Good afternoon, and welcome to the Equinix First Quarter Earnings Conference Call. All lines will be in listen-only mode until we open for questions. Also, today's conference is being recorded. If there are any objections, please disconnect at this time. I would now like to turn the call over to Chip Newcom, Director of Investor Relations. Sir, you may begin.

Good afternoon, and welcome to today's conference call. Before we get started, I would like to remind everyone that some of the statements we will be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we've identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed on February 18, 2022. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is Equinix' policy not to comment on its financial guidance during the quarter, unless it is done through an explicit public disclosure. We will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures in today's press release on the Equinix Investor Relations page at www.equinix.com. We have made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We would like to remind you that we post important information about Equinix on the IR page from time to time and encourage you to check our website regularly for the most current information available. With us today are Charles Meyers, Equinix' CEO and President; and Keith Taylor, Chief Financial Officer. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of wrapping this call up in under an hour, we'd like to ask these analysts to limit any follow-on questions to one. At this time, I'll turn the call over to Charles.

Thanks, Chip. Welcome to the call. Good afternoon, everybody, and welcome also to all of you to our first quarter earnings call. We had a great start to 2022, delivering the best net booking performance in our history, fueled by strong demand across all three regions, robust net pricing actions and near-record low churn, resulting in our 77th consecutive quarter of top line growth, the longest such streak of any S&P 500 company. We executed more than 4,200 deals in the quarter across more than 3,100 customers, demonstrating both the scale and the consistency of our go-to-market machine. While there are a number of macroeconomic factors that we continue to proactively manage, including rising interest rates, inflation, and geopolitical conflict, the business continues to perform exceptionally well. The underlying demand for digital infrastructure continues to rise as enterprises across the globe and in diverse sectors prioritize digital transformation and service providers continue to innovate, distribute, and scale their infrastructure globally in response to that demand. Unfortunately, the war in Ukraine is still unfolding, and we continue to be part of the vigorous global response to that conflict. As stewards of key elements of the world's digital infrastructure, we're committed to doing our part in maintaining that infrastructure to support free and open communications and aid in humanitarian relief. While we do not have operations in Russia or Ukraine, our employees have shown incredible generosity supporting Ukrainian refugees, particularly our team in Poland. Looking more broadly at our responsibilities as a market leader, we continue to advance a bold future-first sustainability agenda that reflects our company's values across our environmental, social, and governance initiatives. We recently published our 2021 corporate sustainability highlights, and I'm pleased to report continued progress, including a 3.6% increase in representation of women at leadership levels and a 20% increase in the number of employees leveraging our well-being and mental health benefits. We also continue to develop pathways and partnerships to enhance our diversity and create opportunities for historically underrepresented groups, both inside and outside of Equinix. As we work to address the urgency of climate change, I'm also proud that Equinix is well on our way to meeting our science-based target commitments. In 2021, we achieved over 90% renewable energy coverage for our portfolio for the fourth consecutive year, while also improving the energy efficiency of our facilities by over 5% as measured by average annual power usage effectiveness, or PUE. A focus on sustainability continues to be top of mind for customers and partners, as they look to buy from and work with companies that have established ESG goals and commitments. As the world's digital infrastructure leader, we have a responsibility to harness the power of technology to create a more accessible, equitable, and sustainable future, and we will continue to focus on the important issues that impact our stakeholders and our business. Now, turning to the results as depicted on slide three. Revenues for Q1 were $1.7 billion, up 10% over the same quarter last year. Adjusted EBITDA was up 5% year-over-year, and AFFO was better than our expectations, again due to strong operating performance. These growth rates are all on a normalized and constant currency basis. Our data center services portfolio continues to extend our differentiated scale and reach, with 43 projects underway across 29 metros in 20 countries, including new projects in Atlanta, Mumbai, Sydney, Tokyo, and Washington, D.C., as customers embrace our interconnected edge as a point of nexus for their hybrid and multi-cloud architectures and leverage our scaled digital ecosystems to enable and drive their digital agenda. According to IDC, by 2024, 65% of the Global 2000 will embed some sort of edge-first data stewardship, security, and network practices into their organization's digital business processes, and we're already seeing the impact with an amazing 89% of recurring revenues now coming from customers deployed in more than one metro. In April, we closed our acquisition of MainOne, extending platform Equinix into Nigeria, Ghana, and Ivory Coast, bringing our global coverage to 69 metros across 30 countries. Nigeria, in particular, is emerging as an innovative and dynamic player in the global digital