A month has gone by since the last earnings report for Equinix (EQIX). Shares have lost about 1.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Equinix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Equinix's Q4 AFFO Beat on Solid Demand, Revenues Rise

Equinix’s fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $7.30 surpassed the Zacks Consensus Estimate of $7.25. The figure improved nearly 3% from the prior-year quarter.

Equinix’s results reflected steady growth in colocation and inter-connection revenues on the back of strong demand for digital infrastructure. During the quarter, Equinix’s total interconnections reached 462,200, rising 3% year over year. The company also issued an outlook for 2024.

Total quarterly revenues came in at $2.11 billion, in line with the Zacks Consensus Estimate. Moreover, the top line increased 12.8% year over year.

In 2023, AFFO per share came in at $32.11, higher than the prior-year tally of $29.55. This was backed by a 12.7% increase in total revenues of $8.19 billion.

Quarter in Detail

Recurring revenues were $1.98 billion, up 11.4% from the year-ago quarter. Our projection was pegged at $2 billion. Non-recurring revenues rose 37.9% to $134.5 million. We estimated the metric to be $101.4 million.

Revenues from the Americas, EMEA and the Asia Pacific rose 6.9%, 24.8% and 7.6% to $931.7 million, $751.2 million and $427.6 million, year over year, respectively.

The adjusted EBITDA came in at $920.5 million, up 9.7% year over year. We projected the metric at $924.2 million. Adjusted EBITDA margin was reported at 44%.

AFFO rose 5% to $690.8 million from the year-ago period.

Equinix spent $105.2 million on recurring capital expenditure in the fourth quarter, up 31.4% on a year-over-year basis. Recurring capital expenditure was 5% of revenues in the reported quarter. Non-recurring capital expenditure was $891 million, up 19.1% year over year.

Balance Sheet

Equinix had $6.5 billion of available liquidity as of Dec 31, 2023. This comprised cash, cash equivalents, its undrawn revolver and $500 million of unsettled at-the-market proceeds. It excluded restricted cash.

Its net leverage ratio was 3.7, and the weighted average maturity was 7.6 years as of Dec 31, 2023.

2024 Guidance

For the first quarter of 2024, Equinix projects revenues between $2.127 billion and $2.147 billion, implying a 1-2% increase over the prior quarter. The adjusted EBITDA is expected to be in the range of $960-$980 million.