Equinix, Inc. (EQIX) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Matt Niknam, comm infrastructure analyst here at Deutsche Bank. And for our next session, we are very pleased to welcome Equinix' Chief Customer and Revenue Officer, Karl Strohmeyer. Karl, welcome to the conference.

Yes, thanks, Matt. It's great to be here. Thanks for having me, albeit virtually.

Yes, albeit virtually. Hopefully, this is one of the last virtual conferences we do, and hopefully we could do this in person in Palm Beach next year as we've done in the past. [Operator Instructions]

And so maybe just to start, Karl, to set the stage, can you talk about your top priorities that you're most focused on in 2021?

Yes. No, thanks, Matt. And of course I need to read my disclosure statement first. So some of what I will talk about today contains forward-looking statements. Please read our SEC filings for more information about factors that could affect these statements. Yes, so it's great to be here. Yes, for '21, we obviously have a clear set of priorities to build on the market leadership. And we've got a number of areas that we want to invest in for to make sure that we continue to deliver sustained value both for our customers, our employees and our shareholders. There's 4 primary areas, Matt. First, supporting our people and our extraordinary culture. As you know, Matt, and I've shared this to many, many investors in the past, we think culture is a massive differentiator, and we continue to invest behind that. People are our foundation and how we navigate the challenges and opportunities ahead. And that was on an incredible display last year as we navigated through the pandemic, as we still navigate through the pandemic this year. And -- but we believe our people obviously afford us a durable source of competitive advantage. And this year, fortunately, we've got a number of award-winning sustainability ambitions and I know we can talk about as we go on here, but certainly a continued priority for the business. And part of that ESG effort obviously has a diversity inclusion, social justice and the obvious climate change dynamics associated with it. We are an important part of bringing the digital infrastructure for the world, so to speak, and so that is a significant focus. So that would be number one. Number two would be simplifying and scaling our business to drive that long-term operating leverage that I know investors are looking for, and of course enhancing the customer experience that our customers continue to ask for. And that's really around how do we automate key aspects of our workflow. We've talked a lot about channel and automating our interfaces to our key reseller channel partners as a big part of that. Delivering an enhanced digital engagement option for customers. About 20% to 25% of our bookings in any one quarter go through our portal today. We want to make sure we continue -- and our portal is kind of that digital front end for service ordering. We want to put more services and make more services available for that digital experience. So that's a big part of where we're investing behind both on the infrastructure side and of course, the go-to-market side. Third would be continuing to expand our global scale and reach. We have ambitious plans around xScale as well as retail, and I'm sure we can talk more about that. And if you look at the number of expansions, projects that we have underway, I think it's about 44, around 30 markets in 20 countries, obviously, all of that is in response to specific customer demand. And we'll be entering new markets like we do in most years. So we announced Genoa, we announced Bordeaux, really around cable landing stations. And of course really excited underlying the GPX acquisition in India, which gives us 2 locations in Mumbai. And hopefully we get that closed here in the first half of this year. And then last but certainly not least, which I know we'll talk about, is accelerating our digital services business. So not only are we looking to automate our core capabilities to put more of our capabilities such that there's a digital front end that is consumable, but also we're rolling out new products and expanding those across the platform and then augmenting our go-to-market motion in support of those new product capabilities. And probably the greatest example of that is our Equinix Metal service offering that I know we'll end up talking more about. But it's those 4 categories, Matt. I hope that helps.

Yes, yes. No, it absolutely does. Maybe just to jump in around a high-level question around the demand backdrop. If you could talk about what you're seeing in terms of the customer demand backdrop across your 3 operating regions as we start the year.

