filings.toolsEquinix 10-Q 2025-09-30
Filed 2025-10-29. 8 sections, 475K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2025
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-40205
EQUINIX, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 77-0487526 | |||||||
| (State of incorporation) | (I.R.S. Employer Identification No.) |
One Lagoon Drive, Redwood City, California 94065
(Address of principal executive offices, including ZIP code)
(650) 598-6000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
| Common Stock, $0.001 | EQIX | The Nasdaq Stock Market LLC | ||||||||||||
| 0.250% Senior Notes due 2027 | The Nasdaq Stock Market LLC | |||||||||||||
| 1.000% Senior Notes due 2033 | The Nasdaq Stock Market LLC | |||||||||||||
| 3.650% Senior Notes due 2033 | The Nasdaq Stock Market LLC | |||||||||||||
| 3.250% Senior Notes due 2031 | The Nasdaq Stock Market LLC | |||||||||||||
| 3.625% Senior Notes due 2034 | The Nasdaq Stock Market LLC | |||||||||||||
| 3.250% Senior Notes due 2029 | The Nasdaq Stock Market LLC | |||||||||||||
| 4.000% Senior Notes due 2034 | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant's Common Stock as of October 28, 2025 was 98,186,078.
EQUINIX, INC.
INDEX
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties that make an investment in our securities speculative or risky, any one of which could materially adversely affect our results of operations, financial condition or business. These risks include, but are not limited to, those listed below. This list is not complete, and should be read together with the section titled “Risk Factors” in this Quarterly Report on Form 10-Q, as well as the other information in this Quarterly Report on Form 10-Q and the other filings that we make with the U.S. Securities and Exchange Commission (the “SEC”).
Risks Related to the Macro Environment
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Geopolitical events and political changes contribute to an already complex and evolving regulatory landscape. If we cannot comply with the evolving laws and regulations in the countries in which we operate, we may be subject to litigation and/or sanctions, adverse revenue impacts and increased costs, and our business and results of operations could be negatively impacted.
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Inflation in the global economy, increased interest rates and adverse global economic conditions, like the ones we are currently experiencing, could negatively affect our business and financial condition.
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Our business could be harmed by increased costs to procure power, prolonged power outages, shortages or capacity constraints as well as insufficient access to power.
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The ongoing military conflicts between Russia and Ukraine and in the Middle East could negatively affect our business and financial condition.
Risks Related to our Operations
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We experienced a cybersecurity incident in the past and may be vulnerable to future security breaches, which could disrupt our operations and have a material adverse effect on our business, results of operation and financial condition.
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Any failure of our physical infrastructure or negative impact on our ability to meet our obligations to our customers, or damage to customer infrastructure within our IBX data centers, could lead to significant costs and disruptions that could reduce our revenue and harm our business reputation and financial condition.
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We are currently making significant investments in our back-office information technology systems and processes. Difficulties from or disruptions to these efforts may interrupt our normal operations and adversely affect our business and results of operations.
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The level of insurance coverage that we purchase may prove to be inadequate.
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If we are unable to recruit or retain key qualified personnel, our business could be harmed.
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The failure to obtain favorable terms when we renew our IBX data center leases, or the failure to renew such leases, could harm our business and results of operations.
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We depend on a number of third parties to provide internet connectivity to our IBX data centers; if connectivity is interrupted or terminated, our results of operations and cash flow could be materially and adversely affected.
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The use of high-power density equipment may limit our ability to fully utilize the space in our older IBX data centers.
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The development and use of artificial intelligence in the workplace presents risks and challenges that may adversely impact our business and operating results.
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We have been, and in the future may be, subject to securities class action and other litigation, which may harm our business and results of operations.
Risks Related to our Offerings and Customers
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Our offerings have a long sales cycle that may harm our revenue and results of operations.
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We may not be able to compete successfully against current and future competitors.
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If we cannot continue to develop, acquire, market and provide new offerings or enhancements to existing offerings that meet customer requirements and differentiate us from our competitors, our results of operations could suffer.
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We have government contracts, which subjects us to revenue risk and certain other risks including early termination, audits, investigations, sanctions and penalties, any of which could have a material adverse effect on our results of operations.
