Charles J. Meyers
President and Chief Executive Officer at Equinix
Thank you, Chip. Good afternoon, and welcome to our fourth quarter earnings call.
We had a solid close to 2023, as digital transformation and accelerating AI demand drove a record quarter for xScale leasing, robust pricing dynamics and continued momentum across our data center and digital services portfolios. For the full year, we delivered more than $8 billion of revenues, eclipsing 21 years of consecutive quarterly growth, all while driving AFfO per share performance above the top end of our long term expectations.
As we look ahead, we see our overall relevance to customers continue to rise with our global reach, highly differentiated ecosystems and full range portfolio of services, positioning us as a key long term partner to fuel digital transformation and unlock the enormous potential of AI. At the same time, many customers remain cautious in the face of macro uncertainty and are driving optimization across their broader IT infrastructure, freeing up dollars for AI related investments while still managing within tighter overall budgets. These dynamics, combined with capacity constraints in certain key markets, continue to create crosscurrents in our business, with solid gross demand and strong pricing dynamics being offset by more deliberate buying decisions and slightly higher levels of churn.
Meanwhile, we continue to realize the benefits of efficiency investments over the past few years and are showing strong operating leverage in the business, allowing us to maintain our differentiated return on invested capital, expand margins and deliver outsized performance on AFFO per share, which we continue to see as our lighthouse metric and the bedrock of long term value creation.
As we work to make digital infrastructure more powerful, accessible and sustainable, we are building relationships as trusted advisors to our customers, innovating across our product portfolio, deepening our technology partnerships to solve customer challenges and maintaining our discipline to put the right customers with the right workloads into the right assets. This approach reinforces the competitive advantages of platform Equinix, as we focus our efforts in 2024 on four key areas.
First, we plan to continue to expand our unmatched global reach, extending to 76 metros in 35 countries by year-end, including opening new markets in India, Indonesia, Malaysia and South Africa. We also intend to add much needed capacity in high demand existing markets across all three regions, including significant retail phases in New York, Paris and Tokyo, and accelerated investment in our xScale portfolio. Second, we intend to extend our interconnection leadership by combining the scalability and performance of physical interconnection and the agility of Equinix fabric with a commitment to lead the way in the massive market of multi cloud networking with new innovations and products like our recently announced Equinix Fabric Cloud Router.
Third, we'll continue to prioritize our Future First sustainability strategy, making Equinix the clear partner of choice to help our customers track and achieve their sustainability goals, and manage an increasingly complex global power landscape. And finally, we intend to unlock the power of platform Equinix, embracing key partners and making it easier than ever to combine our value with theirs, so we can solve our customers' problems together. In particular, we'll focus on AI as we join forces with incredible partners such as NVIDIA to ensure that platform Equinix is the place where private AI happens.
Turning to our results as depicted on Slide 3, revenues for the full year were $8.2 billion, up $925 million, a 15% increase year-over-year or a 9% increase excluding the impact of power price increases. Adjusted EBITDA was $3.7 billion, up 11% year-over-year, and AFFO was more than $3 billion for the first time, resulting in AFFO for share growth of 11% year-over-year. These growth rates are all on a normalized and constant currency basis.
On the AI front, we saw strong momentum across the value chain in Q4, as we cultivated key partnerships and won significant opportunities. While still early GenAI has the capacity to transform every industry and is poised to accelerate rapidly. By 2026, Gartner predicts over 80% of enterprises will have used GenAI APIs and models or deployed GenAI enabled applications in production environments, up from just 5% in early 2023. We're leaning into this opportunity and recently announced our expanded partnership for NVIDIA DGX private cloud at Equinix. This new service provides customers a fast and cost effective way to adopt advanced AI infrastructure that's operated and managed by experts globally, so enterprises can move quickly while balancing performance requirements, a need for cloud adjacency, and a rapidly increasing desire to maintain control of critical enterprise data.
