eqix-20251231
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 10-K
For the fiscal year ended December 31, 2025
OR
For the transition period from _____________ to _____________
Commission file number 001-40205
______________________
EQUINIX, INC.
(Exact name of registrant as specified in its charter)
(State of incorporation) (I.R.S. Employer Identification No.)
One Lagoon Drive, Redwood City, California94065
(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(s) 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
3.250% Senior Notes due 2029 The Nasdaq Stock Market LLC
3.250% Senior Notes due 2031 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
4.000% Senior Notes due 2034 The Nasdaq Stock Market LLC
3.625% Senior Notes due 2034 The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒
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 the 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold as of the last business day of the registrant's most recently completed second fiscal quarter was approximately $77.8 billion. As of February 10, 2026, a total of 98,254,928 shares of the registrant's common stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III – Portions of the registrant's definitive proxy statement to be issued in conjunction with the registrant's 2026 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the registrant's fiscal year ended December 31, 2025. Except as expressly incorporated by reference, the registrant's proxy statement shall not be deemed to be a part of this report on Form 10-K.
TABLE OF CONTENTS
EQUINIX, INC.
Item PART I Page No.
Forward-Looking Statements 3
Summary of Risk Factors 3
1. Business 5
1A. Risk Factors 14
1B. Unresolved Staff Comments 39
1C. Cybersecurity 39
2. Properties 41
3. Legal Proceedings 45
4. Mine Safety Disclosures 45
PART II
7A. Quantitative and Qualitative Disclosures About Market Risk 67
8. Financial Statements and Supplementary Data 68
9A. Controls and Procedures 69
9B. Other Information 70
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 70
PART III
10. Directors, Executive Officers and Corporate Governance 71
11. Executive Compensation 71
13. Certain Relationships and Related Transactions, and Director Independence 71
14. Principal Accounting Fees and Services 71
PART IV
15. Exhibits and Financial Statement Schedules 72
Signatures 80
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PARTI
Forward-Looking Statements
The words "Equinix", "we", "our", "ours", "us" and the "Company" refer to Equinix, Inc. All statements in this discussion that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Equinix's "expectations", "beliefs", "intentions", "strategies", "forecasts", "predictions", "plans" or the like. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Equinix cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the risk factors discussed in this Annual Report on Form 10-K. Equinix expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Equinix's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.
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 Annual Report on Form 10-K, as well as the other information in this Annual Report on Form 10-K and the other filings that we make with the U.S. Securities and Exchange Commission (the “SEC”).
Risks Related to the Macro Environment
•Geopolitical events and political tensions contribute to an already complex landscape, and could have a negative effect on our global business operations.
•The current uncertain economic environment, including challenges related to power and supply chains, could impact our business and the businesses of our customers.
•Our business could be harmed by increased costs to procure power, prolonged power outages, shortages or capacity constraints.
Risks Related to our Operations
•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.
•We experienced cybersecurity incidents 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.
•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.
•The level of insurance coverage that we purchase may prove to be inadequate.
•If we are unable to recruit or retain key qualified personnel, our business could be harmed.
•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.
•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.
•The use of high-power density equipment may limit our ability to fully utilize the space in our older IBX data centers.
•The development and use of artificial intelligence in the workplace presents risks and challenges that may adversely impact our business and operating results.
Risks Related to our Offerings and Customers
•Our offerings have a long sales cycle that may harm our revenue and results of operations.
•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.
•We have government contracts, which subject 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.
•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 and Stock Price
•The market price of our stock may continue to be highly volatile, and the value of an investment in our common stock may decline.
•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.
•Our results of operations may fluctuate.
•We have incurred substantial losses in the past and may incur additional losses in the future.
•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.
Risks Related to Our Expansion Plans
•Our construction of new IBX data centers, IBX data center expansions or IBX data center redevelopment could involve significant risks to our business.
•Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.
•The anticipated benefits of our joint ventures may not be fully realized, or take longer to realize than expected.
•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.
•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.
•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
•Our substantial debt could adversely affect our cash flows and limit our flexibility to raise additional capital.
•Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.
•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.
Risks Related to Sustainability, Environmental Laws and Climate Change
•Environmental and sustainability laws and regulations may impose upon us new or unexpected costs.
•Our business may be adversely affected by physical risks related to climate change and our response to it.
•We may fail to achieve our sustainability initiatives, including reaching our climate targets, or may encounter objections to them, 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
•Government regulation related to our business or failure to comply with laws and regulations may adversely affect our business.
•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.
•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.
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ITEM 1.Business
Overview: Enabling Innovation for the Digital World
Equinix (Nasdaq: EQIX) is the world's digital infrastructure company, shortening the path to boundless connectivity anywhere in the world to enable the innovations that enrich our work, life and planet. Equinix combines a global footprint of International Business ExchangeTM (IBX®) and xScaleTM data centers in the Americas, Asia-Pacific, and Europe, the Middle East and Africa ("EMEA") regions, infrastructure and interconnection offerings, and digital ecosystems required to serve a large and diverse set of customers around the world.
Equinix was incorporated on June 22, 1998 as a Delaware corporation and operates as a REIT for federal income tax purposes. Since our inception, Equinix has been a network-neutral, multi-tenant data center ("MTDC") provider, where competing networks could connect and share data traffic to help scale the rapid growth of the early internet. The company’s name, Equinix (composed from the words "equality," "neutrality" and "internet exchange"), reflects that vision. The founders believed they not only had the opportunity, but also the responsibility, to create a company that would be the steward of some of the most important digital infrastructure assets in the world. Twenty-seven years later, we have expanded upon that vision by connecting economies, countries, enterprises and communities with seamless digital experiences, including cutting-edge artificial intelligence ("AI").
Our data centers around the world allow our customers to bring together and interconnect the infrastructure they need to seamlessly operate their business. With Equinix, they can scale with speed and agility, accelerate the launch of new digital offerings while safeguarding data, and implement AI applications at scale to achieve business success. We enable customers to simplify their digital infrastructure, ensure interoperability across platforms, and maximize speed, efficiency and security to deliver superior customer, partner and employee experiences. As more customers choose Equinix for high connectivity and performance reliability at the metro edge, 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 while continuously enhancing our value proposition to existing customers and enabling them to capture further economic and performance benefits from our offerings.
Our Competitive Advantage
The digital economy continues to accelerate as AI, data-intensive workloads, and ecosystem-based business models reshape how industries operate. Organizations continue to shift from siloed digital adoption toward interconnected systems where data, digital services, and workflows flow smoothly across partners and platforms. Equinix is uniquely positioned to capture the increasing demand for these infrastructure solutions. Trends reinforcing our leading market position include:
•Scaled global presence: As the world becomes increasingly digital across geographies, organizations will need to partner and collaborate with an infrastructure provider that can satisfy their requirements in a globally consistent manner. Our extensive global footprint spans 280 data centers, in 77 markets in 36 countries. Data sovereignty, security and latency requirements are increasing, requiring a distributed and local metro footprint. This further positions us as a global trusted vendor to our current and prospective customers.
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•The requirement of hybrid architectures: Industries are moving from linear value chains to hybrid digital ecosystems. Service providers supply cloud and AI infrastructure, services across payments, cybersecurity and other domains, and industry-specific platforms and applications, while enterprise consumers assemble these capabilities into operational stacks that drive innovation and scale. These comprehensive solutions require a hybrid of enterprise-owned infrastructure combined with networking to a diverse set of service providers. With over 10,500 customers, including 2,000+ network service providers and a leading market share of cloud-on ramps, our position is unmatched in the industry.
•The interconnection imperative: Growing digital complexity and real-time operational demands require secure, low-latency private interconnection across clouds, networks, partners, and data sources. Critical workflows—including digital payments, supply chain telemetry, smart manufacturing, telemedicine, and AI inference—depend on high-performance connectivity. Interconnection has become essential for resiliency, regulatory compliance, and collaboration across increasingly distributed digital ecosystems. Over our 27-year history, we have curated a diverse, industry-leading ecosystem of more than 500,000 interconnections.
•AI as a catalyst for ecosystem acceleration: AI adoption is increasing the need for distributed, interconnected digital infrastructure. Training, inference, and model coordination require dense data exchange across cloud and edge environments. AI-driven use cases—spanning fraud detection, predictive maintenance, connected mobility, personalized retail, energy optimization and agentic connectivity—depend on secure, low-latency pathways. As AI integrates into mission-critical workflows, multi-directional, low-latency connectivity becomes essential. Equinix has curated a leading AI ecosystem of model providers, data platforms, neoclouds and gateways to serve the AI requirements of enterprises.
•Sustainability, resource efficiency and intelligent infrastructure management: Rising digital demand—driven by AI, cloud growth, and global data proliferation—is heightening expectations for environmental accountability. Digital value networks support more efficient operations through innovations in high-density compute, AI-optimized cooling, grid-interactive systems, renewable integration, and telemetry-driven management. Intelligent infrastructure is becoming critical to meeting sustainability goals while supporting expanding digital workloads.
Equinix Business Proposition
In 2025, we continued to build new offerings to further our mission to make digital infrastructure more powerful, accessible and sustainable. At Equinix, businesses can reach strategic markets with scalable, manageable infrastructure that blends physical and virtual options on our one-of-a-kind global ecosystem. We enable competitive advantage for our customers and partners by creating the foundational infrastructure capabilities that harness innovation and create value. We offer a comprehensive, integrated suite of infrastructure and interconnection solutions, with global, state-of-the-art data centers which meet strict standards of security, reliability, certification and sustainability. Our footprint consists of 280 data centers worldwide, including:
•IBXData Centers are our carrier-neutral colocation data centers, providing our customers with the secure, reliable and robust environments (including space and power) necessary to aggregate and distribute information and connect digital and business ecosystems globally. IBX data centers provide access to vital ecosystems where enterprises, network, cloud and SaaS providers, and business partners, can directly and securely interconnect to each other.
•xScale Data Centers are designed to serve the unique core workload deployment needs of a targeted group of hyperscale companies, which include the world's largest cloud service providers. Hyperscalers require infrastructure to support demanding workload requirements for cloud and AI initiatives. With xScale data centers, which are developed and operated through our joint venture partnership arrangements, hyperscale customers add to their core hyperscale data center deployments and existing customer access points at Equinix, allowing streamlined expansion with a single global vendor.
The following are Equinix's primary revenue-generating products and other offerings:
Infrastructure Offerings
Equinix infrastructure offerings include a suite of comprehensive solutions that provide all the components required by a customer to house its IT infrastructure or equipment. These offerings are designed to speed and streamline data center deployments for our customers. These offerings are typically billed based on the space and power a customer consumes in our IBX data centers, are delivered under a fixed duration contract and generate monthly recurring revenue ("MRR").
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•Private Cages are typically designed and built to order for a single customer, with space assigned based on purchased power allocations and planned cabinet quantity. A cage typically includes steel mesh walls with a locking door, interconnection provision such as a demarcation rack with patch panels, and cabling systems such as a ladder rack and fiber raceway. Available security accessories include dedicated cameras, biometric hand scanners and more.
•Secure Cabinets are steel-framed cabinets sized to industry standards and typically configured to order, with lockable, fully ventilated doors. Secure cabinets provide a private, secure, smaller-footprint alternative to a Private Cage. Each cabinet includes an integrated, interconnection-ready demarcation panel and power circuitry sufficient to support planned utilization requirements. Secure cabinets are typically housed in a shared, secured cage within the data center facility.
•Secure Cabinet Express are ready for service secure cabinets that are preconfigured to fit Equinix recommendations and most modern IT deployment requirements, providing a simplified and globally consistent colocation module for cabinet-sized deployments.