Yes. Well, it's in a Rule of 78 recurring revenue story, we love the fact that we had such a strong Q4, and we saw that across all 3 regions. In the Americas, which as you probably remember, I used to be the President of that region so we'll just say it's near and dear to my heart from an operator standpoint. We saw a record -- our third consecutive quarter of record gross bookings with firm pricing coming out of the Americas. And now all Q4s are generally strong, but having that type of repeatable production out of the sales force is good news for all things on a recurring revenue basis. We saw a high mix of midsize deals, which is our sweet spot around customers that value that global deployment with the interconnection that's inherent with our platform. And we had our highest number of new logos in 2 years. And of course we love selling to existing customers, that's the bulk of the motion. But adding new customers, landing them and expanding them obviously is a key part of the strategy as well. And of course in the Americas, and we say this often and sometimes it's probably not understood as well, but the sales force in the Americas continues to be the best producers of what we would say global footprint selling, so selling into the other regions. And we're working hard to get the sales force in the other 2 regions to do the same. But we love that trajectory of just on a productivity per head basis coming out of the Americas. When we look at EMEA, we had our best intra-region activity in a couple of years, which is similar to that notion, which is really selling the platform to a Europe-based headquartered companies. We saw firm pricing and with really good production out of Amsterdam and Frankfurt specifically. We saw strong revenue growth. We do expect a little bit of moderation in '21, as we talked about on earnings around as we lap past some of the onetime events that occurred in the region last year, specifically probably the largest would be the cross-connect pricing increases program that we executed on. And then in AP, really just a continued solid performance really across a lot of small and midsize transactions that were ecosystem accretive. We have some capacity constraints in Singapore that we're working through to unfree this year, but utilization remains -- rates remain high. And we've got some projects and capacity coming to market that will be helped. And of course the enthusiasm that I indicated around India around a really nice new market to expand and leverage GPX as the entry point for that expansion. So I think that in summary, that's what we're seeing across the 3 regions coming out of last quarter.

Yes. No, that's a great overview. And so maybe we can talk a little bit, while we're on the topic of demand, can you talk about how customer demand and their digital infrastructure needs may have changed or evolved post-COVID? I know there was a little bit of an uptick obviously during March of last year in terms of people sort of scrambling. But I want to figure out now that we're sort of emerging post-COVID, how have customer needs evolved over the last, call it, 6 months?

Yes, I mean -- and this won't be surprising to you, but the digital transformation across all segments of the economy was important before COVID, and it's even more important now. And so I think that, that is an underlying trend that ourselves and many organizations are going to be working to take full advantage of. It is reshaping our everyday lives. And to your point, we certainly did see an uptick of those organizations that -- I would categorize it this way, those organizations that were already digitally native and were leaning in on the transformation journey, were relieved to know that their infrastructure could support some of the new dynamics around navigating traffic not just to 10 locations around the world, but thousands based on the work-from-home dynamic as an example. But then there were those that were less digitally native. All have plans of course to embrace digital transformation, but probably had some catch-up to do to respond to that new norm, at least as it pertained to the work-from-home. And we saw -- we supported those organizations to accelerate some of their deployments, accelerate interconnection, increased amount of bandwidth in certain locations. And I think ourselves and a number of organizations benefited from that. But broadly speaking, that underlying trend of digital transformation has just simply gotten more important. And whether you're talking about a software company who is moving into SaaS or an infrastructure or a device company, let's say a security device company that normally would ship product is moving into more of a SaaS virtual capability, or you're talking about the enterprise who's trying to enable consumption to their end points of work-from-home, everybody is really advancing that digital journey, that transformation journey. So we think it continues. We think those that were a little less aware of the significance of it are now keenly aware of it, and those that were prepared for it are excited that they got ahead of it. And so it seems to be a nice continuation of the journey. And when we look -- when we talk to customers today, some of those we have to, would have to convince about the power of the platform and the power of distributing IT architectures on the platform and what that benefit would mean to them and to their business models. That part of the discussion is far easier today.

And so when we think about different customer sets, right, you mentioned some that were farther along, others that maybe were a little bit slower and have maybe pulled forward digital transformation strategies. I mean are there specific verticals where you're seeing more meaningful increases in demand? And then maybe converse to that, I mean I don't know if there are any, but are there any sort of laggards you would flag as well?

