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10-Q – 2025-10-29 – eqix-20250930.htm
Americas Revenues. During the three months ended September 30, 2025, Americas revenues increased by $77 million or 8% (8% on a constant currency basis). Growth in Americas revenues was primarily due to:
• approximately $29 million of incremental revenues generated from IBX data center expansion projects which were completed within the twelve months ended September 30, 2025; and
• an increase in orders from both our existing customers and new customers during the period.
EMEA Revenues. During the three months ended September 30, 2025, EMEA revenues increased by $41 million or 6% (3% on a constant currency basis). Growth in EMEA revenues was primarily due to an increase in orders from both our existing customers and new customers during the period.
Asia-Pacific Revenues. During the three months ended September 30, 2025, Asia-Pacific revenues decreased by $3 million or 1% (2% on a constant currency basis). Decrease in Asia-Pacific revenues was primarily due to a decrease of $48 million in revenues from non-recurring services provided to our joint ventures. This was substantially offset by an increase in orders from both our existing customers and new customers during the period.
Cost of Revenues. Our cost of revenues for the three months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Three Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 467 41 % $ 446 41 % $ 21 5 % 5 %
EMEA 425 37 % 387 35 % 38 10 % 6 %
Asia-Pacific 250 22 % 265 24 % (15) (6) % (7) %
Total $ 1,142 100 % $ 1,098 100 % $ 44 4 % 2 %
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Cost of Revenues
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas Cost of Revenues. During the three months ended September 30, 2025, Americas cost of revenues increased by $21 million or 5% (5% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to $12 million of higher depreciation expense driven by IBX data center expansions and higher costs across various other categories including compensation costs and software costs.
EMEA Cost of Revenues. During the three months ended September 30, 2025, EMEA cost of revenues increased by $38 million or 10% (6% on a constant currency basis). The increase in our EMEA cost of revenues was primarily due to higher costs across various categories including rent and facilities costs and repairs and maintenance expense.
Asia-Pacific Cost of Revenues. During the three months ended September 30, 2025, Asia-Pacific cost of revenues decreased by $15 million or 6% (7% on a constant currency basis) primarily due to $21 million of lower costs to provide non-recurring services, partially offset by higher compensation costs and higher depreciation expense.
We expect cost of revenues to increase across all three regions in line with the growth of our business.
Sales and Marketing Expenses . Our sales and marketing expenses for the three months ended September 30, 2025 and 2024 by geographic regions were as follows ($ in millions):
Three Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 140 64 % $ 147 62 % $ (7) (5) % (5) %
EMEA 51 23 % 53 22 % (2) (4) % (8) %
Asia-Pacific 28 13 % 37 16 % (9) (24) % (25) %
Total $ 219 100 % $ 237 100 % $ (18) (8) % (8) %
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Sales and Marketing Expenses
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas Sales and Marketing Expenses . Our Americas sales and marketing expense did not materially change during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
EMEA Sales and Marketing Expens es. Our EMEA sales and marketing expense did not materially change during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Asia-Pacific Sales and Marketing Expenses. During the three months ended September 30, 2025, Asia-Pacific sales and marketing expense decreased by $9 million or 24% (25% on a constant currency basis) primarily due to lower bad debt expense.
We anticipate that we will continue to invest in sales and marketing initiatives to support the growth of our business. We expect our Americas sales and marketing expenses as a percentage of revenues to be higher than those of our other regions since certain global sales and marketing functions are located within the U.S.
General and Administrative Expenses . Our general and administrative expenses for the three months ended September 30, 2025 and 2024 by geographic regions were as follows ($ in millions):
Three Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 325 69 % $ 293 67 % $ 32 11 % 11 %
EMEA 88 19 % 82 19 % 6 7 % 5 %
Asia-Pacific 57 12 % 59 14 % (2) (3) % (2) %
Total $ 470 100 % $ 434 100 % $ 36 8 % 8 %
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General and Administrative Expenses
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas General and Administrative Expense s . During the three months ended September 30, 2025, Americas general and administrative expenses increased by $32 million or 11% (11% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily due to:
• $17 million of higher compensation costs, including salaries, bonuses and stock-based compensation; and
• $15 million of higher depreciation expense associated with back-office systems to support the growth of our business and acceleration of depreciation expense for certain assets with shortened useful lives.
EMEA General and Administrative Expenses. Our EMEA general and administrative expenses did not materially change during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Asia-Pacific General and Administrative Expenses. Our Asia-Pacific general and administrative expenses did not materially change during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Going forward, although we are carefully monitoring our spending, we will continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. Additionally, since our corporate headquarters is located in the U.S., we expect the Americas general and administrative expenses as a percentage of revenues to continue to be higher than those of other regions.
Restructuring Charges. We did not record a significant amount of restructuring charges during the three months ended September 30, 2025 and 2024.
Transaction Costs. We did not record a significant amount of transaction costs during the three months ended September 30, 2025 and 2024.
Impairment Charges. We did not record a significant amount of impairment charges during the three months ended September 30, 2025 and 2024.
Gain or Loss on Asset Sales. We did not record a significant gain or loss on asset sales during the three months ended September 30, 2025 and 2024.
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Income from Operations. Our income from operations for the three months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Three Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 98 21 % $ 67 16 % $ 31 46 % 46 %
EMEA 217 45 % 219 52 % (2) (1) % — %
Asia-Pacific 159 34 % 139 32 % 20 14 % 11 %
Total $ 474 100 % $ 425 100 % $ 49 12 % 11 %
Americas Income from Operations. During the three months ended September 30, 2025, Americas income from operations increased by $31 million or 46% (46% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth. This was partially offset by higher costs of revenue, as described above.
EMEA Income from Operations. Our EMEA income from operations did not materially change during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Asia-Pacific Income from Operations. During the three months ended September 30, 2025, Asia-Pacific income from operations increased by $20 million or 14% (11% on a constant currency basis), primarily due to organic growth, offset by lower revenues from non-recurring services provided to our joint venture, as described above.
Interest Income. Interest income was $53 million for the three months ended September 30, 2025 and was $35 million for the three months ended September 30, 2024. The increase was primarily due to interest income earned on a higher average balance of cash, cash equivalents and short-term investments.
Interest Expense. Interest expense increased to $128 million for the three months ended September 30, 2025 from $117 million for the three months ended September 30, 2024, primarily due to the following debt issuances:
• the issuance of the 3.650% Euro Senior Notes due 2033 and the 1.558% Swiss Franc Senior Notes due 2029 in the third quarter of 2024;
• the issuance of the 3.250% Euro Senior Notes due 2031 and the 3.625% Euro Senior Notes due 2034 in the fourth quarter of 2024;
• the issuance of the 3.500% SGD Notes due 2030 in the first quarter of 2025;
• the issuance of the 3.250% Euro Senior Notes due 2029 and the 4.000% Euro Senior Notes due 2034 in the second quarter of 2025; and
• the issuance of the 2.900% SGD Notes due 2032 in the third quarter of 2025.
The increase to interest expense driven by debt issuances was partially offset by the repayment of the 2.625% Senior Notes in the fourth quarter of 2024 and the 1.250% Senior Notes and 1.000% Senior Notes in the third quarter of 2025.
During the three months ended September 30, 2025 and 2024, we capitalized $26 million and $9 million, respectively, of interest expense to construction in progress. See Note 9 within the condensed consolidated financial statements.
Other Income or Expense. We did not record a significant amount of other income or expense during the three months ended September 30, 2025 and 2024.
Gain or Loss on Debt Extinguishment. We did not record a significant amount of gain or loss on debt extinguishment during the three months ended September 30, 2025 and 2024.
Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax years ending December 31, 2025 and 2024, respectively. As such, other than certain state income taxes and foreign income and withholding taxes, no provision for income taxes has been included for our REIT and QRSs in the condensed consolidated financial statements for the three months ended September 30, 2025 and 2024.
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We have made TRS elections for some of our subsidiaries in and outside the U.S. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that may not be REIT compliant.
U.S. income taxes for the TRS entities located in the U.S. and foreign income taxes for our foreign operations, regardless of whether the foreign operations are operated as QRSs or TRSs, have been accrued, as necessary, for the three months ended September 30, 2025 and 2024.
For the three months ended September 30, 2025 and 2024, we recorded $25 million and $54 million of income tax expense, respectively. Our effective tax rates were 6.3% and 15.4% for the three months ended September 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three months ended September 30, 2025 as compared to the same period in 2024 was primarily due to the release of the valuation allowance in Canada and the revaluation of the net deferred tax liabilities in Germany due to the tax rate reductions enacted in the current period.
Net Income. Our net income increased by $78 million or 26% in the three months ended September 30, 2025 as compared to the same period in 2024. This increase is driven by the factors described above.
Adjusted EBITDA . We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other income or expense, gain or loss on debt extinguishment, depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs, and gain or loss on asset sales. See "Non-GAAP Financial Measures" below for more information about adjusted EBITDA and a reconciliation of adjusted EBITDA to net income. Our adjusted EBITDA for the three months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Three Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 489 43 % $ 427 41 % $ 62 15 % 15 %
EMEA 384 33 % 372 35 % 12 3 % 1 %
Asia-Pacific 275 24 % 249 24 % 26 10 % 8 %
Total $ 1,148 100 % $ 1,048 100 % $ 100 10 % 8 %
Americas Adjusted EBITDA. During the three months ended September 30, 2025, Americas adjusted EBITDA increased by $62 million or 15% (15% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, partially offset by an increase in costs to support business growth, as described above.
EMEA Adjusted EBITDA. During the three months ended September 30, 2025, EMEA adjusted EBITDA increased by $12 million or 3% (1% on a constant currency basis), primarily due to organic growth, as described above.
Asia-Pacific Adjusted EBITDA. During the three months ended September 30, 2025, Asia-Pacific adjusted EBITDA increased by $26 million or 10% (8% on a constant currency basis), primarily due to lower costs to support business growth, as described above.
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Nine Months Ended September 30, 2025 and 2024
Revenues. Our revenues for the nine months ended September 30, 2025 and 2024 were generated from the following revenue classifications and geographic regions ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency (1)
Americas:
Recurring revenues $ 2,869 43 % $ 2,724 42 % $ 145 5 % 6 %
Non-recurring revenues 171 3 % 139 2 % 32 23 % 25 %
3,040 46 % 2,863 44 % 177 6 % 7 %
EMEA:
Recurring revenues 2,204 32 % 2,089 32 % 115 6 % 5 %
Non-recurring revenues 90 1 % 102 2 % (12) (12) % (13) %
2,294 33 % 2,191 34 % 103 5 % 4 %
Asia-Pacific:
Recurring revenues 1,372 20 % 1,280 20 % 92 7 % 7 %
Non-recurring revenues 91 1 % 153 2 % (62) (41) % (41) %
1,463 21 % 1,433 22 % 30 2 % 2 %
Total:
Recurring revenues 6,445 95 % 6,093 94 % 352 6 % 6 %
Non-recurring revenues 352 5 % 394 6 % (42) (11) % (11) %
$ 6,797 100 % $ 6,487 100 % $ 310 5 % 5 %
(1) As defined in the "Non-GAAP Financial Measures" section in Item 2 of this Quarterly Report on Form 10-Q.
Revenues
(in millions)
Americas Revenues. During the nine months ended September 30, 2025, Americas revenues increased by $177 million or 6% (7% on a constant currency basis). Growth in Americas revenues was primarily due to:
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• approximately $61 million of incremental revenues generated from IBX data center expansion projects which were completed within the twelve months ended September 30, 2025;
• $17 million of incremental revenues from non-recurring services provided to our joint ventures; and
• an increase in orders from both our existing customers and new customers during the period.
EMEA Revenues. During the nine months ended September 30, 2025, EMEA revenues increased by $103 million or 5% (4% on a constant currency basis). Growth in EMEA revenues was primarily due to:
• approximately $9 million of incremental revenues generated from IBX data center expansion projects which were completed within the twelve months ended September 30, 2025; and
• an increase in orders from both our existing customers and new customers during the period.
The increase was partially offset by a decrease of $10 million in revenues from non-recurring services provided to our joint ventures.
Asia-Pacific Revenues. During the nine months ended September 30, 2025, Asia-Pacific revenues increased by $30 million or 2% (2% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:
• approximately $16 million of incremental revenues generated from IBX data center expansion projects which were completed within the twelve months ended September 30, 2025; and
• an increase in orders from both our existing customers and new customers during the period.
The increase was offset by a decrease of $77 million in revenues from non-recurring services provided to our joint ventures.
Cost of Revenues. Our cost of revenues for the nine months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 1,369 42 % $ 1,316 40 % $ 53 4 % 5 %
EMEA 1,206 36 % 1,236 38 % (30) (2) % (3) %
Asia-Pacific 735 22 % 719 22 % 16 2 % 2 %
Total $ 3,310 100 % $ 3,271 100 % $ 39 1 % 1 %
Cost of Revenues
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas Cost of Revenues. During the nine months ended September 30, 2025, Americas cost of revenues increased by $53 million or 4% (5% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:
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• $20 million of higher costs to provide non-recurring services; and
• $14 million of higher utilities costs, driven by increases in power consumption.
The remainder of the increase is driven by higher costs across various categories including compensation costs, office expenses and repairs and maintenance.
EMEA Cost of Revenues. During the nine months ended September 30, 2025, EMEA cost of revenues decreased by $30 million or 2% (3% on a constant currency basis). The decrease in our EMEA cost of revenues was primarily due to lower utilities costs as a result of decreases in power prices in Germany, Netherlands and the United Kingdom. The decrease was partially offset by higher costs across various categories including compensation costs, rent and facilities costs and repairs and maintenance.
Asia-Pacific Cost of Revenues. During the nine months ended September 30, 2025, Asia-Pacific cost of revenues increased by $16 million or 2% (2% on a constant currency basis). The increase in our Asia-Pacific cost of revenues was primarily due to $8 million of higher depreciation expense driven by IBX data center expansions. The remainder of the increase is driven by higher costs across various categories including compensation, partially offset by lower utilities costs.
We expect cost of revenues to increase across all three regions in line with the growth of our business.
Sales and Marketing Expenses . Our sales and marketing expenses for the nine months ended September 30, 2025 and 2024 by geographic regions were as follows ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 434 65 % $ 442 64 % $ (8) (2) % (1) %
EMEA 153 23 % 147 22 % 6 4 % 2 %
Asia-Pacific 82 12 % 93 14 % (11) (12) % (10) %
Total $ 669 100 % $ 682 100 % $ (13) (2) % (2) %
Sales and Marketing Expenses
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas Sales and Marketing Expenses . During the nine months ended September 30, 2025, Americas sales and marketing expense decreased by $8 million or 2% (1% on a constant currency basis) primarily due to $12 million of lower bad debt expense, partially offset by higher advertising costs.