Equinix offers a variety of enabling solutions that support a customer's need to implement, operate and maintain its colocated deployments. These solutions include both on-consumption and subscription services that may generate MRR as well as non-recurring revenue ("NRR").
•Equinix Smart View® is a fully integrated monitoring software that provides customers visibility into the operating data relevant to their specific Equinix footprint as if they were in-house. The software provides online access to real-time environmental and operating data through the Equinix Customer Portal or via either REST (application programming interfaces ("APIs") that provide customers the ability to retrieve information about their assets from every IBX location) or streaming API integrations. With real-time alerts and configurable reporting, Equinix SmartView allows customers to maintain their IBX operations and plan for future growth.
•Equinix Smart Hands® provides around-the-clock, on-site operational support service for remote management, installation and troubleshooting of customer data center equipment. Using Equinix IBX data center technicians, Smart Hands allows customers to manage their data center operations from anywhere in the world.
•Equinix Smart Build ("ESB") provides customers with an easy way to accelerate and simplify world-class data center deployments with expert support. ESBs are repeatable, proven processes that address larger, more complex data center jobs, including installation and implementation of new builds and planned migrations. ESB practices deliver Equinix expertise in colocation design to optimize our customers’ data center needs, including structured cabling, labeling and documentation, procurement recommendations and coordination, and secure de-installation.
•Equinix Managed Solutions and Enablement Services offer flexible and easy-to-consume managed platforms for cloud, storage, backup and firewall, built on top of neutral, leading technology. Combined with simplified implementation of Equinix Fabric and Network Edge, these managed services leverage customer hybrid and multicloud experiences, allowing organizations to prioritize their core business functions.
Interconnection Offerings
Our interconnection solutions connect businesses directly, securely and dynamically within and between our data centers across our global platform. These solutions are typically billed based on the outbound connections from a customer and generate MRR.
•Equinix Fabric®provides secure, on-demand, software-defined interconnection. Built specifically for digital infrastructure, Equinix Fabric enables businesses to connect globally to their choice of thousands of networking, storage, compute and application service providers in the industry’s largest infrastructure ecosystem. As the foundation of Equinix’s interconnection capability, Equinix Fabric also enables customers to quickly and easily connect between the physical and virtual digital infrastructures they have deployed in Equinix data centers globally.
•Equinix Fabric Cloud Router makes it easy to connect applications and data across different clouds. With high-performance and secure private connections, protecting data from exposure to the public internet, these enterprise-grade connections offer virtually unlimited bandwidth and built-in resiliency. Fabric Cloud Router also reduces networking costs, lowers cloud egress charges and enables elastic bandwidth consumption so customers pay for only what they need.
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•Equinix Cross Connects provide a point-to-point cable link between two Equinix customers in the same data center. Cross connects deliver fast, convenient, affordable and highly reliable connectivity and data exchange with business partners and service providers within the Equinix ecosystem.
•Equinix Internet Exchange enables networks, content providers and large enterprises to exchange internet traffic through the largest global peering solution. Service providers can aggregate traffic to multiple counterparties, called peers, on one physical port and handle multiple small peers while moving high-traffic peers to private interconnections. This reduces latency for end users when accessing content and applications.
•Equinix Internet Access is an agile, scalable, resilient and high-performing managed internet access solution. Offering multiple upstream Tier 1 providers per metro and connections to all Equinix and major third-party internet exchanges, with over 300 private peering relationships, it delivers superior availability and performance. Internet Access serves as a one-stop shop for businesses, offering both physical and virtual connection options with Equinix Fabric and Network Edge to deliver primary and secondary internet access solutions. Available in 60+ markets, Internet Access allows scalable bandwidth to meet growing usage needs, empowering businesses to innovate in the digital age.
•Fiber Connect provides dark fiber links between customers and partners between multiple Equinix data centers. Fiber Connect enables fast, convenient and affordable integration with partners, customers and service providers across the global Equinix digital ecosystem. It supports highly reliable, extremely low-latency communication, system integration and data exchange.
•Metro Connect®provides direct, dedicated, carrier-grade network links between customers in one IBX and partners in another IBX within the same metro. Metro Connect provides integration with customers, partners and service providers within the Equinix digital ecosystem, supplying highly reliable, extremely low-latency communication, system integration and data exchange.
•Equinix Network Edge allows customers to modernize networks within minutes, by deploying network functions virtualization ("NFV") from multiple vendors across Equinix metros. Companies can select, deploy and connect virtual network solutions at the edge quickly, with no additional hardware requirements.
Competitive Landscape
While a large number of enterprises and service providers, such as hyperscale cloud service providers, own their own data centers, we believe enterprises are shifting away from single-tenant solutions toward those that enable customers to outsource some or all of their IT infrastructure and interconnection requirements to third-party facilities, such as those operated by Equinix. This shift is being accelerated by the proliferation of hybrid multi-cloud architectures and the adoption of 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 since evolved to include private and carrier-neutral multi-tenant data centers, public and private cloud providers, managed infrastructure and application hosting providers, large hyperscale cloud providers and systems integrators. As a result, the global MTDC market is large and remains highly fragmented—with significant long-term growth opportunities for providers that can bundle various colocation, interconnection and network offerings, outsourced IT infrastructure solutions and managed services.
Equinix has a highly differentiated offering in this large and growing market. Our global platform reaches 36 countries and connects the industry’s largest and most active ecosystem of partners across our sites, including access to a leading share of cloud on-ramps and an increasingly diverse ecosystem of networks and cloud and IT service providers. This ecosystem creates a network effect that improves performance and lowers the cost for our customers, enabling them to innovate and fast-track digital transformation. This is a significant source of competitive advantage for Equinix—particularly as AI and cloud innovations fuel workload demands for hyperscale infrastructure and optimization across enterprises. Our scalable, neutral, global platform offers one-of-a-kind solutions to the most pressing digital challenges customers face. Our platform enables customers to bring together physical and programmable technologies like compute, storage, network, AI and applications to build the foundation for their company's digital success.
Customers
Our customers include telecommunications carriers, mobile and other network services providers, cloud and IT services providers, digital media and content providers, financial services companies, and global enterprise
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ecosystems in various industries. We provide each company with access to a choice of business partners and solutions based on their colocation, interconnection and managed IT service needs, and we delivered 99.9999%+ operational uptime across our global data centers during the year ended December 31, 2025. As of December 31, 2025, we had over 10,500 customers worldwide. No one customer made up 10% or more of our total business revenues for the year ended December 31, 2025.
The following companies represent some of our leading customers and partners:
We serve our customers with a direct sales force and channel marketing program. We organize our sales force by customer type, as well as by establishing a sales presence in diverse geographic regions, which enables efficient servicing of the customer base from a network of regional offices. We also support our customers with a global customer care organization.
Human Capital
As of December 31, 2025, we had 13,716 employees worldwide with 5,917 based in the Americas, 4,706 based in EMEA and 3,093 based in Asia-Pacific. Of those employees, 44% of employees were in engineering and operations, 14% of employees were in sales and marketing and 42% of employees were in management, finance and administration. As of December 31, 2025, approximately 71% of our workforce identified as men, 28% identified as women and less than 1% declined to identify.
Equinix remains steadfast in its commitment to create a thriving workplace where we foster belonging for all— where every one of our colleagues is valued and respected for who they are and what they contribute. Our objective is to continue to make our culture a critical competitive advantage, engaging every leader and every employee in the process.
Our talent strategies focus on attracting, developing and retaining a diverse, global workforce; building leadership capability and accountability; and empowering employees to do the best work of their lives. We continue to leverage and expand our recruiting pathways to attract qualified talent from adjacent industries and reach emerging talent pools. In 2025, our internship and apprenticeship programs provided pathways for early-career talent to gain hands-on experience, mentorship, and development opportunities in both technical and professional settings, setting them up for success to thrive at Equinix. Also, through employee-led collaborations, Equinix is building long-term relationships with local schools to raise awareness of data center careers and provide ongoing opportunities for student engagement, learning and mentorship. Lastly, we continue to focus on leadership development by offering programs that feature external experts to speak on topics ranging from strategic alignment, team management, and industry relevant topics. We also evolved our performance management approach, increasing simplicity and clarity through consistent feedback between employees and their managers.
We believe in equal pay and equal opportunity for everyone. Equinix remains committed to ensuring we have consistent practices in place to recognize, reward and promote all employees, regardless of gender, ethnicity, sexual orientation, or other protected class. Equinix operates a rigorous governance framework to manage pay and other compensation elements to ensure that all reward decisions are fair and without discrimination or bias. All roles are mapped and graded to one consistent global organizational framework. Each grade has a specific pay range informed by benchmarking against the external market in the country in which the role is located. This global
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framework is also used to determine target levels for annual bonuses and long-term incentives. We strive to update annually our global market data where information is available.
We believe our employee engagement efforts differentiate Equinix's culture and accelerate our competitive advantage as they lead to more inclusive and high performing teams, higher employee satisfaction and overall organizational innovation and success. In 2025, employee satisfaction scores resulted in an average score of 78 for Equinix, followed by our average belonging score of 81 and average well-being score of 82. Our Equinix Employee Connection Networks ("EECNs") are a strategic cornerstone of our inclusive culture, fostering a sense of belonging that drives engagement and business impact. Open to all employees, our nine EECNs are designed to provide meaningful learning opportunities, raise awareness of diverse perspectives, and strengthen connections across the organization.
We recognize that creating the best workplace and culture requires a global effort with localized approaches. As of 2025, we have 44 global WeAreEquinix teams, led by employee volunteers, who are empowered to create and promote belonging in locations across the world. Through both virtual and in-person connection, and in collaboration with the business and their local communities, these volunteer leaders create opportunities to support Wellbeing, Sustainability, and Community engagement. Across our EECNs and WeAreEquinix teams, we currently have 800+ volunteer leaders who are working on strengthening community and belonging for our workforce.
The Equinix Foundation and Equinix Community Impact program promote connection and belonging by enabling employees to give back through volunteer services, donations and more, to the communities in which we work and live. In 2025, our employees volunteered over 54,400 hours, representing an increase of approximately 45% year-over-year. Since the launch of the Equinix Foundation in 2022, we have continued to focus on the advancement of digital inclusion—from access to technology and connectivity to the skills needed to thrive in today's digitally-driven world.
We believe our commitment to the highest standards of honesty, integrity and ethical behavior differentiates our business as much as our technology. We promote these high standards through a number of policies including the Equinix Code of Business Conduct. All employees are required to complete training in ethics and the company’s anti-bribery and corruption policies. In addition, we maintain a confidential ethics helpline where employees are encouraged to speak up if they have any questions or concerns that our Code of Business Conduct is being violated. We have a zero-tolerance, non-retaliation policy that protects our employees when they speak up.
Our comprehensive approach to health and safety combines global policies, rigorous inspections and targeted training to foster a safe and supportive work environment. This approach upholds our commitment to employee well-being across all our operations and limits service disruptions, ensuring we meet customer needs. Well-being is weaved into our employee experience and benefit offerings, driven globally through health programs, ergonomic support, technology reimbursements, and a company-wide wellness day.
Our investment in furthering our human capital efforts aligns with our business strategy and enables Equinix's impact and success. We are committed to creating a workplace that allows individuals to contribute their unique strengths, share their varied perspectives, and grow their skills leading to meaningful and fulfilling careers.
