% at the bottom end of our targeted 2 to 2 and a half percent rate.

Turning to regional highlights whose full results were covered on slides five through seven.

Turning to our regional highlights, whose full results were covered on slides 5 through 7.

APAC and Americas were the fastest <unk> growing regions on a year over year normalized basis at 11% and 10% respectively, followed by the EMEA region that step back up to 9% year over year growth as expected.

Feedback from the Americas were the fastest MRR-growing regions on a year-over-year normalized basis at 11% and 10% respectively, followed by the EMEA region, which stepped back up to 9% year-over-year growth as expected.

The Americas region had another outstanding quarter, delivering record bookings with robust channel activity.

The Americas region had another outstanding quarter, delivering record bookings with robust channel activity, strong net positive pricing action, and a low return.

Net positive pricing actions and lower churn.

The Americas momentum is broad based with 24 of our 27 naturals, increasing gross bookings year over year led by our Boston, Denver, Mexico City, Los Angeles, and Toronto markets.

The America's Momentum is broad-based with 24 of our 27 metros increasing gross bookings year over year, led by our Boston, Denver, Mexico City, Los Angeles, and Toronto markets.

The corporate Bell, Canada assets continue to perform better than expected in part due to increasing carrier and cloud deployments and a key Canadian markets.

The former Bell Canada assets continue to perform better than expected, in part due to increasing carrier and cloud deployments in a key Canadian market.

Our EMEA region had a solid quarter with strong retail bookings for our U K Dutch and German businesses.

Our AMIA region had a solid quarter with strong retail bookings of our UK, Dutch and German

Interestingly, we're seeing growing customer interest in this region given our sustainability efforts.

<unk>. The recently signed the PPA with a windfarm developers, Finland to cover over 30 megawatts of capacity.

including the recently signed DPPA with a wind farm developer in Finland to cover over 30 megawatts of capacity.

And finally.

And finally, the Asia Pacific region had a solid quarter with strong pricing and new local activity.

The Asia Pacific region had a solid quarter with strong pricing and new local activity.

We are experiencing good momentum and they do with the GPS test is performing well above plan.

We're experiencing good momentum in India with the GPX as it's performing well above planned.

Although Singapore remains capacity constrained we welcome the government's recent decision to lift the moratorium on new data center builds.

Although Singapore remains capacity constrained, we welcome the government's recent decision to lift the moratorium on new data center buildings.

Going forward, new construction will need to deliver strategic value and international connectivity for Singapore's digital economy, but also needs to be at the forefront of sustainability.

We feel extremely well positioned to deliver against the government's criteria.

Now looking at our capital structure.

Now looking at our capital structure, please refer to slide 8.

Refer to slide eight.

For the year end.

At the year end, we had an unrestricted cap of approximately $1.5 billion.

We had unrestricted cash of approximately $1 5 billion.

a step up from last quarter due to strong operating cash flow and approximately $400 million of ATM funding, offset by our investment and the dividend payment.

A step up from last quarter due to strong operating cash flow at approximately $400 million of ATM funding.

Offset by our investments and the dividend payments.

In early January we renegotiated our line of credit providing us access to $4 billion of additional liquidity, while also increasing our financial flexibility under our new revised covenant package.

In early January , we renegotiated our line of credit, providing us access to $4 billion of additional liquidity, while also increasing our financial flexibility under our new revised covenant package.

Looking forward, we will continue to take a balanced approach to funding our growth consistent with our investment grade rating, while staying focused on creating long term value for our shareholders.

Looking forward, we'll continue to take a balanced approach to fund yard growth consistent with our investment grade rating, while staying focused on creating long term value for our shareholders.

Early in the slide, 9.25 capital expenditures were approximately $817 million, including a recurring capex of $86 million, a meaningful increase over the prior year.

Turning to slide nine for the quarter capital expenditures were approximately $817 million, including a recurring capex of $86 million.

A meaningful increase over the prior quarter as expected.

We opened seven major projects since our last call, including New IMAX in General unit per.

We opened seven major projects since our last call, including new IVXs in Genoa, Munich, and Perth, and a new X-scale asset in Osaka. We also purchased land for development in Belgium.

And our new X scale asset in Osaka.

We also purchased land for development in Dublin, and this table.

Revenues from owned assets represented 59% of our recurring revenues.

Revenues from own assets represent 59% of our recurring revenue.

Our capital investments delivered strong returns as shown on slide 10.

Our capital investments deliver strong returns as shown in slide 10.

Our now 158 stabilized assets increase recurring revenues by 5% year-over-year on a constant currency basis. The top end of our growth range, as expected, due to strong America's growth.

Our now 158 stabilized assets increase recurring revenues by 5% year over year on a constant currency basis. The top end of our growth rates as expected due to strong Americas growth.

These stabilized assets are collectively 86% utilized and generate a 27% cash on cash return on the gross PP&E invested.

These stabilized assets are collectively 86% utilized and generate a 27% cash-on-cash return on the gross PPE investment.

And please refer to slides 11 through 16 for an updated summary of 2022 guidance and bridges.

And please refer to slides 11 through 16 for an updated summary of 2022 guidance and bridge.

Do note, all growth rates are on a normalizing cost-of-currency basis, and our guidance does not include the anticipated results from the pending close of the main one acquisition or any potential future capital market act.

All growth rates are on a normalized and constant currency basis.

Our guidance does not include the anticipated results from the pending close the main one acquisition for any potential future capital market activities.

Starting with revenues for 2022, we expect top line growth of 9% to 10% above the top end of our long term range, reflecting the continued momentum in the business.

Starting with revenues for 2022, we expect top line growth of 9 to 10% above the top end of our long term range, reflecting the continued momentum in the business.

MRR churn is expected to remain within our targeted range of 2 to 2.5% per quarter.

<unk> is expected to remain within our targeted range of two to two 5% per quarter.

We expect 2022 adjusted EBITDA margins of approximately 46%, excluding integration costs. The result of strong operating leverage and efficiency initiatives in the business. Temporarily muted by the higher utility expense.

We expect 2022, adjusted EBITDA margins of approximately 46% excluding integration costs. The result of strong operating leverage and efficiency initiatives in the business temporarily muted by the higher utility expenses.

We expect to incur $20 million of integration costs in 2022 for our various acquisitions.

2022 AFFO is expected to grow 8% to 10% compared to the previous year, and the AFFO per share is expected to grow 7% to 8%.

2022, <unk> is expected to grow 8% to 10% compared to the previous year and.

<unk> per share is expected to grow 7% to 8%.

2022 capex is expected to be approximately 2.3 to 2.6 billion.

2022, Capex is expected to be approximately two three to $2 6 billion.

Including approximately $100 million of on balance sheet, <unk> spend which we expect to be reimbursed as we transfer these assets into the JV and.

including approximately $100 million of on-balance sheet ex-scale spend, which we expect to be reimbursed as we transfer these assets into the JVs, and about $160 million.

And about $160 million of recurring Capex spend.

And finally, we expect our 2022 cash dividends to increase is slightly greater than $1 1 billion.

And finally, we expect our 2022 cash dividends to increase to slightly greater than $1.1 billion.

ten percent increase over the prior year or an eight percent increase on a per share basis. So I'll stop here.

A 10% increase over the prior year or an 8% increase on a per share basis. So I'll stop here and let me turn the call back to Charles.

Thank you. In closing, we're immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us. Although the transitory effects from power pricing impact elements of our 2022 guide, our normalized results would indicate a business trajectory that puts us meaningfully ahead of our analyst data expectations.

Keith in closing we are immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us although the transitory effects from power pricing impact elements of our 2022 guide our normalized results would indicate a business trajectory to puts us meaningfully ahead of our analyst day expectations, we continue to work hard.

continue to work hard to further mitigate the in-year impacts of the Singapore power volatility and in parallel intend to continue to strengthen our market-leading position as the world's digital infrastructure company by scaling and transforming our data center business while also accelerating our digital services business to deliver on the promise of physical infrastructure as software

To further mitigate the in year impact for the Singapore car volatility and in parallel and intend to continue to strengthen our market leading position as the world's digital infrastructure company by scaling and transforming our data center business. While also accelerating our digital services business to deliver on the promise of physical infrastructure at software speed.

And we intend to continue to advance a bold ESG agenda addressing the urgency of climate change with a commitment to climate neutrality by 2030, and fostering a culture and workplace, where every person every day can confidently say I'm safe I belong in a matter of note. We were thrilled to recently received a perfect score from the human rights campaign.

And we intend to continue to advance a bold ESG agenda, addressing the urgency of climate change with a commitment to climate neutrality by 2030, and fostering a culture and workplace where every person, every day, can confidently say, I'm safe, I belong, and I matter. Of note, we were thrilled to recently receive a perfect score from the Human Rights Campaign and be recognized as a best place to work for LGBTQ plus equality.

Can be recognized as a best place to work for LGBTQ plus quality and are proud to be ranked number one in real estate and just capital's 2022 ranking of America's most just companies.

and are proud to be ranked number one in real estate in JustCapital's 2022 rankings of America's most just companies.

Over our nearly 25 year history, we have created and cultivated a foundational set of advantages superior global reach now spanning 66 metros in 27 countries.

Over our nearly 25-year history, we have created and cultivated a foundational set of advantages.

superior global reach, now spanning 66 metros in 27 countries.

Advantaged access to the world's most powerful digital ecosystems, with more than 10,000 customers and over half the Fortune 500. The world's most comprehensive and advanced interconnection platform. And a track record of service excellence that gives our customers the peace of mind they deserve.

Advantaged access to the world's most powerful digital ecosystems with more than 10000 customers and over half the fortune 500, the world's most comprehensive and advanced interconnection platform and a track record of service excellence that gives our customers the peace of mind data serve.

These advantages are strongly aligned to market trends and nearly impossible to duplicate. A dynamic that continues to fuel strong growth and a rapidly expanding addressable market that we are confident will translate to compelling long-term value creation.

These advantages are strongly aligned to market trends and nearly impossible to duplicate.

Dynamic that continues to fuel strong growth in a rapidly expanding addressable market and we are confident will translate to compelling long term value creation.

As we strive to fulfill our purpose, to be a platform where the world comes together, enabling the innovations that enrich our work, our life, and our planet, we will continue to show up every day, remaining in service to our state.

As we strive to fulfill our purpose to be the platform, where the world comes together, enabling the innovations that enrich our work our lives and our planet. We will continue to show up every day remaining in service to our stakeholders.

To each other to our customers to our communities and to you our shareholders. So let me stop there and open it up for questions.

to each other, to our customers, to our communities, and to you, our shareholders. So let me stop there and open it up for questions.

Our first question comes from Jordan Sadler Keybanc capital markets. Your line is open.

Our first question comes from Jordan Sadler, K-Bank Capital Market. Your line is open.

Thank you and good afternoon.

Thank you and good afternoon. First, I'd like to just touch on maybe some of the macro factors that you identified, Keith, in your prepared remarks. You know, first, just maybe

I'd like to just touch on maybe some of the macro factors that you identified.

Keith in your prepared remarks first just maybe.

On the margin impact.

on the margin impact related to the power costs that you're seeing in Singapore. I think you said there was 130 basis points impact year over year, but what specifically was the impact that you're seeing within the 46 percent margin related to Singapore? And then separately,

Related to the power cost that youre seeing in Singapore I. Thank you.

So there was a 130 basis points impact year over year, but what specifically was the impact that you're seeing within the 46% margin related to Singapore and then separately.

Can you maybe discuss how you might be dealing with any other exposures, you know, for example, in Europe , and, you know, if you were able to push through price increases to customers there to offset some of the exposure, some of the exposure you might have had?

Can you maybe discuss how you might be dealing with any other exposures.

For example in Europe and.

If you were able to push through price increases too.

Customers there to offset some of the exposure some of the exposure you might have had.

Sure Hey, Jordan as Charles let.

Hey Jordan, it's Charles. Let me step back and give you some additional color on the power pricing dynamics, and then Keith can add in both on that.

Let me, let me step back and give you some additional color on the on the power pricing dynamics.

Then Keith can add in and bolt on that we can sort of.

Tech teams discussion on that.

on the broader inflationary aspects of the business as well. You know, there's aspects of the power dynamic that are quite complex, but the net of it all is pretty easy to summarize. So, other than Singapore, which I'll talk about, we continue to be really well-hedged around the world, and as our bridges show, you'll see there the impact of, you know, the 130 BIFs, which I'll touch on here in a minute. Other than that, we're really seeing limited margin impact from that. In markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, which, as we've talked about in the past, we have the contractual ability to pass through, and offset in part also by strong operating leverage in the business, which we're very pleased about how that's materializing.

The broader inflationary aspects of the business as well.

Yes.

Theres aspects of the power dynamic there are quite complex, but the net of it all pretty pretty easy to summarize so other than Singapore, which I'll talk about we continue to be really well hedged around the world and as our bridges show you will see there the impact.

The 130 bps, which I'll touch on here a minute other.

Other than that we're really seeing limited margin impact from that in markets with higher volatility and we've really been able to offset the increased rates through a combination of some targeted price increases, which as we've talked about in the past we have the contractual ability to pass through.

And offset a part also by strong operating leverage in the business, which we're very pleased about how that's materializing, but.

But Singapore is clearly an outlier. Last fall, as we looked at the historical trends in that market and other factors, we, alongside our power advisors, decided that we were going to defer on locking in Singapore. And we were pressing, one, given the rates, where the rates were at that time, and two, given an ongoing negotiation of trying to get to a multi-year sort of hedged or locked

But Singapore is clearly an outlier last fall as we looked at the historical trends in that market and other factors, we alongside our power power advisers decided that we're going to defer on locking in Singapore.

And.

We were pressing one given the rates where the rates were at that time and two given an ongoing negotiation of trying to get to a multiyear sort of hedged or locked position.

Then, you know, really the fundamentals of the Singapore power market just dislocated, really driving an unprecedented level of volatility, and so counterparties weren't really able to offer rate locks.

Then the really the <unk>.

On the metals at Singapore power market, just dislocated really driving an unprecedented level of volatility volatility and so counterparties werent really able to offer rate locks and thats exposed is temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So that's where the the that exposure through <unk>.

exposed us temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So that's where that exposure, you know, through the course of the year is what we're estimating at about 100 bps. Then there's an additional 30 bps on a year-over-year compare basis that are an impact of favorable dynamics from our Texas BPPA, you know, last year.

The course of the year is what we're estimating at about 100 bps.

And then there's an additional 30 bps on a year over year compare basis or an impact of favorable dynamics from our Texas BPA.

Last year.

And so the combination of those factors account for about the 130 bps on margin.

So again absent that you'd be talking about margin guide that would be 47 and change.

So again, absent that, you'd be talking about a margin guide that'd be 47 and change, and I think in the broader context, would really reflect the tremendous health of the business.

And I think in the broader context would really reflect the tremendous health of the business.

So that's where we are on the on the margin issue in across the rest of Europe Yes, there's volatility as I said, we would sort of manage that through increasing targeted price increases in some cases those price increases we were going to phase them over a couple years because we feel like they're just

So thats, where we are on the on the margin issue.

Across the rest of Europe , yes, theres volatility.

I said, we would sort of manage that through increasing targeted price increases in some cases those price increases.

We're going to phase them over a couple of years, because we feel like they are just too.

too big to roll through in one plug. But again, the pressure that we, any pressure that we are seeing from that is being offset by nice operating leverage.

Too big to roll through in one slug.

But again the pressure that any pressure that we are seeing from that is being offset by by nice operating leverage in the business.

Okay, maybe you can comment on broader inflationary, you know, sort of factors in Europe and elsewhere. Yeah, Jordan, when it comes to the inflation aspect, as I said, we've invested heavily over the last couple of years in, as I said, a procurement and strategic sourcing team, and so we're getting ahead of many of the inflationary issues. In some cases, we've bought substantial inventory that we're housing at the supplier or the partner's

Keith maybe you can comment on broader inflationary sort of factors in Europe and elsewhere.

Jordan when it comes to the inflationary aspects I just said, we really we've invested heavily over the last couple of years.

As I said, a procurement and strategic sourcing team and so we're getting ahead of many of the inflationary issues in some cases, where blood substantial inventory that we're hosting.

The supplier of the partners.

Location and then we drawdown on that over time this will be.

location, and then we draw down on that over time. And so by locking in that commitment, we've been able to mitigate some of the inflationary risks.

