Equinix Q3 2026: revenue up 11% on record $533M bookings; a $54M atNorth fee lifted EPS 29%

Equinix's revenue for the quarter ended September 30, 2026 rose 11.0% to $2,571 million, and net income attributable to common stockholders rose 30.7% to $489 million, or $4.93 per diluted share (+29.4%). Unlike Q2, the revenue line this time is mostly the everyday business: recurring revenue grew 10.2% and the one-off joint-venture fees that inflated Q2 largely fell away. The profit line, though, got its own one-off help: $54 million of "other income", which the 10-Q says was "primarily related to compensation earned as part of the agreed terms of the atNorth Joint Venture transaction". Equinix also signed a record $533 million of annualized gross bookings (+35%) and raised its 2026 guidance for the third quarter in a row.

Key metrics

Operating margin is income from operations divided by revenue: the share of each sales dollar left after running the business, before interest and tax. FFO, AFFO, adjusted EBITDA and bookings come from the Q3 earnings release (8-K Exhibit 99.1, filed October 28, 2026); everything else is from the 10-Q filed the same day.

Nine months to date, revenue was $7,640 million (+12.4%), net income attributable to common stockholders $1,383 million (+27.5%), diluted EPS $13.96 (+26.1%) and AFFO per diluted share $34.22 (+16.3%).

Why a REIT is judged on FFO and AFFO, not EPS

Equinix is a REIT (real estate investment trust): it pays little corporate tax and in exchange must pay out most of its taxable income as dividends. GAAP net income subtracts a large depreciation charge for the gradual wearing-out of its buildings and equipment, an accounting cost rather than a cash payment. In Q3 total depreciation, amortization and accretion was $548 million, more than net income.

• FFO (funds from operations) is the REIT industry's standard fix: net income with real-estate depreciation ($358 million) and property-sale gains added back. Q3 FFO was $858 million, or $8.64 a share (+20.0%).
• AFFO (adjusted FFO) goes further: it adds back other non-cash costs such as $141 million of stock-based compensation and the rest of depreciation, then subtracts the spending needed just to keep existing sites running ("recurring capex", $68 million). What remains, $1,156 million or $11.64 a share, is a rough measure of the cash available for dividends.

The quarterly dividend of $5.16 is 44% of Q3 AFFO per share, so the payout is well covered; the rest goes toward building new data centers. Equinix does not report an "adjusted EPS", so we compare it on AFFO per share rather than inventing one.

Revenue: the clean part of the quarter

Colocation is the rent customers pay for space and power for their servers; interconnection is the fee for direct cables between customers inside Equinix buildings, the part of the business plain wholesale builders find hardest to copy. Interconnection grew 10% and the Fabric software-defined connection product grew 24%, both on reported and constant-currency terms (constant currency restates this year's results at last year's exchange rates). Net new interconnections were 6,900, down from the record 9,700 in Q2. Managed infrastructure kept shrinking.

Revenue fell 2.1% from Q2's $2,625 million because non-recurring revenue dropped to $129 million from $248 million, as the one-time xScale fees in Q2 did not repeat. Income from Equinix's arrangements with its joint ventures was $47 million against $31 million a year earlier, a small effect next to Q2's $161 million. Recurring revenue rose 2.7% sequentially, faster than Q2's 2.0%.

The 10-Q puts the source of growth in each region on new capacity plus new orders: about $54 million in the Americas, $30 million in EMEA and $17 million in Asia-Pacific came from expansion projects finished in the past 12 months, with the rest from "an increase in orders from both our existing customers and new customers". Currency barely moved the picture this quarter, unlike Q2, when it added three points in EMEA.

Costs, margins and the profit bridge

Cost of revenues rose 10% to $1,257 million, a little slower than revenue. In the Americas it rose $53 million, including $19 million of higher compensation and $17 million of higher utilities, "primarily due to increases in power prices". General and administrative expense fell $21 million to $449 million, which the 10-Q puts down to lower depreciation in the Americas. Together these lifted income from operations 26.6% and operating margin 2.8 points to 23.3%; adjusted EBITDA (earnings before interest, tax, depreciation, stock pay and one-off items) rose 15.1%.

Below operating income, interest expense climbed to $163 million from $128 million after $5.4 billion of new senior notes this year. That rise would have been larger: $50 million of interest was capitalized into construction projects, against $26 million a year earlier, and so never reached the income statement. The effective tax rate rose to 8.9% from 6.3%, because last year's quarter had a valuation-allowance release. Then came the $54 million of other income, against roughly nothing a year earlier.

