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July 30, 2015

Equinix reports solid Q2, prepares Telecity acquisition fund

Colo forecasts an even stronger Q3 as it sets aside $493.8 million in Q2 to fund its TelecityGroup acquisition next year.

By Joao Lima

Following yesterday’s reassuring Q2 reported by TelecityGroup, Equinix today posted its financial results with no surprises.

The colo reported revenues of $665.6 million, $1.03 a share, representing a 3% increase over the previous quarter and a 10% increase over the same quarter last year.

The company’s results were boosted by customers’ investment in their cloud platforms, according to the Q2 report.

Russell Poole, UK MD at Equinix, told CBR: "We see a very long way of continued high levels of demand of what we do. We have a lot of CIO engagement and the feedback we get is what they are looking for and in most cases is a way of migrating to cloud and migrating to a hybrid cloud solution.

Recurring revenues, consisting primarily of collocation, interconnection and managed services were $626.7 million for Q2, 3% more than Q1 and a 9% increase over Q2 2014.

Capital expenditures were $221.3 million, compared to $150.1 million in Q1 and $159.8 million for the period between April and June last year.

The company generated a 115% increase compared to Q2 2014 in cash from operating activities of $212.5 million. Equinix said this was primarily due to improved operating results and favourable working capital activities.

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Poole added the company will react to demand and that its commitment is to deliver to customers the right inventory at the right place and at the right time.

The colo provider invested $298.5 million in the last quarter and approximately $493.8 million, into a restricted cash account for the payment of a portion of the purchase price in connection with its intention to acquire TelecityGroup.

Yesterday, Steve Webb, Ark Data Centres CIO, told CBR that industry consolidation is inevitable and that the industry has been relatively immature for a number of years.

Steve Smith, president and CEO of Equinix, said: "We sit at the crossroads of the Internet where our customers use Platform Equinix to innovate and accelerate their businesses. The scope, scale, reach and diversity of our global offering remain without parallel and we are continuing to invest across systems, processes and people to ensure consistent service delivery worldwide."

For the third quarter of 2015, the company expects revenues to range between $681.0 and $685.0 million.

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