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Because we depend on the development and growth of a balanced customer base, including key magnet customers, failure to attract, grow and retain this base of customers could harm our business and results of operations.
Risks Related to our Financial Results
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The market price of our stock may continue to be highly volatile, and the value of an investment in our common stock may decline.
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Our results of operations may fluctuate.
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We may incur goodwill and other intangible asset impairment charges, or impairment charges to our property, plant and equipment, which could result in a significant reduction to our earnings.
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We have incurred substantial losses in the past and may incur additional losses in the future.
Risks Related to Our Expansion Plans
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Our construction of new IBX data centers, IBX data center expansions or IBX data center redevelopment could involve significant risks to our business.
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Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.
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The anticipated benefits of our joint ventures may not be fully realized, or take longer to realize than expected.
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Joint venture investments could expose us to risks and liabilities in connection with the formation of the new joint ventures, the operation of such joint ventures without sole decision-making authority, and our reliance on joint venture partners who may have economic and business interests that are inconsistent with our business interests.
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If we cannot effectively manage our international operations and successfully implement our international expansion plans, our business and results of operations would be adversely impacted.
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We continue to invest in our expansion efforts, but may not have sufficient customer demand in the future to realize expected returns on these investments.
Risks Related to Our Capital Needs and Capital Strategy
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Our substantial debt could adversely affect our cash flows and limit our flexibility to raise additional capital.
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Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.
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If we are not able to generate sufficient operating cash flows or obtain external financing, our ability to fund incremental expansion plans may be limited.
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Our derivative transactions expose us to counterparty credit risk.
Risks Related to Environmental Laws and Climate Change
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Environmental laws and regulations may impose upon us new or unexpected costs.
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Our business may be harmed by any instability in energy availability and power supply.
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Our business may be adversely affected by physical risks related to climate change and our response to it.
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We may fail to achieve our sustainability objectives, or may encounter objections to them, either of which may adversely affect public perception of our business and affect our relationship with our customers, regulators, our stockholders and/or other stakeholders.
Risks Related to Certain Regulations and Laws, Including Tax Laws
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Government regulation related to our business or failure to comply with laws and regulations may adversely affect our business.
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Changes in U.S. or foreign tax laws, regulations, or interpretations thereof, including changes to tax rates, may adversely affect our financial statements and cash taxes.
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Our business could be adversely affected if we are unable to maintain our complex global legal entity structure.
Risks Related to Our REIT Status in the U.S.
- We have a number of risks related to our qualification as a real estate investment trust for federal income tax purposes ("REIT"), including the risk that we may not be able to maintain our qualification for taxation as a REIT which could expose us to substantial corporate income tax and have a materially adverse effect on our business, financial condition, and results of operations.
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
