Equinix Forecasts Revenue Below Expectations Amid Strong Dollar Concerns

Company Overview:

Equinix (EQIX) projects lower-than-anticipated revenue for Q1 and the entire year. The strong dollar and heightened concerns about data center expansion costs due to increased adoption of generative AI are impacting the company's financial outlook.

Revenue and Spending:

Equinix anticipates Q1 revenue in the range of $2.19-$2.23 billion, falling short of analysts' consensus estimate of $2.29 billion. This forecast incorporates increased seasonal costs of $25 million and a $20 million negative foreign currency impact.

For 2025, the company projects revenue between $9.03-$9.13 billion, including a negative foreign currency impact of $252 million. Analysts had estimated revenue of $9.40 billion. Equinix's global presence in Asia and Europe exposes it to fluctuations in exchange rates.

Financial Performance:

In Q4 2024, Equinix reported revenue of $2.26 billion, below analysts' expectations of $2.97 billion. Adjusted funds from operations (AFFO), a measure of cash flow, reached $7.92 per share, marginally lower than the estimated $7.95 per share.

Market Reaction:

Equinix's stock price declined by over 2% in extended trading following the announcement. Investors are assessing the impact of rising costs and foreign exchange headwinds on the company's long-term growth prospects.