EQUINIX INC (EQIX) FY 2021 MD&A

ITEM 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following commentary should be read in conjunction with the financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed in "Liquidity and Capital Resources" and "Risk Factors" elsewhere in this Annual Report on Form 10-K. All forward-looking statements in this document are based on information available to us as of the date hereof and we assume no obligation to update any such forward-looking statements.

Item 7 of this Form 10-K focuses on discussion of 2021 and 2020 items as well as 2021 results as compared to 2020 results. For the discussion of 2019 items and 2020 results as compared to 2019 results, please refer to Item 7 of our 2020 Form 10-K as filed with the SEC on February 19, 2021.

Our management's discussion and analysis of financial condition and results of operations is intended to assist readers in understanding our financial information from our management's perspective and is presented as follows:

•Overview

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Critical Accounting Policies and Estimates

•Recent Accounting Pronouncements

Overview

We provide a global, vendor-neutral data center, interconnection and edge services platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely

51

Table of Contents

interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScaleTM data center investments, have expanded our total global footprint to 240 data centers, including eight xScale data centers and the MC1 data center that were held in unconsolidated joint ventures, across 66 markets around the world. Metrics also include the MU4 and GN1 data centers which opened in January 2022. Equinix offers the following solutions:

•premium data center colocation;

•interconnection and data exchange solutions;

•edge services for deploying networking, security and hardware; and

•remote expert support and professional services.

Our interconnected data centers around the world allow our customers to increase information and application delivery performance to users, and quickly access distributed IT infrastructures and business and digital ecosystems, while significantly reducing costs. Our global platform and the quality of our IBX data centers, interconnection offerings and edge services have enabled us to establish a critical mass of customers. As more customers choose Platform Equinix for bandwidth cost and performance reasons, it benefits their suppliers and business partners to colocate in the same data centers. This adjacency creates a “network effect” that enables our customers to capture the full economic and performance benefits of our offerings. These partners, in turn, pull in their business partners, creating a "marketplace" for their services. Our global platform enables scalable, reliable and cost-effective interconnection that increases data traffic exchange while lowering overall cost and increasing flexibility. Our focused business model is built on our critical mass of enterprise and service provider customers and the resulting "marketplace" effect. This global platform, combined with our strong financial position, has driven new customer growth and bookings.

Historically, our market was served by large telecommunications carriers who bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and vendor-neutral multi-tenant data center ("MTDC") providers, hyperscale cloud providers, managed infrastructure and application hosting providers, and systems integrators. It is estimated that Equinix is one of more than 2,200 companies that provide MTDC offerings around the world. Each of these data center solutions providers can bundle various colocation, interconnection and network offerings and outsourced IT infrastructure solutions. We are able to offer our customers a global platform that reaches 27 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

The cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 79%, as of December 31, 2021 and 2020. Excluding the impact of our IBX data center expansion projects that have opened during the last 12 months, our cabinet utilization rate would have increased to approximately 81% as of December 31, 2021. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center. This could have a negative impact on the available utilization capacity of a given IBX data center, which could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows.

To serve the needs of the growing hyperscale data center market, including the world's largest cloud service providers, we have entered into joint ventures to develop and operate xScale data centers. In the past two years, we entered into our EMEA 1 Joint Venture, Asia-Pacific 1 Joint Venture and EMEA 2 Joint Venture, and entered into negotiations in connection with a new joint venture (the "AMER 1 Joint Venture"), in the form of limited liability partnerships with GIC, Singapore's sovereign wealth fund ("GIC"). In October 2021, we entered into an agreement to form an additional joint venture in the form of a limited liability partnership with PGIM Real Estate, to further expand our xScale data center portfolio in Asia-Pacific (the "Asia-Pacific 2 Joint Venture"). See Note 5 within the Consolidated Financial Statements.

52

Table of Contents

Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. As was the case with our recent expansions and acquisitions, our expansion criteria will be dependent on a number of factors, including but not limited to demand from new and existing customers, quality of the design, power capacity, access to networks, clouds and software partners, capacity availability in the current market location, amount of incremental investment required by us in the targeted property, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. Like our recent expansions and acquisitions, the right combination of these factors may be attractive to us. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements in order to bring these properties up to our standards. Property expansion may be in the form of purchases of real property, long-term leasing arrangements or acquisitions. Future purchases, construction or acquisitions may be completed by us or with partners or potential customers to minimize the outlay of cash, which can be significant.

Revenue:

Our business is based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to three years in length. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 80% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for the years ended December 31, 2021, 2020 and 2019. Our 50 largest customers accounted for approximately 39% of our recurring revenues for the years ended December 31, 2021, 2020 and 2019.

Our non-recurring revenues are primarily comprised of installation services related to a customer's initial deployment and professional services we perform, as well as equipment sales. These services are considered to be non-recurring because they are billed typically once, upon completion of the installation or the professional services work performed. The majority of these non-recurring revenues are typically billed on the first invoice distributed to the customer in connection with their initial installation. However, revenues from installation services are deferred and recognized ratably over the period of the contract term. Additionally, revenue from contract settlements, when a customer wishes to terminate their contract early, is generally treated as a contract modification and recognized ratably over the remaining term of the contract, if any. As a percentage of total revenues, we expect non-recurring revenues to represent less than 10% of total revenues for the foreseeable future.