| September 30, 2025 | December 31, 2024 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 2,077 | $ | 3,081 | |||||||
| Short-term investments | 854 | 527 | |||||||||
| Accounts receivable, net of allowance of $17 and $19 | 1,144 | 949 | |||||||||
| Other current assets | 891 | 890 | |||||||||
| Total current assets | 4,966 | 5,447 | |||||||||
| Property, plant and equipment, net | 21,897 | 19,249 | |||||||||
| Operating lease right-of-use assets | 1,439 | 1,419 | |||||||||
| Goodwill | 5,945 | 5,504 | |||||||||
| Intangible assets, net | 1,331 | 1,417 | |||||||||
| Other assets | 2,482 | 2,049 | |||||||||
| Total assets | $ | 38,060 | $ | 35,085 | |||||||
| Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 1,275 | $ | 1,193 | |||||||
| Accrued property, plant and equipment | 482 | 387 | |||||||||
| Current portion of operating lease liabilities | 159 | 144 | |||||||||
| Current portion of finance lease liabilities | 157 | 189 | |||||||||
| Current portion of mortgage and loans payable | 17 | 5 | |||||||||
| Current portion of senior notes | 699 | 1,199 | |||||||||
| Other current liabilities | 280 | 232 | |||||||||
| Total current liabilities | 3,069 | 3,349 | |||||||||
| Operating lease liabilities, less current portion | 1,334 | 1,331 | |||||||||
| Finance lease liabilities, less current portion | 2,140 | 2,086 | |||||||||
| Mortgage and loans payable, less current portion | 687 | 644 | |||||||||
| Senior notes, less current portion | 15,789 | 13,363 | |||||||||
| Other liabilities | 861 | 760 | |||||||||
| Total liabilities | 23,880 | 21,533 | |||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Redeemable non-controlling interest | 25 | 25 | |||||||||
| Common stockholders’ equity (shares in thousands): | |||||||||||
| Common stock, $0.001 par value per share: 300,000 shares authorized; 98,250 issued and 98,187 outstanding in 2025 and 97,390 issued and 97,287 outstanding in 2024 | — | — | |||||||||
| Additional paid-in capital | 21,503 | 20,895 | |||||||||
| Treasury stock, at cost; 63 shares in 2025 and 103 shares in 2024 | (24) | (39) | |||||||||
| Accumulated dividends | (11,737) | (10,342) | |||||||||
| Accumulated other comprehensive loss | (1,419) | (1,735) | |||||||||
| Retained earnings | 5,834 | 4,749 | |||||||||
| Total common stockholders' equity | 14,157 | 13,528 | |||||||||
| Non-controlling interests | (2) | (1) | |||||||||
| Total stockholders’ equity | 14,155 | 13,527 | |||||||||
| Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ | 38,060 | $ | 35,085 |
See accompanying notes to condensed consolidated financial statements.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Revenues | $ | 2,316 | $ | 2,201 | $ | 6,797 | $ | 6,487 | |||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
| Cost of revenues | 1,142 | 1,098 | 3,310 | 3,271 | |||||||||||||||||||
| Sales and marketing | 219 | 237 | 669 | 682 | |||||||||||||||||||
| General and administrative | 470 | 434 | 1,359 | 1,315 | |||||||||||||||||||
| Restructuring charges | 5 | — | 17 | — | |||||||||||||||||||
| Transaction costs | 3 | 7 | 12 | 12 | |||||||||||||||||||
| Impairment charges | 4 | — | 5 | — | |||||||||||||||||||
| (Gain) loss on asset sales | (1) | — | (1) | (18) | |||||||||||||||||||
| Total costs and operating expenses | 1,842 | 1,776 | 5,371 | 5,262 | |||||||||||||||||||
| Income from operations | 474 | 425 | 1,426 | 1,225 | |||||||||||||||||||
| Interest income | 53 | 35 | 152 | 88 | |||||||||||||||||||
| Interest expense | (128) | (117) | (385) | (331) | |||||||||||||||||||
| Other income (expense) | — | 7 | 2 | (6) | |||||||||||||||||||
| Gain (loss) on debt extinguishment | — | — | 1 | (1) | |||||||||||||||||||
| Income before income taxes | 399 | 350 | 1,196 | 975 | |||||||||||||||||||
| Income tax expense | (25) | (54) | (112) | (147) | |||||||||||||||||||
| Net income | 374 | 296 | 1,084 | 828 | |||||||||||||||||||
| Net (income) loss attributable to non-controlling interests | — | 1 | 1 | 1 | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 374 | $ | 297 | $ | 1,085 | $ | 829 | |||||||||||||||
| Earnings per share (“EPS”) attributable to common stockholders: | |||||||||||||||||||||||
| Basic EPS | $ | 3.82 | $ | 3.11 | $ | 11.10 | $ | 8.73 | |||||||||||||||
| Weighted-average shares for basic EPS (in thousands) | 97,982 | 95,394 | 97,777 | 94,992 | |||||||||||||||||||
| Diluted EPS | $ | 3.81 | $ | 3.10 | $ | 11.07 | $ | 8.69 | |||||||||||||||
| Weighted-average shares for diluted EPS (in thousands) | 98,174 | 95,731 | 98,037 | 95,350 |
See accompanying notes to condensed consolidated financial statements.
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed in "Liquidity and Capital Resources" below and "Risk Factors" in Item 1A of Part II of this Quarterly Report on Form 10-Q. All forward-looking statements in this document are based on information available to us as of the date of this Report and we assume no obligation to update any such forward-looking statements.
