Equinix, Inc. (EQIX) | The Buildout — AI Infrastructure

——Mkt cap — · 52-wk —–— · YTD — · delayed
Updated Sep 22, 2026Q2 FY2026 reviewed
Equinix operates colocation and interconnection data centers that connect networks, clouds, and AI workloads worldwide.
Revenue +16% YoY
Total revenue $2,625M, including ~$120M xScale fees.
Bookings +23% YoY
Annualized gross bookings $424M, second-highest on record.
Adj. EBITDA margin 53%
Up 300 bps YoY; +150 bps excluding xScale fees.
Power gates growth
Management calls power availability its largest constraint.
The Buildout Takeaway
Q2 2026 reset the investment case: management raised full-year guidance in what it called the largest single raise in company history, and introduced a higher 2027-2029 outlook funded by $5B-$7B of annual capex. The open question is whether the company can deliver that capacity, and the revenue it implies, on schedule.
Analyst coverage
52 analysts·39 Buy12 Hold1 Sell
Median target$1,213  Range $894–$1,340 · 9 estimates
Management guidance
FY2026: revenue growth 11%-12% · adjusted EBITDA margin ~51% · AFFO per share growth 10%-12% · capex $5B-$6B excluding real estate acquisitions and xScale.
Important: The Buildout is a data analytics platform. Content is generated by algorithms and AI agents using public filings, earnings transcripts, and market data. This is not personalized investment advice.
Our View

The Verdict

Equinix builds and operates data centers that sit between networks, clouds, enterprises, and AI platforms. It does not sell compute; it leases space, power, and the private connections that let customers reach each other. In the AI buildout that role matters because AI workloads run across many clouds and geographies at once, and someone has to connect them. Equinix's pitch is that it is neutral — it serves competitors and customers alike, and its ecosystem spans many major metros.

Market Cap—
Revenue (TTM)$9.8B
Revenue Growth+9.9%
EBITDA Margin (TTM)44.0%
Net Debt$21.1B
Earnings Beats5 of 7
P/E (TTM)—
EV/EBITDA (TTM)—

What We Like

  • The company reports $14.2B of remaining performance obligations, with roughly 65% expected to be recognized within two years (10-Q).
  • Revenue is diversified: the 10-Q states that no single customer accounted for 10% or greater of revenues or receivables.
  • The neutral platform reaches both sides of the market — 8 of the top 10 AI model providers and 8 of the top 10 neo clouds run key networking workloads on Equinix.
  • Interconnection, the differentiated layer, grew about 9% YoY in each of the last two quarters, and Cloud Router bookings rose 170% YoY in Q2.
  • Stabilized assets returned 27% cash-on-cash on growth PP&E in Q2, above the ~25% long-term underwrite.

What We’re Watching

  • Power and permitting gate capacity delivery; management calls power availability "the largest constraint in our environment."
  • Capex steps up sharply in FY2026 and through 2029, with leverage expected up about one turn and blended cost of capital up ~150 bps.
  • Nonrecurring xScale revenue is timing-sensitive — the Hampton lease slipped from Q1 to Q2 — and the current guide assumes about 5% of total revenue.
  • Q2 churn of 1.8% was below the 2%-2.5% normal range partly on delayed churn; management expects normalization toward the lower end in the second half.
Bottom Line

The thesis looks stronger on the Q2 2026 evidence. The quarter brought accelerating recurring revenue, record bookings and interconnections, a larger full-year raise, and a new multi-year framework — and management paired the ambition with a delivery record on checkable items such as the Hampton lease, churn, and project count. The open question is execution: whether power, permitting, and equipment lead times let the enlarged capex plan convert into cabinets and revenue on schedule, and whether the capacity-to-capex arithmetic that drew a follow-up in Q&A holds.

Next upThe next checkpoint is the Q3 2026 print, guided to MRR growth of 9%-11%, total revenue growth of 10%-12%, and an adjusted EBITDA margin of 51%. Over 45% of the Q3 bookings target was already closed as of the Q2 call.
Last Quarter — Q2 FY2026

Earnings Beat

Equinix reported Q2 2026 revenue of $2,625M, up 16% YoY including roughly $120M of nonrecurring xScale lease fees, at a 53.1% gross margin. Recurring monthly revenue rose 11% YoY, the third straight quarter of double-digit growth. Management said annualized gross bookings of $424M, up 23% YoY, were the second-highest on record, and net interconnections added reached 9.7k, its most ever.

