Equinix shares fell 3% on Wednesday after the data centre operator issued third-quarter revenue guidance with a midpoint slightly under Wall Street expectations, even as it raised its full-year and longer-term outlook.
Near-term guidance - For the third quarter, Equinix forecast revenue in a range of $2.53 billion to $2.58 billion. The midpoint of that range sits below the analysts' estimate of $2.58 billion.
Updated full-year and long-term targets - The company increased its 2026 revenue forecast to a range of $10.21 billion to $10.29 billion, up from a prior range of $10.14 billion to $10.24 billion. It also raised its full-year adjusted funds from operations, or AFFO, per share guidance to $42.69 to $43.29 from the previous $42.31 to $43.11 per share.
Longer-term growth trajectory - Equinix now expects annual revenue growth of 10% to 13% through 2029, an upward revision from an earlier 7% to 10% range. It likewise lifted its outlook for AFFO per share growth to 9% to 12% annually versus a prior range of 5% to 9%.
Recent results - The specialised data centre operator, which runs 281 data centres worldwide, reported second-quarter revenue of $2.63 billion, above the analysts' estimate of $2.58 billion.
Customer base and demand - Equinix said customer demand remains broad-based and growing. The company highlighted its positioning to meet enterprises' networking, cloud and AI infrastructure needs, and noted customers that include Nvidia, Netflix, and Adobe.
Business model description - Equinix provides organisations with secure, power-efficient space to house IT equipment along with connectivity solutions.
Contextual analysis - The company's revised multi-year revenue and AFFO growth targets indicate management's confidence in demand drivers over the next several years, while the softer third-quarter midpoint shows a nearer-term miss relative to analyst consensus. The market reaction reflected sensitivity to the current-quarter guidance despite the upgraded long-term metrics.