economy, representing a significant opportunity for the expansion of digital services and a key first step in our long-term strategy to extend our carrier-neutral digital infrastructure platform across Africa. In the quarter, we also announced our upcoming expansion into Chile, through the planned acquisition of multiple data centers from Entel, a leading Chilean telecommunications provider. Chile is the fourth largest economy in South America with the highest GDP per capita in the region, and Santiago is emerging as a technology hub, serving both regional cloud and content demand, as well as local enterprises. This transaction is expected to close in Q2 and will further solidify Equinix as the leading provider of digital infrastructure in Latin America. Turning to interconnection, our industry-leading portfolio continues to outpace the broader business, growing 12% year-over-year on a normalized and constant currency basis, driven by a healthy uptick in connections across our top ecosystem. We added an incremental 8,900 total interconnections in the quarter and now have over 428,000 total interconnections on the platform. Internet exchange saw peak traffic up 7% quarter-over-quarter and 25% year-over-year to greater than 24 terabits per second. We continue to see expanding customer demand and accelerated growth across our digital services portfolio. Equinix Fabric saw its highest-ever virtual connection ads as customers employ an increasingly diverse set of end destinations and utilize fabric for a variety of use cases across cloud networking and backbone connectivity. Equinix Metal and Network Edge also had strong quarters as enterprises leverage these services for a variety of virtual deployments, increasing agility and helping them to mitigate supply chain challenges. Metal has the most net customer adds to its service since its launch, with several key enterprise wins and a healthy backlog as our go-to-market partnerships with Dell, Pure Storage, and Mirantis all gained momentum. Shifting to our xScale initiative, in March, we closed our Australian JV with PGIM, which is expected to provide more than 55 megawatts of capacity in the Sydney market when closed and fully built out. In April, we closed our South Korea JV with GIC, which is expected to provide more than 45 megawatts to the rapidly growing Seoul market. We currently have 9 xScale builds under development with over 80 megawatts of incremental capacity, of which nearly two-thirds are already pre-leased. So now I'll cover some highlights from our verticals. Our network vertical had a great quarter with good momentum across all three regions and record channel activity with our key carrier partners. New wins and expansions included one of the largest ISPs in India, establishing network hubs in our Mumbai 1 and 2 IBS, a high-speed satellite broadband service for military and commercial markets, supporting its expansion into Australia; and Global Net, a specialty network expanding its footprint and upgrading connectivity to support its growing user base. The enterprise continues to be our fastest-growing vertical with a strong bookings quarter led by EMEA in the manufacturing and public sector subsegments. New wins and expansions included Technicolor, the creative services and technology company within the media and entertainment industry, establishing regional technology hubs utilizing the full suite of Equinix' digital infrastructure services. A global leader in the celebrations industry is choosing Equinix as their strategic partner, thanks to our robust digital offerings, connectivity to key financial institutions, and our sustainability strategy. We were also proud to work with a global money center bank who leveraged our advanced ecosystems to enable a critical connection to the National Bank of Ukraine, where UNICEF could distribute funds to those that need it most as part of their humanitarian efforts. Our cloud and IT services vertical had solid bookings in the quarter, led by the infrastructure subset, while adding new cloud on-ramps in Dubai, Rio de Janeiro, and Stockholm. New wins and expansions included Digital Edge, a rapidly scaling global cloud hosting provider, who is expanding its infrastructure footprint across multiple regions as they add customers and products. And a leading SaaS company is leveraging Equinix for its distributed data and cloud strategy and expanding their service portfolio. The broadcast and streaming subsegments anchored a solid quarter of content and digital media, including expansions of Fortune 75 media conglomerates across Platform Equinix to support streaming services and content production. A multinational consumer credit reporting company enabled direct connectivity via Equinix to their financial services customers and Fastly, a global CDN expanding capacity and deploying network nodes in support of their edge compute strategy. Finally, our channel program again delivered its fourth consecutive quarter of record bookings, accounting for roughly 40% of bookings and 60% of new logos. Reseller and alliance partners accounted for over 75% of channel bookings, as our partners continue to demonstrate tremendous leadership in helping customers quickly adopt new digital business models. Wins were across a wide range of industry verticals and digital-first use cases with hybrid multi-cloud featuring prominently as the architecture of choice. We saw continued strength with strategic partners like AWS, Microsoft, Dell, and Telstra, including a significant win in France with AT&T, helping a security services company consolidate data centers and interconnect to their choice of cloud providers. We'd also like to recognize AT&T business as our partner of the year for 2021. We are proud to have worked together to drive digital-first outcomes on complex and transformational projects, including the Equinix and AT&T connected cloud initiatives, benefiting hundreds of customers across multiple industries. Now let me turn the call over to Keith and cover the results for the quarter.

