11 November 2010
OnLive and Equinix Make Instant Gaming a Reality
Global Platform Delivers High-end Gaming Content to Virtually Any TV, PC or Mac
FOSTER CITY, CA — November 11, 2010 — Equinix, Inc. (Nasdaq: EQIX), a provider of global data center services, today announced details of its relationship with OnLive, the pioneer of on-demand, instant-play video games. An Equinix customer for more than four years, OnLive chose to deploy the OnLive Game Service with Equinix in order to achieve the performance benefit gained by connecting directly to multiple carriers and strategic business partners. These benefits have enabled OnLive to quickly meet growing demand while ensuring consumers a great gaming experience.
“OnLive makes the impossible possible by providing consumers instant access to top video games over a broadband connection. Equinix is at the epicenter of our strategy,” said Charlie Jablonski, VP of Operations at OnLive. “Having access to a large ecosystem of carriers and potential content partners has greatly expedited our rollout schedule and made scaling the service seamless and efficient. The power of Equinix’s global platform is evident every time a gamer uses OnLive to play instantly.”
According to the telecom and digital media industry analyst group In-Stat, more than 92 million U.S. households will have broadband service to their home by 2013, and nearly 50 million will also be using mobile broadband to take their electronic entertainment with them, wherever they go. “The accelerated adoption of broadband entertainment services means game companies are not just competing with each other, they are competing with an array of digital entertainment services that are a click away with a broadband connection,” said Gerry Kaufhold, principal analyst with In-Stat. “What’s more, TV sets are beginning to ship with network connections built in. When the Web gets to the TV set, it’s a game changer. Savvy companies are expanding on traditional delivery methods with direct-to-Internet approaches that prolong consumer engagement with the product, and with the brand.”
Officially launched in June 2010, the OnLive Game Service offers immediate access to premium video game content on a PC or Mac via a broadband wired or Wi-Fi connection through a web browser, and soon on an HDTV via the MicroConsole™ TV adapter. In order to deploy and scale the service to meet worldwide demand, OnLive leveraged Equinix’s Internet Exchange, a service that enables companies to interconnect their networks to move data securely, efficiently and with minimal latency. The ability to connect with the largest networks in the world optimizes application delivery and lowers costs—crucial elements for any content-driven company.
“As consumers continue to gravitate to on-demand consumption of video games across a widening array of connected devices—in the home, in the hand and beyond—it’s essential that game companies work in concert with the media ecosystem of CDNs, service providers, social networks, cloud companies and smart-phone device platforms to mobilize and monetize their games and their brand,” said Jim Poole, general manager, Global Networks, Mobility and Content at Equinix. “Equinix is home to more market leaders in the digital media space than any other global data center services provider. OnLive understands the inherent opportunity this presents to their business, and we are pleased we can continue to support their vision.”
OnLive is the pioneer of on-demand, instant-play video game services, delivering real-time interactive experiences and rich media through the Internet. With groundbreaking video compression technology, OnLive harnesses cloud computing to provide the power and intelligence needed to instantly deliver the latest, premium game titles directly on PCs and Macs via a web browser and soon on any HDTV via the MicroConsole™ TV adapter. OnLive technology is backed by hundreds of patents and patents pending. The company is headquartered in Palo Alto, Calif. OnLive investors include Warner Bros., Autodesk, Maverick Capital, AT&T, British Telecommunications (BT) and The Belgacom Group. More information is available at www.onlive.com.
Equinix, Inc. (NASDAQ: EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. More than 3,100 enterprises, cloud, digital content and financial companies connect to more than 600 network service providers and rely on Platform Equinix to grow their business, improve application performance and protect their vital digital assets. Equinix operates in 35 strategic markets across North America, Europe and Asia-Pacific and continually invests in expanding its platform to power customer growth.
Learn more at http://www.equinix.com
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc. International Business Exchange is a trademark of Equinix, Inc. OnLive and MicroConsole are trademarks or registered trademarks of OnLive, Inc. Other trademarks are the property of their respective owners and are used by permission.
Non-GAAP Financial Measures
Equinix provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Equinix uses non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow to evaluate its operations. In presenting these non-GAAP financial measures, Equinix excludes certain items that it believes are not good indicators of the Company's current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges and acquisition costs. Legislative and regulatory requirements encourage use of and emphasis on GAAP financial metrics and require companies to explain why non-GAAP financial metrics are relevant to management and investors. Equinix excludes these items in order for Equinix's lenders, investors, and industry analysts who review and report on the Company, to better evaluate the Company's operating performance and cash spending levels relative to its industry sector and competitors.
Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of our IBX centers and do not reflect our current or future cash spending levels to support our business. Our IBX centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of our IBX centers do not recur 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 centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our IBX centers, and are not indicative of current or expected future capital expenditures. Therefore, Equinix excludes depreciation from its operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures, Equinix excludes amortization expense related to certain intangible assets, as it represents a cost that may not recur and is not a good indicator of the Company's current or future operating performance. Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which Equinix believes are not meaningful in evaluating the Company's current operations. Equinix excludes non-cash stock-based compensation expense as it represents expense attributed to equity awards that have no current or future cash obligations. As such, we, and many investors and analysts, exclude this stock-based compensation expense when assessing the cash generating performance of our operations. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to the Company's decision to exit leases for excess space adjacent to several of our IBX centers, which we did not intend to build out, or our decision to reverse such restructuring charges. Equinix excludes acquisition costs from its non-GAAP financial measures. The acquisition costs relate to costs the Company incurs in connection with business combinations. Management believes such items as restructuring charges and acquisition costs are non-core transactions; however, these types of costs will or may occur in future periods.
Investors should note, however, that the non-GAAP financial measures used by Equinix may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. In addition, whenever Equinix uses such non-GAAP financial measures, it provides a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.
Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how it was calculated for the periods presented within this press release.
As used in this document, “Deloitte” means Deloitte LLP. Please see www.deloitte.com/us/ about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.