Operating Expenses:

Cost of Revenues. The largest components of our cost of revenues are depreciation, rental payments related to our leased IBX data centers, utility costs, including electricity, bandwidth access, IBX data center employees' salaries and benefits, including stock-based compensation, repairs and maintenance, supplies and equipment and security. A majority of our cost of revenues is fixed in nature and should not vary significantly from period to period, unless we expand our existing IBX data centers or open or acquire new IBX data centers. However, there are certain costs that are considered more variable in nature, including utilities and supplies that are directly related to growth in our existing and new customer base. We expect the cost of our utilities, specifically electricity, will generally increase in the future on a per-unit or fixed basis, in addition to the variable increase related to the growth

53

Table of Contents

in consumption by our customers. In addition, the cost of electricity is generally higher in the summer months, as compared to other times of the year. Our costs of electricity may also increase as a result of the physical effects of climate change, increased regulations driving alternative electricity generation due to environmental considerations or as a result of our election to use renewable energy sources. To the extent we incur increased utility costs, such increased costs could materially impact our financial condition, results of operations and cash flows.

Sales and Marketing. Our sales and marketing expenses consist primarily of compensation and related costs for sales and marketing personnel, including stock-based compensation, amortization of contract costs, marketing programs, public relations, promotional materials and travel, as well as bad debt expense and amortization of customer relationship intangible assets.

General and Administrative. Our general and administrative expenses consist primarily of salaries and related expenses, including stock-based compensation; accounting, legal and other professional service fees; and other general corporate expenses, such as our corporate regional headquarters office leases and some depreciation expense on back office systems.

Taxation as a REIT

We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our 2015 taxable year. As of December 31, 2021, our REIT structure included all of our data center operations in the U.S., Canada (with the exception of one data center in Montreal), Mexico, Japan, Singapore and the majority of our data centers in EMEA. Our data center operations in other jurisdictions are operated as TRSs. We included our share of the assets in the EMEA and Asia-Pacific Joint Ventures in our REIT structure.

As a REIT, we generally are permitted to deduct from our U.S. federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to U.S. federal income taxes at the entity level but is taxed, if at all, at the stockholder level. Nevertheless, the income of our TRSs which hold our U.S. operations that may not be REIT compliant is subject to U.S. federal and state corporate income taxes, as applicable. Likewise, our foreign subsidiaries continue to be subject to local income taxes in jurisdictions in which they hold assets or conduct operations, regardless of whether held or conducted through TRSs or through QRSs. We are also subject to a separate U.S. federal corporate income tax on any gain recognized from a sale of a REIT asset where our basis in the asset is determined by reference to the basis of the asset in the hands of a C corporation (such as an asset held by us or a QRS following the liquidation or other conversion of a former TRS). This built-in-gains tax is generally applicable to any disposition of such an asset during the five-year period after the date we first owned the asset as a REIT asset to the extent of the built-in-gain based on the fair market value of such asset on the date we first held the asset as a REIT asset. In addition, should we have net income from "prohibited transactions," we will be subject to tax on this income at a 100% rate. "Prohibited transactions," for this purpose, are defined as dispositions, at a gain, of inventory or property held primarily for sale to customers in the ordinary course of a trade or business other than dispositions of foreclosure property and other than dispositions excepted by statutory safe harbors. If we fail to remain qualified for U.S. federal income taxation as a REIT, we will be subject to U.S. federal income taxes at regular corporate income tax rates. Even if we remain qualified for U.S. federal income taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRSs' operations. In particular, while state income tax regimes often parallel the U.S. federal income tax regime for REITs, many states do not completely follow federal rules, and some may not follow them at all.

We continue to monitor our REIT compliance in order to maintain our qualification for U.S. federal income taxation as a REIT. For this and other reasons, as necessary, we may convert some of our data center operations in other countries into the REIT structure in future periods.

On each of March 17, June 16, September 22, and December 15, 2021 we paid quarterly cash dividends of $2.87 per share. We expect the amount of our applicable dividends and other applicable distributions to equal or exceed the REIT taxable income that we recognized in 2021.

The Impact of the ongoing COVID-19 pandemic on Our Results and Operations

We have continued to closely monitor the impact of the COVID-19 pandemic on our people and business. All of our IBX data centers have remained, and continue to remain, operational at the time of filing of this Annual Report on Form 10-K. We have begun a phased plan for return-to-office for most of our non-IBX attached sites on a voluntary basis in accordance with guidance provided by government agencies. Non-essential business travel

54

Table of Contents

remains limited, and while we continue to hold virtual events, we have also resumed certain in-person events as local travel restrictions allow.

While we are experiencing some construction delays, including those due to supply chain impacts from the COVID-19 pandemic, to date, the construction delays and additional costs are insignificant relative to the overall project duration and budget. We have not observed any significant disruption to our IBX data center operations.

During the years ended December 31, 2021 and 2020, the COVID-19 pandemic did not have a material impact on our results of operations. We incurred one-time cash bonuses and compensation expense of $8.6 million for our IBX employees as well as other employees to support their work-from-home requirements during the first quarter of 2020. We have also experienced some travel expense savings during the years ended December 31, 2021 and 2020 resulting from travel restrictions imposed in response to the COVID-19 pandemic.

