Equinix CEO Floats 'Selective Churns' To Swap Low-Priced Tenants For Richer Ones
Scarce capacity gives Equinix pricing power, and its CEO says new-deal pricing rose 12% year over year in the third quarter.
Equinix, which runs data centers where businesses and cloud companies rent space and power and connect to one another, may deliberately push out some customers paying low prices, CEO and President Adaire Fox-Martin told analysts on the company's third-quarter earnings call on Wednesday. Tight capacity, she said, lets the company raise rates as contracts renew.
Swapping tenants on purpose
Answering a Citi analyst's question about falling customer turnover, Fox-Martin said Equinix "may choose to do selective churns." That would mean pushing out, with intention, a customer at a particular price point with low interconnection or network density, and bringing in one with the opposite traits.
She said that activity could move the churn figure. Churn was 1.7% in the quarter. The Citi analyst noted it runs below the 2% to 2.5% range historically assumed, and Fox-Martin said that range still applies for the rest of the year. Management will refresh it when it updates guidance in February.
Chief Financial Officer Olivier Leonetti said customers leaving averaged 5 kW per cabinet, while those arriving averaged 7 kW, reflecting rising densities from AI workloads.
Pricing power, in her words
Pricing on new deals rose 12% year over year in the quarter, Fox-Martin said. Responding to a BMO Capital Markets analyst, she said there is not enough colocation capacity to meet demand, so Equinix is at "the very early stage of durable pricing strength."
The company is "proactively activating opportunities to renew at higher rates," she said. Its contracts are often shorter than in the wholesale market, which lets it review pricing on its installed base sooner.
Interconnection, which she said is 19% of revenue, is also in view. Management is looking at packaging and pricing through its new products. Pricing for Fabric One and Inference Exchange will be defined after general availability, which she said is early next year.
Quarter and raised outlook
Fox-Martin said monthly recurring revenue grew 11% on a normalized, constant-currency basis, and interconnection revenue grew 10%. Equinix raised its 2026 guidance again, including total revenue by $100 million to growth of about 12%.
Its stabilized assets generated a 27% cash-on-cash return, and management expects mid-20% returns on new capacity. Market value was $98.6 billion as of the original report on Wednesday.
Equinix will refresh its churn assumptions when it updates guidance in February.
Sources
- Equinix to Post Q3 Earnings: What's in Store for the Stock? — Yahoo Finance
- Equinix stock rises as strong bookings help Q3, 2026 outlook raised for third straight quarter (EQIX:NASDAQ) | Seeking Alpha — seekingalpha.com
- Equinix FFO of $8.64 beats by $0.64, revenue of $2.57B beats by $10M (NASDAQ:EQIX) | Seeking Alpha — seekingalpha.com
- Equinix (EQIX) Surpasses Q3 FFO and Revenue Estimates — Yahoo Finance
- Equinix Reports Third-Quarter Results and Raises 2026 Guidance — prnewswire.com