Thanks, Charles, and good afternoon to everyone. I hope you're doing well. At Equinix, the team delivered another great quarter. We did better than anticipated. We experienced robust growth in the Americas and solid channel bookings, further expanding the universe of opportunity for our highly differentiated business and enjoyed meaningful inter and intra-region activity, reflecting how we're selling well across our ever-expanding footprint. Interconnection activity remains high both on the physical and virtual levels. Interconnection revenues represent 19% of our recurring revenues and are growing faster than the overall business. Our platform strategy continues to deliver outside its value, further separating us from others in our space. We had strong growth from our digital services products and continued momentum in the most recent acquisitions in Canada, India, and Mexico. Our pipeline remains solid despite record bookings. With a great start to 2022, we're raising our guidance across each of our core financial metrics. As we've said previously, we believe the diversity and scale of our business across sectors, markets, and customers puts us in a highly favorable position to capitalize on all trends digital as well as manage the macro factors and volatility. We have no meaningful near-term exposure to rising interest rates. Our balance sheet strength continues to provide us with a strategic advantage while allowing us to access the capital markets at times that are attractive to us. With regards to supply chain and inflation, we continue to deliver projects against our return expectations with limited delays due to our ability to access and secure critical infrastructure components. The energy markets remain volatile, but our hedging policies are helping us navigate this unusual period. These factors, combined with the momentum we're seeing in our marketplace, enable us to remain steadfast in our commitment to deliver top-line growth, strong, and durable AFFO per share growth to our shareholders as well. Now let me cover the highlights for the quarter. Note that all growth rates in this section are on a normalized and constant currency basis. As depicted on Slide 4, global Q1 revenues were $1.734 billion, up 10% over the same quarter last year and at the midpoint of our guidance due to better than expected MRR revenues, offset in part by the delayed timing of certain nonrecurring xScale fees. Looking forward, we expect a strong Q2 step-up in both recurring and non-recurring revenues. As we've noted before, non-recurring revenues attributed to customer installation work and xScale fee income are inherently lumpy and can move between quarters. Q1 revenues, net of our FX hedges, included a $2 million headwind when compared to our prior guidance rates. Global Q1 adjusted EBITDA was $800 million or 46% of revenues, up 5% over the same quarter last year at the high end of our guidance range due to strong operating performance and timing of spend, although it was impacted by the lower xScale fees. Q1 adjusted EBITDA, net of our FX hedges, included a $1 million FX headwind when compared to our prior guidance rates and also includes $5 million of integration costs. Total Q1 AFFO was $653 million, above our expectations due to strong operating performance. Q1 global MRR churn was 1.8%, the lowest level of churn in recent history and a reflection of our disciplined strategy of selling the platform to the right customer with the right application into the right asset. For 2022, we now expect MRR churn to average at the lower end of our 2% to 2.5% per quarter range. Turning to our regional highlights, who's full results are covered on slides five through seven. APAC was the fastest-growing region on a year-over-year normalized basis at 13%, followed by the Americas and EMEA regions at 10% and 9%, respectively. The Americas region had another great quarter with strong broad-based bookings led by our Chicago, Dallas, New York, and Washington, D.C. markets. Enterprises represented over half the region's bookings that we announce, and we saw record channel activity as businesses continue to leverage platform Equinix to maximize their digital infrastructures' flexibility and agility in the hybrid multi-cloud world. The region also saw robust interconnection activity, adding 4,000 total interconnections and significant Internet exchange capacity led by our Sao Paulo market. Our EMEA region delivered its highest net bookings performance in three years, with strong pricing and a healthy mix of retail activity with solid exports led by our Dubai, Istanbul, London, and Milan markets. In EMEA, sustainability is an ever-increasing focus for our customers and communities, and our local leadership team continues to work to position Equinix as the industry thought leader at both the local and regional levels. The Asia Pacific region had a solid quarter led by Australia, Japan, and Singapore businesses, with traction increasing across the region for our digital services. India had another great quarter, and we're investing behind our momentum in the market with our newly announced Mumbai 3 IBX project as well as purchasing land for development in Chennai. Now looking at our capital structure, please refer to slide 8. We ended the quarter with approximately $1.7 billion of cash, an increase over the prior quarter, largely due to strong operating cash flow, offset by growth CapEx and our cash dividend. Shortly after the quarter end, we completed our fourth green bond offering, raising $1.2 billion to further our commitment to sustainability leadership. With this latest financing, Equinix has issued approximately $4.9 billion of green bonds, making our company the fourth-largest global issuer in the investment-grade green bond market. In early April, we were also pleased to have Moody's upgrade Equinix to Baa2 in line with S&P and Fitch while expanding our leverage targets. We're very appreciative of the support we see from Moody's. Importantly, we're delighted with the increased financial flexibility we now have across all three rating agencies. Looking ahead, as stated previously, we'll continue to take a balanced approach to funding our growth opportunities with both debt and equity while creating long-term value for our shareholders. Turning to slide 9. For the quarter, capital expenditures were approximately $413 million, including seasonally lower recurring CapEx of $24 million. In the quarter, we opened three new retail projects in two markets, Muscat and Singapore, and purchased land for development in Mexico City. Revenues from our own assets increased to 60% of our total revenues. Our capital investments delivered strong returns, as shown on slide 10. Our now 164 stabilized assets increased recurring revenues by 6% year-over-year on a constant currency basis. Consistent with prior years, in Q1, we completed our annual refresh of IBX categorization. Our stabilized asset count increased by net six IBXs. These stabilized assets are collectively 87% utilized and generate a 27% cash-on-cash return on the gross PP&E invested. Please refer to slides 11 through 15 for our updated summary of 2022 guidance and bridges. Note our 2022 guidance includes the anticipated financial results from the MainOne acquisition but does not include any results related to the pending Entel acquisition, which is expected to close in Q2. Starting with revenues for the full year 2022, we're very pleased with the momentum we're seeing in the organic business and excited to report that we now expect our revenues to increase on a normalized and constant currency basis by 10% over the prior year. Relative to our prior guidance, we're increasing our revenues by approximately $90 million, which includes our improved operating performance and $50 million of revenues from MainOne. We expect 2022 adjusted EBITDA margins of approximately 46%, excluding integration costs, an increase of about $40 million compared to our prior guidance, which includes $20 million from MainOne. We now expect to incur $25 million of integration costs in 2022. Given the operating momentum in the business, we're raising our underlying 2022 AFFO by $22 million to now grow between 8% and 10% on a normalized and constant currency basis compared to the previous year, offset by the increased debt financing costs from the MainOne and Entel acquisitions. Note that MainOne is expected to be immediately accretive, and we expect the Entel acquisition to be accretive when closed. 2022 AFFO per share is expected to grow between 7% and 8% on a normalized and constant currency basis. 2022 CapEx is now expected to range between $2.3 billion and $2.5 billion, including approximately $170 million of recurring CapEx spend and about $60 million of on-balance sheet xScale spend. So let me stop here. I'll turn the call back to Charles.

