Equinix, Inc. (EQIX) Earnings Call Transcript & Summary

Welcome, Chief Financial Officer, Keith Taylor.

Good afternoon to everybody today. Thanks for taking time to Equinix' 2025 Analyst Day. So I appreciate all of you that are in the audience, those are on the webcast as well. And we have an exciting agenda for you today. Also recognize it's been 2 years since we last met. So we'll talk a little bit about that. But why don't we get started. But before that, I want to make sure that you realize that we will be making some forward-looking statements, as you would expect. So for risks and uncertainties, please refer to our last 10-Q or 10-K that was filed with the SEC. Now we do have an exciting agenda today. Adaire is going to kick us off. You're going to hear from all the executives. We've got some great customers coming to join us. And then we'll end the day with some questions. So Adaire and I will take questions. The questions will come up. You could either do it on the webcast platform. Or if you have a question in the audience, feel free to email [email protected], and Katrina is going to moderate our session today. So with that, there are sort of 5 -- there are some key takeaways. But what I want to just say is principally speaking, it is about the durability of our business. It is about our growth. It is about the efficiency that will drive into the business, and it is about the durable value that we will create for you. So we're excited to spend the afternoon with you. At the end of the Q&A session, hopefully, some of you will stick around, we'll spend some time and we have some drinks down stars with the kiosks. So without any further ado, I am going to pass it on, and I would just say thank you again for taking time out of your busy day to spend with us. Thank you.

Please welcome, Chief Executive Officer and President, Adaire Fox-Martin.

Good afternoon, everyone. Thank very much Keith for that lovely introduction. We're very, very happy to host you all here today. We know that your time is valuable, and we are extremely grateful that you have chosen to spend some of yours with us today. Now there is no doubt that the AI super cycle is upon us. It's fueled by rapid advancements across the breadth and depth of AI infrastructure and the technology stack. And here in this room and also online, I'm sure that we would all acknowledge that AI is ubiquitous. It's already integrated into everyday products and services from virtual assistance to online shopping to navigation apps. It's changing how we work. It's boosting productivity, helping businesses and individuals save time and improve efficiency as well as providing insights from data. It's changing business from the inside out. It's altering the core proposition of products and services, and it's a long-term transformation. Like the Internet revolution, this AI super cycle will unfold over decades, reshaping industries and society in profound ways, some of which I don't think we have yet fully comprehended or fully considered. Now Thomas Edison said that opportunity is missed by most people because it's dressed in overalls and looks like work. Well, at Equinix, we appreciate how to put opportunity to work and the work that is necessary to capitalize on an opportunity. We have quite literally being built for this moment. For 27 years, Equinix has both enabled and harnessed the most impactful technological forces the industry and indeed, the global economy has ever seen. Today, we directly serve 2/3 of the Fortune 500 and close to half of Forbes Global 2000 from Cisco to Caterpillar, from Continental to Coca-Cola, from Air Canada to E.ON from NVIDIA to NetApp. We host more than 10,000 organizations running across our 273 data centers across 76 markets in 36 countries at five 9s of reliability. We supported the enablement of the Internet. Verizon uses Equinix to host the equipment that provides Internet services to thousands of organizations. We've helped organizations like Zoom deliver impact on societal scale. During the pandemic, we rapidly deployed connections, cages and cabinets across all 3 regions allowing Zoom to keep users close and connected. We enabled journeys to the cloud. Equinix played an indispensable role in Adobe's cloud-only transformation, helping them move to a hybrid and multi-cloud architecture in order to support their growth. Since it's very early days, Salesforce has leveraged Equinix to provide their applications in a private cloud environment to their customers. And as we've delivered value for our customers, we've also delivered returns for our shareholders. Since Equinix was founded, our revenues have grown every year without exception. And our growth has not been dependent on a single solution or a single customer cohort, but it has been balanced across geography, product, industry and customer segment. We have consistently delivered throughout and at the intersection of the most influential areas of digital history through the scaling of the Internet, the evolution of cloud, the growth in SaaS adoption and the mobile revolution. And we've constantly innovated along the way. But as we have grown, we have remained true to our principles, our principles of neutrality, interconnection density and the nurturing of the magnetism of our ecosystem. These principles have stood the test of time and will continue to endure and differentiate us. Our interconnection value proposition continues to grow with over 486,000 unique connections. Our ability to connect businesses with one another and across their value chain allows us to deliver quality customer experiences and command premium pricing and returns. In addition, our interconnection franchise today, we hold the market-leading share in native cloud on-ramps, enabling our customers to connect directly, privately and reliably to their cloud providers. Our neutrality allows our customers to choose from a wide range of network service providers and other IT services. We host 10 of the top 10 cloud providers, 10 of the top 10 SaaS providers, 10 out of the top 10 network service providers and 10 out of the top 10 investment banks, 70% of the world stocks are traded on exchange platforms that depend on Equinix. This vibrant ecosystem of key industry and service provider magnets perpetuates and reinforces the relevance of our role and the value that we enable. The foundations that we have built over the past 27 years, the principles that we have embraced not only embraced but also helped us to position us very well to be the architects of an interconnected AI orientated future. We were built for this moment. Now let me now pivot to providing you with our point of view as to the size of this opportunity for Equinix and how it will evolve in the short to medium term. As a starting position, we've used to report that I know many of you are familiar with, the McKinsey & Company, AI power, expanding data center capacity to meet growing demand report. We've taken the low end of their estimates and converted the gigawatts into dollar values using publicly available pricing data. We have also removed from these estimates hyperscaler built capacity, which is capacity built by an inherently owned by hyperscaler partners. So using this as our base, we expect to see an increase in the total addressable market for AI from USD 38 billion to USD 94 billion over the next 5 years. To give a sense of the velocity of this AI super cycle at our last Analyst Day, we estimated a $20 billion TAM for 2026. Estimates are now almost twice this for this very same year. Now the opportunity falls into 2 main categories: AI training and AI inference. As you all know, AI training is about teaching a foundational model by feeding it large amounts of data. AI inference on the other hand is putting that model to work once it's been properly taught. Up until today, we have mostly experienced the training sprint. And we have participated in this training opportunity in 2 ways: firstly, through our xScale franchise. We've delivered a total of 326 megawatts over the previous 5 years. We have an additional 154 megawatts under construction, 70% of which is preleased. xScale has proven to be a robust and successful vehicle through which we have served the requirements for our hyperscale partners as they seek to lease purpose-built facilities. Secondly, as training has evolved beyond LLMs, we've provisioned private training capabilities for our enterprise customers in our retail footprint, where training is largely centralized inference by its very nature is distributed. Inference is where we all get to interact with AI. It's where applications and software benefit from AI. And depending on the use case, inference can occur anywhere in the hierarchy of deployment locations, the device edge, the far edge stores, airports, restaurants, the metro edge, what we call the interconnection edge here at Equinix and in the cloud availability zone. Now we're in the very early stages, the initial stages of inference being deployed at a different location to training. We believe that the use cases will require a mix across that hierarchy I just described, of locations versus a one-size-fits-all approach. We're witnessing customers evaluating and implementing AI inference across the options for a range of different reasons, reasons that include control, privacy, physical security, latency, data residency, multi-cloud flexibility and OpEx and CapEx amortization. Today, inference makes up about 50% of the total demand for AI. By 2029, we expect it to be 70%. The demand for inferencing is expected to accelerate towards the latter half of this period, almost doubling between 2027 and 2029. And so as inferencing scales and grows and integrates into enterprise workflows, a larger share of these workloads will be hosted in private environments, expected to increase to more than 35% by 2029. And this shift will be driven by a wide range of varying needs across inferencing workloads from data residency all the way to low latency requirements. Implementing, inferencing necessitates considerations of a wide range of requirements, but it is a set of requirements that aligns well with our core value proposition, our neutrality, our dense connections, our native access to the clouds, and our interconnected edge locations. We believe in the enduring nature of this opportunity in the medium to longer term. We believe that no one else in the data center industry is as well-equipped as Equinix to capture the AI opportunity as it integrates into mainstream workflows, and we are investing behind this potential so that in 2027, at the inflection point for the transition in AI workloads from training to inference, we will bring an increased amount of capacity online to meet this demand. Now not all AI workloads -- not all workloads will be AI-driven. We continue to see growth and robust demand for a very broad range of non-AI workloads. Many of our customers have deployed their on-prem applications and data sets at Equinix as part of their own hybrid and multi-cloud architecture design. We estimate that this demand will continue to grow at a 9% CAGR over the next 5 years. It will continue to represent a substantial market opportunity for us to pursue. So this combination of multi-cloud, hybrid and AI workflows elevates the need for neutral, high-density connectivity. Networking requirements are slated to grow from USD 40 billion today to USD 60 billion in 5 years at a CAGR of 11%. So if I take all that together, the AI opportunity, the sustained demand for hybrid and multi-cloud environments, the value for networking. This creates a potential TAM of USD 250 billion. To pursue this addressable market, we must move faster and be bolder in our ambitions. We must shorten the path between the investments we make and the value our customers and our shareholders experience. Shortening the path isn't just a tagline. It's our corporate purpose. It's embedded in our aspiration to become the leading digital infrastructure company of the 21st century. And it's embedded in our strategy, which has been designed to reorientate the entire company in pursuit of this opportunity. Our strategy has 5 elements: 3 strategic moves and 2 strategic enablers. Together, they provide the blueprint for how we invest in key business outcomes that shorten the path to value for all of our stakeholders and growth for our business. And whilst we are early in our journey on full realization of the benefits and the focus, you will have already seen some initial impact from early moves on key indicators such as EBITDA and bookings performance. Build Bolder is at the core of our aspirations. Designing, building and operating data centers is the essence of who we are and the value we bring. Our aim is to shorten the path between the deployment of our capital and the provision of capacity to our customers. Build Bolder is about investing in our future growth. And we will do that whilst recognizing that there is a time lag between our investment and the realization of revenue and, therefore, returns. Our ambition is to double our capacity by the end of 2029. In other words, our aspiration is to bring as much capacity online in the next 5 years as we did in the past 27 years. Now whilst Build Bolder will serve our xScale customers, please understand that this is a program that is very much focused on our retail business, and it is about building to serve our retail enterprise demand. Build Bolder is about investing in locations where we see the greatest value for our customers and the strongest return for our businesses and for our shareholders. Build Bolder is about innovating at every single stage of the design and construction process. It's about pioneering the application of AI to our projects. It's about reimaginating how we navigate supply chain and how we source power and land, and it's about accelerating the physical data center build and expanding our footprint and our network. Build Bolder will enable us to deliver capacity to the market to meet the needs of our customers and our own growth aspirations. Solve Smarter is about how we render our solutions and our products to our customers. At the core of Solve Smarter is our interconnection franchise. Now designing the right network architecture is a complex task, demanding specialized skills and expertise. Defining the right path for cross-connects and interconnects is not always as intuitive as it may first appear. Hybrid and multi-cloud environments are challenging to manage. And if you add to this future distributed AI inference workloads, we enter a whole new realm of connectivity challenges to solve. Solve Smarter is about shortening the path to the resolution of these challenges. Solve Smarter is focused on abstracting the inherent complexity of networking to ensure that Equinix becomes the easy button for customers who are navigating intricate infrastructure landscapes. Our Solve smarter investment is delivering solutions like Secure Cab Express. Secure Cab Express is a preconfigured colocation solution that makes it faster and easier for customers to get up and running in our data centers. With Secure Cab Express, we've condensed order to availability from an average 22 days to just 4. In Q1, 1/3 of all new cabinet sales were through Secure Cab Express. We're accelerating Fabric and Fabric Cloud Route Adopter. This will enable our customers to connect workloads across data centers, clouds and GPU as a service providers, resulting in Equinix increased stickiness for us, reducing, therefore, the likelihood of future churn. Our Solve Smarter teams are innovating across technologies to develop solutions and products. to help customers solve challenging infrastructure problems. And whilst we're in the very early stage of our innovation cycle, we are very excited about the concepts that we are working on and the potential for those concepts for not only an improved customer experience, but for new revenue streams that we've not yet factored into our plans. Jon and Raouf will join us shortly on stage to delve deeper into Solve Smarter and Build Bolder. Now Serve Better is the delivery vehicle for the output of Build Bolder and Solve Smarter. It's about how we evolve our go-to-market to deliver value and improve experiences for all of our customers. Serve Better is also an important part of the input process to Solve Smarter and Build Bolder, ensuring that customer and partner requirements are considered in the early stages of design and development. Our go-to-market team at Equinix is a key differentiator for us. No other data center operator has a go-to-market team to match our scale and enterprise coverage. And this capability is already built into our cost base. Enterprise selling is a multifaceted endeavor. It requires a considered approach to segmentation, to territory management, to channel engagement, to the compensation models that drive the rightly focused internally, whilst delivering the right outcome for the customer externally. And all of this has to be underpinned by data, systems and process. But there is also a significant human element, building trusted relationships with customers, understanding their industry and understanding their business. These and other attributes allow Equinix to sustain relevance to our customers resulting in greater wallet share. The Equinix go-to-market team has a track record of success here. Nearly 90% of our bookings come from our installed base. And as inferencing becomes increasingly relevant to our customers as part of their digital and AI strategies, so too will our sales team who have developed a very deep understanding of their business over an extended period of time. Our efforts in Serve Better have helped us to achieve over 16,000 unique booking transactions in the last 4 quarters representing more than USD 1.3 billion in annualized quarterly gross bookings. Now notwithstanding the inherent advantages implied in our go-to-market coverage and the long-term growth objectives, our initial work on Serve Better has highlighted opportunities to reduce our overall SG&A costs as a percentage of our revenue. So Nicole and Harmeen will join us on stage later to share the efforts that they are driving to help us achieve these outcomes. Supporting our strategic moves of Build Bolder, Solve Smarter and Serve Better, we have defined 2 enablers: Run Simpler and Grow Together. Run Simpler focuses on the operational efficiency at horizontal level of every aspect of our business. Grow Together is focused on our people, linking the success of our valued employees to the success of our valued customers. This strategy is up and running and has begun to deliver outcome. It has been shaped by the voices of our customers, our partners, our people and by many of you who have joined us today. We are excited and optimistic about the future for Equinix, and we intend to invest in our future growth. We are uniquely positioned to capitalize on the opportunities ahead of us. Let me emphasize the word unique. No other player in the digital infrastructure landscape has the combination of attributes that are an inherent part of Equinix Blueprint, our neutrality, an extensive global footprint of data centers located in key metros. Over 10,000 enterprise customers across geographies, industries and segments, interconnection and cloud connectivity leadership, our networking backbone, a vibrant ecosystem that creates a magnetic pull for entire value chains. Operational capabilities that globally deliver five 9s of resilience, innovative design and construction teams that are building premium products, a go-to-market team focused on the customer to activate all of that at scale. Individually, each capability area is already unique. But collectively, when you integrate them in support of a strategy, they create a clear, differentiating competitive advantage. We have been built for this moment. We have a proven 27-year track record of translating the opportunity inherent in new technology advancements into exceptional value for our customers. And we'll be doing this again within the context of this AI super cycle. We have the right strategy in place and the right leadership team and the wider talent in our 13,600 employee base to execute against it. We're equipped like never before to invest in the future, to create and orchestrate differentiating capabilities and put them to work for our customers. In doing this, I am confident that we will continue to deliver top line growth margin expansion and accretive value to our shareholders. Thank you for your time, and I look forward to continuing the dialogue. Thank you.

