Good afternoon and welcome to the Equinix First Quarter Earnings Conference Call. All lines will be able to listen-only until we open for questions. Today's conference is being recorded. If anyone has objections, please disconnect at this time. I would now like to turn the call over to Chip Newcom, Senior 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 that 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, as well as those identified in our filings with the SEC, including our most recent Form 10-K filed February 12th, 2025 and our most recent Form 10-Q. 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's policy not to comment on its financial guidance during the quarter unless it's done to an explicit public disclosure. On today's conference call, we will provide non-GAAP measures. 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've 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 also 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 available information. With us today are Adaire Fox-Martin, Equinix's 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 one hour, we would like to ask these analysts to ask one question each. At this time, I'll turn the call over to Adaire.

Thank you, Chip. Hello, everyone. Good afternoon and a warm welcome to our earnings call for the first quarter 2025. I'm very pleased to share that in Q1, our team executed exceptionally well and outperformed across multiple facets of our business. I'd like to call out three salient indicators of this strong performance. First, our team delivered better-than-expected financial metrics, including revenues, adjusted EBITDA, and AFFO. As a result of this performance, we are raising our guidance on each of these metrics. Second, our sales team executed remarkably well in building customer momentum, improving deal conversion, and shortening the deal cycle, all while maintaining favorable pricing. Third, our strategy is resonating in the market. Our moves around serving better, solving smarter, and building bolder have already enabled us to cultivate a stronger pipeline for the range of products and services offered by Equinix. This gives us continued confidence in our projections for healthy recurring revenue step-up through 2025 and in our growth ambitions for the long-term. Before diving into our operating results, I'd like to take a moment to welcome Harmeen Mehta, who has joined our executive team as our Chief Digital and Innovation Officer. Harmeen is a visionary leader with a proven track record of digital transformation and innovation. She and her team are crucial to the execution of our strategy. Her experience in leading complex programs and developing innovative solutions should equip Equinix to better serve our customers and enhance both efficiency and user experience across our organization. So now I'd like to take a closer look at key financial metrics. As a reminder, the growth rates shared are all on a normalized and constant currency basis. In Q1, we delivered revenues of $2.2 billion, up 8% year-over-year, excluding the impact of power pass-through. This was driven by strong recurring revenue growth as we begin to see the impact of our second-half 2024 bookings performance manifest itself in our recurring revenue trajectory. Our strong recurring revenue growth was offset by lower xScale leasing and fit-out fees in the first quarter as we expected. Adjusted EBITDA margins increased to 48% of revenues, and AFFO per share increased 9% year-over-year. In both instances, results were above our expectations due to strong operating performance, lower utilities costs, and the timing of spend. Keith will provide additional insight into these numbers shortly. Turning to our customer momentum. We continue to cultivate and win significant opportunities across our product set in service to the enduring demand for both AI and the broader set of workloads associated with cloud services. We had several notable AI wins in Q1, including deployments across five markets. Generally, customers are increasingly looking to Equinix to deploy their most complex and interconnected inferencing and training infrastructure. Block will be the first company in North America to deploy the NVIDIA DGX SuperPOD with DGX GB 200 systems. By deploying at Equinix, Block can leverage our unique ecosystems to ensure data privacy, flexibility, and edge connectivity to thousands of partners. We also had a significant AI win with Grok, the pioneer in AI inference. Grok is rapidly scaling their high-performance infrastructure through Equinix. Our unique ecosystems and wide global footprint will serve as a connectivity gateway to their customers and enable efficient enterprise AI workflows at scale. In our enterprise cloud ecosystem, Panasonic Information Systems expanded their partnership with Equinix in Q1 to support their evolving cloud database requirements. They've chosen Equinix for our seamless high-speed connectivity across key cloud platforms like AWS, Azure, and Oracle. We also saw expansion with Repsol, a global multi-energy company leading the energy transition. Repsol expanded their US operations in partnership with Equinix. With us, they have adopted a hybrid and multi-cloud environment that will support both their business and sustainability objectives. Essity, a leading hygiene and health company, is globally deploying Equinix's interconnection services, including Equinix Fabric and Network