EQUINIX INC Q2 FY2025 earnings call

• Financials: Revenues, adjusted EBITDA, and AFFO were in line with or better than expectations; adjusted EBITDA margins hit 50%. • Customer Momentum: Closed 4,100 deals across over 3,300 customers, resulting in $345M annualized gross bookings. Strong small- and medium-sized deal activity with inter and intra region sales. • Strategic Moves: Serve Better (focus on customers), Solve Smarter (simplify consumption of digital infrastructure), Build Bolder (invest in capacity expansion). • New Hires: Shane Paladin joined as Chief Customer and Revenue Officer. • Interconnection: Added net 6,200 total interconnections, Equinix Fabric had over 100 terabits of provision capacity and surpassed 4,000 customers using it. • Capital Expenditures: CapEx was ~$990M, opened 5 major projects, with over 70% of retail expansion projects in largest metros. • Projects: 59 major projects underway globally, including 12 xScale projects; acquired 3 data centers in Philippines.

In Q2 2025, Equinix generated revenues of $2.26 billion, with adjusted EBITDA of approximately $1.13 billion (50% of revenues) and AFFO of $972 million. Recurring revenue grew 7% year-over-year. Interconnection revenues grew 8% year-over-year, crossing $400 million in quarterly revenues. Absolute terms: Revenues were $2.26B, adjusted EBITDA $1.13B, AFFO $972M. Revenue contribution: Recurring revenue contributed significantly, with interconnection revenues making up a growing portion of total revenues.

• Raised 2025 revenues guidance by $58M, maintaining 7%-8% normalized constant currency growth. • Raised adjusted EBITDA guidance by $46M, with adjusted EBITDA margins expected at ~49% and strong second half margins near 50%. • Raised AFFO guidance by $28M, with AFFO expected to grow 10%-12% and AFFO per share 7%-10% growth. • CapEx range revised to $3.8B-$4.3B, including ~$450M on-balance sheet xScale spend. • Anticipated quarter-over-quarter step-up in underlying recurring revenues in Q3 and Q4, with strong NRR activity in Q4 driven by xScale opportunities.

• Supply Chain: Impact on CapEx delivery timelines. • Foreign Exchange Risk: Potential impact on financial results due to currency fluctuations. • MRR Churn: Slight increase in Q2 due to [HEO] bankruptcy, but expected to be within 2%-2.5% range full year. • Execution Risks: Delays in RFS delivery of projects, which could impact revenue and margin targets.

Q: Nick Del Deo asked about interconnection adds and future expectations.

A: Adaire Fox-Martin said interconnection revenues up 8% y/y, 6,200 additions due to cloud and AI expansion, with use cases around data center interconnect and Fabric Cloud Router.

Q: Jonathan Atkin inquired about bookings momentum and backlog.

A: Adaire Fox-Martin said strong Q3 bookings with 40% of Q3 bookings closed, Keith Taylor added backlog decrease sets up well for later quarters.

Q: Eric Luebchow asked about accelerating stabilization and presales.

A: Adaire Fox-Martin said 18-24 month build time, accelerating by building fewer phases, larger enterprise footprints, and presales. Keith Taylor mentioned pre-buys to deliver capacity quickly.

Q: Michael Elias asked about prebuying equipment and customer demand signals.

A: Adaire Fox-Martin discussed customer demand around distributed workloads, AI use cases, data privacy, etc. Keith Taylor talked about prebuys smoothing CapEx curve but not major impact on AFFO.

Q: Frank Louthan asked about capitalization of interest.

A: Keith Taylor explained capitalization considerations, more impact going forward due to more debt and extended build times.

Q: Michael Rollins asked about MRR churn and xScale.

A: Adaire Fox-Martin discussed MRR churn mitigation through growth and capacity, Keith Taylor talked about xScale capacity with 416 of 480 MW delivered/under construction.

Q: Michael Funk asked about customer experience with Shane Paladin.

A: Adaire Fox-Martin said Shane's addition helps improve customer journey, NPS feedback, and overall customer experience.