Equinix Inc. EQIX posted strong results for fourth-quarter 2020, wherein adjusted funds from operations (AFFO) per share and revenues surpassed the Zacks Consensus Estimate and improved year over year.

The company’s quarterly AFFO per share was $5.76, beating the Zacks Consensus Estimate of $5.65. The figure also improved 4.5% from the year-ago quarter’s $5.51.

The upside primarily stemmed from steady growth in interconnection revenues. In fact, during the fourth quarter, it added an incremental 7,700 interconnections, which were driven by cloud, content and gaming segments.

For 2020, Equinix reported AFFO per share of $24.76, up 8.5% from the prior year’s $22.81 and also outpaced the Zacks Consensus Estimate of $24.60. Total revenues of around $6 billion were up 7.8% year over year.

Quarter in Detail

Total quarterly revenues were $1.56 billion, surpassing the Zacks Consensus Estimate by 0.23%. Also, the top-line figure improved 10.4% year over year, representing the 72nd consecutive quarter of revenue growth.

Recurring revenues were $1.46 billion, up 9.6% from the year-ago quarter’s figure. Non-recurring revenues improved 23.8% from the year-ago quarter to roughly $98 million.

Revenues from the three geographic regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and the Asia Pacific jumped 8.9%, 10.3% and 13.7% to $712 million, $511.3 million and $340.7 million, respectively.

Cash gross margin was 65%, declining from the prior-year quarter’s 66%. Total operating expenses flared up 33.4% year over year to $504.8 million.

Adjusted EBITDA was $711.4 million, up 5.4% year over year. Adjusted EBITDA margin was 45%, down from 48% recorded in the prior-year quarter. AFFO appreciated 9.4% year over year to $517 million in the December-end quarter.

Balance Sheet

Equinix exited the fourth quarter with cash and cash equivalents of $1.6 billion. The company’s total debt principal outstanding was $12.5 billion as of Dec 31, 2020.

Dividend Update

Concurrent with its fourth-quarter 2020 earnings release, on Feb 10, Equinix’s board of directors approved a quarterly cash dividend of $2.87 per share. The dividend will be paid out on Mar 17 to shareholders of record as of Feb 24, 2021.

Guidance

The company expects to realize foreign currency benefits in 2021. Further, for the ongoing year, it estimates generating revenues of $6.58-$6.64 billion, indicating year-over-year growth of 10-11% on a normalized and constant currency basis. Assuming integration costs of $30 million, it predicts adjusted EBITDA of $3.067-$3.127 billion.