EQIX

Good afternoon, and welcome to the Equinix first quarter earnings conference call. All lines will be able to listen only until we open for questions. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time. I would now like to turn the call over to Mr. Ryan Burke, Vice President of Investor Relations. You may begin, sir.

Good afternoon, and welcome to our first quarter conference call. Before we get started, I want to remind you that some of the statements that we make today are forward-looking in nature and involve certain risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release and in our filings with the SEC, including our most recent Form 10-K and Form 10-Q. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is our policy to not comment on our financial guidance during the quarter unless it is done through an explicit public disclosure. On today's conference call, we will provide non-GAAP measures.

We provide a reconciliation of those measures to the most directly comparable GAAP measures in today's press release on the Equinix Investor Relations page at www.equinix.com. We have made available on the IR page of our website a presentation to accompany this discussion, along with certain supplemental financial information and other data. With us here today are Adair Fox-Martin, CEO and President, Olivier Leonetti, CFO, and Phillip Konieczny, SVP of Finance. At this time, I'll turn the call over to Adair.

Thank you, Ryan. Hello, everyone, and a warm welcome to our Q1 2026 earnings call. This quarter's results reflect continued strength across the business as we capitalize on a large and growing set of opportunities. Demand is broad-based and durable. Execution is driving efficiency. AI continues to fuel infrastructure investments that play to our strengths. Before I get into our results, I'd like to start with some important market context. Over the course of the past year, my conversations with customers have changed. A year ago, they were about piloting AI. Now our conversations are focused on enterprise-wide adoption at scale. Two forces are driving this shift. Inference has grown from experimental workloads to an engine of real-time business decision-making. Agentic AI is moving from demos into distributed deployments, with agents acting autonomously to achieve business outcomes.

The reality is that most enterprise architectures are not optimized for these workflows. Agents need private, low-latency paths to data wherever it lives. They perform best at the edge, closest to where the decisions get made. They must be able to move freely across models and clouds while staying within jurisdictional boundaries. Performance, cost, and compliance all suffer when today's agents run on yesterday's networks. Simply put, this deployment gap is an architecture problem. Enterprises need infrastructure that's purpose-built for the way AI operates: distributed, interconnected, sovereign by design, and in close proximity to the data that matters most. This is a market that we are built to serve. Equinix is not simply the world's largest digital infrastructure company. We are the world's most deliberately curated digital ecosystem. Our Q1 results demonstrate the progress we are making to capture the market opportunity.

In Q1, our recurring revenue grew 10% on a normalized and constant currency basis, coming in at the high end of our expectations. This is our second straight quarter of double-digit MRR growth. At the same time, we are driving continuous margin improvement. Q1 was also the largest quarter of total sales activity in our history, inclusive of annualized growth bookings and pre-selling activity. Total sales activity was up more than 35% year-over-year. We drove significant interconnection and CapEx billing growth whilst reducing churn, reflecting ecosystem strength across our key operating metrics. We are expanding our capacity whilst bringing new products to market that extend our runway for growth. Our progress stems from the extraordinary efforts of our team, and I'm proud of the way our employees are stepping up to meet the moment.

Let me now provide some color on our overall results and what's driving our performance. As you saw in our press release, our Q1 results do not include the xScale Hampton lease. We are nearing execution on expanded mutual beneficial terms with our customer. Olivier will provide additional details on how you should model Hampton. Adjusting for the timing of Hampton, our Q1 revenue, AFFO, and AFFO per share results were all ahead of our expectations. Overall, our xScale pipeline is robust given that our remaining capacity is in major metros. Our momentum reinforces our confidence in the trajectory for the year. As such, we have raised our guidance across several key metrics. I am especially pleased with the strength of the position we are building across the AI inferencing ecosystem.

The expansion of our relationships with the world's leading hyperscalers, Neo-clouds, AI security vendors, and model providers serves as a magnet for agentic AI workloads. eight of the top 10 AI model providers and four of the top five Neo-clouds are actively expanding with Equinix. They have placed more than 110 separate network nodes with us to support mission-critical and latency-sensitive elements of their architectures. Consistent with the prior quarter, approximately 60% of our largest deals in Q1 were AI-related. Additionally, large capacity Equinix Fabric connections have tripled from just a year ago. We believe there is meaningful upside to come, given we are still in the early days of the agentic AI wave and inferencing adoption. This momentum is part of a broader uptick in customer demand spanning a wide range of AI cloud and networking workloads.

Now let me highlight some recent wins and associated use cases. Qubit Pharmaceuticals, a quantum AI-driven drug discovery company, relies on Equinix for the high-performance, low-latency infrastructure required to run millions of GPU-intensive molecular simulations. By deploying a dedicated GPU cluster in Equinix data centers with direct cloud interconnection, Qubit has reduced experimental cycles by 20x while lowering costs by a factor of five. Most importantly, our solutions are accelerating the path from discovery to potential therapies that can save lives. Gammon Construction, a leading construction and engineering services company in Asia, chose Equinix because of our neutral platform, presence across major metros, and connectivity solutions to enable their multi-cloud AI platform. They are using our Equinix Fabric interconnection portfolio to power their network infrastructure, which is the base for innovative solutions such as AI-powered robotics and drones for on-site risk assessments and smarter decision-making.

During the quarter, we expanded our partnership with Options Technology, the number one provider of infrastructure to global financial services firms. They selected Equinix because of our presence in the locations that matter most to their operations and ecosystems, including London, New York, Singapore, and Tokyo. We are enabling Options Technology to deliver private cloud and AI-managed infrastructure solutions to grow their business while meeting the data sovereignty requirements of their customers. We also grew our relationship with Maersk, a global leader in integrated logistics, as it digitizes critical supply chain infrastructure. Maersk recently selected Equinix as its primary data center partner to support high-performance and AI workloads, including its first liquid-cooled AI deployment in Frankfurt. Our global footprint, secure and resilient operations, and industry-leading interconnection capabilities are supporting Maersk's ongoing network transformation and long-term growth strategy.

I'm exceptionally grateful to all our customers and partners for trusting Equinix to help move their business forward. The outcomes we are enabling for them reflect rigorous execution against our strategic pillars. Starting with Serve Better, we delivered annualized growth bookings of $378 million in Q1, up 9% year-over-year, with approximately $140 million of pre-selling activity on top of that. As I mentioned earlier, that's 35% growth in total sales activity in the quarter, resulting in a record backlog. Transaction volumes continue to demonstrate a broad base of workload requirements, with over 3,800 transactions spanning more than 3,100 unique customers in the quarter. Importantly, we also saw increased customer adoption of our self-service portal. Our portal is a key area of focus as we work to create a better customer experience.

It also drives efficiencies within Equinix compared to a traditional quote-based ordering. This is one example of our broader focus on digitizing processes and workflows across the company. Customers placed 20,000 orders through our portal in Q1, up 12% year-over-year, and we intend to continue driving enhancements to this solution. Turning to Solve Smarter, our customers consistently raise two key challenges to us. The first is AI infrastructure fragmentation. Enterprises are spending too much time and budget navigating dozens of disconnected AI model providers, GPU clouds, data platforms, and security services.

The Equinix Distributed AI Hub, which we introduced at NVIDIA GTC, solves this by giving enterprises a single, private, low-latency connection to the entire AI ecosystem. Unlike AI marketplaces built by providers with their own services to sell, our distributed AI hub is completely neutral, providing access to all models and clouds so customers can select what's best for them. The second challenge facing customers is network complexity. Most enterprise networks are not designed to handle distributed AI workloads, and it's resulting in degraded AI performance, inflated costs, and compliance risk. Equinix Fabric Intelligence solves these problems by monitoring network performance in real time, automatically adjusting configurations, and flagging anomalies before they become outages, all without human intervention. Unlike other network management tools that sit on top of the network, Fabric Intelligence is built directly into our fabric interconnection platform.

This is a structural competitive advantage given the more than 500,000 live interconnections across our ecosystem. Our innovation is extending our market leadership and driving growth. Colossal interconnection revenue was up 9% year-over-year in Q1, boosted by Fabric revenue growth of 26% year-over-year. Fabric bookings were up 70% year-over-year as our attach rate continues to increase. These growth rates are all on a normalized and constant currency basis. On Build Bolder, we continue to expand our capacity to meet demand. We have 46 major projects underway across 32 markets, including six xScale projects. More than 70% of this retail expansion CapEx is in our major metros, with the remainder focused on critical expansion markets, particularly in our Asia region. Given the strength of our pre-sales motion, approximately 25% of our 2026 retail capacity expansion has already been sold.

We continue to meaningfully grow our pipeline for new powered lands and capacity expansion opportunities that can enhance our long-term growth prospects in key metros and deliver attractive returns. We're not just growing, we're doing it responsibly. Last week, we released our annual sustainability report. It shows how we are building essential infrastructure the world needs in ways that are affordable for our communities, sustainable for our planet, and reliable for our customers. These have long been core Equinix values, and they will continue to guide our future investment decisions. In Q1, we announced an important investment in one of the world's most sustainability-focused markets as we signed a joint agreement with Canada Pension Plan Investment Board to purchase atnNorth.