Looking ahead, the full impact of the ongoing COVID-19 pandemic on our future financial condition or results of operations remains uncertain and will depend on a number of factors, including the duration and potential cyclicity of the health crisis and further public policy actions to be taken in response, as well as the continued impact of the pandemic on the global economy and our customers and vendors. Our past results may not be indicative of our future performance and historical trends may differ materially.

For additional details regarding the risks to our business from the ongoing COVID-19 pandemic, refer to Part I, Item 1A. Risk Factors included elsewhere in this Annual Report on Form 10-K.

2021 Highlights:

•In March, we issued €1.1 billion in Senior Notes due 2027 and 2033, or approximately $1.3 billion in U.S. dollars, at the exchange rate in effect on March 10, 2021. Using a portion of the proceeds, we redeemed all of the remaining outstanding 2.875% Euro Senior Notes due 2026 for approximately $590.7 million in U.S. dollars, at the exchange rate in effect on March 24, 2021. See Note 11 within the Consolidated Financial Statements.

•In May, we issued $2.6 billion in Senior Notes due 2026, 2028, 2031 and 2052. Using a portion of the proceeds, we repaid approximately $659.9 million of term loans and redeemed all of our outstanding $1.25 billion 5.375% Senior Notes due 2027. See Note 11 within the Consolidated Financial Statements.

•In May, we sold 137,604 shares under our 2020 "at-the-market" stock offering program (the "2020 ATM Program") for approximately $99.6 million in proceeds, net of payment of commissions to sales agents and other offering expenses. See Note 12 within the Consolidated Financial Statements.

•In June, we entered into an agreement to form another joint venture in the form of a limited liability partnership with GIC, to develop and operate additional xScaleTM data centers in Europe and the Americas (the “EMEA 2 Joint Venture”). The transaction is structured to close in phases over the course of two years, pending regulatory approval and other closing conditions. Upon closing of the first phase of the transaction in September 2021, GIC contributed cash in exchange for an 80% partnership interest in the EMEA 2 Joint Venture and we sold certain data center sites and facilities located in Frankfurt, Helsinki, Madrid, Milan and Paris to the EMEA 2 Joint Venture in exchange for a total consideration of $144.0 million, including a 20% partnership interest in the JV. See Note 5 within the Consolidated Financial Statements.

•In September, we completed the acquisition of two data centers in Mumbai, India from GPX Global Systems, Inc. ("GPX India") for a total purchase consideration of approximately $170.5 million. See Note 3 within the Consolidated Financial Statements.

•In October, we entered into an agreement to form a joint venture in the form of a limited liability partnership with PGIM Real Estate ("PGIM"), to develop and operate xScale data centers in Asia-Pacific (the "Asia-Pacific 2 Joint Venture"). Upon closing, PGIM will contribute cash in exchange for an 80% partnership interest in the Asia-Pacific 2 Joint Venture. We agreed to sell the Sydney 9 ("SY9") data center site in exchange for a 20% partnership interest in the Asia-Pacific 2 Joint Venture and cash proceeds. The assets and liabilities of the SY9 data center, which are currently included within our Asia-Pacific region, were classified as held for sale as of September 30, 2021 and remained held for sale as of December 31, 2021. See Note 5 within the Consolidated Financial Statements.

55

Table of Contents

•In November and December, we sold a total of 500,013 shares under our 2020 ATM Program for approximately $398.4 million in proceeds, net of payment of commissions to sales agents and other offering expenses. See Note 12 within the Consolidated Financial Statements.

•In December, we entered into an agreement to purchase MainOne Cable Company Ltd. ("MainOne") at an enterprise value of approximately $320 million in an all-cash transaction. The acquisition is expected to close in the second quarter of 2022, subject to customary conditions including regulatory approval. See Note 3 within the Consolidated Financial Statements.

Results of Operations

Our results of operations for the year ended December 31, 2021 include the results of operations from two data centers acquired from GPX India from September 1, 2021. Our results of operations for the year ended December 31, 2020 include the results of operations from the acquisitions of 12 data center sites across Canada from Bell from October 1, 2020 and one additional data center acquired from Bell from November 2, 2020, Packet from March 2, 2020 and three data centers in Mexico from Axtel from January 8, 2020. See Note 3 within the Consolidated Financial Statements for further details.

In order to provide a framework for assessing our performance excluding the impact of foreign currency fluctuations, we supplement the year-over-year actual change in results of operations with comparative changes on a constant currency basis. Presenting constant currency results of operations is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for further discussion.

Years ended December 31, 2021 and 2020

Revenues. Our revenues for the years ended December 31, 2021 and 2020 were generated from the following revenue classifications and geographic regions (dollars in thousands):

56

Table of Contents

Revenues

(dollars in thousands)

Americas Revenues. During the year ended December 31, 2021, Americas revenue increased by $314.0 million or 12% (and also 12% on a constant currency basis). Growth in Americas revenues was primarily due to:

•approximately $112.7 million of incremental revenues from the Packet and Bell acquisitions;

•$67.7 million of incremental revenues generated from our IBX data center expansions;

•higher non-recurring revenues, primarily due to increases in EIS product sales; and

•an increase in orders from both our existing customers and new customers during the period.