Our management's discussion and analysis of financial condition and results of operations is intended to assist readers in understanding our financial information from our management's perspective and is presented as follows:
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Overview
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Results of Operations
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Non-GAAP Financial Measures
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Liquidity and Capital Resources
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Critical Accounting Policies and Estimates
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Recent Accounting Pronouncements
Overview
We provide a global, vendor-neutral data center, interconnection and edge solutions platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScaleTM data center investments, have expanded our total global footprint to 273 IBXs, including 21 xScale data centers and the MC1 and SN1 data centers that are held in unconsolidated joint ventures, across 77 markets around the world. We offer the following solutions:
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premium data center colocation;
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interconnection and data exchange solutions;
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edge solutions for deploying networking, security and hardware; and
- remote expert support and professional services.
Our data centers around the world allow our customers to bring together and interconnect the infrastructure they need to fast-track their digital advantage. With Equinix, they can scale with agility, accelerate the launch of digital offerings, deliver world-class experiences and multiply their value. We enable them to differentiate by distributing infrastructure and removing the distance between clouds, users, and applications in order to reduce latency and deliver a superior customer, partner and employee experience. The Equinix global platform, and the quality of our offerings, have enabled us to establish a critical mass of customers. As more customers choose Platform Equinix for bandwidth cost and performance reasons, it benefits their suppliers and business partners to colocate in the same data centers and connect directly with each other. This adjacency creates a network effect that attracts new customers, continuously enhances our existing customers' value and enables them to capture further economic and performance benefits from our offerings.
Industry Overview:
While a large number of enterprises and service providers, such as hyperscale cloud service providers, own their own data centers, we believe the industry is shifting away from single-tenant solutions to customers outsourcing some or all of their IT housing and interconnection requirements to third-party facilities, such as those operated by Equinix. This shift is being accelerated by the increasing adoption of hybrid multi-cloud architectures and the adoption of artificial intelligence (“AI”).
Historically, the outsourcing market was served by large telecommunications carriers that bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and carrier-neutral multi-tenant data centers ("MTDC"), public and private cloud providers, managed infrastructure and application hosting providers, large hyperscale cloud providers and systems integrators. It is estimated that Equinix is one of more than 2,400 companies that provide MTDC offerings around the world. The global MTDC market is highly fragmented. Each of these data center solution providers can bundle various colocation, interconnection and network offerings, outsourced IT infrastructure solutions and managed services. We believe that this outsourcing trend has accelerated and is likely to continue to accelerate in the coming years, especially in light of the movement to digital business, the use of multiple cloud service providers, and the adoption of AI. We are able to offer our customers a global platform that reaches 36 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.
Capacity Trends:
Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 78% as of September 30, 2025 and 2024, respectively. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption, which we expect to accelerate with the adoption of AI, has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our existing IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center, and in our ability to expand our footprint in existing and new markets. Additionally, global supply chain challenges could result in a lack of availability or delays in the delivery of data center equipment. These challenges have driven us to invest in and commit to future purchases in advance of our standard practice to mitigate risks associated with these supply chain issues. These constraints could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows and the growth opportunities presented by the adoption of new technologies, including AI.
Expansion Opportunities:
To s
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
We may be exposed to market risks related to changes in foreign currency exchange rates and interest rates. There have been no significant changes to our risk exposure management or procedures in relation to these risks during the nine months ended September 30, 2025 as compared to the respective risk exposures and procedures disclosed in Quantitative and Qualitative Disclosures About Market Risk, set forth in Part II Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2024.
We monitor our foreign currency and interest rate risk exposures by evaluating the potential for future losses in earnings due to changes in foreign currency exchange rates and interest rates, as further described below.
Foreign Currency Risk
To help manage the exposure to foreign currency exchange rate fluctuations, we have implemented a number of hedging programs, in particular (i) a cash flow hedging program to hedge the forecasted revenues and expenses in our EMEA region as well as our debt denominated in foreign currencies, (ii) a balance sheet hedging program to hedge the remeasurement of monetary assets and liabilities denominated in foreign currencies, and (iii) a net investment hedging program to hedge the long-term investments in our foreign subsidiaries. Our hedging programs reduce, but do not entirely eliminate, the impact of currency exchange rate movements and their impact on the condensed consolidated statements of operations.