MetricQ2 FY2026Q1 FY2026Q2 FY2025YoY
Revenue$2.6B$2.4B$2.3B+16.4%
Gross margin53.1%51.5%52.0%+110bps
EBITDA$1.2B$1.1B$993M+23.1%
EPS$4.83$4.20$3.76+28.7%
Annualized gross bookings$424M$378Mn/a+23%
Net interconnections added9.7k5.8kn/a—
This is the largest single guidance raise in the history of our company.— Adaire Fox-Martin, CEO, 2026-07-29

Management tone: The Q1 2026 call was framed as continuity — a modest raise and capex at the top of the prior range. On the Q2 2026 call the tone shifted: the CEO called the raise the largest in company history, introduced a 2027-2029 framework, and stepped 2026 capex to a new range. Management paired the ambition with a discipline message, saying it is "not speculative land developers or land purchasers" and pointing to the top 25 metros.

Management Guidance

For FY2026 management guides revenue growth of 11%-12%, adjusted EBITDA up $62M at roughly a 51% margin, AFFO per share growth of 10%-12%, and capex of $5B-$6B excluding real estate acquisitions and xScale. For Q3 2026 it guides MRR growth of 9%-11%, total revenue growth of 10%-12%, and an adjusted EBITDA margin of 51%. The new 2027-2029 outlook targets revenue growth of 10%-13% a year (beginning at the low end and accelerating), adjusted EBITDA margin of 53% or higher by 2029, AFFO per share growth of 9%-12%, and capex of $5B-$7B a year. Management also said to assume nonrecurring revenue of about 5% of total revenue.

Business Trajectory

Trajectory

The revenue line is accelerating. Quarterly revenue moved from $2,316M in Q3 FY2025 to $2,442M, then $2,444M in Q1 FY2026, then $2,625M in Q2 FY2026, which was up 7.4% sequentially. Margins are expanding — gross margin rose 240 bps and EBITDA margin 290 bps across the trend, to a 53.1% gross margin in Q2 — though roughly half of the Q2 adjusted EBITDA gain came from nonrecurring xScale fees. Management ties the direction to stronger demand, record bookings, and capacity delivered into constrained metros.

Revenue & Margin Trajectory
RevenueGross margin$0$1.0B$2.0B$925M$943M$950M$1.1B$1.2B$1.2B$1.2B$1.3B$1.3B$1.3B$1.4B$1.4B$1.4B$1.4B$1.4B$1.5B$1.5B$1.6B$1.6B$1.7B$1.7B$1.7B$1.7B$1.8B$1.8B$1.9B$2.0B$2.0B$2.1B$2.1B$2.1B$2.2B$2.2B$2.3B$2.2B$2.3B$2.3B$2.4B$2.4B$2.6B49%53%Q3'16Q4Q1'17Q2Q3Q4Q1'18Q2Q3Q4Q1'19Q2Q3Q4Q1'20Q2Q3Q4Q1'21Q2Q3Q4Q1'22Q2Q3Q4Q1'23Q2Q3Q4Q1'24Q2Q3Q4Q1'25Q2Q3Q4Q1'26Q2
RevenueGross margin$0$1.0B$2.0B$925M$943M$950M$1.1B$1.2B$1.2B$1.2B$1.3B$1.3B$1.3B$1.4B$1.4B$1.4B$1.4B$1.4B$1.5B$1.5B$1.6B$1.6B$1.7B$1.7B$1.7B$1.7B$1.8B$1.8B$1.9B$2.0B$2.0B$2.1B$2.1B$2.1B$2.2B$2.2B$2.3B$2.2B$2.3B$2.3B$2.4B$2.4B$2.6B49%53%Q3'16Q4Q1'17Q2Q3Q4Q1'18Q2Q3Q4Q1'19Q2Q3Q4Q1'20Q2Q3Q4Q1'21Q2Q3Q4Q1'22Q2Q3Q4Q1'23Q2Q3Q4Q1'24Q2Q3Q4Q1'25Q2Q3Q4Q1'26Q2
Gross margin as reported.
Share Price — 12 Months
$500$1,000$052-wk high $1,116Sep '25DecMar '26JunSep '26
52-week range $726–$1,116.
Share Price — 12 Months
$500$1,000$052-wk high $1,116Sep '25DecMar '26JunSep '26
52-week range $726–$1,116.
The Numbers

