Equinix plots further data centre expansion after positive quarter

The company is already starting to bloat after acquiring assets from Verizon and buying Metronode, but with data centre capacity there is always room for more in a rapidly growing market.

Equinix reported a 28% increase on year-on-year revenues for the first quarter after acquisitions. For the quarter ended 31 March the company said revenue was $1.216bn.

This represented a modest 1% increase on the previous fourth quarter. Operating profits though slid 3% to $226m when compared to the previous quarter.

The colocation and data centre firm offered guidance for the year following the quarterly posting. It said it expected a 17% increase in sales to around $5.1bn.

Peter Van Camp, executive chairman and interim CEO and president of Equinix, said: “We have posted our 61st quarter of consecutive revenue growth, which is reflective of the critical role we serve in helping businesses interconnect their IT infrastructure to succeed in the digital economy.”

Equinix said it had completed Q1 capacity builds for the Chicago, Osaka and Paris regions. And during its Q1 report announced new expansions for the Amsterdam, Tokyo and Zurich regions – totalling over $160m of additional capital expenditure.

Last month, Equinix closed its 21st and 22nd acquisitions, the Infomart Building in Dallas and the Metronode business in Australia.

Interconnection revenues in Q1 grew 32% year-over-year and 16% year-over-year on a normalised and constant currency basis. This represents the fastest growing revenue segment, said Equinix, and is “significantly outpacing colocation revenues”.

This reflects the movement towards interconnection oriented architectures and the “rapid adoption of hybrid multi-clouds” as the preferred IT deployment model, Equinix said.

Martin Courtney, an analyst at TechMarketView, said of the results: “The company’s performance over the last five years has been stellar with an aggressive expansion strategy swelling its global footprint to over 200 data centres in 52 cities across five continents.

“Having grown so large so quickly management appear concerned that growth could stall. As such they are now preparing Equinix to capitalise on what they anticipate will be further waves of cloud expansion, as enterprise IT departments shift increasing volumes of workloads into off-premise infrastructure.”

He said: “This trend will demand new types of infrastructure and hosting arrangements for cloud service providers, which is why Equinix has set up a new strategy, services and innovation business unit to address it.”

Last week, Equinix rival Digital Realty also posted first quarter results. It said revenues were $744m, a 2% increase from the previous quarter and a 35% increase from the same quarter last year. The company delivered first quarter 2018 net income of $110m.