By locking in that commitment.

To mitigate some of the inflationary risks.

Others might be experiencing but as I mentioned that we've got the supply available where in some cases, others will not have the supply available.

that others might be experiencing. Not to mention that we've got the supply available, where in some cases, others will not have the supply available.

So I think we've done a real good job locking it in. We're working on an extended basis over many years. We look forward with what our buying commitments are gonna be over that time period. And that's another aspect of our, again, our increased sophistication around what we're doing, when and where, and what we need, when and where. And so the team's doing a good job of sourcing the larger material items for that.

We've done a real good job locking it in.

Working on an extended basis over many years, we look forward with quarter buying commitments are going to be over that time period.

That's another aspect of our again our increase.

Increased sophistication around what we're doing when and where and what we need when and where and so the team is doing a good job of sourcing the the larger material items for that.

I'm going to say, though, the other area that is probably a little bit more difficult is just the human capital.

I'm going to say below the other area that is probably a little bit more difficult. It's just the human capital side and that's one of the greatest risks that you see all across the world and just sourcing not.

And that's, you know, one of the greatest risks that you see all across the world and just sourcing humans not only to do the construction, but all the manufacturing. And so getting ahead of all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing cycle.

Not only to do the construction, but all of the manufacturing and so getting a handle on all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing specials.

All that to say is I think we're in a really good spot. We've seen limited delays thus far.

All that to say is I think where they are really good spot, we're seeing limited delays thus far.

Certainly, prices have gone up in different sets of circumstances. As Charles sort of alluded to on his prior comment, we're putting through appropriate price increases into the marketplace. And it would depend, certainly, on the market, but we're putting appropriate price increases into the market accordingly. And one of the things you've heard us say, and maybe I didn't, just to repeat it, this quarter, again, we had meaningful net price, positive price reaction.

Certainly prices have gone up.

Different sets of circumstances.

Journalists are delivered to us.

As per our comments, we're putting through appropriate price increases.

<unk>.

Into the marketplace.

It's really on the market, but we're putting appropriate price increases into the market accordingly, but one of the things you've heard us say and maybe I can just.

Just to repeat it this quarter again, we had meaningful net price positive pricing actions and I can't even think of the last time, we talked about flat to.

And I can't even think of the last time we talked about flat to negative pricing.

Two negative pricing increases facilities and organization of our price increases.

And so as an organization, our prices increases are more than offsetting our price decreases, which has served us very well in our operating plan.

More than offsetting your price decreases which is.

It served us very well into our operating plan.

Thank you.

Our next question comes from Michael.

Our next question comes from Michael Rollins. Your line is open.

Michael.

Rollins.

Your line is open.

Mike and Eric.

We may have lost Michael.

Let's go into the next several years.

Person in the queue. Please.

Thank you. Our next question comes from David Barden.

Bank of America. Your line is open.

Hey, guys. Thanks, so much for taking the questions I appreciate it.

Hey guys, thanks so much for taking the questions. Appreciate it. Um, I guess I have two if I could. The first one, um...

I guess I have two if I could.

First one.

Charles or Keith, you kind of highlighted some of the vertical strengths that we're seeing across different markets. I think what we're trying to get our arms around is, as we kind of come out post-pandemic,

Maybe Charles or Keith.

You kind of highlight some of the vertical strength that we're seeing across different markets I think what we're trying to get our arms around it as we kind of come out post pandemic.

And you've got this kind of global vision of where people who are still mired in, in, in, in, in Colby are doing one thing and maybe other economies are doing a new thing. Could you kind of elaborate a little bit on that?

And you've got this kind of global vision of where people who are still mired in in in Colby are doing one thing and maybe other economies are doing a new thing could you kind of elaborate a little bit on how we're watching the vertical demand evolve, what's going up whats going down and I guess the SEC.

how we're watching the vertical demand evolve, what's going up, what's going down. And I guess the second question is, now that we've got the Singapore moratorium lifted, it did kind of put a spotlight on this progression towards kind of green power. Could you kind of comment on what, if any, other geographies you see are kind of...

Question is now that we've got the senior for moratorium lifted it did kind of put a spotlight on this progression towards kind of green power.

You kind of comment on.

What if any other geographies you see are kind of.

concerned about this issue and obviously you've been a leader in this, but I'd be interested to see what that leadership might be getting you from a demand standpoint. Thanks.

Concerned about this issue and obviously you've been a leader in this but.

I'd be interested to see what that leadership, Mike getting you from a demand standpoint. Thanks.

Sure David I'll take the first one and then I think Keith and maybe Pat.

Sure. David, I'll take the first one and then I think Keith and maybe Kat can weigh in on the, on the, you know, sustainability side as well, given that she's so close to that. I will tell you that we're seeing just tremendous strength, you know, across the board, really, in our verticals. It's interesting because as I've looked at the last few scripts, it seems like every time we say we have strength somewhere else. So it's not like we're saying

And weigh in on the on the sustainability side as well given the XI so close to that.

I will tell you that we're seeing just tremendous strength.

Across the board really.

In our verticals.

Because as I've looked at the last few scripts. It seems like every time, we say ramp strengths somewhere else. So it's not like we're saying.

Please.

And, you know, we, and as it relates to, and I think that's really driven by this, you know, this really strong movement towards digital transformation and people saying, hey, that is a critical source of competitive advantage, or at least keeping up, and they're, you know, they're making investments accordingly, and how they think about their infrastructure, how they think about the mix between, you know, cloud-based workloads and private infrastructure, I think is really, you know, moving in ways that the wind is at our back. And, you know, I think the team has done a great job of, you know, articulating our relevance to those buyers. And, frankly, sales execution has been super strong. As it relates to COVID, I would tell you that we're not really, it is, you know, obviously, as you've seen, we're having ups and downs, and they're operationally challenging to be constantly dealing with sort of, you know, different mandates and mask mandates, and when we have to be doing, you know, sort of testing people, and when we're in the facilities, when we get an exposure, you know, dealing with that, et cetera. But, you know, the team has just done an amazing job on that. And I wouldn't say that I think we're seeing anywhere around the world that says, oh, they're kind of stuck in a.

And we.

And as it relates to and I think that's really driven by this this really strong movement towards digital transformation and people, saying, hey that is a critical source of competitive advantage or at least keeping up.

And they're making the investments accordingly, and how they how they think about their infrastructure, how they think about the mix between cloud based workloads and private infrastructure.

<unk> is really moving in ways that the windows that are back.

And I think the team has done a great job.

Articulating our relevant to those buyers.

And frankly sales execution has been super strong as it relates to Covid I would tell you that we're not really it is.

Obviously as you've seen we're having ups and downs and they are operationally challenging.

<unk> constantly dealing with sort of.

Different mandates at mass mandates and when we have to be doing sort of testing people and when we're in the facilities when we get an exposure dealing with that et cetera.

But the team has just done an amazing job on that and I wouldn't say that I think we're seeing anywhere around the world that says Oh, they're kind of stuck in.

you know, in a pause mode due to, due to COVID. People seem to be powering through that and saying, we gotta, we gotta move forward regardless. And, and so, you know, I think we've seen, you know, really broad, really broad strength.

In a pause mode due to due to COVID-19 people seem to be powering through that and saying we got to we got to move forward regardless.

And so I think we're seeing really broad really broad strength.

Keith, do you want to take the Singapore moratorium and sustainability question?

Want to take the Singapore moratorium and sustainability questions.

Yeah, I'll kick that off. I'll tell you, David, we're very excited to see the moratorium lifted out over in Singapore. That is absolutely one of our strongest markets, and it is a chance to highlight our focus on sustainability. You're seeing us really try to get in front of this. You know, we were actually the first data center to announce a commitment to climate neutrality by 2030. We rolled out science-based targets. Now, underlying that is a very deep green program, whether it's enhancing our renewable energy coverage.

I'll kick that off I will tell you David we're very excited to see the moratorium lifted out in Singapore that is absolutely one of our strongest markets and it has a chance to highlight our focus on sustainability. You are seeing is really try to get in front of it.

We were actually the first data center to announce their commitment to climate neutrality by 2030.

Rolled out the science based target now underlying that is a very deep green program, whether it's enhancing our renewable energy coverage.

Looking at areas like energy efficiency, which I am certain our investors are going to love as well because these returns around those projects.

It includes looking at areas like energy efficiency, which I am certain our investors are going to love as well because there's returns around those projects, as well as just broadening our commitment in talking with customers. We've seen a huge uptick in customer outreach around this. We used to talk to about 50 customers a year. We're now up to a run rate of 1,000 customers reaching out, asking for all sorts of data to help them really green their supply chain.

As long as it's broadening our commitments and talking with customers, we've seen a huge uptick in customer outreach round that we used to talked about 50 customers a year. We're now up to a run rate of a thousand customers, reaching out asking for all sorts of data to help them really green their supply chain.

So while it certainly is getting a lot of focus around the world, I do believe it's an opportunity. And there's markets, whether particularly the European markets, that are heavily focused on this. And you're seeing us react in certain areas, like in Germany. You know, Germany is... If you go to any of our new German sites, they all have green facades in front of them, as well as implementing new renewable energy coverage. So I think you'll see us continue to lean on that.

Well it certainly is getting a lot of focus around the world.

I do believe it's an opportunity and there's markets weather, particularly the European markets are heavily focused on this and.

And youre seeing us react to in areas like in Germany, Germany is.

If you go to any of our new German sites. They all have green facades on front of them as well as implementing new renewable energy coverage.

You'll see us continuing to lean in heavily around that.

Yeah, one one more comment. Interestingly is is a big deal for talent as well. Talent wants to be working for companies that they believe are committed to sustainability and are are doing the right things. And and so, and I think maybe that you need are particularly true in India, but but we're seeing that across the board. Awesome. All right.

Yes, one more comment interestingly is is a big deal for talent as well.

<unk> wants to be working for companies that they believe are committed to sustainability and our are doing the right. Thanks.

And I think maybe that correctly.

Unique, particularly true in EMEA.

But we're seeing that across the board.

Alright. Thank you guys really appreciate it.

Okay.

Our next question comes from Michael Rollins, Citi. Your line is open.

Our next question comes from Michael Rollins of Citi. Your line is open.

Thanks can you hear me now.

We can.

Great well, thanks for taking the questions two if I could first.

Great. Well, thanks for taking the questions. You know, two, if I could, uh, first.

Going back to the organic constant currency revenue guidance, I'm curious if you could just unpack some of the relative strengths to the annual target, how much might be coming from some of the pricing actions versus the pickup and demand for services, or if there's any other areas of strength that we should be mindful of. And then the second question is, you know, for a number of quarters now you've been discussing the evolution.

Going back to the organic constant currency revenue guidance I'm curious if you could just unpack some of the relative strengths to the annual target how much might be coming from some of the pricing actions versus the pickup in demand for services or if theres any other areas of strengths that we should be mindful of and then the second.

Question is.

For a number of quarters now you've been discussing the evolution.

In the.

in the contribution to logos and bookings from the indirect channel, and as you've had more experience with that channel, I'm curious, once the customers come in through that channel, how do they look relative to the customers that you get from your direct sales force? Are they, you know, adding services, expanding, or are there different characteristics of their revenue life cycle, you know, versus, you know, in indirect versus direct? Thank you. Thank you.

The contribution to logos in bookings from the indirect channel and as you've had more experience with that channel I'm curious once the customers come in through that channel how did they look relative to the customers that you get from your direct sales force are they adding services expanding or are there different character.

<unk> of their revenue lifecycle versus an indirect versus direct.

Thanks, Mike.

So on the organic constant currency guide I would say, it's a combination of factors. Obviously there is a we did say we're in a rising price environment, but that's not a major factor there is actually not a ton of that also that is associated with price increases on the power front theres. Some in there, but thats not a major factor.

So on the organic constant currency guide, I would say, you know, it's a combination of factors. Obviously, there is a, you know, we did say we're in a rising sort of price environment, but that's not a major factor. There's actually not a ton of that also that is associated with price increases on the power front. There's some in there, but that's not a major factor. You know, we are seeing, obviously, digital services outpace the broader business, but it's a...

We are seeing obviously digital services outpaced the broader business, but it's a small portion right.

I mean, the broader and traditional core business is so big that that's really the driving force. And so, I point mostly to just momentum in the core business. I think we just continue to win. Geographic expansion is going well. Our acquisition assets are outperforming without exception. GPX is doing great, Bell's doing great, Excel's doing great. And we're building on that geographic advantage. We're selling into the hybrid and multi-cloud opportunity. And again, both customer demand is strong and sales execution has been excellent. So, I think it's driven mostly by, I think, the core, but we're also excited about the trajectory and the momentum that we see in digital services and how that's going to allow us to really respond to the evolving needs of the customer.

The broad broader than traditional core business is so big that that's really the driving force and so I'd point, mostly to just momentum in the core business.

I think we just continue to win.

Geographic expansion is going well our acquisition assets are outperforming without exception.

GPS is doing great Bell is doing great <unk> doing great.

We're when we're building on that geographic advantage, where we're selling into the hybrid and multi cloud opportunity and again, both customer demand is strong and sales execution has been excellent.

Excellent. So I think it's it's driven mostly by I think the core but we really are but we're also excited about the trajectory and the momentum that we see and in digital services and how thats going to.

Allow us to really.

Respond to the evolving needs of the customer in terms of channel.

In terms of channel, I would not say, off the top of my head, that a channel-acquired customer is meaningfully different. They often come in with a very solution-oriented mindset because typically we're working with a channel partner who's already selling to that customer something that is done better at Equinix.

I would not say off top my head the channel channel acquired customer is meaningfully different.

They also come in with a very solution oriented mindset, because typically it's we're working with the channel partner, who is already selling to that customer or something that.

That is done better at Equinix and so.

Okay.

I would say that the mix of business through the channel is quite good so it's really in that sweet spot.

I would say that the mix of business through the channel is quite good. So it's really in that sweet spot. But I don't think they look meaningfully different, I think they grow at, you know,

But I don't think they look meaningfully different they all I think they grow at.

Newly acquired customers writ large.

Grow faster, but that's true of both above channel as well as non channel customer. So I don't think they differ dramatically, but those we're going to continue to.

look at that. In fact, it's one of the priorities for the year ahead is continuing to refine our segmentation and make sure that we're delivering the right services to the right segment through the right channels. And I think increased, you know, sort of sophistication on that front is going to continue to pay dividends both on the revenue line and the margin line. Thanks. Our next question comes from Colby Cinsale, Cohen & Company. Your line is open. This is Michael on for Colby. Two questions if I may.

Look at that in fact, it's one of the priorities for the year ahead is continuing to refine our segmentation and make sure that we're delivering the right services to the right segments through the right channels and I think increased.

Sophistication on that front is going to continue to pay dividends both on the revenue line and the margin line.

Thanks.

Our next question.

Our next question comes from Colby Cinsale, Cohen and Company, your line is open.

Our next question comes from Colby <unk> Cowen and company. Your line is open.

Hi, This is Michael on for Colby two questions if I may.

Hi, this is Michael on for Colby. Two questions, if I may. First, we've seen key interconnect assets in Africa, namely Terraco, get acquired by one of your peers. And there's also another large global data center company that's reportedly for sale. Given you still have that incremental turn of leverage that you can deploy opportunistically, I just wanted to get your latest thoughts on how you're thinking about M&A. And then also, you know, as a second question.

First we've seen key interconnect assets in Africa, mainly telco.

Quantify one of your peers and there is also another large global data Center company. That's reportedly for sale given you still have that incremental turn of leverage that we can deploy opportunistically and I just wanted to get your latest thoughts on how you're thinking about M&A and then also.

The second question.

you know, you did 10% year over year America's growth in the fourth quarter, uh, you know, real acceleration there. Just wondering what you would expect to see from that business in 2022. Thank you.

The 10% year over year Americas growth in the fourth quarter.

Acceleration there just wondering what you would expect to see from that business in 2022. Thank you.

Sure.

On the M&A front, I guess what I'd say is, you know, we continue to believe M&A is a very appropriate and powerful tool in the kit. We've been very successful at it. We're going to continue to, you know, look at it as an opportunity to extend our reach, scale our business in key markets, and bring in, you know, a critical air connection asset.

On the M&A front I guess, what I'd say is we continue to believe M&A is a very appropriate and powerful tool in the kit.