EMEA Sales and Marketing Expens es. Our EMEA sales and marketing expense did not materially change during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
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Asia-Pacific Sales and Marketing Expenses. During the nine months ended September 30, 2025, Asia-Pacific sales and marketing expense decreased by $11 million or 12% (10% on a constant currency basis) primarily due to lower bad debt expense.
We anticipate that we will continue to invest in sales and marketing initiatives to support the growth of our business. We expect our Americas sales and marketing expenses as a percentage of revenues to be higher than those of our other regions since certain global sales and marketing functions are located within the U.S.
General and Administrative Expenses . Our general and administrative expenses for the nine months ended September 30, 2025 and 2024 by geographic regions were as follows ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 930 68 % $ 897 68 % $ 33 4 % 4 %
EMEA 256 19 % 246 19 % 10 4 % 3 %
Asia-Pacific 173 13 % 172 13 % 1 1 % 1 %
Total $ 1,359 100 % $ 1,315 100 % $ 44 3 % 3 %
General and Administrative Expenses
($ in millions; percentages indicate expenses as a percentage of revenues)
Americas General and Administrative Expense s. During the nine months ended September 30, 2025, Americas general and administrative expenses increased by $33 million or 4% (4% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily driven by higher compensation costs, including salaries, bonuses and stock-based compensation.
EMEA General and Administrative Expenses. During the nine months ended September 30, 2025, EMEA general and administrative expenses increased by $10 million or 4% (3% on a constant currency basis). The increase in our EMEA general and administrative expenses was primarily driven by higher compensation costs, including salaries, bonuses and stock-based compensation, partially offset by lower office expenses.
Asia-Pacific General and Administrative Expenses. Our Asia-Pacific general and administrative expenses did not materially change during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
Going forward, although we are carefully monitoring our spending, we will continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. Additionally, given that our corporate headquarters is located in the U.S., we expect the Americas general and administrative expenses as a percentage of revenues to continue to be higher than those of other regions.
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Restructuring Charges. During the nine months ended September 30, 2025, we recorded restructuring charges of $17 million primarily related to severance and other employee costs. We did not record any restructuring charges during the nine months ended September 30, 2024. See Note 12 within the condensed consolidated financial statements.
Transaction costs. For both the nine months ended September 30, 2025 and 2024, we recorded transaction costs totaling $12 million. These transaction costs were incurred in connection with evaluating and completing acquisitions and the formation of joint ventures. See Note 5 within the condensed consolidated financial statements.
Impairment Charges. We did not record a significant amount of impairment charges during the nine months ended September 30, 2025 and 2024.
Gain or Loss on Asset Sales. During the nine months ended September 30, 2025, we did not record a significant amount of gain or loss on asset sales. During the nine months ended September 30, 2024, we recorded a gain of $18 million related to the sale of the Silicon Valley 12 ("SV12x") data center. See Note 5 within the condensed consolidated financial statements.
Income from Operations. Our income from operations for the nine months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 286 20 % $ 217 17 % $ 69 32 % 34 %
EMEA 671 47 % 559 46 % 112 20 % 20 %
Asia-Pacific 469 33 % 449 37 % 20 4 % 3 %
Total $ 1,426 100 % $ 1,225 100 % $ 201 16 % 16 %
Americas Income from Operations. During the nine months ended September 30, 2025, Americas income from operations increased by $69 million or 32% (34% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity, non-recurring services provided to our joint ventures and organic growth. This was partially offset by higher costs of revenue and general and administrative expenses and the non-recurring gain recognized on the sale of the SV12x data center in the prior year, as described above.
EMEA Income from Operations. During the nine months ended September 30, 2025, EMEA income from operations increased by $112 million or 20% (20% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, partially offset by lower utilities costs, as described above.
Asia-Pacific Income from Operations. During the nine months ended September 30, 2025, Asia-Pacific income from operations increased by $20 million or 4% (3% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, offset by lower revenues as a result of non-recurring services provided to our joint ventures, as described above.
Interest Income. Interest income was $152 million for the nine months ended September 30, 2025 and was $88 million for the nine months ended September 30, 2024. The increase was primarily due to interest income earned on a higher average balance of cash, cash equivalents and short-term investments as well as on the AMER 2 Loan further described in Note 5 within the condensed consolidated financial statements.
Interest Expense. Interest expense increased to $385 million for the nine months ended September 30, 2025 from $331 million for the nine months ended September 30, 2024, primarily due to the following debt issuances:
• the issuance of the 5.500% Senior Notes due 2034 in the second quarter of 2024;
• the issuance of the 3.650% Euro Senior Notes due 2033 and the 1.558% Swiss Franc Senior Notes due 2029 in the third quarter of 2024;
• the issuance of the 3.250% Euro Senior Notes due 2031 and the 3.625% Euro Senior Notes due 2034 in the fourth quarter of 2024;
• the issuance of the 3.500% SGD Notes due 2030 in the first quarter of 2025;
• the issuance of the 3.250% Euro Senior Notes due 2029 and the 4.000% Euro Senior Notes due 2034 in the second quarter of 2025; and
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• the issuance of the 2.900% SGD Notes due 2032 in the third quarter of 2025.
The increase to interest expense driven by debt issuances was partially offset by the repayment of the 2.625% Senior Notes in the fourth quarter of 2024.
During the nine months ended September 30, 2025 and 2024, we capitalized $51 million and $27 million, respectively, of interest expense to construction in progress. See Note 9 within the condensed consolidated financial statements.
Other Income or Expense. We did not record a significant amount of other income or expense during the nine months ended September 30, 2025 and 2024. See Note 5 within the condensed consolidated financial statements.
Gain or Loss on Debt Extinguishment. We did not record a significant amount of gain or loss on debt extinguishment during the nine months ended September 30, 2025 and 2024.
Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax years ending December 31, 2025 and 2024, respectively. As such, other than certain state income taxes and foreign income and withholding taxes, no provision for income taxes has been included for our REIT and QRSs in the condensed consolidated financial statements for the nine months ended September 30, 2025 and 2024.
We have made TRS elections for some of our subsidiaries in and outside the U.S. In general, a TRS may provide services that would otherwise be considered impermissible for REITs to provide and may hold assets that may not be REIT compliant.
U.S. income taxes for the TRS entities located in the U.S. and foreign income taxes for our foreign operations, regardless of whether the foreign operations are operated as QRSs or TRSs, have been accrued, as necessary, for the nine months ended September 30, 2025 and 2024.
For the nine months ended September 30, 2025 and 2024, we recorded $112 million and $147 million of income tax expense, respectively. Our effective tax rates were 9.4% and 15.1%, for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the nine months ended September 30, 2025 as compared to the same period in 2024 was primarily due to the release of the valuation allowance in Canada and the revaluation of the net deferred tax liabilities in Germany due to the tax rate reductions enacted in the current period.
Net Income. Our net income increased by $256 million or 31% in the nine months ended September 30, 2025 as compared to the same period in 2024. This increase is driven by the factors described above.
Adjusted EBITDA. We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other income or expense, gain or loss on debt extinguishment, depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs, and gain or loss on asset sales. See "Non-GAAP Financial Measures" below for more information about adjusted EBITDA and a reconciliation of adjusted EBITDA to net income. Our adjusted EBITDA for the nine months ended September 30, 2025 and 2024 by geographic regions was as follows ($ in millions):
Nine Months Ended September 30, $ Change % Change
2025 % 2024 % Actual Actual Constant
Currency
Americas $ 1,398 42 % $ 1,287 42 % $ 111 9 % 9 %
EMEA 1,148 34 % 1,024 33 % 124 12 % 11 %
Asia-Pacific 798 24 % 765 25 % 33 4 % 4 %
Total $ 3,344 100 % $ 3,076 100 % $ 268 9 % 9 %
Americas Adjusted EBITDA. During the nine months ended September 30, 2025, Americas adjusted EBITDA increased by $111 million or 9% (9% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity, non-recurring services provided to our joint ventures and organic growth. This was partially offset by higher costs of revenues and general and administrative expenses, as described above.
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EMEA Adjusted EBITDA. During the nine months ended September 30, 2025, EMEA adjusted EBITDA increased by $124 million or 12% (11% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, partially offset by lower utilities costs, as described above.
Asia-Pacific Adjusted EBITDA. During the nine months ended September 30, 2025, Asia-Pacific adjusted EBITDA increased by $33 million or 4% (4% on a constant currency basis), primarily due to IBX data center expansion activity and organic growth, offset by lower revenues as a result of non-recurring services provided to our joint ventures, as described above.
Non-GAAP Financial Measures
We provide all information required in accordance with GAAP, but we believe that evaluating our ongoing results of operations may be difficult if limited to reviewing only GAAP financial measures. Accordingly, we also use non-GAAP financial measures to evaluate our operations.
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures. As such, we provide a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Investors should note that the non-GAAP financial measures used by us may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as those of other companies. Investors should therefore exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies.
Our primary non-GAAP financial measures include Adjusted EBITDA and Adjusted Funds from Operations (“AFFO”), as described below. We present these measures to provide investors with additional tools to evaluate our results in a manner that focuses on what management believes to be our core, ongoing business operations. These measures exclude items which we believe are generally not relevant to assessing our long-term performance. Both measures eliminate the impacts of depreciation and amortization, which are derived from historical costs and we believe are not indicative of current or future expenditures, and other items for which the frequency and amount of charges can vary based on the timing and significance of individual transactions. We believe that presenting these non-GAAP financial measures provides consistency and comparability with past reports and that if we did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze our business effectively.
Adjusted EBITDA
Adjusted EBITDA is used by management to evaluate the operating strength and performance of our core, ongoing business, without regard to our capital or tax structures. It also aids in assessing the performance of, making operating decisions for, and allocating resources to our operating segments. In addition to the uses described above, we believe this measure provides investors with a better understanding of the operating performance of the business and its ability to perform in subsequent periods.
We define adjusted EBITDA as net income excluding:
• income tax expense
• interest income
• interest expense
• other income or expense
• gain or loss on debt extinguishment
• depreciation, amortization and accretion expense
• stock-based compensation expense
• restructuring charges, which primarily include employee severance, facility closure costs, lease or other contract termination costs and advisory fees related to the realignment of our management structure, operations or products
• impairment charges
• transaction costs
• gain or loss on asset sales
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The following table presents a reconciliation of Adjusted EBITDA to net income (in millions):
Three Months Ended
September 30, Nine Months Ended
September 30,
2025 2024 2025 2024
Net income $ 374 $ 296 $ 1,084 $ 828
Income tax expense 25 54 112 147
Interest income (53) (35) (152) (88)
Interest expense 128 117 385 331
Other (income) expense — (7) (2) 6
(Gain) loss on debt extinguishment — — (1) 1
Depreciation, amortization, and accretion expense 533 494 1,515 1,509
Stock-based compensation expense 130 122 370 348
Restructuring charges 5 — 17 —
Impairment charges 4 — 5 —
Transaction costs 3 7 12 12
(Gain) loss on asset sales (1) — (1) (18)
Adjusted EBITDA $ 1,148 $ 1,048 $ 3,344 $ 3,076
Funds from Operations ("FFO") and AFFO
AFFO is derived from Funds from Operations (FFO) calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. Both FFO and AFFO are non-GAAP measures commonly used in the REIT industry. Although our measures may not be directly comparable to similar measures used by other companies, we believe that the presentation of these measures provides investors with an additional tool for comparing our performance with the performance of other companies in the REIT industry. Additionally, AFFO is a performance measure used in certain of our employee incentive programs and we believe it is a useful measure in assessing our dividend paying capacity as it isolates the cash impact of certain income and expense items and considers the impact of recurring capital expenditures.
We define FFO as net income attributable to common stockholders excluding:
• gain or loss from the disposition of real estate assets
• depreciation and amortization expense on real estate assets
• adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items
We define AFFO as FFO adjusted for:
• depreciation and amortization expense on non-real estate assets
• accretion expense
• stock-based compensation expense
• stock-based charitable contributions
• restructuring charges, as described above
• impairment charges
• transaction costs
• an adjustment to remove the impacts of straight-lining installation revenue
• an adjustment to remove the impacts of straight-lining rent expense
• an adjustment to remove the impacts of straight-lining contract costs
• amortization of deferred financing costs and debt discounts and premiums
• gain or loss from the disposition of non-real estate assets
• gain or loss on debt extinguishment
• an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances, uncertain tax positions and deferred taxes
• recurring capital expenditures, which represent expenditures to extend the useful life of data centers or other assets that are required to support current revenues
• net income or loss from discontinued operations, net of tax
• adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items
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The following tables present reconciliations of FFO and AFFO to net income (in millions):
Three Months Ended
September 30, Nine Months Ended
September 30,
2025 2024 2025 2024
Net income $ 374 $ 296 $ 1,084 $ 828
Net (income) loss attributable to non-controlling interests — 1 1 1
Net income attributable to common stockholders 374 297 1,085 829
Adjustments:
Real estate depreciation 324 308 933 930
(Gain) loss on disposition of real estate assets (1) (3) — (19)
Adjustments for FFO from unconsolidated joint ventures 10 7 25 19
FFO attributable to common stockholders $ 707 $ 609 $ 2,043 $ 1,759
Three Months Ended
September 30, Nine Months Ended
September 30,
2025 2024 2025 2024
FFO attributable to common stockholders $ 707 $ 609 $ 2,043 $ 1,759
Adjustments:
Installation revenue adjustment 6 (1) 16 (3)
Straight-line rent expense adjustment 1 4 9 15
Contract cost adjustment (8) (6) (25) (16)
Amortization of deferred financing costs and debt discounts 6 5 17 15
Stock-based compensation expense 130 122 370 348
Stock-based charitable contributions — — 3 3
Non-real estate depreciation expense 155 136 426 426
(Gain) loss on disposition of non-real estate assets (3) — (1) —
Amortization expense 51 52 149 155
Accretion expense adjustment 3 (2) 7 (2)
Recurring capital expenditures (64) (69) (145) (135)
(Gain) loss on debt extinguishment — — (1) 1
Restructuring charges 5 — 17 —
Transaction costs 3 7 12 12
Impairment charges 4 — 5 —
Income tax expense adjustment (29) 10 (19) 14
Adjustments for AFFO from unconsolidated joint ventures (2) (1) 1 (6)
AFFO attributable to common stockholders $ 965 $ 866 $ 2,884 $ 2,586
Constant Currency Presentation
Our revenues and certain operating expenses (cost of revenues, sales and marketing and general and administrative expenses) from our international operations have represented and will continue to represent a significant portion of our total revenues and certain operating expenses. As a result, our revenues and certain operating expenses have been and will continue to be affected by changes in the U.S. dollar against major international currencies. During the three and nine months ended September 30, 2025 as compared to the same period in 2024, the U.S. dollar was weaker relative to the British pound and Euro, which resulted in a favorable foreign currency impact on revenue and operating income, and an unfavorable foreign currency impact on operating expenses. During the three and nine months ended September 30, 2025 as compared to the same period in 2024, the U.S. dollar was stronger relative to the Australian dollar and Brazilian real, which resulted in an unfavorable foreign currency impact on revenue and operating income, and a favorable foreign currency impact on operating expenses. In order to provide a framework for assessing how each of our business segments performed excluding the impact of foreign currency fluctuations, we present period-over-period percentage changes in our revenues and certain operating expenses on a constant currency basis in addition to the historical amounts as reported. Our constant currency presentation excludes the impact of our foreign currency cash flow hedging activities. Presenting
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constant currency results of operations is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, we have presented this non-GAAP financial measure to provide investors with an additional tool to evaluate our results of operations. To present this information, our current period revenues and certain operating expenses denominated in currencies other than the U.S. dollar are converted into U.S. dollars at constant exchange rates rather than the actual exchange rates in effect during the respective periods (i.e. average rates in effect for the nine months ended September 30, 2024 are used as exchange rates for the nine months ended September 30, 2025 when comparing the nine months ended September 30, 2025 with the nine months ended September 30, 2024).