Yes, it's a really good question. And I'll -- we categorize verticals in many different ways. And it's probably a little unique just because we obviously are keenly solving business scale problems for service providers as well as enterprises. But when we look at how we segment externally and we just take a look at the network service providers, we had record bookings in Q4. And that's probably intuitive, carriers globally upgrading their core infrastructure and their edge infrastructure as well as mobile networks providers getting ready for 5G. And so we saw that growth rate because as you know, those carriers deploy on Platform Equinix, and we become a platform for revenue growth for them because they use that to interconnect to enterprises and to other service providers. We saw similar from financial services. We had a record quarter as well from that segment, really led by multinational financial services firms, particular in strength in the Americas. And I think that's part of the -- where you see volatility, you see growth and then investments behind that. On the enterprise, the subsegments in enterprise, which is really getting to the root of your question, we saw health care and retail be really the 2 -- the growth engines for the last couple of quarters of last year. Health care is incredibly intuitive as telehealth kicks off. I don't know about you, but visiting a doctor physically these days is pretty difficult to schedule, let alone the comfort level associated with it. And so more and more engagement is being done through telemedicine and helping organizations embrace that, both with a cloud-first architecture is something that we've been enjoying the benefit of. And then retail. As retail entities prepare for a post-pandemic dynamic and/or move more and more of their capabilities online from a digital standpoint, we saw that as 2 growth areas. We really didn't see any subsegments kind of slow down or really push back on transformation itself. I'm sure that we will see a pickup as we continue to see stimulus. We continue to see the virus getting checked and as more and more organizations open back up. So we're looking forward to continue to support the transformation trends for those companies. Content and digital media was strong, particularly driven by video and digital advertising. And cloud and IT continue to be just solid drivers of growth, as you would probably predict.

And so maybe a second -- a follow-up to that question. As we sort of come out of this virus and begin to get back to normalcy, I think one of the bear cases we hear often and I think it maybe conveyed a little bit more with the stock than with the fundamentals, but the risk that 2020 was sort of a once -- I mean -- and I hate to say this, but sort of a once-in-a-lifetime opportunity when you think about a company like Equinix sort of being front and center helping customers adapt to an all digital world. And so now as we go back to normal, I think the fear on some investors' minds is that is the best behind them? And is activity going to slow? And so I want to get your take in terms of what the "new normal" post-COVID could imply for Equinix.

First of all, post-COVID, doesn't that have a nice ring to it? Yes. I mean I would -- look, I'd say the world is becoming inescapably more digital. And so I will be honest with you. I don't have any concerns about a slowdown around the trend for organizations to embrace that in support of both -- and similar to what we're doing in support of both growth as well as efficiency, meaning bending the cost curve internally. And so I think lots of organizations have accelerated their planning, and we're going to help them accelerate the implementation of their plans. And those organizations that got ahead of it and deployed infrastructure in support of work-from-home or other dynamics, maybe there's a soak-in period that occurs. But I think the core enablement that they need to do in order to continue to optimize how they go to market, how they present their services to customers is going to continue. So we don't look at it as some kind of a drop-off in demand, to be honest with you.

Understood. And so I want to touch on profitability a little bit later in the discussion, but maybe we'll just drill in a little bit on the growth side. I want to get your take in terms of what you see is the biggest drivers for growth at Equinix over the next 2 to 4 years. And maybe within that, if you can help us sort of deconstruct the growth profile by different operating regions.

Yes, so you're going to probably hear this from me a lot, Matt, and I apologize ahead of time. And I should have opened up with this, which as you know, we have our Analyst Day coming up in June. We wish we had had it last June because it's always easier to talk the story with investors when there's a 5-year view out there, which can break down a little bit by segment and by product level where the growth is going to come. So in absence of that, and I don't want to take the thunder away from Analyst Day which we're all looking forward to, I will say look, the bookings engine continues to scale. Obviously, we'll have timing, pushing and pulling based on when we can lock down particular deals. And that will have implications to medium -- short to medium-term growth. Turn management obviously is a driver for just hygienically managing to make sure that we're retaining the right sets of customers and the right sets of deployments across the infrastructure and managing how we help customers migrate to more effective and efficient deployments over time. An area which you'll see, which also has some certainly upside at a revenue side, which is xScale. Obviously, that is done through JV partner. But as we continue to -- you'll see that we've got ambitious plans for '21 to expand the JV partnership around, specifically Asia. We'll be adding Australia to the mix this year. And so that will continue to be a focus for the business as we secure hyperscale, wholesale deployments via the JV, proximate to our retail ecosystem invested deployments. And then of course automation, which we talked a little bit about at the beginning. I am a believer that there is elasticity and simplification. Much of our product set, as you know, is bespoke, meaning it's custom. So we engage with customers. We design private cages for them, the sizes of the cages, the number of cabinets, the type of gear they deploy, how that's interconnected and how many locations. We're working really hard to automate more of that so that we're both a volume and value company. We'll always be value, but trying to increase the volume through more of a digital front end, we think, enables more opportunity over time at the core. And of course, we believe our digital service offerings not only help us expand the wallet of existing customers, and happy to talk more about that, but also it gives us the opportunity to service new customers, more digitally native, more start-ups, more devop-type of persona who are looking to try before they buy on the platform certain levels of applications across Equinix Metal, for example. And I'm happy to talk more about that. But again, more specific and details, we'll share with you during the Analyst Day.

