Oppenheimer Discusses Meeting With Equinix Management

Oppenheimer & Co. met with Equinix, Inc. EQIX management to discuss plans going forward. It rates shares at Outperform. In a note to clients, Oppenheimer writes, "The company was generally upbeat about its near-term and long-term prospects, particularly pointing to continued growth in cloud computing which should allow it to continue layering incremental revenues on top of its core collocation offerings. EQIX is looking to deploy as many cloud computing nodes in as many data centers as possible, in order to continue to ride the wave of innovation. Currently cloud-based services are probably around 25% of revenues, but we would expect this mix to grow going forward." Oppenheimer went on to say, "EQIX continues to be confident that it can achieve $2B in revenues by 2013, and its plans to add ~70 new sales employees should be completed by the end of this June. Long term, we would not expect the revenue mix between the US and Rest of the World businesses to change noticeably, given there are simply lots of growth opportunities everywhere. Given the operating leverage of increasing utilization, EBITDA margins should be in the 50% range, or $1 billion." Shares of EQIX gained $1.09 yesterday to close at $100.66, a gain of 1.09%.