Liquidity and Capital Resources
Sources and Uses of Cash
Customer collections are our primary source of cash. We believe we have a strong customer base, and have continued to experience relatively strong collections. As of September 30, 2025, our principal sources of liquidity were $2.9 billion of cash, cash equivalents and short-term investments. In addition to our cash balance, we had approximately $4.0 billion of additional liquidity available to us from our $4.0 billion revolving facility and general access to both public and private debt and equity capital markets. We also have additional liquidity available to us from our 2024 ATM program, under which we may offer and sell from time to time our common stock in "at the market" transactions on either a spot or forward basis. As of September 30, 2025, we had approximately $1.2 billion available for sale remaining under the 2024 ATM Program.
We believe we have sufficient cash, coupled with anticipated cash generated from operating activities and external financing sources, to meet our operating requirements, including repayment of the current portion of our debt as it becomes due, distribution of dividends and completion of our publicly announced acquisitions, ordinary costs to operate the business, and expansion projects.
As we continue to grow, we may pursue additional expansion opportunities, primarily the build out of new IBX data centers, in certain of our existing markets which are at or near capacity within the next year, as well as potential acquisitions and joint ventures. If the opportunity to expand is greater than planned, we may further increase the level of capital expenditure to support this growth as well as pursue additional business and real estate acquisitions or joint ventures, provided that we have or can access sufficient funding to pursue such expansion opportunities. We may elect to access the equity or debt markets from time to time opportunistically, particularly if financing is available on attractive terms. We will continue to evaluate our operating requirements and financial resources in light of future developments.
Cash Flow
Our net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2025 and 2024 were as follows (in millions):
Nine Months Ended September 30,
2025 2024 Change
Net cash provided by operating activities $ 2,767 $ 2,268 $ 499
Net cash used in investing activities (3,774) (2,826) (948)
Net cash provided by financing activities 47 1,245 (1,198)
Operating Activitie s
Net cash provided by our operations is generated by colocation, interconnection, managed infrastructure and other revenues. Our primary uses of cash from our operating activities include compensation and related costs, interest payments, other general corporate expenditures and taxes. Net cash provided by operating activities increased by $499 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily driven by improved results of operations offset by increases in cash paid for costs and operating expenses.
Investing Activities
Net cash used in investing activities increased by $948 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to:
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• $796 million increase in capital expenditures;
• $642 million increase in purchases of short-term investments;
• $247 million decrease in proceeds from the sale of assets; and
• $182 million increase from TIM Acquisition, net of cash acquired (see Note 4 within the condensed consolidated financial statements).
This increase was partially offset by:
• $770 million increase in maturities of short-term investments; and
• $134 million decrease in draw downs on the AMER 2 Loan receivable.
Financing Activities
Net cash provided by financing activities decreased by $1.2 billion for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily driven by:
• $1.2 billion decrease from repayment of senior notes; and
• $877 million decrease in proceeds from the sale of shares under the 2024 ATM Program.
This decrease was partially offset by a $1.0 billion increase in proceeds from senior notes, net of debt discounts.
Material Cash Commitments
As of September 30, 2025, our principal commitments were primarily comprised of:
• approximately $16.6 billion of principal from our senior notes (gross of debt issuance costs and debt discounts);
• approximately $3.9 billion of interest on mortgage payable, other loans payable, senior notes and term loans, based on their respective interest rates and recognized over the life of these instruments, and the credit facility fee for the revolving credit facility;
• $704 million of principal from our term loans, mortgage payable and other loans payable (gross of debt issuance costs and debt discounts);
• approximately $5.4 billion of total lease payments, which represents lease payments under finance and operating lease arrangements, including renewal options that are reasonably certain to be exercised;
• approximately $6.7 billion of unaccrued capital expenditure contractual commitments, primarily for IBX equipment not yet delivered and labor not yet provided in connection with the work necessary to complete construction and open IBX data center expansion projects prior to making them available to customers for installation, the majority of which is payable within the next 12 months; and
• approximately $2.0 billion of other non-capital purchase commitments, such as commitments to purchase power in select locations and other open purchase orders, which contractually bind us for goods, services or arrangements to be delivered or provided during the remainder of 2025 and beyond, the majority of which is payable within the next two years.
We believe that our sources of liquidity, including our expected future operating cash flows, are sized to adequately meet both the near- and long-term material cash commitments for the foreseeable future. For further information on maturities of lease liabilities and debt instruments, see Notes 8 and 9, respectively, within the condensed consolidated financial statements.
Other Contractual Obligations
We have additional future equity contributions and loan commitments to our joint ventures. For additional information, see the "Equity Method Investments" footnote within the condensed consolidated financial statements.
Additionally, we entered into lease agreements with various landlords primarily for data center spaces and ground leases which have not yet commenced as of September 30, 2025. For additional information, see “Maturities of Lease Liabilities” in Note 8 within the condensed consolidated financial statements.
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Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP. The preparation of our financial statements requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the accounting policies, assumptions, estimates and judgments to ensure that our condensed consolidated financial statements are presented fairly and in accordance with U.S. GAAP. Management bases its assumptions, estimates and judgments on historical experience, current trends and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. However, because future events and their effects cannot be determined with certainty, actual results may differ from these assumptions and estimates, and such differences could be material. Critical accounting policies for Equinix that affect our more significant judgment and estimates used in the preparation of our condensed consolidated financial statements include accounting for income taxes, accounting for business combinations, accounting for impairment of goodwill and other intangibles assets, accounting for property, plant and equipment and accounting for leases, which are discussed in more detail under the caption "Critical Accounting Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024.
Recent Accounting Pronouncements
See Note 1 of Notes to Condensed Consolidated Financial Statements in Part I Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
We may be exposed to market risks related to changes in foreign currency exchange rates and interest rates. There have been no significant changes to our risk exposure management or procedures in relation to these risks during the nine months ended September 30, 2025 as compared to the respective risk exposures and procedures disclosed in Quantitative and Qualitative Disclosures About Market Risk, set forth in Part II Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2024.
We monitor our foreign currency and interest rate risk exposures by evaluating the potential for future losses in earnings due to changes in foreign currency exchange rates and interest rates, as further described below.
Foreign Currency Risk
To help manage the exposure to foreign currency exchange rate fluctuations, we have implemented a number of hedging programs, in particular (i) a cash flow hedging program to hedge the forecasted revenues and expenses in our EMEA region as well as our debt denominated in foreign currencies, (ii) a balance sheet hedging program to hedge the remeasurement of monetary assets and liabilities denominated in foreign currencies, and (iii) a net investment hedging program to hedge the long-term investments in our foreign subsidiaries. Our hedging programs reduce, but do not entirely eliminate, the impact of currency exchange rate movements and their impact on the condensed consolidated statements of operations.
We have entered into various foreign currency debt obligations as described in Note 9 within the condensed consolidated financial statements. Our foreign currency debt obligations that would otherwise remeasure through earnings are designated as net investment hedges against our net investments in foreign subsidiaries or are hedged by cross-currency interest rate swaps designated as cash flow hedges. Additionally, we enter cross-currency interest rate swaps to effectively convert some of our U.S. dollar-denominated debt into foreign currencies. These derivative instruments are also designated as net investment hedges against our net investments in foreign subsidiaries. Changes in the fair value of hedging instruments designated as net investment hedges are recorded as a component of accumulated other comprehensive income (loss) in the condensed consolidated balance sheets. As a result, we do not have a significant exposure to future losses in earnings resulting from our foreign currency debt obligations or cross-currency interest rate swaps. Further information about our use of foreign currency derivative instruments is described in Note 6 within the condensed consolidated financial statements.
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The U.S. dollar generally weakened relative to certain of the currencies of the foreign countries in which we operate during the nine months ended September 30, 2025. This has impacted our condensed consolidated financial position and results of operations during this period, including the amount of revenues that we reported. Continued strengthening or weakening of the U.S. dollar will continue to impact us in future periods.
With the existing cash flow hedges in place, a hypothetical 10% strengthening of the U.S. dollar for the nine months ended September 30, 2025 would have resulted in a reduction of our revenues and a reduction of our operating expenses including depreciation and amortization expense by approximately $209 million and $192 million, respectively.
With the existing cash flow hedges in place, a hypothetical 10% weakening of the U.S. dollar for the nine months ended September 30, 2025 would have resulted in an increase of our revenues and an increase of our operating expenses including depreciation and amortization expense by approximately $266 million and $240 million, respectively.
Interest Rate Risk
We are exposed to interest rate risk related to our outstanding debt. An immediate increase or decrease in current interest rates from their position as of September 30, 2025 would not have a material impact on our interest expense due to the fixed coupon rate on the majority of our debt obligations.
We periodically enter into interest rate locks to hedge the interest rate exposure created by anticipated fixed rate debt issuances, which are designated as cash flow hedges. When interest rate locks are settled, any accumulated gain or loss included as a component of accumulated other comprehensive income (loss) will be amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term of the interest rate locks.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation, pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of the effectiveness of our "disclosure controls and procedures" as of the end of the period covered by this quarterly report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(c) Limitations on the Effectiveness of Controls. Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed and operated to be effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On March 20, 2024, the Company received a subpoena from the U.S. Attorney’s Office for the Northern District of California. On April 30, 2024, the Company received a subpoena from the Securities and Exchange Commission. The Company is cooperating fully with both government agencies.
On May 2, 2024, a putative stockholder class action was filed against the Company and certain of our officers in the United States District Court for the Northern District of California. The named plaintiff alleges violations of Section 10(b) of the Exchange Act and Securities and Exchange Commission Rule 10b-5, and Section 20(a) of the Exchange Act, on the basis that the defendants allegedly made false and misleading statements about our business, results, internal controls, and accounting practices between May 3, 2019 and March 24, 2024. The lawsuit seeks, among other relief, a determination that the alleged claims may be asserted on a class-wide basis, unspecified damages, attorneys' fees, other expenses and costs. We filed a motion to dismiss the lawsuit on October 10, 2024. The motion was granted in part on January 6, 2025. On July 15, 2025, the parties entered a Stipulation of Settlement to resolve the action. The Court granted preliminary approval of the settlement on September 4, 2025. The settlement remains subject to final court approval, to be addressed at a hearing on December 18, 2025. We expect the amount paid in settlement to be fully covered by our insurance.
On February 14, 2025, and February 26, 2025, respectively, certain of the Company’s current and former directors and officers were named as defendants in two shareholder derivative lawsuits (in which the Company is a nominal defendant) filed in the United States District Court for the Northern District of California. The lawsuits alleged, among other things, violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste of corporate assets and generally alleged the same purported misconduct as alleged in the putative stockholder class action described above. The lawsuits sought, among other relief, unspecified damages, restitution, attorneys’ fees, and other expenses and costs. On April 17, 2025, and April 18, 2025, respectively, the plaintiffs filed notices of voluntary dismissal without prejudice, subject to court approval, to pursue remedies under Delaware law. The cases were dismissed on April 28, 2025 and August 19, 2025, respectively.
On August 6, 2025, certain of the Company's current and former directors and officers were named as defendants in an additional shareholder derivative lawsuit (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware. The lawsuit makes generally the same types of allegations and seeks the same types of relief as the derivative lawsuits above, and makes additional allegations that certain directors' and officers' alleged knowledge of the purported misconduct constituted insider trading. We filed a motion to dismiss the lawsuit on October 20, 2025.
These matters are subject to uncertainties and we cannot predict the outcome nor reasonably estimate a range of loss or penalties, if any, relating to these matters prior to resolution.
Item 1A. Risk Factors
In addition to the other information contained in this report, the following risk factors should be considered carefully in evaluating our business. Additional risks which we do not presently consider material, or of which we are not currently aware, may also have an adverse impact on us. The information discussed below is at the time of this filing. This section contains forward-looking statements.
Risk Factors
Risks Related to the Macro Environment
Geopolitical events and political changes contribute to an already complex and evolving regulatory landscape. If we cannot comply with the evolving laws and regulations in the countries in which we operate, we may be subject to litigation and/or sanctions, adverse revenue impacts and increased costs, and our business and results of operations could be negatively impacted.
In the U.S., there is some uncertainty on the legality and enforceability of new and existing laws, judicial orders and bans, new presidential executive orders, regulatory frameworks, leadership changes and enforcement priorities and strategies. We cannot guarantee compliance with all such laws and regulations at all times, and violations of
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any applicable domestic or international laws and regulations could result in significant fines, penalties, costly and expensive investigations, criminal sanctions against us, our officers or our employees, prohibitions on our ability to provide our offerings in one or more countries, or the delay or prevention of potential acquisitions, and could also materially damage our reputation, brand, international expansion efforts, ability to attract and retain employees, and our business and results of operations.
Additionally, the U.S. is currently experiencing a government shutdown because of disagreement in the U.S. Congress. There is uncertainty around when the government may resume its operations. Although we are not currently experiencing any material impacts on our business because of the shutdown, we continue to monitor the shutdown as any prolonged shutdown could further adversely affect global economic conditions and our business. Geopolitical events, such as a trade war between the U.S. and China, the war between Russia and Ukraine, and the ongoing conflict in the Middle East, could also have a negative effect on our global business operations. While some time has passed since some of these events first occurred, it remains unpredictable how these events will continue to develop and impact the environment in which we do business.
