Equinix delivered its strongest quarter in years in the second quarter of 2026 and issued the largest single guidance raise in company history, as an accelerating AI-driven infrastructure cycle played to its strengths. Monthly recurring revenue growth accelerated to 11% year over year (a third straight double-digit quarter), total revenue rose 16% to $2,625 million, GAAP diluted EPS was $4.83, and AFFO per share grew 18%, while annualized gross bookings jumped 23% to $424 million (second-highest ever), total sales activity including pre-sales grew over 30%, and the company added a record 9,700 net interconnections against a record backlog. Adjusted EBITDA margin expanded 300 basis points to 52% (about 150 bps excluding ~$120 million of non-recurring xScale leasing fees), and 194 stabilized assets ran 82% utilized at a 27% cash-on-cash yield. Management raised full-year 2026 guidance for the second straight quarter - revenue growth to 11-12%, AFFO per share growth to 10-12%, and adjusted EBITDA margin to ~51% - and materially raised its long-term outlook to 10-13% annual revenue growth through 2029 with a 53%+ EBITDA margin by 2029, funded by $5-7 billion of annual CapEx (concentrated 80%+ in the top 25 metros). To capture demand, Equinix is doubling second-half cabinet deliveries and pulling 7,000+ cabinets from 2027 into Q4 2026, while new products (Fabric Geo Zones for sovereignty, Secure Cabinet Express, Cloud Router) gain traction and eight of the top 10 model providers and neoclouds run key workloads on its platform. The principal cautions are the elevated capital intensity and risk - CapEx-driven leverage rising about a turn, blended cost of capital up ~150 basis points, and near-term earnings drag from the capacity ramp - alongside margin flattered by xScale fees and persistent power constraints in key metros; management expressed high conviction in durable demand via firm pricing, falling churn, four distinct enterprise AI use cases (stack, sovereign, batch and latency-sensitive), and a bottom-up/top-down demand model, with 3 GW of land under control and power largely secured.
Good afternoon, and welcome to our second 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 identify in today's press release and in our filings with the SEC. 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 our website a presentation that we will refer to, along with certain supplemental financial information and other data. With us today are Adaire Fox-Martin, CEO and President, Olivier Leonetti, CFO, and Phillip Konieczny, SVP of Finance. At this time, I'll turn the call over to Adaire.
Thank you, Ryan. Good afternoon to you all. The AI-driven infrastructure cycle continues to accelerate, and it's playing directly to our strengths. Demand for neutral, interconnected, sovereign infrastructure is compounding across our business. Our global scale, differentiated portfolio, and unmatched ecosystems are converting that demand into durable, profitable growth. You see this clearly in our Q2 results. Monthly recurring revenue growth accelerated to 11% year-over-year on a normalized and constant currency basis. This marks our third straight quarter of double-digit MRR growth with strong profit performance. Annualized gross bookings grew 23%, our second highest volume on record. Total sales activity, inclusive of annualized gross bookings and pre-sales, grew over 30%, and we continue to see a record backlog.
We added 9,700 net interconnections, our most ever. AFFO per share grew 18% on a normalized and constant currency basis, a direct result of the disciplined execution by our teams around the world. Given the strength of our performance as well as our bookings and pre-sales momentum, we are raising our full year guidance and long-term outlook. For 2026, we now expect revenue growth of 11%-12% and AFFO per share growth of 10%-12%. This is the largest single guidance raise in the history of our company, reflecting broad-based durable demand and strong execution across our business. We continue to accelerate our capacity expansion to meet this growing demand. In fact, we will double the number of cabinets we deliver in the second half of the year. As a result, we now expect 2026 CapEx to range between $5 billion and $6 billion.
Looking further out, we expect to deliver top- and bottom-line growth well ahead of the outlook we provided last year. Through 2029, we expect total revenue growth in the 10%-13% range annually, with AFFO per share growing 9%-12% during the same period. To capture the robust demand in front of us, we plan to invest $5 billion-$7 billion in CapEx annually through 2029. These are high-conviction investments that we believe will deliver attractive returns whilst enabling the outcomes our customers need. We fully expect the new capital we're deploying to deliver the mid-20% yield you have grown accustomed to. Olivier will provide a more detailed view of our outlook shortly. Our revised outlook reflects more than a strong quarter.