Sustainability
We believe in a future where technology drives sustainable growth and transformative social impact. Our Future First strategy is our commitment to sustainability as we deliver digital infrastructure that fosters positive change through secure, efficient and responsible solutions—bringing the world together to create innovations that will enrich our work, life and planet. We bring this vision to life by growing our digital infrastructure sustainably through our commitment to minimize environmental impact while enabling our customers to leverage the full potential of the digital economy. In addition, we drive social progress by championing belonging for all, fostering a people-centered culture and working to close the digital divide in the communities where we build, work and live. At the core of it all, we lead with integrity by building our business on a foundation of ethical conduct for accessible, resilient and responsibly managed digital infrastructure.
We continue to progress on our sustainability strategy and look to build a business and world that reflects our vision to enable innovations that enrich our work, life and planet. Our sustainability program earned notable recognition in 2025, including achieving the EcoVadis Gold Medal for the first time. EcoVadis provides trusted, independent evaluations of company sustainability performance, and is frequently requested by our customers.
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Environmental Performance
Climate change presents systemic risks to the global economy, infrastructure, and supply chains, making it critical to our long-term business resilience. Reducing greenhouse gas emissions helps us manage regulatory exposure, energy price volatility and climate related disruptions, while also enabling us to meet rising customer expectations, access sustainable capital and drive operational efficiency across our global portfolio. Equinix began its sustainability journey prior to 2014. We were the first in the industry to set approved near-term science-based targets ("SBTs") for our emissions reduction roadmap. In 2024, our 2040 long-term science-based target was approved by the Science Based Targets initiative ("SBTi").
We track our progress towards our goals by measuring and reporting our global Greenhouse Gas ("GHG") footprint across direct ("Scope 1"), indirect energy ("Scope 2") and indirect value chain ("Scope 3") emissions. As of 2024, we have achieved a 10% absolute reduction in operational GHG emissions from a 2019 baseline year (Scope 1 and Scope 2 market-based metric tons of carbon dioxide-equivalent ("mtCO2e")), despite significant business growth. To identify and assess climate-related physical and transition risks, we conduct climate risk assessments and disclose key findings through our Task Force on Climate-related Financial Disclosures ("TCFD")-aligned Climate Risk report. In 2025, we strengthened our climate risk assessment by introducing a quantitative model and expanding the scope of risks analyzed. This approach provides deeper, data-driven insights into both physical and transition risks, helping us better understand their relevance to Equinix and prioritize actions that enhance business resilience. These efforts help inform strategic planning, enhance risk management, and provide insights into how climate change may impact our operations and long-term financial performance.
We invest in energy efficiency and procure renewable energy to reduce our GHG emissions and maintain a competitive edge in our industry. Our operational efficiency is measured through power usage effectiveness ("PUE"), our primary performance indicator. In 2024, we achieved an annual average operational PUE of 1.39, a 6% improvement from 2023, despite an expanded portfolio. In parallel, we continue to expand renewable energy coverage across our portfolio.
Equinix was the first data center company to set a goal of 100% clean and renewable energy coverage across our portfolio. In 2024, 96% of our global electricity consumption, and 100% of U.S. and European electricity consumption, was covered by renewable energy sources. We procure Energy Attributable Certificates ("EACs") through various mechanisms, favoring Power Purchase Agreements ("PPAs") that add new clean energy to the grid. As of December 31, 2025, we have executed 29 PPAs in 12 countries, which brings our total portfolio to 1,472 MW of new wind and solar capacity in Australia, Brazil, Finland, France, India, Italy, Japan, Portugal, Singapore, Spain, Sweden, and the United States.
Our green finance program exemplifies our commitment to sustainability, enabling targeted investments in infrastructure and innovation that deliver measurable environmental benefits while generating resilient value for our stakeholders. In 2024, we updated our Green Finance Framework to broaden our focus, incorporating projects that advance decarbonization, resource efficiency and climate resilience, while also tightening eligibility criteria with more rigorous qualification requirements. These investments, ranging from renewable energy procurement to low- carbon construction materials, help us reduce emissions, conserve resources, and reduce our environmental impact. As of December 31, 2025, Equinix has issued a total of approximately $9.5 billion in green bonds, with $7 billion in net proceeds allocated to eligible green projects.
Customer Impact
As part of our commitment to better serve our customers, Equinix provides customers with Green Power Reports ("GPRs") that detail customer’s electricity consumption, renewable energy coverage and carbon footprint related to their Equinix deployments. In 2025, to enhance accessibility and ease of use, we launched a self-service tool that allows customers to directly download their GPRs. We also introduced Customer Water Reports ("CWRs") that provide allocated water withdrawal and Water Usage Effectiveness ("WUE") metrics for every Equinix site that uses water for cooling.
Sustainability Accounting Standards Board ("SASB") Disclosures
The following metrics are aligned with SASB Real Estate Standard version 2023-06 and represent the performance of our facilities in the calendar years specified. Energy, renewable energy, and GHG emissions are independently assured to ISO 14064-3:2019 Standards for the quantification and reporting of GHG emissions
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(Scope 1, 2 and 3). Calendar year data for 2025 will become available in Q2 2026 and will be published in our annual Sustainability Report located on our corporate website.
Energy Management: Energy Consumption
(1)The scope of energy includes energy used onsite and energy procured.
(2)Like-for-like computed for stabilized asset list for the overlapping list of sites designated as stabilized in 2023 and 2024.
(3)Equinix procures renewable energy to cover for the entire electricity consumption of sites.
(4)Recently constructed or acquired sites for which no utility data is available are excluded. These include BG2, DC16, FR13, IL4, JH1, JN1, KL1, MB4, MD6, NY3, SL4 and TY15. Reseller sites are also excluded in both the gross floor area and the energy metrics (DA99, OS99, SH1).
(5)2023 portfolio coverage excludes xScale sites: DB6x, FR9x, OS4x, SL2x, SV12x.
(6)Recently constructed or acquired sites for which no utility data is available are excluded. These include JN1, MB4 and SA1. Reseller sites are also excluded in both the gross floor area and the energy metrics (DA99, OS99, SH1).
(7)2024 portfolio coverage excludes xScale sites: FR9x.
Energy Management: Green Building Ratings
Our data centers are designed with high operational excellence standards and energy efficiency in mind and are planned holistically to incorporate the needs of our customers and communities, while minimizing the use of natural resources in our operations.
Our Energy Efficiency Center of Excellence is driving a global approach to improving operational efficiency across our global portfolio from lighting and airflow management to efficient cooling innovations. The program also engages customers to manage their implementations more sustainably at our facilities, leading to overall improved site efficiencies.
We aim to have our data centers certified to green buildings and energy management certifications and schemes. These include USGBC LEED green buildings certifications, ISO 14001:2015 Environmental Management Standard, ISO 50001:2011 Energy Management Standard, BCA Green Mark, U.S. EPA Energy Star for Data Centers and others. Data centers receiving green building ratings in 2025 covered 1,278,460 gross sq. ft across Barcelona, Dublin, Istanbul, Johor Bahru, London, Silicon Valley, Tokyo, and Washington, D.C.
In 2025, we had 32.4 million gross sq. ft., or 98.7% of our global footprint, in operation with green buildings and energy management certifications. Within the U.S., we had 10.8 million gross sq. ft., or 100% of our footprint, under certification, including 1.8 million gross sq. ft., or 16.6% of U.S. footprint, having achieved U.S. EPA Energy Star for Data Centers. We disclose these and other site-level details about our data centers on our sustainability website.
(1)Ratings included in our totals: ISO 50001 Energy Management, ISO 14001 Environmental Management, LEED green buildings certifications, U.S. Environmental Protection Agency Energy Star for Data Centers, BCA Green Mark, NABERS and Green Globes.
(2)As of December 2025, ten sites received Energy Star for Data Centers recognition, representing 16.6% of our U.S. portfolio. In contrast, our U.S. portfolio has 24 LEED-certified data centers or 48.2% of the U.S. portfolio by gross square footage.
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Our Business Segment Financial Information
We currently operate in three reportable segments comprised of our Americas, EMEA and Asia-Pacific geographic regions. Information attributable to each of our reportable segments is set forth in Note 18 within the Consolidated Financial Statements.
Available Information
Equinix owns and maintains intellectual property in the form of trademarks, patents, application programming interfaces, customer portals and a variety of products and other offerings.
We were incorporated in Delaware in June 1998. We are required to file reports under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission ("SEC"). The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements and other information.
You may also obtain copies of our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, including exhibits, and any amendments to such reports, free of charge by visiting the Investor Relations page on our website, www.equinix.com. These reports are available as soon as reasonably practical after we file them with the SEC. Information contained on or accessible through our website is not part of this Annual Report on Form 10-K.
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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 tensions contribute to an already complex landscape, and could have a negative effect on our global business operations.
Geopolitical events, including trade tensions between the U.S. and other countries, the war between Russia and Ukraine, and ongoing conflicts in the Middle East, could negatively affect our global operations, and their future impact remains unpredictable. In addition, uncertainty surrounding the legality, enforceability, and interpretation of U.S. and international laws, executive actions, regulatory frameworks, and enforcement priorities could result in compliance challenges, significant penalties, operational restrictions, reputational harm, or adverse effects on our business and results of operations. Periodic risks of a U.S. government shutdown could further disrupt economic conditions. Moreover, actual or proposed U.S. tariffs and potential counter tariffs may increase costs and disrupt our supply chain, with their scope and duration dependent on evolving negotiations and exemptions, making their impact difficult to predict. Our inability to effectively manage these developments could have a material adverse effect on our business, financial condition, results of operations, and the price of our common stock.
The current uncertain economic environment, including challenges related to power and supply chains, could impact our business and the businesses of our customers.
We are 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. Further, as a result of the increase in demand for AI infrastructure, we are anticipating chip shortages relative to those experienced in the market in prior years. This shortage could impact our customers and delay or deter customer server deployments within our IBX data centers. These shortages could also impact our own network rooms and certain products which rely on integration with these chips. Price increases for the chips could be significant and could have a material impact on our business or the business of our customers. The adverse economic conditions we are currently experiencing, including the impact of increased tariffs and inflation, may also impact our customers and 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.
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.
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
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center and may limit our ability to grow our business which could negatively affect our financial performance and results of operations. Furthermore, the inability to supply customers with their contracted power for any reason could harm customer and/or joint venture relationships as well as cause reputational harm.
Each new facility requires access to significant quantities of electricity. Limitations on generation, transmission and distribution may limit our ability to obtain sufficient power capacity for potential expansion sites in new or existing markets. Utility companies and other third-party power providers may impose onerous operating conditions to any agreement to provision power or we may experience significant delays, unfavorable contractual terms, new industry regulations and substantial increased costs to obtain the level of electrical service required by our current or future IBX data center designs. In certain cases, we must commit to power purchases before an IBX center is fully operational, increasing fixed costs and the risk that these costs cannot be passed on to customers. Our ability to find reliable partners and appropriate sites for expansion may also be limited by access to power, especially as we design our data centers to the specifications of new and evolving technologies, such as AI, which are more power-intensive, and further prepare to serve the power demands we expect in the future.
Our IBX data centers are affected by problems accessing electricity sources, such as planned or unplanned power outages and limitations on transmission or distribution of power. Unplanned power outages, including, but not limited to those relating to large storms, earthquakes, fires, tsunamis, cyber-attacks, physical attacks on utility infrastructure, war, and any failures of electrical power grids or internal systems more generally, and planned power outages by public utilities, could harm our customers and our business. Employees working from home could be subjected to power outages at home which could be difficult to track and could affect the day-to-day operations of our non-IBX data center employees. Our international operations are sometimes located outside of developed, reliable electricity markets, where we are exposed to some insecurity in supply associated with technical, regulatory and reliability problems, as well as transmission constraints. Some of our IBX data centers are located in leased buildings where, depending upon the lease requirements and number of tenants involved, we may or may not control some or all of the infrastructure including generators and fuel tanks. As a result, in the event of a power outage, we could be dependent upon the landlord, as well as the utility company, to restore the power. We attempt to limit our exposure to system downtime by using backup generators, which are in turn supported by onsite fuel storage and through contracts with fuel suppliers, but these measures may not always prevent downtime or solve for long-term or large-scale outages. We have experienced outages in the past for various reasons and could experience outages in the future. Any outage or supply disruption could adversely affect our business, customer experience and revenues.