Edge, to enhance their efficiency of care while reducing their environmental impact. And finally, Brink's is rapidly expanding their digital footprint with Equinix, deploying virtual points of presence across key US metros with additional expansion planned in the coming quarters. This wide variation in customer use cases closed in Q1 underpins the core value proposition of Equinix and our durable business model. It enables us to cultivate the pipeline we will need to achieve our revenue growth targets for the remaining quarters of 2025. Turning now to our strategy. The momentum we experienced in Q1, coupled with our performance against key non-financial indicators, demonstrates that we are on the right track. As I shared last quarter, we are focusing on three strategic moves in pursuit of our long-term growth ambitions: serving our customers even better, solving smarter for them, and building bolder for them. Serve Smarter is our strategic move focused on ensuring our customers have the right resources in the right place at the right time, so that we deliver value at every stage in their relationship with us. In Q1, our improved deal conversion and shorter deal cycles resulted in more than 4,100 deals across more than 3,200 customers. This pushed our gross and net bookings considerably past our expectations for the quarter. I am pleased to note that our Q2 bookings performance in April is pacing in line with our targets despite the uncertainty prevalent in the macro environment. Serve Smarter is our strategic move focused on simplifying the consumption of our digital infrastructure and interconnection solutions. In Q1, we saw strong momentum for our Secure Cabinet Express product, a pre-configured colocation solution that makes it faster and easier for our customers to get up and running in our data centers. Now available in more than 75% of our IBXs around the world, this product accounted for one-third of all new cabinet sales in Q1 and nearly a 300% increase year-over-year. Customers love it because it takes what used to be a complex, time-consuming process and turns it into a repeatable streamlined experience. Our industry-leading interconnection franchise continues to perform well. Interconnection revenues grew a healthy 9% year-over-year on a normalized and constant currency basis with more than 486,000 total interconnections now deployed. Equinix Fabric continues to over-index with strong adoption of Fabric Cloud router in the quarter. With Build Bolder, we are building for the future, accelerating innovative ways to expand access to more digital infrastructure for our customers. This means we have shifted our strategy from building many smaller IBXs in phases to building fewer IBXs and larger phases. We now have 56 major projects underway in 33 metros across 24 countries, including 12 xScale projects. In the Americas, we added our Washington DC 17 project, which is expected to deliver 4,700 cabinets or approximately 50 megawatts of capacity to this key market in 2027. In APAC, our upcoming projects are expected to add more than 2,000 cabinets of capacity in one large delivery in 2027. And in EMEA, we are actively looking to accelerate delivery of capacity in metros like London and Paris. We continue to make good progress across our xScale joint ventures, with our announced projects more than 85% leased and pre-leased. This quarter, we opened our Frankfurt 10 asset, which was 100% pre-leased, and we have a strong funnel of additional xScale opportunities in the coming quarters. While we are optimistic based on our strong Q1 performance, we are closely monitoring the rapidly evolving macroeconomic environment. We have seen minimal impact from tariffs on our business directly in the immediate term. However, there is a concern for many of our customers and therefore, also a concern for us. The tariffs are felt acutely among specific industries in which many of our customers operate, particularly consumer goods, transportation, energy, and materials. Further, the uncertainty surrounding these tariffs, if protracted, can understandably lead to a wait-and-see investment posture amongst customers across all industries. We hosted our Americas Customer Advisory Board last week. At that event, our customers who represent a broad spectrum of industries told us that they have made no significant adjustments to their digital infrastructure strategies beyond some pre-purchases of equipment. These customers are collectively signing firm demand, which supports our operating plans despite the economic uncertainty. While we are tempering our optimism with prudent caution, we believe that demand for our digital infrastructure will persist through varying business cycles and economic policies. Technology remains a critical driver of revenue growth while allowing companies to reduce costs, enhance operating leverage, and operate with more agility and responsiveness to their customers' needs. Additionally, Equinix is highly diversified across geography, product mix, industry, and segment, which historically has contributed to our resilience in the face of market dislocations. This, along with strong financial performance, positive customer momentum, a healthy balance sheet, and a strategy that resonates in the market keeps us confident in our operating outlook for underlying recurring revenue throughout 2025. With that, I'll turn it over to Keith to cover the quarter's financials.