We've been very successful at it we're going to continue to look at it as an opportunity to extend our reach scale or our business in key markets and bring in a critical care connection assets.

And so, yes, we're actively involved in those processes. We're going to maintain a level of discipline on that, as we always do. And that means we're probably not going to win every deal. But, you know, that's, it's really important, I think, particularly in markets with multiples that you could argue are overheated in the private markets.

And so yes, we are actively involved in those processes, we're going to maintain a level of discipline on that as we always do and that means we're probably not going to win every deal.

But that's it's really important I think particularly in markets with multiples that you could argue are overheated in the private markets.

To maintain that discipline and in terms of the leverage yes, we do we have that turn of leverage available that's a lot of balance sheet flexibility.

Burning a hole in our pocket. So we're we're happy to continue to have it end.

Use it to drive the best returns in the business and that's our capital allocation strategy is always to put it where we think we can generate the best returns so but I do expect M&A will be a piece of that puzzle and I'm sure you'll hear more from us over the course of the year on that front.

And that's, you know, our capital allocation strategy is always to put it where we think we can generate the best return. So, but I do expect M&A will be a piece of that puzzle, and I'm sure you'll hear more from us, you know, over the course of the year on that front. And as for the Americas, you know, we don't guide on a regional basis, but, you know, what an incredible, you know, sort of momentum from that business over the last five or six quarts. And as we said, you know, John Lennon team, our sales team and our ops team, and really

And as for the Americas, we don't guide on a regional basis, but what an incredible momentum from that business over the last five or six quarts.

And as for the Americas.

We don't guide on a regional basis, but what an incredible sort of.

Momentum from that business over the last five or six quarters.

And.

As we said John Lennon team, our sales team and our ops team and really the entire team just really strong execution Super excited.

As we said, you know, John Lennon team, our sales team and our ops team and really the entire team just, you know, really strong execution, super excited to, you know, take John's immense capabilities and apply them more broadly across the business.

Take John's.

Men's capabilities and apply them more broadly across the business.

But I think youre going to see I do think that this digital transformation demand is following sort of a typical pattern.

Really strong demand in America, and then emerging in other areas across the world and we see that we see that profile and so but as you look at it this quarter, it's pretty interesting and 10% in the America and 11% APAC nine in Europe .

Pretty darn strong across the board and a nice rebound in Europe .

And a nice rebound, you know, in Europe , and we're beginning to lap some of the, you know, some of the prior year increases that we saw there. And so, I think that, I think we're really staying strong across the board, but I do expect continued momentum in the Americas. Great. Thanks for the call. Our next question comes from Nick Del Dio, Lafayette-Matheson. Your line is open. Hey. Thanks for taking my question, guys. Two for you. Maybe one for Charles and one for Keith. You know, first, you know, as alluded to a moment ago, we've seen a few deals happen in Africa recently, you know, most notably you buying Maine One and Digital buying Terraco.

And we're beginning to lap some of the some of the prior year increases that we saw there and so.

I think that I think we're really seeing strong across the board, but I do expect continued momentum in the Americas.

Great. Thanks for the color.

Great, thanks for the call. Our next question comes from Nick.

Our next question comes from Nick del Deo.

Moffat Nathanson your line is open.

Hi, Thanks for taking my question guys.

Hey, thanks for taking my question, guys. Two for you, maybe one for Charles and one for Keith. First, as alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you buying Maine One and Digital buying Teraco. I'm sure you looked at all of them, maybe some that didn't even trade. Why was Maine One the best asset for Equinix, and is there a path for catching up with Teraco in South Africa over time?

For you, maybe one for Charlie and one for Keith.

First.

You guys alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you buying main one and digital buying telco I am sure you looked at all of them, maybe some that didn't even trade why was main won the best asset for Equinix and is there a path for catching up with Terra co in South Africa over time.

And then for Keith, on recurring CapEx, it seems like it's going to be at the very low end of your target range in 2022, and it's been towards the lower end for a few years now. Should we expect, you know, that to tick up in coming years, or is this kind of a new normal for recurring CapEx?

And then for Keith.

On recurring Capex it seems like it's going to be at the very low end of your target range in 2022, and it's been towards the lower end for a few years now should we expect that to tick up in coming years or is this kind of a new normal for recurring capex.

So let me take Africa, and then I'll hand, it over to Keith on the recurring Capex side.

So I'll let me take Africa and then I'll hand it over to Keith on the Regurence FX side. Look, we continue to believe Africa is a very attractive long-term market. It is definitely more, you know, it is one that's going to evolve over many years.

Look we continue to believe Africa is a very attractive long term market is definitely more is one that's going to evolve over many years.

And we're active in that market, as you know, and I wouldn't draw any specific comparisons between deals, because I think they provide different value, you know, but I will say we're very excited about Main One, and we think it's a great, you know, sort of cornerstone to build from. You know, Terraco is a great asset, it's a great team, and a good business, and, you know, we're going to continue, and South Africa is an important market. And so, that one didn't go our way, and we're going to find, we're going to continue to, you know, we're committed to competing in that market, you know, South Africa has to be a part of any thoughtful African strategy, and there's a variety of other paths for us in that market, and we're hard at work at that.

And we're active in that market as you know and I wouldn't I wouldn't draw any draw any specific comparisons between deals because I think they provide different value.

But I will say, we're very excited about <unk>.

And we think it's a great sort of cornerstone to build from.

<unk> is a great asset, it's a great team and a <unk>.

Good business.

And we're going to end.

South Africa is an important market and so that one didn't go our way and we're going to we're going to find and what we're going to continue to that we're committed to competing in that market South Africa has to be a part of any thoughtful African strategy and theres a variety of other paths for us in that market and we're hard at work at that.

And then Keith we'll take the recurring Capex.

And then keep looking at the recurring CapEx. And so it's just on the recurring CapEx. Yeah, we are at, we tend to, we are the sort of lower end of the range for fiscal year 22. Part of it's just timing, Nick. You know, recognizing that you, depending on what we have coming into the portfolio, it's going to dictate sort of the timing of the CapEx. So that'd be one thing. And so there, you saw an elevated Q4 number at roughly 5%.

And so it took us a recurring capex, yes, we are.

We tend to we are the sort of lower end of the range for fiscal year 'twenty two quite a its just timing.

Recognizing.

Depending on what we what we have coming into the portfolio.

It's going to dictate the timing of the Capex spend so that'd be one thing and so you saw an elevated Q4 number at roughly 5%.

um recurring capex relative to to revenue it steps down of course in q1 and then as we look through the year um it is roughly somewhere between two and three percent but i think the biggest thing is really about timing and the number of new assets that we're bringing into the portfolio and as a result when you think about the level of recurring capex that has to be made the newer the portfolio the better the position you have on recurring capex

Recurring capex relative to revenue.

Steps down of course in Q1, and then as we look through the year.

It is roughly similar to 2% and 3%, but I think the biggest thing is really about timing and the number of new assets that we're bringing into the portfolio and as a result, when you think about the level of recurring capex that has to be made the newer of the portfolio. The better the position you have on recurring capex.

I would continue to model two to three percent. It feels like a reasonable approach. And we'll continue to guide you accordingly. But in fairness to your long-term model, I think that would be a fair point.

We continue to model, 2% to 3% it feels like a reasonable approach.

We'll continue to guide you accordingly.

In fairness to your long term model I think that that would be a fair point.

Okay, great. Thank you guys.

Our next question comes from Jon Atkin of RBC capital markets. Your line is open.

Our next question comes from John Atkin, RBC Capital Markets, your line is open.

Yes, a couple of kind of EBITDA questions.

Yeah, a couple of kind of even a questions

or related questions, and then one on X scale. So, I was just interested in what are the churn expectations that are embedded in your 2022 guidance, and then noting the drop in Europe and EBITDA. What are some of the factors that drove that, and how can we think about margin developments by region, and what are the special items to kind of be mindful of?

A related question and then one on X scale. So I was just interested in what are the current expectations that are embedded in your in your 2022 guidance.

And then noting the drop in Europe in EBITDA.

What are some of the factors that drove that and how can we think about the margin.

Elements by region, and what are those special items to kind of keep in mind for us.

Sure.

Well, I think as it relates to churn, first and foremost, as I said in the previous remark,

Well I think as it relates to churn, but first and foremost as I said in the prepared remarks churn for the business was two 1% on average per quarter for 2021.

Turn for the business with 2.1% on average per quarter for 2021.

of 2% in the fourth quarter, which was great. And in many ways, as Charles sort of alluded to in his comments on revenue, part of the reason the revenues were so strong is, I like to say there's no faster way to a revenue dollar than merely eliminating churn.

2% in the fourth quarter, which was great and in many ways Youre Charles sort of alluded to this comments on revenue part of the reason the revenues were so strong is.

Like to say, there's no faster ways to a revenue dollar than merely eliminating churn and churn was very very low level as we look into 2022, theres not going to be a meaningful shift we are guiding you to the sort of the range of 2% to 225%.

and churn was at a very very low level. As we look into 2022, there's not going to be a meaningful shift. We have gotten into the sort of the the range of two to two and a half percent. That's you know indicative of you know indicative of what we think will happen. I think being in the midpoint is probably a fair approach at this stage. I will continue to update you on it but there's nothing meaningful that would there's nothing meaningful that would guide you differently at this point, John .

Indicative of.

Indicative of what we think will happen I think it would be at the midpoint is probably a fair approach at this stage and we'll continue to update you on it but there is nothing meaningful that would.

There is nothing meaningful that we would guide you differently at this point John is.

As it relates to European even job, there's a number of things that are going on.

As it relates to European EBITDA, there's a number of things that are going on in Q.

Q3, one example is, it's just the timing of cost more specifically, but if you look at the implications of Q4 relative to Q3, there's a German power rebate in the third quarter. And so you lap that into the fourth quarter, and then you've got higher seasonal costs in Q4, particularly with the winter months in Europe , you've got higher utility consumption.

Q3 is one example.

Is it just the timing of costs more specifically, but if you look at the implications of Q4 relative to Q3 there is.

German power rebates.

In the third quarter until you lap that into the fourth quarter and then you've got higher seasonal costs in Q4, particularly with the winter months in Europe , you've got higher utility consumption.

And so, as a result, it has an impact on the margin when you look at it more specifically. And then there was just the most.

As a result, it has an impact on the margin when you look at it more specifically and then there was just a moment.

Services and.

site services and an increased hiring cost in the quarter. But there was nothing fundamentally different about Europe that's going on. And overall, you know, our belief is the trajectory to our target of 50% EBITDA margins.

And increased hiring costs in the quarter, but there is nothing fundamentally different about Europe , what's going on and overall, our belief is the trajectory to our target of 50% EBITDA margins.

We're still well on that path notwithstanding the comments Charles made.

We're still well on that path, notwithstanding the comments that Charles made related to Asian power. That's going to be very much a transitory matter, and we'll get to the other side of that probably by the summer.

Weighted to Asia power, that's going to be very much a transitory matters, we'll get the other side of that.

Probably by the second half of the year.

And then on <unk>.

And then on X scale, just curious, any update on your kind of CapEx and growth assumptions, pricing assumptions as well, given the hyperscale demand that we've seen in the sector, as well as the high level of investment seen by a number of competing platforms. Just curious how you view hyperscale demand, pricing, and then your level of participation in terms of CapEx.

Gil just curious any update on your kind of capex and growth assumptions pricing assumptions as well given the hyperscale demand that we've seen in the sector as well as the high level of investment as seen by a number of competing platforms. Just curious how you view.

For skilled demands pricing and then your level of participation in terms of Capex.

Yes, yes.

Yeah, John , we've seen some increases in bill costs, but we're striving to offset those, one, by just continuing to be creative on the design front and continuing to sort of design, try to get some of those out from a design perspective, and then also on the sourcing front and really working on the strategic sourcing side. So we're at, and I think we're seeing returns relatively stable. I think pricing is aggressive but stable. I think that there, yes, there is plenty of supply in the market, but there's even more demand. So I would say, I think supply demand is quite balanced in the X scale realm right now. It's very chunky and very market specific, and so it's a little bit different than our retail business. But as you've seen, our uptake in lease up has been super strong thus far. I think the team's executed really well, and we feel good about that. So there's a lot of megawatts coming down the road and a lot of customer demand. So it's an exciting time, I think, for X scale, and we're pleased with the performance of that piece of the business. And it's important to just remind everybody that our exposure on the capital side is, we have gearing of 10 to one on that CapEx, right? So because we're only 20% of it and there's always leverage involved there. And so it really allows us to have a relatively modest overall exposure to that capital. And so we're putting the bulk of our capital to work on the retail side with really strong.

John .

We've seen some increases in build costs.

We're striving to offset those one by just continuing to be creative on the design front end continuing to sort of design try.

Try to get some of those out from a design perspective, and then also on the sourcing front and really working on the strategic sourcing side.

So.

Sure.

And I think finally, I think we're seeing returns relatively stable pricing.

Pricing is is aggressive but stable I think that there is yes, there is plenty of.

Supply in the market, but there's even more demand. So I would say I think supply demand is quite balanced in the X scale round right now.

It's very chunky and very market specific and so it's a little bit different than our retail business.

But as you've seen our uptake.

And lease up is that super strong thus far.

I think the teams executed really well.

We feel we feel good about that and so there's a lot of megawatts coming down the road and a lot of customer demand. So it's.

Exciting time, I think Brett scale, we're pleased with the performance of that piece of the business and.

I mean, it's important to just remind everybody that our exposure to the capital side. We are hearing of 10 to one on that Capex right. So because we're only 20% of it and Theres always leverage involved there.

And so so it really allows us to have a relatively modest overall exposure to that capital and so we're putting the bulk of our capital to work on the retail side with really strong returns.

Thank you.

Our next question comes from spinal Simon Flannery Morgan Stanley . Your line is open.

Our next question comes from Simon Flannery. Morgan Stanley , your line is open.

Great. Thank you very much. Good evening. I wonder if I could come back to the margin question. You talked a couple of times about margin trends improving in the second half of 2022. Perhaps just help us with what gives you the visibility into that. Is that mostly Singapore and how much clarity do you have there? And then you reiterated the 50 percent by 2025. So given the move here on 2022,

Great. Thank you very much good evening I wonder if I could come back to the margin question you talked a couple of times about margin trends improving in the second half of 'twenty to perhaps just to help us with what gives you that visibility on to that is that most of the Singapore.

And how much clarity how fair and then you reiterated the 50% from 2020 Sky. So given the move here on 22 do we see it going up fairly linearly from 23, 3% to 25 or are there other puts and takes there as we think about that long term growth.

Do we see it going up fairly linearly from 23 through to 25, or are there other puts and takes there as we think about that long-term goal?

Yes.

Yeah, well, what I say is, yes, the big factor on the margin profile in 2022 is Singapore, as we said, 100 bps of that, then you have 30 bps associated with the year-over-year compare on the benefits we got from the DPPA.

Yes, the big factor on the margin profile in 2022, as Singapore is instead of 100 bps of that and you have 30 <unk> associated with the year over year.

Compare on the on the benefits we got from the DPA.

Last year, and so thats the bulk of it I mean, you can see in the bridge there.

One not for their margin step down one not three of that is explained between those two factors and so there's not the rest is a series of puts and takes with some <unk>.

some, you know, some expenses, some investments, and really solid operating leverage in the business. And so, I would say, you know, it's mitigating the Sanford impact, it is operating, driving operating leverage in the business, which is going to be a key focus for John and the team and continue to drive the, you know, the scale in the business. And then, a strong pricing environment. So, I think we're continuing to see, you know, a solid pricing environment. We've demonstrated our ability, you know, to deliver distinctive value to our customers. And so, as the, you know, as the prices, I mean, as the, you know, some of the inflation goes, you know, we're going to go ahead and offset that to some degree on the pricing. So, I think all those factors, you know, sort of will lead us to some solid progression there from a margin standpoint. You know, and I wouldn't guide on where it goes from there and how linear it is or not. I think it's going to, we're going to make judgments in the business, as we always do about investments and how to maximize long-term value creation. But, I think what you heard loud and clear is the level of confidence on our part about the 50% target. And again, as we really dug in hard, which to some degree, the Sanford dynamic was a real catalyst for us to do, it gave us, you know, I think an increased level of confidence about how operating leverage is materializing. And that gives us confidence to sort of reiterate that 50% by 2025. All right. Thank you. Our next question comes from Sammy Baudry, Credit Suisse. Your line is open. Hi. Thank you very much for the question. I'm looking at your same store.

