Equinix Posts Continuing Revenue Growth Despite Lower 2025 Guidance

Data center giant Equinix posted its 22nd consecutive year of annual revenue growth in its latest earnings call, driven by demand for digital infrastructure amid the AI boom, even as the real estate investment trust reported lower annual operating income than 2023 and its 2025 revenue forecasts were below expectations.

The REIT reported on Wednesday $8.75 billion in revenue for 2024, which was 7 percent more than the previous year. Yet its operating income for the year was $1.33 billion, an 8 percent decrease from 2023, due to asset impairments, restructuring and deal costs. Equinix’s net income also decreased 16 percent year-over-year to $815 million and decreased 18 percent per-share to $8.50.  

The company’s guidance for 2025, both for the first quarter and the full year, was also below expectations due in part to a strong dollar against foreign currencies, reflecting Equinix’s large presence in Europe and Asia. The REIT posted an expected revenue range of $2.19 billion and $2.23 billion for the first quarter of this year — a 1 to 3 percent decrease from the fourth quarter of 2024. Further, Equinix expects total revenue for 2025 to range between $9.03 billion and $9.13 billion, or an increase of 3 to 4 percent over 2024’s total. Equinix’s 2025 guidance included a $252 million loss due to foreign currency environments compared with previous guidance rates.

Still, the REIT had a solid fourth quarter, taking in more than $2.26 billion in revenue in the final three months of 2024, or 2.7 percent more than reported for the quarter ending in September. Equinix has 62 development projects in the pipeline across 25 countries, as well as 16 hyperscale data centers (which it refers to as xScale) accounting for 165 megawatts of capacity, according to President and CEO Adaire Fox-Martin. Over half the REIT’s top 25 deals in the fourth quarter were driven by AI and high-performance computation, she added. 

“We remain confident that the continued democratization of an investment in AI represents a secular demand driver for our business,” Fox-Martin said during the call. 

Fox-Marin was asked during the call about the implications over the launching of DeepSeek, the China-based start-up that recently disrupted the AI industry in the U.S. after it claimed it developed its large language model within just a few months for just $6 million, significantly less than those developed by American companies. She responded that she saw the innovation in the AI space as a new opportunity for Equinix, not a hindrance. 

“The drop in inferencing costs that’s implied by the work released into the open source market by DeepSeek, I think, will enable the economics of AI transformations to become a little bit more feasible for a broader set of organizations,” Fox-Martin said. “And so that’s why we feel that this will represent a circular demand driver for our business, as it relates to the actual workload characteristics and the role of inferencing and how that will play out.”

Indeed, Equinix leased about 31 megawatts worth of xScale capacity in the fourth quarter, bringing leasing of its xScale portfolio to over 400 megawatts across the globe. Its announced and completed projects are also over 85 percent leased and pre-leased.

The company is also planning a major expansion of its xScale capacity, having announced in October a joint venture with Singaporean sovereign wealth fund GIC to raise some $15 billion for global xScale data center development, with which it plans to triple its investment.

Nick Trombola can be reached at ntrombola@commercialobserver.com.