We have entered into various foreign currency debt obligations as described in Note 9 within the condensed consolidated financial statements. Our foreign currency debt obligations that would otherwise remeasure through earnings are designated as net investment hedges against our net investments in foreign subsidiaries or are hedged by cross-currency interest rate swaps designated as cash flow hedges. Additionally, we enter cross-currency interest rate swaps to effectively convert some of our U.S. dollar-denominated debt into foreign currencies. These derivative instruments are also designated as net investment hedges against our net investments in foreign subsidiaries. Changes in the fair value of hedging instruments designated as net investment hedges are recorded as a component of accumulated other comprehensive income (loss) in the condensed consolidated balance sheets. As a result, we do not have a significant exposure to future losses in earnings resulting from our foreign currency debt obligations or cross-currency interest rate swaps. Further information about our use of foreign currency derivative instruments is described in Note 6 within the condensed consolidated financial statements.
The U.S. dollar generally weakened relative to certain of the currencies of the foreign countries in which we operate during the nine months ended September 30, 2025. This has impacted our condensed consolidated financial position and results of operations during this period, including the amount of revenues that we reported. Continued strengthening or weakening of the U.S. dollar will continue to impact us in future periods.
With the existing cash flow hedges in place, a hypothetical 10% strengthening of the U.S. dollar for the nine months ended September 30, 2025 would have resulted in a reduction of our revenues and a reduction of our operating expenses including depreciation and amortization expense by approximately $209 million and $192 million, respectively.
With the existing cash flow hedges in place, a hypothetical 10% weakening of the U.S. dollar for the nine months ended September 30, 2025 would have resulted in an increase of our revenues and an increase of our operating expenses including depreciation and amortization expense by approximately $266 million and $240 million, respectively.
Interest Rate Risk
We are exposed to interest rate risk related to our outstanding debt. An immediate increase or decrease in current interest rates from their position as of September 30, 2025 would not have a material impact on our interest expense due to the fixed coupon rate on the majority of our debt obligations.
We periodically enter into interest rate locks to hedge the interest rate exposure created by anticipated fixed rate debt issuances, which are designated as cash flow hedges. When interest rate locks are settled, any accumulated gain or loss included as a component of accumulated other comprehensive income (loss) will be amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term of the interest rate locks.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation, pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of the effectiveness of our "disclosure controls and procedures" as of the end of the period covered by this quarterly report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(c) Limitations on the Effectiveness of Controls. Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed and operated to be effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II - OTHER INFORMATION
| Item 1. Legal Proceedings |
On March 20, 2024, the Company received a subpoena from the U.S. Attorney’s Office for the Northern District of California. On April 30, 2024, the Company received a subpoena from the Securities and Exchange Commission. The Company is cooperating fully with both government agencies.
On May 2, 2024, a putative stockholder class action was filed against the Company and certain of our officers in the United States District Court for the Northern District of California. The named plaintiff alleges violations of Section 10(b) of the Exchange Act and Securities and Exchange Commission Rule 10b-5, and Section 20(a) of the Exchange Act, on the basis that the defendants allegedly made false and misleading statements about our business, results, internal controls, and accounting practices between May 3, 2019 and March 24, 2024. The lawsuit seeks, among other relief, a determination that the alleged claims may be asserted on a class-wide basis, unspecified damages, attorneys' fees, other expenses and costs. We filed a motion to dismiss the lawsuit on October 10, 2024. The motion was granted in part on January 6, 2025. On July 15, 2025, the parties entered a Stipulation of Settlement to resolve the action. The Court granted preliminary approval of the settlement on September 4, 2025. The settlement remains subject to final court approval, to be addressed at a hearing on December 18, 2025. We expect the amount paid in settlement to be fully covered by our insurance.
On February 14, 2025, and February 26, 2025, respectively, certain of the Company’s current and former directors and officers were named as defendants in two shareholder derivative lawsuits (in which the Company is a nominal defendant) filed in the United States District Court for the Northern District of California. The lawsuits alleged, among other things, violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste of corporate assets and generally alleged the same purported misconduct as alleged in the putative stockholder class action described above. The lawsuits sought, among other relief, unspecified damages, restitution, attorneys’ fees, and other expenses and costs. On April 17, 2025, and April 18, 2025, respectively, the plaintiffs filed notices of voluntary dismissal without prejudice, subject to court approval, to pursue remedies under Delaware law. The cases were dismissed on April 28, 2025 and August 19, 2025, respectively.