Please welcome, Executive Vice President, Global Operations; Raouf Abdel and Chief Business Officer Jon Lin.

Good afternoon, everyone, and thank you for joining us today. I'm Jon Lin, Chief Business Officer. I've got my good friend here, Raouf Abdel, EVP of Global Operations. Together, we're excited to give you a deeper look into how we're enabling the digital infrastructure revolution, shortening the path to boundless connectivity through our Build Bolder strategy, our expanding global market presence and Solving Smarter for our customers through innovations in infrastructure and interconnection.

Thanks, Jon. And good afternoon, everyone. And like Jon said, we're excited to be here with you today. We want to take you through a little bit of a deeper dive into our approach. And there are 3 main topics that we want to really explore with you today. The first is how we're building in new ways to meet our customers' demand. And second, how we're managing a dynamic and complex supply chain. And finally, how we're innovating our product offerings to amplify customer value. We will provide a few campus examples as well to illustrate how we're turning these strategies into reality. Let's start with how we're building Build Bolder to meet customer demand. Tell them, Jon.

All right. Thanks, Raouf. At the heart of Build Bolder is a simple truth, our customers' infrastructure needs are changing in this wave of digital transformation more than ever before. What we're seeing is a sharp shift toward higher densities and larger, more complex deployments driven by rapidly evolving workloads from their business as usual to significant AI innovation and everything in between. That density trend is now undeniable and has risen sharply in recent years. 5 years, 10 years ago, 90% of our customer deployments were under 5 kilowatts per cabinet. Today, while we're continuing to see a variety of densities coming from our customers, we're designing our environments to an average density of 12 kilowatts per cabinet with capability to deliver in excess of 100 kilowatts per cabinet for AI workloads. And we're making sure we have the flexibility required to support the workloads of today and tomorrow. Meeting those demands takes more than just capacity though. It requires agility and reach. And our interconnected global footprint makes that possible. From Dallas to Dubai, from Toronto to Tokyo, from Sao Paulo to Singapore, our breadth and scale, combined with our flexible deployment models, means we can move at the speed our customers' demand and seamlessly meet them wherever they want to be. It's not about selling space or power. It's about solving problems for them, whether it's enabling hybrid AI architectures, accelerating time to value for new applications or supporting high-performance workloads at the edge, we're helping our customers turn infrastructure into a competitive advantage. A great example of this is right here in our backyard. Just 6 miles away from where we are today, the heart of the Equinix New York Metro, our Secaucus campus, powers the world's financial community. More than 50% of the installed customers, they are from capital markets, FinTech and banking. And in addition to those 350 customers, the campus also boasts 78 network carriers and 134 cloud and IT companies. With the total campus capacity of 50 megawatts, it delivers unmatched value for our customers and generates almost $50 million in monthly revenue. It's not only a significant portion of our balance sheet and revenue but a huge part of our ecosystem. Within that campus alone, we have 30,000 active cross connects, operating across 4,100 miles of fiber, 4,100. That's the distance from Florida to Alaska or more than half the diameter of the earth. And expansion here is ongoing. We're adding an additional 10 megawatts of power, 2,400 cabinets and pre-deployed liquid cooling technology coming online in 2026. The work we've done here, combined with the essential customer interconnections, makes this campus and many others we operate economically critical for the world. And while often imitated, never replicated. So the question is, how do we continue to execute at speed with the right capacity in the right places and that's where Build Bolder comes in. And Raouf is going to take us through how we're accelerating delivery to meet that demand head on.

In our Build Bolder, we focus on building bigger, better and faster and locations with high demand. This means expanding our existing campuses, accelerating in-flight builds and strategically selecting new sites for larger deployments in markets that serve both xScale and retail customers. We're revolving our construction process by adopting streamlined, highly standard approach while utilizing advanced technologies to solve for scale, density and speed. In 2027, as Adaire said, we plan to deliver over 350 megawatts. That's more than twice what we delivered in 2024. Our revised strategies will allow us to consistently increase delivered capacity year-over-year. One example of this is our Hampton, Georgia campus located 30 miles outside of Atlanta. This campus spans 262 acres and has a capacity of 240 megawatts hosting both xScale and retail customers. This site will have 4 identical 60-megawatt buildings that will leverage 1 of 3 standard designs. We are using generative AI to optimize project scheduling and AR/VR technology for design and construction modeling. The first phase of this is due to go live in 2027. We will continue this method of construction, adapting and evolving as necessary to establish additional campuses globally. Our focus remains on locations near strategic metros, where power and land are available. By focusing on these key factors in our site selection, we are ensuring that our investments align with our customer needs while optimizing value creation for our shareholders. Now that we've discussed how we're building to meet demand, let's shift to discussing managing a dynamic and complex supply chain. As we manage our supply chain, one of the most critical things is, of course, power. And it's about availability, reliability and, of course, sustainability. We've adopted a power first approach, which means we prioritize power availability in our site selection process and employ a variety of strategies to secure that power. This, of course, is in addition to ensuring that we get fiber connectivity to these locations. To meet the demands of our in-flight and upcoming builds, we have secured utility connection agreements for over 1 gigawatt of power through the end of 2026. And we have submitted for an additional 2 gigawatts of power to be delivered through 2029. We also have an active development pipeline for an additional 4 gigawatts in the works. While we're sourcing through traditional power arrangements, we do expect grid constraints to intensify. Being able to power, being able to generate our own power will become essential. To mitigate these constraints, we are investing in several on-site power generation solutions to supplement our primary utility connections. Solutions such as gas turbines and fuel cells are already in use in many locations in our portfolio, allowing us to power these IBXs when power is unavailable. And we are also aggressively investigating and securing future nuclear energy as a longer-term strategy to diversify our energy portfolio.

On top of this, Equinix remains committed to our sustainability pledge for our customers and our communities. We're maximizing utilization of existing resources, including upgrading our infrastructure to incorporate new technologies and improve our operational efficiencies. One example of this is how we're helping the industry migrate to ASHRAE A1A standard, which allows us to reduce energy and water waste from overcooling, while still maintaining the same careful approach to protecting our customers' equipment. Another great example is our improvements to power usage effectiveness. Over the last 5 years, we have reduced our PUE by 28%. In addition, our heat export program, now in its 16th year, continues to grow and provide waste heat to help local communities where our data centers operate. We're also continuing to secure as much of our power supply as possible through renewables. In 2024 alone, we executed 370 megawatts of new PPAs, and we're proud to say that 250 of our data centers have achieved 100% renewable energy coverage. So whether it's availability, reliability or sustainability, we're focused on making sure our power strategy supports the scale, efficiency and resilience our customers need. But energy is just one part of how we future-proof the business, right, Raouf?

That's right, Jon. Another vital aspect of our approach to developing resilience and flexibility is with our supply chain, particularly in light of current dynamic political -- and the political and economic environment. One of the things that truly sets Equinix apart is how we implement a globally distributed and diversified supply chain. Complemented by a local supply strategy in the markets where we operate, we have partnered closely with our major capital equipment vendors to scale our global capacity. This includes specifying new products and partnering with additional vendors across categories such as power systems and cooling equipment. Through all this, we have secured 1.4 gigawatts of critical equipment, our required capacity for the next few years. This diversification reduces dependency on any single supplier and enhances our supply chain strength. In addition to our global supplier diversity, we focus on buying locally whenever possible. This allows us to meet our delivery and availability commitments. We also prioritized the sourcing of local labor whenever possible, contributing to the economic development of the communities where we build and operate. This approach not only reduces risk, but it also fosters long-term success in every market in which we operate in. Our globally distributed model also helps us mitigate the impacts of tariff pressures and geopolitical complexities. And that resilience shows up in more than just how we source. It shows up in how we innovate. We remain focused not only on solving today's needs, but to flex with the future.

Well said, Raouf. One of the biggest forces shaping that future right now is, of course, AI. As Adaire mentioned, demand for AI-ready data center capacity is expected to rise sharply through 2029. And because of this, McKinsey recently stated that just 5 years from now, around 70% of total demand for data center capacity will be for those equipped to host advanced AI workloads. Again, in the near term, most of the market announcements you're hearing about are building capacity based on large training sites. What we believe in the long term, fundamentally, distributed inference will be the primary driver of economic value for customers and our entire industry. And AI is not just driving demand. It's redefining what that infrastructure needs to do from compute density to cooling efficiency to connecting data sources, the bar has been raised, and we're meeting it by shortening the path of powerful AI deployments through these instant AI factories. These purpose-built environments can support today's most advanced workloads while keeping it simple for our customers. That allows us to focus on the infrastructure and freeze our customers to focus on what matters most to them, accelerating their use of AI to drive business outcomes and supporting their customers. We're already deploying with partners like NVIDIA, Dell, HPE and Grok to name a few, and we're doing it at scale. By deploying joint partner solutions into our data centers, customers can accelerate workloads and harness the power of AI more effectively and deliver it securely with the data governance and sovereignty they require. And a critical unlock to supporting AI is high-density liquid cooling.

Some of these workloads generate significant amounts of heat, and traditional air cooling methods are no longer sufficient. So we are moving fast to bring high-density liquid cooling into production, which is specifically designed to meet these requirements. This is not a lab experiment for us. We are operational, proven and capable of scaling. We have over 100 sites across 45 markets that support liquid cooling today, with 12 currently managing large customer production loads. Some of these production environments operate at densities up to 120 kW per cabinet. This video is an example of NVIDIA's GB200 deployment in one of our Silicon Valley IBXs. We now integrate liquid cooling in all of our new builds. This provides greater design flexibility, but more importantly, it gives our customers options, whether they are running AI training clusters or high-performance workloads that cannot operate on traditional cooling methods. This serves as a notable example of how we are not merely reacting to change, but proactively designing for it, with infrastructure that can seamlessly adapt and evolve to the changing requirements. So we have shown you how we are building for the AI future, securing power and delivering the cooling needed for all of it to work. But you still need to move the bits around. And that is really what gives Equinix the edge, our interconnection expertise.

It's the backbone of our offering. And Equinix literally shortens the path to all the digital partners that matter through our interconnection products. It's what turns customer needs into business outcomes, and it's never been more important. As AI, edge and hybrid and multi-cloud architectures become the standard, our position as a neutral interconnected ecosystem gives customers something they can't get anywhere else, access to more than 220 cloud on-ramps and 5,000 cloud IT and network service providers. It's how we shorten that path to value, simplifying the consumption of interconnection-rich solutions for our customers. By connecting them to partners and clouds that power their business, we're reducing time to value and improving performance, creating not just meaningful but critical relationships. As you've heard, we've reached more than 486,000 interconnections across our ecosystem, and we're on track to hit 0.5 million early next year. That's incredible scale. And that kind of scale matters because we believe the era of siloed single cloud AI is ending, and we're entering the era of distributed AI. In short, the philosophy is relatively simple, put AI workloads where they create the most value and use low latency, privacy-preserving interconnections to connect it to all the data sources that matter. And while that's easy to imagine, it's complex to execute and that's where Equinix delivers, shortening that path to boundless connectivity to accelerate the breakthroughs that move the world forward. We believe we are the only company that can interconnect the ecosystem of hyperscalers, data providers, specialized GPU as a service providers, enterprise data centers and strategic inference locations at the digital edge. Whether it's enabling real-time data movement from AI training to inference at the edge or reducing latency between workloads, or simply bridging across clouds and network, interconnection is what makes modern infrastructure work. It's how we help customers move faster and create real-world change every minute of the day. And it's working. We're seeing more use cases and greater capacities than our premier interconnection offering, Fabric. And our Fabric starting ARPU is now up 64% from 2023 to 2025. That shows the huge increase in value that customers are realizing off of that offering. We're seeing stronger customer engagement and a growing number of real-world examples where we're driving serious business impact.

