Equinix, Inc. EQIX is scheduled to report second-quarter 2025 results on July 30, after market close. While the company’s quarterly results are likely to display a year-over-year rise in revenues, adjusted funds from operations (AFFO) per share might display a decline.
In the previous quarter, this Redwood City, CA-based data center real estate investment trust (REIT) reported an AFFO of $9.67 per share, beating the Zacks Consensus Estimate of $8.96 per share. Results reflected higher revenues, led by strong demand for digital infrastructure and services.
Over the preceding four quarters, EQIX’s AFFO per share surpassed the consensus estimate on three occasions and missed once, the average beat being 3.6%. This is depicted in the graph below:
Equinix, Inc. Price and EPS Surprise
Equinix, Inc. price-eps-surprise | Equinix, Inc. Quote
Factors at Play for Equinix
In the second quarter of 2025, Equinix is likely to have benefited from the solid demand for interconnected data center infrastructure. Enterprises and service providers’ continued efforts to integrate artificial intelligence (AI) into their strategies and offerings and advance their digital transformation agendas are likely to keep demand up in the upcoming years.
Moreover, the demand for Equinix’s interconnected ecosystem remains strong, driven by an acceleration in enterprise cloud adoption and increasing cloud or Internet customers’ demands for highly interconnected data center space.
The company’s recurring revenue model, which comprises colocation, related interconnection and managed IT infrastructure services, is expected to have supported stable cash flows in the to-be-reported quarter, boosting the data center REIT’s top line.
Q2 Projections for EQIX
The Zacks Consensus Estimate for colocation revenues is pegged at $1.57 billion, suggesting growth of 4.6% from $1.50 billion in the prior-year period. The consensus mark for interconnection revenues is pegged at $398.9 million, indicating growth of 6.7% from $374 million in the prior-year period.
For the second quarter of 2025, Equinix projected revenues between $2.244 billion and $2.264 billion. The Zacks Consensus Estimate for the same stands at $2.26 billion, indicating an increase of 4.5% from the year-ago period’s reported figure.
EQIX estimated adjusted EBITDA in the range of $1.095-$1.115 billion for the second quarter. Our estimate is pegged at $1.10 billion, implying a year-over-year increase of 6.3%.
However, high interest expenses might have partly impeded the company’s quarterly performance. For the second quarter of 2025, our estimate for interest expenses implies a year-over-year increase of 12.6%.
EQIX’s activities during the to-be-reported period were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has been revised southward by a cent to $9.19 over the past month. It also suggests a 0.3% decrease from the prior-year quarter’s reported figure.
What Our Quantitative Model Predicts for EQIX
Our proven model does not conclusively predict a surprise in terms of AFFO per share for Equinix this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is not the case here.
Equinix currently has an Earnings ESP of -1.20% and a Zacks Rank of 4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — American Tower AMT and VICI Properties VICI — that you may also want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.
AMT, slated to release quarterly numbers on July 29, has an Earnings ESP of +0.95% and carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
VICI Properties is slated to report quarterly numbers on July 30. VICI has an Earnings ESP of +15.43% and carries a Zacks Rank of 3 at present.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
