Equinix Adjusts Revenue Forecast Amid Concerns About Data Center Demand

Equinix, a prominent data center company, has revised its annual revenue outlook due to concerns about the prevailing macroeconomic conditions potentially impacting companies’ plans for cloud-based infrastructure.
Equinix at Oracle OpenWorld 2017The company, headquartered in Redwood City, California, now anticipates annual revenue in the range of $8.17 billion to $8.21 billion, compared to its previous projection of $8.17 billion to $8.25 billion.

Equinix said its total capital expenditures (Capex) are expected to range between $2.675 and $2.925 billion during the current year.

In its third-quarter, Equinix reported 12 percent increase in total revenue to $2.06 billion, reflecting the evolving landscape of data center services.

Equinix has closed 4,200 deals in Q3 across more than 3,100 customers, including record new logos from high-propensity, targeted customers. Equinix has revealed that channel bookings accounted for over 65 percent of new logos with wins focused on digital transformation initiatives.

For the current quarter, Equinix projects revenue to range from $2.09 billion to $2.13 billion.

The outlook for data center spending has shifted, with a growth rate expected to be over 3 percent this year, compared to a previous estimate of 6 percent. This adjustment is attributed to slowing demand and the ongoing efforts of major cloud companies, including Microsoft’s Azure and Amazon.com’s AWS, to streamline their inventory, as noted by Raymond James, a brokerage firm, earlier in October.

In Q3, Equinix added nine new projects, including new builds in Madrid, Osaka, Sao Paulo and Silicon Valley. More than 50 percent of expansion capital investment is supporting major metros as the company builds in highly differentiated and scaled markets.

As AI demand accelerates, Equinix is innovating to build the data center of the future, using its Co-Innovation facility in Ashburn, Virginia, to evaluate technologies to support escalating power requirements including supporting high-power-density AI deployments with liquid cooling technologies — such as direct-to-chip, immersion and rear door heat exchangers.

“We expect Equinix’s broad portfolio of offerings, in tandem with our key technology partners, will allow us to capture high-value opportunities across the AI value chain, positioning Platform Equinix to be the place where private AI happens,” Charles Meyers, President and CEO, Equinix, said.

The company can support liquid-cooled deployments across all markets, including support for direct-to-chip liquid cooling in 45 markets across all three regions, with live liquid-cooled deployments across a range of deployment sizes and densities.

Equinix continues to invest behind its platform strategy with revenue growth from its digital services portfolio over-indexing the broader business, including strong adoption of Equinix’s Network Edge offering by enterprise customers.

Equinix’s decision to revise its annual revenue forecast underscores the complexities of the current economic environment and its potential impact on cloud infrastructure plans. As the data center industry continues to evolve, Equinix remains vigilant, aligning its projections with changing market dynamics.