One great example of combining infrastructure and interconnection is Hyundai Motor Group. To keep more than 10 million connected cars running smoothly around the world and with plans to scale that to over 20 million by 2026, Hyundai needed to shorten the path between their vehicles and the data powering them. That is why they deployed their edge cloud platform across 3 of our IBXs in Frankfurt, Los Angeles and Seoul strategically positioned within our rich ecosystem of network and cloud providers. That connectivity is what makes it all work. By bringing their digital infrastructure closer to the edge, where speed and reliability matter most, they have significantly enhanced app responsiveness and strengthened the quality of their remote services, unlocking boundless connectivity that delivers smarter, safer driving experiences every time someone starts their vehicle.

We're also helping the global pharmaceutical leader Bristol-Myers Squibb, speed up something that can't wait, life-saving drug discovery. By deploying our joint NVIDIA solution inside of DC16, one of our AI-ready data centers this customer now has the high-performance infrastructure they need to accelerate complex molecular simulations, freeing up researchers to test more compounds faster. That's helped to reduce bottlenecks, improve precision and accelerate the path from discovery to delivery. So life-saving therapies can reach patients sooner. With this solution, they're seeing an overall cost savings of 55% compared to their prior model, and Greg Myers, who serves as Chief Digital and Technology Officer for BMS recently shared they're now on track to cut clinical trial cycles by nearly 2 years as a result of this AI work. And of course, this is some of the most critical data for the planet. So deploying that with a private AI solution was important for them and that is AI driving value for the planet, right? And we're so proud to be supporting that. These are just a couple of examples or countless stories just like these that highlight the impact that we're driving.

Thanks, Jon. Nothing you've just heard is theoretical. It's building bolder and solving smarter in action. These are the investments we are making, the innovations we are delivering and the results our customers are seeing in the real world. Let's bring it back to where we started. In addition to managing our current operations worldwide, our commitment to building bolder and solving smarter will enable us to expand our footprint while remaining agile to meet the evolving demand of our customers. By prioritizing effective supply chain, we improve our resilience and responsiveness in today's complex environment. Coupled with relentless product innovation, we empower our customers to leverage innovative technologies and infrastructure solutions. Together, these elements position Equinix as the leader, enabling our customers to thrive in a competitive environment. We have always delivered on reliability and operational excellence. And with industry-leading tenure and expertise of our talented workforce, we will continue to deliver on our promises. There are over 5,000 global operations team members across 36 countries committed to meeting the needs of our customers now and in the years to come, an operational foundation that is unmatched in the data center industry.

That's the power of Equinix. It's not just space and power but the ability to connect, adapt and grow with an incredible team focused on our mission for our customers. So when we say infrastructure is evolving, we mean all of it from how we power it, to how we cool it, to how we connect it. And that's what sets us apart. We're excited about the future and look forward to continuing our journey as we shape the next generation together. By investing boldly, operating globally and executing with purpose, we're continuing to create the infrastructure foundation for the next generation of digital leadership. With millions of transactions being executed across our ecosystem daily, we're responsible for helping our customers move faster, reach further and enable the innovations that enrich our work, life and plan. Thanks for spending time with us today. We're looking forward to the rest of the conversation.

Please Welcome, Executive Vice President, Business Operations, Nicole Collins; and Chief Digital and Innovation Officer Harmeen Mehta.

All right. Thank you so much, Harmeen. It's great to be on stage with you, and thank you, everyone, for being here today. Harmeen and I are going to take a little time to walk you through how we shorten the path to customer value. Because at Equinix, growth is nonnegotiable, but neither is operational excellence. And we know that as we grow in scale, we are going to have to focus on some key areas, how we drive our top line revenue, how we plan to manage our SG&A with intent, and how we plan to continue to transform our company to keep up with the rate, pace, speed and change every one of us is witnessing right now around us. These are the operating goals for run simpler, and they will help us serve customers better. And they're anchored in 3 truths, we're going to walk you through. The first is just secure our core, the second is how we wow our customers, and the third is how we disrupt the norm.

Absolutely. And at Equinix, we don't just power the digital world, we power the world's digital ambition. We're not just building data centers, we're building speed. We're building intelligence. We're building the shortest path to customer value and shareholder value. What does shorten the path mean? It means fewer steps. It means smarter decisions. It also means greater impact. Nicole and I are going to take you behind the curtain today to actually show you how we are becoming faster, bolder, leaner, smarter, how we are accelerating the revenue and also how we are helping drive down our costs, how we're going to increase what customers do with us every day. We believe that in Equinix, we're not just ready for what's next. We're actually building it.

So let's start with secure our core and how we continue to do that. Two years ago, we stood up here and we shared with you that we were going to streamline our operational rhythm within the company, and we've done that, and we've seen critical gains from that work already. And as we continue to grow in scale over the next 5 years, we know that we have to stay very true to areas of focus that have already served us well, how we focus on our plan, how we connect strategy to execution in that planning phase, how we think about prioritization, rationalization and optimization and then how we protect. So I'll start with plan and then Harmeen, I'll hand to you for the other two. When we get into our planning process, we are focused on a few key things. The first is how we maniacally prioritize. We focus on the things that matter, and we're deprioritizing things that no longer serve us. And while this sounds simple, it's actually very hard to do in a large company, and we are proud of the strides we've made here, and we will continue to focus in this area. We've also very much focused on clarity and ownership, making sure every leader, every team member understands the strategy. They see themselves in that strategy, and they know how their role fuels the strategy. Because if we do that well, everyone starts rolling in the same direction, and it creates this force, this momentum, and we are already feeling that inside the company today. And lastly, we got to be a little self-reflective. We're looking at our processes, our handoffs, where there's friction points and starting to modernize how we work because we have to be the easy button. We have to serve customers better. And we are confident that if we do this and continue to do this, we will build not only customer value, but shareholder value.

We've grown fast. But scale without simplification, it can cause friction. So one of the things that Nicole and I are doing is looking at every single aspect, every single process, every single step and see how we can simplify that complexity, how we can create automation and how we can use the power of AI to do that. And we are starting with our architecture. We're building a North Star Architecture based on platform thinking, not just point solutions. This is being designed to scale. It's being designed to adapt. It's being designed with AI at the core. It's not just cleaner, it's smarter. It's the engine behind everything we are unlocking. We are rationalizing our apps by 50% and consolidating these in just 10 to 12 platforms that will power all of Equinix. This is what will create simplicity. This will create cost efficiency. This is how we run simpler and how we actually serve our customers better. We're also building engineering excellence. We're building a developer platform that really allows for our developers, our software engineers to do the best work of their lives. It makes it easier for them to do what they do best. This will give us faster time to market. It will give us speed and it will help us double our own productivity. Furthermore, security is really important to us. And it is very, very important to our customers as well. And cybersecurity is something that you have to continually worry about. We are continuing to strengthen our cybersecurity posture. Security is a commitment. It's a trust symbol. It's also a lever for growth. Our new platforms are built and have security built in them by design. We are investing in cybersecurity as a customer enabler, not just as a control.

Let's move on to truth two, Harmeen, how we wow our customers. They're the heartbeat of everything. In fact, they're why every one of us are sitting in this room today. It's also what sets us apart as a company right now and will continue to set us apart in the future is our customer experience. And we have lofty goals for ourselves over the next 5 years. We want to double our customer delight, and we want to double our delivery speed. And we want to walk you through both of those for the next few minutes. When I think about doubling customer delight, let's anchor in on a typical enterprise customer's customer journey or customer life cycle. This is how customers move through the journey with us. They hit a learning phase first. They're looking at market trends. They're doing their research, then they move into an assessment phase. This is when they start to look across the partner community and decide who can help me with my operating leverage? Where do I get my best ROI? Then they move into an engagement phase. This is when they partner with us and notice I said the word partner and that we are not seen as a vendor. Then they'll move to a delivery phase. This is where they want seamless integration, frictionless onboarding. They want us to be the easy button in this space because from there, they move into a loyalty phase, and they will decide whether they are our brand ambassador or they are a detractor, all based on that journey. So the way we double customer delight is to allow customers to move through that life cycle faster, to speed up every phase of that so that we can get to revenue faster, and we can manage costs along the way. So Harmeen and I right now have stepped back, we've straightened out that life cycle, and we're looking at every single phase how many teams touch a customer, every single handoff, where are their friction points? And most importantly, where can we automate and drive efficiency with new technology staring at all of us right now. And we know that we can decrease cycle time in that journey by 50% over the next 5 years, all the while driving up our Net Promoter Score, which is basically the scorecard that customers give us. And this is how we double customer delight.

Absolutely. In fact, let me take an example that makes it really real. We are building digital twins of all our data centers. This is not just a future vision. This is an operational reality. Every chiller, every router, every cage, we're mapping it all. This is creating a visibility like we've never had before. And it's also creating agility that our customers can really feel and love. When our customers decide to colocate with us, what they're actually looking for is they're looking for a space built to their specification so that they can do the best thing that they need to do for their business. It's for their business outcomes. And each customer is very unique, and they want different things for their own purposes. This is what we call a cage. What we are building is a cage canvas that allows us to co-create and codesign with our customers using AI, our builders, our designers as well as our project managers working together with the customer in the same canvas. This is creating hyper-personalization and maximizing the efficiency and allowing us to build the cages in half the time. This is what we want to do. This is how we deliver twice as fast, and this is how we double their customer delight. This is also how we unlock our revenue much faster. This shortens the path to customer and shareholder value. Co-creation, it not only creates the customer delight, but it is also a market differentiation. We're building a digital world where every customer gets exactly what they need, when they need it and how they need it. This is how we earn their trust. This is how we create loyalty. This is how we grow together, and this is how we serve them better.

That's exactly right, which leads us to our third truth, which is disrupt the norm. This is what all great companies are doing right now. They're deciding, can I be faster? Can I be more nimble? How am I more efficient? How can I drive bold change? And most importantly, how can I leverage data, intelligence, insights and the power of AI right now to just be a better company? And we are no different. We are setting a goal for ourselves to significantly increase our enterprise productivity by 2029. And we are already seeing great things since Harmeen has joined us on where we're igniting this that she'll share with you today.

Yes. That's correct, Nicole. In fact, to increase our enterprise productivity significantly, we must think differently. You all think we're just a data center. Well, we're a data center and look at the amount of data that we generate, 5.2 billion telemetry triggers. We create almost one terabytes of data a day. Now just think about the value we can unlock by using that data much better, both for ourselves and for our customers. With AI at the center as a strategic enabler for our people, for our customers, for performance and for our margin. And that's why we're building the Equinix Brain. It's our data intelligence platform. Three strands weaved into it, a Customer 360, which has all the intelligence, information and data needed for our customers and needed by our customers and Asset 360, which is really the powerhouse of our company. This is what we sell. This is what we have. This is what we use. And then the Product 360, our customers consume our assets through the vehicle of products. So understanding them really better, the pricing, the usage and how we can build and create better products, but also increase the utilization of them that is what this encompasses. So 1 platform, 3 dimensions and endless intelligence. This is not just data. This is true foresight. This is how we go from reactive to predictive. And we are deploying AI not just as a layer but much more as a partner, every function, every workflow, every solution and every platform. Let me introduce you to our AI teammates. It's a family of intelligent personal assistance for every single person in the company. Each trained for a purpose, each connected to that work's specialization. I know you're looking for an investor AI teammate here as well. Well, we can talk about that over drinks. So what is the outcome of all of this. With just AI, we are looking to create $300 million value for our company through revenue creation and cost efficiency. And that's what I love about this. It's not just about tech, it's actually about new habits.

Exactly because what you're hearing is a unification, a unification of people, process and technology. And that trifecta allows us to run simpler, it allows us to serve customers better and it allows us to grow together. And Harmeen, myself and Brandi, our Chief People Officer, are responsible for that piece of the strategy, and we're proud to lead that effort. It's the undercurrent of efficiency for Build Bolder, Solve Smarter and Serve Better. And we know that if we do this well, we will drive down cycle times. We will double our customer delight, and we will lift and continue to lift our enterprise productivity because the path to margin and cost efficiency doesn't happen by accident, and it definitely doesn't happen through heroics. It happens through very thoughtful planning, connecting your strategy, to your execution plan. providing clarity on ownership and being maniacally focused and accountable on critical outcomes, and that is exactly what we're doing today.

Yes. In fact, our -- what we've shown you is our foundation is secure, our engine is getting intelligent and more intelligent, more intelligent day by day. And the customer remains central. This is what reduces cost. This is what helps us increase our revenue. Let's see exactly by how much. Looks like Keith has redacted the numbers, so we're going to have to wait for his section to see that.