What the headline numbers hide

• Nearly 40% of the profit growth is one deal fee. Pretax income rose $138 million, or 34.6%, to $537 million. Take out the $54 million of other income, mostly the atNorth fee, and pretax income rose about 21% (our arithmetic). The company's own normalized figures make the same point: AFFO rose 20% as reported but 14% excluding the fee and currency, and AFFO per share 18% as reported but 12%.
• One-off costs partly offset it. Transaction costs rose to $20 million from $3 million, "primarily in connection with the formation of joint ventures", and the higher tax rate cost roughly $14 million (our arithmetic). Net, the quarter still reads better than the business.
• Cash conversion is normal for a REIT, but the cash is all spoken for. Nine-month operating cash flow was $3,027 million against $1,381 million of net income, the gap being depreciation. Spending on new property and equipment was $4,392 million over nine months (+53%), including about $1,558 million in Q3 (derived from the Q2 and Q3 year-to-date figures). Free cash flow as the company defines it was negative $801 million for the nine months, and total debt principal rose to $25.2 billion from $21.4 billion at year-end.
• Receivables are not a concern. Accounts receivable rose to $1,203 million from $1,001 million, but the nine-month cash outflow from receivables ($210 million) is close to last year's ($180 million).
• No buyback effect. Equinix returned cash only through dividends, $518 million in Q3 ($1,547 million year to date less $1,029 million in the first half), and bought back no shares; diluted share count rose 1.1% to 99.3 million, so per-share growth slightly trails total growth.

On balance the quarter is flattered: revenue growth is close to underlying, but GAAP EPS growth of 29% and AFFO per share growth of 18% include the atNorth fee, against 12% underlying AFFO-per-share growth by the company's own normalized measure.

Did last time's read hold up?

Our Q2 report said the quarter's 16% revenue growth leaned on one-time xScale fees, that Q3 revenue guidance of $2,525–2,575 million sat below Q2, and that the 2026 test was whether AFFO per share would land inside the $42.69–43.29 range once those fees dropped out. All three held: non-recurring revenue halved, Q3 revenue of $2,571 million landed at the top of the guided range with the guided ~51% adjusted EBITDA margin, and the full-year AFFO-per-share range has now moved above the old one. Of the $0.92 raise at the midpoint, $0.54 is what the company calls an underlying adjustment, $0.31 comes from atNorth and $0.07 from currency, so a good part of the beat is the same deal fee.

The atNorth deal and the build-out

On September 2, 2026 Equinix put $869 million into a new joint venture with CPP Investments that bought atNorth, a Nordic operator of high-density data centers. Equinix owns about 34%. Most of its stake ($831 million) is in non-voting preference shares that pay a cumulative 12% annual dividend and rank ahead of the common shares. Equinix has also committed to lease a minimum amount of capacity from atNorth by 2030, an amount the 10-Q says is "not currently determinable".

Cabinet utilization, the share of cabinet space that is billed, held at about 78%, flat on a year ago. With bookings up 35% and the release saying nearly 40% more cabinets will be delivered in 2026 than first planned, growth depends on finishing new space on time. The 10-Q warns that in some markets growth "may increasingly depend on the timely delivery of new capacity and supporting power infrastructure".

Guidance

• Q4 2026: revenue of $2,684–2,724 million (+11% to 13% reported), adjusted EBITDA of $1,328–1,368 million, a 49%–50% margin.
• Full-year 2026 (raised again): revenue of $10,325–10,365 million (was $10,205–10,285 million), adjusted EBITDA of $5,290–5,330 million (~51% margin), AFFO of $4,340–4,380 million and AFFO per diluted share of $43.71–44.11 (was $42.69–43.29), up 14%–15% reported or 11%–12% normalized. Total capex $5–6 billion; expected cash dividends about $2,037 million.

The full-year AFFO range implies Q4 AFFO of about $951–991 million, below Q3's $1,156 million (our arithmetic from the nine-month $3,389 million). Part of that is the atNorth fee not repeating; the release does not break out the rest.

Takeaway: Q3 is the cleaner version of Q2: the 11% revenue growth is mostly recurring, and record bookings plus a third guidance raise say demand is not the problem. But the 29% EPS jump and 18% AFFO-per-share growth include a one-time atNorth fee; the company's own underlying AFFO-per-share growth is 12%. The question for 2027 is whether $5–7 billion a year of borrowed-and-built capacity fills up fast enough to keep that 12% intact as interest costs rise.

Our view

The operating business is in good shape: recurring revenue growth ticked up sequentially, costs grew a little slower than revenue, and bookings point to more growth as new capacity opens. The pressure is on the funding side. Free cash flow is negative, debt rose $3.8 billion in nine months, and interest expense is up 27% even after more of it was capitalized into construction. Two things to watch in Q4: whether net interconnection additions recover from 6,900, since they are the stickiest part of the revenue, and whether AFFO lands inside the implied $951–991 million once the atNorth fee is gone.