Some expenses from investments in really solid operating leverage in the business and so I would say is.

Mitigating the standpoint impact it is operating the driving operating leverage in the business, which is going to be a key focus for offer John and the team and continuing to drive the scale in the business.

And then and then a strong pricing environment.

We're continuing to see.

A solid pricing environment, we have demonstrated our ability to deliver distinctive value our customers and so as the as the.

Prices.

Some of the inflation goes we're going to go ahead and offset that some degree on the pricing. So I think all of those factors will lead us to some some some solid progression there from margin standpoint.

And I wouldn't guide on where it goes from there and how linear it is or not I think it's going to we're going to make judgments in the business as we always do about investments in and how to maximize long term value creation, but I think what you heard loud and clear is the level of confidence on our part about the 50% target.

And again as we really dug in hard which is to some degree the Singapore dynamic was a real catalyst for us to do it gave us I think an increased level of confidence about how operating leverages materializing.

And that gives us confidence to sort.

Sort of reiterate that 50% by 2025.

Great, thank you.

Alright, thank you.

Got that.

Our next question comes from Sami Badri Credit Suisse. Your line is open.

Our next question comes from Sammy Baudry, Credit Suisse, your line is open.

Hi, thank you very much for the question. I'm looking at your same store growth, and that definitely came in a little bit above people's expectations. And I'm trying to take some of your prior comments where you talked about if there was no Singapore utility impact, you would probably grow or be able to come in to just to leave it at margins of 47% and change. And this is making me think about the long-term picture and the road to 50%.

Hi, Thank you very much for the question.

I'm looking at your same store growth.

Definitely came in a little bit about people's expectations, and I'm trying to.

Some of your prior comments, where you talked about if there was no Singapore utility impact you would probably grow or be able to come in adjusted EBITDA margins of 47% and change and this is making me think about the long term picture and the road to 50%.

Does the same store have to grow 5% plus for you to get to 50% adjusted EBITDA margin long-term by 2025? Or could you just maybe unpack that growth rate or that vector for us?

The same store has to grow 5% plus for you to get to 50% adjusted EBITDA margin long term by 2025 or can you just maybe unpack.

That growth rate of that vector for us.

Sure. Yeah, I don't think the short answer is no. We said, you know, we typically guided in a 3 to 5% on the recurring revenue range. Obviously really pleased with 5% at the top end of that range for the Stabilize that.

Sure, Yes, I don't think the short answer is no.

We said, we've typically guided at a 3% to 5% on the recurring revenue range, obviously really pleased with 5% top end of that range. After the stabilized assets they move around a little bit depending on a variety of factors, but I think overall, we're continuing as business churns in those markets, we're replacing it with a strong sort of.

They move around a little bit depending on a variety of factors, but I think, you know, overall, we're continuing as business, you know, churns in those markets. We're replacing it with a strong, you know, sort of sweet spot business, continuing to drive interconnection, continuing to expand fabric into more locations that drives more interconnection. And so I think that's going to drive good results. But I don't think that's, I don't think, you know, it's incumbent on us to have that happen to get to the 50.

Sweet spot business, continuing to drive interconnection continuing to expand fabrics into more locations that drives more interconnection and so I think that's going to drive good results, but I don't think that I don't think.

It's incumbent on us to have that happen to get to the 50.

I think there's a variety of sources of operating leverage in our business as we examine our ability to simplify, automate, digitize our business that I think will give us the trajectory that we need to get to that 50%.

Theres a variety of sources of operating leverage in our business as we examine our ability to simplify automate and digitize our business.

I think we will give us the trajectory that we need.

To get to that 50%.

Got it thank you.

There are less.

Our last question comes from Ari Klein BMO capital markets. Your line is open.

Our last question comes from Ari Klein, BM Capital Markets, your line is open.

Thank you Charles you mentioned some of the challenges in hedging in Singapore as you look at other markets, where energy prices are elevated hedges roll off are you hedging at these higher prices and Jeff you also mentioned passing on some of the cost of what has been the response on the customer side from that.

Thank you. Carol, you mentioned some of the challenges in hedging in Singapore. As you look at other markets where energy prices are elevated and hedges roll off, are you hedging at these higher prices? And Jess, you also mentioned passing down some of those costs. What has been the response on the customer side from that?

Yeah, look, I mean, undoubtedly customers, you know, aren't excited about it, you know, but it is, you know, it is the reality that, you know, and it's different. The reality is in deregulated markets.

Yeah look I mean undoubtedly customers aren't excited about it.

But it is it is the reality.

And it's different realities in deregulated markets.

Everybody's in the same boat were all exposed to the regulated rate. If the rate rises is more than a certain percentage of our contracts allow us to pass that through and that's the baseline expectation of the customer and so while they may not love it.

the customer. And so while they may not love it, that's just an expectation. I think in deregulated markets, it's a little more complex. We have these multi-year hedges, which essentially allow you to dampen volatility and adapt to a rising rate environment more gradually. And so that's typically what we've seen. That's the way hedging works. You're either kind of chasing it down or following it up because your hedges work either with a plus or minus around a range. And so I think we're going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those hedges out into future years. And it's important to remember, we've been doing this for many, many years. And so it's not really a new dynamic. There are definitely some markets that were more volatile and more spiky. And then you have to make a judgment about if your rate increase and the potential price increase, if the price increase, you reflect something that doesn't feel right from a long-term customer relationship standpoint, and we always take the long lens on our customer relationships, then we'll adjust accordingly. And that could mean that we have some pressure from that. But as you see in the bridges, we've been able to offset that with other operating leverage. And so we expect that to continue to be the case. You know, this is an area where the scope and the scale of our business really helps us. And so, you know, yes, there are factors out there that we have to deal with, and we deal with them carefully and with the customer in mind. And I think, as you can see, we feel confident we'll be able to manage through it. Got it. And are those price increases permanent? So if, I guess, if pricing or energy costs normalize, can that turn into a tail end?

That's just an expectation.

I think in deregulated markets, it's a little more complex.

Had these multiyear hedges, which essentially allow you to dampen volatility and adapt to in a rising rate environment more gradually.

And so that's typically what we've seen and that's the way of hedging works in it.

Youre, either you're kind of chasing it down we're following it up because your hedges work, either plus or minus around a range and so so I think we're going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those hedges out into future years.

And it's important.

Remember we've been doing this for many many years.

So it's not a not really a new dynamic there are definitely some markets that were more volatile and more spiky.

And then you have to make a judgment about is that if your rate increase in Europe and the potential price increase.

If the price increase you reflects something that doesn't feel right from a long term customer relationship standpoint, and we always take the long lens on our customer relationships. Then, we'll we'll we'll adjust accordingly.

And that could mean that we have some pressure from that but as you see in the bridge is we've.

Been able to offset that with other operating leverage and so we expect that to continue to be the case.

This is an area, where the scope and the scale of our business really helps us.

And.

So yes, there are factors out there that we have to deal with and we deal with them carefully and with the customer in mind.

And I think.

As you can see and we feel confident we'll be able to manage through it.

Got it and are those price increase is permanent or I guess, if pricing or <unk>.

Got it. And are those price increases permanent? So I guess if pricing or energy costs normalize, can that turn into a tailwind from your snapshot?

Energy costs normalized and that turned into a tailwind tailwind from yourselves.

Yes, very good question.

Yeah, very good question. Here's what I would say. There are different types of price increases. We're actually implementing some baseline new pricing for new deals because of a broader set of inflationary characteristics.

Here's what I would say there are different types of price increases, we're actually implementing some baseline sort of new new pricing for new deals.

A broader set of inflationary characteristics.

um, and a and a deep confidence in the value that we deliver to customers. Those I view as more

And a and a deep confidence in the value that we deliver to customers those I view as more structural.

But then in other markets, there are more temporal pricing adjustments associated directly with the utility volatility. And I wouldn't expect those to be permanent. If it retrenches, then we would want to give that back to the customer. But we've been hedged. Our hedging strategy allows us to really dampen that volatility out typically.

But then in other markets there are more temporal pricing adjustments associated.

Directly with the utility volatility and I would.

I wouldn't expect those to be permanent if they if it retrenching.

Would want to give that back to the customer so.

We are.

But we've been we've been hedged.

Our hedging strategy allows us to really dampen that volatility out typically.

We have definitely seen more volatility. So, I wouldn't say we're going to just bank them regardless of what happens in, you know, to power prices in the future, but I do think that for all those, but I do think there's a level of them that are more, a level of those that are more structural in terms of new price points on new deals.

<unk> definitely seen more volatility so I wouldn't say, we're going to just bank, regardless of what happens in power prices in the future.

But I do think that for all of those but I do think there is a level of them. There are more a level of those that are more structural in terms of new price points on new deals.

Got it thank you.

You bet Eric.

Thank you that concludes our Q4 call. Thank you for joining us.

Thank you. That concludes our Q4 call. Thank you for joining us.

Yes.

[music].

Good afternoon, and welcome to the Equinix fourth quarter earnings Conference call all lines will be on listen only until we open for questions. Also today's conference is being recorded if anyone has objections. Please disconnect at this time I'd like to now turn the call over to Katrina <unk> Senior Vice.

afternoon and welcome to the Equinix fourth quarter earnings conference call. All lines will be on listen only.

Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I'd like...

Katrina Rimel, Senior Vice President of Corporate Finance and Sustainability, you may begin.

Evidence of corporate finance and sustainability you may begin.

Good afternoon, and welcome to today's conference call before we get started I'd like to remind everyone that some of the statements. We're making today are forward looking nature.

Good afternoon and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we're making today are forelooking nature and involve risk and uncertainty.

And involve risks and uncertainties.

It may be affected by the risks we identified in today's press release and those identified in our filing with the SEC, including our most recent Form 10-K , filed on February 19, 2021, and 10-Q, filed on November 4, 2021.

Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is Equinix's policy not to comment on the financial guidance during the quarter unless it is done through an explicit public disclosure.

In addition, we'll provide non-GAAP measures on today's conference call.

In addition, we will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures

We provide a reconciliation of those measures to the most directly comparable GAAP measures.

And a list of the reasons why the company uses these measures in today's press release on the Equinix IR page at Www Equinix Dot com.

and a list of the reasons why the company uses these measures in today's press release on the Equinix IR page at www.equinix.com.

We have made available on the IR page of our website a presentation designed to accompany this discussion along with certain supplemental financial information and other data.

We have made available on the IR page of our website a presentation designed to accompany the

along with certain supplemental financial information and other data.

We'd also like to remind you that we post important information about Equinix IR page from time to time and encourage you to check our website regularly for the most current available information.

With us today are Charles Meyers, Equinix, as CEO , and President and Keith Taylor Chief Financial Officer.

With us today are Charles Myers, F1-X's CEO and President, and Keith Taylor, Chief Financial Officer.

Following our prepared remarks, we'll be taking questions from sell side analysts.

Following our prepared remarks, we'll be taking questions from South Side Analysts.

In the interest of wrapping this up in an hour we'd like to ask these analysts to limit any follow on questions to just one.

In the interest of wrapping this call up in an hour, we'd like to ask you panelists to limit any following questions to just one. At this time,

At this time I'll turn the call over to Charles.

Thanks Katrina. Good afternoon everybody and welcome to our fourth quarter range call. We had a great finish to the year with our best bookings performance ever, driven by an exceptional demand backdrop for our business. With continued strength across our platform, more specifically in the Americas, low churn and continued momentum in our digital services portfolio.

Specifically in the Americas, low churn and continued momentum in our digital servicing portfolio for the full year, we achieved over $6 $6 billion of revenue, marking our 17th consecutive quarter of top line increases and amazing 19 years of continuous revenue growth, while driving attractive <unk> per share to the bottom line.

For the full year, we achieved over $6.6 billion of revenue, marking our 76th consecutive quarter of top lining.

an amazing 19 years of continuous revenue growth, while driving attractive AFFO per share to the bottom line.

And this is globally continue to prioritize digital transformation and the foundational source of competitive advantage and the secular drivers for our business have never been stronger as digital leaders demand infrastructure that is more distributed more ecosystem powered more flexible more sustainable and more interconnected than ever before.

Increasingly equinix represents a critical point of Nexus customers implement hybrid and multi cloud as the clear architecture of choice.

As the global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands and capture the enormous opportunity ahead.

And as a global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands and capture the enormous opportunity ahead.

As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong with a solid demand pipeline stable churn in a rising price trends, resulting in our revenue outlook for the year that is at or above the high end of our long term guidance range and an <unk> share outlook, it's still within our long term guidance range despite pressure it.

The gross margin line associated with power price volatility in Singapore.

Absent these specific dynamics, our underlying business performance will be producing <unk> per share growth towards the high end of our analyst day guidance well ahead of our expectations.

absentee-specific dynamics, our underlying business performance would be producing AFFO for shared growth towards the high end of our analyst aid guidance, well ahead of our expectations.

We believe the current dislocation in Singapore is transitory, with power prices showing signs of moderating in the second half of the year.

We believe the current dislocation in Singapore, it's transitory with power prices showing signs of moderating in the second half of the year.

Bottom line, the business is performing very well and we remain on track to meeting or exceeding our Analyst Day objectives for both top-line revenues and ASFO per share growth. And as we see these temporary headwinds moderate and continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin to 50% by 2026.

Bottom line the business is performing very well and we remain on track to meeting or exceeding our analyst day objectives for both top line revenues at <unk> per share growth and as we see the temporary headwinds moderate and continue to realize efficiency gains from prior year investments, we have a strong resolve and continued confidence in our ability to scale adjusted EBITDA margin.

To 50% by 2025.

Turning to our results, as depicted on slide three, revenues for the full year were $6.6 billion, up 8% year-over-year. Adjusted EBITDA was also up 8% year-over-year, and AFFO per share grew 9%.

Interconnection revenues for the quarter grew 12% year-over-year with solid unit ads, reflecting strong momentum with Equinix Fabrics as expanding use cases drive connections to more locations and more counterparties. These growth rates are all on a normalized and constant-current basis.

Growth rates are all on a normalized and constant currency basis.

Our global reach remains as important as ever IDC predicts that by 2025 more than 50% of enterprise data will be generated at the edge and customers continue to see equinix as the best manifestation of the digital edge.

This competitive differentiation continues to drive our business with revenues from multi region customers, increasing 1% quarter over quarter to an impressive 75%.

This competitive differentiation continues to drive our business with revenues for multi-region customers increasing 1% quarter over quarter to an impressive 75%.

This acquisition will Mark the first step in <unk> long term strategy to become one of Africa's leading digital infrastructure providers and will position us well in the continent's largest economy.

To fuel our ongoing global interconnection leadership, we're also targeting strategic internet traffic flows by supporting and winning subsea cables, such as Ellalink, the first ever subsea cable between Europe and Latin America, which recently went into operation with POPs in our South Hollow 4, Libyan 1, and Madrid 2 IVXs. And by entering new markets, like our recently completed Genoa Italy IVX and our newly announced IVX in Salalah, Oman.

The fuel our ongoing global Air connection leadership, we're also targeting strategic Internet traffic flows by supporting and winning subsea cables, such as <unk>. The first ever subsea cable between Europe , and Latin America, which recently went into operation with Pops in our Sao Paulo or lived in one in Madrid to IV.

And by entering new markets like our recently completed Genoa, Italy, Ibs, and our newly announced <unk> and solar alone.

Our data center services portfolio remains the bedrock of Platform Equinix. We're excited about the recent appointment of John Lin to the position of EVP and general manager for data center services.

Don has delivered extraordinary results as president of our Americas business and is a great choice to implement our strategy and expand our global market leadership and interconnected co location.

To that end, we continue to expand our global footprint 41 major projects underway across 28 metros in 19 countries, representing over 20000 cabinets of retail and over 80 megawatts of X scale capacity.

To that end, we continue to expand on our global footprint with 41 major projects underway across 28 metros in 19 countries, representing over 20,000 cabinets of retail and over 80 megawatts of ex-scale capacity.

We remain focused on simplifying, automating, and digitizing our services, allowing us to scale our business and enhance operating leverage, and we're already seeing the results of these efforts. For example, we recently launched our new SecureCAD Express product, leveraging pre-deployed capacity to dramatically reduce cycle times and enable online quoting and ordering for our most commonly requested configuration.