Laws and regulations related to economic sanctions, export controls, anti-bribery and anti-corruption, and other international activities may restrict or limit our ability to engage in transactions or dealings with certain counterparties, in or with certain countries or territories, or in certain activities. For example, we have several Chinese customers who are named in restrictive executive orders ("EOs"), and while a majority of these EOs do not apply to the type of services that we currently provide to these Chinese customers, the landscape continues to evolve, and new rules have been broader than what we have historically experienced. New or expanded rules could restrict our ability to continue serving such Chinese customers. If we are required to cease business with these companies, or additional companies in the future, our revenues could be adversely affected.
Furthermore, the U.S. has been adopting a restrictive posture toward Chinese technology, data flows, and cross-border digital infrastructure, which could materially impact our business. Proposed tariffs to be imposed by the U.S. on imports from certain countries and potential counter-tariffs in response, could also lead to increased costs and supply chain disruptions. The proposed tariffs and positioning by the U.S. and other countries remain unsettled and it is unclear how or to what extent these changes could impact our business at this time and if we are not able to effectively navigate these changes, it could have a material adverse effect on our business and results of operations, as well as on the price of our common stock.
The validity, extent of application and duration of tariffs and the resulting impact on general economic conditions and on our business, financial condition and results of operation are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, and exemptions or exclusions that may be granted.
Inflation in the global economy, increased interest rates and adverse global economic conditions, like the ones we are currently experiencing, could negatively affect our business and financial condition.
Inflation is impacting various aspects of our business and it is unclear if we will enter a period of further inflation. We are also experiencing an increase in our costs to procure power and supply chain issues globally. Rising prices for materials related to our IBX data center construction and our data center offerings, energy and gas prices, as well as rising wages and benefits costs negatively impact our business by increasing our operating costs. The adverse economic conditions we are currently experiencing, including the impact of increased tariffs, may cause a decrease in sales as some customers may initiate cost cutting measures or scale back their operations. This could result in churn in our customer base, reductions in revenues from our offerings, adverse effects to our days of sales outstanding in accounts receivable ("DSO"), longer sales cycles, slower adoption of new technologies and increased price competition, which could adversely affect our liquidity. Customers, vendors and/or partners filing for bankruptcy could also lead to costly and time-intensive actions with adverse effects, including greater difficulty or delay in accounts receivable collection. The uncertain economic environment could also have an impact on our foreign exchange forward contracts if our counterparties' credit deteriorates or if they are otherwise unable to perform their obligations. Further, volatility in the financial markets and rising interest rates could affect our ability to access the capital markets at a time when we desire, or need, to do so which could have an impact on our flexibility to pursue additional expansion opportunities and maintain our desired level of revenue growth in the future. We also could be exposed to hyperinflation in certain economies as a result of potential expansion into developing countries.
Our efforts to mitigate the risks associated with these adverse conditions may not be successful and our business and growth could be adversely affected.
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Our business could be harmed by increased costs to procure power, prolonged power outages, shortages or capacity constraints as well as insufficient access to power.
Any power outages, shortages, capacity constraints, limits on access or significant increases in the cost of power may have an adverse effect on our business and our results of operations.
In each of our markets, we contract with and rely on third parties, third party infrastructure, governments, and global suppliers to provide a sufficient amount of power to maintain our IBX data centers and meet the needs of our current and future customers. In certain instances, we have experienced difficulties in securing the energy supply we have contracted for or that we need for our expansion plans. In certain markets, there are specific requirements to cover our operations with power procured from renewable energy resources and the availability of such alternative energy resources may be limited. Any such limitations may have a negative impact on a given IBX data center and may limit our ability to grow our business which could negatively affect our financial performance and results of operations. Furthermore, the inability to supply customers with their contracted power for any reason could harm customer and/or joint venture relationships as well as cause reputational harm.
Each new facility requires access to significant quantities of electricity. Limitations on generation, transmission and distribution may limit our ability to obtain sufficient power capacity for potential expansion sites in new or existing markets. Utility companies and other third-party power providers may impose onerous operating conditions to any agreement to provision power or we may experience significant delays, unfavorable contractual terms, new industry regulations and substantial increased costs to obtain the level of electrical service required by our current or future IBX data center designs. Our ability to find reliable partners and appropriate sites for expansion may also be limited by access to power, especially as we design our data centers to the specifications of new and evolving technologies, such as AI, which are more power-intensive, and further prepare to serve the power demands we expect in the future.
Our IBX data centers are affected by problems accessing electricity sources, such as planned or unplanned power outages and limitations on transmission or distribution of power. Unplanned power outages, including, but not limited to those relating to large storms, earthquakes, fires, tsunamis, cyber-attacks, physical attacks on utility infrastructure, war, and any failures of electrical power grids or internal systems more generally, and planned power outages by public utilities, such as Pacific Gas and Electric Company's practice of planned outages in California to minimize fire risks, could harm our customers and our business. Employees working from home could be subjected to power outages at home which could be difficult to track and could affect the day-to-day operations of our non-IBX data center employees. Our international operations are sometimes located outside of developed, reliable electricity markets, where we are exposed to some insecurity in supply associated with technical, regulatory and reliability problems, as well as transmission constraints. Some of our IBX data centers are located in leased buildings where, depending upon the lease requirements and number of tenants involved, we may or may not control some or all of the infrastructure including generators and fuel tanks. As a result, in the event of a power outage, we could be dependent upon the landlord, as well as the utility company, to restore the power. We attempt to limit our exposure to system downtime by using backup generators, which are in turn supported by onsite fuel storage and through contracts with fuel suppliers, but these measures may not always prevent downtime or solve for long-term or large-scale outages. We have experienced outages in the past for various reasons and could experience outages in the future. Any outage or supply disruption could adversely affect our business, customer experience and revenues.
We are currently experiencing inflation and volatility pressures in the energy market globally. Various macroeconomic factors are contributing to the instability and global power shortage including inadequate power generation and transmission to meet market demand in certain locations, severe weather events, governmental regulations, government relations and inflation. While we have aimed to minimize our risk, via hedging, conservation, and other efficiencies, we expect the cost for power to continue to be volatile and unpredictable and subject to inflationary pressures. We believe we have made appropriate estimates for these costs in our forecasting, but the current unpredictable energy market could materially affect our financial forecasting, results of operations and financial condition.
The ongoing military conflicts between Russia and Ukraine and in the Middle East could negatively affect our business and financial condition.
The war in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, an increase in cybersecurity incidents as well as supply chain disruptions.
Additionally, various Russian actions have led to sanctions and other penalties being levied by the U.S., the European Union, the United Kingdom, and other countries, as well as other public and private actors and
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companies, against Russia and certain other geographic areas, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system and restrictions on imports of Russian oil, liquified natural gas and coal. We do not have operations in Russia or Ukraine and historically we have had a limited number of Russian and Ukrainian customers, which we continue to screen against applicable sanctions lists per our standard processes. Although we continue to devote resources to this screening effort, including the use of software solutions, the sanctions screening process remains partially manual, and the sanctions lists continue to evolve and vary by country. We continue to address necessary changes in global sanctions laws and modify our processes as necessary in light of these evolving laws. A material failure to comply with global sanctions laws could have a negative effect on our reputation, business and financial condition.
In addition to compliance with applicable sanctions laws, we are currently limiting the ability of Russian customers to place orders for our offerings unless, after reviewing these orders, we believe they are aligned with our stated objectives in support of Ukraine. We do not allow purchases from Russian partners or suppliers and have committed to not make any direct or indirect investment in Russia absent an end to this conflict. In addition, for our customers located in Ukraine, we are currently providing offerings free of charge and may continue to do so in the future.
The associated disruptions in the oil and gas markets have caused, and could continue to cause, significant increases in energy prices, which could have a material effect on our business. Additional potential sanctions and penalties have also been proposed and/or threatened. If Russia further reduces or turns off energy supplies to Europe, our EMEA operations could be adversely affected. Russian military actions and the resulting sanctions could further affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional debt or equity financing on attractive terms in the future.
In the case of the Middle East conflict, the current situation continues to be volatile. It is possible that such events will continue to adversely impact the level of economic activity globally and that we will face increased regulatory and legal complexities in the regions affected thus impacting our business and employees, our financial condition and results of operations. Additionally, any sustained military action in the area of the Red Sea or the Persian Gulf could contribute to supply chain challenges as well as potential issues with subsea cables.
Prolonged unfavorable economic conditions or uncertainty, including as a result of the military conflict between Russia and Ukraine or in the Middle East, may adversely affect our business, financial condition, and results of operations. Any of the foregoing may also magnify the impact of other risks described in this Quarterly Report on Form 10-Q.
Risks Related to our Operations
We experienced a cybersecurity incident in the past and may be vulnerable to future security breaches, which could disrupt our operations and have a material adverse effect on our business, results of operation and financial condition.
Despite our efforts to protect against cyber-attacks, we are not fully insulated from such threats. We have experienced cybersecurity attacks and security incidents to varying degrees, and in some cases threat actors have gained unauthorized access to our systems and data. For example, in September 2020, we discovered ransomware on certain of our internal systems. While this and other incidents have been resolved, and their impacts have been immaterial, we expect we will continue to face risks associated with unauthorized access to our computer systems, loss or destruction of data, computer viruses, ransomware, malware, distributed denial-of-service attacks or other malicious activities, and the impact of such events in the future may be material. In the course of our business, we utilize vendors and other partners who are also sources of cyber risks to us. In addition, our hybrid working model, that includes both work from home and in office working environments, could expose us to additional security risks.
We offer professional solutions to our customers where we consult on data center solutions and assist with implementations. We also offer managed services in certain locations. where we manage the data center infrastructure for our customers. The access to our clients' networks and data, which is gained from these solutions, creates some risk that our clients' networks or data could be improperly accessed. We may also design our clients' cloud storage systems in such a way that exposes our clients to increased risk of data breach. If we were held responsible for any such breach, it could result in a significant loss to us, including damage to our client relationships, harm to our brand and reputation, and legal liability.
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As techniques used to breach security change frequently and are generally not recognized until launched against a target, we may not be able to promptly detect that a cyber breach has occurred, or implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented. Recent developments in the cyber threat landscape include use of AI and machine learning, as well as an increased number of cyber extortion and ransomware attacks, with the potential for higher financial ransom demand amounts and increasing sophistication and variety of ransomware techniques and methodology. Further, any adoption of AI by us or by third parties may pose new security challenges. A party who is able to compromise the security measures on our networks or the security of our infrastructure could misappropriate the proprietary or sensitive information of Equinix, our customers, including government customers, or the personal information of our employees, or cause interruptions or malfunctions in our operations or our customers' operations. As we provide assurances to our customers that we provide a high level of security, such a compromise could be particularly harmful to our brand and reputation. We also may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused by cyber breaches in our physical or virtual security systems. Any breaches that may occur in the future could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, damage relating to loss of proprietary information, harm to our reputation and increases in our security costs, which could have a material adverse effect on our financial performance and results of operations. The international cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyber-attacks. We maintain insurance coverage for cyber risks, but such coverage may be unavailable or insufficient to cover our losses.
Any failure of our physical infrastructure or negative impact on our ability to meet our obligations to our customers, or damage to customer infrastructure within our IBX data centers, could lead to significant costs and disruptions that could reduce our revenue and harm our business reputation and financial condition.
Our business depends on providing customers with highly reliable solutions. We must safeguard our customers' infrastructure and equipment located in our IBX data centers and ensure our IBX data centers and non-IBX business operations remain operational at all times. We own certain of our IBX data centers, but others are leased by us, and we rely on the landlord for basic maintenance of our leased IBX data centers and office buildings and, in some cases, the landlord is responsible for the infrastructure that runs the building such as power connections, UPSs and backup power generators. If such landlord has not maintained a leased property sufficiently, we may be forced into an early exit from the center which could be disruptive to our business. Furthermore, we continue to acquire IBX data centers not built by us and we may be required to incur substantial additional costs to repair or upgrade the IBX data centers. Newly acquired data centers also may not have the same power infrastructure and design in place as our own IBX data centers. These legacy designs could require upgrades in order to meet our standards and our customers’ expectations. Until the legacy systems are brought up to our standards, customers in these IBX data centers could be exposed to higher risks of unexpected power outages. We have experienced power outages because of these legacy design issues in the past and we could experience these in the future.
Problems at one or more of our IBX data centers or corporate offices, whether or not within our control, could result in service interruptions or significant infrastructure or equipment damage. These could result from numerous factors, including but not limited to:
• human error;
• equipment failure;
• physical, electronic and cybersecurity breaches;
• fire, earthquake, hurricane, flood, tornado and other natural disasters;
• extreme temperatures;
• water damage;
• fiber failures, subsea cable damage and other network damage/interruptions;
• software updates;
• power loss;
• terrorist acts;
• sabotage and vandalism;
• global pandemics such as the COVID-19 pandemic;
• inability of our operations employees to access our IBX data centers for any reason; and
• failure of business partners who provide our resale products.
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We have service level commitment obligations to most customers. As a result, service interruptions or significant equipment damage in our IBX data centers could result in difficulty maintaining service level commitments to these customers and potential claims related to such failures. Because our IBX data centers are critical to many of our customers' businesses, service interruptions or significant equipment damage in our IBX data centers could also result in lost profits or other indirect or consequential damages to our customers. We cannot guarantee that a court would enforce any contractual limitations on our liability in the event that one of our customers brings a lawsuit against us as a result of a problem at one of our IBX data centers and we have in the past and may decide in the future to reach settlements with affected customers irrespective of any such contractual limitations. Any such settlement may result in a reduction of revenue under U.S. generally accepted accounting principles ("GAAP"). In addition, any loss of service, equipment damage or inability to meet our service level commitment obligations could reduce the confidence of our customers and could consequently impair our ability to obtain and retain customers, which would adversely affect both our ability to generate revenues and our results of operations.
Furthermore, we are dependent upon internet service providers, telecommunications carriers and other website operators in the Americas, Asia-Pacific and EMEA regions and elsewhere, some of which have experienced significant system failures and electrical outages in the past. We also rely on a number of third-party software providers in order to deliver our offerings and operate our business. Our customers may in the future experience difficulties due to system failures unrelated to our systems and offerings. If, for any reason, these providers fail to provide the required services, our business, financial condition and results of operations could be materially and adversely impacted.