EMEA Revenues. During the year ended December 31, 2021, EMEA revenue increased by $158.8 million or 8% (7% on a constant currency basis). Growth in EMEA revenues was primarily due to:

•approximately $32.0 million of incremental revenues generated from our IBX data center expansions;

•$28.2 million of incremental revenues from services provided to our joint ventures; and

•an increase in orders from both our existing customers and new customers during the period.

The increase was partially offset by a net increase of $75.0 million of realized cash flow hedge losses from foreign currency forward contracts.

Asia-Pacific Revenues. During the year ended December 31, 2021, Asia-Pacific revenue increased by $164.2 million or 13% (11% on a constant currency basis). Growth in Asia-Pacific revenue was primarily due to:

•approximately $86.4 million of incremental revenues generated from our IBX data center expansions;

•$20.6 million of incremental revenues from services provided to our joint ventures;

•$6.9 million of incremental revenues from the GPX India Acquisition; and

•an increase in orders from both our existing customers and new customers during the period.

57

Table of Contents

Cost of Revenues. Our cost of revenues for the years ended December 31, 2021 and 2020 were split among the following geographic regions (dollars in thousands):

Cost of Revenues

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas Cost of Revenues. During the year ended December 31, 2021, Americas cost of revenues increased by $210.6 million or 17% (16% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

•approximately $115.2 million of incremental cost of revenues from the Packet and Bell acquisitions;

•$33.5 million of higher depreciation driven by IBX data center expansions;

•$17.8 million of higher costs related to increased EIS product revenues;

•$11.2 million of higher other cost of sales related to an increase in bandwidth for new vendors and an increase in equipment;

•$11.1 million of higher repairs and maintenance expense driven by IBX data center expansions;

•$10.0 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth;

•$8.8 million of higher tax, license, and insurance costs driven by IBX data center expansions; and

•$5.3 million of higher consulting services driven by increases in security and IBX data center expansions.

EMEA Cost of Revenues. During the year ended December 31, 2021, EMEA cost of revenues increased by $122.7 million or 11% (9% on a constant currency basis). The increase in our EMEA cost of revenues was primarily due to:

•$58.7 million of higher depreciation expenses driven by IBX data center expansions in the Netherlands, Germany, Switzerland and the UK;

•$34.1 million of higher utilities costs driven by increased utility usage to support IBX data center expansions and utility price increases, primarily in Germany, the UK and France;

58

Table of Contents

•$18.5 million of higher rent and facilities costs and repairs and maintenance expense, primarily in the UK and the Netherlands;

•$18.2 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth;

•$17.8 million of higher costs related to EIS product revenues; and

•$5.1 million of higher office expenses primarily due to additional software and support services.

This increase was partially offset by a net increase of $30.1 million of realized cash flow hedge gains from foreign currency forward contracts and $9.7 million decrease of other third party costs, primarily in the Netherlands and the UK.

Asia-Pacific Cost of Revenues. During the year ended December 31, 2021, Asia-Pacific cost of revenues increased by $64.9 million or 9% (7% on a constant currency basis). The increase in our Asia-Pacific cost of revenues was primarily due to:

•$27.5 million of higher depreciation expense, primarily from IBX data center expansions in Hong Kong, Australia and Japan;

•$10.1 million of higher costs related to increased EIS product revenues;

•$8.3 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth;

•$7.2 million of higher utilities costs, primarily driven by increases in prices and higher utility usage in Singapore; and

•$5.2 million of higher costs related to dark fiber and customer installations, primarily in Hong Kong.

We expect Americas, EMEA and Asia-Pacific cost of revenues to increase in line with the growth of our business, including from the impacts of acquisitions.

59

Table of Contents

Sales and Marketing Expenses. Our sales and marketing expenses for the years ended December 31, 2021 and 2020 were split among the following geographic regions (dollars in thousands):

Sales and Marketing Expenses

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas Sales and Marketing Expenses. During the year ended December 31, 2021, Americas sales and marketing expenses increased by $13.4 million or 3% (and also 3% on a constant currency basis). The increase in our Americas sales and marketing expenses was primarily due to $12.0 million of higher compensation costs, including sales compensation, salaries and stock-based compensation, partially due to additional compensation expenses incurred related to our recent acquisitions and higher bonus and merit payments.

EMEA Sales and Marketing Expenses. During the year ended December 31, 2021, EMEA sales and marketing increased by $10.6 million or 7% (5% on a constant currency basis). The increase in our EMEA sales and marketing expenses was primarily due to $10.2 million of higher compensation costs, including sales compensation, salaries and stock-based compensation.

Asia-Pacific Sales and Marketing Expenses. Our Asia-Pacific sales and marketing expense did not materially change during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

We anticipate that we will continue to invest in sales and marketing initiatives across our three regions in line with the growth of our business. We also expect travel and entertainment expenses to increase as travel restrictions that were imposed in response to the COVID-19 pandemic are eased. We expect our Americas sales and marketing expenses as a percentage of revenues to be higher than those of our other regions since certain global sales and marketing functions are located within the U.S.

