Equinix Q1 Earnings Call Highlights

Key Points

• AI is driving demand: Customer conversations shifted from pilots to enterprise-wide AI adoption—about 60% of Equinix’s largest Q1 deals were AI-related, Fabric bookings rose roughly 70% YoY, and Fabric revenue grew 26% as hyperscalers, neoclouds, and model providers expand with Equinix.
• Strong Q1 results and raised guidance: Normalized results included recurring revenues of $2.3B (+10% YoY), total revenues $2.4B (+8%), adjusted EBITDA $1.2B (+13%) with a 51% margin, AFFO above $1.0B (+11%), and management raised full-year revenue, adjusted EBITDA, and AFFO guidance.
• Capacity buildout and strategic deals: Equinix has 46 major projects (including six xScale), Q1 CapEx was about $1.3B mostly for growth, it signed to acquire atNorth (adding ~800 MW over five years), and a Hampton xScale lease was timing-shifted into Q2 without changing the full-year economics.

Equinix NASDAQ: EQIX reported first-quarter 2026 results that management said reflected broad-based demand, improving efficiency, and increasing customer activity tied to artificial intelligence and interconnection. Executives also raised full-year guidance across several financial metrics, while noting that the quarter’s reported results excluded the timing of an expected xScale lease signing related to the Hampton site.

AI adoption and “agentic” workloads shape customer conversations

CEO and President Adaire Fox-Martin said customer discussions have shifted over the past year from AI pilots to “enterprise-wide adoption at scale,” driven by the growth of inference workloads and the move of “agentic AI” from demonstrations to distributed deployments. Fox-Martin characterized the challenge as an “architecture problem,” saying enterprises need “distributed, interconnected, sovereign by design” infrastructure that is close to data and supports low-latency paths.

Fox-Martin said Equinix is seeing momentum across the AI inferencing ecosystem, citing expansions with hyperscalers, neoclouds, AI security vendors, and model providers. She said eight of the top 10 AI model providers and four of the top five neoclouds are actively expanding with Equinix and “have placed more than 110 separate network nodes with us.” She also said that “approximately 60% of our largest deals in Q1 were AI-related,” consistent with the prior quarter, and that large-capacity Equinix Fabric connections have tripled from a year ago.

First-quarter financial performance and key operating metrics

CFO Olivier Leonetti, who joined the company in March, said the quarter was the largest on record for total sales activity, up 35% year-over-year, reflecting broad demand across “all of our verticals, products, and channels.” On a normalized constant-currency basis, Leonetti reported:

• Recurring revenues: $2.3 billion, up 10% year-over-year
• Total revenues: $2.4 billion, up 8% year-over-year
• Adjusted EBITDA: $1.2 billion, up 13% year-over-year
• Adjusted EBITDA margin: 51%, up 190 basis points quarter-over-quarter and 300 basis points year-over-year
• AFFO: above $1.0 billion for the first time, up 11% year-over-year
• AFFO per share: $10.79, up 10% year-over-year

Leonetti attributed margin performance to “continued cost discipline,” “cost benefits,” and operating leverage, adding that driving efficiency would remain a focus. He said that adjusted for the timing of the Hampton/xScale lease signing, results were above the midpoint of the company’s Q1 revenue and adjusted EBITDA guidance ranges.

Operationally, Leonetti said the company increased physical and virtual net interconnections by 5,800, with strength in Fabric additions, and added 4,100 net cabinet billing. Cabinet backlog—cabinets sold but not yet installed—was at a record. Churn was 1.7%, which management attributed to delayed churn and renewal execution; Leonetti said the company is tracking toward the low end of its 2% to 2.5% full-year churn guidance range. MRR per cabinet rose to $2,524, up 7% year-over-year, which Leonetti tied to “firm pricing” and higher density.

Interconnection growth, product initiatives, and sales execution

Fox-Martin highlighted record sales activity and said the company delivered annualized growth bookings of $378 million in Q1, up 9% year-over-year, along with about $140 million of pre-selling activity. She said the quarter included more than 3,800 transactions across more than 3,100 customers, and that customers placed 20,000 orders through the self-service portal, up 12% year-over-year.