We remain focused on simplifying and automating and digitizing our services, allowing us to scale, our business and enhanced operating leverage and we're already seeing the results of these efforts. For example, we recently launched our new secure cab express product leveraging pre deployed capacity dramatically reduced cycle times and enable online quote.

And ordering for our most commonly requested configuration.

We expect to roll this new service out to customers in the coming quarters driving increased customer responsiveness, while simultaneously enhancing margin.

We expect to roll this new service out to customers in the coming quarters, driving increased customer responsiveness, while simultaneously enhancing margins.

Our global interconnection franchise continues to perform well, and we now have over 419,000 interconnections on our industry-leading platform.

Our global interconnection franchise continues to perform well and we now have over 419000 interconnections on our industry leading platform in Q4, we added an incremental 7500 organic interconnection as enterprises drive growth and further enhance our ecosystem density.

Q4, we added an incremental 7,500 organic interconnections as enterprises drive growth and further enhance our ecosystem density.

Turning to digital infrastructure services cloud computing has permanently reshape customer expectations for speed and simplicity.

According to Digital Infrastructure Services, cloud computing has permanently reshaped customer expectations for speed and simplicity.

We want to deploy infrastructure, where they want it when they want it seamlessly seamlessly integrating cloud based workloads and private infrastructure and enabling agility in performance between the two <unk>.

As a result, customers are embracing a broader set of our services, combining fabric, metal, and network edge to build virtual points of presence. And our plan expansions will fully enable this capability across 30 markets by the end of 2020.

As a result customers are embracing a broader set of our services combining fabric metal and network edge to build virtual presence in our plant expansions will fully enabled their capability across 30 markets by the end of 2022.

Our acronic metal business delivered strong results with a great mix of wins and new logos across verticals and a healthy back.

Our equinix metal business delivered strong results with a great mix of wins and new logos across verticals and a healthy backlog.

And network edge saw continued traction with growth from new and existing customers as they use the service to implement Wan optimization and cloud to cloud routing.

And Network Edge saw continued traction with growth from new and existing customers as they use the service to implement WAN optimization and cloud to cloud routing.

Shifting to X scale in January we announced plans to expand at scale in South Korea with an agreement to establish a $525 million joint venture with GIC to develop two data centers in salt.

Difting to XScale, in January , we announced plans to expand XScale into South Korea with an agreement to establish a $525 million joint venture with GIC to develop two data centers in Seoul.

Total investment in our various Hyperscale joint ventures, when closed and fully built out, is now expected to be more than 8 billion dollars across 36 facilities globally with more than 720 megawatts of power capacity.

Investment in our various Hyperscale joint ventures, when closed and fully built out is now expected to be more than $8 billion.

Across 36 facilities globally with more than 720 megawatts of power capacity.

Currently have nine X scale builds under development and during the quarter, we fully leased the first phase of our Frankfurt 11 assets in the first and second phases of our soft power five asset representing approximately 20 megawatts of capacity.

Total X-scale leasing is now over 130 megawatts, and our initial JV and EMEA is over 80% leased.

Total lack scale leasing is now over 130 megawatts and our initial JV in EMEA is over 80% leased.

Now let me cover some of the highlights from our verticals.

Our network vertical had solid bookings quarter with healthy new logo activities led by the Americas as companies expand and optimize digital capabilities to support both the delivery and consumption of data at the edge.

Our network vertical had solid bookings quarter with healthy new logo activity led by the Americas as companies expand and optimize digital capabilities to support of the delivery and consumption of data at the edge.

New wins and expansions included a Fortune 200 telecom company deploying infrastructure to support the U.S.'s first cloud-native, open-RAN-based 5G network.

New wins and expansions included a fortune 200 Telecom company deploying infrastructure to support the U S is first cloud Native open ran based <unk> network.

in Lego Networks, an Australian cable systems operator deploying digital infrastructure to support a new subsea cable across Southeast Asia, Australia, and the U.S.

<unk> networks in Australia in cable systems, operator, deploying digital infrastructure to support a new subsea cable across Southeast Asia, Australia, and the U S and an African local telco deploying a network hub in Lisbon to improved pairing and performance.

and an African local telco deploying a network hub in Lisbon to improve peering and performance.

Our enterprise vertical saw another quarter of record bookings as IDC predicts almost half of the global economy will be based on are influenced by digital in 2022.

Fueling strong demand for hybrid infrastructure.

Q4 had particular strength in fintech, industrial services, and energy subsegments, with wins and expansions, including NASDAQ, a Fortune 500 technology company, scaling its cloud-enabled infrastructure to deliver ultra-low latency edge compute capabilities from our NY11 data center in Carteret.

<unk> had particular strength in Fintech industrial services, and energy sub segments with wins and expansions, including NASDAQ a fortune 500 technology company scaling it cloud enabled infrastructure to deliver ultra low latency edge compute capabilities from our NY 11 data center and Carter at.

Our buyer cloud communications and worked through a collaboration company implementing an edge data center strategy on platform Equinix to streamline private connectivity for our customers and ADT U S is leading smart home security provider embracing the cloud with an infrastructure modernization effort spanning multiple geographies.

Avaya, a cloud communications and workstream collaboration company implementing an edge data center strategy on platform equinix to streamline private connectivity for its customers. And ADT, the U.S.'s leading smart home security provider, embracing the cloud with an infrastructure modernization effort spanning multiple geographies.

Our cloud and it services vertical also had solid bookings this quarter led by the software and infrastructure sub segments with good momentum in EMEA and APAC expansions included Zee scalar a leading global 2000 security cloud provider upgrading capacity for sustainable enterprise cloud transformation and growing network traffic at the edge.

Our cloud and IT services vertical also had solid bookings this quarter, led by the software and infrastructure subsegments, with good momentum in EMEA and APAC. Expansions included Zscaler, a leading mobile 2000 security cloud provider, upgrading capacity for sustainable enterprise cloud transformation and growing network traffic at the edge.

Wiz Technologies, a Singaporean full suite IT service provider deploying on Equinix Metal and upgrading Fabric services to support quick and seamless business expansion.

With technology, the Singaporean full suite IP service provider deploying an equinix metal and upgrading fabric services to support quick and seamless business expansion.

and Oracle, a top five global software provider deploying FastConnect cloud on-ramps to support new regions in Singapore, Milan, and Stockholm, bringing their total number of on-ramps available at Equinix to 24, more than any of their other partners.

Our content and digital media vertical has strong links led by the publishing and digital media subsegments and record channel activity.

Our content digital media vertical had strong bookings led by the publishing and digital media sub segments and record channel activity expansions included cloud player. The U S based global web infrastructure and security company upgrading and expanding their footprint in over 40 markets Index exchange.

Expansions included CloudFlare, the U.S.-based global web infrastructure and security company upgrading and expanding their footprint in over 40 markets, IndexExchange, a global ad tech marketplace expanding compute nodes in APAC to manage traffic growth, and a top three global credit agency deploying regional network and cloud hubs in APAC to support its operations.

<unk> AD tech marketplace, expanding compute nodes in APAC demanded traffic growth and a top three global credit agency deploying regional network and cloud hubs in APAC to support its operations.

Our channel program delivered a record quarter to close the year, accounting for 40% of bookings and nearly 60% of new logos. And we have line of sight for channels to grow to 50% of our bookings in the coming years, as we enhance our systems and processes and leverage our diverse set of partners to scale our reach.

Wins were across a wide range of industry verticals and use cases with continued strength from strategic partners like Microsoft, Dell, Cisco, Google, and BT, including a significant win with Wipro and AT&T helping a utility company modernize its IT infrastructure in Europe and the U.S. So now it's time to call our receipts and coverage results.

On the call over to Keith and cover the results for the quarter.

Thanks, Charles. Good afternoon to everyone. I'll start my prepared remarks by saying our business is performing exceedingly well.

Thanks, Charles and good afternoon to everyone I'll start my prepared remarks by saying our business is performing exceedingly well.

Frankly, better than our expectations for both the quarter and year, and we're bringing our momentum into 2022.

Frankly, better than our expectations for both the quarter and year, when we're bringing our momentum into 2022.

We had a great end to the year delivering record gross and net bookings are very strong channel activity.

We had a great end to the year, delivering record growth in net bookings with very strong channel activity, while recording our highest ever recurring revenue step up in a quarter.

Recording our highest ever recurring revenue step up in the quarter.

For the year without any major acquisitions revenues were up over $600 million.

For the year, without any major acquisitions, revenues were up over $600 million.

Well, it's over 17500 deals into 2021, highlighting the tremendous scale and reach of our business.

We've closed over 17,500 deals in 2021, highlighting the tremendous scale and reach of our business.

The velocity of our go to market engine.

The Americas region continues to pick up steam growing 10% over the prior year effects, a double the rate of growth from last year.

America's region continues to pick up steam, growing 10% over the prior year, effectively double the rate of Peru from last year, benefiting from strong leadership and a distributed portfolio of highly interconnected IBX assets, resulting in record bookings and lower churn.

Fitting from strong leadership and its distributed portfolio are highly interconnected IBM assets, resulting in record bookings and lower churn.

For the company, our terms settled at the lower end of our guided range of 2 to 2.5% per quarter, for an average of 2.1% per quarter for the year, our lowest level since 2016.

For the company our church settled at the lower end of our guided range of two to two 5% per quarter for an average of two 1% per quarter for the year, our lowest level since 2016.

which is highly reflective of our strategy to put the right customer with the right application into the right IVF.

Which is highly reflective of our strategy to put the right customers with the right application into the right Ibs.

Quite simply the decisions, we're making are strengthening and extending our leadership position as the world's digital infrastructure company.

Quite simply, the decisions we're making are strengthening and extending our leadership position as the world's digital infrastructure company.

As previously discussed perhaps top of mind for you. There are a number of macroeconomic factors that we continue to proactively manage such as supply chain part costs interest rates and inflation.

As it relates to product costs, we're seeing approximately 130 basis points of in your margin pressure due to the temporarily inflated prior rates in Singapore, and the lapping of the favorable V. PPA settlements from Texas last February .

For 2022 were predominantly hedged to meet our global car leads but intend to continue to layer in additional hedges for the remaining 22 exposure.

For 2022, we're predominantly hedged to meet our global priorities, but intend to continue to layer in additional hedges for the remaining 2022 exposure and to meet the demands for future periods as we navigate past this unusually volatile period.

To meet the demand for future periods, as we navigate patches unusually volatile period.

As Charles noted, we expect the market dislocation in Singapore to be transitory largely given the current prices are significantly higher than any other markets that we operate in the.

As Charles noted, we expect the market dislocation in Singapore to be transitory, largely given that current prices are significantly higher than any other markets that we operate in.

Spot market rates appear to be trending down although they do remain volatile.

Sport market rates appear to be trending down, although they do remain volatile.

As reflected in our guidance, we expect second half margins to improve over the first half and we remain on our path to deliver against our analyst day, adjusted EBITDA and <unk> margin expectations.

As reflected in our guidance, we expect second half margins to improve over the first half, and we remain on our path to deliver against our endless day adjusted EBITDA and AFFO margin expectations.

As it relates to the rising interest rate environment, our balance sheet is very well positioned.

As it relates to the rising interest rate environment, our balance sheet is very well-positioned.

We have minimal near term exposure to rising interest rates with 95% of our debt fixed across the weighted average maturity periods of over nine years.

We have minimal near-term exposure to rising interest rates, with 95% of our debt fixed across a weighted average maturity period of over nine years.

Despite the recent increase in interest rates the cost of Boral remains at historically low levels, while we enjoy returns substantially higher than our multiples of our cost of barrel and whack.

And despite the recent increase in interest rate, the cost of borrow remains at historically low levels while we enjoy returns substantially higher than or multiples of our cost to borrow and wax.

Our financial strength continues to feel significant, and our balance sheet, fueled by our strong cash generation capabilities, has great flexibility.

Our financial strength continues to feel significant and our balance sheet fueled by our strong cash generation capabilities has great flexibility.

Lastly, with regards to supply chain and the inflationary pressures in the marketplace. We have invested heavily in a sophisticated and coordinating procurement and strategic sourcing organization.

Joining us to execute against our robust development pipeline across our platform, while continuing to deliver against our return expectations.

This is not to say there isn't congestion in the supply chain, but we feel very well-placed with our partners and suppliers, resulting in limited delays against our expectations.

This is not to say there isn't suggestion in the supply chain, but we feel very well placed with our partners.

Suppliers, resulting in limited delays against our expectations.

To highlight that point in the fourth quarter alone. We added 17, new projects to our IV <unk> build program.

To highlight that point, in the fourth quarter alone, we added 17 new projects to our IBX and ExField build program.

across 14 separate markets, while we completed seven projects across six markets.

Across 14 separate markets, while we completed seven projects across six markets.

Now let me cover the highlights for the quarter note that all growth rates in this section are on a normalized and constant currency basis.

Now let me cover the highlights from the quarter. Note that all growth rates in this section are on a normalized and constant currency basis.

As depicted on slide four global Q4 revenues were $1 706 billion.

As depicted on slide 4, global Q4 revenues were $1.706 billion.

up 10% over the same quarter last year and above the top end of our guidance range due to strong business performance led by the Americas.

Up 10% over the same quarter last year and above the top end of our guidance range due to strong business performance led by the Americas.

Consistent with our expectations, non-recurring revenue stepped down to 6% of total revenues in the quarter due to timing of large customer installations.

Consistent with our expectation nonrecurring revenue step down to 6% of total revenues in the quarter due to timing of large customer installations.

Interconnection revenues were 19% of recurring revenues, but strong growth across all three regions, reflecting the continued benefit of our global platform and diversified product portfolio.

Interconnection revenues were 19% of recurring revenues with strong growth across all three regions, reflecting the continued benefit of our global platform and diversified product portfolio.

Q4 revenues and out of our FX hedges included a $5 million headwind when compared to our prior guidance rate.

Core revenues net of our FX hedges included a $5 million headwind when compared to our prior guidance rates.

Global Q4 adjusted EBITDA was $788 million for 46% of revenues, up 11% over the same quarter last year, and above the top end of our guidance range due to strong operating performance and timing of spend.

Before, just to even up, the number of FX hedges included a $3 million headwind when compared to our prior guidance rates, and $5 million.

Q4, adjusted EBITDA net of our FX hedges included a $3 million headwind when compared to our prior guidance rates at.

$5 million of integration costs.

Global Q4 FFO was $564 million, in line with our expectations while absorbing the anticipated unseemly high recurring CapEx investments, similar to prior years.

Global Q4, <unk> was $564 million in line with our expectations, while absorbing the anticipated and seasonally higher recurring capex investments similar to prior years.

Before I go, I am our turn was 2% at the bottom end of our targeted 2 to 2 and a half percent rate.

Q4, global <unk> churn was 2% of the bottom end of our targeted two to two 5% range.

Turning to our regional highlights, whose full results were covered on slides 5 through 7.

Turning to regional highlights whose full results were covered on slides five through seven.

APAC and Americas were the fastest <unk> growing regions on a year over year normalized basis at 11% and 10% respectively, followed by the EMEA region, but step back up to 9% year over year growth as expected.

The Americas region had another outstanding quarter, delivering record bookings with robust channel activity strong net positive pricing actions and lower churn.

The Americas region had another outstanding quarter, delivering record bookings with robust channel activity, strong net positive pricing action, and lower returns.

The America's Momentum is broad-based with 24 of our 27 metros increasing gross bookings year over year. Led by our Boston, Denver, Mexico City, Los Angeles and Toronto markets.

The Americas momentum is broad based with 24 of our 27 metros, increasing gross bookings year over year led by our Boston, Denver, Mexico City, Los Angeles, and Toronto markets.

The former Bell, Canada assets continue to perform better than expected in part due to increasing carrier and cloud deployments and a key Canadian markets.

The former Bell Canada assets continue to perform better than expected, in part due to increasing carrier and cloud deployments in a key Canadian market.

Our EMEA region had a solid quarter with strong retail bookings.

Our AMIA region had a solid quarter with strong retail bookings of our UK, Dutch, and German

K Dutch and German businesses.

Interestingly, we're seeing growing customer interest in this region given our sustainability efforts.

including the recently signed DPPA with a wind farm developer in Finland to cover over 30 megawatts of capacity.