This deal will further enhance our position in the Nordics by giving us access to an installed and active development pipeline of approximately 800 MW expected to come online over the next five years. at North's footprint in key markets such as Copenhagen is complementary to our existing EMEA operations and is well-positioned to serve enterprise, cloud, and AI growth. The transaction is subject to closing conditions and is expected to be immediately accretive to AFFO per share upon the closing. Overall, Q1 demonstrated continued momentum across the business, and we see significant opportunities to accelerate growth as we deliver on our strategy. I'm now going to turn the call over to our new CFO, Olivier Leonetti, to go into more detail on our financials. Olivier joined us in March. He has already proven to be an excellent addition to our leadership team.

Previously, Olivier was CFO of Eaton and Johnson Controls, two large suppliers to the data center industry. He has a strong track record of delivering profitable growth and creating shareholder value, and we look forward to his contributions to our success as we work to deliver healthy revenue growth, margin expansion, and superior returns. Olivier, over to you.

Thank you for the kind words, Adair. I'm delighted to be here. Nearly two months in, I'm excited about the strength of the markets we serve and very impressed by Equinix company culture, vision, and unique positioning to serve accelerating customer demand. I look forward to helping enable our vision by prudently allocating capital and thoughtfully utilizing our balance sheet to drive durable, profitable growth. As Adair summarized, we are executing well across our business. This was the largest quarter of total sales activity on record, up 35% year-over-year, reflecting broad demand and strong execution. Customer activity increased across all of our verticals, products, and channels. Turning to Q1 results on slide seven, and with all figures discussed on a normalized constant currency basis.

Recurring revenues were $2.3 billion, up 10% year-over-year, as our bookings performance from the second half of last year is converting into revenue. Total revenues were $2.4 billion, up 8% year-over-year. Adjusted EBITDA was $1.2 billion, up 13% year-over-year, resulting in a 51% Adjusted EBITDA margin, which is up 190 basis points quarter-over-quarter and 300 basis points year-over-year. This is a result of our continued cost discipline, forward cost benefits, and scaling our operating leverage. As we have discussed, driving additional efficiency would be a focus moving forward. Quarterly AFFO surpassed the $1 billion mark for the first time, increasing 11% year-over-year, and AFFO per share was $10.79, up 10% year-over-year.

Please note that adjusted for the AmpthonXL lease signing, which I will provide details on in a moment, we came in above the midpoint of our Q1 revenue and Adjusted EBITDA guidance ranges. As Adair mentioned, we are near execution on the Ampthon/XL leases. These types of negotiations are fluid, and we have adjusted the expected timing while discussing expanded mutually beneficial terms with our customers. Here are the moving pieces as they relate to guidance over the past two quarters. Our guidance for Q4 2025 assumed $54 million of non-recurring revenue from the deal based on the original terms being considered. Our guidance for Q1 2026 included the expanded terms with an expected contribution of approximately $80 million of revenue, $65 million of AFFO, and $0.65 of AFFO per share. The expanded economics are now included in our guidance for Q2.

This timing shift does not impact our full-year outlook because the economics were already incorporated. Now to our non-financial metrics, which also demonstrate strong momentum. We increased physical and virtual net interconnections by 5,800 with particular strength in Fabric additions. We added 4,100 net cabinet billing and our backlog of cabinets sold but not yet installed is at a record level. Churn came at 1.7%, primarily due to the benefit of some delayed churn and through focus and execution during our renewal process. For the full year, we are tracking towards the low end of our 2%-2.5% guidance range. MRR per cabinet increased to $2,524, up 7% year-over-year, reflecting the firm pricing environment and continued increase in density.

On slide 12, our capital investments continue to deliver very strong returns. Consistent with prior years, this quarter we completed the annual refresh of our stabilized pool, which increased by 5 IBX data centers. Our 192 stabilized assets increased recurring revenue by 6% year-over-year, are collectively 82% utilized, and generated a 26% cash-on-cash return on growth PP&E. Turning to our capital structure on slide 10. At quarter end, we approximately had $3.1 billion of cash and short-term investments on the balance sheet, and our net leverage was 3.8x annualized Adjusted EBITDA. During the quarter, we issued $1.5 billion of senior notes at a blended effective rate of 3.1%, reflecting proactive execution in the market and our ability to take advantage of lower cost debt around the world.

Our balance sheet and diversified capital program are competitive advantages in all macro environments, particularly so in the kind we see today. In combination with significant retained cash flow, we continue to access lower cost sources of capital to fund our robust growth opportunity. Looking at CapEx on slide 11. Total CapEx for the quarter were about $1.3 billion, approximately 90% of which was growth and value accretive capacity expansion. We continue to expect mid-20% unlevered cash-on-cash returns on investment. Since the last earnings call, we opened six projects, adding critical capacity to meet demand across six metros. Before we get into guidance, I'll briefly address the energy environment given developments in the Middle East.

We systematically hedge energy costs to provide predictability to our customers and broader stakeholders, particularly in volatile periods. Globally, we are more than 90% hedged for 2026, and as usual, we are progressively edging into the future. As a result, we expect minimum impact for 2026, even if energy prices were to remain elevated. Finally, please refer to slides 13-17 for an update of 2026 guidance with all growth rates discussed on a normalized and constant currency basis. Based on the robust environment and the team's execution, we are raising guidance across key financial metrics. For the second quarter, we anticipate continuing strength across the business, including MRR growth of 10%-11% year-over-year. For total revenue, the largest piece to consider is that it includes the expanded economics from the atNorth xScale lease signing that I provided a moment ago.

Again, please know that these economics were already included in our guidance for the full year. They simply shifted from Q1 into Q2. For the full year, we're raising total revenue guidance by $21 million based on our Q1 outperformance, improving expected total revenue growth range by 100 basis points to 10%-11%. We're raising Adjusted EBITDA guidance by $24 million, resulting in Adjusted EBITDA margins of approximately 51%, a 200 basis point improvement over last year. Additionally, we are raising AFFO guidance by approximately $40 million, improving our expected AFFO growth range by 100 basis points to 10%-12%. This corresponds to a similar 100 basis point improvement in our expected AFFO per share growth range to 9%-11%. We continue to execute on our capacity expansion to meet robust customer demand.

Excluding xScale and land acquisitions, we now expect total capital expenditures to approximate the top end of our prior range at $4.1 billion, including $280 million-$300 million of recurring spend and approximately $3.8 billion of non-recurring spend. Given our confidence in the growth opportunity in front of us, the team continues to evaluate opportunities to accelerate our capacity to deliver growth and value to our shareholders. Overall, we are pleased with our progress and confident in our plan. We will continue executing with discipline to deliver on our goals and create shareholder value. I now turn the call back over to Adair.

Thank you, Olivier. Our Q1 results demonstrate strong performance. Our outlook reflects underlying strength across the business. We see immense opportunity ahead to drive revenue, enhance margins, and deliver attractive AFFO per share growth. We take nothing for granted. Our continued success demands focused execution against our strategic priorities and disciplined investment to unlock structurally higher returns. Above all, it calls on every member of our Equinix team to deliver exceptional value for our customers each and every day. This is the mindset guiding us forward. I'm confident in our direction. We are well-positioned across our markets. We are building momentum in key growth areas. We remain focused on delivering against the goals we have set. With that, let's open the line for questions.

Thank you. We will now begin the Q&A session, and we would like to ask analysts to limit their questions to one question. If you would like to ask a question, please reenter the queue. Again, that is star one. Our first caller is Ari Klein with BMO Capital Markets. Ari Klein with BMO Capital Markets. We'll go to the next caller. Michael Rollins with Citi.

Thanks, and good afternoon. Olivier, congratulations on joining the team. I have a question.

Thank you, Michael.

Oh, thank you. Adair, I had a question about some of the comments you made earlier in the call. I think if I got this right, you mentioned that eight of the top 10, I think it was maybe hyperscalers and four of the top five Neoclouds are actively expanding with Equinix for AI, 110 separate network nodes. I'm curious if you could provide more color. Is that 110 in addition to whatever cloud nodes they typically would have? Can you characterize the types of interconnectivity demand that you're already seeing for those AI nodes and how that's informing you maybe early in this environment of the type of growth that's out there from AI?

Your business model. Thanks.

Okay. Hi, Mike. Thanks so much for the question. Maybe let me just clarify a couple of points. I mentioned that it was eight of the 10 AI model providers, the LLMs, and four of the five Neoclouds have deployed between them 110 or so separate network nodes to Equinix. That is in addition to all of the nodes that we see that are being deployed by the hyperscalers in order to manage their connectivity journey. When we look at, you know, the role of the Neos here, we can see that for many of them, their journey is evolving a little.

