The stock market likes Equinix (NASDAQ: EQIX), and after yesterdays conference call and 1Q financial release you can see why. Revenues were 31% over the same quarter last year. EBITDA over 40%, definable expansion, refinanced debt and new CEO Stephen Smith a pervious senior HP executive.
Equinix provides data center services and collocation services in the United States and Asia. The company has a lot going on. It just completed a $70 million data center in DC. Capital expenditures could reach $370 million in 2007. Expansion includes DC, Chicago, New York and Japan. In March they also picked up $250 million in a convertible debt offering. The company has some $390 million in the war chest to fund this expansion.
Current guidance is that 2007 revenues could hit $359 to $367 million, and EBITDA of $136 – $140 million or about 38%. Investors obviously like the growth and margins; the Equinix share price has run up 18% since the first of the year.
The number I found interesting was the long term revenue growth possibilities. Given full utilization at current prices of the Equinix plant and that currently being constructed, revenues could grow to $625-$650 million. That’s grow – and high margin growth to boot.
The point – this is a good sign for the sector. Smaller independent and public companies should reap some benefit also. The colocation/data center sector is definitely in favor which usually means that someone will be looking to put there money here. It may be a good time for you to expand or refinance also.
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About Tom Millitzer
I am an M&A guy. I sell Hosting Companies. I want you to fulfill your dreams. If you are building your company or exiting for success...I want help you grow rich.
I started NCC International in 1994, we represented our first hosting company in 1997. NCC has completed over 400 assignments. If you are considering buying or selling you need to know me. I do not bite.
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