Thanks, Keith. In closing, we had a tremendous start to the year. The demand backdrop for the business remains robust as enterprises across the globe continue to aggressively prioritize digital transformation and service providers expand their infrastructure globally in response to this demand. Data is being created, moved, manipulated, and stored at unprecedented levels, and the need to distribute infrastructure and position it in proximity to the broader digital ecosystem is fueling outsized demand for the distinctive value proposition and platform equities. Growth continues to outpace our Analyst Day expectations, thanks to strength across multiple simultaneous growth vectors for the business, expanding geographic reach, accelerating adoption of digital services, low churn, positive pricing trends, and strong channel execution. We continue to leverage our market-leading scale and expansive balance sheet to deliver new capacity, even in an increasingly challenging macro environment. Our bold future-first sustainability agenda guides and rallies our team as we collectively pursue our shared purpose to be the platform where the world comes together to create the innovations that enrich our work, our life, and our planet. We are delighted with the ongoing performance of the business, optimistic about the road ahead, and remain keenly focused on delivering distinctive and durable value to our customers and to you, our shareholders. So let me stop there and open it up for questions.

Simon Flannery with Morgan Stanley. You may go ahead.

Good evening. Thank you for your time. I believe you've mentioned the macro environment a few times, particularly the concerns about the risk of recession in Europe. Could you share your observations from March and April regarding IT leaders and CIOs in the European market? Additionally, we've noticed considerable increases in the power sector. You addressed the hedges, and it's encouraging to see the guidance. How should we approach the medium to long term regarding when those hedges will need to be replaced? Thank you.