Their value proposition was always based on pricing and based on GPU access, and largely facilitating large term training footprints, mostly focused with the SaaS and the hyperscalers. As we can see, they're transforming into AI inference workloads and looking to pursue enterprise customers and medium-sized SaaS companies. We see them as potential inference magnets for our ecosystem going forward, and we see many of them converging, as I've mentioned already, and engaging at Equinix. It's about a couple of things in terms of the use cases. It's about network nodes that provide connectivity to the CSPs and the NSPs for the neos and the LLMs. It's about AI inference nodes for densely populated metros, a little bit of a different picture. It's about Fabric access to the enterprise customer base of Equinix.

That sums up the three things that we're seeing for the Neoclouds of our environment.

Thank you.

Thank you. Our next caller is Cameron McVeigh with Morgan Stanley. Your line is open.

Hi, thank you. I wanted to ask about the $140 million in pre-leasing activity. Just you know, curious how tenant appetite is changing and if tenants are willing to commit further in advance and for longer terms, and really how that's translating to, you know, the terms for Equinix, whether through pricing, terms or deposits. Any color there would be helpful. Thanks.

Pricing remains firm, whether we're looking at pre-sales or booking within the quarter. I think the pre-sales booking really provides our customers with security. Security in terms of the infrastructure that they're defining and, you know, the opportunity to ensure that they are, you know, solving for their own compute and energy future. You know, this is something that I think we've done only in the recent past, but we're seeing a great benefit from that in terms of the conversations with our customer and our long-term ability to serve them.

Thank you. Would you like to go to the next caller?

Yes, please.

Matthew Niknam with Truist. Your line is open.

Hi. Thanks so much for taking the question. Congrats on the quarter. My question is more big picture around macro. Have you seen any macro dynamics, particularly around rising memory or fuel and energy costs and the prospects for higher IT costs later on in the year affecting customer behavior at all, whether it's pulled forward demand or pushed out deals if customers are running into supply shortages? Thanks.

I think, as it relates to concerns about energy costs, Olivier mentioned our hedging program, which means that we're in a position to be able to continue to support our customers at the price points that we're operating today. I would say based on the demand environment that we see that it is a very durable and broad-based demand environment. It is very diverse, and we're not certainly seeing any pullback from customers as it relates to, you know, increasing costs, et cetera, at this point in time. I think you can see that reflected just in the sheer scale of the numbers of transactions, and that those transactions occurred across all of our customer segments and also actually equally enough across all industries that were all growing at roughly the same percentage in Q1.

Thank you.

Thank you. Our next caller is Frank Louthan with Raymond James. Your line is open, sir.

Great. Thank you. As you see the rising demand for AI inferencing, is there any difference in the incremental capital required that you're seeing to fulfill those new workloads versus what you've traditionally seen? Can you quantify that if there is? Thanks.

No, we don't see any difference in the capital that will be required. You know, notwithstanding the fact that, you know, our strategy has been to be very metro-focused. We are located in 77 metros across the world, and we will continue to build on that footprint. That's already embedded into how we've managed our capital because that's part of our 27-year history, and therefore we don't anticipate any capital differences. I'm gonna ask Phillip to add an additional comment here.

Yeah. The only thing that I would add on to that, Frank, is that, you know, as we are always kind of skating to where the puck is going, as they say, in thinking about, you know, the types of requirements that are needed, you know, for the deployments. When you look at some of our facilities that we're gonna be bringing online in the next few years, you know, the densities that we are building towards are much higher and much more suited, you know, for a lot of the requirements that we're hearing from our customers. We're always thinking about, you know, where we need to go and what the requirements are of our customers, and we're building towards that.

Is that increasing or decreasing the returns that you're looking at going forward with that higher density requirement?

No. The densities that we're the returns we're underwriting against even those higher densities are still in that mid-twenties% that we've been talking about for a long time.

All right. Thank you.

Thank you. Our next caller is Vikram Malhotra with Mizuho. Your line is open, sir.

Thanks. Evening. Thanks for taking the questions. I just want to clarify two things. One, just the, you know, the bookings dipping sequentially, how much of that is seasonal? Maybe you can give some composition of traditional enterprise versus maybe chunky bits. Then just secondly, the interconnection business, given kind of the rapid crippling almost of the fabric business, how is that, you know, playing into interconnection revenue growth overall? You mentioned sort of, yeah, network enhancements needed there. I'm just wondering, like, how does that flow through? Does that mean in the future we see a greater pickup in the interconnection side? Thanks.

Yeah. Just to comment first on the sequential nature of our annualized growth bookings. You know, first of all, we've concluded Q1. Q1 is seasonally a quarter that has traditionally been lower. I have to say that I am especially pleased with the performance that we had in Q1, given that we came off the back of such a large Q4. I think that the team worked really hard to deliver, you know, what was our largest Q1 ever and driving our largest backlog ever. I look forward to moving that into revenue in the future.

I'm proud that the delivery of our bookings in Q1 isn't just related to top line, but we did it at margins that are growing and profitability that is growing, too. Across the Q1 booking profile, we saw strength, as I mentioned already, across various different industries, but we also saw some very broad-based strength in our under 1 MW deal cohort. As it relates to the second question around interconnection revenue and interconnection revenue growth, we're obviously very pleased by the performance that we've seen here. Our interconnection revenue growth was at 9% on a normalized and constant currency basis. Fabric revenue growth was at 26%, our Fabric bookings grew 74% year-over-year.

This kind of growth, the value proposition that we're delivering to customers is really behind, you know, our investment strategy around our Distributed AI Hub and our Fabric Intelligence, which is in preview with a number of customers and partners, who are very positive about the outcomes that we're driving with this solution set.

Thank you. Our next caller is Jonathan Atkin with RBC. Your line is open, sir.

Yeah, I wanted to just follow up on that last response and maybe ask you more directly. Is there a scenario over the next several years where interconnection growth would exceed the growth that you're seeing and would represent a meaningfully increased percentage of your overall revenue composition?

I guess in some way, Jonathan, we're probably seeing that in our stabilized assets where, like, our stabilized assets are growing at 6% and interconnection within that asset group is growing at 9%. I do believe that there is opportunity for us to continue to grow our footprint and the range of services that we are offering to our customers here because we fill a very specific niche in the market in terms of providing that neutral environment where the ecosystem around AI converges. There is potential for upside here, but that is not yet factored into our plans.

Thank you.

Thank you. Our next caller is Irvin Liu with Evercore.

Hi. Thank you for the question and welcome, Olivier. Appreciate the color on energy hedging. Just given your exposure to the Middle East, I wanted to understand whether recent geopolitical crosscurrents in the region have or have had any impact on your operations, specifically related to your ability to sell and or add IBX capacity. Thank you.

Yes. Thank you very much for the question. First of all, I think the most important thing for us is the safety of our employees, our customers, and our partners, and that was our most important priority as we navigated recent events in the Middle East. Thankfully, all of our people have remained safe, and our facilities are fully operational. We do have a limited footprint across the region. We have a total of 6 data centers across the Middle East region, and they're comprising about 1% of total revenues. We have one project underway in Dubai at our DX3 facility with construction project, and we have seen the RSS state of that project be impacted due to the conflict. Limited operational impact. We were able to keep our facilities up and running.

We're watching the situation very carefully. Our long-term view is that the region will continue to see growth and investment in digital infrastructure as the Middle East itself looks to position itself as a global AI hub.

Thank you. Our next caller is Nick Del Deo with MoffettNathanson. Your line is open.

Hi. Thanks for taking my question. Again, first I wanted to congratulate Olivier on his appointment. My question is also for him. I was wondering if you could elaborate, kind of share with us your high level capital allocation and operating philosophies and whether your previous vantage point as a supplier to the data center industry provides any initial insights into, you know, areas where you think Equinix might be able to improve the business or things you'll be focused on.

Thank you for your question, Nick. First, regarding capital allocation, we're going to keep the course that has worked pretty well for the organization. First, what we want to do to fund our ambitious CapEx program, growth program. We want first to use debt as a way to finance our growth. We can do that based upon the leverage we have today, 3.8x. I mentioned that in my remarks. We will use equity on an opportunistic basis, but the key is going to use debt. Relative to impressions, I guess that's the question you had. As a supplier of Equinix, I was, we were, all of us, very impressed by what we had seen.

We use Equinix always as a pioneer in this, in this market. After two months, I've been, it looks like a marketing comment, but it's true, impressed by the quality of the team, the culture, and also and mainly the rigor with which we run the operations. What we have said before, you see it at play. We have high quality data centers in top-tier markets. We're connecting the world, and we're ready to power the AI agentic workload. Very happy. We are very differentiated, looking forward to help Adair and the team to grow this business even more.

Okay. Any particular areas where you're looking to drill down more or too soon to say?

No. We want to enable the strategy that Adair has lined up. Build Bolder, Solve Smarter, Serve Better. I'm going to be a tool among many others to enable this strategy, but no change today. Not that there was a need to.

Thank you. Our next caller is Richard Chung with JPMorgan. Your line is open, sir.

Hi. I just wanted to follow up on the churn. You know, 1.7% super low, but I think you mentioned some of it's delayed, and it should go back into the range. I mean, should, you know, 2Q be above range and or the rest of the year at the higher end or could we be seeing a kind of maybe low end or towards the lower end for the full year?

