Equinix's Q2 2025: Navigating Contradictions in Interconnection Growth, xScale Demand, and Churn Rates

Interconnection growth and sales cycle improvement, xScale leasing and market demand, churn rate expectations, xScale revenue projections and future impact, xScale leasing outlook are the key contradictions discussed in Equinix's latest 2025Q2 earnings call.



Strong Financial Performance:
- Equinix reported revenue of $2.26 billion for Q2 2025, up 5% year-over-year, driven by strong recurring revenue growth of 7%.
- The company achieved an adjusted EBITDA margin of 50%, the highest in its history, and AFFO per share increased by 8% year-over-year.
- This performance was underpinned by solid operating flow-through and lower-than-expected SG&A expenses.

Customer Momentum and Bookings:
- Equinix closed 4,100 deals with more than 3,300 customers in Q2, resulting in $345 million in annualized gross bookings.
- The strong bookings performance was driven by small and medium-sized deal activity, inter and intra-regional sales, and favorable pricing across deal sizes.

Interconnection Growth:
- Equinix's interconnection revenues grew by 8% year-over-year, contributing to more than $400 million in quarterly revenues for the first time.
- This growth was driven by cloud and AI expansion activities, resulting in a net increase of 6,200 total interconnections.

Capital Expenditure and Growth Strategy:
- Equinix plans to invest $3.8 billion to $4.3 billion in CapEx for the year, with a significant portion allocated to xScale joint ventures and digital product offerings.
- The investments are aimed at expanding capacity to accelerate revenue growth and leveraging strong customer demand signals, particularly in AI and hybrid/multi-cloud deployments.