Equinix Raises Outlook Again as Data Center Bookings Hit Record in Q3

Equinix raised its 2026 outlook for the third straight quarter after reporting record data center bookings as demand for artificial intelligence and cloud infrastructure continues to skyrocket.

The Redwood City, Calif.-based data center real estate investment trust recorded $533 million in annualized gross bookings during the third quarter, up 35 percent from a year earlier and 26 percent from the previous quarter. Pricing on new deals increased 12 percent from last year.

CEO Adaire Fox-Martin told investors Wednesday that the company expects pricing power to strengthen as demand outpaces available space.

“There isn’t enough capacity to satisfy the demand that we see in the market,” Fox-Martin said during the earnings call. “So we believe that we are at the very early stage of durable pricing strength going forward.”

Equinix generated $2.57 billion in third-quarter revenue, down slightly from $2.63 billion in the second quarter but up 11 percent from a year earlier. Net income reached $489 million, compared with $477 million in the second quarter and $374 million in the same period last year.

Funds from operations increased to $858 million, up from $854 million in the previous quarter and $707 million a year earlier. Equinix raised its 2026 total revenue forecast to between $10.33 billion and $10.37 billion, up from $10.21 billion to $10.29 billion predicted earlier.

The company is also accelerating development plans. Equinix now expects to deliver nearly 40 percent more retail cabinets — which house customers’ computing and networking equipment — than initially planned for 2026.

A company record of more than 13,000 cabinets are expected to become available during the fourth quarter. More than 20 percent of that capacity has already been pre-sold, while approximately 15 percent of capacity scheduled for delivery in 2027 is committed.

Fox-Martin acknowledged that power constraints, regulation and community opposition have delayed some projects, including a proposed development in Dubai.

“We have a very diversified portfolio and pipeline,” she said. “This means that we can manage opportunity and we can manage challenges, moving one project forward to perhaps supplement another that might have slowed down.”

She added that most of Equinix’s development involves expanding existing campuses or building within industrial zones rather than developing new greenfield sites.

Meanwhile, utilization across Equinix’s stabilized data centers reached 83 percent. Fox-Martin said the company may replace some lower-paying tenants as contracts expire to secure higher rents from new customers.

“We may choose to churn out with intention a customer that’s operating at a particular price point and perhaps with low interconnection or network density, and churn in a customer that has some of the opposite parameters,” she said.

Equinix announced an AI infrastructure collaboration with Texas A&M, Dell and AMD involving a 1.2-megawatt deployment in Dallas. The company also announced a 20-year electricity infrastructure agreement in Georgia and will finance new transmission lines and a substation.

The company’s executives also discussed growing demand from AI cloud providers, but Fox-Martin warned the sector faces uncertainty.

“There are over 100 providers now in this segment, with lots of different business models, and we’re absolutely certain that there are going to be winners and losers as this plays out,” she said.

Equinix’s exposure to those providers represents less than 2 percent of monthly recurring revenue.

Capital expenditures totaled $1.6 billion during the third quarter, in line with the previous quarter, with 90 percent directed toward expansion. Full-year capital expenditure remained at a pace of between $5 billion and $6 billion, excluding real estate acquisitions and xScale joint venture investments.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.

Source: commercialobserver.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.