Yeah.

Things can.

Thanks very much for the question. You know, as you saw at 1.7, we were below the low end of our range. I think there were probably two elements as to why that was so. One was the timing of some churn, including our Equinix Metal business, moving forward into this quarter. Others really is just the continued focus that we've had on the renewal process from our teams. We're very pleased with the performance that we've seen in Q1. Notwithstanding that we don't want to call victory too early, therefore, I think, you know, to keep our churn in the range of 2%-2.5% for the rest of the year is the right thing to do.

We do believe that our focus on our available to renew contracts, we've been doing that much earlier in the cycle, is actually starting to have an impact. We will watch those trends closely over the next several or so quarters. Obviously our aim is to bring churn down consistently over time. For now, we're holding into the 2-2.5 range for the year.

Thank you. Our next caller is David Guarino with Green Street. Your line is open, sir.

Hey, thanks. As we think about modeling these large one-time fees related to the xScale leases, I was wondering if there's any framework you can provide us to estimate and forecast how large they might be. Kind of tied in with that, we heard some rumors that the Minooka campus might have been pre-leased, but you guys didn't comment on that at all. Could you give an update on what's happening with that project and how soon we could maybe expect another large xScale leasing fee after the Hampton one?

Look, you know, these transactions are always very complex and multifaceted, and particularly, as we have very high demand assets, you know, locations that are energized within the right timeframe in great locations. I think, as we look forward into the second half of next year, in terms of Minooka, it is not timing that we have put into the short term. It is something that we are still working on.

We have a very robust pipeline of interested parties, obviously we want to ensure that we're maximizing the outcome for our customers, for our shareholders, for the company. As we look forward into the second half of the year and into 2026, the guide assumes a total NRR of approximately 5.8% for the full year, a portion of that is associated with xScale leasing.

An additional comment, if I may, David. If you look at the balance of the year, with the exception of the xScale deal we have mentioned many times now, the rest of the xScale deals are relatively small in nature, and we believe that the risk is balanced for the rest of the year.

Thanks.

Thank you. Michael Ng with Goldman Sachs, your line is open.

Hey, good afternoon. Thanks for the question. Adair, you talked about agents performing best when closer towards the edge. Have you seen some customer workload repatriation or shift in investment away from public cloud as a result? You know, when enterprises decide to do more in the edge, could you talk a little bit about the customer decision tree between, you know, co-located data centers versus on-prem today? Thank you.

Sure. I think the reality of the environment that our customers operate in is the environment that we've been describing on many of these calls, and that is a hybrid multi-cloud environment, where data sits across the plethora of all of those platforms. That creates the opportunity for a neutral platform like Equinix to serve customers who want to run agentic workflows across those environments but need to access the information that sits in more than one location.

I would certainly say that, you know, customers have a multi-cloud environment that they are, of course, looking at the cost associated with their environments, as well as important considerations, particularly in locations like Europe, around sovereignty and the compliance to the sovereignty legislation, which may mean that certain parts of their data set need to move into into a private environment or be repatriated from cloud. I wouldn't say that this is a broad-based conversation that we have across our customer base.

I think as we talk to CIOs, it's a conversation that is less about on-prem and cloud and more about the journey from, you know, token management, token cost, all the way through to, you know, those kind of sovereign data controls that ensure that the organization is compliant, you know, to whatever set of data governance rules that they have in place for their own business. And that's certainly a conversation that's an important one because, you know, we can help customers navigate that by providing through the Equinix Distributed AI Hub access to all of the players as well as to private SLM models which companies have for smaller, less intense AI type activity.

I think the conversation is really about how you navigate from, you know, the token and the training all the way through to that compliance conversation, often driven by sovereignty in some locations.

Great. Thank you, Adair.

Thank you. Our next caller is Madison Rezaei with Bernstein. Your line is open.

Thanks, guys. You've talked about potentially building multiple incremental gigawatts with the Build Bolder program. With the full year CapEx plan now around $4.1 billion, is this the kind of annual spend we should anticipate for the next couple of years? Is it more front-loaded? Do you think the intensity will ramp as you are sort of moving into more large campuses? Short follow-up to that, are you anticipating maintaining the cash-on-cash return level throughout that build process?

Okay. Thank you for the questions. Maybe we'll take that between us, given that there is a portion for each of us in here. You know, first of all, as I think we mentioned in our, in our materials, we have 3 GW currently either in land under control or in development today at Equinix. That's the broad base of the portfolio that we are working with. As Olivier mentioned in his prepared remarks, we are at the top end of the range that we mentioned for CapEx earlier at Analyst Day last year.

We are continuing to meaningfully grow our pipeline for new powered land and capacity expansion opportunities to enhance what we see as the long-term growth prospects in key metros, which of course we know delivers very attractive returns. We're very pleased and excited about what we see in the business. We're very excited to position ourselves for growth. You can see that we are at the top end of our range as it relates to CapEx from the Analyst Day event when we provided that guide last year. Perhaps I'll flick to Olivier and allow you to comment a little on the returns and so on.

The diligence we have before to do deals, deploy new CapEx is very strong. The mid 25% is a target. That's not an aspiration. We are seeing that quarter after quarter. We feel very comfortable with achieving that return target as we are in a market where demand is over supply. We can be very selective about the deals we take. We are very differentiated today, and interconnection is more and more an important part of the value proposition of the company. We feel very confident about this mid 25% target.

Thank you. Our next caller is Erik Rasmussen with Stifel. Your line is open.

Yeah, thanks for taking the questions. Olivier, good luck and look forward to working with you. You talked about Maersk in one of your customer highlights, and they had a liquid cooling deployment in Frankfurt. Maybe just overall, can you give us a sense of where customer demand is for liquid cooling activity today? How many active or signed deployments are using the direct to chip or even immersion cooling? How quickly is that moving from, you know, pilot to maybe scale production? Thanks.

Yeah, thank you. Thank you so much for the question. We had quite a significant quarter in Q1 as it relates to liquid cooling orders generally, of which Maersk was one. I believe it was a 50% growth in terms of our in liquid cooling deployments. Today, we have 36 deployments across our footprint of customers using liquid cooling to facilitate the workload and density of the systems that they have put in place. It's active across all our regions. It's something that we, you know, continue to evaluate and work closely on with our customers. That's, I guess, the landscape that we see as far as liquid cooling is concerned.

As said, 36 deployment, seven orders within Q1 across all of our regions, up 50% Q on Q.

Great. Thank you.

Thank you. Our last question comes from Joseph Osha with Guggenheim Partners. Sir, your line is open.

Wow, I made it. Thank you. Kind of a follow-up from the previous question is, as you think about these fairly power dense, you know, agentic workloads out at the edge of the network, you know, are you encountering situations where either from a physical space, a power or just a thermal standpoint, you're running into constraints? I'm just trying to understand how much of a challenge that is. Thank you.

I think probably the, you know, the availability of power would be the largest constraint in our environment. As densification increases, quite often we would need to put some space on hold around that particular implementation in order to ensure that at that IBX, we're meeting not only the obligations of the workload, that is a highly dense workload, but also the service level agreements and the obligations that we have with the other customers who are sharing that space and power. That's, I think, one of the reasons why you see the, you know, the yield on our MRR per cab, you know, grow so effectively, you know, up to our $25.24, up 7% year-on-year, partly due to the increase in densification.

Of course, the association of a value-added products like interconnect with every installation, as one of the measures of that.

Thank you. I'll turn the call back over to you for any closing comments.

We just wanna thank you all for joining us for our Q1 call. Have a great rest of your day.

Thank you. This concludes

Goodbye.

Today's conference call. You may go ahead and disconnect at this time.

Good afternoon, and welcome to the Equinix, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. All lines will be in a listen-only mode until we open for questions. Also, today's conference is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Phillip Konieczny, Senior Vice President of Finance. You may begin. Good afternoon, and welcome to our fourth quarter conference call. Before we get started, I would like to remind everyone that some of the

statements that we will be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release, as well as those identified in our filings with the SEC, including our most recent Form 10-Ks filed on February 11, 2026 and our most recent Form 10-Q. Equinix, Inc. assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is our policy not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. On today's conference call, we will provide non-GAAP measures. We provide a reconciliation of those measures to the most directly comparable GAAP measures in today's press release on the Equinix Investor page at www.equinix.com. We have made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data. With us today are Adaire Fox-Martin, CEO and President, and Keith D. Taylor, Chief Financial Officer. At this time, I will turn the call over to Adaire.

Thanks so much, Phillip. Hello, and a warm welcome to our call today.