We are currently experiencing inflation and volatility pressures in the energy market globally. Various macroeconomic factors are contributing to the instability and global power shortage including inadequate power generation and transmission to meet market demand in certain locations, severe weather events, governmental regulations, government relations and inflation. While we have aimed to minimize our risk, via hedging, conservation, and other efficiencies, we expect the cost for power to continue to be volatile and unpredictable and subject to inflationary pressures. We believe we have made appropriate estimates for these costs in our forecasting, but the current unpredictable energy market could materially affect our ability to expand our business, our financial forecasting, results of operations and financial condition.
Risks Related to our Operations
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.
Our business depends on providing customers with highly reliable solutions. We must safeguard our customers' infrastructure and equipment located in our IBX data centers and ensure our IBX data centers and non-IBX business operations remain operational at all times. We own certain of our IBX data centers, but others are leased by us, and we rely on the landlord for basic maintenance of our leased IBX data centers and office buildings and, in some cases, the landlord is responsible for the infrastructure that runs the building such as power connections, UPSs and backup power generators. If such landlord has not maintained a leased property sufficiently, we may be forced into an early exit from the center which could be disruptive to our business. Furthermore, we continue to acquire IBX data centers not built by us and we may be required to incur substantial additional costs to repair or upgrade the IBX data centers. Newly acquired data centers also may not have the same power infrastructure and design in place as our own IBX data centers. These legacy designs could require upgrades in order to meet our standards and our customers’ expectations. Until the legacy systems are brought up to our standards, customers in
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these IBX data centers could be exposed to higher risks of unexpected power outages. We have experienced power outages because of these legacy design issues in the past and we could experience them in the future.
Problems at one or more of our IBX data centers or corporate offices, whether or not within our control, could result in service interruptions or significant infrastructure or equipment damage. These could result from numerous factors, including but not limited to:
•human error;
•equipment failure;
•physical, electronic and cybersecurity breaches;
•fire, earthquake, hurricane, flood, tornado and other natural disasters;
•extreme temperatures;
•water damage;
•fiber failures, subsea cable damage and other network damage/interruptions;
•software updates;
•power loss;
•terrorist acts;
•sabotage and vandalism;
•insider threat;
•global pandemics;
•inability of our operations employees to access our IBX data centers for any reason; and
•failure of business partners who provide our resale products.
We have service level commitment obligations to most customers. As a result, service interruptions or significant equipment damage in our IBX data centers could result in difficulty maintaining service level commitments to these customers and potential claims related to such failures. Because our IBX data centers are critical to many of our customers' businesses, service interruptions or significant equipment damage in our IBX data centers could also result in lost profits or other indirect or consequential damages to our customers. We cannot guarantee that a court would enforce any contractual limitations on our liability in the event that one of our customers brings a lawsuit against us as a result of a problem at one of our IBX data centers and we have in the past and may decide in the future to reach settlements with affected customers irrespective of any such contractual limitations. Any such settlement may result in a reduction of revenue under U.S. generally accepted accounting principles ("GAAP"). In addition, any loss of service, equipment damage or inability to meet our service level commitment obligations could reduce the confidence of our customers and could consequently impair our ability to obtain and retain customers, which would adversely affect both our ability to generate revenues and our results of operations.
Furthermore, we are dependent upon internet service providers, telecommunications carriers and other website operators in the Americas, Asia-Pacific and EMEA regions and elsewhere, some of which have experienced significant system failures and electrical outages in the past. We also rely on a number of third-party software providers in order to deliver our offerings and operate our business. Our customers may in the future experience difficulties due to system failures unrelated to our systems and offerings. If, for any reason, these suppliers fail to provide the required services, our business, financial condition and results of operations could be materially and adversely impacted.
Our IBX data center employees are critical to our ability to maintain our business operations and reach our service level commitments. Although we have redundancies built into our workforce, if our IBX employees are unable to access our IBX data centers for any reason, we could experience operational issues at the affected site. Pandemics, weather and climate related crises or any other social, political, or economic disruption in the U.S. or abroad could prevent sufficient staffing at our IBX data centers, or at our corporate offices, and have a material adverse impact on our operations.
We experienced cybersecurity incidents 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.
Despite our efforts to protect against cyber-attacks, we are not fully insulated from such threats. We have experienced cybersecurity attacks and security incidents to varying degrees, and in some cases threat actors have gained unauthorized access to our systems and data. While previous incidents have been resolved, and their impacts have been immaterial, we expect we will continue to face risks associated with unauthorized access to our
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computer systems, loss or destruction of data, computer viruses, ransomware, malware, distributed denial-of-service attacks or other malicious activities, and the impact of such events in the future may be material. A cyber attack may originate from either an external actor or an insider threat within the organization. In the course of our business, we utilize vendors and other partners who are also sources of cyber risks to us. In addition, our hybrid working model, that includes both work from home and in office working environments, could expose us to additional security risks.
We offer professional solutions to our customers where we consult on data center solutions and assist with implementations. We also offer managed services in certain locations where we manage the data center infrastructure for our customers. The access to our clients' networks and data, which is gained from these solutions, creates some risk that our clients' networks or data could be improperly accessed. We may also design our clients' cloud storage systems in such a way that exposes our clients to increased risk of data breach. If we were held responsible for any such breach, it could result in a significant loss to us, including damage to our client relationships, harm to our brand and reputation, and legal liability.
As techniques used to breach security change frequently and are generally not recognized until launched against a target, we may not be able to promptly detect that a cyber breach has occurred, or implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented. Recent developments in the cyber threat landscape include use of AI and machine learning, as well as an increased number of cyber extortion and ransomware attacks, with the potential for higher financial ransom demand amounts and increasing sophistication and variety of ransomware techniques and methodology. Further, any adoption of AI by us or by third parties may pose new security challenges. A party who is able to compromise the security measures on our networks or the security of our infrastructure could misappropriate the proprietary or sensitive information of Equinix, our customers, including government customers, or the personal information of our employees, or cause interruptions or malfunctions in our operations or our customers' operations. As we provide assurances to our customers that we provide a high level of security, such a compromise could be particularly harmful to our brand and reputation. We also may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused by cyber breaches in our physical or virtual security systems. Any breaches that may occur in the future could expose us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, damage relating to loss of proprietary information, harm to our reputation and increases in our security costs, which could have a material adverse effect on our financial performance and results of operations. The international cybersecurity regulatory landscape continues to evolve and compliance with the proposed reporting requirements could further complicate our ability to resolve cyber-attacks. We maintain insurance coverage for cyber risks, but such coverage may be unavailable or insufficient to cover our losses.
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.
We have been investing heavily in our back-office information technology systems and processes for a number of years and expect such investment to continue for the foreseeable future in support of our pursuit of global, scalable solutions across all geographies and functions that we operate in. These continuing investments include ongoing improvements to the customer experience from initial quote to customer billing and our revenue recognition process; integration of recently acquired operations onto our various information technology systems; and implementation of new tools and technologies to either further streamline and automate processes, or to support our compliance with evolving U.S. GAAP and international accounting standards. As a result of our continued work on these projects, we may experience difficulties with our systems, management distraction and significant business disruptions. For example, difficulties with our systems may interrupt our ability to accept and deliver customer orders and may adversely impact our overall financial operations, including our accounts payable, accounts receivables, general ledger, fixed assets, revenue recognition, close processes, internal financial controls and our ability to otherwise run and track our business. We may need to expend significant attention, time and resources to correct problems or find alternative sources for performing these functions. Changes to our financial systems also create an increased risk of deficiencies in our internal controls over financial reporting until such systems are stabilized. Such significant investments in our back-office systems may take longer to complete and cost more than originally planned. In addition, we may not realize the full benefits we hoped to achieve and there is a risk of an impairment charge if we decide that portions of these projects will not ultimately benefit us or are de-scoped. Finally, the collective impact of these changes to our business has placed significant demands on impacted employees across multiple functions, increasing the risk of errors and control deficiencies in our financial statements, distraction from
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the effective operation of our business and difficulty in attracting and retaining employees. Any such difficulties or disruptions may adversely affect our business, our culture and our results of operations.
The level of insurance coverage that we purchase may prove to be inadequate.
We carry liability, property, business interruption and other insurance policies to cover insurable risks to our company. We select the types of insurance, the limits and the deductibles based on our specific risk profile, the cost of the insurance coverage versus its perceived benefit and general industry standards. Our insurance policies contain industry standard exclusions for events such as war and nuclear reaction. We purchase earthquake insurance for certain of our IBX data centers, but for our IBX data centers in high-risk zones, including those in California and Japan, we have elected to self-insure. The earthquake and flood insurance that we do purchase would be subject to high deductibles. Any of the limits of insurance that we purchase, including those for flood or cyber risks, could prove to be inadequate, which could materially and adversely impact our business, financial condition and results of operations.
If we are unable to recruit or retain key qualified personnel, our business could be harmed.
In December 2025, we announced the retirement of and succession plan for our Chief Financial Officer. Any significant leadership change involves risk, and any failure to transition effectively could hinder our strategic planning, business execution and future performance. A transition in our Chief Financial Officer role may create uncertainty and operational challenges, including disruption to employee workflows, increased distraction, potential adverse impacts on employee retention and satisfaction, and an increased risk of delays or errors in financial reporting and internal controls during the transition period. Any such impacts could impair our ability to execute our financial strategy effectively and could adversely affect our results of operations and financial condition. Our future performance depends on the continued success of our executive team and our ability to attract and retain skilled employees, including management. In addition, our talent strategy could continue to evolve with the future direction of the business. We must continue to identify, hire, train and retain key personnel who maintain relationships with our customers and who can provide the technical, strategic and marketing skills required for our company's growth. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of talent. We cannot provide assurance that we will be able to retain our existing personnel or attract additional qualified employees in the future. The failure to recruit and retain necessary key personnel could cause disruption, harm our business and hamper our ability to grow our company.
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.
While we own certain of our IBX data centers, others are leased under long-term arrangements. These leased IBX data centers have all been subject to significant development by us in order to convert them from, in most cases, vacant buildings or warehouses into IBX data centers. Most of our IBX data center leases have renewal options available to us. However, many of these renewal options provide for the rent to be set at then-prevailing market rates. To the extent that then-prevailing market rates or negotiated rates are higher than present rates, these higher costs may adversely impact our business and results of operations, or we may decide against renewing the lease. There may also be changes in shared operating costs in connection with our leases, which are commonly referred to as common area maintenance expenses. In the event that an IBX data center lease does not have a renewal option, or we fail to exercise a renewal option in a timely fashion and lose our right to renew the lease, we may not be successful in negotiating a renewal of the lease with the landlord. Further, for various reasons, a landlord may not want to renew the lease with us, or he may transfer his interests to third parties which could affect our ability to renew the lease. A failure to renew a lease or termination by a landlord of any lease could force us to exit a building prematurely, which could disrupt our business, harm our customer relationships, impact and harm our joint venture relationships, expose us to liability under our customer contracts or joint venture agreements, cause us to take impairment charges and affect our results of operations negatively.
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.