Okay. No, that sounds great. Yes, so the question of new logos, it's interesting because I've seen a couple of your peers have talked about more of the growth coming from the existing base, having a tougher time maybe signing up new logos amidst COVID. But it was interesting to hear your comments and the commentary on the last call saying you actually saw the highest number of new logos in 2 years in the Americas last quarter. So I'm curious whether you can talk about what's driving this. And I guess more broadly, do you sense there's pent-up demand from new logos that could actually accelerate in 2021?

Yes, it's a great question. I got to just -- as the owner of the revenue and the go-to-market team specifically, I was super pleased to see the progress we saw, exiting the year. As you can imagine, the -- not -- everything was virtual last year. And demand gen from a marketing standpoint, was virtual. Selling was virtual. And of course that would make it probably a little easier to sell to existing customers who already understood our value prop, which is why any -- about 90% of our bookings are coming from existing customers. And we saw that throughout the year. But seeing the new logo uptick, we had solid new logo adds each quarter, but seeing the record performance at the end of the year was great. I think it's a combination of there probably is some pent-up demand in anticipation of understanding how Equinix can play in the digital transformation journey for companies. I think we've gotten much better and more sophisticated at targeting those companies with a virtual message. And I think the sales force has gotten a heck of a lot better at engaging virtually with new clients as well. And part of it also, as will be prevalent I'm sure in the rest of the conversation, is our investment behind channel. And so a lot of our new logos come through channel partners. And you saw that 35% of our bookings came from channel, and a good number of new logos came with that. And so I think a combination of those things are all coming to fruition. And so just like anything else, one quarter is great, another quarter is okay. And so you'll see some spikiness throughout the quarters. But I like the trajectory we're on, and I'm super proud of the discipline and the capability that we've built to engage virtually. And I think that, that will serve us well for years to come.

And just one more on the growth dynamics. So enterprise I know has been a big area that the company has talked about the last couple of years. Maybe if you could just update us on where Equinix is right now in terms of the enterprise penetration opportunity today. And then where do you see this going over time?

Yes, I -- look, it's still -- I know you're going to hate to hear when I say that's still early stages or early innings, so to speak. I believe that we are very focused, as you've heard us say in the past. We use this propensity model, which we call STAR, that is a learning model. So every new customer we add to the portfolio or to the platform, there are characteristics about that company that help us fine-tune how we target the next customer for the platform. And so that disciplined approach continues to be a big part of the model. We currently serve 54% of the Fortune 500, 40% of the Global 2000. And in every one of those customers, there is more wallet to get as we continue to penetrate across multiple business units and service units within them and help them with their digital transformation. And we think the -- and that's just the existing core capabilities of space, power, interconnect and fabric as we add new capabilities with Metal, we continue to deploy network edge, which allows us to have a virtual switch and router capability set. It unlocks even additional spend. So as we knock them down, we spend a lot of time then to kind of expand through the business. So I think there's a lot there across our existing base of customers. And of course on the new customers that we're attracting to the platform. But it's early. It's early.

Okay, okay. It's actually -- it's a good segue to the next question. So I was going to ask about more broadly around Platform Equinix. If you could just talk about the biggest competitive advantages you highlight to newer customers who may have been slower to embrace a hybrid cloud strategy in the past. How does Equinix sort of get their foot in the door and show these customers they can best solve their customer needs and win relative to the competition?