Our IBX data center employees are critical to our ability to maintain our business operations and reach our service level commitments. Although we have redundancies built into our workforce, if our IBX employees are unable to access our IBX data centers for any reason, we could experience operational issues at the affected site. Pandemics, weather and climate related crises or any other social, political, or economic disruption in the U.S. or abroad could prevent sufficient staffing at our IBX data centers, or at our corporate offices, and have a material adverse impact on our operations.
We are currently making significant investments in our back-office information technology systems and processes. Difficulties from or disruptions to these efforts may interrupt our normal operations and adversely affect our business and results of operations.
We have been investing heavily in our back-office information technology systems and processes for a number of years and expect such investment to continue for the foreseeable future in support of our pursuit of global, scalable solutions across all geographies and functions that we operate in. These continuing investments include ongoing improvements to the customer experience from initial quote to customer billing and our revenue recognition process; integration of recently acquired operations onto our various information technology systems; and implementation of new tools and technologies to either further streamline and automate processes, or to support our compliance with evolving U.S. GAAP and international accounting standards. As a result of our continued work on these projects, we may experience difficulties with our systems, management distraction and significant business disruptions. For example, difficulties with our systems may interrupt our ability to accept and deliver customer orders and may adversely impact our overall financial operations, including our accounts payable, accounts receivables, general ledger, fixed assets, revenue recognition, close processes, internal financial controls and our ability to otherwise run and track our business. We may need to expend significant attention, time and resources to correct problems or find alternative sources for performing these functions. Changes to our financial systems also create an increased risk of deficiencies in our internal controls over financial reporting until such systems are stabilized. Such significant investments in our back-office systems may take longer to complete and cost more than originally planned. In addition, we may not realize the full benefits we hoped to achieve and there is a risk of an impairment charge if we decide that portions of these projects will not ultimately benefit us or are de-scoped. Finally, the collective impact of these changes to our business has placed significant demands on impacted employees across multiple functions, increasing the risk of errors and control deficiencies in our financial statements, distraction from the effective operation of our business and difficulty in attracting and retaining employees. Any such difficulties or disruptions may adversely affect our business, our culture and our results of operations.
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The level of insurance coverage that we purchase may prove to be inadequate.
We carry liability, property, business interruption and other insurance policies to cover insurable risks to our company. We select the types of insurance, the limits and the deductibles based on our specific risk profile, the cost of the insurance coverage versus its perceived benefit and general industry standards. Our insurance policies contain industry standard exclusions for events such as war and nuclear reaction. We purchase earthquake insurance for certain of our IBX data centers, but for our IBX data centers in high-risk zones, including those in California and Japan, we have elected to self-insure. The earthquake and flood insurance that we do purchase would be subject to high deductibles. Any of the limits of insurance that we purchase, including those for flood or cyber risks, could prove to be inadequate, which could materially and adversely impact our business, financial condition and results of operations.
If we are unable to recruit or retain key qualified personnel, our business could be harmed.
Our future performance depends on the leadership of our executive team and other key employees to execute on our strategic plans, and certain key roles remain to be hired. Our talent strategy could continue to evolve with the future direction of the business. We must continue to identify, hire, train and retain key personnel who maintain relationships with our customers and who can provide the technical, strategic and marketing skills required for our company's growth. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of talent. The failure to recruit and retain necessary key personnel could cause disruption, harm our business and hamper our ability to grow our company.
The failure to obtain favorable terms when we renew our IBX data center leases, or the failure to renew such leases, could harm our business and results of operations.
While we own certain of our IBX data centers, others are leased under long-term arrangements. These leased IBX data centers have all been subject to significant development by us in order to convert them from, in most cases, vacant buildings or warehouses into IBX data centers. Most of our IBX data center leases have renewal options available to us. However, many of these renewal options provide for the rent to be set at then-prevailing market rates. To the extent that then-prevailing market rates or negotiated rates are higher than present rates, these higher costs may adversely impact our business and results of operations, or we may decide against renewing the lease. There may also be changes in shared operating costs in connection with our leases, which are commonly referred to as common area maintenance expenses. In the event that an IBX data center lease does not have a renewal option, or we fail to exercise a renewal option in a timely fashion and lose our right to renew the lease, we may not be successful in negotiating a renewal of the lease with the landlord. Further, for various reasons, a landlord may not want to renew the lease with us, or he may transfer his interests to third parties which could affect our ability to renew the lease. A failure to renew a lease or termination by a landlord of any lease could force us to exit a building prematurely, which could disrupt our business, harm our customer relationships, impact and harm our joint venture relationships, expose us to liability under our customer contracts or joint venture agreements, cause us to take impairment charges and affect our results of operations negatively.
We depend on a number of third parties to provide internet connectivity to our IBX data centers; if connectivity is interrupted or terminated, our results of operations and cash flow could be materially and adversely affected.
The presence of diverse telecommunications carriers' fiber networks in our IBX data centers is critical to our ability to retain and attract new customers. We are not a telecommunications carrier, and as such, we rely on third parties to provide our customers with carrier services. We believe that the availability of carrier capacity will directly affect our ability to achieve our projected results. We rely primarily on revenue opportunities from the telecommunications carriers' customers to encourage them to invest the capital and operating resources required to connect from their data centers to our IBX data centers. Carriers will likely evaluate the revenue opportunity of an IBX data center based on the assumption that the environment will be highly competitive. We cannot provide assurance that each and every carrier will elect to offer its services within our IBX data centers or that once a carrier has decided to provide internet connectivity to our IBX data centers that it will continue to do so for any period of time.
Our new IBX data centers require construction and operation of a sophisticated redundant fiber network. The construction required to connect multiple carrier facilities to our IBX data centers is complex and involves factors outside of our control, including regulatory processes and the availability of construction resources.
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Any hardware or fiber failures on these networks, either on land or subsea, may result in significant loss of connectivity to our new IBX data center expansions. This could affect our ability to attract new customers to these IBX data centers or retain existing customers.
To date, the network neutrality of our IBX data centers and the variety of networks available to our customers has often been a competitive advantage for us. In certain of our markets, the limited number of carriers available reduces that advantage. As a result, we may need to adapt our key revenue-generating offerings and pricing to be competitive in those markets.
If the establishment of highly diverse internet connectivity to our IBX data centers does not occur, is materially delayed, disrupted or is discontinued, or is subject to failure, our results of operations and financial condition will be adversely affected.
The use of high-power density equipment may limit our ability to fully utilize the space in our older IBX data centers.
Server technologies continue to evolve and in some instances these changes can result in customers increasing their use of high-power density equipment in our IBX data centers which can increase the demand for power on a per cabinet basis. Additionally, the workloads related to new and evolving technologies such as AI are increasing the demand for high density computing power. Because many of our IBX data centers were built a number of years ago, the current demand for power may exceed the designed electrical capacity in these IBX data centers. As power, not space, is a limiting factor in many of our IBX data centers, our ability to fully utilize the space in those IBX data centers may be impacted. The ability to increase the power capacity of an IBX data center, should we decide to, is dependent on several factors including, but not limited to, the local utility's ability to provide additional power; the length of time required to provide such power; and/or whether it is feasible to upgrade the electrical and mechanical infrastructure of an IBX data center to deliver additional power and cooling to customers. Although we are currently designing and building to a higher power specification than that of many of our older IBX data centers, and are considering redevelopment of certain sites where appropriate, there is a risk that demand could continue to increase, or our redevelopment may not be successful, and the space inside our IBX data centers could become underutilized sooner than expected.
The development and use of artificial intelligence in the workplace presents risks and challenges that may adversely impact our business and operating results.
We have begun leveraging AI and machine learning capabilities for our employees to use in their day-to-day operations. Failure to invest adequately in such capabilities may result in us lagging behind our competitors in terms of improving operational efficiency and achieving superior outcomes for our business and our customers. As we embark on these initiatives, we may encounter challenges such as a shortage of appropriate data to train internal AI models, a lack of skilled talent to effectively execute our strategy of leveraging AI internally, or the possibility that the tools we utilize may not deliver the intended value. Use of third-party AI tools can also bring information security, data privacy and legal risks. Failure to successfully harness these AI tools and manage associated risks could negatively impact our business and operating results.
We have been, and in the future may be, subject to securities class action and other litigation, which may harm our business and results of operations.
We have been, and in the future may be, subject to securities class action or other litigation. For example, we are currently facing a stockholder class action and a derivative claim as described in "Legal Proceedings" included in Part II, Item 1 of this Quarterly Report on Form 10-Q. Litigation can be lengthy, expensive, and divert management's attention and resources. Results cannot be predicted with certainty and an adverse outcome in litigation could result in monetary damages or injunctive relief. Further, any payments made in settlement may directly reduce our revenue under U.S. GAAP and could negatively impact our results of operations for the period. While we maintain insurance coverage, we cannot be certain that such coverage will continue to be available on acceptable terms or in sufficient amounts to cover potential losses. For all of these reasons, litigation could seriously harm our business, results of operations, financial condition or cash flows.
Risks Related to our Offerings and Customers
Our offerings have a long sales cycle that may harm our revenue and results of operations.
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A customer's decision to purchase our offerings typically involves a significant commitment of resources. In addition, some customers will be reluctant to commit to locating in our IBX data centers until they are confident that the IBX data center has adequate carrier connections. As a result, we have a long sales cycle. Furthermore, we may devote significant time and resources to pursuing a particular sale or customer that does not result in revenues.
Instability in the markets and the current macroeconomic environment could also increase delays in our sales cycle. Delays due to the length of our sales cycle may materially and adversely affect our revenues and results of operations, which could harm our ability to meet our forecasts and cause volatility in our stock price.
We may not be able to compete successfully against current and future competitors.
The global multi-tenant data center market is highly fragmented. It is estimated that we are one of more than 2,400 companies that provide these offerings around the world. We compete with these firms which vary in terms of their data center offerings and the geographies in which they operate. We must continue to evolve our product strategy and be able to differentiate our IBX data centers and product offerings from those of our competitors.
Some of our competitors may adopt aggressive pricing policies, especially if they are not highly leveraged or have lower return thresholds than we do. As a result, we may suffer from pricing pressure that would adversely affect our ability to generate revenues. Some of these competitors may also provide our target customers with additional benefits, including bundled communication services or cloud services, and may do so in a manner that is more attractive to our potential customers than obtaining space in our IBX data centers. Similarly, with growing acceptance of cloud-based technologies, we are at risk of losing customers that may decide to fully leverage cloud infrastructure offerings instead of managing their own. Competitors could also operate more successfully or form alliances to acquire significant market share. Regional competitors may also consolidate to become a global competitor. Consolidation of our customers and/or our competitors may present a risk to our business model and have a negative impact on our revenues. Further, because of the expected growth and opportunity related to AI, we anticipate significant investments in the data center industry by both current competitors and new investors and companies looking to capture this opportunity. If Equinix is unable to compete against these new market entrants, or capture a proportionate share of these investments, we could lose market share during this expected period of growth. We also must compete against certain of these competitors to secure the land and power needed for our expansion plans.
Failure to compete successfully may materially adversely affect our financial condition, cash flows and results of operations.
If we cannot continue to develop, acquire, market and provide new offerings or enhancements to existing offerings that meet customer requirements and differentiate us from our competitors, our results of operations could suffer.
As our customers evolve their IT strategies, we must remain flexible and evolve along with new technologies and industry and market shifts. The process of developing and acquiring new offerings and enhancing existing offerings is complex. If we fail to anticipate customers’ evolving needs and expectations or do not adapt to technological and IT trends, our results of operations could suffer. Ineffective planning and execution in our cloud, AI and product development strategies may cause difficulty in sustaining our competitive advantages. Additionally, any delay in the development, acquisition, marketing or launch of a new offering could result in customer dissatisfaction or attrition. If we cannot continue adapting our products and strategies, or if our competitors can adapt their products more quickly than us, our business could be harmed.
In order to adapt effectively, we sometimes must make long-term investments and commit significant resources before knowing whether our predictions will accurately reflect customer demand for the new offerings. This kind of investment may include real estate expansion or developing, acquiring and obtaining power and intellectual property investments. If we fail to invest before or contemporaneously with our competitors our results of operations could suffer, we also must remain flexible and change strategies quickly if our predictions are not accurate. We are currently investing in our AI strategy to serve the large footprint we foresee for customers’ AI workloads. The future of AI is still uncertain and as it continues to evolve, our predictions about the market may prove inaccurate. Market news and speculation about the future of AI and/or its impact on the data center industry have caused volatility in our stock price in the past. We cannot guarantee our investments and predictions will be accurate around AI or any other customer demand.
We have also been making investments of resources in expanding our product portfolio in recent years. New offerings may come with additional risks and may not always be successful, and certain past offerings have been
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discontinued including the Equinix Metal product. New offerings may also require additional capital, have lower margins and higher customer churn as compared to our data center offerings, thus adversely impacting our results. These offerings may also introduce us to different competition and faster development cycles as compared to our data center business. If we cannot develop or partner to quickly and efficiently meet market demands, we may also see adverse results. While we believe these product offerings and others we may implement in the future will be desirable to our customers and will complement our other offerings on Platform Equinix, we cannot guarantee the success of any product or any other new product offering.
We have also invested in joint ventures in order to develop capacity to serve the large footprint needs of a targeted set of hyperscale customers by leveraging existing capacity and dedicated hyperscale builds. We believe these hyperscale customers will also play a large role in the growth of the market for AI. We have announced our intention to seek additional joint ventures for certain of our hyperscale builds. There can be no assurances that our joint ventures will be successful or that we find appropriate partners, or that we will be able to successfully meet the needs of these customers through our hyperscale offerings.
Failure to successfully execute on our product strategy or hyperscale strategy could materially adversely affect our financial condition, cash flows and results of operations.
We have government contracts, which subjects us to revenue risk and certain other risks including early termination, audits, investigations, sanctions and penalties, any of which could have a material adverse effect on our results of operations.
We derive revenues from contracts with the U.S. government, state and local governments and foreign governments. Some of these customers may terminate all or part of their contracts at any time, without cause. There is increased pressure for governments and their agencies, both domestically and internationally, to reduce spending. Some of our federal government contracts are subject to the approval of appropriations being made by the U.S. Congress to fund the expenditures under these contracts. Similarly, some of our contracts at the state and local levels are subject to government funding authorizations.
Government contracts often have unique terms and conditions to address public sector acquisition requirements, such as most favored customer obligations, and are generally subject to audits and investigations. Being out of compliance with the terms of such contracts could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions, or debarment from future government business. On occasion, we have been out of compliance with contractual terms of certain government contracts and have remedied as necessary.
Because we depend on the development and growth of a balanced customer base, including key magnet customers, failure to attract, grow and retain this base of customers could harm our business and results of operations.