On interconnection, Fox-Martin said “colossal interconnection revenue” increased 9% year-over-year in Q1, boosted by Fabric revenue growth of 26% year-over-year. She said Fabric bookings were up 70% year-over-year, with an increasing attach rate. In the Q&A, she reiterated interconnection revenue growth of 9% and Fabric revenue growth of 26%, while also citing Fabric bookings growth in the 70%+ range.

Fox-Martin also discussed two newer initiatives introduced publicly, describing the Equinix Distributed AI Hub as a neutral way for enterprises to connect privately to the AI ecosystem, and Equinix Fabric Intelligence as a way to monitor and adjust network performance in real time, “built directly into our fabric interconnection platform.” In response to a question about whether interconnection growth could become a meaningfully larger part of revenue, Fox-Martin said there is “potential for upside,” but “that is not yet factored into our plans.”

Capacity expansion, atNorth agreement, and guidance updates

On expansion, Fox-Martin said Equinix has 46 major projects underway across 32 markets, including six xScale projects, and that approximately 25% of 2026 retail capacity expansion has already been sold due to strong pre-sales. Leonetti said first-quarter CapEx was about $1.3 billion, with roughly 90% tied to growth and capacity expansion, and he reiterated expectations for “mid-20% unlevered cash-on-cash returns on investment.”

Fox-Martin said Equinix signed a joint agreement with Canada Pension Plan Investment Board to purchase atNorth, describing it as a way to enhance the company’s Nordics position and gain access to “approximately 800 MW expected to come online over the next 5 years.” She said the transaction is subject to closing conditions and is expected to be immediately accretive to AFFO per share upon closing.

Leonetti detailed the timing shift related to the Hampton xScale lease. He said prior guidance assumed $54 million of non-recurring revenue in Q4 2025 based on original terms, while Q1 2026 guidance included expanded terms with an expected contribution of about $80 million of revenue, $65 million of AFFO, and $0.65 of AFFO per share. Those expanded economics, he said, are now included in Q2 guidance, and the shift “does not impact our full-year outlook because the economics were already incorporated.”

For guidance, Leonetti said Equinix raised full-year expectations based on Q1 outperformance and continued demand. He said the company expects second-quarter MRR growth of 10% to 11% year-over-year. For the full year, he said Equinix raised:

• Total revenue guidance by $21 million, with expected growth of 10% to 11% (a 100-basis-point improvement in the growth range)
• Adjusted EBITDA guidance by $24 million, with margins of about 51% (a 200-basis-point improvement over last year)
• AFFO guidance by about $40 million, with expected AFFO growth of 10% to 12%
• AFFO per share growth range to 9% to 11%

On capital spending, Leonetti said that excluding xScale and land acquisitions, total CapEx is now expected to be near the top end of the prior range at about $4.1 billion, including $280 million to $300 million of recurring spend and roughly $3.8 billion of non-recurring spend.

Additional topics in the Q&A included energy and geopolitics. Leonetti said Equinix is “more than 90% hedged for 2026” and expects “minimum impact” even if energy prices remain elevated. Fox-Martin said the company’s Middle East footprint is limited—six data centers representing about 1% of total revenue—and that facilities remained operational, though she said a project in Dubai at the DX3 facility saw its “RSS state” impacted due to the conflict.

Fox-Martin also discussed liquid cooling demand, saying the company ended the quarter with 36 liquid-cooling deployments across its footprint and cited “7 orders within Q1,” describing it as up 50% quarter-over-quarter.

About Equinix NASDAQ: EQIX

Equinix, Inc is a global provider of digital infrastructure and interconnection services, specializing in carrier-neutral data centers and colocation. The company operates a platform that enables enterprises, cloud and network service providers, and content companies to colocate IT infrastructure, interconnect directly with partners and providers, and access cloud on-ramps and network services in a secure, low-latency environment.

Equinix's offerings include traditional colocation space and power, cross-connects and meet-me rooms, and a suite of connectivity and on-demand services designed for hybrid multicloud architectures.

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