Yes, I mean it really comes down to fundamentals. It's not as sexy as maybe we would want to make it. But there are 3 things that we do really well and is at the cornerstones of where we invest, the cornerstones of innovation within the business. And those are the ecosystem of 10,000 customers and the underlying interconnection that fuels the growth of those customers associated with the ecosystems. That's number one. Number two is we are where you're going to want to be. So we're globally deployed in current markets where that then up really nicely to your centers of manufacturing or your centers where you've got employees and where you've got outsourcing or where your customers are trying to connect to you. And then of course, the overall Equinix promise of service excellence that you can trust us that we will take care of your most critical data infrastructure architecture and requirements and make sure that those are effectively cared for. It's -- those are the fundamental things. And then of course, we apply use cases and other similarly situated companies. So if we're talking to an airline, we'll use other airlines that are on the platform. If we're talking to a manufacturing company, we'll talk about how other manufacturers have leveraged our capability set in support of 5G and IoT and what that has done to help transform their architectures and their enterprise. And so we use those use cases, but it really comes down to those 3 fundamental differentiators.

Understood. And then within the platform, obviously the company has been active in enhancing the value there with newer products like Equinix Metal that you referenced. And so I'm wondering if you can talk about what are -- what some of the more popular services are that you offer unique to Equinix? And then also maybe talk a little bit about the benefits they drive for the business, whether it's revenue growth, lower churn, improved profitability and so on.

Yes. No, I -- so thank you for the question. I mean we're excited about the portfolio we're building. We are learning as we continue to innovate and advance. Equinix Metal, I think is a great example of -- we made an acquisition of a company called Packet. We've integrated that acquisition. We've expanded -- we've designed a new platform called Equinix Metal, and we've deployed that to 8 markets. And it's going to go to 18 markets by the end of the year, so 10 additional markets. And we're learning. We're learning the various use cases associated with it, that product is relevant for existing customers, existing infrastructure buyers who are looking to expand even further on the global platform, but aren't quite sure that it meets the hurdle rate for the capital involved to buy servers, buy routers, buy switches, buy the space and buy the interconnection, and then have the OpEx of the employees locally to support it, but it could if they could spin off a server, throw on their own applications after their OS, interconnect via Fabric and do it all virtually. They can get the benefit of our physically deployed ecosystem and interconnection in that remote market, but doing it virtually, almost trying it to see if it meets the requirements or the hurdle rates associated with the performance benefit that they would see if they physically deployed. So that's one area that's exciting. I'd say the one that we're really putting a lot of juice behind and we're learning with is Equinix Fabric. And we've talked about Fabric for a number of years, but it is approaching 30,000 virtual connections on the platform. That's growing 28% year-over-year. We have over 2,400 customers connecting to over 950 cloud and network destinations. It's currently available in 49 markets, over 170 data centers, and -- sorry to throw all the stats at you, but we've been investing in that platform. And it's becoming an interesting de facto way to interconnect not just to clouds, but also the networks, also SaaS providers, but also to themselves. So we're seeing use cases of the enterprise connecting their one market to another market via Fabric, and then localizing via Fabric interconnection to the cloud. And so that to-themselves type of trend we like and we're of course encouraging. And we announced something new that I'm not sure got the fanfare that we think it should. But we announced the ability for customers on the platform, if you're already connected to Fabric, you now have the ability to connect to any one of our 10,000 customers even if they're not connected to Fabric on the other end. And so that discovery and capability set is something that we're deploying across the program, and we're pretty excited about. Now Fabric, so there's all kinds of use cases that we're learning. And of course as we do, and customers are generally smarter than the product that we built and we learn with them, but what we're seeing with Fabric is it's also the on-ramp to consume other services that we make available. So in order to consume Metal, you're going to do it via Fabric. In order to consume network edge, you can consume it via Fabric. And so as we add on new virtual services, you can consume it via Fabric across the platform. And we think that those are exciting trends for us and were being driven by our customers to deploy even deeper in those capabilities.