60

Table of Contents

General and Administrative Expenses. Our general and administrative expenses for the years ended December 31, 2021 and 2020 were split among the following geographic regions (dollars in thousands):

General and Administrative Expenses

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas General and Administrative Expenses. During the year ended December 31, 2021, Americas general and administrative expenses increased by $120.0 million or 15% (and also 15% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily due to:

•$70.3 million of higher compensation costs, including salaries, bonuses, and stock-based compensation, primarily due to additional compensation expenses incurred related to headcount growth, including that from our recent acquisitions;

•$39.9 million of higher depreciation expense associated with systems to support the integration of recent acquisitions and the growth of our business; and

•$13.3 million of higher office expenses primarily due to additional software and support services.

EMEA General and Administrative Expenses. During the year ended December 31, 2021, EMEA general and administrative expenses increased by $44.7 million or 22% (20% on a constant currency basis). The increase in our EMEA general and administrative expenses was primarily due to:

•$41.1 million of higher compensation costs, including salaries, bonuses, and stock-based compensation, primarily due to headcount growth; and

•$5.7 million of higher other operating expenses, primarily due to the prior year having lower costs attributable to a favorable legal settlement in the first quarter of 2020.

This increase was partially offset by a net increase of $5.7 million of realized cash flow hedge gains from foreign currency forward contracts.

61

Table of Contents

Asia-Pacific General and Administrative Expenses. During the year ended December 31, 2021, Asia-Pacific general and administrative expenses increased by $46.1 million or 44% (41% on a constant currency basis). The increase in our Asia-Pacific general and administrative expense was primarily due to:

•$28.5 million of higher compensation costs, including salaries, bonuses, and stock-based compensation, primarily due to additional compensation expenses incurred related to headcount growth, including that from our recent acquisitions;

•$9.1 million of higher rent and facility costs, primarily related to our offices in Japan and Singapore; and

•$6.7 million of consulting costs in support of our business growth.

Going forward, although we are carefully monitoring our spending, we expect our general and administrative expenses to increase across all three regions as we continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. We also expect travel and entertainment expenses to increase as travel restrictions that were imposed in response to the COVID-19 pandemic are eased. Additionally, given that our corporate headquarters is located in the U.S., we expect the Americas general and administrative expenses as a percentage of revenues to be higher than those of other regions.

Transaction Costs. During the year ended December 31, 2021, we recorded transaction costs totaling $22.8 million, primarily related to costs incurred in connection with the formation of the new joint ventures and the GPX India Acquisition. During the year ended December 31, 2020, we recorded transaction costs totaling $55.9 million, primarily related to costs incurred in connection with the acquisitions of Bell, Packet, and Axtel and the formation of the Asia-Pacific 1 Joint Venture.

Impairment Charges. During the year ended December 31, 2021, we did not record any impairment charge. During the year ended December 31, 2020, we recorded impairment charges totaling $7.3 million in the Asia-Pacific region as a result of the fair value adjustment of the Asia-Pacific 1 Joint Venture xScale data centers, which were classified as held for sale assets before they were sold on December 17, 2020.

Gain on Asset Sales. During the year ended December 31, 2021, we recorded a gain of $10.8 million primarily related to the sale of the Dublin 5 ("DB5") data center. During the year ended December 31, 2020, we did not record a significant amount of gain on asset sales.

Income from Operations. Our income from operations for the years ended December 31, 2021 and 2020 was split among the following geographic regions (dollars in thousands):

Americas Income from Operations. During the year ended December 31, 2021, Americas income from operations decreased by $13.1 million or 7% (5% on a constant currency basis), primarily due to higher operating expenses as a percentage of revenues, which included higher depreciation expenses driven by expansion activity and an increase in compensation costs, as well as margin dilution from recent acquisitions and increases in EIS product sales.

EMEA Income from Operations. During the year ended December 31, 2021, EMEA income from operations did not materially change as compared to the year ended December 31, 2020.

Asia-Pacific Income from Operations. During the year ended December 31, 2021, Asia-Pacific income from operations increased by $69.0 million or 20% (18% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, as described above, as well as lower cost of revenues and sales and marketing expense as a percentage of revenues.

62

Table of Contents

Interest Income. Interest income was not significant for the year ended December 31, 2021 and was $8.7 million for the year ended December 31, 2020. The average yield for the year ended December 31, 2021 was 0.17% versus 0.43% for the year ended December 31, 2020.

Interest Expense. Interest expense decreased to $336.1 million for the year ended December 31, 2021 from $406.5 million for the year ended December 31, 2020, primarily due to interest savings as a result of our recent refinancing activities. During the years ended December 31, 2021 and 2020, we capitalized $24.5 million and $26.8 million, respectively, of interest expense to construction in progress. See Note 11 within the Consolidated Financial Statements.

Other Income or Expense. We recorded net other expense of $50.6 million for the year ended December 31, 2021, primarily due to approximately $32.0 million impairment charge resulting from the settlement of a pre-acquisition uncertain tax position, refer to below "Income Taxes" section for further information, as well as foreign currency exchange gains and losses. For the year ended December 31, 2020, we recorded net other income of $6.9 million, which was primarily due to foreign currency exchange gains and losses, net of the impact from derivative instruments used to manage foreign exchange risks.

Loss on Debt Extinguishment. During the year ended December 31, 2021, we recorded $115.1 million of net loss on debt extinguishment primarily due to the redemption of 2.875% Euro Senior Notes due 2026 and the 5.375% Senior Notes due 2027. During the year ended December 31, 2020, we recorded $145.8 million of loss on debt extinguishment primarily related to the redemption of the Senior Notes due 2022, 2024, 2025, and 2026.

Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax years ended December 31, 2021 and 2020, respectively. As such, other than tax attributable to state income taxes and foreign income and withholding taxes, no provision for income taxes has been included for the REIT and its QRSs in the accompanying consolidated financial statements for the years ended December 31, 2021 and 2020.

We have made TRS elections for some of our subsidiaries in and outside the U.S. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that may not be REIT compliant.

U.S. income taxes for the TRS entities located in the U.S. and foreign income taxes for our foreign operations regardless of whether the foreign operations are operated as QRSs or TRSs have been accrued, as necessary, for the years ended December 31, 2021 and 2020.

For the years ended December 31, 2021 and 2020, we recorded $109.2 million and $146.2 million of income tax expenses, respectively. Our effective tax rates were 17.9% and 28.3%, respectively, for the years ended December 31, 2021 and 2020. The lower effective tax rate in 2021 as compared to 2020 is primarily due to the reversal of uncertain tax positions of $69.8 million resulting from the settlements of various tax audits in the United Kingdom ("UK"), Germany, and Australia, partially offset by $12.3 million resulting from the revaluation of our deferred tax liabilities in the EMEA region due to the UK corporate tax rate increase from 19% to 25% and the Dutch corporate tax rate increase from 25% to 25.8% enacted in the current period.

Of the unrecognized tax benefits being realized in the year ended December 31, 2021, approximately $32.0 million is related to the uncertain tax position inherited from the Metronode Acquisition in 2018. The uncertain tax position was covered by an indemnification agreement with the Seller. The realization of the unrecognized tax benefits resulted in an impairment of the indemnification asset for the same amount, which has been included in Other Income (Expense) on the Consolidated Statements of Operations for the year ended December 31, 2021.

Adjusted EBITDA. Adjusted EBITDA is a key factor in how we assess the operating performance of our segments and develop regional growth strategies such as IBX data center expansion decisions. We define adjusted EBITDA as income or loss from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain on asset sales. See "Non-GAAP Financial Measures" below for more information about adjusted EBITDA and a reconciliation of adjusted EBITDA to income or loss from operations. Our adjusted EBITDA for the years ended December 31, 2021 and 2020 was split among the following geographic regions (dollars in thousands):

63

Table of Contents

Americas Adjusted EBITDA. During the year ended December 31, 2021, Americas adjusted EBITDA increased by $140.4 million or 12% (and also 12% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth as described above.

EMEA Adjusted EBITDA. During the year ended December 31, 2021, EMEA adjusted EBITDA increased by $59.1 million or 6% (5% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, as described above.

Asia-Pacific Adjusted EBITDA. During the year ended December 31, 2021, Asia-Pacific adjusted EBITDA increased by $92.0 million or 13% (11% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth as described above.

Non-GAAP Financial Measures

We provide all information required in accordance with GAAP, but we believe that evaluating our ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, we use non-GAAP financial measures to evaluate our operations.

Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. We have presented such non-GAAP financial measures to provide investors with an additional tool to evaluate our results of operations in a manner that focuses on what management believes to be our core, ongoing business operations. We believe that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides a better understanding of the overall performance of the business and ability to perform in subsequent periods. We believe that if we did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze Equinix effectively.

Investors should note that the non-GAAP financial measures used by us may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as those of other companies. Investors should therefore exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies.

Our primary non-GAAP financial measures, adjusted EBITDA and adjusted funds from operations ("AFFO"), exclude depreciation expense as these charges primarily relate to the initial construction costs of our IBX data centers and do not reflect our current or future cash spending levels to support our business. Our IBX data centers are long-lived assets and have an economic life greater than 10 years. The construction costs of an IBX data center do not recur with respect to such data center, although we may incur initial construction costs in future periods with respect to additional IBX data centers, and future capital expenditures remain minor relative to our initial investment. This is a trend we expect to continue. In addition, depreciation is also based on the estimated useful lives of our IBX data centers. These estimates could vary from actual performance of the asset, are based on historical costs incurred to build out our IBX data centers and are not indicative of current or expected future capital expenditures. Therefore, we exclude depreciation from our results of operations when evaluating our operations.

64

Table of Contents

In addition, in presenting adjusted EBITDA and AFFO, we exclude amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of our acquisitions and these charges may vary in amount from period to period. We exclude amortization expense to facilitate a more meaningful evaluation of our current operating performance and comparisons to our prior periods. We exclude accretion expense, both as it relates to asset retirement obligations as well as accrued restructuring charge liabilities, as these expenses represent costs which we believe are not meaningful in evaluating our current operations. We exclude stock-based compensation expense, as it can vary significantly from period to period based on share price, the timing, size and nature of equity awards. As such, we, and many investors and analysts, exclude stock-based compensation expense to compare our results of operations with those of other companies. We also exclude restructuring charges. The restructuring charges relate to our decisions to exit leases for excess space adjacent to several of our IBX data centers, which we did not intend to build out, or our decision to reverse such restructuring charges. We also exclude impairment charges generally related to certain long-lived assets. The impairment charges are related to expense recognized whenever events or changes in circumstances indicate that the carrying amount of long-lived assets are not recoverable. We also exclude gain or loss on asset sales as it represents profit or loss that is not meaningful in evaluating the current or future operating performance. Finally, we exclude transaction costs from AFFO and adjusted EBITDA to allow more comparable comparisons of our financial results to our historical operations. The transaction costs relate to costs we incur in connection with business combinations and the formation of joint ventures, including advisory, legal, accounting, valuation, and other professional or consulting fees. Such charges generally are not relevant to assessing our long-term performance. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as restructuring charges, impairment charges, gain or loss on asset sales and transaction costs are non-core transactions; however, these types of costs may occur in future periods.