The Model

The model projects FY+1 revenue of $10,350M and EBITDA of $4,751M, a 45.9% margin, then FY+2 revenue of $11,560M and EBITDA of $5,399M, a 46.7% margin. FY+1 is anchored by record bookings and presales converting through capacity delivered in 2026 and by management's guided 11%-12% revenue growth. FY+2 assumes the 2027-2029 plan begins to build, with stepped-up annual capex adding capacity mainly in the top 25 metros.

Revenue & EBITDA Projections
REVENUE$9.2B$10.3B$11.6BFY25FY+1 (E)FY+2 (E)EBITDA & MARGIN$3.9B$4.8B$5.4B46.7%FY25FY+1 (E)FY+2 (E)
REVENUE$9.2B$10.3B$11.6BFY25FY+1 (E)FY+2 (E)EBITDA & MARGIN$3.9B$4.8B$5.4B46.7%FY25FY+1 (E)FY+2 (E)
Solid bars are reported actuals; outlined bars are model projections — not company guidance.
MetricFY2025Next FY (E)Following FY (E)
Revenue$9.2B$10.3B$11.6B
YoY Growth—+12.0%+11.7%
EBITDA$3.9B$4.8B$5.4B
EBITDA Margin42.4%45.9%46.7%

Projections are the median of 5 independent model runs.

For FY2026 management guides revenue growth of 11%-12%, adjusted EBITDA up $62M at roughly a 51% margin, AFFO per share growth of 10%-12%, and capex of $5B-$6B excluding real estate acquisitions and xScale. For Q3 2026 it guides MRR growth of 9%-11%, total revenue growth of 10%-12%, and an adjusted EBITDA margin of 51%. The new 2027-2029 outlook targets revenue growth of 10%-13% a year (beginning at the low end and accelerating), adjusted EBITDA margin of 53% or higher by 2029, AFFO per share growth of 9%-12%, and capex of $5B-$7B a year. Management also said to assume nonrecurring revenue of about 5% of total revenue.

What Could Go Right — and Wrong

What good looks like
  • The 2027-2029 plan delivers 10%-13% annual revenue growth, with adjusted EBITDA margin reaching 53% or higher by 2029.
  • AI-linked demand broadens beyond the largest deals into enterprise and mid-market customers, lifting interconnection attach and Cloud Router bookings.
  • The 3 GW land bank converts to contracted power and ready-for-service capacity on schedule, keeping cabinet deliveries on plan.
  • Pricing holds firm in constrained metros, supporting the ~25% cash-on-cash return underwritten at stabilization.
  • Newer products such as Fabric One, Inference Exchange, and Fabric Intelligence scale into disclosed revenue.
What could go wrong
  • Power, permitting, or equipment lead times delay capacity delivery, pushing revenue out of the guided windows.
  • Hyperscaler, neocloud, or model-provider AI capex slows, easing the largest deals that drive bookings.
  • Power, memory, steel, or labor costs rise faster than pricing offsets, compressing underwritten returns on the larger capex plan.
  • A large xScale lease slips out of a guidance window, putting reported nonrecurring revenue below plan.
  • An unresolved item turns negative — the shareholder lawsuit overhang, or the open 8-Ks on the filings line.
What’s Next

Looking Ahead

Over the next 12 months the story is execution. Management has to deliver the accelerated cabinet schedule — doubling cabinets in the second half of 2026 and pulling more than 7,000 from 2027 into Q4 — while meeting FY2026 guidance of 11%-12% revenue growth and a ~51% adjusted EBITDA margin. Newer items to track include the product rollouts (Fabric One, Inference Exchange, Fabric Intelligence), the atNorth integration completed 2026-09-02, and additional large xScale leases.