Sure, thanks, Simon. I'll begin, and Keith can add if necessary. We had a great quarter in Europe, and I want to commend the sales team there. Johan Arts, our sales leader, coordinated a tremendous quarter. We've asked him to continue reshaping that business as we've adjusted our revenue mix towards small to midsized deals, where we're seeing great momentum. A few quarters ago, we discussed accelerating growth back to previous levels, and we have delivered on that forecast this quarter, achieving 9%. The pipeline looks strong. The broader macro environment, particularly regarding digital transformation priorities from technology and IT buyers, continues to be positive, and we have a high degree of relevance in how they perceive us and our role. Overall, I feel very optimistic about that region. As for our power perspective, as mentioned previously, we are mostly hedged where possible in Europe. We haven't experienced significant impacts; while we see elevated rates, we have ample runway for our hedges and are actively building our positions for 2023 and beyond. The success of our hedging program gives us considerable visibility and flexibility in deciding when and at what levels to pass costs through. This is ongoing work, and I believe we will be in a strong position going into 2023 to adapt as needed.

Thanks a lot.

And our next question is from David Guarino with Green Street. You may go ahead.

Hey, thanks. I have a question on the same-store cash gross profit declining. I think this is the first time we've seen it turn negative since you guys started disclosing that data. Was a lot of that due to the power cost in Singapore or was something else driving that?

Yes, I mean, the same-store revenue growth is strong, and we did see some contribution to that 6% from APAC and Singapore, in particular. I think there probably is some contribution from the cash gross margin side associated with that. Overall, we were pleased with the same-store growth performance because less than half of that gain up to the 6% is really impacted by the power PIs. It’s really impacted more by the addition of the new assets into the mix and strength in the Americas, which has an oversized influence on the stabilized assets. So, Keith, do you have anything further to add?

Just as we've noted, and it's embedded in our guidance, the impact is coming from the power cost in Singapore, which has a knock-on impact on the Asia Pac market, but the overall performance of the business on a gross margin basis is solid. Again, nothing out of what we expected. The fact is that stabilized assets are growing at 6% on a recurring revenue basis. We have great momentum in the business, and we've now absorbed the impact of the Singapore business. That's the business going forward.

All right. That's helpful. And then one another quick one. It looks like you guys are building two new phases at your AT1 facility in Atlanta. Are you seeing any shift from tenants who want to relocate away from other colocation data centers in the Atlanta market?

Yeah. I mean the Atlanta market has been good. We continue to see demand there, and we've been making some of our own transition in terms of really attracting and motivating the network density into the AT1 facility on Peachtree. You certainly see competitive wins in that market as well as just net new customers. So it's been a good market. We're continuing to invest there in terms of new capacity, as you noted, and we feel good about that market overall.

And our next question is from Jon Atkin with RBC Capital Markets. You may go ahead.

Thank you. I was interested on the energy topic. You're currently hedging presumably at elevated rates, and I just wondered what sorts of applications that might have down the road if energy prices were to normalize. Do you see any exposure in terms of pushback from customers? On the other end, just any more color around pricing actions. You mentioned power-related PIs, but anything else about what's pricing renewal discussions, FastConnect, and how pricing is evolving? Thanks.

Sure. Yeah. Where we're hedged now is in the rising rate environment as we have these feathered hedges over multiple years. We're hedged essentially below the prevailing market rate. In a rising rate environment, that provides some protection to the customer against those market rates because we'll be able to roll them in more gradually. Again, as hedges roll off and you've hedged at increasing rates, you are chasing that up. But again, it provides a net benefit. The customer will have an expectation of some kind of rise as they see what the market rate is even in their own power consumption. I think the hedging and the success of our hedging gives us a general sense of confidence. In terms of pricing, we continue to see strong pricing actions. We have increased list pricing meaningfully and will continue to evaluate that. That's partially impacted by increasing unit costs and other factors in the business beyond power, like labor. But we continue to have a really strong response to the value proposition on a value basis.

Just to add, we've noted that the net pricing past pricing actions this quarter were substantial even when you take out the increased power pricing. When we look at our overall growth rate, you could take out the full implication of our pricing increases associated with power, and you'd still see a growth rate of greater than 9% on a normalized and constant currency basis. So it has some impact, but the foundational business is driving growth.

Just two quick ones and a follow-up. Churn, can it remain on a sustainable basis at these below-average rates? Does demand seem elevated with a strong guide, or do you see a normalizing dynamic?

