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