The presence of diverse telecommunications carriers' fiber networks in our IBX data centers is critical to our ability to retain and attract new customers. We are not a telecommunications carrier, and as such, we rely on third parties to provide our customers with carrier services. We believe that the availability of carrier capacity will directly affect our ability to achieve our projected results. We rely primarily on revenue opportunities from the
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telecommunications carriers' customers to encourage them to invest the capital and operating resources required to connect from their data centers to our IBX data centers. Carriers will likely evaluate the revenue opportunity of an IBX data center based on the assumption that the environment will be highly competitive. We cannot provide assurance that each and every carrier will elect to offer its services within our IBX data centers or that once a carrier has decided to provide internet connectivity to our IBX data centers that it will continue to do so for any period of time.
Our new IBX data centers require construction and operation of a sophisticated redundant fiber network. The construction required to connect multiple carrier facilities to our IBX data centers is complex and involves factors outside of our control, including regulatory processes and the availability of construction resources.
Any hardware or fiber failures on these networks, either on land or subsea, may result in significant loss of connectivity to our new IBX data center expansions. This could affect our ability to attract new customers to these IBX data centers or retain existing customers.
To date, the network neutrality of our IBX data centers and the variety of networks available to our customers has often been a competitive advantage for us. In certain of our markets, the limited number of carriers available reduces that advantage. As a result, we may need to adapt our key revenue-generating offerings and pricing to be competitive in those markets.
If the establishment of highly diverse internet connectivity to our IBX data centers does not occur, is materially delayed, disrupted or is discontinued, or is subject to failure, our results of operations and financial condition will be adversely affected.
The use of high-power density equipment may limit our ability to fully utilize the space in our older IBX data centers.
Server technologies continue to evolve and in some instances these changes can result in customers increasing their use of high-power density equipment in our IBX data centers which can increase the demand for power on a per cabinet basis. Additionally, the workloads related to new and evolving technologies such as AI are increasing the demand for high density computing power. Because many of our IBX data centers were built a number of years ago, the current demand for power may exceed the designed electrical capacity in these IBX data centers. As power, not space, is a limiting factor in many of our IBX data centers, our ability to fully utilize the space in those IBX data centers may be impacted. The ability to increase the power capacity of an IBX data center, should we decide to, is dependent on several factors including, but not limited to, the local utility's ability to provide additional power; the length of time required to provide such power; and/or whether it is feasible to upgrade the electrical and mechanical infrastructure of an IBX data center to deliver additional power and cooling to customers. Although we are currently designing and building to a higher power specification than that of many of our older IBX data centers, and are considering redevelopment of certain sites where appropriate, there is a risk that demand could continue to increase, or our redevelopment may not be successful, and the space inside our IBX data centers could become underutilized sooner than expected.
The development and use of artificial intelligence in the workplace presents risks and challenges that may adversely impact our business and operating results.
We have begun leveraging AI and machine learning capabilities for our employees to use in their day-to-day operations. Failure to invest adequately in such capabilities may result in us lagging behind our competitors in terms of improving operational efficiency and achieving superior outcomes for our business and our customers. As we embark on these initiatives, we may encounter challenges such as a shortage of appropriate data to train internal AI models, a lack of skilled talent to effectively execute our strategy of leveraging AI internally, or the possibility that the tools we utilize may not deliver the intended value. Use of third-party AI tools can also bring information security, data privacy and legal risks. Failure to successfully harness these AI tools and manage associated risks could negatively impact our business and operating results.
Risks Related to our Offerings and Customers
Our offerings have a long sales cycle that may harm our revenue and results of operations.
A customer's decision to purchase our offerings typically involves a significant commitment of resources. In addition, some customers will be reluctant to commit to locating in our IBX data centers until they are confident that
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the IBX data center has adequate carrier connections. As a result, we have a long sales cycle. Furthermore, we may devote significant time and resources to pursuing a particular sale or customer that does not result in revenues.
Delays due to the length of our sales cycle may materially and adversely affect our revenues and results of operations, which could harm our ability to meet our forecasts and cause volatility in our stock price.
We may not be able to compete successfully against current and future competitors.
The global multi-tenant data center market is highly fragmented. It is estimated that we are one of more than 2,400 companies that provide these offerings around the world. We compete with these firms which vary in terms of their data center offerings and the geographies in which they operate. We must continue to evolve our product strategy and be able to differentiate our IBX data centers and product offerings from those of our competitors.
Some of our competitors may adopt aggressive pricing policies, especially if they are not highly leveraged or have lower return thresholds than we do. As a result, we may suffer from pricing pressure that would adversely affect our ability to generate revenues. Some of these competitors may also provide our target customers with additional benefits, including bundled communication services or cloud services, and may do so in a manner that is more attractive to our potential customers than obtaining space in our IBX data centers. Similarly, with growing acceptance of cloud-based technologies, we are at risk of losing customers that may decide to fully leverage cloud infrastructure offerings instead of managing their own. Competitors could also operate more successfully or form alliances to acquire significant market share. Regional competitors may also consolidate to become a global competitor. Consolidation of our customers and/or our competitors may present a risk to our business model and have a negative impact on our revenues.
Further, because of the expected growth and opportunity related to AI, we anticipate significant investments in the data center industry by both current competitors and new investors and companies looking to capture this opportunity. If Equinix is unable to compete against these new market entrants, or capture a proportionate share of these investments, we could lose market share during this expected period of growth. We also must compete against certain of these competitors to secure the land and power needed for our expansion plans.
Failure to compete successfully may materially adversely affect our financial condition, cash flows and results of operations.
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.
As our customers evolve their IT strategies, we must remain flexible and evolve along with new technologies and industry and market shifts. The process of developing and acquiring new offerings and enhancing existing offerings is complex. If we fail to anticipate customers’ evolving needs and expectations or do not adapt to technological and IT trends, our results of operations could suffer. Ineffective planning and execution in our cloud, AI and product development strategies may cause difficulty in sustaining our competitive advantages. Additionally, any delay in the development, acquisition, marketing or launch of a new offering could result in customer dissatisfaction or attrition. If we cannot continue adapting our products and strategies, or if our competitors can adapt their products more quickly than us, our business could be harmed.
In order to adapt effectively, we sometimes must make long-term investments and commit significant resources before knowing whether our predictions will accurately reflect customer demand for the new offerings. This kind of investment may include real estate expansion or developing, acquiring and obtaining power and intellectual property investments. If we fail to invest before or contemporaneously with our competitors, our results of operations could suffer. We also must remain flexible and change strategies quickly if our predictions are not accurate. We are currently investing in our AI strategy to serve the large footprint we foresee for customers’ AI workloads. The future of AI is still uncertain and as it continues to evolve, our predictions about the market may prove inaccurate. Market news and speculation about the future of AI and/or its impact on the data center industry have caused volatility in our stock price in the past. We cannot guarantee our investments and predictions will be accurate around AI or any other customer demand.
We have also been making investments of resources in expanding our product portfolio in recent years. New offerings may come with additional risks and may not always be successful, and certain past offerings have been or are being discontinued, including the Equinix Metal product. New offerings may also require additional capital, have lower margins and higher customer churn as compared to our data center offerings, thus adversely impacting our
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results. These offerings may also introduce us to different competition and faster development cycles as compared to our data center business. If we cannot develop or partner to quickly and efficiently meet market demands, we may also see adverse results. While we believe these product offerings and others we may implement in the future will be desirable to our customers and will complement our other offerings, we cannot guarantee the success of any product or any other new product offering.
We have also invested in joint ventures in order to develop capacity to serve the large footprint needs of a targeted set of hyperscale customers by leveraging existing capacity and dedicated hyperscale builds. We believe these hyperscale customers will also play a large role in the growth of the market for AI. We have announced our intention to seek additional joint ventures for certain of our hyperscale builds. There can be no assurances that our joint ventures will be successful or that we find appropriate partners, or that we will be able to successfully meet the needs of these customers through our hyperscale offerings.
Failure to successfully execute on our product, AI or hyperscale strategies could materially adversely affect our financial condition, cash flows and results of operations.
We have government contracts, which subject 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.
We derive revenues from contracts with the U.S. government, state and local governments and foreign governments. Some of these customers may terminate all or part of their contracts at any time, without cause. There is increased pressure for governments and their agencies, both domestically and internationally, to reduce spending. Some of our federal government contracts are subject to the approval of appropriations being made by the U.S. Congress to fund the expenditures under these contracts. Similarly, some of our contracts at the state and local levels are subject to government funding authorizations.
Government contracts often have unique terms and conditions to address public sector acquisition requirements, such as most favored customer obligations, and are generally subject to audits and investigations. On occasion, we have been out of compliance with contractual terms of certain government contracts and have remedied as necessary. Being out of compliance with the terms of such contracts could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions, or debarment from future government business.
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.
Our ability to maximize revenues depends on our ability to develop and grow a balanced customer base, consisting of a variety of companies, including enterprises, cloud, digital content and financial companies, and network service providers. We consider certain of these customers to be key magnets in that they draw in other customers. In many instances, the more balanced the customer base within each IBX data center, the better we will be able to generate significant interconnection revenues, which in turn increases our overall revenues. Our ability to attract customers to our IBX data centers will depend on a variety of factors, including the presence of multiple carriers, the mix of our offerings, the overall mix of customers, the presence of key customers attracting business through vertical market ecosystems, the IBX data center's operating reliability and security and our ability to effectively market our offerings. However, some of our customers may face competitive pressures and may ultimately not be successful or may be consolidated through merger or acquisition. If these customers do not continue to use our IBX data centers it may be disruptive to our business. If customers combine businesses, they may require less colocation space, which could lead to churn in our customer base. Finally, any uncertain global economic climate, including the one we are currently experiencing, could harm our ability to attract and retain customers if customers slow spending, or delay decision-making on our offerings, or if customers begin to have difficulty paying us or seek bankruptcy protection and we experience increased churn in our customer base. Any of these factors may hinder the development, growth and retention of a balanced customer base and adversely affect our business, financial condition and results of operations.
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Risks Related to our Financial Results and Stock Price
The market price of our stock may continue to be highly volatile, and the value of an investment in our common stock may decline.
The market price of the shares of our common stock has recently been and may continue to be highly volatile. General economic and market conditions, like the ones we are currently experiencing, and market conditions for technology, data center and REIT stocks in general, may affect the market price of our common stock.
Announcements by us or others, or speculations about our future plans, may also have a significant impact on the market price of our common stock. These may relate to:
•our results of operations or forecasts;
•new issuances of equity, debt or convertible debt by us, including issuances through any existing ATM Program;
•increases in market interest rates and changes in other general market and economic conditions, including inflationary concerns;
•changes to our capital allocation, tax planning or business strategy;
•our qualification for taxation as a REIT and our declaration of distributions to our stockholders;
•changes in U.S. or foreign tax laws;
•changes in management or key personnel;
•developments in our relationships with customers;
•announcements by our customers or competitors;
•changes in the perceived demand for goods and services supporting AI;
•changes in regulatory policy or interpretation;
•market speculation involving us or other companies in our industry, which may include short seller reports;
•litigation and governmental investigations;
•changes in the ratings of our debt or stock by rating agencies or securities analysts;
•our purchase or development of real estate and/or additional IBX data centers;
•our acquisitions of complementary businesses; or
•the operational performance of our IBX data centers.
The stock market has from time-to-time experienced extreme price and volume fluctuations, which have particularly affected the market prices for technology, data center and REIT stocks, and which have often been unrelated to their operating performance. These broad market fluctuations may adversely affect the market price of our common stock. One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution rate as a percentage of our stock price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets may affect the market value of our common stock. Furthermore, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We have been the target of this type of litigation and we may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and/or damages, and divert management's attention from other business concerns, which could seriously harm our business.