Great. Okay. Let's take it to competition. I want to see if we can dig in maybe from a high level, talk about what you're seeing across the competitive landscape. And obviously this may vary by region, so if you want to sort of divide it up by region, that's fine. And then whether you can talk about how the competitive backdrops also evolved or changed over the last several quarters.

Yes, let me start there, which I think we've often talked about regional retail-esque competitors that we have to navigate in any particular one region or a particular market. And there are -- certainly there are examples of those that still exist today. But even that broad community along with the PE-backed type of competition really are focusing on the hyperscalers. And trying to get those large deployments, working to establish the trusted relationship with the hyperscalers, anticipate where they need to go next, build out that infrastructure in a build-to-suite notion, and then drive to single-digit type of returns in a wholesale engaged market. And I know you navigate this and you see this all over the place, but we're seeing a lot of that happen across all 3 regions. And that actually is good news for us because we are still focused on our retail ecosystem-centric proposition. And so certainly in L.A we'll run against CoreSite, who has a really strong position at One Wilshire. We continue to see interaction in Europe, continue to be a strong retail player. We're obviously seeing some integration dynamics occurring with them in digital. But it's really region by region or market by market. We don't see a lot of money coming into the market to invest in a retail proposition. And it does feel a bit more rational around the supply/demand curve. We -- I used this earlier today where maybe a year ago or 2 years ago, you could get pretty concerned about the amount of capacity that was targeted to Ashburn. The good news is the bulk of that capacity is focused on hyperscalers, not retail. And so we feel good that the competitor scenario really hasn't changed that much, albeit we're seeing them focus more on the hyperscale or wholesale deployments, and you can see that in their announcements.

Makes sense. Okay, I want to jump to the channel because I know that's something that we also talked about. It's been a big driver of growth in recent years. And you referenced it's made up 35% of bookings last quarter. Can you -- maybe just to start, can you talk about where among your channel partners you've seen the most success, whether it's the telcos, the hyperscalers? Maybe just help us think through where are you seeing the most success, and where do you see the most room for opportunity?

Yes. Well, they're going to be -- not surprisingly, where we saw success and are seeing success and where we see the opportunity are very related. We're excited about channel. We've been investing behind it, as you know, for a handful of years. We've got more work to do to continue to -- as we automate our core capabilities and develop ways to present them to channel partners, so that those partners can integrate to them via APIs and offer an integrated solution to their sets of customers. That is ongoing work that we'll continue to do. Specifically, answer the motions that are driving the majority of the benefit, I'd say there were 3. One is the hyperscalers themselves. We -- because of the on-ramp nature of the deployments, we have over 40% of the hyperscale deployments across the platform in the markets that we operate. Because of that, our go-to-market relationship with a hyperscaler sales team in a particular market and our sales team is very strong and we're doing literally territory mapping with them. And they -- the bulk of them know that if a customer goes to Platform Equinix and interconnects and consumes their public cloud solution via Equinix, they're going to sell more instances of it because of the direct connect nature of that dynamic. And so there's a benefit to the hyperscale sales team. There's a benefit to our sales team because they're introducing us to new customers. And so that motion is a sell-with motion that is going really well, and we're continuing to mature that across all the markets that we operate. I'd say the second bucket is the thing called technology partnership programs, where we'll work with let's say the big producers of servers who they themselves are looking to get into the services market. They'll deploy on Platform Equinix. And then we'll do joint market engagements to go solve a storage solution on behalf of an enterprise buyer with one of those technology partners. And the list goes on. So that's an area of motion that we're continuing to support, and that's a handful of those very large producers of product. And then the third, which is where most of the effort is around automation are the resellers. So those large companies, think of the telcos, who have deployed their infrastructure on Platform Equinix and then are looking to go solve digital transformation needs on behalf of their customers, and they're leveraging us to not only be a place to deploy those workloads, but also using Fabric as a way to interconnect to the long tail of cloud and SaaS providers as they go ahead and pursue enterprise customers specifically. And so in that arena, and we'll just pick on the telcos, there's work going on, on API-ing their quote to cash systems with ours so that they can quote, configure and order themselves as they create their own SKUs and solutions to their customers. And we're working hard to continue to enable that, but that is a growing and important motion for the channel.