Our ability to maximize revenues depends on our ability to develop and grow a balanced customer base, consisting of a variety of companies, including enterprises, cloud, digital content and financial companies, and network service providers. We consider certain of these customers to be key magnets in that they draw in other customers. In many instances, the more balanced the customer base within each IBX data center, the better we will be able to generate significant interconnection revenues, which in turn increases our overall revenues. Our ability to attract customers to our IBX data centers will depend on a variety of factors, including the presence of multiple carriers, the mix of our offerings, the overall mix of customers, the presence of key customers attracting business through vertical market ecosystems, the IBX data center's operating reliability and security and our ability to effectively market our offerings. However, some of our customers may face competitive pressures and may ultimately not be successful or may be consolidated through merger or acquisition. If these customers do not continue to use our IBX data centers it may be disruptive to our business. If customers combine businesses, they may require less colocation space, which could lead to churn in our customer base. Finally, any uncertain global economic climate, including the one we are currently experiencing, could harm our ability to attract and retain customers if customers slow spending, or delay decision-making on our offerings, or if customers begin to have difficulty paying us or seek bankruptcy protection and we experience increased churn in our customer base. Any of these factors may hinder the development, growth and retention of a balanced customer base and adversely affect our business, financial condition and results of operations.
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Risks Related to our Financial Results
The market price of our stock may continue to be highly volatile, and the value of an investment in our common stock may decline.
The market price of the shares of our common stock has recently been and may continue to be highly volatile. General economic and market conditions, like the ones we are currently experiencing, and market conditions for technology, data center and REIT stocks in general, may affect the market price of our common stock.
Announcements by us or others, or speculations about our future plans, may also have a significant impact on the market price of our common stock. These may relate to:
• our results of operations or forecasts;
• new issuances of equity, debt or convertible debt by us, including issuances through any existing ATM Program;
• increases in market interest rates and changes in other general market and economic conditions, including inflationary concerns;
• changes to our capital allocation, tax planning or business strategy;
• our qualification for taxation as a REIT and our declaration of distributions to our stockholders;
• changes in U.S. or foreign tax laws;
• changes in management or key personnel;
• developments in our relationships with customers;
• announcements by our customers or competitors;
• changes in regulatory policy or interpretation;
• market speculation involving us or other companies in our industry, which may include short seller reports;
• litigation and governmental investigations;
• changes in the ratings of our debt or stock by rating agencies or securities analysts;
• our purchase or development of real estate and/or additional IBX data centers;
• our acquisitions of complementary businesses; or
• the operational performance of our IBX data centers.
The stock market has from time-to-time experienced extreme price and volume fluctuations, which have particularly affected the market prices for technology, data center and REIT stocks, and which have often been unrelated to their operating performance. These broad market fluctuations may adversely affect the market price of our common stock. One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution rate as a percentage of our stock price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets may affect the market value of our common stock. Furthermore, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We have been the target of this type of litigation and we may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and/or damages, and divert management's attention from other business concerns, which could seriously harm our business.
Furthermore, short sellers may engage in activity intended to drive down the market price of our common stock, which could also result in related regulatory and governmental scrutiny, among other effects. Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of later buying lower priced identical securities to return to the lender. Accordingly, it is in the interest of a short seller of our common stock for the price to decline. At any time, short sellers may also publish, or arrange for the publication of, opinions or characterizations that are intended to create negative market momentum in our common stock. Short selling reports can cause downward pressure and increased volatility in an issuer’s stock price. In particular, on March 20, 2024, a short seller report was published about us, which contained certain allegations related to components of our operating results and other strategic matters. As a result, the Audit Committee of our Board of Directors commenced an independent investigation to review the matters referenced in the report. Shortly after the release of the report, we received a subpoena from the U.S. Attorney’s Office for the Northern District of California and on April 30, 2024, we also received a subpoena from the Securities and Exchange Commission. We are cooperating fully with both. The foregoing subpoenas, or any inquiries or investigations conducted by a governmental organization or other regulatory body or internal investigation, could result in a material diversion of our management’s time and result in substantial cost and, in the event of an adverse finding, could have a material adverse effect on our business and results of operations.
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Our results of operations may fluctuate.
We have experienced fluctuations in our results of operations on a quarterly and annual basis. The fluctuations in our results of operations may cause the market price of our common stock to be volatile. We may experience significant fluctuations in our results of operations in the foreseeable future due to a variety of factors, many of which are listed in this Risk Factors section. Additional factors could include, but are not limited to:
• the timing and magnitude of depreciation and interest expense or other expenses related to the acquisition, purchase or construction of additional IBX data centers or the upgrade of existing IBX data centers;
• demand for space, power and solutions at our IBX data centers;
• the availability of power and the associated cost of procuring the power;
• changes in general economic conditions, such as those stemming from pandemics or other economic downturns, or specific market conditions in the telecommunications and internet industries, any of which could have a material impact on us or on our customer base;
• additions and changes in product offerings and our ability to ramp up and integrate new products within the time period we have forecasted;
• restructuring charges incurred in the event of a realignment of our management structure, operations or products;
• the financial condition and credit risk of our customers;
• the provision of customer discounts and credits;
• the mix of current and proposed products and offerings and the gross margins associated with our products and offerings;
• increasing repair and maintenance expenses in connection with aging IBX data centers;
• lack of available capacity in our existing IBX data centers to generate new revenue or delays in opening new or acquired IBX data centers that delay our ability to generate new revenue in markets which have otherwise reached capacity;
• changes in employee stock-based compensation;
• changes in our tax planning strategies or failure to realize anticipated benefits from such strategies;
• changes in income tax benefit or expense; and
• changes in or new GAAP as periodically released by the Financial Accounting Standards Board ("FASB").
Any of the foregoing factors, or other factors discussed elsewhere in this report, could have a material adverse effect on our business, results of operations and financial condition. Although we have experienced growth in revenues in recent quarters, this growth rate is not necessarily indicative of future results of operations. It is possible that we may not be able to generate net income on a quarterly or annual basis in the future. In addition, a relatively large portion of our expenses are fixed in the short-term, particularly with respect to lease and personnel expenses, depreciation and amortization and interest expenses. Therefore, our results of operations are particularly sensitive to fluctuations in revenues. As such, comparisons to prior reporting periods should not be relied upon as indications of our future performance. In addition, our results of operations in one or more future quarters may fail to meet the expectations of securities analysts or investors.
We may incur goodwill and other intangible asset impairment charges, or impairment charges to our property, plant and equipment, which could result in a significant reduction to our earnings.
In accordance with U.S. GAAP, we are required to assess our goodwill and other intangible assets annually, or more frequently whenever events or changes in circumstances indicate potential impairment, such as changing market conditions or any changes in key assumptions. If the testing performed indicates that an asset may not be recoverable, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made.
We also periodically monitor the remaining net book values of our property, plant and equipment, generally at the individual IBX data center level. Although our individual IBX data centers are generally performing in accordance with our expectations, our IBX data centers could under-perform relative to our expectations which may result in additional non-cash impairment charges.
These charges could be significant, which could have a material adverse effect on our business, results of operations or financial condition.
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We have incurred substantial losses in the past and may incur additional losses in the future.
As of September 30, 2025, our retained earnings were $5.8 billion. We are currently investing heavily in our future growth through the build out of multiple additional IBX data centers, expansions of IBX data centers and acquisitions of complementary businesses. As a result, we will incur higher depreciation and other operating expenses, as well as transaction costs and interest expense, that may negatively impact our ability to sustain profitability in future periods unless and until these new IBX data centers generate enough revenue to exceed their operating costs and cover the additional overhead needed to scale our business for this anticipated growth. The current global financial uncertainty may also impact our ability to sustain profitability if we cannot generate sufficient revenue to offset the increased costs of our recently opened IBX data centers or IBX data centers currently under construction. In addition, costs associated with the acquisition and integration of any acquired companies, as well as the additional interest expense associated with debt financing, we have undertaken to fund our growth initiatives, may also negatively impact our ability to sustain profitability. Finally, given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability on a quarterly or annual basis.
Risks Related to Our Expansion Plans
Our construction of new IBX data centers, IBX data center expansions or IBX data center redevelopment could involve significant risks to our business.
In order to sustain our growth in certain of our existing and new markets, we may have to expand an existing data center, lease a new facility or acquire suitable land, with or without structures, to build new IBX data centers from the ground up. Expansions or new builds are currently underway, or being contemplated, in new and existing markets. Construction projects expose us to many risks which could have an adverse effect on our results of operations, financial condition and/or on customer demand and satisfaction. The current global supply chain, tariffs and inflation issues have exacerbated many of these construction risks and created additional risks for our business. Some of the risks associated with construction projects include:
• construction delays and/or quality issues;
• power and power grid constraints;
• lack of availability and delays for data center equipment, including items such as generators and switchgear;
• unexpected budget changes;
• increased prices for and delays in obtaining building supplies, raw materials and data center equipment;
• labor availability, labor disputes and work stoppages with contractors, subcontractors and other third parties;
• unanticipated environmental issues and geological problems;
• delays related to permitting and approvals to open from public agencies and utility companies;
• unexpected lack or reduction of power access;
• adverse impacts on existing customers in the IBX data center;
• delays in site readiness leading to our failure to meet commitments made to customers planning to expand into a new build; and
• unanticipated customer requirements that would necessitate alternative data center design, making our sites less desirable or leading to increased costs in order to make necessary modifications or retrofits.
We are currently experiencing rising construction costs which reflect the increase in cost of labor and raw materials, supply chain and logistic challenges, and high demand in our sector. While we have invested in creating a reserve of materials to mitigate supply chain issues and inflation, it may not be sufficient and ongoing delays, difficulty finding replacement products and continued high inflation could affect our business and growth and could have a material effect on our business. In certain instances we have elected to pre-buy certain equipment and materials to mitigate supply chain issues before our construction plans are finalized. If our estimates are wrong, we may be liable to pay for goods we no longer need.
Current relations between the U.S. and China have created increased supply chain risk due to successive U.S. legislation promoting decoupling from China on semiconductors and specific telecommunications equipment makers, and having to source for alternative suppliers for key components outside of China. We are currently using our global supply chain to manage the evolving tariff environment and reduce impacts on our business and customers. At this time, we believe the largest potential tariff impact for us is related to steel and steel derivatives. Tariffs on steel and steel derivatives could lead to significant building cost increases for us if we are unable to source alternative options. Any proposed tariffs to be imposed by the U.S. on imports from certain countries and potential counter-tariffs in response, could lead to increased costs and supply chain disruptions.
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Attacks on merchant vessels remain high in the Red Sea which is causing disruptions in shipping routes. Although alternative routes are available, including routes via the Cape of Good Hope, these routes can add additional transit time and lead to delayed deliveries and increased fuel costs. We anticipate the disruptions in the Red Sea could continue to escalate. Any additional or unexpected disruptions to our supply chain, including in the event of any sustained regional escalation of the current conflict in the Middle East in the area around the Red Sea or more broadly, or inflationary pressures could significantly affect the cost of our planned expansion projects and interfere with our ability to meet commitments to customers who have contracted for space in new IBX data centers under construction.
Construction projects are dependent on permitting from public agencies and utility companies. Any delay in permitting could affect our growth. We are currently experiencing permitting delays in most metros. While we don't currently anticipate any material long-term negative impact to our business because of these construction delays, these types of delays and stoppages related to permitting from public agencies and utility companies could worsen and have an adverse effect on our bookings, revenue or growth.
All construction related projects require us to carefully select and rely on the experience of one or more designers, general contractors, and associated subcontractors during the design and construction process. Additionally, we specify performance and quality requirements for our products. Constraints to component availability, restrictions on permitted suppliers, import and export controls and supplier backlogs could lead suppliers to source from alternative providers. This could lead to increased quality defects and a failure of Equinix to meet our performance and quality requirements. Further, should a designer, general contractor, significant subcontractor or key supplier experience financial problems or other problems during the design or construction process, we could experience significant delays, increased costs to complete the project and/or other negative impacts to our expected returns.
Site selection is also a critical factor in our expansion plans. There may not be suitable properties available in our markets with the necessary combination of high-power capacity and fiber connectivity, or selection may be limited. We expect that we will continue to experience limited availability of power and grid constraints in many markets as well as shortages of associated equipment because of the current high demands and finite nature of these resources. These shortages could result in site selection challenges, construction delays or increased costs. Government limitations or moratoriums placed on data center construction in a given market may also negatively impact our ability to expand according to our plans. Thus, while we may prefer to locate new IBX data centers adjacent to our existing locations, it may not always be possible. In the event we decide to build new IBX data centers separate from our existing IBX data centers, we may provide metro connect solutions to connect these two IBX data centers. Should these solutions not provide the necessary reliability to sustain connection, or if they do not meet the needs of our customers, this could result in lower interconnection revenue and lower margins and could have a negative impact on customer retention over time.
Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.
