Financial Trends -- 8.0/10
| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 |
|---|---|---|---|---|---|---|---|---|
| Recurring Revenue | $2,010M | $2,024M | $2,059M | $2,091M | $2,087M | $2,143M | $2,215M | $2,294M |
| Non-Recurring Revenue | $117M | $135M | $142M | $170M | $138M | $113M | $101M | $126M |
| Total Revenue | $2,127M | $2,159M | $2,201M | $2,261M | $2,225M | $2,256M | $2,316M | $2,420M |
| YoY Total Rev Growth | — | — | — | — | +4.6% | +4.5% | +5.2% | +7.0% |
- FY2025 total revenue of $9.22B vs $8.75B in FY2024, up 5.4% YoY
- Recurring revenue grew from $8.18B to $8.74B (+6.8%), representing 95% of total revenue
- Non-recurring revenue declined in Q2-Q3 2025 but recovered in Q4, reflecting lumpy installation timing
- YoY growth accelerated from +4.5% in Q2 to +7.0% in Q4, driven by AI-related demand and bookings conversion
- FY2025 AFFO of $3.76B vs $3.36B in FY2024, up 12.1% YoY -- the strongest growth in 3 years
- Q1 2025 AFFO of $947M was the quarterly peak, reflecting favorable working capital timing
- Q4 AFFO of $877M was seasonally lower but grew +14% YoY, the fastest quarterly growth rate
- AFFO growth consistently outpaced revenue growth, reflecting margin expansion and operational discipline
- FY2025 AFFO/share of $38.33 vs $35.02 in FY2024, up 9.5% YoY -- a record
- 5-year CAGR of ~9% from $27.11 (FY2021), demonstrating consistent per-share compounding
- Q2 2025 was the quarterly peak at $9.91/share; Q4 was seasonally lower at $8.91
- At $1,000.37, the stock trades at 26.1x FY2025 AFFO -- a premium reflecting the growth profile
- FY2025 Adj. EBITDA of $4.53B vs $4.10B in FY2024, up 10.6% YoY -- significantly outpacing revenue growth
- EBITDA margin expanded 200 bps from 47% to 49%, driven by operating leverage and SG&A discipline
- Q2 and Q3 2025 hit 50% margin -- a first for Equinix -- before Q4 moderated to 49%
- YoY EBITDA growth accelerated to +16% in Q4 2025, the strongest quarterly growth in the 8-quarter period
- FY2025 interconnection revenue of $1.66B vs $1.52B in FY2024, up 8.9% YoY
- Growth accelerated every quarter: +6.8%, +8.8%, +9.9%, +10.2% -- a clear inflection
- Interconnection count reached 507K globally (+5.2% YoY), more than double the nearest competitor
- The acceleration reflects AI-driven multi-cloud connectivity demand and pricing power
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Total Revenue ($M) | $6,636M | $7,263M | $8,188M | $8,748M | $9,217M |
| Revenue YoY | — | +9.4% | +12.7% | +6.8% | +5.4% |
| Recurring Rev ($M) | $6,220M | $6,871M | $7,745M | $8,184M | $8,739M |
| Recurring YoY | — | +10.5% | +12.7% | +5.7% | +6.8% |
| Adj. EBITDA ($M) | $3,144M | $3,370M | $3,702M | $4,097M | $4,530M |
| EBITDA YoY | — | +7.2% | +9.9% | +10.7% | +10.6% |
| EBITDA Margin | 47% | 46% | 45% | 47% | 49% |
| AFFO ($M) | $2,451M | $2,714M | $3,019M | $3,356M | $3,761M |
| AFFO YoY | — | +10.7% | +11.2% | +11.2% | +12.1% |
| AFFO/Share | $27.11 | $29.55 | $32.11 | $35.02 | $38.33 |
| AFFO/Share YoY | — | +9.0% | +8.7% | +9.1% | +9.5% |
| Interconnection Rev ($M) | $1,162M | $1,268M | $1,394M | $1,519M | $1,655M |
| Intx Rev YoY | — | +9.1% | +9.9% | +9.0% | +8.9% |
| Interconnections | — | 446K | 462K | 482K | 507K |
- Revenue compounded from $6.64B (FY2021) to $9.22B (FY2025), an 8.6% CAGR over 4 years
- AFFO/share compounded from $27.11 to $38.33, a 9.0% CAGR -- consistent per-share growth
- EBITDA margin bottomed at 45% in FY2023, then expanded to 49% in FY2025 (+400 bps in 2 years)
- Interconnection revenue grew from $1.16B to $1.66B, a 9.3% CAGR -- the highest-quality revenue stream
- Interconnection count grew from 446K (FY2022) to 507K (FY2025), reinforcing the network effect moat
| Metric | FY2025A | FY2026E Guidance |
|---|---|---|
| Revenue | $9.22B | $10.12B - $10.22B (+9-10% YoY) |
| AFFO | $3.76B | $4.16B - $4.24B (+9-11% YoY) |
| AFFO/Share | $38.33 | $41.93 - $42.74 (+8-10% YoY) |
| Adj. EBITDA Margin | 49% | ~51% |
| P/AFFO | 26.1x | ~23.6x (midpoint) |
| Consensus Price Target | -- | ~$996 (22 analysts, Moderate Buy) |
- FY2026E guidance of $10.12-$10.22B revenue implies 9-10% growth, a meaningful acceleration from +5.4% in FY2025
- AFFO/share guidance of $41.93-$42.74 is 300 bps above the midpoint laid out at the June 2025 Analyst Day
- EBITDA margin guided to ~51%, which would be an all-time high and +200 bps vs FY2025
- At $1,000.37, the forward P/AFFO of ~23.6x represents moderate compression from 26.1x trailing
- The valuation premium to the REIT sector is justified by the growth profile and interconnection moat
- Morgan Stanley raised its target to $1,075 post-Q4 results, the highest on the Street
Equinix delivered a breakout FY2025 with revenue crossing $9.2B (+5.4% YoY), AFFO growing 12.1% to $3.76B, and AFFO/share reaching a record $38.33 (+9.5% YoY). The financial profile is compelling for a REIT: 49% EBITDA margin (expanding 200 bps YoY), 95% recurring revenue, and accelerating interconnection revenue (+8.9% FY, +10.2% in Q4). The bookings acceleration to $1.6B (+27% YoY) with Q4 at $474M (+42%) provides strong forward visibility.
The most impressive trend is the EBITDA margin expansion from 45% (FY2023) to 49% (FY2025), with 51% guided for FY2026 -- demonstrating operating leverage as the AI-driven demand cycle builds. Recurring revenue grew 6.8% to $8.74B while non-recurring revenue was volatile, underscoring the durability of the base business.
FY2026 guidance of $10.12-$10.22B revenue and $41.93-$42.74 AFFO/share materially exceeds prior Street expectations, with Q1 FY2026 already at 45% of bookings target plus $100M+ in pre-sales (the largest quarter ever). The 5-year compounding track record (9% AFFO/share CAGR) combined with accelerating forward indicators is rare for a $98B market cap company.
The primary constraints on a higher score are: (1) capital intensity ($6.5B capex in FY2025), (2) the premium valuation (~24x forward P/AFFO), and (3) the CFO transition risk as Keith Taylor retires after 27 years.
Score: 8.0/10 -- Strong and accelerating REIT financial profile with record AFFO/share, expanding margins, and compelling forward guidance. The interconnection revenue acceleration and bookings momentum provide upside. Minor deductions for capital intensity, CFO transition, and the premium valuation that limits margin of safety.