In addition, in light of Regulation Fair Disclosure, it is our policy to not comment on our financial guidance during the quarter unless it is done through an explicit public disclosure. Hello, everyone, and a warm welcome to our Q1 2026 earnings call. In Q1, our recurring revenue grew 10% on a normalized and constant currency basis, coming in at the high end of our expectations. Q1 was also the largest quarter of total sales activity in our history, inclusive of annualized growth bookings and pre-selling activity.
We drove significant interconnection and CapEx billing growth whilst reducing churn, reflecting ecosystem strength across our key operating metrics. We are expanding our capacity whilst bringing new products to market that extend our runway for growth. Adjusting for the timing of Hampton, our Q1 revenue, AFFO, and AFFO per share results were all ahead of our expectations. Overall, our xScale pipeline is robust given that our remaining capacity is in major metros.
This momentum is part of a broader uptick in customer demand spanning a wide range of AI cloud and networking workloads. We also grew our relationship with Maersk, a global leader in integrated logistics, as it digitizes critical supply chain infrastructure. Our global footprint, secure and resilient operations, and industry-leading interconnection capabilities are supporting Maersk's ongoing network transformation and long-term growth strategy. Starting with Serve Better, we delivered annualized growth bookings of $378 million in Q1, up 9% year-over-year, with approximately $140 million of pre-selling activity on top of that.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue growth | FY 2026 | 10%-11% (raised by $21 million) (+100 bps) |
| Adjusted EBITDA | FY 2026 | raised by $24 million; margins approximately 51%, +200 bps over last year (raised $24M) |
| AFFO growth | FY 2026 | 10%-12% (raised by ~$40 million) (+100 bps) |
| AFFO per share growth | FY 2026 | 9%-11% (+100 bps) |
| MRR growth | Q2 2026 | 10%-11% year-over-year (guidance set) |
| Total CapEx (excl. xScale and land) | FY 2026 | ~$4.1 billion (top end), incl. $280M-$300M recurring and ~$3.8B non-recurring (raised to top end) |
| Total NRR | FY 2026 | approximately 5.8% for the full year (guidance set) |
| Metric | YoY | Note |
|---|---|---|
| Recurring revenue | up 10% | second-half 2025 bookings performance converting into revenue |
| Total revenue | up 8% | recurring revenue strength; excludes the deferred xScale lease |
| Adjusted EBITDA | up 13% | continued cost discipline, forward cost benefits, and scaling operating leverage |
| AFFO | up 11% | surpassed $1 billion for the first time |
| AFFO per share | up 10% | came in at $10.79 |
| Interconnection revenue | up 9% | boosted by Fabric revenue growth of 26% and increasing attach rate |
| MRR per cabinet | up 7% | firm pricing environment and continued increase in density, reaching $2,524 |
| Stabilized asset recurring revenue | up 6% | 192 stabilized assets, 82% utilized, generating a 26% cash-on-cash return |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Adjusted EBITDA margin | ~49% in Q4 2025 | 51% in Q1 2026, up 190 bps QoQ and 300 bps YoY | Improving |
| AI inferencing / agentic AI | customer conversations about piloting AI a year ago | enterprise-wide adoption at scale; 8 of top 10 model providers and 4 of top 5 neo-clouds expanding with 110+ network nodes | Accelerating |
| AI share of largest deals | ~60% in Q4 2025 | ~60% in Q1 2026 | Consistent |
| Churn | 2.2% in Q4 2025 | 1.7% in Q1, below the low end of range | Improving |
| Liquid cooling deployments | fewer deployments | 36 deployments, 7 orders in Q1, up 50% quarter-over-quarter | Growing |
| CFO leadership | Keith Taylor as CFO | Olivier Leonetti as new CFO, nearly two months in | Transition completed |
| Net leverage | 3.8x in Q4 2025 | 3.8x annualized adjusted EBITDA | Stable |