I will start by saying on a personal level how deeply pleased I am with our performance in 2025 and particularly in Q4. Demand for our solutions has never been higher, and our teams have stepped up exceptionally well to capitalize on it. To our employees around the world, I would like to say a huge thank you for all you are doing to achieve our goals. I also want to thank our customers and partners for the trust they have placed in Equinix, Inc. as we intensified our investment in growth—investment that is already paying off. Our bookings have accelerated dramatically. Our recurring revenue growth rate continues to climb, and we are managing our spend with great discipline. All of these factors are combining to fuel an expansion pipeline and growth in AFFO per share materially ahead of expectations. Given our momentum exiting 2025, our confidence in our 2026 plan has grown. This is reflected in both our revenue and our AFFO per share outlook. Our performance and our outlook demonstrate two things. The first is that Equinix, Inc. is connecting the fastest growing segments of technology infrastructure, and the value of our platform is increasing with every connection. The second is that our execution continues to improve. This winning combination delivers superior customer outcomes and stronger shareholder returns. Not only are we on the right track, we are moving far faster along it. Now our momentum is clear across several key metrics. Monthly recurring revenue, the most powerful driver of long-term value creation, grew 10% in Q4 and 8% for the full year on a normalized and constant currency basis. And for bookings, the leading indicator for revenue performance, the story is even stronger. We delivered annualized gross bookings of $1,600,000,000 in 2025, up 27% year over year. Our Q4 bookings were $474,000,000, up 42% year over year and 20% from Q3, well ahead of our plan. We delivered record capacity to meet growing demand, including 23,250 cabinets in our retail footprint and more than 19 megawatts in our xScale business in 2025. We delivered more than 30% of this retail capacity ahead of schedule, which we believe will accelerate our growth in 2026 and beyond. Now Keith will go deeper into our metrics shortly, including recommendations on how to model the Hampton transaction. As you saw in our release, the expected timing of this transaction shifted from Q4 to Q1, which, as we have shared in the past, simply reflects the fluid nature of xScale lease signings. Before I turn the call over to Keith, I would like to provide some additional perspective on why our business is performing so well. For starters, we are building on the strength of our fundamentally differentiated value proposition. Our decision to double down on the digital infrastructure and connectivity requirements of enterprise customers is fueling our success, particularly as they implement AI across their operations. In Q4, approximately 60% of our largest deals were driven by AI workloads. That is up from approximately 50% earlier this year, a trend line that we believe will continue, as we are really only at the beginning of this journey. Equinix, Inc. is the neutral ground

where enterprise infrastructure converges,

and we provide the essential layer of connectivity that make it all work at scale to unlock real business value. This is a long-term tailwind for our business, particularly as AI inferencing expands across industries. With market-leading native cloud on-ramps, the largest global footprint across the most critical markets, and the broadest enterprise customer base, we deliver what AI inference demands: network diversity, cloud proximity, AI-ready interconnection, and low latency. These are structural advantages we have built over decades and we believe will continue to set us apart. In 2025, we completed over 17,200 transactions, up 6% year over year with over 6,100 unique customers. Our Q4 transaction volume was the highest ever at over 4,500 deals with more than 3,400 unique customers. We saw an uptick in volumes for all workload sizes, from single cabinet requirements up to our largest cage configurations. And more than 60% of our existing customers added new services last year. Now let me share some recent customer wins and use cases that really showcase what is driving this demand. Salesforce chose Equinix, Inc. to create a private multi-cloud networking layer for the engine inside their data and AI foundation. This is our largest global Fabric Cloud Router sale to date. By deploying Equinix Fabric Cloud Router across 14 countries and 21 metros, we are enabling private network connectivity between Salesforce's presence in AWS, Azure, and other cloud service providers. Alimbic, an AI-powered marketing analytics platform, selected Equinix, Inc. for the scale and consistency of our global operations and the richness of our interconnection ecosystem. We are working with Alimbic as they deploy the NVIDIA DGX SuperPOD with NVIDIA Grace Blackwell Systems to expand their addressable market through distributed AI. BigMate, a leader in AI-powered workplace safety and operational intelligence, chose us because Equinix Fabric securely connects their edge devices, cloud providers, and customer networks. This enables them to deliver real-time AI-driven quality control for industries ranging from food processing to manufacturing. Leading quantitative trading firm Hudson River Trading selected Equinix, Inc. because our global footprint and our advanced cooling solution enable them to achieve the latency and the density requirements they need to power their next-gen AI trading workloads. And Fortune 500 multinational Honeywell Corporation expanded its relationship with Equinix, Inc. because of the secure, flexible solutions and global Fabric connectivity we provide, including for key metros such as Shanghai, Tokyo, and London. This is the first of many projects driving the integration of internal AI applications and the wider transformation at Honeywell. These are just some of the use cases underpinning our momentum. Our progress is a direct result of the changes we have made through our Start Better, Solve Smarter, and Build Bolder initiatives. Starting with Start Better, customers continued to secure both near-term and long-term capacity across our global platform. Our $474,000,000 in annualized gross bookings in Q4 were supported by an incremental pre-sales balance of $170,000,000, with more than $60,000,000 occurring in the quarter. Larger footprint requirements from enterprises and service providers contributed to this performance. Our pipeline is strong, and we have already booked approximately 45% of our Q1 2026 target, and signed an additional $100,000,000-plus of pre-sales as of today—already our largest pre-sales quarter ever. As we accelerate growth, we are committed to a disciplined pricing strategy that is commensurate with both the strong and durable demand patterns we see and the differentiated value our solutions provide. This translates into our strong cash and cash return profile and the premium yields we secure. We continue to underwrite our newest projects with these principles in mind. With Solve Smarter, we are helping customers connect and simplify their infrastructure. Interconnection revenue grew 9% year over year on a normalized and constant currency basis. We added 7,800 net interconnections in the quarter, including our adjustments. We also crossed an extraordinary milestone in Q4, surpassing 500,000 interconnections worldwide. To put this into context, that is more than double our nearest competitor. As AI amplifies the need for massive real-time data movement, Equinix, Inc. is delivering the connectivity infrastructure that enterprises depend on the most. As part of our Build Bolder initiative, the work we are doing across our global development portfolio is strengthening our competitive advantage. In Q4, we delivered more than 12,000 cabinets to our retail business across key metros. Our development engine remains exceptionally active with 52 major projects underway across 35 markets, including nine xScale projects. Since October, we have added 10 new expansion projects. We also closed on a number of strategic land acquisitions last year, adding approximately one gigawatt to our powered land under control balance. This positions us well to meet long-term demand from both enterprise and hyperscale customers. Our xScale business achieved a key milestone in recent weeks. In January, we contributed our Hampton asset to the Americas JV, an important first step towards deploying $15,000,000,000 of capital across major metros in the U.S. The Hampton facility will support approximately 240 megawatts of IT capacity when fully built out. The signing of the lease for half of this facility to a hyperscale customer is expected in Q1, and we expect the site to be fully leased later this year. In addition, we have established a healthy leasing pipeline, demonstrating the value of our xScale strategy. Of the approximate three gigawatts of capacity that can be developed, close to one gigawatt is currently earmarked for our xScale business. Further, our land acquisition pipeline continues to grow, as we maintain our focus on major metro expansion opportunities where we are confident of significant long-term demand. As such, we expect xScale will continue to contribute to NRR over the next several years as we execute our strategy. Overall, we are winning where it matters most by connecting the infrastructure that powers the AI build-out happening across industries. And we are laser-focused on extending our category leadership through disciplined execution that drives healthy revenue growth, margin expansion, and superior shareholder returns. I will now turn it over to Keith to take a closer look at the numbers behind the quarter and our outlook.

Thanks, Adaire. And a very good afternoon to everyone. First and foremost, I will start by briefly building on Adaire's comments. Simply, it was an outstanding close to 2025. From my perspective, Equinix, Inc. delivered its best quarter ever by far, closing the last quarter of the year with over $470,000,000 of annualized gross bookings, and more than $60,000,000 of pre-sales activity—well ahead of our expectations and certainly any prior quarter. The magnitude of our quarterly activity, across the substantial number of diverse deals but also with over 3,400 customers, underscores that our strategy is working and meeting the opportunity in front of us.

Also,

I would say that it is our retail business that is the standout, delivering record bookings across each of our small, medium, and large size-of-deal categories. And alongside our strong sales execution,

the teams continue to operate the business with great focus and discipline. And we are only getting started. This created better-than-expected margins. We raised our capital more efficiently than planned and invested or utilized the cash more effectively, creating better-than-planned cash flows. Suffice it to say, our performance is creating momentum in the business to drive attractive recurring revenue growth and the scaling of healthy AFFO per share performance. Now, I will cover some of the highlights for the quarter as depicted on Slide 7. Note, all growth rates in this section are on a normalized and constant currency basis. First, as we indicated last quarter, our Q4 guide assumed the execution of a large xScale lease for two of the four buildings on the Hampton campus. As Adaire noted, this transaction is now expected to close in the first quarter. We also had some one-time planned benefits which will not repeat themselves in Q1. That being said, our fundamental underlying performance was meaningfully better than our expectations from top to bottom. Please refer to Slide 15 that bridges our quarterly revenues from Q4 2025 to Q1 2026. Now let me move specifically to revenues. Q4 revenues were $2,400,000,000, up 7% over the same quarter last year, fueled by continued strength in our monthly recurring revenues, which was up 10% over last year, and, as you likely noted, a steady quarterly improvement throughout 2025. Q4 revenues, net of our hedges, included an $8,000,000 currency headwind when compared to our prior guidance rates. Global Q4 MRR churn was 2.2%, lower than planned, and for the full year, our average quarterly MRR churn was 2.4%. Looking forward, our teams remain highly focused on reducing MRR churn, which includes the development of AI predictive tools to help identify opportunities to eliminate or defer any MRR churn. Global Q4 adjusted EBITDA was $1,200,000,000, or approximately 49% of revenues, up 15% over the same quarter last year. Q4 adjusted EBITDA, net of our FX hedges, included a $4,000,000 FX headwind when compared to our prior guidance rates. Our 2025 margin improvements reflect our continued focus on delivering higher operating leverage across the business while also investing in growth. As it relates to 2026, we expect to continue to deliver improved adjusted EBITDA margins while also absorbing both accelerated and increased expansion drag, the byproduct from our growth investments.

