Equinix, Inc. Common Stock REIT RBC Capital Markets 2026 Global Communications and Infrastructure Conference
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Welcome, everybody, to our 2:00 session. I'm Jonathan Atkin with RBC, and I lead the investment research effort in communications infrastructure. Pleased to have the CFO of Equinix, Olivier Leonetti, joining us.
Welcome. Thank you. Nice to meet all of you or see some of you.
A couple of quarters in the seat. I guess I'm just kind of interested in what are some of your assessment in terms of what you've inherited and the initiatives going forward and the playbook that you're executing against. Any kind of mid-year update as we head into the fourth quarter?
Yeah. We said it before, our CEO has said it, this is our moment. If you look at today, the drive for AI inference, what you need is low latency. You need a global presence. You need sovereignty. You need neutrality. You need a dense network of players in your data centers. You need amazing interconnection solutions, and our company is able to offer all of that, significantly more than what is present in the market. This is our moment. Actually, the team undersold the value proposition of the company. We're very excited. You saw we raised our guide lately, 3 points more growth on top line and bottom line. We believe the best is to come.
Great. Let's maybe dive into Demand and AI and non-AI demand drivers. What does the pipeline look like today compared to before you started a year ago, let's say? Any trends to call out?
Q2, we announced total sales velocity of about 30%. The demand is strong, and today we could, but it's not a smart thing to do, have a higher order book and discuss that all this morning. We don't want to do that because we want to nurture the best ecosystem for long-term value for the assets we deploy. Demand is strong. We are now pushing back on some level of demands to push a diverse set of customers being present on our platform.
Very strong. Maybe dive into the cloud drivers, cloud connectivity, AI training, AI inference, traditional enterprise.
Any kind of quick bullet points on where you're seeing particular strength or expect growth going forward?
The strength is impacting many of our customer set. Enterprise, neocloud, cloud providers, large language model, all of them are interested by joining our network. But the key theme behind this is the need to do agentic AI. I go back to what I discussed earlier. Agentic AI, you need what we offer. That's why people want to join now. The other question is, on this AI agentic trend, all of you are as informed as I am. We are just at the very start of this. We believe that in the next three years, AI agentic will be 50% of the AI demand. We think that AI agentic in the next three years will be 30%-40% of the data center activity. We're just at the start, and this start is driving the demand we are having at Equinix.
On the Cross Connect side, you put up quite strong numbers in the last- Yeah reported quarter.
To what do you attribute that?
To the same theme, right? Why would you join us? You do not join us to have access to compute. You join us to have access to an ecosystem of participants. You want to be free to move from one AI model to another. You want to be free to move from one cloud provider to another. You join the network for that. You want to have an open infrastructure in the new world. That is what we offer, and that translates into very strong interconnection business. Again, we think that more is to come. We have announced about a month ago a new offering. It is called Fabric One, which allows our participant to connect to actors in the ecosystem in seconds, when before it used to take about a month to connect. So interconnection deal, and that is why people join our network.
The thing that the business has seen episodically is, as you go from that next quantum of optronics to bigger pipes, and this is for Cross Connects inside the data center. There has been circuit grooming and a little bit of churn. Maybe give us your thoughts on whether you are contemplating more of a usage base. That is usage-based, in fact, and sometimes usage can increase, but with optronics, the physical cost connect count can actually go the other way. If you pivot the pricing model, what are your thoughts on avoiding that through usage-based types of pricing mechanisms?
We haven't discussed how we're going to price. We're too low, and it's a bundled offering. You come to us to have access to space, power, ecosystem, and then interconnection. It's a bundled offering. It's very difficult to dissociate interconnection from the rest of the business. There are a certain number of things we know though, where that will drive interconnection revenue faster than the base. That we know. I will leave it there. We are going through a few models in term of pricing, but we think those offerings will be priced higher than the prior one because we offer more value.
As we think about open source models, open weight models, there's been a lot of developments on that in just the last 6 weeks or so during the summer. Just philosophically, is that a development that you see affecting your business one way or the other, whether it's frontier models or open source and open weight?
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