Equinix Inc. (EQIX) reported first-quarter 2013 earnings per share of 75 cents, in line with the Zacks Consensus Estimate of 75 cents.
Revenues
Total revenue in the reported quarter was $519.5 million, up 17.2% from the year-ago quarter. The company witnessed double-digit revenue growth compared with the previous year across all three regions of the network vertical, with particular strength in Asia-Pacific. Moreover, as the IP traffic continues to grow, Equinix has started witnessing better business in the sub-sea cable systems.
This apart, recurring revenues (including colocation, interconnection and managed services) were $495.3 million during the first quarter, up 17.7% from the year-ago quarter. Non-recurring revenues were $24.2 million in the quarter, up 8.2% from $22.4 million reported in the year-ago quarter.
Operating Results
Gross margin for the quarter was 50.1% versus 51.0% in the year-ago quarter. The gross margin remained constant, but was better than the company’s expectation, as a result of lower payroll costs and utility expenses.
Total operating expenses increased 20.9% from the year-ago quarter. The year-over-year increase in cash operating expenses was primarily attributed to higher selling and marketing expenses (up 25.6%) and general and administrative expenses (up 14.5%).
Operating income from continuing operation was $108.6 million, up 7.8% from $100.8 million reported in the year-ago quarter.
Net income attributable to Equinix stood at $35.9 million or 71 cents per share versus $34.5 million or 71 cents per share in the year-ago quarter.
Balance Sheet, Cash Flow & Capital Expenditure
The company generated $84.2 million of cash from operating activities for the first quarter, down from $209.1 million reported in the previous quarter. This apart, cash, cash equivalents and short-term investments were $918.3 million versus $418.7 million in the earlier quarter.
Equinix reported capital expenditures of $75.7 million, which was below Equinix’s expectation, mostly as a result of the timing of cash payment to Equinix’s contractors. Total capital expenditure includes ongoing capital expenditure of $34.0 million.
Guidance
Equinix expects second-quarter 2013 revenues in the range of $530.0 to $534.0 million. While the cash gross margins are expected to range between 68.0% and 69.0%. Adjusted EBITDA would be around $240.0 and $244.0 million. Capital expenditures are expected to hover in the range of $170.0 to $180.0 million. This will include $45.0 million of ongoing capital expenditures and expansion capital expenditure in the range of $125.0 to $135.0 million.