Adjusted EBITDA

The following table shows the reconciliation from income from operations to adjusted EBITDA (in thousands):

Our adjusted EBITDA results have improved each year in total dollars due to our steady operating results, as discussed in "Results of Operations", as well as the nature of our business model consisting of a recurring revenue stream and a cost structure which has a large base that is fixed in nature, as also discussed in "Overview".

Funds from Operations ("FFO") and AFFO

We use FFO and AFFO, which are non-GAAP financial measures commonly used in the REIT industry. FFO is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. FFO represents net income (loss), excluding gain (loss) from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.

65

Table of Contents

In presenting AFFO, we exclude certain items that we believe are not good indicators of our current or future operating performance. AFFO represents FFO excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain (loss) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income (loss) from discontinued operations, net of tax, and adjustments from FFO to AFFO for unconsolidated joint ventures' and noncontrolling interests' share of these items. The adjustments for installation revenue, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the consolidated statement of operations. We exclude the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with debt financings that have no current or future cash obligations. We exclude gain (loss) on debt extinguishment since it generally represents the write-off of initial costs incurred in connection with debt financings or a cost that is incurred to reduce future interest costs and is not a good indicator of our current or future operating performance. We include an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances, uncertain tax positions and deferred taxes that do not relate to current period's operations. We deduct recurring capital expenditures, which represent expenditures to extend the useful life of its IBX data centers or other assets that are required to support current revenues. We also exclude net income (loss) from discontinued operations, net of tax, which represents results that may not recur and are not a good indicator of our current future operating performance.

66

Table of Contents

Our FFO and AFFO were as follows (in thousands):

(1)Impairment charges for 2021 relate to the impairment of an indemnification asset in Q2 2021 resulting from the settlement of a pre-acquisition uncertain tax position, which was recorded as Other Income (Expense) on the Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense (benefit) adjustment line on the table above.

Our AFFO results have improved due to the improved operating results discussed earlier in "Results of Operations," as well as due to the nature of our business model which consists of a recurring revenue stream and a cost structure which has a large base that is fixed in nature as discussed earlier in "Overview."

67

Table of Contents

Constant Currency Presentation

Our revenues and certain operating expenses (cost of revenues, sales and marketing and general and administrative expenses) from our international operations have represented and will continue to represent a significant portion of our total revenues and certain operating expenses. As a result, our revenues and certain operating expenses have been and will continue to be affected by changes in the U.S. dollar against major international currencies. During the year ended December 31, 2021 as compared to the same period in 2020, the U.S. dollar was stronger relative to the Brazilian real and Japanese yen, which resulted in an unfavorable foreign currency impact on revenue, operating income and adjusted EBITDA, and a favorable foreign currency impact on operating expenses. During the year ended December 31, 2021 as compared to the same period in 2020, the U.S. dollar was weaker relative to the Australian dollar, British Pound, Euro and Singapore dollar, which resulted in a favorable foreign currency impact on revenue, operating income and adjusted EBITDA, and an unfavorable foreign currency impact on operating expenses. In order to provide a framework for assessing how each of our business segments performed excluding the impact of foreign currency fluctuations, we present period-over-period percentage changes in our revenues and certain operating expenses on a constant currency basis in addition to the historical amounts as reported. Our constant currency presentation excludes the impact of our foreign currency cash flow hedging activities. Presenting constant currency results of operations is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, we have presented this non-GAAP financial measure to provide investors with an additional tool to evaluate our results of operations. To present this information, our current period revenues and certain operating expenses from entities reporting in currencies other than the U.S. dollar are converted into U.S. dollars at constant exchange rates rather than the actual exchange rates in effect during the respective periods (i.e. average rates in effect for the year ended December 31, 2020 are used as exchange rates for the year ended December 31, 2021 when comparing the year ended December 31, 2021 with the year ended December 31, 2020).

Liquidity and Capital Resources

Sources and Uses of Cash

Customer collections are our primary source of cash. We believe we have a strong customer base, and have continued to experience relatively strong collections. As of December 31, 2021, our principle sources of liquidity were $1.5 billion of cash, cash equivalents and short-term investments. In addition to our cash and investment portfolio, we had $1.9 billion of additional liquidity available to us from our $2.0 billion revolving facility and general access to both public and private debt and the equity capital markets. We also have additional liquidity available to us from our ATM program, under which we may offer and sell from time to time our common stock in "at the market" transactions. As of December 31, 2021, we had $1.0 billion available for sale under the 2020 ATM Program.

We believe we have sufficient cash, coupled with anticipated cash generated from operating activities and external financing sources, to meet our operating requirements, including repayment of the current portion of our debt as it becomes due, distribution of dividends and completion of our publicly-announced acquisitions, ordinary costs to operate the business, and expansion projects. We also believe that our financial resources will allow us to manage future possible impacts of the ongoing COVID-19 pandemic on our business operations for the foreseeable future, which could include reductions in revenue and delays in payments from customers and partners.