<unk>. The recently signed the PPA with a wind farm developer in Finland that cover over 30 megawatts of capacity.

And finally, the Asia Pacific region has a solid quarter with strong pricing and new local activity.

And finally the.

Asia Pacific region had a solid quarter with strong pricing and new logo activity.

We are experiencing good momentum and you do with the GPS assets performing well above plan.

We're experiencing good momentum in India with the GPX assets performing well above planned.

Although Singapore remains capacity constrained we welcome the government's recent decision to lift the moratorium on new data center builds.

Although Singapore remains capacity-constrained, we welcome the government's recent decision to lift the moratorium on new data center buildings.

Going forward, new construction will need to deliver strategic value and international connectivity for Singapore's digital economy, but also need to be at the forefront of sustainability.

Going forward, new construction will need to deliver strategic value and international connectivity for Singapore's digital economy, but also needs to be at the forefront of sustainability.

We feel extremely well positioned to deliver against the government's criteria.

We feel extremely well positioned to deliver against the governance criteria.

Now looking at our capital structure.

Now looking at our capital structure, please refer to slide 8.

Refer to slide eight.

For the year end.

At the year end, we had an unrestricted cap of approximately $1.5 billion.

We had unrestricted cash of approximately $1 5 billion.

A step up from last quarter due to strong operating cash flow at approximately $400 million of ATM funding.

a step up from last quarter due to strong operating cash flow and approximately $400 million in ATM funding, offset by our investment and the dividend payment.

Offset by our investments and the dividend payments.

In early January we renegotiated our line of credit providing us access to $4 billion of additional liquidity, while also increasing our financial flexibility under our new revised covenant package.

Looking forward, we'll continue to take a balanced approach to fund yard growth consistent with our investment grade rating, while staying focused on creating long term value for our shareholders.

Turning to slide nine for the quarter capital expenditures were approximately $817 million, including a recurring capex of $86 million.

Early slide nine for the quarter capital expenditures were approximately eight hundred and seventeen million including a recurring capex of eighty six million a meaningful increase over the prior

A meaningful increase over the prior quarter as expected.

We opened seven major projects since our last call, including new IBAX in Genoa, Munich, and Perth, and a new eggscale asset in Osaka. We also purchased land for development in Belgium.

We opened seven major projects since our last call, including new <unk> and General Munich.

And a new E X scale asset in Osaka, we.

Also purchased land for development in Dublin, and this table.

Revenues from owned assets represent 59% of our recurring revenue.

Revenues from owned assets represented 59% of our recurring revenues.

Our capital investments delivered strong returns as shown on slide 10.

Our capital investments deliver strong returns as shown in slide 10.

Our now 158 stabilized assets increased recurring revenues by 5% year over year on a constant currency basis. The top end of our growth rates as expected due to strong Americas growth.

Our now 158 stabilized assets increase recurring revenues by 5% year-over-year on a constant currency basis. The top end of our growth range, as expected, due to strong America's growth.

These stabilized assets are collectively 86% utilized and generate a 27% cash on cash return on the gross PP&E invested.

These stabilized assets are collectively 86% utilized and generate a 27% cash-on-cash return on the gross PPE investment.

And please refer to slides 11 through 16 for updated summary of 2022 guidance and written

And please refer to slides 11 through 16 for our updated summary of 2022 guidance and bridges.

All growth rates are on a normalized and constant currency basis.

Do note all growth rates are on a normalizing cost and currency basis, and our guidance does not include the anticipated results from the pending close of the main one acquisition or any potential future capital market act.

Our guidance does not include the anticipated results from the pending close the main one acquisition for any potential future capital market activities.

Starting with revenues for 2022, we expect top line growth of 9% to 10% above the top end of our long term range, reflecting the continued momentum in the business.

Starting with revenues for 2022, we expect top line growth of 9 to 10% above the top end of our long term range, reflecting the continued momentum in the business.

MRR is expected to remain within our targeted range of 2 to 2.5% per quarter.

<unk> is expected to remain within our targeted range of two to two 5% per quarter.

We expect 2022 adjusted EBITDA margins of approximately 46%, excluding integration costs, the result of strong operating leverage and efficiency initiatives in the business, temporarily muted by the higher utility expenses.

We expect to incur $20 million of integration costs in 2022 for our various acquisitions.

2022 AFFO is expected to grow 8% to 10% compared to the previous year and the AFFO for sure is expected to grow 7% to 8%.

2022, <unk> is expected to grow 8% to 10% compared to the previous year.

<unk> per share is expected to grow 7% to 8%.

2022 CapEx is expected to be approximately $2.3 to $2.6 billion.

2022, Capex is expected to be approximately two three to $2 6 billion.

including approximately $100 million of on-balance sheet ex-scale spend, which we expect to be reimbursed as we transfer these assets into the JVs, and about $160 million.

Including approximately $100 million of on balance sheet X scale spend which we expect to be reimbursed as we transfer these assets into the JV.

And about $160 million of recurring Capex spend.

And finally, we expect our 2022 cash dividends to increase to slightly greater than $1.1 billion.

And finally, we expect our 2022 cash dividends to increase to slightly greater than $1 1 billion.

A 10% increase over the prior year or an 8% increase on a per share basis.

10% increase over the prior year, or an 8% increase on a per share basis. So I'll stop here, and let me turn it over to you.

Dr <unk>.

Let me turn the call back to Charles.

Thanks, Keith in closing we are immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us although the transitory effects from power pricing impact elements of our 2022 guide our normalized results would indicate a business trajectory to puts us meaningfully ahead of our analyst day expectations, we continue to work.

continue to work hard to further mitigate the in-year impacts of the Singapore car volatility and in parallel intend to continue to strengthen our market-leading position as the world's digital infrastructure company by scaling and transforming our data center business while also accelerating our digital services business to deliver on the promise of physical infrastructure as software

Hard to further mitigate the in year impact of the Singapore car volatility and in parallel intend to continue to strengthen our market leading position as the world's digital infrastructure company by scaling and transforming our data center business. While also accelerating our digital services business to deliver on the promise of physical infrastructure at software speed and we.

We intend to continue to advance our bold ESG agenda addressing the urgency of climate change with a commitment to climate neutrality by 2030, and fostering a culture and workplace, where every person every day can confidently say I'm safe I belong in a matter of note. We were thrilled to recently receive a perfect score from the human rights campaign and BRAF.

Ignite as a best place to work for LGBTQ, plus quality and are proud to be ranked number one in real estate and Jeff Capital's 2022 ranking of America's most just companies.

and are proud to be ranked number one in real estate in JustCapital's 2022 rankings of America's most just companies.

Over our nearly 25 year history, we have created and cultivated a foundational set of advantages superior global reach now spanning 66 metros in 27 countries.

Over our nearly 25-year history, we have created and cultivated a foundational set of advantages.

superior global reach, now spanning 66 metros in 27 countries.

Advantaged access to the world's most powerful digital ecosystems with more than 10,000 customers and over half the Fortune 500. The world's most comprehensive and advanced interconnection platform and a track record of service excellence that gives our customers the peace of mind they deserve.

Vantage the access to the world's most powerful digital ecosystems with more than 10000 customers and over half the fortune 500, the world's most comprehensive and advanced interconnection platform and a track record of service excellence that gives our customers the peace of mind data serve.

These advantages are strongly aligned to market trends and nearly impossible to duplicate.

<unk> that continues to fuel strong growth in a rapidly expanding addressable market and we are confident will translate to compelling long term value creation.

As we strive to fulfill our purpose to be the platform, where the world comes together, enabling the innovations that enrich our work our life in our plan. We will continue to show up every day remaining in service to our stakeholders.

As we strive to fulfill our purpose to be a platform where the world comes together, enabling the innovations that enrich our work, our life, and our planet, we will continue to show up every day remaining in service to our state.

to each other, to our customers, to our communities, and to you, our shareholders. So let me stop there and open it up for questions.

To each other to our customers to our communities and to you our shareholders. So let me stop there and open it up for questions.

Our first question comes from Jordan Sadler Keybanc capital markets. Your line is open.

Our first question comes from Jordan Sadler, K-Bank Capital Market. Your line is open.

Thank you and good afternoon.

Thank you and good afternoon. First, I'd like to just touch on maybe some of the macro factors that you identified, Keith, in your prepared remarks. You know, first, just maybe

I'd like to just touch on maybe some of the macro factors that you identified.

Keith in your prepared remarks first just maybe.

on the margin impact related to the power cost that you're seeing in Singapore? I think you said there was 130 basis points impact year over year, but what specifically was the impact that you're seeing within the 46 percent margin related to Singapore? And then separately,

On the margin impact.

Related to the power cost that Youre seeing in Singapore, I think you.

So there was a 130 basis points impact year over year, but what specifically was the impact that you're seeing within the 46% margin related to Singapore and then separately.

Can you maybe discuss how you might be dealing with any other exposures.

For example in Europe and.

If you were able to push through price increases too.

Customers there to offset some of the exposure some of the exposure you might have had.

Sure Hey, Jordan, it's Charles.

Hey Jordan and Charles, let me step back and give you some additional color on the power pricing dynamics and then Keith can add in both on that we can sort of...

Let me step back and give you some additional color on the on the power pricing dynamics.

And then Keith can add in and bolt on that we can sort of.

Tech team have a discussion on.

discussion on the broader inflationary aspects of the business as well. There's aspects of the power dynamic that are quite complex, but the net of it all is pretty easy to summarize. So, other than Singapore, which I'll talk about, we continue to be really well hedged around the world. And as our bridges show, you'll see there the impact of the 130 BIFs, which I'll touch on here in a minute. Other than that, we're really seeing limited margin impact from that. In markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, which, as we've talked about in the past, we have the contractual ability to pass through, and offset in part also by strong operating leverage in the business, which we're very pleased about how that's materializing.

The broader inflationary aspects of the business as well.

Yes.

The 130 bps, which I'll touch on here a minute.

Other than that we're really seeing limited margin impact from that in markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, which as we've talked about in the past we have the contractual ability to pass through.

And offset in part also by strong operating leverage in the business, which we're very pleased about how that's materializing, but.

But Singapore is clearly an outlier. Last fall, as we looked at the historical trends in that market and the other factors, we, alongside our power advisors, decided that we were going to defer on locking in Singapore. And, you know, we were pressing, one, given the rates, where the rates were at that time, and two, given an ongoing negotiation of trying to get to a multi-year sort of hedged or locked

And.

We're pressing one given the rates where the rates were at that time and two given an ongoing negotiation of trying to get to a multiyear sort of hedged or loss position.

Then the really the.

Fundamentals of the Singapore power market, just dislocated really driving an unprecedented level of volatility volatility and so counterparties weren't really able to offer rate locks and thats exposed is temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So that's where the the that.

Those are through the course of the year is what we're estimating at about 100 bps.

And then there's an additional 30 bps on a year over year compare basis. They are an impact a favorable dynamics from our Texas BPA.

Last year.

And so, the combination of those factors account for about the 130 bps on margin.

And so the combination of those factors account for about 130 bps on margin.

So again, absent that, you'd be talking about a margin guide that'd be 47 and change, and I think in the broader context would really reflect the tremendous health of the business.

So again absent that you'd be talking about a margin guide that would be 47 and change.

And I think in the broader context would really reflect the tremendous health of the business.

So thats, where we are on the on the margin issue.

Across the rest of Europe , Yes, theres volatility as I said, we would sort of manage that through increasing targeted price increases in some cases those price increases.

We're going to phase them over a couple of years, because we feel like Theyre just too.

too big to roll through in one plug. But again, the pressure that we, any pressure that we are seeing from that is being offset by nice operating leverage.

Too big to roll through in one slug.

But again the pressure that we have any pressure that we are seeing from that is being offset by by nice operating leverage in the business.

Maybe you can comment on broader inflationary sort of factors in Europe and elsewhere.

Maybe you can comment on broader inflationary sort of factors in Europe and elsewhere. Yeah, Jordan, when it comes to the inflation aspect, as I said, we've invested heavily over the last couple of years in, as I said, a procurement and strategic sourcing team, and so we're getting ahead of many of the inflationary issues.

Jordan when it comes to the inflation aspects as I said, we've really invested heavily over the last couple of years.

As I said, a procurement and strategic sourcing team and so we're getting ahead of many of the inflationary issues in some cases, where blood substantial inventory that we're hosting.

In some cases, we've lost substantial inventory that we're housing at the supplier of the partners.

The supplier of the partners.

location and then we draw down on that over time. And so by locking in that commitment we've been able to mitigate some of the inflationary risks that others might be

Location and then we drawdown on that over time this will be.

By locking in that commitment.

Been able to mitigate some of the inflationary risks.

Others might be experiencing let's mentioned that we've got the supply available where in some cases, others will not have the supply available.

Not to mention that we've got the supply available, where in some cases others will not have the supply available.

We have done a real good job locking it in.

So I think we've done a real good job locking it in. We're working on an extended basis over many years. We look forward with what our buying commitments are gonna be over that time period. And that's another aspect of our, again, our increased sophistication around what we're doing when and where, and what we need when and where. And so the team's doing a good job of sourcing the larger material items for that.

Working on an extended basis over many years, we look forward with you a quarter by commitments are going to be over that time period.

That's another aspect of our again.

Increased sophistication around what we're doing when and where and what we need when and where and so the team is doing a good job of sourcing the the larger material items for that.

I'm going to say, though, the other area that is probably a little bit more difficult is just the human capital.

I'm going to say below the other area that is probably a little bit more difficult. It's just the human capital side.

And that's, you know, one of the greatest risks that you see all across the world and just sourcing humans, not only to do the construction, but all the manufacturing. And so getting ahead of all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing cycle.

One of the greatest risks that you see all across the world and just sourcing.

All of that to say is I think where they are really good spot, we're seeing limited delays thus far.

All that to say is I think we're in a really good spot. We've seen limited delays thus far.

Certainly prices have gone up.

Different sets of circumstances.

Charles are delivered to us.

His prior comments, we're putting through appropriate price increases.

<unk>.

Into the marketplace and it will depend.

Certainly on the market, but we're putting appropriate price increases into the market accordingly, but one of the things you've heard us say and maybe I can.

Just to repeat it.

This quarter again, we had meaningful net positive pricing actions.

And I can't even think of the Li time we talked about flat to to negative praing.

And even think of the last time, we talked about flat to.

Two negative pricing increases.

And so as an organization, our prices increases are more than offsetting our price decreases, which has served us very well in our operating plan.

As an organization our price increases.

More than offsetting your price decreases which is.

It served us very well into our operating plan.

Thank you.

Our next question comes from.

Our next question comes from Michael Rollins. Your line is open.

Michael.

Rollins.

Your line is open.

Mike and Eric.

We may have lost Michael.

Let's go to the next 70 exotic.

Person in the queue. Please thank.

Thank you. Our next question comes from David Barden.

Bank of America. Your line is open.

Hey, guys. Thanks, so much for taking the questions I appreciate it.

Hey guys, thanks so much for taking my questions. Appreciate it. I guess I have two if I could.

I guess I had two if I could.

The first one.

Maybe Charles or Keith.

Kind of highlight some of the vertical strength that we're seeing are quite different.

The market I think what we're trying to get our arms around it as we kind of come out post pandemic.

Um, and you've got this kind of global vision of where people who are still mired in, in, in, in, in cold it are doing one thing and maybe other economies are doing a new thing. Could you kind of elaborate a little bit on.

And you've got this kind of global vision of where people who are still mired in.

In in Colby are doing one thing and maybe other economies are doing a new thing could you kind of elaborate a little bit on <unk>.

We're watching the vertical demand evolve, what's going up whats going down and I guess the second question is now that we've got the senior for moratorium lifted.

I'd kind of put a spotlight on this progression towards kind of green power could.

Could you kind of comment on what if any other geographies you see are kind of.

concerned about this issue and obviously you've been a leader in this, but I'd be interested to see what that leadership might be getting you from a demand standpoint. Thanks.

<unk> learned about this issue and obviously you've been a leader in this but I'd.

I'd be interested to see what that leadership, Mike getting you from all that.

Dominion standpoint thanks.

Sure David I'll take first one and then I think Keith and maybe Pat.