On August 6, 2025, certain of the Company's current and former directors and officers were named as defendants in an additional shareholder derivative lawsuit (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware. The lawsuit makes generally the same types of allegations and seeks the same types of relief as the derivative lawsuits above, and makes additional allegations that certain directors' and officers' alleged knowledge of the purported misconduct constituted insider trading. We filed a motion to dismiss the lawsuit on October 20, 2025.
These matters are subject to uncertainties and we cannot predict the outcome nor reasonably estimate a range of loss or penalties, if any, relating to these matters prior to resolution.
Item 1A. Risk Factors
In addition to the other information contained in this report, the following risk factors should be considered carefully in evaluating our business. Additional risks which we do not presently consider material, or of which we are not currently aware, may also have an adverse impact on us. The information discussed below is at the time of this filing. This section contains forward-looking statements.
Risk Factors
Risks Related to the Macro Environment
Geopolitical events and political changes contribute to an already complex and evolving regulatory landscape. If we cannot comply with the evolving laws and regulations in the countries in which we operate, we may be subject to litigation and/or sanctions, adverse revenue impacts and increased costs, and our business and results of operations could be negatively impacted.
In the U.S., there is some uncertainty on the legality and enforceability of new and existing laws, judicial orders and bans, new presidential executive orders, regulatory frameworks, leadership changes and enforcement priorities and strategies. We cannot guarantee compliance with all such laws and regulations at all times, and violations of
any applicable domestic or international laws and regulations could result in significant fines, penalties, costly and expensive investigations, criminal sanctions against us, our officers or our employees, prohibitions on our ability to provide our offerings in one or more countries, or the delay or prevention of potential acquisitions, and could also materially damage our reputation, brand, international expansion efforts, ability to attract and retain employees, and our business and results of operations.
Additionally, the U.S. is currently experiencing a government shutdown because of disagreement in the U.S. Congress. There is uncertainty around when the government may resume its operations. Although we are not currently experiencing any material impacts on our business because of the shutdown, we continue to monitor the shutdown as any prolonged shutdown could further adversely affect global economic conditions and our business. Geopolitical events, such as a trade war between the U.S. and China, the war between Russia and Ukraine, and the ongoing conflict in the Middle East, could also have a negative effect on our global business operations. While some time has passed since some of these events first occurred, it remains unpredictable how these events will continue to develop and impact the environment in which we do business.
Laws and regulations related to economic sanctions, export controls, anti-bribery and anti-corruption, and other international activities may restrict or limit our ability to engage in transactions or dealings with certain counterparties, in or with certain countries or territories, or in certain activities. For example, we have several Chinese customers who are named in restrictive executive orders ("EOs"), and while a majority of these EOs do not apply to the type of services that we currently provide to these Chinese customers, the landscape continues to evolve, and new rules have been broader than what we have historically experienced. New or expanded rules could restrict our ability to continue serving such Chinese customers. If we are required to cease business with these companies, or additional companies in the future, our revenues could be adversely affected.
Furthermore, the U.S. has been adopting a restrictive posture toward Chinese technology, data flows, and cross-border digital infrastructure, which could materially impact our business. Proposed tariffs to be imposed by the U.S. on imports from certain countries and potential counter-tariffs in response, could also lead to increased costs and supply chain disruptions. The proposed tariffs and positioning by the U.S. and other countries remain unsettled and it is unclear how or to what extent these changes could impact our business at this time and if we are not able to effectively navigate these changes, it could have a material adverse effect on our business and results of operations, as well as on the price of our common stock.
The validity, extent of application and duration of tariffs and the resulting impact on general economic conditions and on our business, financial condition and results of operation are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, and exemptions or exclusions that may be granted.
Inflation in the global economy, increased interest rates and adverse global economic conditions, like the ones we are currently experiencing, could negatively affect our business and financial condition.