Furthermore, short sellers may engage in activity intended to drive down the market price of our common stock, which could also result in related regulatory and governmental scrutiny, among other effects. Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of later buying lower priced identical securities to return to the lender. Accordingly, it is in the interest of a short seller of our common stock for the price to decline. At any time, short sellers may also publish, or arrange for the publication of, opinions or characterizations that are intended to create negative market momentum in our common stock. Short selling reports can cause downward pressure and increased volatility in an issuer’s stock price. On March 20, 2024, a short seller report was published about us, which contained certain allegations related to components of our operating results and other strategic matters. As a result, the Audit Committee of our Board of Directors commenced an independent investigation to review the matters referenced in the report. Shortly after the release of the report, we received a subpoena from the U.S. Attorney’s Office for the Northern District of California (the "NDCA") and on April 30, 2024, we also received a subpoena from the SEC. On November 19, 2025, we received correspondence from the SEC indicating that the agency had concluded its investigation and does not intend to recommend an enforcement action. The Company also does not expect any further related action from the NDCA. Although these investigations are resolved, any future subpoenas, inquiries or investigations conducted by a
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governmental organization or other regulatory body or internal investigation, could result in a material diversion of our management’s time and result in substantial cost and, in the event of an adverse finding, could have a material adverse effect on our business and results of operations.
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.
We have been, and in the future may be, subject to securities class action or other litigation. For example, we recently resolved a stockholder class action lawsuit and continue to face multiple stockholder derivative claims as described in "Legal Proceedings" included in Part I, Item 3 of this Annual Report on Form 10-K. Litigation can be lengthy, expensive, and divert management's attention and resources. Results cannot be predicted with certainty and an adverse outcome in litigation could result in monetary damages or injunctive relief. Further, any payments made in settlement may directly reduce our revenue under U.S. GAAP and could negatively impact our results of operations for the period. While we maintain insurance coverage, we cannot be certain that such coverage will continue to be available on acceptable terms or in sufficient amounts to cover potential losses. For all of these reasons, litigation could seriously harm our business, results of operations, financial condition or cash flows.
Our results of operations may fluctuate.
We have experienced fluctuations in our results of operations on a quarterly and annual basis. The fluctuations in our results of operations may cause the market price of our common stock to be volatile. We may experience significant fluctuations in our results of operations in the foreseeable future due to a variety of factors, many of which are listed in this Risk Factors section. Additional factors could include, but are not limited to:
•the timing of investment commitment versus the subsequent resulting revenue as development can take multiple years;
•the timing and magnitude of depreciation and interest expense or other expenses related to the acquisition, purchase or construction of additional IBX data centers or the upgrade of existing IBX data centers;
•demand for space, power and solutions at our IBX data centers;
•the availability of power and the associated cost of procuring the power;
•changes in general economic conditions, such as those stemming from pandemics or other economic downturns, or specific market conditions in the telecommunications and internet industries, any of which could have a material impact on us or on our customer base;
•additions and changes in product offerings and our ability to ramp up and integrate new products within the time period we have forecasted;
•restructuring and other exit charges incurred in the event of a realignment of our management structure, operations or products or other exit activities;
•the financial condition and credit risk of our customers;
•the provision of customer discounts and credits;
•the mix of current and proposed products and offerings and the gross margins associated with our products and offerings;
•increasing repair and maintenance expenses in connection with aging IBX data centers;
•lack of available capacity in our existing IBX data centers to generate new revenue or delays in opening new or acquired IBX data centers that delay our ability to generate new revenue in markets which have otherwise reached capacity;
•changes in employee stock-based compensation;
•changes in our tax planning strategies or failure to realize anticipated benefits from such strategies;
•changes in income tax benefit or expense; and
•changes in or new GAAP as periodically released by the Financial Accounting Standards Board ("FASB").
Any of the foregoing factors, or other factors discussed elsewhere in this report, could have a material adverse effect on our business, results of operations and financial condition. Although we have experienced growth in revenues in recent quarters, this growth rate is not necessarily indicative of future results of operations. It is possible that we may not be able to generate net income on a quarterly or annual basis in the future. In addition, a relatively large portion of our expenses are fixed in the short-term, particularly with respect to lease and personnel expenses, depreciation and amortization and interest expenses. Therefore, our results of operations are particularly sensitive to fluctuations in revenues. As such, comparisons to prior reporting periods should not be relied upon as indications of our future performance. In addition, our results of operations in one or more future quarters may fail to meet the expectations of securities analysts or investors.
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We have incurred substantial losses in the past and may incur additional losses in the future.
As of December 31, 2025, our retained earnings were $6.1 billion. We are currently investing heavily in our future growth through the build out of multiple additional IBX data centers, expansions of IBX data centers and acquisitions of complementary businesses. As a result, we will incur higher depreciation and other operating expenses, as well as transaction costs and interest expense, that may negatively impact our ability to sustain profitability in future periods unless and until these new IBX data centers generate enough revenue to exceed their operating costs and cover the additional overhead needed to scale our business for this anticipated growth. The current global financial uncertainty may also impact our ability to sustain profitability if we cannot generate sufficient revenue to offset the increased costs of our recently opened IBX data centers or IBX data centers currently under construction. In addition, costs associated with the acquisition and integration of any acquired companies, as well as the additional interest expense associated with debt financing, we have undertaken to fund our growth initiatives, may also negatively impact our ability to sustain profitability. Finally, given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability on a quarterly or annual basis.
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.
In accordance with U.S. GAAP, we are required to assess our goodwill and other intangible assets annually, or more frequently whenever events or changes in circumstances indicate potential impairment, such as changing market conditions or any changes in key assumptions. If the testing performed indicates that an asset may not be recoverable, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made.
We also periodically monitor the remaining net book values of our property, plant and equipment, generally at the individual IBX data center level. Although our individual IBX data centers are generally performing in accordance with our expectations, our IBX data centers could under-perform relative to our expectations which may result in additional non-cash impairment charges.
These charges could be significant, which could have a material adverse effect on our business, results of operations or financial condition.
Risks Related to Our Expansion Plans
Our construction of new IBX data centers, IBX data center expansions or IBX data center redevelopment could involve significant risks to our business.
In order to sustain our growth in certain of our existing and new markets, we may have to expand an existing data center, lease a new facility or acquire suitable land, with or without structures, to build new IBX data centers from the ground up. Expansions or new builds are currently underway, or being contemplated, in new and existing markets. Construction projects expose us to many risks which could have an adverse effect on our results of operations, financial condition and/or on customer demand and satisfaction. As part of our current strategy, we are also building larger campuses than we have in the past which may exacerbate many of the risks associated with construction projects. Current global supply chain, tariffs and inflation issues have also increased many of these construction risks and created additional risks for our business. Some of the risks associated with construction projects include:
•construction delays and/or quality issues;
•power and power grid constraints;
•unexpected lack or reduction of power access;
•increased prices and lack of availability and delays for data center equipment, including items such as generators and switchgear;
•water constraints;
•unexpected budget changes;
•increased prices for and delays in obtaining building supplies and raw materials;
•labor availability, labor disputes and work stoppages with contractors, subcontractors and other third parties;
•unanticipated environmental issues and geological problems;
•delays related to permitting and approvals to open from public agencies and utility companies;
•community protest and/or disruption;
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•adverse impacts on existing customers in the IBX data center;
•delays in site readiness leading to our failure to meet commitments made to customers planning to expand into a new build; and
•unanticipated customer requirements that would necessitate alternative data center design, making our sites less desirable or leading to increased costs in order to make necessary modifications or retrofits.
We are currently experiencing rising construction costs which reflect the increase in cost of labor and raw materials, supply chain and logistic challenges, and high demand in our sector. While we have invested in creating a reserve of materials to mitigate supply chain issues and inflation, it may not be sufficient and ongoing delays, difficulty finding replacement products and continued high inflation could affect our business and growth and could have a material effect on our business. In certain instances, we have elected to pre-buy certain equipment and materials to mitigate supply chain issues before our construction plans are finalized. If our estimates are wrong, we may be liable to pay for goods we no longer need.
Current relations between the U.S. and China have created increased supply chain risk due to successive U.S. legislation promoting decoupling from China on semiconductors and specific telecommunications equipment makers as well as the threat of increased tariffs and having to source from alternative suppliers for key components outside of China. We are currently using our global supply chain to manage the evolving tariff environment and reduce impacts on our business and customers. At this time, we believe the largest potential tariff impact for us is related to steel and steel derivatives. Tariffs on steel and steel derivatives could lead to significant building cost increases for us if we are unable to source alternative options. Any additional tariffs to be imposed by the U.S. on imports from certain countries and potential counter-tariffs in response, could lead to increased costs and supply chain disruptions.
Attacks on merchant vessels remain high in the Red Sea which is causing disruptions in shipping routes. Although alternative routes are available, including routes via the Cape of Good Hope, these routes can add additional transit time and lead to delayed deliveries and increased fuel costs. We anticipate the disruptions in the Red Sea could continue to escalate. Any additional or unexpected disruptions to our supply chain, including in the event of any sustained regional escalation of the current conflict in the Middle East in the area around the Red Sea or more broadly, or inflationary pressures could significantly affect the cost and delivery timing of our planned expansion projects and interfere with our ability to meet commitments to customers who have contracted for space in new IBX data centers under construction.
Construction projects are dependent on permitting from public agencies and utility companies. Any delay in permitting, including due to community opposition, could affect our growth. We are currently experiencing permitting delays in most metros. While we don't currently anticipate any material long-term negative impact to our business because of these construction delays, these types of delays and stoppages related to permitting from public agencies and utility companies could worsen and have an adverse effect on our bookings, revenue or growth. Additionally, increased community scrutiny of data center resource use including land, water and power, may lead permitting authorities to impose stricter requirements, resulting in longer approval processes, higher costs, or project cancellations. These challenges could hinder our ability to execute growth plans and meet strategic objectives.
All construction related projects require us to carefully select and rely on the experience of one or more designers, general contractors, and associated subcontractors during the design and construction process. Additionally, we specify performance and quality requirements for our products. Constraints to component availability, restrictions on permitted suppliers, import and export controls and supplier backlogs could lead suppliers to source from alternative providers. This could lead to increased quality defects and a failure of Equinix to meet our performance and quality requirements. Further, should a designer, general contractor, significant subcontractor or key supplier experience financial problems or other problems during or leading up to the design or construction process, we could experience significant delays, increased costs to complete the project and/or other negative impacts to our expected returns.
Site selection is also a critical factor in our expansion plans. There may not be suitable properties available in our markets with the necessary combination of high-power capacity, sufficient water supply and fiber connectivity, or selection may be limited. We expect that we will continue to experience limited availability of water and power and grid constraints in many markets as well as shortages of associated equipment because of the current high demands and finite nature of these resources. These shortages could result in site selection challenges, construction delays or increased costs. Government limitations or moratoriums placed on data center construction in a given market may also negatively impact our ability to expand according to our plans or prevent us from
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completing our data center construction projects leading to stranded capital. Thus, while we may prefer to locate new IBX data centers adjacent to our existing locations, it may not always be possible. In the event we decide to build new IBX data centers separate from our existing IBX data centers, we may provide metro connect solutions to connect these two IBX data centers. Should these solutions not provide the necessary reliability to sustain connection, or if they do not meet the needs of our customers, this could result in lower interconnection revenue and lower margins and could have a negative impact on customer retention over time.
Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.