All right. So this is how we shorten the path to customer value. This is how we shorten the path to shareholder value. Now Adaire has laid out a bold vision and strategy. Jon and Raouf came up and showed us our future and how we get there. It's exciting to see their teams work every day on that charter. Harmeen, Brandi and I, we own the how, the undercurrent of efficiency to fuel our strategy. Up next, you're going to hear from customers that are in a partnership with us today, feeling everything that we just shared with you. And then Keith will come up stitch it all together with the financials. So Harmeen, it's an honor to share the stage with you, and thank everyone here for being with us today.

Likewise. Thank you.

This concludes the first part of Equinix Analyst Day. We will resume our program promptly at 2:20. [break]

Hello, everyone. Great to be here. I'm super excited about the -- being the one person in between you and Keith Taylor, which is really all that you're here to see. But I thought it was interesting, first of all, the Louis Vuitton organization is a fantastic customer of ours. But I want to acknowledge my wife in this scenario because I thought when she found out that they were a customer, she offered to support them. And she thought, "I want to test how your systems are working", and I thought that was very thoughtful of her and how about we just watch a Netflix movie instead and support them. Okay. So thank you very much for taking the time. Whether you are here in the room or online, we appreciate you spending your afternoon with us. I have -- coming up in August, it will be my 10-year anniversary at Equinix. And there's been no better time than right now for our sales team to be focused on doing what we do best, which is helping our customers become more successful. And so today, I've got the opportunity for the next half hour to share with you a little bit of our customers, them giving you their story of what they're going through and how Equinix can help them. And so we'd like to welcome one of our customers up first from Honeywell Sheila Jordan. Please come on up, Sheila. Okay. So excited to see you, Sheila. Thanks for coming.

Absolutely.

Maybe you can give everybody a quick perspective of your role at Honeywell.

Yes. So it's the Chief Digital Technology Officer. And what that means is really all technology for inside the company, so corporate IT, but also data is becoming so critical. So data is included in that as well, both the data quality, data management, all the data aspects. And then, of course, Gen AI, is being introduced. So it's really running the technology in what Honeywell has been through in the last -- I've joined Honeywell 5 years ago. And what we've been driving is a massive digital transformation across the whole organization and across the different strategic business units. So it's been quite exciting.

Great. Well, I mean, everyone -- I know everyone has heard the name Honeywell. But maybe you could just give a little perspective of what things are happening in Honeywell these days because I know you're going through a lot of transformation. .

Yes, we are. Vimal Kapur, our CEO, has really been focused on driving a growth agenda and growth being both organic and inorganic growth. And so what -- the first thing we did was we said the mega themes for Honeywell is 3 things. We are in industrial automation. We're in aerospace, and we're in energy. So those are the 3 mega themes that Honeywell is now driving. So with that, we now are looking at portfolio shaping to say what do we want to do to make sure that is what Honeywell does, fits those 3 themes. So we've been on a pretty big quest on the inorganic growth. We're working now with 6 acquisitions. We spun 1 small company off, and we've just announced 2 bigger spins, Applied Material and now we're going to spin off the Aero business. So 6 acquisitions, 1 small spin and 2 divestitures, all within like an 18-month time period. So we're quite busy in doing this portfolio shaping. Simultaneously, organic growth is just as important. So our new product introduction, and this is, again, an area that we're working together on is as we think about we have 4 business models of Honeywell. We sell products historically, projects. So when we go into a stadium or a hospital or facility with a building management system, fire safety, security, we actually sometimes offer the project to go implement that, the installation of that. So we sell products, projects and now we're moving into software and services. So think connected services across those building management systems. So all of a sudden, the 4 business models is now allowing us to come up with new product introductions into those -- with those 4 different things way beyond just products and that's really the future.

So a lot of acquisitions, a lot of little merging happening, a little spin-offs. A little bit of transformation going on.

Yes, all 3.

And how -- maybe -- and obviously, agility is important for you with that happening. How does Equinix help you be more agile.

Yes. So one of the things I'd tell you is there's 2 things that I really just deeply appreciate the partnership and the relationship. The first is, you are very easy to do business with. And I don't say that lightly. But when we need to pull off something pretty quickly, in my world today, in most CIOs world, speed matters really matters and minutes matter. And so when we have to go and change course of direction or get the administrative POs done, I mean, you're very easy to do business with. So I deeply appreciate that part of the relationship and you respond very quickly to the demands that we come in and even if we have to change course. The other thing I'll tell you is when you think about the separating 3 companies, I have to quickly decide what does the network structure look like globally because we're in every region, everywhere -- we're in 84 countries and 400 locations. So we got to think about what does the separation of that network look like for each company. And so we quickly became -- right now, we work with you in 7 different locations. And what we've decided is because of this separation, we need 16 different locations in each one of the businesses, Aero, Automation And Energy are a bit different. They are corporate headquarters around many different places. So we had to think about -- we needed a company that had a global footprint and you guys responded quickly, we were able to go from 7 to 16 in the planning phases and actually begin to execute that so much so that we're going to have the backbone and the network done fairly quickly. And it's the first step. I can't do much of more of the separation until the network and the data center is separated, and then I can start moving the applications and the data in all those 3 different places. So I just can't appreciate enough the partnership and the responsiveness. And just your overall strategy fits so nicely, your footprint fits so nicely with what we need at this time.

That's great. Well, good to hear. I'm happy about that, and we're happy to help you with more locations, Sheila, if you have others as you do. But just as you start to think about that, I mean, I think it's important for us to understand when you think strategy, how -- like how early do you bring Equinix into that thought process of hey, here's the new strategic decision or something that we're getting ready to do.

Well, I'll say we just kicked off -- I mean, a few months ago, we've kicked off the actual Aero spin. And one of the first things, I'm a big planner, and I like to derisk massive programs. And so the first thing we had to think about was what was the network in the backbone. And that, of course, we really looked at our cloud providers and Equinix to say what's our strategy here because there is a sequence. Again, I got to get that stuff sorted out and then start moving some of the applications, we've got to think about how we're separating the data, the content, laptops, all the other things that follow, but you can't really do much if you don't start with the network and the infrastructure in the backbone. So that was very much a strategic discussion super early on into this whole separation planning.

Great. How about -- you've heard those 2 words a few times called artificial intelligence. Talk to us a little bit about how that is affecting things at Honeywell? And what might we be thinking from an Equinix perspective regarding your AI strategy?

So one of the things I'll step back and say is, I've been in the business for 25 years, having worked at Cisco and Symantec and some other companies. And I would tell you that every 5 to 7 years, there comes a technology that fundamentally changes how you work, live and play. I'll date myself, but think about we used to print out MapQuest.

Well, yes.

The older people in the room are laughin that the others didn't. Search. I'll never forget we had the debate in Cisco for quite some time. Should we bring mobile phones into the workforce, just because that was just a foreign concept 10, 15 years ago. So I would just say that there are those moments in time and technology that's introduced usually on the consumer side first and then it moves into the enterprise that Fundamentally changes how you work, live and play. I actually think Gen AI is that same technology. Now AI has been around for 20 years, so I'm not necessarily talking about that. I am talking about Gen AI.

Gen AI, YES.

And the difference -- the reason I say that is because Gen AI does a couple of things that we haven't been able to do before. First, it thinks, and it gets smarter and smarter and smarter. The more you train the models and you think and you teach it, it gets smarter and smarter. So that's really interesting. So it's not just a static application that's going to work the same way unless you go and configure it or customize it. It actually thinks. The second part is, in most companies, we have this plethora of structured data that we -- transactional data, bookings, billings, backlog, all the data that runs your companies, but we've been not able to tap into what I call unstructured data. So think videos, think the terms in a contract like the contract, we negotiate lawyers, negotiate all these contracts and that the terms and conditions, the SLAs and all that are part of this unstructured data. It's not a table in a place you can actually go use it. So unstructured data is pretapped. And studies have said that a company of our size your unstructured data is 2 to 3x the amount you're structured data. So when you start thinking about Gen AI can go find insights across structured data and unstructured data so that you get these new insights and all this information, think employee sentiment, think customer sentiment, think partner sentiment. You can actually video, voice, words that they use, you can actually start to understand things that we couldn't have done before or at least you couldn't have scaled and analyzed it before. So I'm super excited about the opportunity. We have over 20 different every function, so legal, HR, engineering, IT, finance, every function in every strategic business unit has a Gen AI program or project deployed in Honeywell. So I have over 20 in production. And again, that just shows the breadth of what the capabilities are. It's not just about one function can you use it, like many can.

all using at the same time.

The best example I can give you is our software engineers are using GitHub. It's a Microsoft product. It wrote 116,000 lines of code last week, which is the equivalent of 233 engineers. So again, it's the work that is a bit tedious, the work that is repetitive. Now we still have all of our engineers because they have to validate the code, they got to check the code, but they're not the typist, they're systems thinkers that can actually look across and make sure the code is accurate. And so what does all that mean? It means time to market. It means our products get to market faster. So that's just 1 example, but we're very, very, very bullish on it. And we also are now incorporating, I mentioned earlier that we have 4 different business models. We're going to start including gen AI into the products and services and specifically the software that we sell. So the best example I can tell you here is, again, we sell building management systems. So think fire, safety, security, surveillance cameras and many, many, many buildings, nonresidential buildings across the United States, across the world. And now we're going to do is connected services. So those connected services will be able to work, have remote work on them. We can see what the sensors are doing and talking to each other. So think about safety, think about fire for a second, we have intelligent security solutions where today, unfortunately, there's a fire, the firemen and the emergency services know what? They know your name and your address. Tomorrow, we're going to know where you are in the building, what queue, what office, what floor, what's the sprinkler system that's on the way there? What are the emergency services? Who else is in the building. So knowledge that we're going to have around this as connected services is all going to be using data and then, of course, gen AI on top of that.

Well, as you think about that, I know we've talked a little bit about that kind of the beginning part being the training. And then as you move more into inference, the importance of distribution and being dispersed. Is that where you see Equinix helping?

Well, that's where I actually think as we go into distributed and actually some of the manufacturing sites, it's going to be more and more and more distributed. So at the edge, so when we start having this intelligence and this data and sensors and stuff in our manufacturing sites, seconds will matter. Performance will matter. Accuracy will matter. And so we're going to need to think about not only cloud and centralized sources of data, but also how we can get that information that's important in the moment -- somebody on a manufacturing line needs to know some information really fast. That is going to be super important to know. So in certain use cases, in certain places, the distributed becomes more localized and not necessarily centralized.

So the global footprint matters a lot in that scenario.

Absolutely.

How about as you start to think about just in general, what makes the partnership with Equinix unique?

Well, again, I would say I have 14 strategic accounts that I work with, I mean, across the cloud providers and the technology and you are one of them. But I would say, it really does come down to, and I tell the salespeople this all the time, you have to know the business of your customer. You have to know what you're trying to do, what you're trying to accomplish. You got to know what my pain points are. You got to know how -- the fact that I have 6 acquisitions and some spins happening. I mean you have to know kind of be able to adjust and be agile. So that relationship is super important. Your policies and procedures and how you operate and run matters to me because if you're efficient and effective and we can get things done quickly, then again, that's a big benefit in speed. And I would just say, in general, speed always matters, right? Speed is important for -- when the CEOs have ideas and they want to do and they want to get them done quick. But I would say that when you're in the A&D world, mergers, acquisitions and divestitures, like speed is nonnegotiable, like you have got to go fast. And so we want to make sure when we -- by the way, things will change. It's just the ability to pivot and change decisions or change sequence and change orders then the order of the work, then your ability to help us with that. And the third thing is that I would say, it's super important is co-innovate. We're not going to know everything in this whole new world of services and software, we're not going to know everything. And I think it's important that -- and I know you're using a lot of our solutions and things in your data centers, thank you very much. But I would just say that when you bring 2 companies together that has an opportunity to co-innovate together and leverage each other's skills but deliver something even better to our joint customers that's where it gets really fun.

Yes, for sure. How about lastly, just when you start to think about what's next -- what's the next for us and our partnership.

I honestly can't think beyond the [indiscernible] part -- so mergers, acquisitions, divestures, everything, it's on our plate right now for the next 18 months, I would suggest that when we separate, we'll have new Honeywell and we'll have Honeywell Aerospace. And then I think it's going to be an interesting place for us to think and think about the possibility of what's going to happen next. But right now, it is all about the work that's in front of us.

Well, we're so glad that you include us not only in the planning, but as you just look at your overall next steps, we're happy to be there with you and glad that we can work together on it.

Absolutely. Thank you.

Well, thank you so much. Sheila Jordan. Thank you very much. Thanks so much. That was really appreciated. Thank you very much, Sheila. Okay. We have 1 more customer that I'd love to bring up from ServiceNow. Please help me welcome to the stage, Peter Bud.

My wife would like to help you with that venture, by the way.

I'm sure she would. So tell us a little bit about -- maybe you could set the tone a little bit like Sheila did in terms of giving people a little perspective of your role at ServiceNow.

Yes, sure. I started with ServiceNow 12 years ago, I'm running their data centers. We were small at the time Equinix has. So we only had 4 data centers, 2 in America, 2 in Europe. And I took over the APJ role in EMEA and then went to a senior director to look over the whole global footprint.