Sure. David, I'll take the first one, and then I think Keith and maybe Kat can weigh in on the, you know, sustainability side as well, given that she's so close to that. I will tell you that we're seeing just tremendous strength, you know, across the board, really, in our verticals. It's interesting, because as I've looked at the last few scripts, it seems like every time we say we have strength somewhere else. So it's not like we're saying

Weigh in on the on the sustainability side as well given the XI so close to that.

I will tell you that we're seeing just tremendous strength.

Across the board really.

In our verticals.

Because as I've looked at the last few scripts. It seems like every time, we say ramp strengths somewhere else. So it's not like we're saying.

Please.

And, you know, we, and as it relates to, and I think that's really driven by this, you know, this really strong movement towards digital transformation and people saying, hey, that is a critical source of competitive advantage, or at least keeping up, and they're, you know, they're making investments accordingly, and how they think about their infrastructure, how they think about the mix between, you know, cloud-based workloads and private infrastructure. I think it's really, you know, moving in ways that the wind is at our back, and, you know, I think the team has done a great job of, you know, articulating our relevance to those buyers, and frankly, sales execution has been super strong. As it relates to COVID, I would tell you that we're not really, it is, you know, obviously as you've seen, we're having ups and downs, and they're operationally challenging to be constantly dealing with sort of, you know, different mandates, and mask mandates, and when we have to be doing, you know, sort of testing people, and when we're in the facilities, when we get an exposure, you know, dealing with that, et cetera, but, you know, the team has just done an amazing job on that, and I wouldn't say that I think we're seeing anywhere around the world that says, oh, they're kind of stuck in a.

And we.

And as it relates to and I think that's really driven by this.

Really strong.

<unk> towards digital transformation and people, saying, hey that is a critical source of competitive advantage or at least keeping up.

And they.

They are making the investments accordingly, and how they how they think about their infrastructure, how they think about the mix between cloud based workloads and private infrastructure.

I think it's really moving in ways that the windows that are back.

And I think the team has done a great job.

Articulating our relevance to those buyers.

And frankly sales execution has been super strong as it relates to Covid I would tell you that we're not really it is.

Obviously, we as you've seen we're having ups and downs and Theyre operationally challenging.

<unk> constantly dealing with sort of.

Different mandates that math mandates and when we have to be doing sort of testing people and when we're in the facilities when we get an exposure dealing with that et cetera.

But the team has just done an amazing job on that and I wouldn't say that I think we're seeing anywhere around the world that says Oh, they're kind of stuck in.

you know, in a pause mode due to due to COVID people seem to be powering through that and saying we gotta we gotta move forward regardless. And, and so, you know, I think we've seen, you know, really broad, really broad strength.

In a pause mode due to due to COVID-19 people seem to be powering through that and saying we got to we got to move forward regardless.

And so I think we're seeing really broad really broad strength gives.

Keith, do you want to take the Singapore moratorium and sustainability question?

<unk> you want to take the Singapore moratorium and sustainability questions, Yes, I'll kick that off I will tell you David we're very excited to see the moratorium lifted out in Singapore that is absolutely one of our strongest markets and it has a chance to highlight our focus on sustainability. You are seeing is really try to get in front of that.

Yeah, I'll kick that off. I'll tell you, David, we're very excited to see the moratorium lifted out over in Singapore. That is absolutely one of our strongest markets, and it is a chance to highlight our focus on sustainability. You're seeing us really try to get in front of this. You know, we're actually the first data center to announce a commitment to climate neutrality by 2030. We rolled out science-based targets. Now, underlying that is a very deep green program, whether it's enhancing our renewable energy coverage.

We were actually the first data center to announce a commitment to climate neutrality by 2030.

Rolled out science based target now underlying that is a very deep green program, whether it's enhancing our renewable energy coverage.

It includes looking at areas like energy efficiency, which I am certain our investors are going to love as well, because there's returns around those projects, as well as just broadening our commitment in talking with customers. We've seen a huge uptick in customer outreach around this. We used to talk to about 50 customers a year. We're now up to a run rate of 1,000 customers reaching out, asking for all sorts of data to help them really green their supply chain.

It includes looking at areas like energy efficiency, which I am certain our investors are going to love as well because these returns around those projects.

As long as it's broadening our commitments and talking with customers, we've seen a huge uptick in customer outreach around this we used to talk to about 50 customers a year. We're now up to a run rate of a thousand customers, reaching out asking for all sorts of data to help them really green their supply chain.

So while it certainly is getting a lot of focus around the world, I do believe it's an opportunity. And there's markets, whether particularly the European markets are heavily focused on this. And you're seeing us react to certain areas like in Germany. You know, Germany is, if you go to any of our new German sites, they all have green facades in front of them, as well as implementing new renewable energy coverage. So I think you'll see us continue to lean towards that.

Well it certainly is getting a lot of focus around the world how.

How do you believe it's an opportunity.

And theres markets, whether it particularly the European markets are heavily focused on this.

And youre seeing us react to in areas like in Germany, Germany is.

If you go to any of our new German sites. They all have green facades on front of them as well as implementing new renewable energy coverage. So I think you'll see us continuing to lean in heavily around this.

Yeah, one one more comment. Interestingly, is is a big deal for talent as well. Talent wants to be working for companies that they believe are committed to sustainability and are are doing the right things. And and so, and I think maybe that you need are particularly true. And I mean, but, but we're seeing that across the board. Awesome. Alright.

One more comment interestingly is is a big deal for talent as well.

Talent wants to be working for companies that they believe are committed to sustainability and our are doing the right banks and.

And I think maybe.

Our unique era, particularly true in EMEA.

But we're seeing that across the board.

Alright. Thank you guys really appreciate it.

Okay.

Our next question comes from Michael Rollins of Citi. Your line is open.

Our next question comes from Michael Rollins, Citi. Your line is open.

Thanks can you hear me now.

We can.

Great. Well, thanks for taking the questions. You know, two, if I could, uh, first.

Great well, thanks for taking the questions two if I could first going back to the organic constant currency revenue guidance I'm curious if you could just unpack some of the relative strengths to the annual target how much might be coming from some of the pricing actions versus the pickup in demand for services or if there is.

Any other areas of strengths that we should be mindful of and then the second question is.

For a number of quarters now you've been discussing the evolution.

<unk>.

The contribution to logos in bookings from the indirect channel and as you've had more experience with that channel I am curious once the customers come in through that channel how do they look relative to the customers that you get from your direct sales force are they adding services expanding or are there different character.

<unk> of their revenue lifecycle versus an indirect versus direct.

Thanks, Mike.

So on the organic constant currency guide I would say, it's a combination of factors. Obviously there is a we did say we're in a rising.

So, on the organic constant currency guide, I would say, you know, it's a combination of factors. Obviously, there is a, you know, we did say we're in a rising sort of price environment, but that's not a major factor. There's actually not a ton of that also that is associated with price increases on the power front. There's some in there, but that's not a major factor. You know, we are seeing, obviously, digital services outpace the broader business, but it's a...

This environment, but that's not a major factor there is actually not a ton of that also that is associated with price increases on the power front theres. Some in there, but thats not a major factor.

We are seeing obviously digital services outpaced the broader business, but it's a small portion right.

I mean, the broader and traditional core business is so big that that's really the driving force. And so, I point mostly to just momentum in the core business. I think we just continue to win, geographic expansion is going well, our acquisition assets are outperforming without exception, GPX is doing great, Bell's doing great, Excel's doing great. And we're building on that geographic advantage, we're selling into the hybrid and multi-cloud opportunity. And again, both customer demand is strong and sales execution has been excellent. So, I think it's driven mostly by, I think, the core, but we're also excited about the trajectory and the momentum that we see in digital services and how that's going to allow us to really respond to the evolving needs of the customer.

The broad broader than traditional core business is so big that that's really the driving force and so I'd point, mostly to just momentum in the core business I.

I think we just continue to win.

Geographic expansion is going well our acquisition assets are outperforming without exception.

<unk> is doing great Bell is doing great <unk> doing great.

We're at when we're building on that geographic advantage, where we're selling into the hybrid and multi cloud opportunity and again, both customer demand is strong and sales execution has been excellent. So I think it's it's driven mostly by I think the core but we really are but we're also excited about the trajectory and the momentum that we see.

And in digital services, and how thats going to.

To allow us to really.

Respond to the evolving needs of the customer in terms of channel.

In terms of channel, I would not say, off the top of my head, that a channel-acquired customer is meaningfully different. They often come in with a very solution-oriented mindset, because typically we're working with a channel partner who's already selling to that customer something that is done better at Equinix.

I would not say off the top my head the channel channel acquired customer is meaningfully different.

They also come in with a very solution oriented mindset, because typically it's we're working with the channel partners is already selling to that customer or something that.

That is done better at Equinix.

So.

I wouldn't say that.

I would say that the mix of business through the channel is quite good. So it's really in that sweet spot. But I don't think they look meaningfully different, I think they grow at, you know,

Mix of business through the channel is quite good so it's really in that sweet spot.

And but they don't I don't think they look meaningfully different they all I think they grow at.

Newly acquired customers writ large.

So faster, but that's true of both above channel as well as non channel customers I don't think they differ dramatically, but those we're going to continue to really look at that in fact, it's one of the priorities for the year ahead is continuing to refine our segmentation and make sure that we're delivering the right services to the right segments through the right channels.

And I think increased.

Of sophistication on that front is going to continue to pay dividends both on the revenue line and the margin line.

Thanks.

Our next question comes from Colby Cinsale, Cohen and Company. Your line is open.

Our next question.

Our next question comes from Colby <unk> Cowen and company. Your line is open.

Hi, this is Michael on for Colby. Two questions, if I may. Now, first, we've seen key InterConnect assets in Africa, namely Terraco, get acquired by one of your peers. And there's also another large global data center company that's reportedly for sale. Given you still have that incremental turn of leverage that you can deploy opportunistically, I just wanted to get your latest thoughts on how you're thinking about M&A. And then also, you know, as a second question.

Hi, This is Michael on for Colby two questions if I may.

First we've seen key interconnect assets in Africa in England telco.

Quired by one of your peers and there is also another large global data Center company. That's reportedly for sale given you still have that incremental turn of leverage that we can deploy opportunistically and I just wanted to get your latest thoughts on how youre thinking about M&A and then also.

The second question.

you know, you did 10% year-over-year America's growth in the fourth quarter, you know, real acceleration there. Just wondering what you would expect to see from that business in 2022. Thank you.

You did 10% year over year Americas growth in the fourth quarter.

Acceleration there just wondering what you would expect to see from that business in 2022. Thank you.

Sure.

On the M&A front I guess, what I'd say is we continue to believe M&A is a very appropriate and powerful tool in the kit.

We've been very successful at it we're going to continue to look at it as an opportunity to extend our reach scale or our business in key markets and bring in a critical care connection assets.

And so, yes, we're actively involved in those processes. We're going to maintain a level of discipline on that as we always do. And that means we're probably not going to win every deal. But, you know, that's, it's really important, I think, particularly in markets with multiples that you could argue are overheated in the private markets, you know, to maintain that discipline. And in terms of the leverage, yes, we do, we have that turn of leverage available. That's a lot of balance sheet flexibility. It's not burning a hole in our pocket. So, you know, we're happy to continue to have it and, you know, use it to drive the best returns in the business. And that's, you know, our capital allocation strategy is always to put it where we think we can generate the best return. So, but I do expect M&A will be a piece of that puzzle. And I'm sure you'll hear more from us, you know, over the course of the year on that front.

And so yes, we're actively involved in those processes, we're going to maintain a level of discipline on that as we always do and that means we're probably not going to win every deal.

But that's it's really important I think particularly in markets with multiples that you could argue are overheated in the private markets.

To maintain that discipline and in terms of the leverage yes, we do we have that turn of leverage available that's a lot of balance sheet flexibility.

Brian a hole in our pocket. So we're we're.

We're happy to continue to have it end.

And as for the Americas, we don't guide on a regional basis, but what an incredible momentum from that business over the last five or six quarts.

And as to the Americas.

We don't we don't guide on a regional basis, but what an incredible sort of.

Momentum from that business over the last five or six quarters.

It.

As we said, John Lennon team, our sales team and our ops team and really the entire team, just really strong execution, super excited to take John's immense capabilities and apply them more broadly across the business.

As we said John Lennon team, our sales team and our ops team and really the entire team just really strong execution Super excited.

Take John's.

<unk> capabilities and apply them more broadly across the business.

But I think youre going to see I do think that this digital transformation demand is following sort of a typical pattern.

Really strong demand in America, and then emerging in other areas across the world and we see that we see that profile and so but as you look at it this quarter, it's pretty interesting in that 10% in the America and 11% APAC nine in Europe .

Pretty darn strong across the board and a nice rebound in Europe , and we're going to be.

And a nice rebound, you know, in Europe , and we're beginning to lap some of the, you know, some of the prior year increases that we saw there. And so, I think that, I think we're really staying strong across the board, but I do expect continued momentum in the Americas. Great. Thanks for the call. Our next question comes from Nick Del Dio, Napa Nathanson. Your line is open. Hey, thanks for taking my question, guys. Two for you, maybe one for Charles and one for Keith. You know, first, you know, as alluded to a moment ago, we've seen a few deals happen in Africa recently, you know, most notably you buying Main One and Digital buying Terrico.

Gaining to lap some of the some of the prior year increases that we saw there so.

I think that I think we're really seeing strong across the board, but I do expect continued momentum in the Americas.

Thank you for the call.

Great. Thanks for the call.

Our next question comes from Nick del Deo.

Nathan Your line is open.

Hey, thanks for taking my question, guys, two for you, maybe one for Charles and one for Keith. You know, first, you know, as alluded to a moment ago, we've seen a few deals happen in Africa recently, you know, most notably you buying Maine One and Digital buying Teraco. I'm sure you looked at all of them, maybe some that didn't even trade. Why was Maine One the best asset for Equinix, and is there a path for catching up with Teraco in South Africa over time?

Hi, Thanks for taking my question guys.

For you, maybe one for Charles and one for Keith.

First.

You guys alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you bind main one and digital buying telco I'm sure you've looked at all of them, maybe some that didn't even trade why was main won the best asset for Equinix and is there a path for catching up with Terra co in South Africa over time.

And then for Keith.

Recurring capex it seems like it's going to be at the very low end of your target range in 2022, and it's been towards the lower end for a few years now should we expect that to tick up in coming years or is this kind of a new normal for recurring capex.

Let me take Africa and then I'll hand it over to Keith on the Regurence FX side. Look, we continue to believe Africa is a very attractive long-term market. It is definitely more, you know, it is one that's going to evolve over many years.

So let me take Africa, and then I'll hand, it over to Keith on the recurring Capex side.

Look.

We continue to believe Africa is a very attractive long term market is definitely more as one that's going to evolve over many years.

And we are active in that market as you know and I wouldn't I wouldn't draw any draw any specific comparison between deals because I think they provide different value.

But I will say, we're very excited about <unk>.

And we think it's a great sort of cornerstone to build from.

Telco is a great asset, it's a great team and a good business.

And we're going to change and in South Africa is an important market and so that one didn't go our way and we're going to we're going to find and what we're going to continue to that we're committed to competing in that market South Africa has to be a part of any thoughtful African strategy and theres a variety of other paths for us in that market and we're hard at work at that.

And then keep looking at the recurring capex. And so it's just on the recurring capex. Yeah, we are at, we tend to, we are sort of lower end of the range for fiscal year 22. Part of it's just timing, Nick. You know, recognizing that you, depending on what we have coming into the portfolio, it's going to dictate sort of timing of the capex then. So that'd be one thing. And so there, you saw an elevated Q4 number at roughly 5%.

And then Keith we'll take the recurring catheter.

And so it's just on the recurring Capex. We are at we tend to we are the sort of lower end of the range for fiscal year 'twenty, two quite a bit just timing Nick.

Recognizing.

Depending on what we what we have coming into the portfolio.

Going to dictate the timing of the Capex spend so that'd be one thing and so you saw an elevated Q4 number at roughly 5%.

um recurring capex relative to to revenue and steps down of course in q1 and then as we look through the year um it is roughly somewhere between two and three percent but i think the biggest thing is really about timing and the number of new assets that we're bringing into the portfolio and as a result when you think about the level of recurring capex that has to be made the newer the portfolio the better the position you have on recurring capex

Recurring capex relative to revenue.

Steps down of course in Q1, and then as we look through the year.

We will approach will continue to guide you accordingly.

But in fairness to your long term model I think that that would be a fair point.