Understood, okay. And so when -- as the contribution from channel grows, how does this impact profitability over time? And I'm going to ask this maybe before the investments you're making in automation. Because I would assume those automation investments specific to '21 have a payoff. And if you can talk to that as well, that would be great. But I'm just wondering maybe from a higher level, is the channel contribution growth, how would that impact the margins for the business over time?

We don't expect to see material impact. Our strategic alliance partnerships, those hyperscalers, that first motion I talked about is really a referral relationship. So there's not a ton of cost embedded either way. Our resell partners, they do receive obviously a little discount off of list because of the volume. However, they don't -- we don't bear their SG&A cost of their sales force. And so there's a little dynamic there that's probably neutralizing. And then -- and of course to your point though, as we automate the engagement, it's really more about unlocking demand and how we can access that demand via that automation. So we're really not counting on it as a bend -- an option that really bends the cost curve. But obviously we're continuing to look for ways to drive efficiency in the program itself, for sure.

Okay, makes sense. And so maybe pivoting to a question on profitability, I guess more broadly for the business, the big question we've been getting post-results. Obviously, the company talked about reinvesting about 50 basis points of margin this year into several areas, one of them obviously being the channel scaling initiatives, but there were several others I think that were talked about on the call. And so I'm wondering if you can shed some light on these reinvestment initiatives, and then whether these are limited to '21? Or are there more multiyear exercises?

Yes, I mean look, the way to think about some of them is that we're -- we, Equinix, are an enterprise and we're on our own digital transformation journey ourselves and looking to automate more of our workflow, working to present a broader set of our product set digitally to our customers to be able to consume more easily and faster. And those things are just intuitive, but those things are multiyear investments, for certain. And we've been investing in them. We think there's a step change investment that we can do around some of the workflow in support of them. And so you're seeing some of that. Look, we do have a goal of getting to a 50% margin, and we're going to continue to -- at an EBITDA level, and we're going to continue to drive to that. But as we see investment opportunities in the business that we think can accelerate growth, unlock opportunity and have future benefit to incremental leverage, we're going to invest in those. And I would think you would want us to because obviously that's a really good -- that's a high-return use of dollars into the infrastructure and the franchise. But that's really the focus of those investments.

Okay, makes sense. On the xScale side, and I guess more broadly in terms of your role in hyperscale, can you give us an update on where you are with the xScale initiative? And then maybe share any takeaways, positive or negative, now that we're a few years in.

Yes, I mean we are very pleased with the progress. Like every initiative that's new, you've got new learnings, and you've got to stabilize the team of resources that are applied to it. You have to figure out how they operate within the retail expansion, CapEx planning horizon and what those trade-offs are. But we are really pleased with the progress. In Q4 in 2020, we closed the APAC JV with GIC. As you noticed, we contributed the Paris 9 facility to the EMEA JV. The JV net of equity investments has reimbursed us about 300 million so far. We've got ambitious plans for '21 to resource xScale to accelerate growth. We do have plans to increment the existing JVs. We're going to enter new markets. We're going to enter Australia, as I indicated earlier. And we're evaluating new options to broaden the reach and leverage our existing land bank of, as we've over the years in our key campus environments continue to have a long position on land, as you would hope we would. We're leveraging that land in support of xScale in some of our key markets where the hyperscalers are looking to deploy is something we're continuing to consider. But we're pleased with it, and we think '21 is going to be a strong year for it.

And is there any way to maybe quantify or maybe pin down sort of the impact the JV has had on your core business in terms of demand you're seeing from these larger cloud players?

Yes. I think it's early, to be honest with you. I mean it's good to remind investors why we're doing the JV, why we're pursuing these wholesale deployments, off-balance sheet primarily, 80% of it, and why we're doing that. And so just as a reminder, we believe strategically it makes sense in key markets where there's -- for an interconnection standpoint, to have the hyperscale deployments proximate to that retail interconnection. We think that's both offensive and defensive. And that's good, to your point, to help drive the growth of the retail franchise. It's early days to see how that translates into incremental performance. To your point, the relationship with the hyperscalers continues to get deeper and deeper every day. But it was already strong, as you know, because we manage the majority of the on-ramps for them across the world. And so -- but we're learning new pathways into them, new relationships. And we're learning how to work with partners to build wholesale capabilities that will hopefully continue to add and augment the interconnection dynamic around the retail business.