We have completed numerous acquisitions and we expect to make additional acquisitions in the future, which may include (i) acquisitions of businesses, products, solutions or technologies that we believe to be complementary, (ii) acquisitions of new IBX data centers or real estate for development of new IBX data centers; (iii) acquisitions through investments in local data center operators; or (iv) acquisitions in new markets with higher risk profiles. We may pay for future acquisitions by using our existing cash resources (which may limit other potential uses of our cash), incurring additional debt (which may increase our interest expense, leverage and debt service requirements) and/or issuing shares (which may dilute our existing stockholders and have a negative effect on our earnings per share). Acquisitions expose us to potential risks, including but not limited to:
•the possible disruption of our ongoing business and diversion of management's attention by acquisition, transition and integration activities, particularly when multiple acquisitions and integrations are occurring at the same time or when we are entering an emerging market with a higher risk profile;
•our potential inability to successfully pursue or realize some or all of the anticipated revenue opportunities associated with an acquisition or investment;
•the possibility that we may not be able to successfully integrate acquired businesses, or businesses in which we invest, or achieve anticipated operating efficiencies or cost savings;
•the possibility that announced acquisitions may not be completed, due to failure to satisfy the conditions to closing as a result of:
•an injunction, law or order that makes unlawful the consummation of the acquisition;
•inaccuracy or breach of the representations and warranties of, or the non-compliance with covenants by, either party;
•the nonreceipt of closing documents; or
•for other reasons;
•the possibility that there could be a delay in the completion of an acquisition, which could, among other things, result in additional transaction costs, loss of revenue or other adverse effects resulting from such uncertainty;
•the possibility that our projections about the success of an acquisition could be inaccurate and any such inaccuracies could have a material adverse effect on our financial projections;
•the dilution of our existing stockholders as a result of our issuing stock as consideration in a transaction or selling stock in order to fund the transaction;
•the possibility of customer dissatisfaction if we are unable to achieve levels of quality and stability on par with past practices;
•the possibility that we will be unable to retain relationships with key customers, landlords and/or suppliers of the acquired businesses, some of which may terminate their contracts with the acquired business as a result of the acquisition or which may attempt to negotiate changes in their current or future business relationships with us;
•the possibility that we could lose key employees from the acquired businesses;
•the possibility that we may be unable to integrate certain IT systems for any reason including because they do not meet Equinix's standard requirements with respect to security, privacy or any other standard;
•the potential deterioration in our ability to access credit markets due to increased leverage;
•the possibility that our customers may not accept either the existing equipment infrastructure or the "look-and-feel" of a new or different IBX data center;
•the possibility that additional capital expenditures may be required or that transaction expenses associated with acquisitions may be higher than anticipated;
•the possibility that required financing to fund an acquisition may not be available on acceptable terms or at all;
•the possibility that we may be unable to obtain required approvals from governmental authorities under antitrust and competition laws on a timely basis or at all, which could, among other things, delay or prevent
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us from completing an acquisition, limit our ability to realize the expected financial or strategic benefits of an acquisition or have other adverse effects on our current business and operations;
•the possible loss or reduction in value of acquired businesses;
•the possibility that future acquisitions may present new complexities in deal structure, related complex accounting and coordination with new partners, particularly in light of our desire to maintain our qualification for taxation as a REIT;
•the possibility that we may not be able to prepare and issue our financial statements and other public filings in a timely and accurate manner, and/or maintain an effective control environment, due to the strain on the finance organization when multiple acquisitions and integrations are occurring at the same time;
•the possibility that future acquisitions may trigger property tax reassessments resulting in a substantial increase to our property taxes beyond that which we anticipated;
•the possibility that future acquisitions may be in geographies and regulatory environments to which we are unaccustomed and we may become subject to complex requirements and expose us to risks with which we have limited experience;
•the possibility that future acquisitions may appear less attractive due to fluctuations in foreign currency rates;
•the possibility that carriers may find it cost-prohibitive or impractical to bring fiber and networks into a new IBX data center;
•the possibility of litigation or other claims in connection with, or as a result of, an acquisition, or inherited from the acquired company, including claims from terminated employees, customers, former stockholders or other third parties;
•the possibility that asset divestments may be required in order to obtain regulatory clearance for a transaction;
•the possibility of pre-existing undisclosed liabilities, including, but not limited to, lease or landlord related liability, tax liability, environmental liability or asbestos liability, for which insurance coverage may be insufficient or unavailable, or other issues not discovered in the diligence process;
•the possibility that we receive limited or incorrect information about the acquired business in the diligence process; and
•the possibility that we do not have full visibility into customer agreements and customer termination rights during the diligence process which could expose us to additional liabilities after completing the acquisition.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows. If an acquisition does not proceed or is materially delayed for any reason, the price of our common stock may be adversely impacted, and we will not recognize the anticipated benefits of the acquisition.
We cannot assure that the price of any future acquisitions of IBX data centers or businesses will be similar to prior IBX data center acquisitions and businesses. In fact, we expect costs required to build or render new IBX data centers operational to increase in the future. If our revenue does not keep pace with these potential acquisition and expansion costs, we may not be able to maintain our current or expected margins as we absorb these additional expenses. There is no assurance we would successfully overcome these risks, or any other problems encountered with these acquisitions.
The anticipated benefits of our joint ventures may not be fully realized, or take longer to realize than expected.
We have entered into joint ventures to develop and operate data centers. Certain sites that are intended to be utilized in joint ventures require investment for development. The success of these joint ventures will depend, in part, on our ability to find suitable land and power. From time to time, Equinix may incur costs or make commitments to acquire land and/or power prior to the consummation of the joint venture or in advance of their transfer to the joint venture. These commitments could result in increased costs and risks for Equinix. The success of these joint ventures will also depend on the development of the data center sites. Such development may be more difficult, time-consuming or costly than expected and could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could materially impact our business, financial condition and results of operations. Additionally, if it is determined these sites are no longer desirable for the joint ventures, we would need to adapt such sites for other purposes and incur additional expenses as a result.
We may not realize all of the anticipated benefits from our joint ventures. The success of these joint ventures will depend, in part, on the successful partnership between Equinix and our joint venture partners. Such a
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partnership is subject to risks as outlined below, and more generally, to the same types of business risks as would impact our IBX data center business. A failure to successfully partner, or a failure to realize our expectations for the joint ventures, including any contemplated exit strategy from a joint venture, could materially impact our business, financial condition and results of operations. These joint ventures could also be negatively impacted by inflation, supply chain issues, an inability to obtain financing on favorable terms or at all, an inability to fill the data center sites with customers as planned, unexpected power constraints, and development and construction delays, including those we are currently experiencing in many markets globally.
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.
In addition to our current and proposed joint ventures, we may co-invest with other third parties through partnerships, joint ventures or other entities in the future. These joint ventures could result in our acquisition of non-controlling interests in, or shared responsibility for, managing the affairs of a property or portfolio of properties, partnership, joint venture or other entity. We may be subject to additional risks, including:
•we may not have the right to exercise sole decision-making authority regarding the properties, partnership, joint venture or other entity;
•our joint venture structures may come with complex governance obligations that may be challenging to meet;
•if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital or be otherwise adversely impacted;
•our partners may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives;
•our joint venture partners may take actions that are not within our control, which could require us to dispose of the joint venture asset, transfer it to a taxable REIT subsidiary ("TRS") in order to maintain our qualification for taxation as a REIT, or purchase the partner's interests or assets at an above-market price;
•our joint venture partners may take actions unrelated to our business agreement but which reflect poorly on us because of our joint venture relationship;
•disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business;
•we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require us to pay an amount greater than its investment in the joint venture;
•we may fail to maintain the complex tax structure of the joint ventures and, as a result, become liable for additional tax liabilities of the joint ventures;
•our joint venture partner may have contractual exit rights under certain circumstances, and may force us to buy them out on terms and timing unfavorable to us;
•we may need to change the structure of an established joint venture or create new complex structures to meet our business needs or the needs of our partners which could prove challenging; and
•a joint venture partner's decision to exit the joint venture may not be at an opportune time for us or in our business interests.
Each of these factors may result in returns on these investments being less than we expect or in losses, and our financial and results of operations may be adversely affected.
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.
For the years ended December 31, 2025, 2024 and 2023, we recognized approximately 61%, 62% and 63%, respectively, of our revenues outside the U.S. We currently operate outside of the U.S. in Canada, Mexico, South America, the Asia-Pacific region and the EMEA region.
In addition, we are currently undergoing expansions or evaluating expansion opportunities outside of the U.S., which could include entering into emerging and higher-risk markets which may expose us to new risks. Undertaking and managing expansions in foreign jurisdictions may present unanticipated challenges to us.
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Our international operations are generally subject to a number of additional risks, including:
•the costs of customizing IBX data centers for foreign countries;
•protectionist laws and business practices favoring local competition;
•greater difficulty or delay in accounts receivable collection;
•difficulties in staffing and managing foreign operations, including negotiating with foreign labor unions or workers' councils;
•difficulties in managing across cultures and in foreign languages;
•political and economic instability;
•difficulties in managing varying business standards and construction speeds across markets;
•fluctuations in currency exchange rates;
•exposure to hyperinflation related to expansion into developing countries;
•difficulties in repatriating funds from certain countries;
•our ability to obtain, transfer or maintain licenses required by governmental entities with respect to our business;
•difficulties in procuring power and/or in obtaining stable sources of power;
•our ability to secure and maintain the necessary physical and telecommunications infrastructure;
•unexpected changes in political environments and government relations including trade wars;
•changes in the government and public administration in emerging markets that may impact the stability of foreign investment policies;
•compliance with anti-bribery and corruption laws;
•compliance with economic and trade sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury, the Bureau of Industry and Security of the US Department of Commerce and other enforcement agencies in other jurisdictions around the world including those related to the Russian and Ukrainian war;
•compliance with changing and conflicting laws, policies and requirements related to sustainability;
•increasing scrutiny on the operational resilience of data centers, especially in countries where data centers are designated as critical national infrastructure and/or essential ICT service providers;
•increasing resistance to data center presence and expansion by local communities;
•compliance with evolving cybersecurity laws including reporting requirements;
•unexpected changes and compliance with tax laws; and
•compliance with evolving governmental regulation.
If we cannot effectively manage the challenges associated with our international operations and expansion plans, we could experience a delay in our expansion projects or a failure to grow. Expansion challenges and international operations failures could also materially damage our reputation, our brand, our business and results of operations. Our success depends, in part, on our ability to anticipate and address these risks and manage these difficulties.
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.
We are considering the acquisition or lease of additional properties and the construction of new IBX data centers beyond those expansion projects already announced. We will be required to commit substantial operational and financial resources to these IBX data centers in advance of securing customer contracts and we may not have sufficient customer demand in those markets to support these IBX data centers once they are built. In addition, unanticipated technological changes could affect customer requirements for data centers, and we may not have built such requirements into our new IBX data centers. Either of these contingencies, if they were to occur, could make it difficult for us to realize expected or reasonable returns on these investments.
Risks Related to Our Capital Needs and Capital Strategy
Our substantial debt could adversely affect our cash flows and limit our flexibility to raise additional capital.
We have a significant amount of debt and have announced our need to incur additional debt to support our planned growth. Additional debt may also be incurred to fund future acquisitions, any future special distributions, regular distributions or the other cash outlays associated with maintaining our qualification for taxation as a REIT. As of December 31, 2025, our total indebtedness (inclusive of finance lease liabilities and gross of debt issuance costs and debt discounts) was approximately $21.4 billion, our stockholders' equity was $14.2 billion and our cash, cash equivalents and short-term investments totaled $3.2 billion. In addition, as of December 31, 2025, we had
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approximately $4.0 billion of additional liquidity available to us from our $4.0 billion revolving credit facility. In addition to our substantial debt, we lease many of our IBX data centers and certain equipment under lease agreements, some of which are accounted for as operating leases. As of December 31, 2025, we recorded operating lease liabilities of $1.5 billion, which represents our obligation to make lease payments under those lease arrangements.