Catalysts
  • Q3 2026Q3 2026 results — Guided: MRR growth 9%-11%, revenue growth 10%-12%, margin 51%.
  • H2 2026Cabinet delivery acceleration — Doubling second-half cabinets; >7,000 pulled into Q4 2026.
  • FY2026Full-year guidance delivery — Revenue +11%-12%, AFFO/share +10%-12%, margin ~51%.
  • 2027-2029Long-term plan begins — Targets 10%-13% annual revenue growth and 53%+ margin by 2029.
  • Over next 5 yearsatNorth pipeline conversion — ~800 MW Nordic pipeline expected to come online.
Numbers

Financials

Annual Summary

MetricFY2024FY2025TTMYoY
Revenue$8.7B$9.2B$9.8B+5.6%
Gross Margin49.0%51.2%51.6%+227bps
EBITDA$3.3B$3.9B$4.3B+17.3%
EBITDA Margin38.1%42.4%44.0%+422bps
Net Income$815M$1.4B$1.5B+65.6%
Free Cash Flow$183M−$400M$1.4B—
Net Cash————

Key Ratios (Trailing)

Valuation
  • P/E TTM—
  • EV/EBITDA TTM—
  • EV/Revenue TTM—
  • Price/FCF TTM—
Profitability
  • Gross Margin (TTM)51.6%
  • EBITDA Margin (TTM)44.0%
  • Net Margin (TTM)15.6%
  • ROIC4.8%
  • FCF Conversion31.7%
  • SBC / Revenue5.4%
Reference

The Company

Equinix is a digital infrastructure company. It builds and operates International Business Exchange (IBX) and xScale data centers, and sells colocation, interconnection, and managed infrastructure to enterprises, networks, clouds, and AI platforms. It does not sell compute. Its role is to be the neutral meeting point where customers reach each other over private, low-latency connections, and it describes its ecosystem as approximately twice the size of the next largest provider.

Equinix reports three geographic segments — Americas, EMEA, and Asia-Pacific — each offering colocation, interconnection, managed infrastructure, and other products. The 10-Q lists 281 data centers, including 23 xScale data centers, across 77 markets. Sites are a mix of owned and leased, and executive offices are in Redwood City, California.

Business Segments

Colocation
Q1 2026 revenue $1,730M
Physical space, power, and cabinets in IBX data centers, including pre-configured Secure Cabinet Express.
Growth driver: AI demand for higher-density, liquid-cooled cabinets
Interconnection
Q1 2026 revenue $446M
Private, low-latency connections through Equinix Fabric, cross connects, and Network Edge.
Growth driver: Multi-cloud and AI traffic across Fabric and Cloud Router
Managed infrastructure
Q1 2026 revenue $115M
Managed solutions and enablement services layered on top of the physical estate.
Growth driver: Services attachment on the colocation base

Competitive Landscape

Equinix competes in data center capacity and interconnection. Its differentiation, in its own framing, is the neutral position: it serves both competitors and customers, and the same names appear on both lists. The company says its ecosystem is approximately twice the size of the next largest provider.

  • Digital Realty
    Named as a competitor in the source set.
  • Applied Digital
    Named as a competitor in the source set.
  • American Tower
    Named in filings; not discussed.
Competitors drawn from the source set's wiring file, which tags 22 competitors; several names (Applied Digital, Digital Realty) also appear as customers.

Supply Chain

Equinix sits downstream of power, construction, and equipment suppliers, and upstream of the enterprises, networks, and clouds that lease its space. No supplier relationship in the source set is tagged sole source.

Supplier
Central Georgia EMC
Power infrastructure under a 20-year take-or-pay agreement
Supplier
Oklo
Nuclear power under a documented payment and letter of intent
Supplier
Bloom Energy
100+ MW of solid-oxide fuel cells at US colocation sites
Supplier
NVIDIA
GPUs and DGX systems; also a customer
→
Neutral, dense interconnection ecosystem
EQIX
Operates IBX and xScale data centers across the Americas, EMEA, and Asia-Pacific.
→
Customer concentration
no single customer above 10%
Broad base at the top, per the Q1 2026 10-Q

Related companies

Suppliers
CSCO · Cisco SystemsNVDA · NVIDIAOKLO · OkloVRT · Vertiv Holdings Co
Competitors
APLD · Applied DigitalBTBT · Bit DigitalCIFR · Cipher MiningCLSK · CleanSpark

See all Operators companies → · How this layer works: Chapter 12, The Operators →

Analysis updated Sep 22, 2026, reviewing Q2 FY2026. Prices delayed. Built with The Buildout’s published methodology. Not investment advice. No positions held. © The Buildout 2026.

More on EQIX: Earnings recap