Okay, great. Thank you guys.

Our next question comes from Jon Atkin of RBC capital markets. Your line is open.

Our next question comes from John Atkin, RBC Capital Markets, your line is open.

Yeah, a couple of kind of EBITDA questions.

Yes, a couple of kind of EBITDA questions.

Related questions and then one on X scale. So I was just interested in what are the current expectations that are embedded in your and your 2022 guidance and then noting the drop in Europe in EBITDA.

or related questions, and then one on X-scale. So, I was just interested in what are the churn expectations that are embedded in your 2022 guidance, and then noting the drop in Europe and EBITDA. What are some of the factors that drove that, and how can we think about the margin developments by region, and what are the special items to kind of be mindful of?

Some of the factors that drove that and how can we think about margin.

The development by region and what are those special items to kind of keep in mind for us.

Sure.

Well I think as it relates to churn first and foremost as I said in the prepared remarks trim for the business was two 1% on average per quarter for 2021.

Well, I think as it relates to churn, first and foremost, as I said in the prepared remarks

Return for the business was 2.1% on average per quarter for 2021.

of 2% in the fourth quarter, which was great. And in many ways, you know, as Charles sort of alluded to in his comments on revenue, part of the reason that revenues were so strong is, I like to say, there's no faster way to a revenue dollar than merely eliminating churn.

2% in the fourth quarter, which was great.

The way to utilize Charles sort of alluded to the comments on revenue part of the reason the revenues were so strong is I'd like to say, there's no faster ways to a revenue dollar than merely eliminating churn and churn was at a very low level as we look into 2022, theres not going to be a meaningful shift.

and churn was at a very very low level. As we look into 2022, there's not going to be a meaningful shift. We have gotten into the sort of the the range of two to two and a half percent. That's you know indicative of you know indicative of what we think will happen. I think being in midpoint is probably a fair approach at this stage. I will continue to update you on it but there's nothing meaningful that would there's nothing meaningful that that would guide you differently at this point.

We are guiding you to the sort of the range of two to two 5% that's indicative of.

And thinking about what we think will happen I think it would be at the midpoint is probably a fair approach at this stage and we'll continue to update you on it but there is nothing meaningful.

There is nothing meaningful that would be.

You guys do differently at this point John .

As it relates to European even job, there's a number of things that are going on.

As it relates to European EBITDA, there is a number of things that are going on in.

Q3, One example.

Is it just the timing of costs more specifically, but if you look at the implications of Q4 relative to Q3 there is a.

German power Rebase.

In the third quarter until we lap that into the fourth quarter and then you've got higher seasonal costs in Q4, particularly with the winter months in Europe , you've got higher utility consumption.

And so as a result, it has an impact on the margin when you look at it more specifically. And then there was just some outside services and an increased hiring cost in the quarter. But there was nothing fundamentally different about Europe that was going on. And overall, our belief is the trajectory to our target of 50% EBITDA margins.

As a result, it has an impact on the margin when you look at it more specifically and then Theres just the moat.

Services in India.

Increased hiring costs in the quarter, but there is nothing fundamentally different about Europe that is going on and overall, our belief is the trajectory to our target of 50% EBITDA margins.

Yeah, we're still well on that path, notwithstanding the comments that Charles made related to Asian power. That's going to be very much a transitory matter, and we'll get to the other side of that probably by this afternoon.

We're still well on that path notwithstanding the comments Charles maiden.

Related to Asia and power.

Can be very much a transitory matters, we'll get the other side of that.

Probably by the second half of the year.

And then.

On the on X scale, just curious any update on your kind of capex and growth assumptions pricing assumptions as well given the hyperscale demand that we've seen in the sector as well as the high level of investment as seen by a number of competing platforms. Just curious how you view.

Skilled demands pricing and then your level of participation in terms of Capex.

Yes, yes.

Yeah, John , we, you know, we've seen some increases in bill costs, you know, but we're striving to offset those one by just continuing to be creative on the design front and continuing to sort of design, you know, try to get some of those out from a design perspective, and then also on the sourcing front and really working on the strategic sourcing side. So, you know, we're and I think I think we're seeing returns relatively stable. I think, you know, pricing is is, you know, aggressive, but stable. I think that there is yes, there is plenty of supply in the market, but there's even more demand. So I would say, I think, you know, supply demand is quite balanced in the X scale realm right now. It's, you know, it's very chunky and very market specific and, you know, so it's a little bit different than our retail business. But as you've seen our uptake, you know, and Lisa has been super strong thus far, I think teams executed really well and we feel we feel good about that. So there's a lot of megawatts coming down the road and a lot of customer demand. So it's, it's an exciting time, I think, for X scale, and we're, you know, we're pleased with the performance of that piece of the business. And, you know, I mean, it's important to just remind everybody that our exposure to the capital side is, you know, we have gearing of ten to one on that capex, right? You know, so because we're only 20% of it, and there's always leverage involved there. And so so it really allows us to have a relatively modest overall exposure to that capital. And so so we're putting the bulk of our capital to work on the retail side, you know, with really strong.

John .

We've seen some increases in build costs, but.

We're striving to offset those one by just continuing to be creative on the design front end continuing to sort of design.

Try to get some of those out from a design perspective, and then also on the sourcing front and really working on the strategic sourcing side. So.

Sure.

And I think Bob I think we're seeing returns relatively stable I think.

Pricing is is aggressive but stable I think that there is yes, there is plenty of.

Supply in the market, but there's even more demand. So I would say I think supply demand is quite balanced in the X scale round right now.

It's very chunky and very market specific and so it's a little bit different than our retail business.

But as you've seen our uptake.

And lease up is that super strong thus far.

<unk> executed really well and we feel we feel good about that and so there's a lot of megawatts coming down the road and a lot of customer demand. So it's.

It's an exciting time I think Brett scale, and we're pleased with the performance of that piece of the business and Russia. I mean, it's important to just remind everybody that our exposure on the capital side. We are hearing of 10 to one on that Capex right. So because we're only 20% of it and Theres always leverage involved there.

And so so it really allows us to have a relatively modest overall exposure to that capital and so we're putting the bulk of our capital to work on the retail side.

Really strong returns.

Thank you.

Our next question comes from Simon Flannery Morgan Stanley . Your line is open.

Our next question comes from Simon Flannery. Morgan Stanley , your line is open.

Great. Thank you very much good evening I wonder if I could come back to the margin question you talked a couple of times about margin trends improving in the second half of 'twenty to perhaps just to help us with what gives you the visibility into that is that most of the Singapore.

And how much clarity you have there and then you reiterated the 50% from 2020 Sky. So given the move here on 22 do we see it going up fairly linearly from 23, 3% to 25 or are there other puts and takes there as we think about that long term growth.

Do we see it going up fairly linearly from 23 through to 25, or are there other puts and takes there as we think about that long-term goal?

Yes.

Yeah, well, what I say is, yes, the big factor on the margin profile in 2022 is Singapore, as you said, 100 BIFs of that, then you have 30 BIFs associated with the year-over-year compare on the benefits we got from the DPPA.

Yes, the big factor on the margin profile in 2022, as Singapore as I said 100 bps of that and you have 30 <unk> associated with the year over year.

Compare on the on the benefits we got from the PPA.

Last year, and so thats the bulk of it I mean, you can see in the bridge there.

<unk> dot for their margin step down one to three of that is maybe between those two factors and so there's not the rest is a series of puts and takes with some.

some, you know, some expenses, some investments, and really solid operating leverage in the business. And so, I would say it is, you know, it is mitigating the Sanford impact, it is operating – driving operating leverage in the business, which is going to be a key focus for John and the team, and continue to drive the, you know, the scale of the business. And then, a strong pricing environment. So, I think we're continuing to see, you know, a solid pricing environment. We've demonstrated our ability, you know, to deliver distinctive value to our customers. And so, as the, you know, as the prices – I mean, as, you know, some of the inflation goes, you know, we're going to go ahead and offset that to some degree on the pricing. So, I think all those factors, you know, sort of will lead us to some solid progression there from a margin standpoint. You know, and I wouldn't guide on where it goes from there and how linear it is or not. I think that we're going to make judgments in the business, as we always do, about investments and how to maximize long-term value creation. But, I think what you heard loud and clear is the level of confidence on our part about the 50% target. And again, as we really dug in hard, which, to some degree, the Sanford dynamic was a real catalyst for us to do, it gave us, you know, I think, an increased level of confidence about how operating leverage is materializing, and that gives us confidence to sort of reiterate that 50% by 2025. All right. Thank you. Yes, sir. Our next question comes from Sammy Baudry, Credit Suisse. Your line is open. Hi. Thank you very much for the question. I'm looking at your same store.

Some expenses from investments in really solid operating leverage in the business and so I would say is is mitigating the standpoint impact. It is operating with driving operating leverage in the business, which is going to be a key focus for offer John and the team and continuing to drive the scale of the business.

And then and then a strong pricing environment.

We're continuing to see.

A solid pricing environment, we have demonstrated our ability to deliver distinctive value our customers and so as the as the.

Prices.

Some of the in place and goes we're going to go ahead and offset that to some degree on the pricing. So I think all those factors will lead us system.

Solid progression there from margin standpoint.

And I wouldn't guide on where it goes from there and how linear it is that or not I think it's going to we're going to make judgments in the business as we always do about investments in and out and maximize long term value creation, but I think what you heard loud and clear is the level of confidence on our part about the 50% target.

And again as we really dug in hard which to some degree the Singapore dynamic was a real catalyst for us to do.

It gave us I think an increased level of confidence about how operating leverages materializing.

And that gives us confidence to sort of reiterate that 50% by 2025.

Alright, thank you.

All right, thank you.

Got that.

Our next question comes from Sami Badri Credit Suisse. Your line is open.

Our next question comes from Sammy Baudry, Credit Suisse, your line is open.

Hi, Thank you very much for the question.

Hi. Thank you very much for the question. I'm looking at your same store growth, and that definitely came in a little bit above people's expectations. And I'm trying to take some of your prior comments where you talked about if there was no Singapore utility impact, you would probably grow or be able to come in and just leave it at margins of 47% and change. And this is making me think about the long-term picture and the road to 50%.

Im looking at your same store growth and that definitely came in a little bit about people's expectations and I'm trying to take some of your prior comments, where you talked about if there was no Singapore utility impact you would probably grow or be able to come in adjusted EBITDA margins of 47% in change.

And this is making me think about the long term picture and the road to 50%.

Same store has to grow 5% plus for you to get to 50% adjusted EBITDA margin long term by 2025 or can you just maybe unpack.

the same store have to grow a 5% plus for you to get to 50% adjusted EBITDA margin long term by 2025? Or can you just maybe unpack that growth rate or that vector for us?

That growth rate of that vector for us.

Sure Yes.

Sure. Yeah, I don't think the short answer is no. We've said, you know, we've typically guided in 3 to 5% on the recurring revenue range. Obviously, really pleased with 5% at the top end of that range for the stabilized asset.

The short answer is no.

They move around a little bit, depending on a variety of factors, but I think, you know, overall, we're continuing as business, you know, churns in those markets. We're replacing it with a strong, you know, sort of sweet spot business, continuing to drive interconnection, continuing to expand fabric into more locations that drives more interconnection. And so I think that's going to drive good results. But I don't think that's, I don't think, you know, it's incumbent on us to have that happen to get to the 50.

I think overall, we're continuing as business churns in those markets, we're replacing it with a strong.

Sweet spot business.

To drive interconnection, continuing to expand fabrics into more locations that drives more interconnection and so I think that's going to drive good results, but I don't think that I don't think.

It's incumbent on us to have that happen to get to the 50.

Theres a variety of sources of operating leverage in our business as we examine our ability to simplify automate and digitize our business that I think will give us the trajectory that we need.

To get to that 50%.

Got it thank you.

There are less.

Our last question comes from Ari Klein BMO capital markets. Your line is open.

Our last question comes from Ari Klein, BM Capital Markets. Your line is open.

Thank you. Carol, you mentioned some of the challenges in hedging in Singapore. As you look at other markets where energy prices are elevated and hedges roll off, are you hedging at these higher prices? You also mentioned passing down some of those costs. What has been the response on the customer side from that?

Thank you.

You mentioned some of the challenges in hedging and Singapore as you look at other markets, where energy prices are elevated hedges roll off are you hedging at these higher prices and Jeff you also mentioned passing on some of the cost of what has been the response on the customer side from that.

Yeah look I mean undoubtedly customers aren't excited about it.

But it is it is the reality.

It's different.

He is in deregulated markets.

<unk>.

the customer. And so while they may not love it, that's just an expectation. I think in deregulated markets, it's a little more complex. We have these multi-year hedges, which essentially allow you to dampen volatility and adapt to an arising rate environment more gradually. And so that's typically what we've seen. That's the way hedging works. You're either kind of chasing it down or following it up because your hedges work either with a plus or minus around a range. And so I think we're going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those hedges out into future years. And it's important to remember, we've been doing this for many, many years. And so it's not really a new dynamic. There are definitely some markets that were more volatile and more spiky. And then you have to make a judgment about if your rate increase and the potential price increase, if the price increase, you reflect something that doesn't feel right from a long-term customer relationship standpoint, and we always take the long lens on our customer relationships, then we'll adjust accordingly. And that could mean that we have some pressure from that. But as you see in the bridges, we've been able to offset that with other operating leverage. And so we expect that to continue to be the case. This is an area where the scope and the scale of our business really helps us. And so, yes, there are factors out there that we have to deal with, and we deal with them carefully and with the customer in mind. And I think, as you can see, we feel confident we'll be able to manage through it. Got it. Are those price increases permanent? So if, I guess, if pricing or energy costs normalize, can that turn into a tail end?

That's just an expectation I think in deregulated markets, it's a little more complex.

We've had these multiyear hedges, which essentially allow you to dampen volatility and adapt to in a rising rate environment more gradually and.

So that's typically what we've seen.

The way of hedging works in it.

Youre, either you or kind of chasing it down we're following it up because your hedges work, either plus or minus around a range and so so I think we're.

Going to be implementing it gradually over time as hedges roll off and sort of hedging into the new market rates as we roll those hedges out into future years.

And it's important to remember we've been doing this for many many years.

So it's not a not really a new dynamic there are definitely some markets that were more volatile and more spiky.

And then you have to make a judgment about is that if your rate increase in Europe and the potential price increase.

If the price increase you reflect something that doesn't feel right from a long term customer relationship standpoint, and we always take the long lens on our customer relationships than we will.

Adjust accordingly, and that could mean that we have some pressure from that but as you see in the bridge is.

Been able to offset that with other operating leverage and so we expect that to continue to be the case.

This is an area, where the scope and the scale of our business really helps us.

And.

So yes, there are factors out there that we have to deal with and we deal with them carefully and with the customer in mind.

And I think but I think.

As you can see and we feel confident we'll be able to manage through it.

Got it. And are those price increases permanent? So if I guess if pricing or energy costs normalize, can that turn into a tail end, a tailwind from your session?

Got it and are those price increase is permanent or I guess, if pricing or <unk>.

Energy costs normalized and that turned into a tailwind tailwind from yourselves.

Yes, very good question.

Here's what I would say there are different types of price increases, we're actually implementing some baseline sort of new new pricing for new deals.

A broader set of inflationary characteristics.

um, and a and a deep confidence in the value that we deliver to customers. Those I view as more

And a and a deep confidence in the value that we deliver to customers those I view as more structural.

But then in other markets there are more temporal pricing adjustments associated.

Directly with the utility volatility and I would.

I wouldn't expect those to be permitted if they if it retrenching.

Want to give that back to the customer so.

We are.

But we've been we've been hedged.

Our hedging strategy allows us to really dampen that volatility out typically.

We have definitely seen more volatility. So I wouldn't say we're going to just bank them regardless of what happens in, you know, to power prices in the future, but I do think that for all those, but I do think there's a level of them that are more, a level of those that are more structural in terms of new price points on new deals.

<unk> definitely seen more volatility so I wouldn't say, we're going to just bank, regardless of what happens in power prices in the future.

But I do think that for all of those but I do think there is a level of them. There are more a level of those that are more structural in terms of new price points on new deals.

Got it thank you.

You bet Eric.

Thank you that concludes our Q4 call. Thank you for joining us.

Thank you. That concludes our Q4 call. Thank you for joining us.

Q4 2021 Equinix Inc Earnings Call

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