It shows what a focused team executing the right strategy can deliver. We're doing it in a market that's materially stronger than it was a year ago. As the market has evolved, the nature of the demand has given us greater conviction in our plan. A significant proportion of this demand comes from the world's largest enterprises modernizing their on-prem infrastructure that was never built for today's broad-based distributed workloads. The remainder comes from net new AI native workloads and service providers powering them. In both cases, the majority are already Equinix customers. They increasingly need solutions we are uniquely positioned to deliver because of our consistent focus on this target market. All around the world, customers are confronting the same reality. Their networking, cloud, and AI workloads are growing more distributed, complex, and demanding. They need infrastructure built for a new era.
Their workloads don't live in one place. They run across clouds, models, and geographies simultaneously in real-time. That's something compute alone can't solve. It requires connectivity at the intersection of everything. That point of intersection is Equinix. We have been at the center of every major shift in enterprise technology over the past 30 years. We were the neutral ground where the internet scaled. We were the neutral platform that made multi-cloud real. As inference and agentic AI unleash extraordinary capabilities alongside new layers of complexity, we are the neutral exchange where customers can run, connect, and orchestrate it all. This kind of connectivity has never been more important. No one has built what we have built. Our ecosystem is approximately twice the size of the next largest provider. As we curate the emerging AI ecosystem, our competitive advantage is growing.
Eight of the top 10 model providers, as well as eight of the top 10 neo clouds, are already running their key networking workloads on Equinix today. That kind of ecosystem density creates a flywheel of growth and value creation. Our infrastructure attracts interconnection-rich workloads. Interconnection expands the ecosystem. A more expansive ecosystem attracts more of everything. Our momentum continues to build. Let me share some recent customer examples that bring our momentum to life. Leading AI cloud infrastructure provider OrionVM selected Equinix to power its fully managed private agentic AI bundle, helping enterprises deploy and scale sovereign agentic AI with a clear path to measurable ROI. Built on our secure, neutral infrastructure, the bundle supports private AI deployments, heterogeneous compute, and autonomous AI capabilities. Through OrionVM's collaboration with Tenstorrent, customers gain greater choice and flexibility at the AI accelerator layer.
SCX.ai, Australia's sovereign AI infrastructure provider, partnered with Equinix to build the country's first sovereign AI inferencing node, leveraging our Sydney operations. Equinix enables a faster, more governed path to integrating AI into core operations with a scalable foundation for expansion across Asia Pacific. Raymond James, one of the leading financial services firms, selected Equinix to augment their on-premise models to our multi-cloud infrastructure. Our ability to enable low-latency connectivity to their customers' clouds and SaaS providers, as well as the strength of our overall financial services industry ecosystem, were key factors in their decision to grow their business using Equinix. We are working with Verizon to deliver enhanced enterprise connectivity by combining their adaptive network fabric with Equinix's neutral interconnection hubs. This integration via APIs allows for near real-time provisioning.
Our unmatched metro density, global scale, and advanced automation capabilities help customers like Verizon lower execution risk and accelerate service delivery. These examples are enabled by our progress against our strategic pillars. Starting with Start Better, we delivered annualized growth bookings of $424 million, up 23% year-over-year, a notable acceleration from Q1. In addition, we delivered approximately $110 million of pre-selling activity. Collectively, that's over 30% growth in total sales activity in the quarter. We have a robust pipeline entering the back half of the year. We've already closed over 45% of our bookings target for Q3. Our pre-selling motion continues to show very encouraging trends as we have now sold approximately 30% of our remaining 2026 retail capacity expansion. Secure Cabinet Express, our standardized business-ready colocation offering, is continuing to gain traction, with cabinet orders up more than 30% year-over-year.