Our substantial amount of debt and related covenants, our off-balance sheet commitments, and our intent to raise additional debt could have important consequences. For example, they could:
•require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt and in respect of other off-balance sheet arrangements, reducing the availability of our cash flow to fund future capital expenditures, working capital, execution of our expansion strategy and other general corporate requirements;
•increase the likelihood of negative outlook from our credit rating agencies, or of a downgrade to our current rating;
•make it more difficult for us to satisfy our obligations under our various debt instruments;
•increase our cost of borrowing and even limit our ability to access additional debt to fund future growth;
•increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations;
•limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a competitive disadvantage compared with our competitors;
•limit our operating flexibility through covenants with which we must comply;
•limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business; and
•make us more vulnerable to increases in interest rates because of the variable interest rates on some of our borrowings to the extent we have not entirely hedged such variable-rate debt.
The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition.
We also plan to refinance a portion of our outstanding debt as it matures. Given current market conditions, there is a risk that we may not be able to refinance existing debt or the terms of any refinancing may not be as favorable as the terms of our existing debt. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in even higher interest rates upon refinancing than we anticipate, the interest expense relating to that refinanced indebtedness would increase. 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.
These risks could materially adversely affect our financial condition, cash flows and results of operations.
Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.
Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance acquisitions or repay debt. In October 2024, we established an "at the market" equity offering program (the "2024 ATM Program") to replace a previous program from 2022 which had been exhausted (the "2022 ATM Program”). Under the $2.0 billion 2024 ATM Program, we may, from time to time, issue and sell shares of our common stock to or through sales agents up to established limits. As of December 31, 2025, we had approximately $1.2 billion available for sale under the 2024 ATM Program. We have refreshed our ATM program in the past and may refresh our ATM program in the future, which may lead to additional dilution for our stockholders. We may also seek authorization to sell additional shares of common stock through other means which could lead to additional dilution for our stockholders. Please see Note 11 within the Consolidated Financial Statements of this Annual Report on Form 10-K for sales of our common stock under our ATM programs.
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 capital expenditures, together with ongoing operating expenses, obligations to service our debt and the cash outlays associated with our REIT distribution requirements, are, and will continue to be, a substantial burden on our cash flow and may decrease our cash balances. Additional debt or equity financing may not be available when needed or, if available, may not be available on satisfactory terms. Our inability to obtain additional debt and/or equity financing or to generate sufficient cash from operations may require us to prioritize projects or curtail capital expenditures which could adversely affect our results of operations.
Risks Related to Sustainability, Environmental Laws and Climate Change
Environmental and sustainability laws and regulations may impose upon us new or unexpected costs.
Many countries and states have increasingly taken a more proactive approach relating to sustainability through the adoption of laws, regulations and directives that require corporations to disclose their corporate sustainability efforts, including through mandatory reporting and preparation of carbon reduction plans. Despite there being some developments in the U.S. and the EU to deregulate, scale back or simplify the requirements on corporate sustainability efforts, the global regulatory landscape on corporate sustainability reporting has continued to expand in both size and complexity across other parts of the world in which we operate. It is possible that compliance with sustainability-related laws, regulations and directives will require us to re-evaluate and make changes to our business, including changes in operations and in our supply chain and thus increase our cost of doing business in the relevant affected regions or countries. We also may incur incremental costs to enhance our internal systems to collect the data needed to meet these regulatory requirements, including attestation standards.
We are subject to various federal, state and local environmental and health and safety laws and regulations in the United States and at our non-U.S. locations, including those relating to the generation, storage, handling and disposal of hazardous substances, regulated materials and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have arranged for, disposed of or released hazardous substances into the environment. Our operations involve the use of hazardous substances and other regulated materials such as petroleum fuel for emergency generators, as well as batteries, cleaning solutions, refrigerants and other materials. At some of our locations, hazardous substances or regulated materials are known to be present in soil or groundwater, and there may be additional unknown hazardous substances, or regulated materials present at sites that we own, operate or lease. At some of our locations, there are land use restrictions in place relating to earlier environmental cleanups that currently do not materially limit our use of the sites. To the extent any hazardous substances or any other substance or material must be investigated, cleaned up or removed from any property that we own, operate or lease, we may be responsible under applicable laws, regulations, permits or leases for the investigation, removal or cleanup of such substances or materials, the cost of which could be substantial.
Regulations or other governmental actions taken or implemented by federal executive branch officials (including U.S. Presidents) and agencies (such as the U.S. EPA), state environmental and health and safety agencies, regulators in other countries or judicial opinions or orders could limit or impact standards for air emissions from fossil fuel-fired power plants. Similarly, they could limit discharges of cooling water, the availability of potable water and otherwise impose new or different operational restraints or requirements on power plants that could increase costs and reliability of electricity. Regulatory programs intended to promote increased generation of electricity from renewable or carbon-free sources may also increase our costs of procuring electricity. In addition, we are directly subject to environmental, health and safety laws regulating air emissions, storm water management and other environmental matters arising in our business. For example, our emergency generators are subject to federal, state and country-specific regulations governing air pollutants, which could limit the operation of those generators or require the installation of new pollution control technologies. While environmental regulations do not normally impose material costs upon our operations, unexpected events, equipment malfunctions, human error and changes in law or regulations, among other factors, can lead to additional capital requirements, limitations upon our operations and unexpected increased costs.
Further, greenhouse gas ("GHG") emissions regulations, carbon taxes, carbon pricing mechanisms and removal of incentives for renewable energy development and GHG reductions could also increase expenses, create unexpected costs and require investments in new technologies. Non-U.S. regulations related to the environment and sustainability are expected to continue to increase and evolve and may impose upon us new or unexpected costs. The course of future and existing legislation and regulation in the U.S. and abroad remains difficult to predict, and the potential increased costs associated with national or supra-national GHG regulation and other government policies cannot be estimated at this time.
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We also purchase significant amounts of electricity from generating facilities and utility companies. These facilities and utility companies are subject to executive actions, environmental laws, regulations, permit requirements and policy decisions that could be subject to material change, which could result in increases in our electricity suppliers' compliance costs that may be passed through to us in the form of higher electricity costs.
Our business may be adversely affected by physical risks related to climate change and our response to it.
Acute physical risks and severe weather events, such as heatwaves, droughts, flooding, wildfires and storms, pose threats to our data centers by causing physical damages, power disruptions, and rising electricity costs, which may impact our ability to operate, maintain service and attract and retain customers, thereby affecting our costs and revenues. The frequency and intensity of severe weather events are reportedly increasing as part of broader climate changes. Changes in global weather patterns may also pose long-term risks of physical impacts to our business.
Interruptions in power transmission and grid constraints due to severe weather events can disrupt operations and increase costs, potentially resulting in adverse effects on our reputation or demand for our services and products. While we maintain disaster recovery and business continuity plans to allow us to recover from natural disasters or other events that can interrupt our business, we cannot be certain that our plans will work as intended to mitigate the impacts of such disasters or events. Failure to prevent impact to customers from such events could adversely affect our business.
We may fail to achieve our sustainability initiatives, including reaching our climate targets, or may encounter objections to them, which may adversely affect public perception of our business and affect our relationship with our customers, regulators, our stockholders and/or other stakeholders.
We face pressure from our customers, stockholders and other stakeholders, such as the communities in which we operate, who are increasingly focused on sustainability, to prioritize clean and renewable energy procurement, reduce our carbon footprint, promote resource efficiency practices and demonstrate economic benefits to society. We have established science-based climate targets, including goals of achieving 100% clean and renewable energy coverage across our global portfolio by 2030 and reaching net-zero GHG emissions across the value chain by 2040. We also plan to continue to scale our clean and renewable energy strategy and pursue opportunities to improve energy and water efficiency. As a result of these and other initiatives, we intend to make progress towards reducing our environmental impact, meeting our climate targets and ensuring that our business remains viable in a low-carbon economy.
While we believe these initiatives are beneficial to our business, they may involve additional costs for conducting our business,including costs related to collecting, measuring and reporting sustainability data and information. Further, we have undertaken efforts to support availability of new clean and renewable energy development. These efforts may increase our costs of electricity above those that would be incurred through procurement of conventional electricity from existing sources or through conventional grids. Reducing our environmental footprint may also require physical or operational modifications that may be costly.These initiatives could adversely affect our financial position and results of operations.
There is also a risk that our climate targets will not be met.It is possible that we may fail to reach our climate targets in a timely manner or that our customers, stockholders, or other stakeholders might not be satisfied with our progress. Our customers, stockholders or other stakeholders may object to our climate targets or the way we seek to achieve them. A failure to meet climate targets, or significant controversy regarding these targets and how we achieve them, could adversely affect public perception of our business, employee morale or customer, stockholder or public support. If we do not meet our customers', stockholders' or other stakeholders' expectations regarding sustainability initiatives, or lose support in our communities, our business and/or our share price could be harmed.
Some governmental and non-governmental entities in the U.S. and certain investor constituencies have questioned the appropriateness of or objected to sustainability initiatives. Some investors may use sustainability-related factors to guide their investment strategies and may choose not to invest in us, a factor that could tend to reduce demand for our shares and possibly affect our share price adversely. We may face increased governmental scrutiny, potential enforcement actions or private litigation challenging our sustainability goals, or our disclosure of those goals. This could also impact our ability to achieve our sustainability goals. New or changing regulation or public opinion regarding our sustainability goals or our actions to achieve them may result in adverse effects on our financial performance, reputation or demand for our services and products, or may otherwise result in obligations and liabilities that cannot be predicted or estimated at this time.
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Risks Related to Certain Regulations and Laws, Including Tax Laws
Government regulation related to our business or failure to comply with laws and regulations may adversely affect our business.
Various laws and governmental regulations, both in the U.S. and abroad, governing internet-related services, related communications services and information technologies are evolving rapidly to address technological advancements, shifting consumer behaviors and the rise of new services. Changes to these laws and regulations could have a material adverse effect on us and our customers. We expect there may also be forthcoming regulation in areas of regulating the responsible use of AI, such as the proposed EU Artificial Intelligence Act and the introduction of heightened measures to be adopted with respect to cybersecurity, operational resilience, data privacy, sustainability, taxation and data security, any of which could impact us and our customers.
We remain focused on whether and how existing and changing laws, such as those governing intellectual property, privacy, libel, telecommunications services, data flows/data localization, carbon emissions impact, competition and antitrust, and taxation apply to our business and those which might have a material effect on our customers’ decisions to purchase our solutions. Substantial resources may be required to comply with regulations or bring any non-compliant business practices into compliance with such regulations. In addition, the continuing development of the market for online commerce and the displacement of traditional telephony service by the internet and related communications services may prompt an increased call for more stringent consumer protection laws or other regulation both in the U.S. and abroad that may impose additional burdens on companies conducting business online and their service providers.
In countries where there are shortages of power, land and water resources, local governments have and/or will be imposing more stringent regulations and requirements to control the growth and development of data centers in their countries. New builds and further expansion of data center operations in such markets are increasingly being evaluated and approvals (where required) may only be granted where a data center operator is not only able to demonstrate that it is efficient in its use of energy and water but also that its operations have and/or will bring positive and significant environmental, economic and social impact to the country and the local community. Our data center operations increasingly have to accommodate thermal demands of high-performance computing infrastructure at scale. Using evaporative cooling to meet these demands introduces water-related risks that could impact our operations, costs, and reputation. For example, certain facilities are located in regions experiencing water stress or recurring droughts, and evaporative cooling systems can consume millions of gallons annually. In water-scarce areas, this can lead to regulatory restrictions, community opposition, or operational limitations.