Global Q4 was $877,000,000 or up 13% over

the same quarter last year, including the seasonally higher recurring CapEx spend. Q4 AFFO included a $2,000,000 FX headwind when compared to our prior guidance rates.

And

our non-financial metrics continue to demonstrate strong momentum across our core or key metrics of net interconnection additions, net new cabinets billing, and MRR per cabinet pricing. Our net interconnection additions increased by 7,800, including both physical and virtual connections and also include our adjustments. As Adaire highlighted, we have now surpassed the half-million interconnection milestone across our ecosystem—an unmatched competitive advantage, which has been curated over 25 years of history. Turning to our cabinets billing, we added 4,300 net cabinets billing in the quarter, including cabinets from our MainOne portfolio. Our underlying net cabinets billing increased by the highest level in three years, driven by strong bookings performance across each of our three regions. Our backlog of cabinets sold but not yet installed stands at a record, given the bookings performance, especially in 2025. And finally, we continue to drive attractive MRR per cabinet yields, stepping up $65 quarter over quarter on a normalized and constant currency basis, driven by very favorable pricing backdrops, increasing power densities, and strong interconnection attach rates. Turning to our capital structure, please refer to Slide 10. As of year-end, our balance sheet increased to approximately $40,000,000,000, including cash and short-term investment totaling about $3,200,000,000. Our net leverage was 3.8 times our annualized adjusted EBITDA. During the quarter, we issued $1,800,000,000 of senior notes at an effective rate of about 3.2%. Throughout 2025, our diversified capital raising program allowed us to raise debt at very attractive rates, which helped us optimize our 2025 net interest expense. Looking at 2026, we plan to continue to raise debt in lower-cost locations either directly or synthetically, including Canada, Singapore, and Europe. And now looking at our capital expenditures for the quarter, please refer to Slide 11. Capital expenditures were approximately $1,400,000,000, including our planned seasonally higher recurring CapEx of about $140,000,000. We have opened 16 major projects across 14 markets since our last earnings call, adding important retail capacity to several of our key undersupplied metros. And we announced 10 new projects, which will be added to our global portfolio over the next few years. Revenues from owned assets are 70% of our recurring revenues. Our capital investments delivered strong returns as shown on Slide 12. Related to our now 187 stabilized assets, revenues increased by 6% year over year on a constant currency basis. These stabilized assets are collectively 82% utilized and generated a 27% cash-on-cash return on the gross PP&E invested on a constant currency basis.

Now

given our strong underlying Q4 results, our 2026 outlook is expected to be meaningfully ahead of our expectations that we shared with you at our June 2025 Analyst Day. Our strong pricing discipline, coupled with our best-in-class capital allocation efforts, should allow us to generate industry-leading durable cash flows with attractive cash yields, thereby delivering revenue growth and long-term value for our shareholders. Please refer to Slides 13 through 17 for our summary of 2026 guidance and bridges. Do note all growth rates are on a normalized and constant currency basis. Starting with revenues for the full year 2026, we expect total revenues to grow between 9–10%, which includes a modest 40 bps attributed to the NRR from the xScale lease timing. We expect our monthly recurring revenues to grow between 8–10%, driven by strong 2025 bookings performance, including pre-sales momentum. MRR churn is anticipated to remain comfortably within our targeted range of 2% to 2.5% per quarter. We expect 2026 adjusted EBITDA margins to be approximately 51%, an expected 200 basis point improvement over 2025, reflecting anticipated revenue growth and focused expense management. 2026 AFFO is expected to grow between 9–11% compared to the previous year. AFFO per share is expected to grow between 8–10%, which, after adjusting for 100 basis points of xScale lease timing, is 300 basis points higher at midpoint relative to our prior expectations from past summer. 2026 CapEx is anticipated to range between $3,700,000,000 and $4,200,000,000, including about $280,000,000 of recurring CapEx spend. We have not included any on-balance sheet xScale spend, as we do expect to be reimbursed for these costs as we transfer these assets into the xScale JVs. And finally, we expect our quarterly cash dividend to increase by 10% over 2025 on a per-share basis. As a result, our total 2026 cash dividends paid will approximate $2,000,000,000. So let me stop here. I will turn the call back to Adaire.

Thanks very much, Keith. As this is my first opportunity to address all of you since Keith's retirement announcement, I wanted to take a moment to acknowledge his tremendous impact on Equinix, Inc. over the past 27 years. His leadership has been integral to our success and has helped us lay the foundation for our future. I am particularly grateful for Keith's partnership since I joined the company, and I look forward to his continued support as a special adviser over the next year. Our process for selecting Keith's successor is well underway, and we look forward to updating you when we have news to share. Before we turn to questions, I want to leave you with a final thought. Equinix, Inc. is at the center of a historic multiyear infrastructure investment cycle. To deploy AI at scale, enterprises need to connect and manage increasingly complex and distributed technology ecosystems. Equinix, Inc. is the neutral connector that unlocks business value for our customers. It is what we do best. It is where we have continued to focus, and our focus is paying off. We were built for this moment. But execution is everything, and we will continue to prioritize doing the most important things exceptionally well so that we delight our customers whilst delivering structurally higher returns and AFFO per share growth for our shareholders. That is exactly what we did last quarter, and it is what you should expect from us going forward. So with that, we will open the line for questions.

Thank you. We will now begin the Q&A session, and we would like to ask analysts to limit their questions and reenter the queue. Our first question comes from Eric Thomas Luebchow with Wells Fargo. You may go ahead.

Great. Thank you for taking the question. Adaire, maybe you could touch a little bit on kind of the bookings momentum that you talked about that came through in Q4 and it sounds like you are off to a really good start in Q1. I think you said 60% plus of the largest deal came from AI workloads. Are you seeing more of these, you know, kind of coming from traditional enterprise companies adopting AI? Is it coming more from the hyperscalers putting edge nodes in your facility? And as you kind of look out, do you think that 60% is going to continue to rise throughout the course of the year? Thank you.

Thanks very much for the question, Eric. Let me perhaps unpack a little of that AI 60% stat for you. And I think the value that we provide is obviously something that is been amplified thanks to the continued investment in this sector overall and the excitement around it. I think for us, the breadth and scale of our product continuum, they are very, it is very uniquely aligned to meet this demand. As I mentioned in my prepared remarks and you just repeated there, 60% of our largest deals were driven by AI workloads. Now, over the course of the quarter, when I look at that 60% related to AI, interestingly enough, nearly half of them were deployed by non-cloud and IT companies, but they were deployed by companies in the retail, e-commerce, manufacturing, financial services, and content sectors. So I think this demonstrates increasing enterprise AI adoptions outside of the service provider community. We also had 11 liquid cool deployments in Q4, five of which were in our New York City facilities, underpinning the requirements of our FSI customers to support elements, use cases like algorithm training in that sector. I think this also demonstrates continuing strong diversity. And from an interconnection lens, we see a very healthy growth in the AI service provider ecosystem, although it is still early days given, you know, I think the breadth and depth of our established ecosystem density. So interesting to see that it was of the 60, 50% driven by non-cloud and IT providers, really demonstrating the growth in enterprise application of AI processes to business, and we see this as a continued positive tailwind for our company.

Thank you. Our next question comes from Jonathan Atkin with RBC. You may go ahead.

Thanks. I was interested if there was any update to your multiyear guidance provided at the Capital Markets Day last June. And are those targets still relevant? Or should we be thinking about 9% as being the new baseline for AFFO per share growth? Thanks.