So you're now responsible for making the decisions around all your data centers.

Yes. So I run the cloud basically at ServiceNow. So my team look after the cloud, the support -- the everyday support of the cloud. So the frontline of support really.

So how about -- what have you noticed over that 12 years in terms of kind of as you were growing, how is the relationship with Equinix grown over that 12 years?

Yes. I think the -- I see a lot of similarities actually between the 2 companies. I know that they worked with Bill before. But there's -- the maturity and the trust is a key element for us. I think that's the big thing for us. Bill says, trust is one of the biggest commodities you can have, you learn it in droplets and you lose it in buckets. I think with ServiceNow and with Equinix, we have that trust element. It's never going to be all plain sailing. You're going to have outages, but it's how you react to the outages. So we have our topology of data centers where we'll have active data centers in region or in country. And that means we can actually move a customer from one data center to the other pairing data center because they're mirror imaged. We can do that within seconds, but we need to know when the failure happens because the time to resolve is key for us and that's the trust element. You coming to us. Raouf's team notifying us when there's an issue so that we can actually remedy it straight away or move the customer out of harm's way.

Yes. And how -- if that ever happens, do you notice a difference in our reaction to the very few times if there is -- even a brief outage, anything between difference in Equinix response compared to other people because you obviously use multiple data center providers.

Yes. As I said, I think it's the maturity of each you knowing our product. Sheila talked about it earlier. It's knowing your customer. We are very big in listening to our customer, listen to a customer, understand their footprint, understand their product, what we do and we cookie cut intentionally globally with you. So it's great with you that you see that and your IBXs globally are the same, consistency is great for us. That's what we're looking for.

Great. How about as you think about ServiceNow. So ServiceNow started as a software company. And now some would say that you're the seventh largest cloud out there. Tell us a little bit about that journey and what Equinix and you did together in that journey?

Yes. So Fred Luddy, who's amazing person, our founder. He was a software company, and he was saying, what frustrated him about software packages or software companies. They would sell you the bells and whistle of a product, and you would only use a portion of it, but you'd have to pay for all of it. So he said, "Why don't turn it on his head, build the software around the customers' needs and only charge them for what they are using, simple, but brilliant. And with that, it's workflows, automation, that's what ServiceNow does. They were -- it was kind of a SaaS. We're now really a platform platforms, if you like. So with AI as well, we're looking to be what we would call the AI control tower. So we're in companies, you've got different softwares, silos, you want to kind of break those silos down, have a swivel chair effect have like 1 pane of glass, yes? And that's what ServiceNow does from a platform view.

As you -- how does it evolve kind of your usage? I mean, as you said -- I know when you talked a little bit about when you first got there, we were solely Equinix in that scenario. so how did that -- tell us a little bit about how that grows over the years?

Yes. So the great thing about the brand, and it's been highlighted in today's sessions is you are #1 for connectivity, you're unparalleled for that. And that's great for us because when we go into a new geo or a new metro, if Equinix are there, that's half my job done. So you've got that standard, you've got that brand, and we really like working with you. Any problem sometimes if you're not available in certain geos, we have to go with other colo providers. But we would look to you first.

Great. And did it expand? You're using us in multiple regions, correct?

sure.

Across all 3.

Yes, across all geos, we're in Americas, South America, Canada, Europe, Seoul, Singapore, Australia, we're really all over the place.

And in each one, you have the exact same setup.

Yes. And my staff, you could liken it to a McDonald's, I know that's not a great analogy. But you go in there, you're now out to order your food, we do the cage situation exactly the same. We have the same setup. So we do structured cabling away from the networks, which is we'll do IDFs. So our engineers can go anywhere around the world. They walk into a ServiceNow cage and they know where they are. They can work straight away.

And that's what's perfect about our global footprint in that scenario.

Yes, consistency. Sometimes when you acquire somewhere, it takes you a little bit too long to equinize it.

feedback is a gift. Thank you, thank you for that. Noted. How about when you're thinking about artificial intelligence, how about for you, Peter. What does that mean for ServiceNow?

Yes. So obviously, I talked about our workflow, our kind of automation. Now putting AI over that accelerates the whole thing. It's a game changer. It is. I look at it from -- in the last 5 years, we've had 2 generational changes. One -- first was COVID. So we had COVID that meant more remote working. Companies like us Zoom went through the roof. But that then meant data center space was prime real estate. Then Gen AI is going, high density. How are we going to call these servers GPUs? And Raouf and John touched on, we really want to partner with you how we can do cooling to the chip or rear door or what makes sense. And the great thing about Equinix is that we have the flexibility of going from a retail model or to the xScale model, and that really benefits us.

Yes. So you can look at us our full portfolio and take advantage of that because you've got all different needs.

Yes. Yes. And I think when we go into a certain geo, it might not be as big but you can cater for that. We could go in a little bit small and that point of presence, then we get to a tipping point, and we can build out then 2 data centers in that country or region.

Yes. And so the retail piece, how do you see that -- and we always talk about the importance of how much more space people need, how much more data center space. But how about you in terms of the retail business and your access to Equinix on that? How do you see that?

Yes. I love the retail model. And I do see a lot of companies a bit similar to ServiceNow have outgrown the retail model, though, for size. But the level of support, we still would love that level of support, and that's why I think xScale working with you to work out how we can kind of utilize that. So we're coming out of the 5 megawatts. We're going into the 10-megawatt footprint, and we still would love that kind of flavor of support where you got the IBX engineers, you've got 5,000 staff globally, and they are a credit to Equinix because they really do feel for the brand, they're career minded, and we see that every day with my staff.

Yes, they're passionate about what they do. As you start to think about things that you value in the partnership, Peter, maybe you could share with people some of that.

Yes. I think I said about trust, but I think sustainability, we get questioned a lot from our customers what we're doing with our carbon footprint. We know that you're on -- we're on a story together. Like it or not, data centers haven't got the best track record. We know that. But the good thing about Equinix is when we go into their data centers, in any geo, we know that your PUE is going to be better than anyone else. And that's a fact because we do -- we look across the portfolio of data centers we got and your average is the lowest. So that's another.

Across the board in terms of -- and you're comparing it against everybody in that.

Yes.

How about -- when you think about the things that are important to you, as you've talked about trust, you talked a little bit about that. What pieces do you think Equinix brings that other companies don't bring?

Connectivity is -- you're definitely the lead of connectivity. What you've done well because you were kind of ahead of the game, you had more footprints and more geos than anyone else. You use that as making it your own backbone. So your Fabric is second to none. other companies have tried to do, Megaport and stuff like that, but it's nowhere near the amount of connectivity that you've got. So we want to kind of leverage that. We're looking at doing a new kind of POP solution. So we're going to kind of take the edge network away from the customer footprint, put it in highly rich connected zones or metros. So we can utilize the retail model because it's a smaller footprint. But then we can look at you where you're going to go to maybe emerging markets that we can look at building with you, and then we can put the customer footprint in those locations.

fantastic. As you start to think about that and growing in that space, what do you think about -- how do we make your job easy.

Not selling to any hyperscalers. No...

Meaning you want all our space. Is that...

It's a good point. I think I said the 2 generational changes meant that the demand for data center space is unlike it's been ever before and the hyperscales are actually buying colo space because they're not building their own at the moment because it gets time to market, they're actually acquiring colo. But the great thing about Equinix is you still give us a seat at that top table. When you do geos or when you do builds, you let us know, we work with the road map. So keep doing that.

Well, it's important for us to have a lot of diversity inside the buildings that we have. And that also gives us the true -- you mentioned connectivity. And we think of it just as those ecosystems that are in those buildings is people are attracted to us because you can get that and you can't get it anywhere else. Is that important to you as well.

Yes. Yes, it's very important, very because your brand is constant through. So if we're going into new markets and new territories, it's great when we've got someone familiar with our kind of portfolio. So that really helps.

Any last thoughts you have, Peter, for anybody about just our relationship, how we partner together?

Yes. No, just keep doing what you're doing, but I think today is really a lot of the sessions have like pointed out, I think the growth is the key thing. We're probably at a 50-megawatt globally. So it's not extreme, but we probably have to triple that in size over the next 3 years. So we need to partner with you going forward. We're not in the business of building our own data centers. Don't worry about that, so we're not going to do that. But we would rather grow with a partner like you that's consistent and has the right brand awareness, listens to the customer and has the sustainability story you need for our customers as well.

Good. Well, I think we -- as Sheila even talked a little bit about co-innovating together, too. And I feel like we've been able to share successes over the years as we've looked at things that you wanted to do when you wanted to do them as well as for us. And I think we need to keep doing that together as well.

Yes. I think there's a lot of options to go to market as well. And I know that both teams are talking to each other at the moment. And I think there's a lot of opportunity there because I do see Equinix being like data center of data centers. And ServiceNow platform of platforms, so it should be interconnected.

Yes, Very much so, we're happy to partner together and really appreciate your support and being such a great partner over the years. So Peter Mudd. Thank you.

Please welcome back, Chief Financial Officer, Keith Taylor.

It's been a good session so far. As you can tell, look, I love the presentations that we've had today. And one of the things that probably isn't a surprise to you, when I see those presentations and the opportunity that is in front of us, even after 26 years, you can get very excited about Equinix and its future opportunity. So for me, it's really not -- it's not just about the growth, but I also think it's lot about the efficiency that we're going to bring into the business. And that's going to create an environment where generate more profits then we'll look at our investments at a different level with a different level of focus and that's going to give us growth, and we will return that to the shareholders in the form of the dividend. So you really we really started the day talking about growth, efficiency and return, and that's where I think we are. Now I have 2 segments in my presentation that I'll do the outlook. I think the first thing that I want to do, though, because you're probably going to ask me, and so I'm going to go do it right away is how did we do versus what we said we'd do when I was standing up here 2 years ago. Anybody have that on your mind, but I think it was important because one of it is we want to measure ourselves. We're a say-do culture. We want to do what we say we do. We can do. And that's -- we take a lot of pride in that. So let me just start off with revenues because I think it's really important. And revenues are not in and of themselves. When you do the subcomponents of it our gross bookings were, you've heard, they're really quite good over this time period. Pricing was strong. But you've heard me say publicly on many a time, the churn had been annoyingly high and it has been. And why is that, Well, I think there's a few reasons. I mean we all know them, but I'll repeat them. I think the macro conditions have been very, very difficult at times. I think our ability to curate growth and optimize IBX is where we effectively demarket a customer to bring in more capacity for customers that are growing with us, put a lens on basically our churn as well. And then the bankruptcies, there are a number of bankruptcies. So that all said, in the spirit of openness when I look at how we perform relative to our expectations, I would say that we're at the lower end of our guidance range. But then I fast forward to AFFO per share. I said, okay, well, how do we do there? If I look at the model that we used in 2023 and where it would be today, and then I compare that, how did we do? We did better, meaningfully better. And we did better largely because gross margins were better than we anticipated than we originally planned for. And our ability to raise capital to fund our future, we did a better job both in how we sourced our funds and how we deploy the capital. And the best way to present that was really the third sort of key guidance point that we had with you, which was the dividend. And the fact of the matter is, if I think about the dividends, we distributed $500 million more than we anticipated when I stood up here 2 years ago, versus what we plan on distributing. So it just gives you a sense that overall, the business performed well. Yes, we'd like to do better. And yes, we strive to do better. But that at least puts in perspective. Now a lot of what I'm going to talk about, at least in the first segment is really the value that we create through shifting cycles. And I'll just start off by saying the story is a little bit about resilience, but it is about the durability of our revenues. So as markets have evolved, we adapt and thrive. And as you've heard from Adaire, the biggest of all market shifts is at our doorstep today, which is AI. And we intend to fully capture that opportunity, largely because of all that you've heard plus from our -- just recently from our customers, the foundational advantages that we have relative to anybody else are immense. And as a result, we think we're going to be a very large recipient of that opportunity, and we're going to invest behind it. I want you hear, we're going to invest behind it. So it's exciting to me. And so what is it that sort of gives us that confidence. Well, it is our foundational -- our unparalleled foundational benefit that we have compared to anybody else that gives us the confidence that we are going to have an outsized opportunity relative to anyone else. And it starts with the diversity of networks. No surprise. It's the cable landing stations, whether it's the origination or the termination point and the value that we bring to that solution. It's the cloud on-ramps. It's the customers, 10,000-plus customers who are growing and scaling with us. 64% of our revenues come from those customers who operate in 3 regions, and they're going to continue to grow and scale with us. We just have to create the capacity. The world is increasingly -- is going to become more digital. And we want to benefit from the diversity that we create for those customers, as you heard Peter speak about and the sovereignty of where the data needs to reside. I want to talk a little bit about revenues and the diversity and durability of it. On the first part, when you look at the business, from a market perspective, 80% of our revenues come from major metros. Those are the metros that we generate $100 million more revenue or greater. And the other 20%, which is the growth in emerging markets. We want to continue to invest in those growth in emerging markets, but our major metros today is 15 in total and it's going to scale. But I think what's important is then looking at where does the business operate out of, Well, 60% of our currency, if you will, of the operating performance resides outside the U.S. that we hedge that because we need predictability around the cash flows because we distribute our dividends in U.S. dollar. But it gives you a sense there's tremendous diversity, and we protect ourselves as much as we can from our hedging positions. The verticals continue to be to scaling and the subsegments of those verticals also are thriving. So it gives you a diversity of customer through those vertical segments and subsegments. And then lastly, our largest customer, you've heard this before, but I want to repeat it. our largest customer is less than 3% of our revenues, less than 3% of our revenues. Our top 50 customers are less than 37% of our revenues. So I love the fact that our revenues are diverse. And they're durable. And the thing that I like about the durability of our revenue and the returns that we get, again, we have that foundational advantage and it allows us to have industry-leading cash-on-cash yields on the dollars that we invest. So what you see in these charts, sorry, this chart behind me is basically major metros and then the growth in emerging markets. And what I would tell you is we continue to invest in those major metros, Think about 20% to 30% cash on cash yields unlevered or greater as we grow and scale. And when we think about growing scale now. We used to think of things in millions. Now we think of things in billions. We think -- we used to think in megawatts, now we think in gigawatts. As it relates to the growth in emerging markets, we're still going to invest in those because we need to. It's a platform. But as we continue to grow and scale those emerging markets, which are many inside those bubbles, they're going to shift over towards the cash yields that you that you see on the chart here. And there's no better example to talk about a major metro in Singapore. This is a metro that we came into in 2002 through the acquisition of a company called ISCT in Singapore. And we haven't looked back ever since even when there was a temporary -- sorry, temporary moratorium put on data centers in 2019, our Singapore market, to give you a perspective, why we talk about it and why it's so important to Southeast Asia is we do $190 million of revenue a quarter in Singapore that earns almost 80% cash gross margins. We've invested $1.6 billion, and given the recent allotment of more capacity, we'll spend another $400 million, and we'll get returns at the upper end of the range that I just spoke of.