Yeah. I think we continue to see an increasing overall addressable market as people prioritize digital transformation. The nature of digital infrastructure has changed significantly as they adopt public cloud, which is now a prominent part of their strategy, among other factors. All of those lend themselves to our value proposition. We're seeing great strength across multiple simultaneous growth vectors, expanding geographic reach, accelerating adoption of digital services, low churn, positive pricing trends, and strong channel execution. Our pipeline continues to look strong. This isn't a catch-up, but a sustained level of demand for the business. Regarding churn, we always caution people that it can fluctuate. But over the long term, it has shown a downward trend that I believe to be sustainable.

Thank you.

Our next question is from Aryeh Klein with BMO Capital Markets. You may go ahead.

Thank you. Following up on the power questions, the expectation with Singapore was for the impact to moderate in the second half of the year. Have the view shifted since the original guidance, given recent events?

Yes, a little bit. Overall, the significant power issue is in Singapore. There’s not much change from what we said last quarter. Q1 was actually a bit better than expected, and the back half of the year may be a little higher than we had originally forecasted, but we are now over 50% of our load hedged or locked in rate-wise in Singapore, giving us better visibility. There isn’t a ton of variability and outcome from here. We’ll continue to update you if that changes.

Got it. In the Americas, you've had several strong quarters in a row. As we look ahead, with over 70% of cabinets outside the Americas, how should we think about occupancy rates before significant builds are needed?

Yes, good question. We have a fair amount of headroom in the Americas with a lower overall utilization rate there on a much bigger business. The Americas business has performed exceptionally well, and plenty of capacity is available to sell. We’re continuing to invest where we start to see pinch points. I feel really good about our ability to continue to increase utilization and to invest accordingly.

Thanks, and good afternoon. Just thinking through some of the comments on hybrid cloud and hyperscale. Are you considering ways Equinix can increasingly serve enterprise needs beyond retail deployments?

Yes. We're focused on critical global hyperscalers and are ensuring we have the capacity and key equipment necessary. We're working to secure our supply chain and doing well in delivering capacity and projects on time. I remain positive about our strategy, staying selective about large footprint, lower margin business while delivering on our digital services portfolio which positions us well for continued enterprise momentum.

Thanks for taking the questions. This quarter, we're expecting good strength from hyperscalers. What hurdles exist in meeting this demand?

The business is executing well. We have an appropriate plan that delivers strategic value to the overall platform while focusing on a small number of critical global hyperscalers. Delivery capacity remains a key focus, and we've been proactive about securing our supply chain to ensure timely project deliveries.

Great. That's helpful. And on M&A, you've been disciplined historically. With current multiples up, could you stretch your comfort level to avoid losing a deal?

Every deal is different, and we have examples from our past where we've stretched on multiples based on confidence in growth potential. While we’re appropriately disciplined, we see M&A as key to extending our platform and we’ll act when it makes sense strategically.

To start, we're about one year on from your long-term guidance for a 50% adjusted EBITDA margin by 2025. Your guidance seems to imply some contraction. Can you update us on your long-term target ability?

We continue to see 50% as an appropriate long-term target for EBITDA margin despite some moving parts. We still drive efficiencies and leverage in the business and remain confident in our ability to deliver against growth targets.

Hi. Thank you. I had one question on the Americas business. Can you elaborate on the MRR per cab down quarter-on-quarter? And what's driving that?

Looking at MRR per cab in the Americas can be volatile depending on several factors. We had some settlement activity and a large install that isn't ramped yet. The overall health of MRR per cab remains strong, and we anticipate stability moving forward.

Just adding to what Charles said, we saw the impact of lower currencies which influenced the US dollar denominated number. Overall, though, this is not a cause for concern given the underlying strength in the business.

I have one question on the power cost side and the price increases. When you do pass through higher power cost to customers, is it structured as a temporary surcharge or is that a permanent increase?

It varies. If we see a reversion back to lower rates, we will adjust as needed. There's a distinction between power-related pricing adjustments and structural price levels within the business, and we will navigate that on a market-by-market basis.

On the balance sheet, your rating agency upgrades allow for some additional leverage capacity. What’s your optimal leverage thinking now given the business's expanded scale?

We have flexibility, currently at 3.8x leverage. Looking forward, we believe that 4-plus leverage is appropriate. We will maintain a blend of debt and equity to fund growth and remain opportunistically active in capital markets.

This concludes our Q1 call. Thank you for joining us.

This concludes today's conference. Thank you for participating. You may disconnect at this time.