Thanks, Adaire and good afternoon to everyone. As you've just heard from Adaire, we had a strong start to the year, delivering better-than-expected results across each of our core financial metrics. We had healthy gross bookings. Net pricing actions were firmly positive. MRR churn, despite some large unexpected churn, was lower than forecast, and therefore, net bookings were better than our expectations. From a results perspective, if we start with revenues, and then we work our way down the income statement, every key line was better than expected. And as we look forward, our guidance implies healthy underlying recurring revenue step-ups for the year and strong cash gross profit and adjusted EBITDA margins. As I mentioned last quarter, we expect to exit the year at or near the 50% adjusted EBITDA level, an important threshold for us. Now, despite the continued strength of our business and the strong secular demand environment across the digital infrastructure space, we will remain vigilant given the broader and volatile market conditions and, if necessary, adjust accordingly. But that said, and as we've stated before, Equinix has thrived during periods of disruption largely due to the diverse set of high-quality customers across many industries and geographies, as they continue to expand their digital environments with us by buying more services in the existing markets, we're expanding into new markets with us. Finally, our strong liquidity position and investment-grade credit profile provide us the strategic and operational flexibility, which allows us to invest in growth when others may choose to slow down or even pull back on their investments. Now let me cover the highlights for the quarter as depicted on Slide 4. Note that all growth rates in this section are on a normalized and constant currency basis. Global Q1 revenues were approximately $2.2 billion, up 8% over the same quarter last year, excluding impact from the prior pass-through and near the top end of our guidance range. We saw a strong underlying quarter-over-quarter MRR step-up of $27 million for a solid bookings momentum from the second half of 2024, offset by lower xScale NR fees as we expected. Q1 revenues, net of our FX hedges, included a $4 million benefit when compared to our prior guidance rates. Global Q1 adjusted EBITDA was approximately $1.1 billion or 48% of revenues, above the top end of our guidance range due to strong operating performance, including solid gross profit and lower-than-expected SG&A expenses despite the higher seasonal costs in Q1. Q1 adjusted EBITDA, net of our FX hedges, included a $2 million FX benefit when compared to our prior guidance rates. Global Q1 AFFO was $947 million, up 13% over the same quarter last year and well above our expectations due to strong operating performance, favorable net interest expense and solid FX mitigation strategies. Also consistent with prior year's recurring CapEx, both in dollar terms and as a percentage of revenues are lower in the quarter, in part due to timing of spend. Q1 AFFO included a $1 million FX benefit when compared to our prior guidance rates. Global Q1 MRR churn was 2.4%, as expected. This core metric included two large and anticipated MR churn events. One of those events related to one of our largest customers as they evolve from a legacy service platform to a new offering at Equinix related to certain of the Amsterdam and London deployments. The second large and anticipated MR churn event related to a large multinational customer in our Singapore market as previously discussed. For the full year, we continue to expect MR churn to average in our 2% to 2.5% quarterly guidance range. With respect to our nonfinancial metrics, they continue to trend favorably with global MRR per cabinet yield stepping up greater than 5% or $113 year-over-year on a constant currency basis, driven by favorable pricing actions and increasing power densities. Cabinets billing saw a strong step-up in the Americas region and solid performance in APAC, offset by softness in EMEA related to the previously noted expected churn. And finally, we had strong seasonal gross interconnection additions, resulting in a healthy net 3,900 total interconnections added in Q1. Turning to our regional highlights, whose full results are covered on Slides 5 through 7. On a year-over-year normalized and constant currency basis, excluding the impact of power pass-through to our customers, recurring revenues grew the fastest in our APAC region at 8%, followed by both the Americas and EMEA regions at 7%. The Americas region had an outstanding quarter delivering its best growth in net bookings performance to date with continued favorable pricing trends as power density per cabinet increased. We saw particularly strong demand from our financial services and AI-oriented customers with momentum across our Chicago, Dallas, New York, and Silicon Valley metros, as well