Now the challenge we have in Singapore, there are limitations. And so when there's limitations, we can continue to invest, but it will be as best as we can. So you have to think about, well, like other markets, how do you grow in scale? Well, you have to think about proximity. And so markets that are proximate to Singapore will build out, Johor, Jakarta, Kuala Lumpur as examples. Over time, it will be our goal to try and make them major metros as well, which is $100 million or more. And over some reasonable time, one, both or all 3 -- sorry, 1, 2 or all 3 of them could be major metros. But our goal is absolutely to continue to invest in Singapore. Singapore is critical node for Southeast Asia and the opportunity in that part of the world. So I'm going to pause. This is a slide you've never seen before. This is information you have been asking for. So I'm going to pause, give you 2, 3 seconds. I'm just going to stand here quietly. A lot of cameras up there. Look, we understand over the past many, many quarters. But we knew -- we give you the qualitative view on what we thought we would do from a booking perspective. And I think one of the best ways to measure the health of a system, an ecosystem is looking at the gross activity. It's driving just like interconnection, it's thriving. So we're always looking at the growth, but we have a net number to report. So we look at the growth. So we go, okay. So what I want to tell you here is our new metric that we will provide you on a quarterly basis, which will give you visibility into the forward revenues. And I'll give you a sense of the momentum of the business. It's going to be called quarterly gross bookings annualized. It will include net pricing actions in the quarter. Effectively, it's the new MRR that we will have booked inside that quarter. Now it's probably not a surprise to you because Adaire said it already, over the last 4 quarters, $1.3 billion of gross activity. Now we're also going to give you churn. We're going to continue to give you churn. And right now, we're going to -- until we have anything better, we're going to continue to give you some of the other metrics. But churn, we want to give you the current quarter and the forward quarters, and that gives you the predictability for your models. It gives you a sense of how are we doing, particularly when you compare us against anybody else. The line of best fit in this scenario is up and to the right, as you can see. But again, we say that because it should be. We're looking for records. Business is growing. And so the line of best fit should be up into the right. But I would tell you on a go-forward basis, I hope that we have that predictability, but the reality is there should be some variability because utilization levels or IBXs, they get full. And until we bring more capacity on, it can have an impact or we have a mix issue. We have different price points in different markets, but that will be up to us to communicate that to you. But suffice it to say, this gives you a pretty good sense on what we're going to provide on a go-forward basis. And obviously, when you look at the first quarter, it was a tremendously strong quarter for us. But I just wanted to leave this segment with just a couple of comments on the interconnection as well because it really is about the fabric of our -- it's the fabric of our success. Yes, we build better, we operate better. We do all those things compared to, I think, the broader industry. But the one thing that nobody else has, and they cannot replicate it. It's that simple. They cannot replicate what we have ever. And that's that interconnection. And for us, for 2025, we're estimating we'll have $1.7 billion of interconnection revenues. It's a compound growth rate over the last 5 years of roughly 11%. It will be 19% of our MRR. So again, very, very attractive, and it's an enhancer, if you will. It's an enhancer, if you will, to the cash-on-cash returns that we get on our data centers. So highly important. When you look at the right side of the chart, I think as Jon and Raouf alluded to in their presentation, the fab -- and Peter referred to in his comments. Fabric is a very important aspect of our business. And the attach rate that we have from fabric is increasing and up to the right. The company is -- one of the key objectives for the company's corporate bonus plan is for that fabric attach rate to continue to move up and to the right. So 42% is certainly great in Q1 but we expect it to be higher by the end of the year. The other thing, that I thought was very interesting on this slide that I wanted to share with you at least comment on and Jon spoke a little bit about it, is that there's convergence between the price -- the average price a customer pays for a virtual connection versus a physical connection, and you can see they're converging. So from our perspective, we're a little bit agnostic on how they procure those services. But again, up and to the right is the positive metric, which I think is really important. So we talked a little bit about revenues, talked a little bit about our assets. I think it's also important I want to talk a little bit about the balance sheet, which is an interesting segment for me. And this sort of gives you sort of a framework that, look, we have a balance sheet. It's a very strong and healthy, and I call it advantaged balance sheet. And so when you look about the growth that we intend to invest in and all the stuff that Raouf sort of alluded to in his presentation today with Jon, you get a sense that we're going to start investing bigger than we have invested before. And what I like about this particular chart is really that we have been investing in our future success for a period of time. We've been land banking. You saw the cash on our balance sheet start to elevate because we knew we had things to do. And it was marrying up basically the passage of time with the investment strategy. Well, we're now sort of there. Again, I love what Adaire said. I think, again, Jon and Raouf said it. What we plan on doing in the next 5 years is equivalent to what we've done in 27 years. Again, for me, it's just we're dealing in numbers that maybe none of us have ever anticipated. But that time is here. And I think we have a very compelling advantage. The only other thing I wanted to share with you on this slide, if you actually just take the inventory. And hypothetically, you just take our growth and our investment to 2029 and you stop. I said, tell me hypothetically, what would our revenues be if we just filled up that capacity to 90% at the current price point. And the answer is greater than $15 billion. So it gives you a sense that despite the investments we're making, we have a very long runway that I'm really excited about the opportunity to go and sell that capacity to the customers. And if we stop building, $15 billion or greater. Now again, when you have a strong balance sheet and you invest your capital, one of the things we've been talking about quite extensively is Build Bolder. You hear it on our earnings call, you'll hear it in the hallways, you certainly heard it many times today. And what I find really interesting about the Build Bolder strategy is really the fact that it's going to constrict amount of time frame in which we build incremental capacity, fewer phases with greater density. And the best way to look at it is the most -- the largest and probably most competitive data center market in the world, which is Washington, D.C. or the Washington D.C. area and for us, it's Ashburn. And if I look at DC12, we introduced it in 2017. We underwrote it to 23% returns. It did better than that. Then in 2023, we introduced DC16. We underwrote that to higher returns, and it's double the size, and we did better than that. And now the very first Build Bolder data center that's being introduced is our DC17 in 2027, which is 50 megawatts. We're underwriting that to even higher returns. And there's just a tremendous amount of momentum in the D.C. market for the delivery of the services that we offer to our customers. So that's exciting to see. Now when you look at the balance sheet, and you think a little bit about the capital that we have to allocate. It's not going to be a surprise to many of you. Yes, we'll continue to invest in the DC-type initiatives where we get outsized returns. But I want to share with you the highest and best use of our resources is putting it into the organic business. Investing in our growth because when you can get those type of returns, that's what you should be doing all day. But the other aspect of the business is we also wanted to return capital back to you in the form of dividends. For the 10-year period post REIT to the end of 2024, we delivered $9 billion in cash dividends. For the period of '25 through '29, we anticipate that the dividend that we will distribute to you, the investors and our shareholders will be $11 billion. So over that time period, since becoming a REIT through 2029, we're looking at almost $20 billion of cash we distributed back to the shareholders, at the same time, growing the business substantially. Our focus is on growth, but it is on maximizing shareholder return. And I want to make sure that you appreciate that. Also during this journey, though, we are going to run the business more efficiently. You heard from Harmeen and Nicole, just the work that they're doing around their campaign around systems and process improvements, not to mention all the other things we're doing across the company. It's about driving down our cost of revenues, reducing our SG&A as a percent of revenue. We want to see improvements in our cash gross profit and our EBITDA margins. And we'll talk a little bit more about that shortly. But when you look at the right side of the balance sheet, we've also got some debt maturities. We have a very attractive debt maturity tower. But over the next 5 years, including 2025, we're going to refinance $8 billion in debt that has an average coupon of 2.1%. The other thing I want to say, in that same time period, we intend to raise an additional $8 billion to fund our growth. So over that time period, we're talking effectively about refinancing and raising incremental capital of $16 billion. Let me leave you with one other thought. Given what we see in front of us, we believe we can do this. We're confident and we can support it on our balance sheet with comfort. Still have a little bit of flexibility for sure. But the other thing I'll leave you with, again, market condition is dependent. It is not our intention to raise any incremental equity over the same time period, other than employee share plans. And some of the markets in which we'll choose to raise capital very much, like I said before, we've been able to raise capital in markets where there's a lower cost of capital. There's roughly $6 billion of debt that we have raised over the last few years, and we did that at 3.4%. If you remember at the last Analyst Day, I told you the debt that we -- the assumption that we had in the model was 4.5%. The assumption I have in the model today is 4.9% because a lot of that debt we anticipate could be raised in the U.S. and we've got elevated rates. The point I'm trying to make is we have an advantage that very few companies have where we can raise our capital in multiple markets, deploy that capital in those markets. And to the extent there's excess, we'll repatriate it back to the U.S. and it gives us a natural hedge and the tax efficiencies that we need to drive cash flow in the business. So this gives you a little bit of a sense of ourselves versus some of our public peers from a leverage and debt capacity perspective. The point that I really want to make here is we are going to continue to focus on being a highly valued investment-grade rated company. But at the same time, we're taking our leverage up at least one full turn. So under our methodology, not the rating agencies, our leverage, you should see rise over a period of time to 4.5% or thereabout. So I would be remiss if I didn't mention something a little bit about xScale. xScale, to me, is a balance sheet enhancer, a value creator. You can see our projected accretion for AFFO to AFFO went from range of 3% to 5%, 4% to 5% and this doesn't yet even include xScale 2.0. And the thing I like about xScale is we're investing with great global partners. But 2.0 takes time. You saw the size of the commitment that we're making inside Atlanta. And we're looking at other properties around the U.S. and elsewhere in the world. It takes time. As I look forward, when I see the fee stream that's coming out of our xScale business, the fee stream has been really quite attractive. It gives us that outsized return. We talk about 12% to 17% levered returns inside the joint venture, but think about the fee stream that we get to enjoy as a business on top of that. We layer in 50% to 60% debt, which I know you all understand. And this yet has not been -- we don't get the benefit of the AFFO contribution coming from the ventures performance. Said differently, the fee stream comes to Equinix, but the joint ventures are still -- they're still growing and filling up and stabilizing and absorbing, if you will, the cost of debt, so we don't yet enjoy that benefit. '25 and '26 onwards, you should start to see some contribution coming from the AFFO. And then to the extent any of our partners choose to monetize, of course, there's the promote. Again, we're looking at different markets with the customers -- sorry, with the partners depending on what they want to do. But I would just tell you that the appetite could suggest that we could earn promotes on this investment as well. So that's something that you find attractive. The last piece I want to do is just give you a sense of if I take all of the joint ventures and I add them together. Right now, the business is doing somewhere between $700 million and $800 million of revenue, revenues that we do not record on our books. So I want to give you a sense of that size. And as we alluded to, you're only seeing it going to continue to ramp up as we invest more, and then we get into xScale 2.0, which, as Raouf alluded to, the first building, I think, will be available in 2027. So let me just talk a little bit about long term -- our long-term outlook. But I want to first sort of just start with when you appreciate how Adaire articulated the strategy for the business and how our teams will operationalize it, we can talk about a lot of different things, but I want you as investors to walk away with 4 simple things. We're going to accelerate our growth, but it's going to take time. We're absolutely going to improve our efficiency, and you're starting to see the front end of that already with our 2025 guide at 49% with the second half at or near 50%. We're going to continue to be very disciplined about the capital and our balance sheet management, but that comes at a cost. Our sole focus is to create and maximize shareholder return. It's about value creation. So with that, I'm going to start sharing some guidance with you. Okay? Revenues, 7% to 10%. Remember the window I'm looking at, you already have guidance for 2025. We think at 7% to 10% with the front end being at the lower end of the range and we accelerate to the back end of the -- the higher end of the range. EBITDA margins, because of our growth, because of the operational -- operating efficiency that we've built into the business, and we will continue to -- all that good work that Harmeen and Nicole are going to do is not in our numbers yet. But our EBITDA margins are going to move up and to the right. I said by 2029, 52% plus or better. Spending. Over the next 5 years, '25 included, we're going to spend $4 billion to $5 billion a year, $4 billion to $5 billion a year. That includes the land that sits underneath. We're making some assumptions that there's land investment in here. Perhaps they're even conservative. But right now, we've got some money set aside for that. We're also making the assumption that the contribution of our pro rata share to the joint venture is embedded in those numbers. I've already told you about the dividend, but it gives you a sense over the next 5 years, '25 included again, $20 billion to $25 billion of investment. Okay, last one. And this one, I broke into 3 segments because I think it's really important that you hear this. So I'm going to say just -- I'm going to start off by saying our AFFO per share, the underlying performance is 8% to 11%. Now the debt that we're refinancing in 2025, and just be clear, it's at 27 basis points, we're going to feel the full annualized impact in that next year 2026. We're also refinancing a fair bit of debt in 2026. And you should assume for your models, we are going to raise an incremental $2 billion of debt on top of what we already have. And think about how that impacts the business. And it's all in support of our Build Bolder and other investments. So as a result, AFFO per share will grow at 5% to 9%. For 2026, AFFO per share will grow at 5% or greater. And then we intend post '26. So post '26, we will accelerate to 2029, such that in 2029, our AFFO per share will be $50 or greater including $7 of drag associated with investments that we're making today, where the benefit will not be realized in the planning period. Now I also want to leave you with another thought. If interest rates change, AFFO improves. If we choose not to raise that $2 billion next year, for whatever reason, that's 2 growth points. Just to give you a perspective, 2 growth points. We are exceedingly enthusiastic about what's in front of us. And it comes with an investment. And that's what we're intending to do. The opportunity has never been greater. As enterprises continue to grow their compute, as AI inference takes hold, as Adaire alluded to, we want to invest behind that opportunity. And as a result, that's how it gets reflected in our results. The fundamental business is performing exceedingly well, and that's why we wanted to show you this chart this way. And as I said, the dividend will grow. I've shared that with you already at probably 8% on a compounded basis over the next 5 years. So I'm leaving you with 3 thoughts. It's about revenue growth. It's about the creation of a more efficient and optimized organization, and it's about managing our capital allocation to drive value to our shareholders, both over the medium and the long term. So that's all I have for you. So I'm going to pause here. I'm going to thank you all for spending time with us today. I'm going to invite Adaire and Katrina to come up on stage with me and we're going to answer your questions. And then I hope all of you have some time to spend with the Equinix team either down at the [ kiosk ] or spending time sort of talking to the team just about all the stuff that we've shared with you today. But again, thank you very much. I appreciate your time.