Jonathan, first and foremost, thank you very much for the question. I think what is most important is to understand just the underlying momentum of the business. As Adaire highlighted both in her prepared remarks and certainly in the commentary around our booking activity, the business is performing well. I sort of said it over the last two quarters, and we sort of will talk about it this quarter. It is the execution on the top line, it is the management of the cost, as well as efficiently raising capital and deploying it appropriately. So I think we are on the right trajectory. We are delighted with what we have delivered for 2026. I just feel it is a little premature to talk about 2027 and beyond, but as you can appreciate, the momentum is wind at our back. And I would add to that, I think currencies are to continue to be wind at our back as an organization. So the combination of really strong performance, the ability to maybe invest faster than we were anticipating as Ralph sort of brings forward as many of the assets as possible, I just think we are in a really good spot. And I think it is just a bit early to talk about 2027 and beyond, but I know you can do math very, very well. And so I am going to leave it to you to sort of interpret both how we are performing this quarter being Q1 2026 and what that really implies exiting 2026. So again, feel good about our position, but let us defer the 2027 discussion till later.

Thank you.

Our next caller is Aryeh Klein with BMO Capital Markets. You may go ahead.

Thanks. First, I guess, Keith, congrats on your career and wish you the best moving forward. I guess, Adaire, just going back to the previous question around AI and that 60%, do those deals look different than some of your more traditional deals, be it from a size or location standpoint? Then I guess from an underlying demand standpoint, it seems like things have meaningfully accelerated since the Investor Day back in June. Can you just unpack that? What specifically has, I guess, driven that acceleration momentum?

Yes. So let me comment on that accelerated momentum first and then I will address the second part of your question, which is around the characteristics of some of those AI deals that we saw in the first quarter. I think when I look at the, you know, the gross booking outcome that we saw in Q4, in fact, was an acceleration from Q3 all the way through to Q4 very much across the second half of the year. And as we have mentioned, in Q1 we already see some early acceleration in the current quarter. So when I look at the characteristics of what is driving that, I think it is in large part two very specific, very different themes. The first is the external one, and I will speak to that in a moment, and the second is the internal one. So if I think about the external one, we are seeing robust demand right across all workload types. And what was extremely interesting about the demand profile more generally across our Q4 performance was that it was right across the different segments that we serve. We saw all segments and all verticals grow. So it was a very robust, broad-based demand across numerous different types of workloads. We, of course, saw, you know, specificity around AI

opportunity.

Where there was connectivity requirements for near-metro connectivity requirements to unlock the value in that process. So very robust demand across workloads, across all industries, across all regions, and across all of the segments that we serve. Then there is the internal piece, which is the execution of the team against this particular opportunity that we saw in the market. First of all, we did accelerate some capacity into the year, and that was a helpful element in terms of our output and our performance. But we also had a phenomenal pipeline conversion rate, so the team converted at around 49% in Q4, which speaks, I think, to the quality of the pipeline that we had coming into the quarter. And as I have mentioned previously, we have been putting a lot of focus on ensuring that we are forecasting the future pipeline with the same intensity that we are forecasting the current booking pipeline, and really building our footprint strongly as we enter each quarter so that we know that we are executing on very highly qualified opportunities. Interestingly, it was also great to see some very firm pricing right across all of those segments and across all of those regions in Q4. So great disciplined internal execution that kind of met the market moment the market was at. And as it relates to the characteristics of the transactions that sat in that 60% contingent, it was, of course, some of our larger transactions were related to our AI opportunity. And I think one characteristic of all of them—I have shared with you some of the use cases already across the different segments that we facilitated this functionality into—but one characteristic was that we saw a 33% increase in density compared to the non-AI deals, so an average of about 10 kVA per cab for these transactions. Our next question comes from Michael Ian Rollins with Citi.

You may go ahead.

Thanks. Good afternoon. Keith, I also want to

extend my congratulations and best wishes on your upcoming retirement. Maybe going back to some of the comments from earlier in the call, I think you were discussing the opportunity to improve churn,

and curious as you are preparing these new tools,

to help get that churn down, how much of this is in the company's control versus how much of it is just simply customer optimization of workloads that the churn will happen, you know, Equinix tries to get in front of it. And then just a secondary clarification on the 6% stabilized revenue growth. Can you unpack that a little bit in terms of delivering that incremental strength relative to the recent history? Thanks.

Mike, this is Adaire. I might take the churn question and then Keith answer the question around the 6% stabilized growth for you. Let me unpack the churn commentary. So over the course of the past two quarters, we saw that our churn has sat more at the lower end of the range that we guide to than at the higher end. And this is a combination of access to data and unpacking the data, the tool that, you know, we are working on and have some early pilots in place that Keith alluded to in his prepared remarks, the fact that we identify much earlier in the process what we call ATR, or available to renew. So much earlier in the process, the cohort of customers that fit in that ATR category, and then being able to deploy our customer success team onto that ATR cohort of customers in order to make phone calls much earlier in the process than we have been doing in the past, and to facilitate not just a renewal but even potentially an upsell opportunity. One of the things that we saw in Q4 was that 60% of our existing customers added additional services from Equinix, Inc. to their portfolio, and every time you have a call with a customer, you have an opportunity to share what we are doing around new services. I think it is the combination of those elements—ATR, telemetry, and visibility into our data, the customer success team focused on this, and tools that help us predict more accurately. And there is, of course, as you quite rightly point out, a proportion of churn that is not addressable by us. And, you know, that is now something that we have visibility into, and it means we focus our resources, our efforts, on the proportion where we can actually address an outcome for the customer and for the business.

And Michael, first, thank you for the nice comment. I appreciate it. To respond to the question on stabilized assets and the growth rate, the beauty of what we shared, number one, is that there is more and more volume going through basically the stabilized assets that is not necessarily cabinet-related because our utilization is 82%. So that is number one. Number two, you have higher density per average cabinet. And so that is working in our favor. Number three, which I think is really important and then also refers back to one of the comments I made in my prepared remarks, where we have sort of one-off benefits that do not necessarily repeat themselves, at least over quarter, and that is basically price increases—price increases relating to the fourth quarter. And so it is a combination of all those that really delivered a strong stabilized growth rate on an asset base that is really quite substantial. And so feel very good about what we delivered. I probably would say, though, and to try and give you some steer, if you will, as you look forward, we still generally feel good about the stabilized assets growing 3% to 5%. That is the typical range. We are going to have these periods where we are slightly higher, and sometimes we might be a bit lower just based on the timing. But overall, feel really good about the 3% to 5% growth rate attributed to stabilized assets.

Very helpful. Thank you. Our next

caller is Frank Garrett Louthan with Raymond James. You may go ahead.

Great. Thank you. So part of your footprint expansion was to be able to capture some of the increased power demands from enterprises. We have definitely seen the demand ramp up. So where are you today with regards to your ability to meet that customer demand for folks needing incrementally new levels of power from enterprises? Have you caught back up on that? Where are you in that process? Thanks.

I will answer that for you. Thanks for the question, Frank. So, obviously, you know, power and the sourcing of power is, you know, a very significant factor for us as a data center operator. Having power means that we are able to secure the compute and energy future of our customers. As we indicated, you know, we currently have three gigawatts of developable land under control. And it is not developable land full stop. It is powered land, or land that we are close to securing the power on. And so, yes, we are not in the business of, you know, surreptitiously buying a block of land if we are not sure that we can power that asset. And so that means that as we look at our capacity and our build profile moving out, we are building against powered land portfolios, which therefore will enable us to continue to advance and evolve our footprints and our facilities to meet the density requirements of our customers. As I mentioned, we saw already in the AI workloads that we enjoyed in Q4, being 33% more dense than non-AI workloads, and we can certainly see that density increasing across our footprint. So we believe that we are very well positioned to address those requirements of our customers.

And maybe just adding on to what Adaire said, because I think it is important, is we have 52 projects currently underway. They are energized projects, and I am talking about generally the retail space. And as we shared with you at Analyst Day, whether you look at a DC-17 or a new Dallas build, they are coming with scale and size, but they are not so big that maybe there is excess focus on it. So feel really good. We talked about the one with 67 megawatts, and so it gives you a sense of where we are building capacity—in markets

where

there is a sort of broad need for that capacity, and they are the important markets: the Chicago, the New York, the Dallas, the Washington, and you go around the world and think about all those critical markets and that we are trying as hard as we can to build on that capacity. And so with the 52 projects currently underway, it sort of just adds to what Adaire is saying, that we have the current and then we also are creating the future opportunity for ourselves as well.

Great. Thank you very much.

Our next caller is Michael J. Funk with Bank of America. You may go ahead.

Yes. Keith, first, congratulations and thank you again for all the help over

over the years. So in prepared remarks, mentioned a disciplined pricing

strategy. Keith, just curious, kind of the magnitude of how much higher you can take pricing. Then you mentioned a minute ago that 3% to 5% projected range for growth with some variance. Any more comments around what would cause the variance, whether seasonality,

timing? The final part of my question would be, are you seeing ability to change contract terms on renewal, whether increased escalators or other factors?

