Equinix Raises 2025 Earnings Expectations After Strong Q2

As the AI revolution pushes demand for digital infrastructure to new heights, data center developer Equinix continues to reap the rewards. 

The real estate investment trust, the fourth largest in the U.S. by market cap, reported strong financial gains across the board in the second quarter, much of which was recurring. Overall revenues increased by 5 percent year-over-year on a normalized basis to $2.26 billion, while its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 8 percent to $1.13 billion, adjusted funds from operations rose 11 percent to $972 million, and operating income jumped 13 percent to $494 million.

Adjusted EBITDA margins also hit 50 percent for the first time in the company’s history, according to CEO Adaire Fox-Martin. The gains permitted the company to raise its 2025 revenue guidance by $58 million, and adjusted EBITDA guidance by $46 million. 

“No other player in the digital infrastructure landscape possesses the unique combination of strengths that are an inherent part of Equinix,” Fox-Martin told investors during the firm’s earnings call on Wednesday. She highlighted the company’s “diverse and neutral, interconnected ecosystems; our extensive global footprint across key metros; our more than 10,000 enterprise customers across geographies, industries and segments; our track record of reliability and service excellence.”

Strong bookings activity drives that revenue growth, with the REIT having closed 4,100 deals with more than 3,300 customers in the second quarter, per its latest earnings call, alongside 6,200 new interconnections (a service that bridges customer networks across two or more data centers).

Equinix, as per usual, also plans to greatly expand its data center capacity. The firm currently has 59 major projects in the pipeline across the globe, nine of which were added since the previous quarter, in Bangkok, Chennai, Chicago, Dallas, Jakarta, Kuala Lumpur, London, Montreal and Silicon Valley. Equinix isn’t shy about acquiring data center properties either, having acquired three facilities in the Philippines earlier this summer for an undisclosed price. 

The REIT’s development total includes 12 xScale data centers, massive facilities intended for large cloud service providers a la Google or Amazon. On pace with the previous quarter, Equinix’s xScale portfolio is currently 85 percent leased and pre-leased, according to its quarterly earnings report. 

While Equinix’s xScale wing is a core part of its business, Fox-Martin and Chief Financial Officer Keith Taylor both described xScale transactions as “inherently lumpy” in response to a request for an update on xScale leasing and inventory for the second half of this year. The sheer size of the facilities mean that delivery dates vary, Fox-Martin indicated, though she was quick to point out that completion variability is an industry-wide condition. 

“We have undertaken the pre-purchase of key components in our supply chain to minimize risk, but there will always be some variables that are outside our control,” Fox-Martin said. “That being said, XScale is a very critical part of our product continuum.”

“The recurring revenue model [for xScale facilities] is continuing to accelerate, and that’s the attractiveness to the model and it gives us the entree into 2026,” Taylor added.

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