As we continue to grow, we may pursue additional expansion opportunities, primarily the build out of new IBX data centers, in certain of our existing markets which are at or near capacity within the next year, as well as potential acquisitions and joint ventures. If the opportunity to expand is greater than planned we may further increase the level of capital expenditure to support this growth as well as pursue additional business and real estate acquisitions or joint ventures provided that we have or can access sufficient funding to pursue such expansion opportunities. We may elect to access the equity or debt markets from time to time opportunistically, particularly if financing is available on attractive terms. We will continue to evaluate our operating requirements and financial resources in light of future developments, including those relating to the ongoing COVID-19 pandemic.

68

Table of Contents

Cash Flow

Operating Activities

Our cash provided by our operations is generated by colocation, interconnection, managed infrastructure and other revenues. Our primary uses of cash from our operating activities include compensation and related costs, interest payments, other general corporate expenditures and taxes. Net cash provided by operating activities increased by $237.4 million during the year ended December 31, 2021 as compared to December 31, 2020, primarily driven by improved results of operations partially offset by increases in cash paid for costs and operating expenses.

Investing Activities

Net cash used in investing activities decreased by $420.2 million during the year ended December 31, 2021 as compared to December 31, 2020, primarily due to $1.0 billion less spent on business acquisitions, which consisted of the Bell, Packet and Axtel acquisitions in 2020 and the GPX acquisition in 2021 and a $20.2 million decrease in purchases of investments. This decrease was partially offset by a $469.0 million increase in capital expenditures as a result of our expansion activity, a $125.8 million decrease in the proceeds from the sale of assets to our Joint Ventures and a $25.3 million decrease in proceeds from the sale of investments.

Financing Activities

Net cash provided by financing activities decreased by $401.8 million for the year ended December 31, 2021 as compared to December 31, 2020, primarily driven by a decrease of $1.7 billion in proceeds from public offerings of common stock, a $750.8 million decrease in proceeds from the revolving credit facility and term loan facilities, a $553.0 million decrease in proceeds from senior notes, a $95.0 million increase in dividend distributions and a $50.3 million increase in repayments of finance lease liabilities. This decrease is partially offset by a $2.4 billion decrease in the repayment of senior notes, a $199.6 million increase in proceeds from the ATM program, a $112.5 million decrease in the repayment of mortgage and loans payable, a $17.1 million decrease in debt issuance costs, a $15.5 million increase in proceeds from employee awards and a $12.5 million decrease in debt extinguishment costs.

Material Cash Commitments

As of December 31, 2021, our principle commitments were primarily comprised of:

•approximately $11.1 billion of principal from our senior notes (gross of debt issuance cost and debt discount);

•approximately $2.7 billion of interest on mortgage payable, loans payable, senior notes and term loans, based on their respective interest rates and recognized over the life of these instruments, and the credit facility fee for the revolving credit facility;

•$620.0 million of principal from our term loans, mortgage and loans payable (gross of debt issuance cost, debt discount, plus mortgage premium);

•approximately $4.9 billion of total lease payments, which represents lease payments under finance and operating lease arrangements, including renewal options that are reasonably certain to be exercised;

•approximately $1.0 billion of unaccrued capital expenditure contractual commitments, primarily for IBX equipment not yet delivered and labor not yet provided in connection with the work necessary to complete construction and open IBX data center expansion projects prior to making them available to customers for installation, the majority of which is payable within the next 12 months; and

•approximately $1.3 billion of other non-capital purchase commitments, such as commitments to purchase power in select locations and other open purchase orders, which contractually bind us for goods, services

69

Table of Contents

or arrangements to be delivered or provided during 2022 and beyond, the majority of which is payable within the next two years.

We believe that our sources of liquidity, including our expected future operating cash flows, are sized to adequately meet both the near and long term material cash commitments for the foreseeable future. For further information on maturities of lease liabilities and debt instruments, see Notes 10 and 11, respectively, within the Consolidated Financial Statements.

Other Contractual Obligations

We have additional future equity contributions and commitments to the Joint Ventures with GIC that are in EMEA and APAC. For additional information, see the "Equity Method Investments" footnote within the Consolidated Financial Statements.

Additionally, we entered into lease agreements with various landlords primarily for data center spaces and ground leases which have not yet commenced as of December 31, 2021. For additional information, see “Maturities of Lease Liabilities” in Note 10 within the Consolidated Financial Statements.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. Management bases its assumptions, estimates and judgments on historical experience, current trends and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. However, because future events and their effects cannot be determined with certainty, actual results may differ from these assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 1 to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. Management believes that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our consolidated financial statements, and they require significant judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain:

•    Accounting for income taxes;

•    Accounting for business combinations;

•    Accounting for impairment of goodwill and other intangible assets;

•    Accounting for property, plant and equipment; and

•    Accounting for leases.

70

Table of Contents

71

Table of Contents

72

Table of Contents

73

Table of Contents

Recent Accounting Pronouncements

See "Recent Accounting Pronouncements" in Note 1 within the Consolidated Financial Statements.

74

Table of Contents