Okay. Hi. I will take the question and Keith can add some components to it as needed. As I mentioned, we experienced very firm pricing throughout Q4 across all segments and for all regions, and we are very disciplined around the approvals and the approach that we take with our customers. We recognize that in the platform that is Equinix, Inc., there is a range of differentiated value that allows us to accelerate, you know, the pricing opportunity—our pricing commanding yields as a result of our interconnection density, a result of our cloud on-ramps, and, of course, the metro locations, which becomes even more important when we look in a low-latency world around certain applications of AI workloads. So, I think from a pricing perspective, we are very disciplined. We are very focused on that, and we know that we have opportunity to accelerate that in that regard. The vast majority of our contracts auto-renew, and they renew, you know, with a particular pricing increment applied to them. But this is also an opportunity for us to have a conversation with our customers. And that is why the ATR program is an extremely important one for us because it does allow us to look at customer usage, not just of the space and power within our footprint, but some of the additional and incremental services that Equinix, Inc. offers, and then allows us to enjoy the price points that those services represent in terms of value for our customers.

Our next caller is David Guarino with Green Street. You may go ahead.

Thanks. Your stabilized cash gross profit growth has been excellent all year, I guess, in 2025. And part of that, I know, is due to shrinking expenses. So wondering, do you think that trend of reducing costs will continue? Or at some point, are you going to have to increase staffing levels if this outsized pace of bookings continues?

David, let me take that one. Adaire, jump in as needed. So one of the comments we made is that we are just getting started. I think when you step back and look at the organization, we are driving the top line. Ralph and his organization is doing a great job of managing the IBXs to the gross profit line. And then you have the rest of the organization, and today, you know, for round numbers, you are 18–19% SG&A as a percent of revenue, right? We have a stated goal that we really would like to get—we would like to improve that. And that is through bending the cost curve. It is not always about eliminating costs, it is bending the cost curve and becoming more efficient. Our goal is to get to 15% over some period of time. And so the combination of managing into the different markets and also managing the spend while also investing behind Harman and her efforts to, I guess, to create efficiency in our organization through processes, through systems, tooling—it is a combination of all these things that I think can make a difference over the years. And still early, but we are offering up this year a guide of roughly 200 basis points improvement. It is coming from the top line, it is coming certainly from Ralph's organization. And we are still investing in the business to develop future opportunity for us. So I am not necessarily sort of subscribing to what you said that we need to throw more bodies at it. We tend to be a little bit more headcount-dense than almost anybody else out in the marketplace, and I would argue that we get more leverage from that as we introduce more assets into our environment. If you build another—put up another building in Dallas, as an example, you do not need to necessarily go hire more SG&A to support that asset. And so I feel very comfortable that when you look out that we can become an increasingly more efficient business. And consistent with the comments we made at Analyst Day, that we are surely on a nice trajectory. We said 52% plus, and there is a very good reason why we put the plus at the end of the 52. So a journey that we are going to be on together, and I am excited—

Helpful. Thanks.

Our next caller is Michael Elias with TD Cowen. You may go ahead.

Great. Thanks for taking the question and congrats on the

results. Question for you regarding the bookings.

Obviously, great to see big bookings quarter in 4Q. What I would like to get a sense of is, you know, how would you rank order the contributions to the bookings from the cabinets that you have coming online in capacity-constrained markets, obviously brought on cabs in Northern Virginia as well as Frankfurt, both of which were capacity constrained, versus it being a structural acceleration in demand. And really what I am trying to get at is how sustainable is the 4Q bookings level because that obviously has implications for forward revenue growth. Thank you.

Okay. Hi, Michael. I will have a go at the question and then Keith can jump in if we need additional clarification on a couple of points. I, you know, I guess, you know, over the course of the last year, we began to show our annualized gross bookings to you as a metric. And the reason for doing that was to give you, with the combination of the pre-sales number, to give you a sense of the momentum that we see inside the business in any given quarter. And since we have done that, we have seen our annualized gross bookings moving upwards every quarter. And certainly, you know, Q4 was no exception to that particular outcome. We have a very strong pipeline going into Q1. We have already closed 45% of our Q1 target, and we have had a meaningful pre-sales experience in Q1 to date that has given us our largest pre-sales quarter even though we are just halfway through. So I think looking forward, you know, our bookings growth will continue to be a very strong indicator of underlying health. I think the best line of best fit is up and to the right, but that is where we see the demand. Obviously, there will be some variability quarter to quarter as seasonality and other elements kick in. So that is something that we will manage as we look at it on a quarterly basis. But as it relates to the cabinets, Keith, do you want to—

Right. Michael, I will just add a little bit to what Adaire said as well. I think our expansion tracking sheet gives all the people on the call a pretty good sense of where we are making our investments. We need more capacity and we are going to continue to invest in more capacity. And as Adaire alluded to, we have roughly three gigawatts that we are considering over a period of time while we are still building currently. I think the combination of continuing to make the current investments while thinking longer term, while at the same time demand-shaping to markets—and you have always heard us talk about the right customer with the right application going into the right data center—and that will continue to hold true. But particularly in markets where they are constrained, not just for us but for the industry, we feel that we can demand-shape that opportunity into other markets that are proximate or within the fiber route sort of environment that would make it suitable for our customer to consume. And so I will just say that there is a lot of things that are going into it. Different markets are going to have different sets of circumstances. But this is what we are focusing on as an organization—not only increasing the density but making sure that we demand-shape to the right markets in support of the customers' needs. And that also plays into that a little bit to the pricing as well. So hopefully that gives you a bit of a sense that, yeah, we understand that some markets are more constrained than others, but we are also going to build in adjacency such that we can maybe continue to enjoy the opportunity that is in the marketplace.

Great. Thank you both for the color.

Our next caller is Nick Del Deo with MoffettNathanson. You may go ahead.

Hi, thanks for taking my question. And Keith, congratulations on your upcoming retirement and thanks for all your help over the years.

Adaire, earlier in the call, you noted

the strength in the interconnection franchise. Some of the big cloud service providers that you work with have announced and are developing, you know, products to help customers go the multi-cloud, multi-cloud route. Was wondering if you could talk a bit about the puts and takes of those efforts as it relates to the interconnection franchise.

Thank you for the question. I guess, at Equinix, Inc., we have always understood and always appreciated the importance of the network. And I think some of the announcements that we have seen around connectivity is a validation of connectivity and the importance of the network as part of the broader AI ecosystem and landscape. And, of course, we have continued to invest in our network products, in our interconnection product portfolio, and it is a significant part of our—and a significant part of our global revenue. You know, we recognize that, you know, many of the clouds have made a cloud-to-cloud connectivity announcement. But this is a very simple use case. Cloud to cloud is a simple connectivity use case. In reality, the reality of our customers is much more complex than this. We have always, always believed in a multi-cloud hybrid world, and that requires much more complex consideration around connectivity and networking strategies for our customers. And the interesting element for us, of course, is that many of these clouds, they are very valued partners of Equinix, Inc. And they use a large part of our infrastructure to help create their value proposition in terms of networking positions and network topologies. We are always evaluating our strategy here and always looking at, you know, what is emerging around the ecosystem. And that is why for us, you know, we recognize the inherent value of our interconnection franchise. And the role of Fabric continues to evolve within that franchise as we see provisioned VC capacity stepping up quarter over quarter. And we have a range of very exciting developments around our footprint here, our product footprint here—developments that will simplify the networking journey for our customers, developments that will support MCP as it relates to, you know, the augmentation of AI agents and AI workloads, and developments that will really enhance the observability—sorry, Martin, I am stumbling over that word—that our customers enjoy on our network. So a lot happening in this space for us, that we really see that many of the announcements really validate the role that the network plays in any AI ecosystem. And it is really, I think, a validation of the connective opportunity that we see ahead of us. It is one of the reasons why we have continued to invest in this space.

Right. Thank you, Adaire.

And our last question comes from Cameron McVeigh with Morgan Stanley.

Hi, thanks. Just wanted to echo my congratulations to Keith. And secondly, you have spoken in the past about the shift from

AI training to AI inference workloads. And curious if you have any updated views on the timing you have seen. And then secondly, this may be a follow-up to the last question, but just how important interconnection offerings are to drawing AI inference workloads from enterprises? Thanks.

The first part of your question, I think when you look at how our deal profile has moved through the course of 2025 into 2026, an uptick of 50% to 60%, we can see this tailwind of opportunities perhaps emerging earlier, you know, as an enterprise footprint than we originally thought when we presented in summer of last year. And so I think that is really good news because it is taking the promise of AI and putting it into the hands of consumers, of citizens, and customers all the way around the world. As it relates to the role of interconnection in AI workloads, I think there is a very significant element here for us to consider. And in some ways, the Salesforce example that I shared in prepared remarks is a really great example of where our connectivity capability was able to deliver a very unique service to Salesforce around creating private network connectivity. And so we are very excited about the opportunity to serve our customers' evolving needs in a complex hybrid multi-cloud world. We think it is a very fast-growing space. We think it is something that would be additive to our colo capabilities because it will broaden the range of customers and that it will continue to strengthen our platform and our ecosystem. So this is something, as I have mentioned before, that we are very excited about the opportunity and see that we have a very strong competitive differentiation when it relates to others in the segment with this interconnection footprint.

Okay, great. Well, thanks everybody for joining our conference call today and have a great afternoon. Thank you all.

Goodbye.

And this concludes today's conference.

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