as our Canadian business. Our EMEA business delivered a solid gross booking performance with strong retail volume and firm pricing, though impacted by the MR churn that I already noted. In the quarter, we saw booking momentum in Dublin, Istanbul, and Stockholm metros. And finally, the Asia Pacific region had a solid quarter with strong momentum in Malaysia and India businesses and robust net pricing activity. Also in April, we were pleased to announce the signing of our first renewable PPA in Japan, advancing our commitment to supporting the addition of new renewable energy sources in the markets where we operate. And now looking at our capital structure. Please refer to Slide 8. Our balance sheet increased to approximately $36 billion, including cash and short-term investments of approximately $3.7 billion. In the quarter, we issued $500 million in Singapore dollar-denominated senior green notes at a rate of 3.5%. Additionally, we raised approximately $100 million of equity through our ATM program during the mid-February to early March time frame at $927 a share. As we've said before, we consider our balance sheet to be a strategic tool that provides us with significant operational and strategic flexibility to invest behind the growth opportunity we see in the digital infrastructure market. Over the near-term, as we review our current leverage levels, our capital raising activities will be biased towards debt capital, given our ability to access these capital pools in lower cost markets around the world. Both to refinance our maturing debt and to fund our build Boulder growth initiatives. Separately, in March, we are pleased to receive a positive outlook from Moody's as we continue to strive to obtain increased debt capacity and a higher credit rating from all of our credit rating agencies. Turning to Slide 9 for the quarter. Capital expenditures were $750 million, including seasonally lower recurring CapEx of $26 million as expected. We opened 10 major projects since our last earnings call, adding retail capacity in Kuala Lumpur, Lagos, Manchester, Salalah, Santiago, and Sao Paulo. We also purchased land for development in Bogota and Milan. More than 85% of our current retail expansion spend is on our own land, our own buildings with long-term ground leases and over 70% of our announced retail expansion project spend is allocated to those largest metros where we have strong established ecosystems. Now moving to Slide 10. Our capital investments have continued to deliver strong returns. Consistent with prior years, in Q1, we completed the annual refresh of our IBX categorization exercise and our stabilized asset count increased by 13 IBXs. The PP&E related to our 2025 stabilized asset class was meaningfully larger than the prior two years, and the performance to date was strong relative to those prior year cohorts. The ramping utilizations and the growth from the 2025 cohort is expected to favorably impact our cash yield metric over the course of the year. Our now 190 stabilized assets increased recurring revenues by 3% year-over-year on a constant currency basis and are collectively 82% utilized and generated a 26% cash-on-cash return on the gross PP&E invested. And finally, please refer to Slides 11 through 15 for our updated summary of 2025 guidance and bridges. Do note that all growth rates are on an annualized and constant currency basis. Given our strong Q1 performance relative to our expectations and due to the weakening of the US dollar against our other operating currencies, we're raising our guidance across each of our key financial metrics of revenues, adjusted EBITDA, AFFO, and AFFO per share. For the full year, we're raising our 2025 revenue guidance by $142 million. This maintains a 7% to 8% normalized and constant currency growth rate while adjusting for lower power cost pass-through to our customers. Importantly, our outlook continues to imply a step-up in our underlying recurring revenue growth over the course of the year. We're also raising our 2025 adjusted EBITDA guidance by $85 million. Adjusted EBITDA margins are expected to be approximately 49%, now a 210 basis point improvement over the last year. We continue to expect quarterly margins to step up over the course of the year with second-half adjusted EBITDA margins to be at or near 50%. And we're raising our 2025 AFFO guidance by $69 million. This maintains our AFFO growth rate at 9% to 12% and AFFO per share growth of 7% to 9% compared to the previous year. 2025 CapEx is now expected to range between $3.4 billion and $3.7 billion, including approximately $180 million of on-balance sheet xScale spend, which we expect to be reimbursed as we transfer assets into our US joint venture and about $270 million of recurring CapEx spend. This increase in CapEx spending is due to our newly approved projects and the higher FX rates as we build Boulder behind the market opportunity in front of us.