Okay. I have a question coming in from the audience, and actually it's one of the questions I had as well. So I'm going to pull it forward, but it's more around expansion into newer markets internationally. How does Equinix think about expanding its footprint and growth potential from newer emerging markets? And maybe we can sort of weave in the discussion around GPX and whether that's an opportunity to maybe leverage that into broader expansion in that region.

Yes. No, I mean great question. We've -- I think the math is I think we've down 27 acquisitions to date, and the most recent are Axtel, Bell Canada and GPX hopefully closing here shortly, and of course Packet. And so just at a macro level, there are probably 3 primary drivers of why we would do acquisitions. One is entering new markets. There's no questions, our customers are asking us for our capability set in markets where we're not currently operating. That is the best form of forward indicator of future demand that anyone could have. And we're privileged to have those 10,000 customers being a loud voice in one of our ears. That's why we did the Axtel deal in Mexico. We're excited about that. We continue to invest in Axtel post-acquisition, and that is fully integrated. Bell, it's got 7 markets in Canada -- 7 new markets in Canada. It came with 8 markets and 13 data centers. And we'll continue to expand and deploy in Canada now that we are the #1 retail colo provider in that growing region. To your point, GPX India is the one that has been the most requested -- or India the most requested market that we haven't been in from our customers for a number of years. It is 2 centers in Mumbai. They're highly interconnected. If we could find more GPXs around the world, we would be excited about that. But it is -- to your point, it is a platform from which we are going to grow. We already see a strong pipeline. We've already sent deals, specific customer deals, to GPX pre-close. So we like the trajectory there. Metronode, if you remember, was really 4 new markets on Australia that really expanded our capability set in Australia. And we continue to invest behind that. So that's entering the new market dynamic. And there are other markets of, course. There's more markets in Latin America that we're always taking a look at and trying to determine when the size of the market justifies that physical investment by us and some of the other trends. South Africa is one that we've constantly talked about, which is of course of interest to us. In fact all of Africa, we think, has long-term growth prospects that are intriguing that are going to be needing an interconnected focused retail provider over time. We think Southeast Asia, there are other markets in addition to where we're already operating that have attractive growth profiles and act as nice augments to the heavy foundational growth that exists in Singapore. Obviously, we'll look at enhancing interconnection when we're thinking about a market. NAP of the Americas in Miami is a great example of that. Infomart Dallas is probably another great example. And then we'll look at adding new services and capabilities like Packet. That is teaching us a lot about how to build those new virtual capabilities on top of the already powerful platform. So those are kind of the 3 drivers and how we're thinking about some of the markets that customers are asking us to think more seriously about.

Great. And then I think we have time for one more question. So I'm going to ask about the Analyst Day, even though I know the response maybe stay tuned. But I'll ask it anyways for the purpose of everyone on the line. So obviously you've got the Analyst Day coming up in June. Any initial thoughts at least, in terms of what investors could expect from that?

Yes. No, it's a very fair question. We're excited for it ourselves. We wish it was in-person, but it will be virtual. We'll talk about -- it [ pattern masks ] prior investor days that we've done. We'll talk about the market opportunity as we see it. We'll talk about our product and our services initiatives to try to help understand how we're thinking about growth, both out of existing customers and new customers. I'll have the pleasure of interviewing either a customer or a partner on stage to be able to bring to home how customers are utilizing the platform across both the infrastructure side as well as the more virtual side. And so those are the things you can anticipate. And of course Keith will do his thing at the end and map that out for how that plays out financially around ranges for the next 5 years for the things that obviously investors really care about, which is revenue growth and AFFO per share growth.

Perfect. All right. I think we've got to end it there. Karl, thanks so much for the time. And as we said in the beginning, hopefully we can do this in person next year. Take care.

Matt, it was an absolute pleasure. Thank you.