All right. Well, first off, thank you to everyone for doing the deeper dive with Equinix this afternoon, and we truly appreciate the investment in time.

So next up, our executive Q&A and there's going to be 2 ways to ask questions. So you can ask them online. So our IR team is standing by. Go ahead and e-mail [email protected]. They are linked to my iPad. I will be getting them live and then we'll also be taking questions from the room. So we've had -- we have some proactive analysts who have been sending in questions already. So I'll start with a couple online, and then I'll turn it over to the room. So our first question comes from Michael Funk at Bank of America. Thank you for the new data on the AI TAM. As you think about the distribution of AI applications, can you quantify your service addressable market, or SAM, and the required investment to pursue that?

First of all, I think that it's important that we understand the breadth of this opportunity and how we, in Equinix, are positioned to adopt it. And I think we laid that out in the early narrative. We laid out the journey on the inference piece and we laid out the journey on the cloud hybrid piece. It's a huge opportunity. I think when 2 years ago the team looked at the AI opportunity in the market generally, it was like is this a market opportunity that could get Equinix to $10 billion in revenue. And now when we look at the size and scale of the opportunity ahead of us is, is this a pool of opportunity that could potentially get us to $20 billion, $30 billion in revenue at some point in the future. And so I think that's the opportunity that's ahead of us. That's the opportunity that we want to invest in. The TAM is broken down in various different ways across the footprint, but we've really just looked at it holistically as an inference opportunity given the breadth of connectivity and networking solutions that we have in the company. For us, it is something that we're super excited about and something that we will be looking to pursue with vigor and with passion because we absolutely believe that a share of that market is ours.

Thank you. Next question is coming from buy-side investor. For your bridge on the AFFO per share long-term guide, can you help us frame the headwinds from the net interest expense and Build Bolder expansions impacting the underlying AFFO per share growth in your long-term outlook?

Yes. Well, the headwind is just to give everybody a perspective on what we've embedded into the model that we shared with you. And again, that's why I wanted to make sure we had a reference to the rate in which we borrow and the amount of incremental borrow that we have. So right now, interest -- net interest expense we're estimating given all the different moving pieces, and I'm talking about net interest expense is an incremental $200 million in 2026 over 2025. As we take it out to the end of term, again, Daniel is in the audience here. And so some of -- hopefully, you get some time to spend with Daniel, who is our Treasurer. We anticipate we'll continue to fund the business. I wouldn't say equally over the next few years because it comes in chunks. And as we generate more cash, we put it back into the business. But we anticipate that we'll raise that incremental $6 billion over the remaining 3 years. And as a result, our cash -- our net sort of interest burn by the time you get to 2029, it's $1 billion. So it gives you a sense on the carry that we have to invest in these assets to get them to -- unfortunately, in some cases, it's beyond the planning period that we're talking about in front of you here today. But that's why I thought it was really important to also share with you the types of returns that we're looking at in our business, particularly when we invest in major metros. So I'd just say, overall, look, it's a relatively heavy debt service cost. Our goal is to get it down. We raised capital in Japan, as you know. We've done some in Switzerland. We just did some recently in Singapore. We're going to look at Canada. We'll probably go back to Japan and maybe some of the other markets. But you have to remember, those markets are relatively shallow. We also did a big raise not that long ago in Europe. We get preferential pricing of roughly 6 -- sorry, the [ $3.62 ] was the rate. So we're assuming, again, [ 4.9% ] is a pretty big number, but that's because the U.S. influence on it. Our expectation is we'll drive that down and we'll optimize as best as we can. And as Adaire and I sort of gave you guidance, in February of next year, we'll have -- and before that, we'll give you more clarity because I think it is a big number. But I also wanted to make sure it got out there because you can't grow without investing. And we don't want to use our equity capital. And therefore, we want to use the debt capital. And just -- hopefully that gives you the perspective. I'm going to stop talking.

So the next 2 questions that came in are on doubling capacity as well. So we'll do a little bit of a deeper dive there. So the first one is from Frank Louthan at Raymond James. As you think about doubling your capacity over the next 5 years, maybe talk a little bit about -- more about your expected ROIC and how you expect that to change over the same time period.

Well, when you look at the returns that we're talking about, it's really accretive to ROIC. But the problem that you have is that you've got a bow wave of investment coming in, which dilutes ROIC when you -- and then you throw on real positive higher returning investments on top of that. So the answer -- the bias or the line of best fit is up and to the right but you have to then -- you have to break it down into its components on what's diluting versus what's accreting to the model. And suffice it to say, ROIC is going to go up. Just -- it makes sense, but you got to give us the benefit of time.

So the next question is kind of a second part to this. This is Richard Choe from JPMorgan. Our analysts always love more information. So the next part is, when you talk about doubling of capacity, how should we think about retail and xScale? How should we think about the mix of existing markets and new markets? And then any comments on domestic versus international?

Okay. Maybe I'll take that at a high level. I think we're very fortunate that we have access to our leadership team here today. And so Raouf is driving this for us. But when we look at the overall view, I think Keith alluded to the importance of the retail market for us and the importance of Tier 1 metros and the proximity to those metros and any investments that we make because it continues to perpetuate the Equinix value proposition. So that's obviously going to be a criteria as we look at the land that we are banking and the land that we are sourcing over the course of the next period of time. We also have our xScale road map. That's very clearly defined over the course of the next period of time in terms of the bills that are underway and the land that we are pursuing for the next phase of our xScale program. So that will be something that goes very closely in tandem. And then I know that Raouf has these numbers at the top of his head, so I'm going to ask him to take a microphone to Raouf there in a minute to give you this color. But we already alluded to the hike in capacity that's coming on in '27. And '27 will be a very different year for us in terms of capacity that will be available -- salable capacity that will be available to the teams in order to turn the investments that we've referred to here into revenue for the business. Raouf, could you perhaps just take a moment to articulate through the last couple of years and then '27, what you see, '28, '29 and the breakdown from there.

Yes, sure. Thanks, Adaire and I think you did a great job of sort of summing it up. But if you look at what we've historically been doing and then what we're doing this year and next, as Adaire alluded to, and as Keith alluded to, it takes some time to sort of develop data centers. And so '27 becomes a really important inflection point for us in terms of the capacity that we will deliver. And I touched on it in my presentation, we're looking at about 350 megawatts. And then we foresee in the subsequent years that continuing to step up over the next sort of 2 years on top of that, so '28 and '29, sort of being more in the circa 500 megawatts per year range. And I think one of the aspects of the question was what is the split between retail and xScale. And also, as Adaire alluded to in her presentation in her commentary, a significant portion of that remains pointed at our retail business. And so north of 60% of the capacities that I've been describing are more pointed towards the retail space. And so the real change in delivered capacity is much more about retail than it is our xScale capacity. But that, in addition, will also start to ratchet up with time. And so you can see over the course of that period, what's happening in the sort of the step-ups that we intend to have with time. Did I get all the aspects of the capacity question?

Yes, I think so.

Well, there's always more coming, Raouf. All right. And this is actually a good follow-up to this. So we have Nick Del Deo from MoffettNathanson, ask sort of a little bit of a longer question. So as you've been historically very disciplined about the types of deployments that you bring into core Equinix, should we be concerned that types of deployments you'll accept or fill will shift to all types of workloads that are more vanilla or more scale-oriented versus being interconnection-oriented. So any comments on that?

It's a really great question because I guess it speaks to the fundamental core element of the thing that really differentiates Equinix, which I think every presenter has highlighted is the interconnection and the interconnection capability that we bring to our customers who also took the opportunity to highlight that here today. When I think about where we are today in our business, I don't think we have a demand issue. It's more a supply issue in terms of the capacity that's available to us today to serve all of our customers as they would wish and want to be served. Managing a retail colocation facility is a little bit like managing a Tetris block. There's a lot of moving pieces. And even though you might look and say, hey, there's this much capacity that's free, Quite often, [ it isn't ] contiguous capacity, right? Or it might not be in a location that's the premium location that's going to best suit the workload that, that customer has. And in many respects, the team have done an amazing job over the last period of time harvesting capacity from our existing infrastructure in order to ensure that we can continue to serve customers like ServiceNow and others. So I think it's super important that we recognize that one of the bases that which Equinix has already -- has always operated on is understanding the strategic nature of the workloads that we pursue and the work and the thought that we have in terms of putting the right customer with the right application into the right data center. Nevertheless, it has been very clear to us that over the past period of time, the short period of time, 2 or so years, the customer ask of us has changed. It's changed in terms of density, and it's also changed in terms of megawatt size and scale. Now this doesn't mean that we would be moving into a wholesale large footprint environment because that doesn't distinguish what we do. But it does mean that we would want the opportunity to be able to service customers who are strategic in nature to us and who are looking at beyond space and power, the ability to connect their business and to drive their business outcomes using Equinix facilities. So we definitely do see the size and the density changing. In fact, we've already acknowledged that. I think Jon made that very clear in terms of the work that we're doing to look to navigate capacity. But what we're looking forward to, most of all, is having capacity available at the scale that Raouf mentioned in 2027, which is really that inflection point especially on the revenue guide that Keith presented for the second half of that revenue guide to get into that double-digit zone.

So I'm going to take one more online. So I'm going to turn it open to the audience, so get your questions in the room ready. So the next question is from Jon Petersen at Jefferies. With the AI TAM expected to more than double in the next 5 years with a 23% CAGR, can Equinix maintain its market share and also double its revenue over that time period?

It's a great goal, doubling revenue over that time period. I mean, I certainly -- we mentioned already that we feel that our revenue growth is the 7% to 10% range in that time period. A key element of that is the capacity and meeting that capacity goal that Raouf has set for the team in '27. That's when we will see that inflection point in our revenue growth to the upper end of that range. And that's what we're all focused on driving.

Great. So we have microphones. Let's go ahead and open it up to the room.

Michael Elias, TD Cowen. Expansion drag. It's been a long time since we've talked about that. One of the things you said when you were talking about the CapEx is that not all of the benefit comes in, in the planning period. Did I catch that correctly?

That's correct.

Okay. If we were to normalize the CapEx after the planning period, what would that AFFO essentially be? Is it that 8% to 11%? And really the 5% to 9% that we're talking about is just the drag from the long-term value creation?