Thank you, Keith. In closing, we had a strong start to 2025, delivering better-than-expected bookings and financial results. While the economic landscape is dynamic and uncertain, we believe that the secular demand environment for digital infrastructure and our services will endure. Equinix has a history of not only weathering challenging environments but growing through times of uncertainty. We are committed to delivering value to our customers and stakeholders, and I believe that our focus on innovation, operational excellence, and customer-centric solutions will continue to drive our success. I would like to extend my gratitude to our employees for their hard work and commitment, to our customers and partners for their trust in us, and to our investors for their continued support. Together, we are not just navigating the complexities of today's market, we are shaping the future of the landscape for digital connectivity. Finally, we look forward to hosting our upcoming Analyst Day in June. We plan to dive deeper into how we are building out our strategy and outline our plans to pursue the opportunity in front of our business. We expect to update our long-term financial outlook, including how our investments will translate into attractive revenue growth, expanding margins, and equity value creation for our shareholders. We also look forward to sharing additional data that we believe will help investors better understand our business. So with that, I'll stop here and open it up to questions.

Thank you. We will now begin the Q&A session. Matt Niknam from Deutsche Bank. You may proceed.

Hi, thank you very much. I believe you mentioned some improvements that might have led to shorter sales cycles. Could you provide more insight into the factors driving this? Additionally, I am curious if the macroeconomic environment has had any negative effects on sales cycles in April. Thank you.

Thank you for the question, Matt. I'll address it in two parts. First, regarding customer demand, our numbers indicate a very strong Q1. In April, our bookings have aligned with our targets, showing no significant shifts in demand during that period. We are confident that we can meet our operating plans despite uncertainties and will monitor the situation closely. Recently, we held our Americas customer advisory board meeting with a diverse group of customers representing various industries. They reported no changes in their digital infrastructure plans, although some have noted pre-purchases of equipment. On a broader scale, we are witnessing increasing optimism among our global customer base in the IMU sector. Emerging requirements like data placement and sovereignty, as well as the need for local presence, are favoring Equinix. In the APAC region, despite market diversity, our customers are focusing on AI and digital transformation, recognizing technology as a key growth driver. Most organizations we’ve engaged with are actively pursuing technology-enabled opportunities while enhancing productivity. In Q1, our sales organization demonstrated improved productivity, including shorter conversion times and the establishment of an out-of-quarter pipeline for the next quarters of 2025. We took a careful approach to our qualification process, focusing on highly qualified opportunities. Changes to our contracting process have also contributed to a median cycle time reduction of over 20% for smaller deals and around 5% for larger deals, resulting in improved sales productivity.

Thank you. Our next caller is Aryeh Klein with BMO Capital Markets.

Thank you. Good afternoon. Could you please provide more details on the expectation for recurring revenue growth to accelerate in the second half of the year and the factors driving that? Also, does the expectation for increased growth include a rise in cabinet net additions? Thank you.

Cabinet net adds, okay. Thanks very much for the question, Aryeh. As we move into the second half of the year, we bring with us our bookings momentum from the second half of 2024. Those sales become implementable solutions and revenue that begins to turn the clock for us in 2025. We saw some demonstrated step-up of that in our Q1 results. The very strong bookings performance in Q1 also bodes well for a step-up in the second half because the opportunity to implement those customers and convert bookings into recurring revenue exists as we close Q2 transactions. So opportunity exists for continued momentum through Q2 bookings to fuel the MRR step-up expected in the second half of 2025. In terms of our cabinets, we're experiencing interesting dynamics around density which represents opportunities for us holistically as an organization. We are continuously addressing evolving density dynamics. Equinix is ahead of the game in responding to this, being the first to implement broad-scale liquid cooling across all geos. We expect to see a net cab increase across the quarters, despite anticipating challenges in EMEA due to churn, particularly related to the bankruptcy we faced in Q1 from a major customer, Technicolor.

And just to add on to what Adaire said, already, despite what we talked about there, the depth of the pipeline, as Adaire referred to, and the conversion rates are continuing to be strong. That's why we feel confident in the growth of recurring revenue throughout the rest of the year. You're also going to see more profit in Q2, certainly over Q1, and in the second half compared to the first half. We’re on a nice trend despite absorbing some challenges, some of which are anticipated in our forecast.

