Equinix, Inc. (EQIX) Earnings

Management highlights

### Core Market & Strategic Positioning - The AI-driven infrastructure cycle is accelerating, with growing demand for neutral, interconnected, sovereign data infrastructure that aligns with Equinix's core strengths - Demand is broad-based: 50% comes from large enterprises modernizing legacy on-premise infrastructure, 50% comes from net new AI-native workloads and supporting service providers; most new demand is from existing Equinix customers - Equinix's ecosystem is approximately twice the size of its closest competitor, with 8 of the top 10 AI model providers and 8 of the top 10 neoclouds already operating on Equinix infrastructure, creating a self-reinforcing growth flywheel ### Operational Execution & Product Development - Annualized gross bookings grew 23% year-over-year to $424 million, with $110 million in additional pre-sales activity, bringing total sales activity growth above 30% year-over-year; 45% of Q3 2026 bookings target is already closed - Secure Cabinet Express, Equinix's standardized ready co-location offering, grew cabinet orders more than 30% year-over-year - New product launches: Fabric GeoZones, a built-in network sovereignty solution that enforces compliant traffic routing, is in preview with 80 global enterprises; cloud router bookings grew 170% year-over-year, including growth from non-colocation customers - Strategic partnerships with Cisco, NVIDIA, and Presidio deliver standardized AI infrastructure blueprints, automation, and pre-deployment validation to accelerate enterprise AI adoption ### Leadership & Expansion Updates - Equinix appointed Chris Saude (former HashiCorp Chief Product and Technology Officer for Infrastructure and AI) as new Chief Product Officer, and promoted 16-year veteran Bruce Owen to EVP Global Markets to oversee all three regions - Equinix accelerated more than 7,000 cabinets planned for 2027 into Q4 2026, doubling the number of cabinets delivered in H2 2026 to meet strong demand; 52 major expansion projects are currently underway across 33 markets, with new projects announced in Chicago, Istanbul, and Johor this quarter - 80% of all future capacity expansion will be concentrated in Equinix's top 25 global metros, where the company already has established market presence, ecosystem density, and stakeholder relationships ### Community & ESG Engagement - Equinix published its US Community Principles this quarter, outlining commitments to fund grid infrastructure directly, invest in renewable energy and water efficiency, and create local skilled job opportunities including veteran pathways and technical workforce development programs

Guidance

Equinix raised full-year 2026 guidance for the second consecutive quarter, the largest single guidance raise in company history, and also updated its long-term outlook through 2029: - 2026 Q3 expected performance: MRR growth 9-11% year-over-year, total revenue growth 10-12% year-over-year, adjusted EBITDA margin 51% - 2026 full-year guidance: Total revenue growth raised 100 basis points to 11-12%; AFFO per share growth raised to 10-12%; adjusted EBITDA margin expected to hit 51%, a 200 basis point improvement over 2025; capex expected to range from $5 to $6 billion as capacity expansion is accelerated - 2027-2029 long-term guidance: Annual total revenue growth expected to range from 10-13%, starting at the low end of the range and accelerating through the period as new capacity comes online; annual AFFO per share growth expected 9-12%; adjusted EBITDA margin expected to reach 53% or higher by 2029; annual capex expected to range from $5 to $7 billion, with over 80% allocated to capacity expansion in top 25 metros; new deployed capital is expected to deliver mid-20% cash-on-cash yields; dividend growth will approximate AFFO per share growth; leverage will increase by only ~1 turn through 2029, allowing Equinix to maintain its investment-grade credit rating

Segment performance

Equinix does not break out performance by product segment in this call. Aggregate consolidated Q2 2026 performance is as follows: - Recurring revenue: +11% year-over-year (normalized constant currency) - Total revenue: +16% year-over-year, including $120 million in non-recurring fees from closed 134 megawatts of X-scale leases - Adjusted EBITDA margin: 53%, up 300 basis points year-over-year; 150 basis points increase excluding X-scale leasing fees - AFFO per share: +18% year-over-year (normalized constant currency) - Non-financial operational metrics: Added a record 9,700 net interconnections, added 4,200 net cabinets, sold-but-not-installed backlog reached a record high, churn was 1.8%

Risks & headwinds

The following risks were referenced or discussed in the call: - Top 25 global target metros for expansion are often power-constrained, creating execution risk for new capacity delivery - General supply chain risk for MEP equipment and availability of skilled construction labor to deliver new projects on schedule - Demand may not meet updated forecast expectations, requiring adjustments to capacity deployment plans - Increasing capital deployment will lead to a moderate increase in leverage and a ~150 basis point increase in blended cost of capital - Early stage enterprise AI market development means long-term demand trends could shift from current projections

Analyst Q&A

• Q: What market changes give management confidence to significantly raise capex and long-term growth guidance, and has the balance of growth shifted from MRR per cabinet to installed cabinets? /

  A: The AI infrastructure cycle has accelerated faster than expected, particularly for inference workloads, with broad-based demand across Equinix's entire portfolio. AI acts as an accelerant to ongoing enterprise digitization, and team execution has improved materially across all functions over the past year. 80% of new capex will be deployed in Equinix's top 25 metros, where the company already has established competitive advantages and existing ecosystem relationships. Growth will still come from a mix of installed cabinet expansion and MRR per cabinet growth, aligned with existing market dynamics.

• Q: Are you seeing changes to deal metrics from rising AI demand, and what markets are seeing the strongest growth? /

  A: Deal density is increasing as customers reserve capacity for future AI and energy needs, pricing remains firm, and Equinix is still hitting target yield requirements. Interconnection revenue grew 9% year-over-year following the record 9,700 net interconnection additions in Q2, with additional interconnection growth as new customers expand their usage on the platform. Geographically, Americas is seeing strong low-double-digit growth even after normalizing for non-recurring transactions, APAC growth is accelerating, and EMEA continues to perform well driven by demand for sovereignty solutions even with constrained capacity in key metros.

• Q: How is Equinix managing operational and supply chain risk to deliver this large capex plan, especially given power constraints in top target metros? /

  A: Equinix only advances projects after completing internal gating for power contracts and permitting, and currently holds 3 gigawatts of controlled land where 700 megawatts is under active development, with very high confidence of securing power for all controlled sites. Equinix has long-standing strategic relationships with key suppliers and general contractors, and its strong balance sheet allows it to pre-purchase required MEP equipment when needed, with a fungible design that enables moving equipment across the portfolio as needed. Equinix's typical 60 megawatt project size is far smaller and more manageable than the gigawatt-scale projects developed by other firms.

• Q: What is your confidence in the durability of current strong demand to support increased development spending, amid widespread large-scale capacity builds across the industry? /

  A: Equinix's unique focus on the enterprise sector, paired with its dense interconnection ecosystems and global metro footprint, positions it well to capture persistent long-term demand. The enterprise AI market is still very early in development, and colocation is a durable end-state for enterprise AI infrastructure. Networking demand is growing, with AI requirements adding to existing enterprise connectivity budgets, and broader indicators including firm enterprise IT budgets, accelerating server and data center silicon demand all support durable demand. Equinix uses a proprietary bottom-up demand model paired with customer planning to align capacity with actual need, with all capex concentrated in 25 high-demand metros.