According to a ResearchandMarkets report published earlier this week, the global Data Center Colocation Market is estimated to grow 15% annually over the next five years to $73.8 billion by 2023 from $31.25 billion in 2017. Redwood City-based Equinix (NYSE: EQIX) is a leading player in the segment.

Equinix’s Financials

Equinix was founded in 1998 by Al Avery, Jay Adelson, and William Norton. It was set up with the aim of providing secure physical connection points where networks, content providers, and enterprises could interconnect through a neutral party to avoid the competing interests of telecommunication providers. Equinix’s technology was important in making the Internet more scalable and cost-effective. Its platform saw big adoption and soon players like Microsoft and Cisco System became its big investors. Within a year, the company had set up the first-ever International Business Exchange [IBX] data center in Ashburn, Virginia.

Today, it provides global data center services to global organizations to help protect and connect their networks. It operates 90 IBX data centers across 35 major metropolitan areas in 11 countries in North America, Europe, and Asia-Pacific. It is the biggest retail colocation data center in the world with more than 10.5% of the global market share. For comparison, China Telecom, the second largest player in the industry owns a comparatively modest 5.9% of the market.

Equinix recently reported its fiscal 2017 results that surpassed market expectations. Revenues for the fourth quarter grew 27% over the year to $1.2 billion, marginally ahead of the Street’s forecast of $1.19 billion. This was the 60^th quarter of consecutive revenue growth. Since Equinix is part of the Real Estate Investment Trust (REIT) industry, the market looks for its adjusted funds from operations (AFFO) metric. For the quarter, AFFO grew to $4.82 per share compared with $4.08 per share a year ago. This was also ahead of the Street’s forecast of $4.80 per share for the quarter.

Among operating metrics, recurring revenues that include colocation, interconnection, and managed services, grew 26% over the year to $1.12 billion. Non-recurring revenues grew 55% to $77.6 million.

It ended the year with revenues increasing 22% to $4.368 billion and AFFO growing 22% to $18.5 per share.

Equinix expects to end the current year with revenues of more than $5.010 billion, compared with the market’s forecast of $5.05 billion. It forecast an AFFO of more than $1.635 billion for the year. For the current quarter, Equinix expects revenues of $1.204-$1.212 billion, compared with the market’s forecast of $1.21 billion.

Equinix’s Acquisitions

It was not always rosy for Equinix. At the time of the dot-com burst, it nearly went bankrupt. Despite the troubles, the management was committed to the business model and opted for a reverse stock split. It restructured its ownership and allowed lenders to exchange loans for stock in the company. As the market recovered, Equinix began to slowly build back by focusing on acquisitions. It continues to rely heavily on acquisitions even today to drive growth.

It recently announced the acquisition of Australia-based datacenter company Metronode for an estimated AU$1 billion (~$0.8 billion). The acquisition will make Equinix the market leader in Australia as it will add to its portfolio Metronode assets of nearly 215,000 square feet (20,000 square meters) of gross colocation space in Australia. Metronode also owned more than 90% of its 860,000 square feet (80,000 square meters) of land. Overall, the acquisition adds two data centers in Melbourne, and three in greater Sydney, two in Perth, and one each in Canberra, Adelaide and Brisbane to Equinix’s platform. Additionally, Equinix will benefit from Metronode’s strong presence in the government sector. With the acquisition, Equinix now has 40 data centers in the Asia Pacific region. Prior to the acquisition, Metronode was operating at revenues of AU$60 million (~$45.8 million) for the year.

More recently, Equinix also announced the acquisition of Infomart Dallas from ASB Real Estate Investments for an estimated $800 million. The acquisition will add approximately 1.6 million gross square feet of space to Equinix’s platform and will allow it to expand in the Dallas market through further build-out. Dallas is a major connection point for LATAM traffic as it provides key terrestrial routes that serve the Central and South America regions.

Equinix went public in 2000 when it raised more than $270 million at $12 a share. Its stock is currently trading at $407.58 with a market capitalization of $32.3 billion. It touched a 52-week high of $495.35 in October last year and has recovered from the 52-week low of $370.79 it had fallen to in February this year.