Equinix (EQIX.US) reported strong third-quarter results, with revenue reaching $2.316 billion, up 5.23% year-over-year (YoY). Net income rose 25.93% YoY to $374 million, while basic EPS grew 22.83% YoY to $3.82. The company highlighted three key drivers behind its performance: revenue growth, profitability, and expansion.

Revenue growth was driven by an 8% YoY increase in monthly recurring revenue (MRR) and a record annualized gross booking of $394 million, up 25% YoY and 14% quarter-over-quarter (QoQ). This growth was supported by a highly diversified customer base across geographies, industries, and client types.

Profitability remained robust, with adjusted EBITDA margins staying strong. Adjusted funds from operations (AFFO) grew 12% YoY, exceeding expectations due to operational efficiency, lower net interest expenses, and favorable timing of recurring capital expenditures. As a result, Equinix raised its full-year guidance for adjusted EBITDA, AFFO, and AFFO per share.

Expansion efforts are accelerating under the "Build Bolder" strategy, with plans to double capacity by 2029. The company recently acquired land in key cities, including Amsterdam, Chicago, Johannesburg, London, and Toronto, supporting over 900 megawatts (MW) of retail and xScale capacity. These acquisitions align with Equinix's long-term capital investment strategy.

In Q3, Equinix signed over 4,400 deals with more than 3,400 customers, reflecting strong demand for AI and non-AI workloads, data localization, and seamless connectivity. The ecosystem continues to expand across industries such as automotive, financial services, networking, cloud computing, and AI service providers.

Given the strong Q3 performance, Equinix raised its 2025 adjusted EBITDA guidance by $21 million, expecting an EBITDA margin of 49%–50%. AFFO guidance was also increased by $31 million, with projected YoY growth of 11%–13% and AFFO per share growth of 8%–10%. Capital expenditures for 2025 are estimated at $3.8–$4.3 billion, including approximately $290 million in recurring capex.

During the Q&A session, management discussed the strategic importance of cloud on-ramps and AI-focused clients, noting that Equinix serves as a connectivity hub for emerging cloud providers like Nebius and Groq. The company also highlighted its presale strategy, which allows sales teams to book capacity up to 12 months in advance, contributing to strong forward-looking demand.

Pricing remains firm, with no signs of decline, and Equinix is confident in its ability to meet future demand through accelerated construction timelines and efficient capital allocation. The company also emphasized its strong position in securing power for its 12 xScale projects, ensuring no supply bottlenecks.

Looking ahead, Equinix remains focused on revenue growth, operational efficiency, and strategic expansion, with a clear path to doubling capacity by 2029 while maintaining profitability and shareholder returns.