We're seeing strong interest in this service across all three regions, with early adoption from digital leaders in biopharma, financial services, software, automotive and retail subsegments. Early wins in this partnership include a Fortune 100 global biopharma company who will create an AI Center of Excellence to accelerate its research and development process and shorten time to market for new medications.
Our data center services portfolio continues to scale with nine new data center openings since our last earnings call. Given the strong underlying demand for digital infrastructure and the long duration in delivering new capacity, we continue to invest broadly across our global footprint. We currently have 49 major projects underway in 35 markets across 21 countries, including 11 xScale builds representing nearly 20,000 cabinets of retail and more than 50 megawatts of xScale capacity through 2024.
Wins this quarter included a European biotechnology company, exiting their traditional data centers in favor of a global network dense, hybrid and multicloud environment, including liquid cooling requirements. And Orhan Holding, a Turkish conglomerate mainly serving as a strong global automotive supply company, expanding with Equinix to support their operations across 15 countries.
Shifting to our xScale initiative, the wave of hyperscale demand to support AI and cloud is translating into robust demand and preleasing activity. Since our last earnings call, we leased 90 megawatts of capacity across six assets in EMEA and APAC, including approximately 32 megawatts leased at the start of the year. This brings total xScale leasing to 300 megawatts globally. Wins this quarter included supporting strategic GenAI workloads as well as a hyperscaler's first scaled liquid cooling deployment at Equinix. Looking ahead, we have a meaningful pipeline of opportunities to drive continued xScale momentum in the quarters to come.
Turning to our industry leading global interconnection franchise, we now have more than 462,000 total interconnections deployed on our platform. In Q4, Interconnection revenues stepped up 8% year-over-year on a normalized and constant currency basis, and we added an incremental 4,300 organic interconnections for the quarter. We again had healthy gross ads activity, offset somewhat by continued grooming and consolidations into higher bandwidth connections.
Internet exchange saw peak traffic up 3% quarter-over-quarter and 22% year-over-year to nearly 36 terabits per second, led by expansion from existing customers. Additionally, during the quarter, we added four new native cloud on-ramps in Bogota, Calgary and Zurich. Equinix customers can now enjoy low latency access to multiple native cloud on-ramps in 37 metros, including eight out of the 10 world's largest metros by GDP. Wins this quarter included a leading European quantum computing company offering its technology through Equinix Metal and Equinix Fabric, enabling different industries to explore potential use cases in quantum computing. And OUTsurance, a South African insurance company expanding in EMEA leveraging Equinix Fabric and a managed service solution to be ready to begin trading.
In our digital services portfolio, we saw continued momentum as Equinix Metal and Network Edge drove attractive pull through to Equinix Fabric. In January, we announced the general availability of Equinix Fabric Cloud Router, a new virtual routing service to simplify enterprises complex cloud to cloud and hybrid cloud networking challenges by providing an easy to configure enterprise grade multicloud routing service that can be deployed in under a minute. Customers can deploy Equinix Fabric cloud router in all 58 Equinix Fabric enabled metros globally with low latency connectivity to all the major cloud providers as well as hundreds of other service providers.
Key digital services wins included NetApp, who expanded their partnership with Equinix to deliver a Bare Metal as a Service solution, a comprehensive compute network and storage infrastructure stack with low latency connections to major public clouds. And a leading semiconductor company establishing a cloud adjacent storage presence using Equinix Metal and Pure Storage with integration into AWS.
Our channels program delivered another good quarter, accounting for 35% of bookings and over 50% of new logos. We saw continued growth from partners like Avant, HPE, HCL, NVIDIA and WWT with wins across a wide range of industry verticals and digital first use cases. Wins this quarter included supporting a consumer healthcare company's business unit spinoff with Dell, setting up a hybrid IT environment by leveraging colocation and cloud for their SAP environment in London and Singapore.
Now let me turn the call over to Keith to cover the results for the quarter.