Q4 2025 Earnings Call Transcript

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.

Adaire Fox-Martin: Thanks so much, Phillip. Hello, and a warm welcome to our call today.

Adaire Fox-Martin: 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,

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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?

Adaire Fox-Martin: 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

Adaire Fox-Martin: opportunity.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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?

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: 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.

Adaire Fox-Martin: And this concludes today's conference.

Thank you for participating. You may disconnect at this time and have a great rest of your day.