Data centre REIT Equinix, based in Redwood City in the US state of California, has revised its full-year guidance for 2026 upwards for the third consecutive time. This follows an all-time high in new contracts during the third quarter, driven primarily by sustained demand for infrastructure supporting artificial intelligence and cloud applications. Annualised gross bookings reached $533 million during the reporting period, representing an increase of 35 per cent compared to the prior-year quarter and 26 per cent quarter-on-quarter.
In the third quarter, Equinix generated total revenues of $2.57 billion. This represents a slight decline compared to $2.63 billion in the second quarter, but an increase of 11 per cent year-on-year. Net income improved to $489 million, up from $477 million in the previous quarter and $374 million in the prior-year period. Funds from operations (FFO) climbed to $858 million. For the full year 2026, management now expects revenues between $10.33 billion and $10.37 billion, having previously guided for $10.21 billion to $10.29 billion.
Rising prices and acceleration of the development pipeline
Pricing for newly signed contracts increased by 12 per cent year-on-year in the third quarter. Chief Executive Officer Adaire Fox-Martin told investors that the company expects its pricing power to strengthen further, as market supply is unable to meet current demand levels. In her view, Equinix is only at the beginning of a sustained phase of pricing power.
To address this supply shortfall, Equinix is accelerating capacity expansion. The company now plans to deliver nearly 40 per cent more retail cabinets for the full year 2026 than originally envisaged. For the fourth quarter alone, the completion of more than 13,000 cabinets is scheduled. Over 20 per cent of these are already pre-contracted, whilst around 15 per cent of the capacity slated for completion in 2027 is committed. Fox-Martin emphasised that construction activity is concentrated on expanding existing campus locations and schemes in designated industrial zones, rather than opening up new greenfield sites.
Selective space allocation and investments in energy infrastructure
Occupancy across the portfolio's stabilised data centres recently stood at 83 per cent. In light of tight space constraints, management plans deliberately not to renew expiring contracts that yield lower profitability, making room for higher-margin customers with greater network density. At the same time, Fox-Martin noted delays on individual projects, such as in Dubai, caused by power supply bottlenecks, regulatory hurdles or local opposition. However, thanks to global diversification, such regional slowdowns can be balanced out.
In parallel, Equinix is making targeted investments in power supply: in the US state of Georgia, the company entered into a 20-year agreement to fund new transmission lines and a substation. In addition, an AI infrastructure partnership was agreed with Texas A&M, Dell and AMD covering a 1.2-megawatt installation in Dallas. Capital expenditure in the third quarter totalled $1.6 billion, with 90 per cent channelled directly into expansion projects, and is expected to reach between $5 billion and $6 billion for the full year.