Thank you. Jonathan Atkin with RBC Capital Markets. You may go ahead.

Thanks. I'm curious about what contributed to the strength in interconnect, particularly regarding fabric. Are there any emerging use cases, or was it primarily driven by a sales effort for that specific product? I would appreciate any insight. Thanks.

Thank you. Thanks very much. Yes, I think we had a very solid quarter in Q1. We saw strong gross demand in Q1 for interconnects, and we added 3,900 new interconnections to the portfolio. A number of factors contributed to the demand profile observed in the quarter. New customers and deployments have helped spur interconnection activity. Also, as we entered new markets, the potential for interconnection density emerged. We have seen promising developments from our Jakarta and Joe Barge entries with interconnection demand. Furthermore, our VCs can accommodate greater volumes and a broader set of use cases. We view interconnection as a portfolio of solutions and the growth drivers of that portfolio will be the number of counterparties and density of the network, rather than just scaling terabytes per second. We look forward to expanding this aspect of our product portfolio and allowing our customers to seamlessly integrate this capability into their infrastructure.

Thank you. Our next caller is Eric Luebchow with Wells Fargo. You may go ahead sir.

Appreciate you taking the question. Maybe you could just update us on the progress of the U.S. xScale JV. I know you have a site in Atlanta with more sites under consideration. And just related to xScale, how we should think about the moving pieces of nonrecurring revenue over the remainder of the year? I know you've got some fit-out costs in there that are coming out, but I just wanted an update there. Thank you.

Yes. I'll perhaps do a frame and then I'll ask Keith to add some specificity as needed. Regarding our xScale pipeline, nothing has changed about our pipeline. We've got a strong overall pipeline, and we see strong pre-leasing sentiment against that pipeline. We are continuing a structured engagement with the support of our partners. As far as the Hampton location is concerned, we're excited about that build-out. We've begun to prepare that brand and are progressing on that project as expected. The opportunity around our xScale portfolio continues with a strong demand profile. While there have been some rumors around certain hyperscalers potentially pushing back, others are pushing ahead. Importantly, we maintain a broad range of relationships with our hyperscalers beyond just AI, enabling a broader cloud demand and connectivity relationship, making for exceptional partnerships. I believe this bodes well for future leasing decisions. Keith, anything that you would add?

Yes, Eric. To add to what Adaire said, as she noted, we are absorbed with planning for roughly a $40 million investment in SG&A related to xScale. We are making investments not just for today but with recognition that these projects will take years to build and deploy. We also had significant nonrecurring revenue in Q1, similar to Q4, including great performance for the P&L associated with these fit-out costs. However, in Q2, we anticipate a decline of about $38 million in nonrecurring revenues, which largely pertains to xScale. Therefore, we anticipate an even more streamlined quarter in our business’s performance. This means we are comfortably aligned in our core business performance while focusing on growth and our xScale 2.0 initiatives.

That being said, we have a strong pipeline of xScale opportunities that we look forward to executing over the course of the year.

Thank you. Our next caller comes from Vikram Malhotra with Mizuho. You may go ahead.

Thanks for taking the question. Just looking at the cadence, you mentioned a step-up in growth. If you could compare that to the growth comp in '24. It seems like 2Q the growth comp is tougher and then it eases up a little bit. So if you can just talk about some of the EBITDA growth, the AFFO. Is there like a step down in 2Q before it steps up? Thanks.

I just want to make sure, Vikram, are you referring to the revenue side of the equation or EBITDA and AFFO?

I see, if you can give color on all 3 revenue, EBITDA and AFFO.

Perhaps Adaire can cover revenue, and I’ll handle EBITDA and AFFO. As you know, there is seasonality in our business. Q1 often incurs some seasonal costs despite delivering results that surpass expectations. So, as you look into Q2, Q3, and Q4, you’ll see fluctuations. However, we'll experience improving margins throughout the year, which is significant. These improvements emerge from revenues as well as gross profit and effective management of SG&A expenses. Regarding AFFO, recurring CapEx typically incurs seasonal impacts. In Q1, our recurring CapEx relative to revenue was about 1.2%, but it tends to rise in the second half of the year. Despite these factors, we maintain optimism for strong profits, and we’re looking forward to a positive remainder of the year.

