Detailed narrative
AI conversation shifts from pilots to enterprise-scale inference and Agentic deployment
Management framed the quarter around a change in customer conversations from AI piloting a year ago to enterprise-wide adoption at scale. Two forces drive it: inference growing from experimental workloads into real-time business decision-making, and Agentic AI moving from demos into distributed autonomous deployments.
Management argues most enterprise architectures are not optimized for these workflows, which need private low-latency paths to data, freedom to move across models and clouds, and jurisdictional/sovereign compliance — an 'architecture problem' Equinix's neutral, distributed, interconnected platform is built to serve.
The Distributed AI Hub (launched at NVIDIA GTC) and Fabric Intelligence were introduced to address AI fragmentation and network complexity.
Record sales activity and bookings
Q1 was the largest quarter of total sales activity in company history, up more than 35% YoY inclusive of annualized gross bookings and preselling. Annualized gross bookings were $378M (up 9% YoY) with ~$140M of preselling on top, producing a record backlog.
Transaction volume exceeded 3,800 across more than 3,100 unique customers, with broad-based strength across industries and particular strength in the sub-1MW deal cohort. Approximately 60% of the largest Q1 deals were AI related, consistent with the prior quarter, and large-capacity fabric connections have tripled versus a year ago.
Interconnection and Fabric strength
Total interconnection revenue rose 9% YoY, boosted by fabric revenue growth of 26% YoY, with fabric bookings up ~70% (management cited 74% in Q&A) as attach rates increase. The company highlighted more than 500,000 live interconnections as a structural moat underpinning Fabric Intelligence, which is embedded directly in the interconnection platform rather than layered on top.
Within the stabilized asset pool, interconnection grew 9% versus 6% pool revenue growth, and management sees further upside in interconnection mix that is not yet in its plans. 8 of the top 10 AI model providers and 4 of the top 5 neoclouds are expanding with Equinix, placing 110+ separate network nodes.
Margin expansion and financial results
Recurring revenue of $2.3B grew 10% YoY and total revenue of $2.4B grew 8%, both normalized and constant currency. Adjusted EBITDA of $1.2B rose 13% YoY at a 51% margin, up 190 bps QoQ and 300 bps YoY on cost discipline, forward cost benefits and operating leverage — with additional efficiency a stated forward focus.
Quarterly AFFO topped $1B for the first time (up 11%) and AFFO per share was $10.79 (up 10%). Adjusted for the Hampton timing shift, revenue, adjusted EBITDA, AFFO and AFFO per share all landed above the guidance midpoint / ahead of expectations.
Capacity expansion (Build Bolder) and CapEx
Equinix has 46 major projects underway across 32 markets, including 6 xScale projects; more than 70% of retail expansion CapEx is in major metros with the remainder in critical Asia expansion markets. About 25% of 2026 retail capacity expansion is already pre-sold.
The company controls or is developing 3 gigawatts of capacity today. Q1 total CapEx was ~$1.3B (~90% growth/value-accretive), 6 projects opened across 6 metros, and full-year CapEx (ex-xScale/land) was lifted to ~$4.1B, the top of the Analyst Day range, with returns underwritten in the mid-20s percent even at higher AI-driven densities.
Power availability — not capital or space — is the primary constraint.
Hampton xScale lease timing
Q1 results excluded the Hampton xScale lease as the company nears execution on expanded mutually beneficial terms with the customer. The original Q4 2025 guide assumed $54M of nonrecurring revenue; the Q1 2026 guide had assumed the expanded ~$80M revenue / $65M AFFO / $0.65 AFFO-per-share contribution, which has now moved into Q2.
Management stressed no full-year impact since the economics were already incorporated, and characterized the balance of the year's other xScale deals as relatively small with balanced risk. The Manuka campus remains an active, unclosed pipeline opportunity, not timed near-term.
atNorth acquisition and Nordics expansion
Equinix signed a joint agreement with Canada Pension Plan Investment Board to acquire atNorth, adding an installed and active development pipeline of approximately 800 MW expected to come online over the next five years. atNorth's footprint in markets such as Copenhagen is complementary to existing EMEA operations, positioning Equinix for enterprise, cloud and AI growth in a sustainability-focused Nordic market.
The deal is subject to closing conditions and is expected to be immediately accretive to AFFO per share upon closing.
Balance sheet and capital allocation under new CFO Olivier Leonetti
Equinix ended the quarter with ~$3.1B of cash and short-term investments and net leverage of 3.8x annualized adjusted EBITDA. It issued $1.5B of senior notes at a 3.1% blended effective rate, and is more than 90% hedged on energy for 2026, expecting minimal impact even if prices stay elevated.
New CFO Olivier Leonetti (previously CFO of Eaton and Johnson Controls) outlined a debt-first funding philosophy for the growth CapEx program given current leverage, using equity only opportunistically, and signaled continuity with the existing Build Bolder / Solve Smarter / Serve Better strategy.