- Equinix has raised its annual adjusted core earnings forecast amid robust data centre demand, driven by the increasing generative AI adoption.
- The company has also provided a revenue forecast for the third quarter and reported a sequential increase in adjusted core earnings and funds from operations for the second quarter.
OUR TAKE
Equinix, the world’s leading provider of data centre services, recently raised its annual core earnings forecast, reflecting strong momentum in the business and positive trends in the industry overall. Behind this decision is the urgent need for high-performance computing resources and the continued pursuit of advanced data centre services.
–Elodie Qian, BTW reporter
What happened
Equinix, a leading global provider of data centre services, has raised its forecast for annual adjusted core earnings, capitalising on the robust demand for its operations amid the surge in generative artificial intelligence (AI) technology adoption.
The company’s decision comes as businesses increasingly integrate generative AI into their offerings and shift their workloads to the cloud. This trend has led to a sustained demand for data centre services, benefiting firms such as Equinix and Digital Realty Trust, which offer data centre leasing to clients.
Equinix’s recent acquisition of three data centres in the Philippines highlights its strategic expansion into the high-growth Southeast Asia region. This move is expected to bolster the company’s market presence and contribute to its financial outlook.
For the fiscal year of 2024, Equinix anticipates its adjusted core earnings to range between $4.07 billion and $4.13 billion, an upward revision from the previous estimate of $4.04 billion to $4.12 billion.
This forecast aligns closely with the analysts’ consensus, which stands at an average expectation of $4.10 billion, according to data from the London Stock Exchange Group (LSEG).
Also read: Data centre operator Equinix plans $2B sale of Hong Kong stake
Also read: How generative AI can help banks manage risk and compliance?
Why it’s important
In addition to the annual forecast, Equinix has also provided a revenue projection for the third quarter, estimating it to be within the $2.19 billion to $2.21 billion bracket. This projection is in line with the analysts’ estimates, which predict a figure of $2.21 billion.
The company reported a revenue of $2.16 billion for the second quarter, meeting the analysts’ expectations. During this period, Equinix’s adjusted core earnings saw a 4% increase from the previous quarter, amounting to $1.04 billion.
A key indicator of cash flow, the adjusted funds from operations, showed a sequential increase of 4%, reaching $9.22 per share for the three months ended June 30.
Equinix’s financial performance and strategic initiatives reflect the company’s commitment to meeting the growing demands of the digital economy, supported by the expanding adoption of generative AI technologies.
The company’s outlook remains positive, with a clear focus on leveraging its global platform to support clients’ evolving needs in data management and cloud services.