On the revenue side, there is indeed a step-up in the second half as we planned. This step-up will be supported by multiple factors, some of which I've already mentioned, including the implementation of bookings we closed in the first half of 2025. This means your year is laid out rather clearly ahead of you once you close bookings in Q2.

Thank you. Our next caller is Mike Funk with Bank of America. You may go ahead, sir.

Yes, thank you very much. Adaire, it's great to meet you, and Keith, it's nice to speak with you again. I have a quick question about inferencing. Microsoft reported strong growth in Azure related to AI, surpassing expectations. You made a brief comment in your opening remarks. Can you share any insights from Microsoft's report and discuss the demand you're observing from customers regarding inferencing?

I'm happy to address that. We continue to cultivate and win very attractive and significant AI opportunities. In fact, in Q1, of our top 25 deals, 50% were AI-related, in line with Q4. We've implemented liquid cooling across five markets during Q1. Demand is notably driven as service providers pursue capacity, of which we are an integral part. We see growing demand for AI inferencing illustrated by the deal with Grok, which we closed in Q1. At the enterprise level, customers are targeting focused use cases, rather than large-scale deployments, underpinned by the unique value proposition that Equinix offers for inferencing. Our flexible data strategy allows customers to distribute and move data easily, ensuring compliance with privacy and regulatory requirements. We can deliver the necessary low latency infrastructure for ongoing AI systems, supported by our extensive partner ecosystem, allowing customers to adapt in an ever-changing landscape. We’re also seeing demand rise for AI factories or centers of excellence, with organizations centralizing AI development efforts to govern costs effectively. Our partnership with NVIDIA around instant AI factory service is a testament to this growth trajectory.

Thank you. Our next caller is Tim Horan with OPCO.

Thanks, guys. On the supply side, do you think you are supply constrained or you may become supply constrained? And I guess, can you raise prices to help manage that? Thanks.

From a pricing perspective during Q1, we observed firm pricing, especially during renewals, where we leverage yield strategy through standard step-ups. Regarding capacity, through our Build Bolder program, we've aggressively looked into our pipeline of opportunities and builds to identify ways to accelerate the delivery of new capacity. We've managed to do this in three locations this year, reducing time to market by at least a year. We currently have a lot of build activities, with 56 projects in progress across 33 metros.

Thank you. Our last caller is Michael Elias with TD Cowen. You may go ahead, sir.

Okay. Thanks for taking the question. It looks like on the cabinet delivery schedule, there are some movements from 3Q to 4Q and now you're delivering just over 9,000 cabinets in the fourth quarter. As we start thinking about the trajectory into 2026, I know you've done some pre-leasing in facilities. About nine months is when you start pre-leasing. Is there any color you could give us regarding the pre-leasing of those 9,000 cabinets coming online in the fourth quarter to support conviction on the exit growth rate into 2026? Thank you.

Yes. You're correct about the capacity coming online. We are experiencing some presale activity, similar to what we saw in the second half of Q4. Customers are committed to securing both compute and energy futures by making commitments to capacity that is aligned with our delivery roadmap.

Thank you. And our last question is from Michael Rollins with Citi. You may go ahead, sir.

Thank you. Good afternoon. In the second half of last year, the discussion picked up around Equinix going after some larger deal sizes as an incremental opportunity. So just curious how that progressed during 1Q, and how that may evolve through the year. As that evolves, should we be mindful of how that may impact the KPIs going forward?

Thank you for the question. In Q1, we saw a good mix of different deal profiles, not just across the metros and tiers but across sizes and scales. We noticed an increase in volume from our retail and small and medium deals, alongside a continued increase in larger footprint transactions. Greater density in our cabinets, along with larger footprints, are evident as customers secure capacity fulfilling their future business objectives. This trend aligns well with our Build Bolder initiatives and is a consideration as we design and develop our data centers.

Thank you, everyone, for joining our Q1 earnings call. We look forward to seeing many of you at our Analyst Day in June. Have a good day.

Goodbye. This concludes today's conference call. You may go ahead and disconnect at this time.