I think one of the ways to think about it is I referred to $7 of drag in the 2029 time period. So it gives you a sense of 100 million shares, that's a lot of drag in the business, right? And I was talking about -- I'm predominantly talking about our investment drag. Again, it's a term that we all use at least here. There's the operational drag that's in the business as well as we continue to build out capacity and you don't go to -- you don't get to a cash flow breakeven generally right out of the gate, right? And so there's an element of incremental drag that's associated with that, that's embedded in those results. But I don't have that -- and we chose not to break it out. But suffice it to say, when you build the capacity that we're talking about, there's going to be an element of operational drag in addition to sort of financial drag.

All right. And then one other question is part of that. As we try and track -- now that you're giving us bookings, as we try and track your progress towards your goal, are there some key bookings milestones? I think you and I appreciate that you need to have records pretty much every quarter if you want to continue growing at the same rate? Are there any key bookings milestones that you have embedded in your plan that we should be tracking you against?

I'll maybe take that a little on the booking side. One of the things that we've been working to do on the booking side, I think you saw that reflected in Q1 is to try and even out some of the seasonality that you typically would experience in a booking cycle. Ordinarily, your Q1 would be lower than your Q4 because it's the starting point of that particular quarter or that particular year. And that's because the linearity goals that are typically set are based on seasonality and are usually lower. This year, we heightened that number and had the team pursue Q1 almost as if it was Q5. And you saw that we delivered a better performance than we had done in Q4. So one of the things that we're working to do is to even out the seasonality so that there is a consistency. But I think to Keith's point earlier on, bookings by their very nature can be volatile, right? And so seeing the curve like that and heading up to the right was a lovely way of seeing the input to our revenue continue to grow but we should be cognizant that it is a metric that can move up and down, albeit that we are working to even the seasonality out of that metric for the financial year.

Maybe on that, so one clarifying question actually came in, and I'll turn it back to the audience. So from a buy side, on the bookings, can you help Keith with, does this include new leasing, renewal net pricing, and then does it include xScale leasing or just a little bit more clarity on the bookings definition we gave?

Yes, the booking definition does not include xScale, so separate that out. It includes the net pricing activity in the quarter. And I share that with you on a regular basis. I usually give you a view on whether it's net -- good net pricing actions in the quarter. That means the price increases more than outweighed the price decreases. One of the things we actually track inside the business is the relationship have increased to decrease, and we're always usually trending anywhere from about 2.8 to 4x. So the price increases are 2.8 to 4x the price decreases. So it all depends on where you are in the cycle with the customer and what the price point is in the marketplace relative to that customer. But for your benefit, we're not assuming any price escalators, if that was part of the question. It's not about leasing. It's what we book inside the quarter. And if you sign a 10-year contract, and it goes up 5% for the next 10 years per year, we're not bringing that into the quarter. We're just giving you what you should expect within roughly the next quarter with a book to bill interval of 60 to 90 days.

Yes. Just to clarify that, it's the bookings in the quarter where the expectation is that we turn that booking to revenue within 90 days. If we are unable to see a path to do that, then we don't declare that booking in that quarter, we'll declare it in the quarter where we will implement.

Well, because that goes -- will generally go into backlog. So we'll give you probably color on backlog, and that's something Adaire and I will be working on. But it's something that we're going to continue to work out. This is what we think the best model is right now. As we see information, we'll -- and we get input from all of you and those on the webcast to the extent that we need to shift, we can look and see does it make sense because we're missing something.

Great. Let's bring it back to the room.

Eric Luebchow from Wells Fargo. I think you just mentioned a little bit of the model shifting. I mean, previously, it was more about net cabinet additions, MRR per cabinet. I was wondering if we disaggregated your revenue growth outlook, thinking about it on a cabinet basis and an MRR per cabinet basis, how we should expect that to track? Or is that something that we shouldn't focus on as much going forward?

We think that -- well, first of all, we'll still provide that information to you, so you'll be able to see that because from a cabinet perspective, I think one of the elements that, that shows in the MRR per cap revenue is the actual totality of the value that Equinix brings over and above space and power, the kind of price point and price premium that we demand. But I think the inclusion of the bookings picture here just gives you another angle on the health of the business and how you can project that forward. So I think it will just be something in addition to that allows you to look at cabinets maybe through the lens of some of the density scenarios that Jon has been describing there, obviously, as the density of our cabs increases, then so other metrics around that also changes.

And just one follow-up. Keith, you touched on churn a little bit how it's been elevated compared to the previous Analyst Day. Could you maybe touch on is the expectation still that 2% to 2.5% range? And anything you're doing to try to drive that to the lower end of the range over the next couple of quarters? Any visibility you have into that?

I'm happy to take that question. So I guess, first of all, we are still inside the range of 2% to 2.5%. I think when we look at our churn data, I mentioned earlier the notion that within our existing footprint today, the teams work hard to harvest capacity. And sometimes that means that at a point in a customer contract, we might take a customer and offer them maybe a different location in order to move a customer in who would have a premium price associated with that particular piece of capacity. When you look at that, that obviously is something that has an impact on some churn that is initiated by Equinix, right, because we believe there's a pricing premium that we could command. There are pieces of churn that are addressable by us and pieces that are not addressable. Some of the bankruptcies that Keith has alluded to and that you've seen appear in different earnings over the course of the period of time, they are not something that is necessarily addressable by us. The one thing that we have come to understand from the data that we are analyzing and looking at is that in order to impact churn in any positive way, it needs to be at a significant point ahead of the churn happening and often not even within the context of a single financial year. It can often be 16 to 18 months before the churn event. Because when you think about a churn event from a customer point of view in our world, there is a significant amount of tasks that have to be handled in order for the customer to move from location A to location B. So getting that earlier handle is an important path. So even if we were to discover churn happening in this year, in the 2025 year, we probably have limited flexibility about what we can actually do to affect that outcome. It's more now with the lens to '26 because then there's an opportunity for us to begin to affect that outcome. So actually, looking at the data, understanding the data in much more depth, understanding the signals that come into that data path and being able to predict those and then clearly identifying the churn that's addressable and not addressable by us means that we can hone our resources around where we need. We're trying to get on the front end of some things. We definitely know that if customers are in more than 1 region with us or more than 1 metro. We also know that if customers have our fabric products or any of our software products, the propensity to churn is a lot lower. So we're doing attaches on those at the front end of the sales process because that then further down the line reduces that propensity. So there's a whole series of different activities to address that challenge. But I think as we start to bring more capacity online, particularly in 2027, we'll have less harvesting activity amongst our existing footprint, and I think that will also have a positive impact on our churn dynamics.

Mike Rollins from Citi. Two topics, if I could. So the first, I'm curious if I could ask about the CapEx outlook maybe a little differently. So when you look at the change in annual CapEx or investment going forward versus like the '25 experience, how much of that would be from first addressing capacity where you have constraints? So you need to just get more capacity to sell in certain markets. Second would be how much comes from more of the speculative opportunities in the future that would include your expectations for AI? And third, how much would come from redevelopment or putting money back into existing campuses to turbocharge those opportunities? And I'll follow up on the second topic afterwards.

You want to take that? I think the third one is really around the recurring piece.

Yes. There's 3 other potential redevelopment properties we're looking at right now. That will add to both the recurring and some incremental, but it's not significant. So I want to put that to the side. It's important and we'll just highlight it for you. Raouf, Miami 1 is one of them, right? DC2 Miami 1?

At least one other in Europe that's projected sort of from this year into next.

Yes. So again, not too much there, Michael. As it relates to what I call growth in emerging, I think there's always going to be -- I think there's those markets around the world that we're not in today that we should be looking at. And again, it's a decision that Adaire and ultimately, the Board will decide on. One that comes to mind right out of the gate would be [ REIT ]. We're not there. And again, no decisions have per se been made. But that's -- there's not a lot. The thing that I really like about what Raouf is doing is and you can see it in our -- by the way, in our sort of expansion tracking sheet, like a DC17, a lot of this investment is going into markets that are either major metros or proximate to major metros because we have no choice, particularly where there's limitations. And so that's the exciting part. And you take a DC17 that's 50 megawatts, that's a hefty Investment. So I would say that I don't have a rule of thumb, but it's probably more prone to that type of investment than it is emerging markets. And then I just think of the emerging markets on a separate topic, I think the -- like over a reasonable period of time, we have to look at where do we want to continue to invest. One of the things I know Raouf has done under the Bill Bolder strategy is let's build it all out, but maybe we don't build any more in those markets. So we run them to cash. But those are decisions that will get made over the coming years, and we can elaborate a little bit further than that when we we'll go out to look at the information.

Secondly, on just margin expansion, if I could. When you look at the progression of margins that you're expecting over that multiyear period of time, is it a smooth path of margin expansion year-to-year? Is it loaded to the front end or back end? Just any context you have for that would be great.

Yes. I mean there's no line of best fit because some of the work that we -- that Harmeen and Nicole talked about, we're going to -- their investment -- sometimes you got to take a step back to take two steps forward. And I would just say that I don't want it to be linear, but I think it is -- obviously, we accelerate in '28 and '29 relative to '26 and '27.

I'm going to take one more from the online and then turn it over to our audience for our last question. So the online, this is from a long-only investor. As you think about the spin out to 2029, can you talk a little bit more about your stabilized assets and how you think those will be contributing to the AFFO in the forecast period?

Yes, look, the stabilized assets in and of themselves, we're getting attractive growth. It depends on where it is from a stabilized perspective. So clearly, some of the investments are going to allow us to accelerate our stabilized asset growth. Others are more mature, if you will. And so it's really about pricing influence and then maybe some incremental services. But suffice it to say, I think our stabilized assets are going to continue to grow healthily largely because we're going to optimize around those investments and make sure the optimize around the IBXs when I talk about the investments. We're going to optimize around and drive it up while at the same time, trying to manage the cost model. And I think that's really important to note that it's not just about going after SG&A or I would say maybe a little bit differently, SG&A as a percent of future revenue, I think will come at a lower percent than where we were historically. But Raouf is also looking at how does he optimize his cost of revenue lines as well. And that's through technology and the work that, again, Harmeen and Nicole referred to. So again, I'm excited about the stabilized assets, but a lot of the growth is going to come clearly from the new builds.

All right. Who is going to close off our last question of the day?

This is Irvin Liu from Evercore ISI. So I wanted to double-click on the topic of rack densification. I think during Raouf and Jon's presentation, they mentioned that average rack densities were trending higher towards 12 kilowatts per rack. Can you just help us understand how pricing on your high-powered cabs compare versus the more lower density cabinets? And if interconnection and attach rates were any different at all?

Okay. Jon, do you want to take that as you are the expert on our densification?

Can you hear me?

Yes.

All right. Great. I'd say, overall, what we've seen is pricing is firm or maybe even slightly higher on the like extremely dense deployments. The fact is there aren't that many operating environments on the planet that are capable of supporting them and operating those. So we've seen really firm pricing around that. From an interconnection perspective, I'd just say the amount of interconnection per kind of customer deployment still is very healthy and strong. I think the size of the deployments can be bigger. So if you're measuring like interconnections per cabinet, that's probably a trickier metric to look at as we think about some of these large deployments. But on an interconnection like deployment perspective, they're still really healthy for these larger deployments we're talking about.

Thanks, Jon.

Are you finished, Irvin?

Actually, no. I've one more follow-up for you, Keith, actually. I wanted to ask about the xScale 2.0 program. And I realize that it might be too early to disclose any sort of long-term contribution to your model. But can you just provide us with an update on where you are in terms of site selection, land and power procurement any sort of customer pre-leasing discussions? And maybe what is the timetable for xScale 2.0 to eventually contribute to your model?

Yes. I can respond, but I think the best person to respond is Jon and/or Raouf.

Well, I think the essence of the question was where are we? I think we've announced one site that we're currently pursuing, which I mentioned in my presentation. We have a pipeline of other sites. So matrix is solely in the U.S. And we have several others that are in process that we're fairly close on but not in a position to disclose just yet. And more broadly speaking, xScale 2.0, we're pursuing sites of similar capacity and size across both the EMEA and the APAC region. And we've got a robust pipeline of sites as well as power that we're pursuing currently. And obviously, we'll announce those in due course.

Perhaps I'll just comment on the funnel a little bit. I think that one of the things that we've stood up this year is we've had Tiffany come in to lead our xScale business and really focused in on how we're operating xScale operationally. And then the funnel that we're working through in order to ensure that as we move through the site selections and as we begin to move dirt on these site selections that we understand where our tenant -- who our tenant will be and when that will commence. So it's a very important part of the work that we're doing on xScale.

Great. So as we wrap up our main stage presentations, I just want to thank you to this entire audience for joining us today. We're next going to move to a little bit more fun part of the program, which is kiosk and cocktails downstairs. So now the fun part is everyone with a red tag is from Equinix, and we have brought out the full set of the team. You'll see kiosk, you can work around. If you are looking for a particular person, ask anyone with a red badge, and we were happy to introduce you. With that, let me turn it over to Adaire for closing.

Really, let me just add my thanks to [ guests ] for your presence here today, both in person and online. We're very honored to have had the opportunity to spend some time with you and to share our thoughts. I hope that you can feel the level of confidence and excitement that we feel as a leadership team in the opportunity ahead. We are investing in our growth and we are extremely confident in our ability to execute against the market opportunity ahead of us and to deliver returns for our shareholders as a result of that execution. So I look forward to continuing the dialogue with you over a cocktail or two this evening. Thank you very much.