It's a great example of how we're simplifying the customer buying experience to accelerate growth. On Solve Smarter, we are turning the demands of enterprise AI into products customers can deploy today. Most enterprises know what they want to build. The infrastructure to support it at scale is the challenge. Our expanded collaboration with Cisco and NVIDIA tackles this head-on by bringing standardized AI factory blueprints and automation across our global IBX network. Through our new partnership with Presidio, customers can test and validate before they scale. That's how we help enterprises move faster with greater certainty. Data sovereignty is a challenge for enterprises and an opportunity for Equinix. Most networks were built for performance, not compliance. Our new Fabric Geo Zones offering was built for both. Traffic either flows along compliant paths, or it is blocked.
Sovereignty is no longer a configuration. It is a property of the network itself. Fabric Geo Zones is in preview with approximately 80 enterprises around the world. These are two examples of our customer-focused product roadmap. We're just getting started. This week, we welcomed Chris Audie to Equinix as our Chief Product Officer. He brings extensive experience to the role, most recently as HashiCorp's Chief Product and Technology Officer for infrastructure and AI. His strong background spanning product, software, and infrastructure will help us accelerate and expand our solution portfolio. We also named Bruce Owen, a 16-year Equinix veteran with deep experience across our business, as EVP Global Markets, overseeing our three regions. Chris and Bruce strengthen our leadership team at exactly the right moment. Turning to Build Boulder, our teams continue to execute at a high level.
Our acceleration of more than 7,000 cabinets from 2027 into Q4 2026 reflects our confidence in our ability to deliver, as well as our commitment to bring capacity online faster to meet growing demand. This quarter, we announced significant new projects in Chicago, Istanbul, and Johor, with more expected throughout the remainder of the year. We now have 52 major projects underway across 33 markets. I also want to take a moment to emphasize something that matters deeply to us as we expand. In the communities where we build and operate, we're not a visitor. We are a neighbor. That distinction has defined our approach for nearly 30 years as we have built the essential infrastructure that underpins the everyday experiences and connections people depend upon. Across all of our markets, we engage early and transparently.
We listen and adapt to local needs. We invest for the long term because we are there to stay. That's how we build trust. It's what makes communities stronger over time. It's why we have been able to consistently execute our projects on time and at scale. This quarter, we published our U.S. Community Principles. They reflect the standards that have long guided our approach and that we hold ourselves to. This includes funding energy and grid infrastructure costs directly, investing in renewable energy and water use efficiency, and creating meaningful opportunities for the people around us, from construction and skilled trades jobs, to pathways for veterans, to programs that build the next generation of technical talent.
Thank you, Adaire. Our unique positioning and strong execution are evident in our performance and raised outlook through 2029. We're driving momentum across our business with demand strength in every vertical, product, and channel. Looking at Q2 results on slide seven of our earnings presentation, with growth rates discussed on a normalized and constant currency basis. Recurring revenues increased 11% year-over-year, reflecting the underlying strength of our business and record bookings converted into revenue. Total revenues increased 16% year-over-year. As expected, we closed 134 MW of xScale leases, including Hampton, which contributed approximately $120 million in non-recurring fees. Our adjusted EBITDA margin was 52%, up 300 basis points year-over-year. This is a result of continued cost discipline, scaling our operating leverage, and our xScale leasing fees. Excluding xScale leasing fees, our adjusted EBITDA margin was up approximately 150 basis points year-over-year.
AFFO per share increased 18% year-over-year. Our non-financial metrics also continue to demonstrate momentum and our strategy in action. We added a record 9,700 net interconnections. We added 4,200 net cabinet billings, and our backlog sold but not yet installed is at a record level. Churn was 1.8%, primarily due to our renewal process execution and some delayed churn. We expect to be near the lower end of our typical 2-2.5 range for the back half of the year. On slide 10, you see that our capital investments deliver very strong returns. Our 194 stabilized assets are collectively 82% utilized and generated a 27% cash-on-cash yields on growth PP&E. We continue to achieve these upside returns on assets we have delivered in recent years, reflecting our focus on offering differentiated infrastructure and services to our customers.