We have completed numerous acquisitions, including most recently that of three data centers in Manila, Philippines, from Total Information Management ("TIM") in 2025. We expect to make additional acquisitions in the future, which may include (i) acquisitions of businesses, products, solutions or technologies that we believe to be complementary, (ii) acquisitions of new IBX data centers or real estate for development of new IBX data centers; (iii) acquisitions through investments in local data center operators; or (iv) acquisitions in new markets with higher risk profiles. We may pay for future acquisitions by using our existing cash resources (which may limit other potential uses of our cash), incurring additional debt (which may increase our interest expense, leverage and debt service requirements) and/or issuing shares (which may dilute our existing stockholders and have a negative effect on our earnings per share). Acquisitions expose us to potential risks, including:
• the possible disruption of our ongoing business and diversion of management's attention by acquisition, transition and integration activities, particularly when multiple acquisitions and integrations are occurring at the same time or when we are entering an emerging market with a higher risk profile;
• our potential inability to successfully pursue or realize some or all of the anticipated revenue opportunities associated with an acquisition or investment;
• the possibility that we may not be able to successfully integrate acquired businesses, or businesses in which we invest, or achieve anticipated operating efficiencies or cost savings;
• the possibility that announced acquisitions may not be completed, due to failure to satisfy the conditions to closing as a result of:
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• an injunction, law or order that makes unlawful the consummation of the acquisition;
• inaccuracy or breach of the representations and warranties of, or the non-compliance with covenants by, either party;
• the nonreceipt of closing documents; or
• for other reasons;
• the possibility that there could be a delay in the completion of an acquisition, which could, among other things, result in additional transaction costs, loss of revenue or other adverse effects resulting from such uncertainty;
• the possibility that our projections about the success of an acquisition could be inaccurate and any such inaccuracies could have a material adverse effect on our financial projections;
• the dilution of our existing stockholders as a result of our issuing stock as consideration in a transaction or selling stock in order to fund the transaction;
• the possibility of customer dissatisfaction if we are unable to achieve levels of quality and stability on par with past practices;
• the possibility that we will be unable to retain relationships with key customers, landlords and/or suppliers of the acquired businesses, some of which may terminate their contracts with the acquired business as a result of the acquisition or which may attempt to negotiate changes in their current or future business relationships with us;
• the possibility that we could lose key employees from the acquired businesses;
• the possibility that we may be unable to integrate certain IT systems that do not meet Equinix's standard requirements with respect to security, privacy or any other standard;
• the potential deterioration in our ability to access credit markets due to increased leverage;
• the possibility that our customers may not accept either the existing equipment infrastructure or the "look-and-feel" of a new or different IBX data center;
• the possibility that additional capital expenditures may be required or that transaction expenses associated with acquisitions may be higher than anticipated;
• the possibility that required financing to fund an acquisition may not be available on acceptable terms or at all;
• the possibility that we may be unable to obtain required approvals from governmental authorities under antitrust and competition laws on a timely basis or at all, which could, among other things, delay or prevent us from completing an acquisition, limit our ability to realize the expected financial or strategic benefits of an acquisition or have other adverse effects on our current business and operations;
• the possible loss or reduction in value of acquired businesses;
• the possibility that future acquisitions may present new complexities in deal structure, related complex accounting and coordination with new partners, particularly in light of our desire to maintain our qualification for taxation as a REIT;
• the possibility that we may not be able to prepare and issue our financial statements and other public filings in a timely and accurate manner, and/or maintain an effective control environment, due to the strain on the finance organization when multiple acquisitions and integrations are occurring at the same time;
• the possibility that future acquisitions may trigger property tax reassessments resulting in a substantial increase to our property taxes beyond that which we anticipated;
• the possibility that future acquisitions may be in geographies and regulatory environments to which we are unaccustomed and we may become subject to complex requirements and risks with which we have limited experience;
• the possibility that future acquisitions may appear less attractive due to fluctuations in foreign currency rates;
• the possibility that carriers may find it cost-prohibitive or impractical to bring fiber and networks into a new IBX data center;
• the possibility of litigation or other claims in connection with, or as a result of, an acquisition, or inherited from the acquired company, including claims from terminated employees, customers, former stockholders or other third parties;
• the possibility that asset divestments may be required in order to obtain regulatory clearance for a transaction;
• the possibility of pre-existing undisclosed liabilities, including, but not limited to, lease or landlord related liability, tax liability, environmental liability or asbestos liability, for which insurance coverage may be insufficient or unavailable, or other issues not discovered in the diligence process;
• the possibility that we receive limited or incorrect information about the acquired business in the diligence process; and
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• the possibility that we do not have full visibility into customer agreements and customer termination rights during the diligence process which could expose us to additional liabilities after completing the acquisition.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows. If an acquisition does not proceed or is materially delayed for any reason, the price of our common stock may be adversely impacted, and we will not recognize the anticipated benefits of the acquisition.
We cannot assure that the price of any future acquisitions of IBX data centers or businesses will be similar to prior IBX data center acquisitions and businesses. In fact, we expect costs required to build or render new IBX data centers operational to increase in the future. If our revenue does not keep pace with these potential acquisition and expansion costs, we may not be able to maintain our current or expected margins as we absorb these additional expenses. There is no assurance we would successfully overcome these risks, or any other problems encountered with these acquisitions.
The anticipated benefits of our joint ventures may not be fully realized, or take longer to realize than expected.
We have entered into joint ventures to develop and operate data centers. Certain sites that are intended to be utilized in joint ventures require investment for development. The success of these joint ventures will depend, in part, on our ability to find suitable land and power as well as the successful development of the data center sites. Such development may be more difficult, time-consuming or costly than expected and could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could materially impact our business, financial condition and results of operations. Additionally, if it is determined these sites are no longer desirable for the joint ventures, we would need to adapt such sites for other purposes.
We may not realize all of the anticipated benefits from our joint ventures. The success of these joint ventures will depend, in part, on the successful partnership between Equinix and our joint venture partners. Such a partnership is subject to risks as outlined below, and more generally, to the same types of business risks as would impact our IBX data center business. A failure to successfully partner, or a failure to realize our expectations for the joint ventures, including any contemplated exit strategy from a joint venture, could materially impact our business, financial condition and results of operations. These joint ventures could also be negatively impacted by inflation, supply chain issues, an inability to obtain financing on favorable terms or at all, an inability to fill the data center sites with customers as planned, unexpected power constraints, and development and construction delays, including those we are currently experiencing in many markets globally.
Joint venture investments could expose us to risks and liabilities in connection with the formation of the new joint ventures, the operation of such joint ventures without sole decision-making authority, and our reliance on joint venture partners who may have economic and business interests that are inconsistent with our business interests.
In addition to our current and proposed joint ventures, we may co-invest with other third parties through partnerships, joint ventures or other entities in the future. These joint ventures could result in our acquisition of non-controlling interests in, or shared responsibility for, managing the affairs of a property or portfolio of properties, partnership, joint venture or other entity. We may be subject to additional risks, including:
• we may not have the right to exercise sole decision-making authority regarding the properties, partnership, joint venture or other entity;
• if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital or be otherwise adversely impacted;
• our partners may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives;
• our joint venture partners may take actions that are not within our control, which could require us to dispose of the joint venture asset, transfer it to a taxable REIT subsidiary ("TRS") in order to maintain our qualification for taxation as a REIT, or purchase the partner's interests or assets at an above-market price;
• our joint venture partners may take actions unrelated to our business agreement but which reflect poorly on us because of our joint venture relationship;
• disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business;
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• we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require us to pay an amount greater than its investment in the joint venture;
• we may fail to maintain the complex tax structure of the joint ventures and, as a result, become liable for additional tax liabilities of the joint ventures;
• our joint venture partner may have contractual exit rights under certain circumstances, and may force us to buy them out on terms and timing unfavorable to us;
• we may need to change the structure of an established joint venture or create new complex structures to meet our business needs or the needs of our partners which could prove challenging; and
• a joint venture partner's decision to exit the joint venture may not be at an opportune time for us or in our business interests.
Each of these factors may result in returns on these investments being less than we expect or in losses, and our financial and results of operations may be adversely affected.
If we cannot effectively manage our international operations and successfully implement our international expansion plans, our business and results of operations would be adversely impacted.
For the years ended December 31, 2024, 2023 and 2022, we recognized approximately 62%, 63% and 61%, respectively, of our revenues outside the U.S. We currently operate outside of the U.S. in Canada, Mexico, South America, the Asia-Pacific region and the EMEA region.
In addition, we are currently undergoing expansions or evaluating expansion opportunities outside of the U.S., which include entering into emerging and high-risk markets. Undertaking and managing expansions in foreign jurisdictions may present unanticipated challenges to us.
Our international operations are generally subject to a number of additional risks, including:
• the costs of customizing IBX data centers for foreign countries;
• protectionist laws and business practices favoring local competition;
• greater difficulty or delay in accounts receivable collection;
• difficulties in staffing and managing foreign operations, including negotiating with foreign labor unions or workers' councils;
• difficulties in managing across cultures and in foreign languages;
• political and economic instability;
• difficulties in managing varying business standards and construction speeds across markets;
• fluctuations in currency exchange rates;
• difficulties in repatriating funds from certain countries;
• our ability to obtain, transfer or maintain licenses required by governmental entities with respect to our business;
• unexpected changes in regulatory, tax and political environments;
• difficulties in procuring power and/ or in obtaining stable sources of power;
• trade wars;
• changes in the government and public administration in emerging markets that may impact the stability of foreign investment policies;
• our ability to secure and maintain the necessary physical and telecommunications infrastructure;
• compliance with anti-bribery and corruption laws;
• compliance with economic and trade sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury, the Bureau of Industry and Security of the US Department of Commerce and other enforcement agencies in other jurisdictions around the world including those related to the Russian and Ukrainian war;
• compliance with changing laws, policies and requirements related to sustainability;
• increasing scrutiny on the operational resilience of data centers, especially in countries where data centers are designated as critical national infrastructure and/or essential ICT service providers;
• increasing resistance to data center presence and expansion by local communities;
• compliance with evolving cybersecurity laws including reporting requirements; and
• compliance with evolving governmental regulation.
Further, if we cannot effectively manage the challenges associated with our international operations and expansion plans, we could experience a delay in our expansion projects or a failure to grow. Expansion challenges
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and international operations failures could also materially damage our reputation, our brand, our business and results of operations. Our success depends, in part, on our ability to anticipate and address these risks and manage these difficulties.
We continue to invest in our expansion efforts, but may not have sufficient customer demand in the future to realize expected returns on these investments.
We are considering the acquisition or lease of additional properties and the construction of new IBX data centers beyond those expansion projects already announced. We will be required to commit substantial operational and financial resources to these IBX data centers in advance of securing customer contracts and we may not have sufficient customer demand in those markets to support these IBX data centers once they are built. In addition, unanticipated technological changes could affect customer requirements for data centers, and we may not have built such requirements into our new IBX data centers. Either of these contingencies, if they were to occur, could make it difficult for us to realize expected or reasonable returns on these investments.
Risks Related to Our Capital Needs and Capital Strategy
Our substantial debt could adversely affect our cash flows and limit our flexibility to raise additional capital.
We have a significant amount of debt and have announced our need to incur additional debt to support our planned growth. Additional debt may also be incurred to fund future acquisitions, any future special distributions, regular distributions or the other cash outlays associated with maintaining our qualification for taxation as a REIT. As of September 30, 2025, our total indebtedness (inclusive of finance lease liabilities and gross of debt issuance costs and debt discounts) was approximately $19.6 billion, our stockholders' equity was $14.2 billion and our cash, cash equivalents and short-term investments totaled $2.9 billion. In addition, as of September 30, 2025, we had approximately $4.0 billion of additional liquidity available to us from our $4.0 billion revolving credit facility. In addition to our substantial debt, we lease many of our IBX data centers and certain equipment under lease agreements, some of which are accounted for as operating leases. As of September 30, 2025, we recorded operating lease liabilities of $1.5 billion, which represents our obligation to make lease payments under those lease arrangements.
Our substantial amount of debt and related covenants, our off-balance sheet commitments, and our intent to raise additional debt could have important consequences. For example, they could:
• require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt and in respect of other off-balance sheet arrangements, reducing the availability of our cash flow to fund future capital expenditures, working capital, execution of our expansion strategy and other general corporate requirements;
• increase the likelihood of negative outlook from our credit rating agencies, or of a downgrade to our current rating;
• make it more difficult for us to satisfy our obligations under our various debt instruments;
• increase our cost of borrowing and even limit our ability to access additional debt to fund future growth;
• increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations;
• limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a competitive disadvantage compared with our competitors;
• limit our operating flexibility through covenants with which we must comply;
• limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business; and
• make us more vulnerable to increases in interest rates because of the variable interest rates on some of our borrowings to the extent we have not entirely hedged such variable-rate debt.
The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition.
We also plan to refinance a portion of our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt and given current market conditions the terms of any refinancing may not be as favorable as the terms of our existing debt. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in even higher interest rates upon refinancing than we anticipate, the interest expense relating to that refinanced indebtedness would increase. These risks could materially adversely affect our financial condition, cash flows and results of operations.
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Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.
Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance acquisitions or repay debt. In October 2024, we established an "at the market" equity offering program (the "2024 ATM Program") to replace a previous program from 2022 which had been exhausted (the "2022 ATM Program”). Under the $2.0 billion 2024 ATM Program, we may, from time to time, issue and sell shares of our common stock to or through sales agents up to established limits. As of September 30, 2025, we had approximately $1.2 billion available for sale under the 2024 ATM Program. We have refreshed our ATM program in the past and may refresh our ATM program in the future, which may lead to additional dilution for our stockholders. We may also seek authorization to sell additional shares of common stock through other means which could lead to additional dilution for our stockholders. Please see Note 11 within the condensed consolidated financial statements of this Quarterly Report on Form 10-Q for sales of our common stock under our ATM programs.
If we are not able to generate sufficient operating cash flows or obtain external financing, our ability to fund incremental expansion plans may be limited.
Our capital expenditures, together with ongoing operating expenses, obligations to service our debt and the cash outlays associated with our REIT distribution requirements, are, and will continue to be, a substantial burden on our cash flow and may decrease our cash balances. Additional debt or equity financing may not be available when needed or, if available, may not be available on satisfactory terms. Our inability to obtain additional debt and/or equity financing or to generate sufficient cash from operations may require us to prioritize projects or curtail capital expenditures which could adversely affect our results of operations.
Our derivative transactions expose us to counterparty credit risk.
Our derivative transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract. Disruptions in the financial markets could lead to sudden decreases in a counterparty's liquidity, which could make them unable to perform under the terms of their derivative contract and we may not be able to realize the benefit of the derivative contract.
Risks Related to Environmental Laws and Climate Change
Environmental laws and regulations may impose upon us new or unexpected costs.
We are subject to various federal, state and local environmental and health and safety laws and regulations in the United States and at our non-U.S. locations, including those relating to the generation, storage, handling and disposal of hazardous substances, regulated materials and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have arranged for, disposed of or released hazardous substances into the environment. Our operations involve the use of hazardous substances and other regulated materials such as petroleum fuel for emergency generators, as well as batteries, cleaning solutions, refrigerants and other materials. At some of our locations, hazardous substances or regulated materials are known to be present in soil or groundwater, and there may be additional unknown hazardous substances, or regulated materials present at sites that we own, operate or lease. At some of our locations, there are land use restrictions in place relating to earlier environmental cleanups that do not materially limit our use of the sites. To the extent any hazardous substances or any other substance or material must be investigated, cleaned up or removed from our property, we may be responsible under applicable laws, permits or leases for the investigation, removal or cleanup of such substances or materials, the cost of which could be substantial.
Regulations announced by federal agencies (such as the U.S. EPA), state environmental and health and safety agencies or regulators in other countries could limit air emissions from fossil fuel-fired power plants, restrict discharges of cooling water, limit the availability of potable water and otherwise impose new operational restraints on power plants that could increase costs and reliability of electricity. Regulatory programs intended to promote increased generation of electricity from renewable sources may also increase our costs of procuring electricity. In addition, we are directly subject to environmental, health and safety laws regulating air emissions, storm water management and other environmental matters arising in our business. For example, our emergency generators are subject to state, federal and country-specific regulations governing air pollutants, which could limit the operation of those generators or require the installation of new pollution control technologies. While environmental regulations do not normally impose material costs upon our operations, unexpected events, equipment malfunctions, human error
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and changes in law or regulations, among other factors, can lead to additional capital requirements, limitations upon our operations and unexpected increased costs.
