In addition, in light of Regulation Fair Disclosure, it is our policy not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. Hello everyone, and a very warm welcome to our Q3 2025 earnings call. We are seeing continued revenue acceleration, delivering MRR growth of 8% year-over-year on a normalized and constant currency basis. Further, we also achieved record annualized gross bookings of $394 million, a meaningful 25% increase year-over-year and up 14% over Q2.
Importantly, this accelerated growth comes from a highly diversified set of customers across geographies, industries, and segments. We again delivered strong adjusted EBITDA margins for the quarter, and AFFO was up 12% year-over-year on a normalized and constant currency basis. This was better than expected and reflects strong flow-through of our operating results, favorable net interest expense, and timing of recurring CapEx spend. As a result, we are raising our adjusted EBITDA, AFFO, and AFFO per share guidance for the full year.
Given the strong demand backdrop, we are advancing our bold strategic move where our intent is to double capacity by 2029. This volume reflects continued demand for a wide variety of latency-sensitive AI and non-AI workloads, supporting significantly increased data residency and sovereignty requirements, and delivering seamless connectivity to distributed data sources. This helps them simplify their network for future expansion and supports Nitori's growth objectives of tripling their branches worldwide. As I've shared in previous earnings calls, our strategy comprises three strategic moves orchestrated across the business to accelerate our expansion, innovation, and profitable top-line growth.
| Metric | Period | Current guidance |
|---|---|---|
| Underlying revenue growth (full year 2025) | FY 2025 | 7%-8% (maintained) |
| Adjusted EBITDA (underlying) | FY 2025 | raised by another $21 million; margins 49%-50% (raised $21M) |
| AFFO (underlying) | FY 2025 | raised by another $31 million; AFFO growth 11%-13% (raised $31M) |
| AFFO per share growth | FY 2025 | 8%-10% (raised) |
| CapEx | FY 2025 | $3.8B-$4.3B including ~$290M recurring (updated) |
| Q-over-Q MRR step-up | Q4 2025 | greater than $60 million (step-up) |
| Metric | YoY | Note |
|---|---|---|
| Revenue | up 5% | recurring revenue growth of 8% from bookings momentum, partially offset by lower xScale non-recurring fees and a $9M FX headwind |
| Recurring revenue / MRR | up 8% | continued bookings momentum of the business |
| Adjusted EBITDA | up 8% | strong operating flow-through; included a $4M FX headwind |
| AFFO | up 12% | strong operating performance, disciplined balance sheet management, favorable net interest expense, and timing of recurring CapEx spend |
| Interconnection revenue | up 8% | driven partially by a 57% year-over-year increase in Equinix Fabric bookings |
| Stabilized asset revenue | up 4% (constant currency) | 188 stabilized assets, 82% utilized, generating a 26% cash-on-cash return |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Annualized gross bookings | $345 million in Q2 | record $394 million in Q3 | Accelerating |
| Pre-sales motion | three-to-six-month sell window | extended to a 12-month window; $185 million pre-sold balance, 40% signed in Q3 | Expanding |
| Developable capacity | lower base | approximately 3 GW, nearly 50% increase from prior quarter | Expanding |
| MRR churn | higher | stepped down to 2.3%, within the 2%-2.5% range | Improving |
| Net leverage | n/a | 3.6x annualized adjusted EBITDA | Stable |