Equinix Q2 Earnings Call Highlights

Key Points

• Equinix raised its 2026 and long-term outlook after second-quarter recurring revenue grew 11% year over year, bookings rose 23% to $424 million, and record interconnection additions reached 9,700. AFFO per share increased 18%, while adjusted EBITDA margin expanded to 53%.
• The company is accelerating data-center capacity expansion to meet AI and enterprise demand, including delivering more than 7,000 cabinets ahead of schedule. Equinix has 52 major projects underway across 33 markets and controls 3 gigawatts of land capacity.
• Management said demand is broadening beyond traditional cloud customers to enterprise AI, sovereign infrastructure and service providers; Fabric Cloud Router bookings surged 170% year over year. Through 2029, Equinix targets annual revenue growth of 10% to 13% and AFFO-per-share growth of 9% to 12%.

Equinix NASDAQ: EQIX raised its full-year and long-term outlook after reporting accelerating recurring-revenue growth, record interconnection additions and strong bookings in the second quarter, as the company said AI-related infrastructure demand is broadening across enterprise customers and service providers.

CEO and President Adaire Fox-Martin said the “AI-driven infrastructure cycle continues to accelerate” and is supporting demand for neutral, interconnected and sovereign infrastructure. Monthly recurring revenue, measured on a normalized and constant-currency basis, grew 11% year over year, marking the company’s third consecutive quarter of double-digit growth.

Annualized gross bookings increased 23% year over year to $424 million, Equinix’s second-highest volume on record, while total sales activity including bookings and pre-sales grew more than 30%. The company also added a record 9,700 net interconnections during the quarter and reported record sold-but-not-yet-installed backlog.

Financial Results and Updated 2026 Outlook

CFO Olivier Leonetti said total revenue rose 16% year over year in the second quarter, including the effect of 134 megawatts of xScale leases closed during the period. Those transactions included Hampton and contributed approximately $120 million in non-recurring fees.

Adjusted EBITDA margin reached 53%, up 300 basis points from a year earlier. Excluding xScale leasing fees, the adjusted EBITDA margin increased about 150 basis points year over year, according to Leonetti. Adjusted funds from operations, or AFFO, per share grew 18% on a normalized and constant-currency basis.

Equinix raised its 2026 guidance for the second consecutive quarter. The company now expects:

• Total revenue growth of 11% to 12% on a normalized and constant-currency basis.
• Monthly recurring revenue growth of about 10%, at the high end of its prior range.
• An adjusted EBITDA margin of approximately 51%, representing a 200-basis-point improvement from the prior year.
• AFFO per-share growth of 10% to 12%.
• Capital expenditures of $5 billion to $6 billion, excluding real estate acquisitions and xScale.

For the third quarter, the company expects monthly recurring revenue growth of 9% to 11%, total revenue growth of 10% to 12%, and an adjusted EBITDA margin of 51%.

Leonetti said churn was 1.8% in the quarter, driven primarily by renewal-process execution and some delayed churn. Equinix expects churn to be near the lower end of its typical 2% to 2.5% range in the second half of the year.

Capacity Expansion Accelerates

Equinix plans to double the number of cabinets it delivers in the second half of the year, including accelerating more than 7,000 cabinets originally planned for 2027 into the fourth quarter of 2026. Fox-Martin said the company has 52 major projects underway across 33 markets, with new projects announced in Chicago, Istanbul and Johor during the quarter.

About 90% of the company’s $1.6 billion in quarterly capital expenditures was directed toward capacity expansion. Equinix opened new projects in Madrid, Milan and Silicon Valley since its prior earnings call.

The company said it has 3 gigawatts of land under control and is currently building about 700 megawatts. Fox-Martin said Equinix either has contracted power or a high degree of confidence in power availability across that portfolio. She added that the company’s typical data center project is about 60 megawatts, distinguishing its development model from substantially larger single-site projects pursued elsewhere in the industry.

Equinix expects to use about 0.3 gigawatts of power under its expanded capital plan and to retain about 2 gigawatts of available capacity by the end of its long-range planning period, according to Leonetti.

Long-Term Growth Plan

Through 2029, Equinix expects annual revenue growth of 10% to 13% and annual AFFO-per-share growth of 9% to 12%. The company expects growth to begin at the lower end of the revenue range and accelerate as capacity expansion comes online.

Equinix also forecast adjusted EBITDA margin of at least 53% by 2029 and annual capital expenditures of $5 billion to $7 billion from 2027 through 2029, excluding real estate acquisitions and xScale. More than 80% of expansion is expected to occur in the company’s top 25 global metros.

Leonetti said the company expects stabilized assets to continue producing the “traditional” approximately 25% cash-on-cash returns around three to four years after being ready for service. Its 194 stabilized assets were 82% utilized and generated a 27% cash-on-cash yield on growth property, plant and equipment, he said.

The company had about $7.7 billion of available liquidity, including an upsized revolving credit facility, and net leverage of 3.6 times annualized adjusted EBITDA. Leonetti said Equinix intends to maintain investment-grade credit ratings, funding expansion through retained cash flow and debt. He said leverage is expected to rise by about one turn through the planning period, while the blended cost of capital could increase by approximately 150 basis points.

AI, Interconnection and Enterprise Demand

Management said much of the demand underpinning the outlook comes from large enterprises modernizing on-premise infrastructure, alongside new AI-native workloads and service providers. Fox-Martin said the majority of these customers are already Equinix clients.

Eight of the top 10 model providers and eight of the top 10 neoclouds are running key networking workloads on Equinix, Fox-Martin said. The company also cited stronger demand for its Fabric offerings, including Fabric Geo Zones, which is in preview with approximately 80 enterprises. The product is designed to direct traffic over compliant paths or block it, addressing data-sovereignty requirements.

Equinix said its Fabric Cloud Router bookings increased 170% year over year, including demand from non-colocation customers. Management said it continues to see firm pricing even as customer deployments become denser and larger.

Fox-Martin identified four enterprise AI deployment patterns the company is observing: private AI infrastructure using open models; sovereign AI systems built for data residency and compliance; AI factories for model training and batch inference; and latency-sensitive inference deployments in specific metropolitan areas.

The company also announced leadership additions, naming Chris Audie as chief product officer and Bruce Owen as executive vice president of global markets. Audie most recently served as HashiCorp’s chief product and technology officer, while Owen is a 16-year Equinix veteran who will oversee the company’s three regions.

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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