Snapshot
Equinix Inc reported $2.32B of revenue in Q3 2025, up 5.2% year over year, with diluted EPS of $3.81 and an operating margin of 20.5%.
- Revenue
- $2.32B
- YoY growth
- +5.2%
- Diluted EPS
- $3.81
- Operating margin
- 20.5%
What management said
- •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.
- •Hello everyone, and a very warm welcome to our Q3 2025 earnings call.
- •We are seeing continued revenue acceleration, delivering MRR growth of 8% year-over-year on a normalized and constant currency basis.
- •Further, we also achieved record annualized gross bookings of $394 million, a meaningful 25% increase year-over-year and up 14% over Q2.
- •Importantly, this accelerated growth comes from a highly diversified set of customers across geographies, industries, and segments.
- •We again delivered strong adjusted EBITDA margins for the quarter, and AFFO was up 12% year-over-year on a normalized and constant currency basis.
- •This was better than expected and reflects strong flow-through of our operating results, favorable net interest expense, and timing of recurring CapEx spend.
- •As a result, we are raising our adjusted EBITDA, AFFO, and AFFO per share guidance for the full year.
- •Given the strong demand backdrop, we are advancing our bold strategic move where our intent is to double capacity by 2029.
- •This volume reflects continued demand for a wide variety of latency-sensitive AI and non-AI workloads, supporting significantly increased data residency and sovereignty requirements, and delivering seamless connectivity to distributed data sources.
- •This helps them simplify their network for future expansion and supports Nitori's growth objectives of tripling their branches worldwide.
- •As I've shared in previous earnings calls, our strategy comprises three strategic moves orchestrated across the business to accelerate our expansion, innovation, and profitable top-line growth.
What went well
- •Equinix delivered MRR growth of 8% year-over-year on a normalized and constant currency basis and global Q3 revenues of approximately $2.32 billion, up 5% over the same quarter last year.
- •The company achieved record annualized gross bookings of $394 million, a 25% increase year-over-year and up 14% over Q2, plus a $185 million pre-sold balance of annualized gross bookings.
- •Global Q3 adjusted EBITDA was $1.15 billion, approximately 50% of revenues and up 8%, while AFFO was $965 million, up 12% year-over-year and meaningfully above expectations.
- •The company raised its full-year adjusted EBITDA, AFFO, and AFFO per share guidance.
- •Interconnection had an exceptional quarter, adding 7,100 net connections to surpass 499,000 total, with interconnection revenue up 8% to $422 million and Equinix Fabric bookings up 57% year-over-year.
- •Build-bolder progress included land acquisitions supporting over 900 MW of capacity, bringing developable capacity to approximately 3 GW, nearly a 50% increase from the prior quarter.
What went wrong
- •Non-recurring revenues moderated sequentially, largely due to lower xScale fees.
- •Q3 revenues, adjusted EBITDA, and AFFO each absorbed FX headwinds versus prior guidance rates of $9 million, $4 million, and $2 million respectively.
- •The large xScale transaction underpinning the Q4 step-up remained uncontracted, prompting an expanded Q4 revenue guidance range due to fluid contracting timing.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Underlying revenue growth (full year 2025) | FY 2025 | 7%-8% | 7%-8% | maintained |
| Adjusted EBITDA (underlying) | FY 2025 | prior guidance | raised by another $21 million; margins 49%-50% | raised $21M |
| AFFO (underlying) | FY 2025 | prior guidance | raised by another $31 million; AFFO growth 11%-13% | raised $31M |
| AFFO per share growth | FY 2025 | prior guidance | 8%-10% | raised |
| CapEx | FY 2025 | prior guidance | $3.8B-$4.3B including ~$290M recurring | updated |
| Q-over-Q MRR step-up | Q4 2025 | n/a | greater than $60 million | step-up |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Revenue | up 5% | recurring revenue growth of 8% from bookings momentum, partially offset by lower xScale non-recurring fees and a $9M FX headwind |
| Recurring revenue / MRR | up 8% | continued bookings momentum of the business |
| Adjusted EBITDA | up 8% | strong operating flow-through; included a $4M FX headwind |
| AFFO | up 12% | strong operating performance, disciplined balance sheet management, favorable net interest expense, and timing of recurring CapEx spend |
| Interconnection revenue | up 8% | driven partially by a 57% year-over-year increase in Equinix Fabric bookings |
| Stabilized asset revenue | up 4% (constant currency) | 188 stabilized assets, 82% utilized, generating a 26% cash-on-cash return |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Annualized gross bookings | $345 million in Q2 | record $394 million in Q3 | accelerating |
| Pre-sales motion | three-to-six-month sell window | extended to a 12-month window; $185 million pre-sold balance, 40% signed in Q3 | expanding |
| Developable capacity | lower base | approximately 3 GW, nearly 50% increase from prior quarter | expanding |
| MRR churn | higher | stepped down to 2.3%, within the 2%-2.5% range | improving |
| Net leverage | n/a | 3.6x annualized adjusted EBITDA | stable |
Q&A summary
How strategic are AI-magnet deployments like Nebius and Groq versus traditional cloud on-ramps, and what is Equinix doing to attract them?
Adaire Fox-Martin reaffirmed Equinix's market-leading native cloud on-ramp position and noted strong AI-magnet presence (Zetaris, Lyceum, Block, Groq, Outrider, Nebius, CoreWeave). Many neo-clouds use Equinix as a point of connectivity and presence, attracted in part by its 10,000+ enterprise customers, with the Americas team managing those relationships.
Is the new ability to sell capacity further out driving pre-sales strength, and how much pre-leasing is occurring in key markets?
Management said the retail pre-sales window was extended from three-to-six months to 12 months, with velocity increasing through Q3 (40% of the pre-sold balance signed in Q3). Activity is fairly evenly spread but heaviest in supply-short markets like Frankfurt, London, and New York. Keith Taylor attributed the new motion to a shifted supply-demand environment where the company is chasing demand.
How confident is Equinix in power availability for its 12 xScale projects?
Adaire Fox-Martin said all 12 current xScale projects have power secured, so power is not a constraint on them. For recent land acquisitions, power is either fully committed or in advanced discussions, aided by the company's strong balance sheet and 27-year history with utilities.
What explains the width of the Q4 revenue guidance range and the non-recurring xScale toggle?
Keith Taylor explained the ~$153 million Q3-to-Q4 midpoint step-up includes $60 million+ recurring and ~$90 million non-recurring, of which roughly two-thirds is one large xScale transaction (240 MW across four 60 MW buildings, with about half embedded in guidance). The range was widened to cover the scenario where the deal closes in Q1 rather than Q4.
Why did Americas margins accelerate while EMEA EBITDA growth lagged?
Keith Taylor said the Americas segment carries corporate SG&A, so cost-cutting benefits show there, while EMEA had roughly $10 million of one-offs this quarter versus a $10 million benefit a year ago, creating a ~$20 million swing. Underlying profitability is increasing across all three regions.