Snapshot
Equinix Inc reported $2.44B of revenue in Q1 2026, up 9.8% year over year, with diluted EPS of $4.20 and an operating margin of 23.6%.
- Revenue
- $2.44B
- YoY growth
- +9.8%
- Diluted EPS
- $4.20
- Operating margin
- 23.6%
What management said
- •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.
- •Hello, everyone, and a warm welcome to our Q1 2026 earnings call.
- •In Q1, our recurring revenue grew 10% on a normalized and constant currency basis, coming in at the high end of our expectations.
- •Q1 was also the largest quarter of total sales activity in our history, inclusive of annualized growth bookings and pre-selling activity.
- •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.
- •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.
- •This momentum is part of a broader uptick in customer demand spanning a wide range of AI cloud and networking workloads.
- •We also grew our relationship with Maersk, a global leader in integrated logistics, as it digitizes critical supply chain infrastructure.
- •Our global footprint, secure and resilient operations, and industry-leading interconnection capabilities are supporting Maersk's ongoing network transformation and long-term growth strategy.
- •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.
What went well
- •Recurring revenue grew 10% year-over-year on a normalized and constant currency basis to $2.3 billion, the second straight quarter of double-digit MRR growth, with total revenue of $2.4 billion up 8%.
- •Q1 was the largest quarter of total sales activity in the company's history, up more than 35% year-over-year, including $378 million of annualized growth bookings (up 9%) and approximately $140 million of pre-selling activity, producing a record backlog.
- •Adjusted EBITDA was $1.2 billion, up 13% year-over-year, for a 51% margin, up 190 basis points quarter-over-quarter and 300 basis points year-over-year.
- •Quarterly AFFO surpassed $1 billion for the first time, up 11% year-over-year, and AFFO per share was $10.79, up 10% year-over-year.
- •Interconnection revenue was up 9% year-over-year, boosted by Fabric revenue growth of 26% and Fabric bookings up 70%-74% year-over-year, with large-capacity Fabric connections tripling from a year ago.
- •Churn came in at 1.7%, below the low end of the 2%-2.5% range, and the company raised guidance across several key financial metrics.
What went wrong
- •Q1 results did not include the xScale Hampton/atNorth lease, as the company is still nearing execution while negotiating expanded terms, shifting an expected ~$80 million of revenue, $65 million of AFFO, and $0.65 of AFFO per share from Q1 into Q2.
- •One project underway in Dubai at the DX3 facility saw its ready-for-service date impacted due to conflict in the Middle East, though operational impact was limited.
- •Bookings dipped sequentially from the record Q4, which management attributed to Q1 being a seasonally lower quarter coming off a large Q4.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total revenue growth | FY 2026 | 9%-10% | 10%-11% (raised by $21 million) | +100 bps |
| Adjusted EBITDA | FY 2026 | prior | raised by $24 million; margins approximately 51%, +200 bps over last year | raised $24M |
| AFFO growth | FY 2026 | 9%-11% | 10%-12% (raised by ~$40 million) | +100 bps |
| AFFO per share growth | FY 2026 | 8%-10% | 9%-11% | +100 bps |
| MRR growth | Q2 2026 | n/a | 10%-11% year-over-year | guidance set |
| Total CapEx (excl. xScale and land) | FY 2026 | prior range | ~$4.1 billion (top end), incl. $280M-$300M recurring and ~$3.8B non-recurring | raised to top end |
| Total NRR | FY 2026 | n/a | approximately 5.8% for the full year | guidance set |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Recurring revenue | up 10% | second-half 2025 bookings performance converting into revenue |
| Total revenue | up 8% | recurring revenue strength; excludes the deferred xScale lease |
| Adjusted EBITDA | up 13% | continued cost discipline, forward cost benefits, and scaling operating leverage |
| AFFO | up 11% | surpassed $1 billion for the first time |
| AFFO per share | up 10% | came in at $10.79 |
| Interconnection revenue | up 9% | boosted by Fabric revenue growth of 26% and increasing attach rate |
| MRR per cabinet | up 7% | firm pricing environment and continued increase in density, reaching $2,524 |
| Stabilized asset recurring revenue | up 6% | 192 stabilized assets, 82% utilized, generating a 26% cash-on-cash return |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Adjusted EBITDA margin | ~49% in Q4 2025 | 51% in Q1 2026, up 190 bps QoQ and 300 bps YoY | improving |
| AI inferencing / agentic AI | customer conversations about piloting AI a year ago | enterprise-wide adoption at scale; 8 of top 10 model providers and 4 of top 5 neo-clouds expanding with 110+ network nodes | accelerating |
| AI share of largest deals | ~60% in Q4 2025 | ~60% in Q1 2026 | consistent |
| Churn | 2.2% in Q4 2025 | 1.7% in Q1, below the low end of range | improving |
| Liquid cooling deployments | fewer deployments | 36 deployments, 7 orders in Q1, up 50% quarter-over-quarter | growing |
| CFO leadership | Keith Taylor as CFO | Olivier Leonetti as new CFO, nearly two months in | transition completed |
| Net leverage | 3.8x in Q4 2025 | 3.8x annualized adjusted EBITDA | stable |
Q&A summary
Are the 110 AI network nodes incremental to typical cloud nodes, and what interconnectivity demand are they generating?
Adair Fox-Martin clarified the 110 nodes are from eight of the top 10 AI model providers and four of the top five neo-clouds, in addition to hyperscaler nodes. Neo-clouds are evolving from training toward AI inference and pursuing enterprise customers, acting as inference magnets; use cases include connectivity nodes to CSPs/NSPs, AI inference nodes in dense metros, and Fabric access to Equinix's enterprise base.
How is tenant appetite changing on the $140 million of pre-leasing activity, and how is it affecting terms or pricing?
Adair Fox-Martin said pricing remains firm whether for pre-sales or in-quarter bookings. Pre-sales provide customers security over their infrastructure and compute/energy future, and the relatively new motion is yielding benefits in customer conversations and long-term ability to serve them.
Are rising memory, fuel, or energy costs affecting customer behavior, such as pulled-forward or pushed-out deals?
Adair Fox-Martin pointed to the hedging program enabling support at current price points and described demand as durable, broad-based, and diverse with no pullback, reflected in the scale of transactions across all customer segments and industries growing at roughly the same rate in Q1.
Does rising AI inferencing demand change the incremental capital required versus traditional workloads?
Adair Fox-Martin said no difference in required capital given the company's metro-focused, 27-year strategy across 77 metros. Phillip Konieczny added that newer facilities are being built to much higher densities, and the returns underwritten against those higher densities remain in the mid-20% range.
How should investors model the large one-time xScale lease fees, and what is happening with Minooka?
Adair Fox-Martin said these transactions are complex; Minooka is not in the short-term timing but has a robust pipeline of interested parties, and the full-year guide assumes total NRR of approximately 5.8%, a portion tied to xScale leasing. Olivier Leonetti added that, aside from the much-discussed deal, remaining xScale deals are relatively small and risk is balanced for the year.