Inflation is impacting various aspects of our business and it is unclear if we will enter a period of further inflation. We are also experiencing an increase in our costs to procure power and supply chain issues globally. Rising prices for materials related to our IBX data center construction and our data center offerings, energy and gas prices, as well as rising wages and benefits costs negatively impact our business by increasing our operating costs. The adverse economic conditions we are currently experiencing, including the impact of increased tariffs, may cause a decrease in sales as some customers may initiate cost cutting measures or scale back their operations. This could result in churn in our customer base, reductions in revenues from our offerings, adverse effects to our days of sales outstanding in accounts receivable ("DSO"), longer sales cycles, slower adoption of new technologies and increased price competition, which could adversely affect our liquidity. Customers, vendors and/or partners filing for bankruptcy could also lead to costly and time-intensive actions with adverse effects, including greater difficulty or delay in accounts receivable collection. The uncertain economic environment could also have an impact on our foreign exchange forward contracts if our counterparties' credit deteriorates or if they are otherwise unable to perform their obligations. Further, volatility in the financial markets and rising interest rates could affect our ability to access the capital markets at a time when we desire, or need, to do so which could have an impact on our flexibility to pursue additional expansion opportunities and maintain our desired level of revenue growth in the future. We also could be exposed to hyperinflation in certain economies as a result of potential expansion into developing countries.
Our efforts to mitigate the risks associated with these adverse conditions may not be successful and our business and growth could be adversely affected.
Our business could be harmed by increased costs to procure power, prolonged power outages, shortages or capacity constraints as well as insufficient access to power.
Any power outages, shortages, capacity constraints, limits on access or significant increases in the cost of power may have an adverse effect on our business and our results of operations.
In each of our markets, we contract with and rely on third parties, third party infrastructure, governments, and global suppliers to provide a sufficient amount of power to maintain our IBX data centers and meet the needs of our current and future customers. In certain instances, we have experienced difficulties in securing the energy supply we have contracted for or that we need for our expansion plans. In certain markets, there are specific requirements to cover our operations with power procured from renewable energy resources and the availability of such alternative energy resources may be limited. Any such limitations may have a negative impact on a given IBX data center and may limit our ability to grow our business which co
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Item 5. Other Information
Rule 10b5-1 Trading Plans
During the three months ended September 30, 2025, each of the following directors and/or officers adopted a “Rule 10b5-1 trading arrangement”, as such term is defined in Item 408(a) of Regulation S-K. All trading plans were entered into during an open insider trading window and are intended to satisfy the affirmative defense of Rule 10b5- (c) under the Securities Exchange Act of 1934, as amended, and our policies regarding transactions in our securities.
| Name and Title | Date | Action | Start Date | End Date | Total Shares to be Sold | |||||||||||||||||||||||||||
| Charles Meyers, Executive Chairman | 8/18/2025 | Adoption | 11/17/2025 | 4/30/2026 | See footnote (1) | |||||||||||||||||||||||||||
| Christopher Paisley, Director | 8/6/2025 | Adoption | 11/18/2025 | 8/18/2026 | See footnote (2) | |||||||||||||||||||||||||||
| Michael Shane Paladin, Chief Customer and Revenue Officer | 8/27/2025 | Adoption | 1/16/2025 | 4/30/2026 | See footnote (3) |
(1)Mr. Meyers’ plan includes (a) 5,087 shares and (b) subject to the achievement of performance conditions, the potential sale of shares for tax withholding relating to awards totaling up to 19,997 shares on a grant-by-grant basis. This plan also includes any shares to be granted under the 2025 Annual Incentive Plan, as determined based on final company performance, to be sold for tax withholding and/or diversification purposes.
(2)Mr. Paisley’s plan includes the potential sale of 500 shares, previously acquired via Restricted Stock Unit(s), for diversification purposes.
(3)Mr. Paladin’s plan includes, subject to the achievement of performance conditions, the potential sale of shares for tax withholding relating to awards totaling up to 4,607 shares on a grant-by-grant basis. This plan also includes any shares to be granted under the 2025 Annual Incentive Plan, as determined based on final company performance, to be sold for tax withholding.
Item 6. Exhibits
** Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
EQUINIX, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| EQUINIX, INC. | ||||||||
| Date: October 29, 2025 | ||||||||
| By: | /s/ KEITH D. TAYLOR | |||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) |