What third-quarter changes supported the increase in full-year guidance?

  • Equinix's third-quarter revenue was 2.571 billion dollars, up 11% year over year and slightly above the market consensus of 2.567 billion dollars; adjusted EBITDA was 1.321 billion dollars, up 15% year over year, with a margin of 51.4%.
  • New orders for the quarter reached a record 533 million dollars on an annualized basis, up 35% year over year; the backlog of orders sold but not yet installed also reached a record. Monthly recurring revenue posted double-digit year-over-year growth for the fourth consecutive quarter on a normalized, constant-currency basis.
  • The company raised its full-year 2026 guidance for the third consecutive quarter: the revenue range rose to 10.325 billion–10.365 billion dollars, with the midpoint 100 million dollars higher than before; the adjusted EBITDA range rose to 5.29 billion–5.33 billion dollars, with the midpoint up 70 million dollars.
  • Third-quarter AFFO growth included a one-time fee benefit from the atNorth joint venture; excluding that benefit, AFFO rose 14% year over year on a normalized, constant-currency basis. The company expects the fourth-quarter adjusted EBITDA margin to fall sequentially to 49%–50% because of seasonal spending, while still improving by about 1.4 percentage points year over year.

How do higher new-order prices carry over to existing customers?

  • The price per kilowatt for newly signed deals rose 12% year over year in the third quarter. Retail colocation capacity is tight and contract terms are relatively shorter than in the wholesale business, so new-deal prices provide a reference for repricing existing customers at renewal.
  • Monthly recurring revenue per cabinet rose 5.7% year over year, partly due to higher power density: new customers averaged 7 kilowatts per cabinet, versus 5 kilowatts for departing customers.
  • Third-quarter customer churn was 1.7%, below the company's maintained assumption of 2%–2.5% for the rest of 2026. Management is considering proactively allowing lower-priced customers with fewer interconnection needs to churn, freeing capacity for higher-value deployments; Bernstein accepts this trade-off and expects reallocating capacity could take 30 to 60 days.

How much demand supports expansion, and what will it cost?

  • The company's 2026 retail capacity delivery schedule is nearly 40% ahead of the original plan. It plans to deliver more than 13 thousand cabinets in the fourth quarter, a single-quarter record, with more than 20% already presold; about 15% of retail capacity planned for delivery in 2027 has also been presold.
  • The company lists 3 gigawatts of developable capacity, about 80% of it in its top 25 metropolitan markets, with land, power and permits largely secured. Separately, atNorth, in which it invests alongside CPP Investments, has an 800-megawatt development pipeline under construction for the next five years; atNorth is accounted for under the equity method and is not consolidated into these operating statistics.
  • Third-quarter capital expenditure was approximately 1.6 billion dollars, with about nine-tenths used for expansion; individual projects still face delays, such as the Dubai project, which was postponed because of regional macroeconomic conditions.

How do interconnection and financing costs affect the next phase?

  • Third-quarter interconnection revenue was 465 million dollars, up 10% year over year, including 24% growth in Fabric revenue. Fabric One is scheduled to begin testing in the fourth quarter of 2026 and launch commercially in early 2027, with the aim of reducing deployment time for complex network configurations from weeks to minutes; pricing and packaging will be discussed after testing and commercial launch.
  • The company's third-quarter net leverage was 4.1 times, available liquidity was 9.1 billion dollars, and the blended interest rate on existing borrowings was about 3.2%; Bernstein notes that the cost of new debt has exceeded 5%, so price increases in 2027 need to cover a heavier interest burden.
  • Bernstein maintained its outperform rating and 1270-dollar price target for Equinix, based on a valuation of 24 times forward AFFO of approximately 52.88 dollars per share; the firm considers the company to remain its top pick.