On slide 11, total capital expenditures for the quarter were about $1.6 billion, approximately 90% of which was invested in capacity expansion. Since the last earnings call, we opened new projects in Madrid, Milan, and Silicon Valley. Turning to our capital structure on slide 12. We have approximately $7.7 billion of available liquidity, including our recently upsized revolving credit facility, and our net leverage was 3.6x annualized adjusted EBITDA. We continue to execute on our access to lower-cost capital around the world to fund our growth. Please refer to slides 14-18 for an updated view of our 2026 guidance with all growth rates on a normalized and constant currency basis. Based on the robust environment and the team execution, we're raising 2026 guidance for the second consecutive quarter. The raise reflects our recent outperformance and a stronger outlook for the rest of the year.
For the third quarter, we anticipate continuing strength, including MRR growth of 9%-11% year-over-year, total revenue growth of 10%-12% year-over-year, and an adjusted EBITDA margin of 51%. For the full year, with dollar amounts discussed prior to FS adjustments, we're raising total revenue guidance by $100 million, improving our expected growth range to 11%-12%. We expect MRR growth to be around 10% at the high end of our prior range. We're raising adjusted EBITDA guidance by $62 million, resulting in an adjusted EBITDA margin of approximately 51%, a 200 basis point improvement over last year. We're raising AFFO guidance by approximately $50 million, driving an increase in our expected AFFO per share growth range to 10%-12%.
Excluding real estate acquisition and xScale, we expect total capital expenditures to be $5 billion-$6 billion as we accelerate capacity expansion into the year. As Adaire mentioned, a significant portion of our planned capacity additions for the remainder of 2026 are already committed through bookings and pre-sales, providing increased visibility into future growth and returns. Turning to our long-term outlook update. We are clearly in a stronger environment, and the team is executing very well. We have been closely analyzing the market opportunity to calibrate where we stand and where we are headed. Through this, we have gained even stronger conviction in our strategy, positioning, and trajectory. With AI as an accelerant, we expect demand to remain robust as customers modernize their technology architectures and increasingly orchestrate their strategies on our platform.
Scaling our business will continue to be a focus, driving revenues, controlling expenses, and enhancing our margins. Our competitive advantages drive returns on development that are unmatched. Recognizing this strength, we have developed a demand-driven capacity expansion plan that accelerates delivery timeline, enables deployment flexibility in response to demand signals, minimizes earnings drag, and maximizes our long-term growth profile. Demand is clearly exceeding the assumptions in our prior long-term outlook. Bookings, pre-sales, backlog, and pricing are strong, and we are uniquely positioned to meet the durable demand by deploying capital over the next few years. We expect $5 billion-$7 billion of capital expenditures annually from 2027 to 2029, with the vast majority focused on capacity expansion delivered into a target market where our value proposition is increasingly differentiated. More than 80% of this expansion will be our top 25 major global metros.
The result will be a higher growth portfolio built over 30 years that is uniquely fit to serve the new technology era. As always, our balance sheet and diversified capital program are critical differentiators. In combination with significant retained cash flow, we'll continue to access lower-cost sources of capital to fund our robust growth opportunity. Referring to slide 19, we expect the following for 2027 through 2029. Total revenue growth ranging from 10%-13% per year, beginning the period at the low end of this range and accelerating as the benefit of our capacity expansion plan builds. Adjusted EBITDA margin to reach 53% or higher by 2029. AFFO per share growth in the 9%-12% range per year. Capital expenditures in the $5 billion-$7 billion range per year, excluding real estate acquisitions and xScale. Dividend growth to approximate AFFO per share growth.
Utilizing our balance sheet, we will achieve this with only a moderate leverage increase, allowing us to maintain our current and critically important investment-grade credit ratings. In conclusion, demand is stronger and more durable. The team is executing. Our confidence in future growth has increased, and we are accelerating capacity expansion to capture the opportunity in front of us. I now turn the call back over to Adaire.
Thanks, Olivier. The first half of 2026 has been a strong one. It has set the stage for something bigger. The demand signals are clear. Our strategy is working. The investments we are making today are designed to drive sustainable long-term growth well above our prior expectations. We will maintain our relentless focus on disciplined execution that solves the challenges our customers face and creates value for our shareholders. Our team stands ready to capture the opportunities ahead. With that, let's open the line for questions.