Further, greenhouse gas ("GHG") emissions regulations, carbon taxes, carbon pricing mechanisms and removal of incentives for renewable energy development and GHG reductions could also increase expenses, create unexpected costs and require investments in new technologies. To date, regulations aimed at reducing GHG emissions have not had a material adverse effect on our electricity costs, but potential new regulatory requirements and the market-driven nature of some of the programs could have a material adverse effect on our operating expenses. Non-U.S. regulations related to the environment and sustainability are expected to continue to increase and evolve and may impose upon us new or unexpected costs. The course of future and existing legislation and regulation in the U.S. and abroad remains difficult to predict, and the potential increased costs associated with national or supra-national GHG regulation and other government policies cannot be estimated at this time.
We also purchase significant amounts of electricity from generating facilities and utility companies. These facilities and utility companies are subject to environmental laws, regulations, permit requirements and policy decisions that could be subject to material change, which could result in increases in our electricity suppliers' compliance costs that may be passed through to us in the form of higher electricity costs.
Our business may be harmed by any instability in energy availability and power supply.
Potential disruptions in power supply or increased operational costs related to power may be caused by changes in energy availability, market fluctuations, regulatory changes and climatic events affecting power prices and commodities markets. Interruptions in power transmission and grid constraints could disrupt operations and increase our costs. The growing demand for data centers and power in energy constrained areas exacerbate these risks. These limitations in power supply, transmission, combined with higher energy costs, may have an adverse effect on our business.
Our business may be adversely affected by physical risks related to climate change and our response to it.
Acute physical risks and severe weather events, such as heatwaves, droughts, flooding, wildfires and storms, pose threats to our data centers by causing physical damages, power disruptions, and rising electricity costs, which may impact our ability to operate, maintain service and attract and retain customers, thereby affecting our costs and revenues. The frequency and intensity of severe weather events are reportedly increasing as part of broader climate changes. Changes in global weather patterns may also pose long-term risks of physical impacts to our business.
Interruptions in power transmission and grid constraints due to severe weather events can disrupt operations and increase costs, potentially resulting in adverse effects on our reputation or demand for our services and products. While we maintain disaster recovery and business continuity plans to allow us to recover from natural disasters or other events that can interrupt our business, we cannot be certain that our plans will work as intended to mitigate the impacts of such disasters or events. Failure to prevent impact to customers from such events could adversely affect our business.
We may fail to achieve our sustainability objectives, or may encounter objections to them, either of which may adversely affect public perception of our business and affect our relationship with our customers, regulators, our stockholders and/or other stakeholders.
We face pressure from our customers, stockholders and other stakeholders, such as the communities in which we operate, who are increasingly focused on sustainability, to prioritize clean and renewable energy procurement, reduce our carbon footprint, promote resource efficiency practices and demonstrate economic benefits to society. We have established science-aligned sustainability objectives, including long-term goals of achieving 100% clean and renewable energy coverage and reducing our GHG emissions from our operations and supply chain to address some of these goals where possible. We also plan to continue to scale our clean and renewable energy strategy, use refrigerants that pose fewer risks of environmental impact and pursue opportunities to improve energy and water efficiency. As a result of these and other initiatives, we intend to make progress towards reducing our environmental impact, meet our sustainability objectives, as well as ensuring that our business remains viable in a low-carbon economy.
While we believe these initiatives are beneficial to our business, pursuing these sustainability objectives may involve additional costs for conducting our business. For example, developing and acting on sustainability initiatives, including collecting, measuring, and reporting sustainability data and information can be costly. Further, we have undertaken efforts to support availability of new clean and renewable energy development. These efforts may
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increase our costs of electricity above those that would be incurred through procurement of conventional electricity from existing sources or through conventional grids. Reducing our carbon footprint may also require physical or operational modifications that may be costly. These initiatives could adversely affect our financial position and results of operations.
There is also a risk that our sustainability objectives will not be met. It is possible that we may fail to reach our sustainability objectives in a timely manner or that our customers, stockholders, members of our communities and/or other stakeholders might not be satisfied with our sustainability efforts or the speed of their adoption. Our customers, stockholders or other stakeholders may object to our sustainability objectives or the way we seek to achieve such objectives. A failure to meet our sustainability goals, or significant controversy regarding these goals and how we achieve them, could adversely affect public perception of our business, employee morale or customer, stockholder or community support. If we do not meet our customers' or stockholders' expectations regarding those initiatives, or lose support in our communities, our business and/or our share price could be harmed.
Some governmental entities in the U.S. and certain investor constituencies question the appropriateness of or object to sustainability initiatives. Some investors may use sustainability-related factors to guide their investment strategies and may choose not to invest in us, a factor that could tend to reduce demand for our shares and possibly affect our share price adversely. We may face increased governmental scrutiny, potential enforcement actions or private litigation challenging our sustainability goals, or our disclosure of those goals. This could also impact our ability to achieve our sustainability goals. New or changing regulation or public opinion regarding our sustainability goals or our actions to achieve them may result in adverse effects on our financial performance, reputation or demand for our services and products, or may otherwise result in obligations and liabilities that cannot be predicted or estimated at this time.
Risks Related to Certain Regulations and Laws, Including Tax Laws
Government regulation related to our business or failure to comply with laws and regulations may adversely affect our business.
Various laws and governmental regulations, both in the U.S. and abroad, governing internet-related services, related communications services and information technologies are evolving rapidly to address technological advancements, shifting consumer behaviors and the rise of new services. Changes to these laws and regulations could have a material adverse effect on us and our customers. We expect there may also be forthcoming regulation in areas of regulating the responsible use of AI, such as the proposed EU Artificial Intelligence Act and the introduction of heightened measures to be adopted with respect to cybersecurity, operational resilience, data privacy, sustainability, taxation and data security, any of which could impact us and our customers.
We remain focused on whether and how existing and changing laws, such as those governing intellectual property, privacy, libel, telecommunications services, data flows/data localization, carbon emissions impact, competition and antitrust, and taxation apply to our business and those which might have a material effect on our customers’ decisions to purchase our solutions. Substantial resources may be required to comply with regulations or bring any non-compliant business practices into compliance with such regulations. In addition, the continuing development of the market for online commerce and the displacement of traditional telephony service by the internet and related communications services may prompt an increased call for more stringent consumer protection laws or other regulation both in the U.S. and abroad that may impose additional burdens on companies conducting business online and their service providers.
Many countries and states have increasingly taken a more proactive approach on sustainability through the adoption of regulations that oblige corporations to make disclosures on their corporate sustainability efforts through mandatory reporting and to decarbonize their operations and supply chain. Despite there being some developments in the U.S. and the EU to deregulate or scale back the requirements on corporate sustainability efforts, it is uncertain if the regulations on corporate sustainability will be revoked permanently. For example, while the EU Stop-the-Clock Directive seeks to delay the enforcement and reduce the scale of corporate sustainability reporting under the EU Corporate Sustainability Reporting Directive (“CSRD”), the obligations under the CSRD remains valid and will have to be complied with albeit at a later date. Additionally, the global regulatory landscape on corporate sustainability reporting continues to expand in both size and complexity across other parts of the world. It is possible that compliance with the sustainability-related regulations and directives will require us to re-evaluate and make changes to our current operations and our supply chain and thus increase our cost of doing business in the relevant affected regions or countries. We may incur incremental costs to enhance our internal systems to collect the data needed to meet these regulatory requirements, including attestation standards.
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In countries where there are shortages of power, land and water resources, local governments have and/or will be imposing more stringent regulations and requirements to control the growth and development of data centers in their countries. New builds and further expansion of data center operations in such markets are increasingly being evaluated and approvals (where required) may only be granted where a data center operator is not only able to demonstrate that it is efficient in its use of energy and water but also that its operations have and/or will bring positive and significant environmental, economic and social impact to the country and the local community. Our data center operations increasingly have to accommodate thermal demands of high-performance computing infrastructure at scale. Using evaporative cooling to meet these demands introduces significant water-related risks that could impact our operations, costs, and reputation. For example, many of our facilities are located in regions experiencing water stress or recurring droughts, and evaporative cooling systems can consume millions of gallons annually. In water-scarce areas, this can lead to regulatory restrictions, community opposition, or operational limitations.
Digitalization has been accelerated in many countries as a direct consequence of the pandemic and regulators are increasingly aware and recognizing the importance of data centers in ensuring the availability, resiliency, security and stability of digitalized critical services such as national security, healthcare and financial and banking services. Our business was designated "critical infrastructure" or "essential services" which allowed our data centers to remain open in many jurisdictions during the COVID-19 pandemic. Regulations such as the US Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA 2022”), the SEC Cybersecurity Disclosure Rule, the EU Network and Information Security Directive No.2 (“NIS 2”), the EU Digital Operational Resilience Act (“DORA”), and Australia’s Security of Critical Infrastructure Act 2018 make it mandatory for Equinix to comply with more stringent requirements related to cybersecurity, data privacy, controls on data storage and cross border data transfer and operational resilience, more so, in countries where our entities and/or IBXs are designated as critical information or critical national infrastructure. Any regulations restricting our ability to operate our business for any reason could have a material adverse effect on our business. In our efforts to meet the various data privacy regulations that apply to us, we have made and continue to make certain changes to our business practices and use of certain third party tools and vendors. Additionally, customer sensitivity to privacy continues to increase and our privacy statements and practices may create additional customer expectations about the collection, use, and sharing of personal information.
We strive to comply with all laws and regulations that apply to our business. However, as these laws evolve, they can be subject to varying interpretations and regulatory discretion. To the extent a regulator or court disagrees with our interpretation of these laws and determines that our practices are not in compliance with applicable laws and regulations, we could be subject to civil and criminal penalties that could adversely affect our business operations. The adoption, or modification of laws or regulations relating to the internet and our business, or interpretations of existing laws, could have a material adverse effect on our business, financial condition and results of operations.
Changes in U.S. or foreign tax laws, regulations, or interpretations thereof, including changes to tax rates, may adversely affect our financial statements and cash taxes.
We are a U.S. company with global subsidiaries and are subject to income and other taxes in the U.S. (although currently limited due to our taxation as a REIT) and many foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income and other taxes. Although we believe that we have adequately assessed and accounted for our potential tax liabilities, and that our tax estimates are reasonable, there can be no certainty that additional taxes will not be due upon audit of our tax returns or as a result of changes to the tax laws and interpretations thereof. For example, we are currently undergoing audits in a number of jurisdictions where we operate. The final results of these audits are uncertain and may not be resolved in our favor.
The Organization for Economic Co-operation and Development ("OECD") is an international association made up of over 30 countries including the U.S. The OECD has proposed and made numerous changes to long-standing tax principles, which, if adopted by the member countries, could have a materially adverse effect on our tax liabilities. For example, it has proposed a framework to implement a global minimum tax of 15% for businesses with global revenues and profits above certain thresholds (referred to as Pillar Two). The framework includes a mechanism empowering foreign jurisdictions to levy a top-up tax on our profits in the U.S. Certain aspects of Pillar Two became effective January 1, 2024, and the rest of the new tax regime became generally effective January 1, 2025, if the rules were adopted and ratified by the legislatures in the OECD countries. On January 20, 2025, the U.S. issued an executive order formally repudiating its commitment to the OECD Pillar Two framework unless it is explicitly enacted by Congress. The order states that the global tax deal has “no force or effect in the United States” and directs the Treasury to assess foreign tax regimes for potential discriminatory impacts on U.S. businesses. On
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June 28, 2025, a joint statement issued by G7 members indicated that a “shared understanding” had been reached that would exempt US-parented groups from both of the primary Pillar Two tax regimes. The latest development has substantially decreased the risk of a global minimum tax regime on us, but we will continue to monitor the global tax landscape and the OECD.
Our business could be adversely affected if we are unable to maintain our complex global legal entity structure.
We maintain a complex global organizational structure, containing numerous legal entities of varied types and serving various purposes, in each country in which we operate. For example, to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes, we use TRSs and qualified REIT subsidiaries ("QRSs") in order to segregate our income between net income from real estate and net income from other non-real estate activities. This results in significantly more entities than we might otherwise utilize if we were not having to maintain our qualification for taxation as a REIT in the U.S.
Additionally, we maintain certain other regional and/or business specific organizational structures for various tax, legal and other business purposes. The organization, maintenance and reporting requirements for our entity structure are complex and require coordination amongst many teams within Equinix and the use of outside service providers. While we use automation tools and software where possible to manage this process, a meaningful amount of work continues to be manual. We believe we have adequate controls in place to manage these complex structures, but if our controls fail, there could be significant legal and tax implications to our business and our operations including but not limited to material tax and legal liabilities.
Risks Related to Our REIT Status in the U.S.
We may not remain qualified for taxation as a REIT.
We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our 2015 taxable year. We believe that our organization and method of operation comply with the rules and regulations promulgated under the Internal Revenue Code of 1986, as amended (the "Code"), such that we will continue to qualify for taxation as a REIT. However, we cannot assure you that we have qualified for taxation as a REIT or that we will remain so qualified. Qualification for taxation as a REIT involves the application of highly technical and complex provisions of the Code to our operations as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of applicable REIT provisions of the Code.
If, in any taxable year, we fail to remain qualified for taxation as a REIT and are not entitled to relief under the Code:
• we will not be allowed a deduction for distributions to stockholders in computing our taxable income;
• we will be subject to U.S. federal and state income tax on our taxable income at regular corporate income tax rates; and
• we would not be eligible to elect REIT status again until the fifth taxable year that begins after the first year for which we failed to qualify for taxation as a REIT.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for other purposes. If we fail to remain qualified for taxation as a REIT, we may need to borrow additional funds or liquidate some investments to pay any additional tax liability. Accordingly, funds available for investment and distributions to stockholders could be reduced.
As a REIT, failure to make required distributions would subject us to federal corporate income tax.
We paid a quarterly distribution on September 17, 2025 and have declared a quarterly distribution for the fourth quarter of 2025 to be paid on December 17, 2025. The amount, timing and form of any future distributions will be determined, and will be subject to adjustment, by our Board of Directors. To remain qualified for taxation as a REIT, we are generally required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gain) each year, or in limited circumstances, the following year, to our stockholders. Generally, we expect to distribute all or substantially all of our REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain distributions that approximate our REIT taxable income and may fail to remain qualified for taxation as a REIT. In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual
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