EQUINIX INC

Previous wording

We provide a global, vendor-neutral data center, interconnection and edge solutions platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScale TM data center investments, have expanded our total global footprint to 270 IBXs, including 21 xScale data centers and the MC1 and SN1 data centers that are held in unconsolidated joint ventures, across 75 markets around the world. We offer the following solutions:

Current wording

We provide a global, vendor-neutral data center, interconnection and edge solutions platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScale TM data center investments, have expanded our total global footprint to 272 IBXs, including 21 xScale data centers and the MC1 and SN1 data centers that are held in unconsolidated joint ventures, across 76 markets around the world. We offer the following solutions:

Previous wording

Historically, the outsourcing market was served by large telecommunications carriers that bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and carrier-neutral multi-tenant data centers ("MTDC"), public and private cloud providers, managed infrastructure and application hosting providers, large hyperscale cloud providers and systems integrators. It is estimated that Equinix is one of more than 2,400 companies that provide MTDC offerings around the world. The global MTDC market is highly fragmented. Each of these data center solution providers can bundle various colocation, interconnection and network offerings, outsourced IT infrastructure solutions and managed services. We believe that this outsourcing trend has accelerated and is likely to continue to accelerate in the coming years, especially in light of the movement to digital business, the use of multiple cloud service providers, and the adoption of AI. We are able to offer our customers a global platform that reaches 35 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

Current wording

Historically, the outsourcing market was served by large telecommunications carriers that bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and carrier-neutral multi-tenant data centers ("MTDC"), public and private cloud providers, managed infrastructure and application hosting providers, large hyperscale cloud providers and systems integrators. It is estimated that Equinix is one of more than 2,400 companies that provide MTDC offerings around the world. The global MTDC market is highly fragmented. Each of these data center solution providers can bundle various colocation, interconnection and network offerings, outsourced IT infrastructure solutions and managed services. We believe that this outsourcing trend has accelerated and is likely to continue to accelerate in the coming years, especially in light of the movement to digital business, the use of multiple cloud service providers, and the adoption of AI. We are able to offer our customers a global platform that reaches 36 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

Previous wording

Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 78% and 79%, as of March 31, 2025 and 2024, respectively. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption, which we expect to accelerate with the adoption of AI, has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our existing IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center, and in our ability to expand our footprint in existing and new markets. Additionally, global supply chain challenges could result in a lack of availability or delays in the delivery of data center equipment. These challenges have driven us to invest in and commit to future purchases in advance of our standard practice to mitigate risks associated with these supply chain issues. These constraints could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows and the growth opportunities presented by the adoption of new technologies, including AI.

Current wording

Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 78% and 77% as of June 30, 2025 and 2024, respectively. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption, which we expect to accelerate with the adoption of AI, has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our existing IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center, and in our ability to expand our footprint in existing and new markets. Additionally, global supply chain challenges could result in a lack of availability or delays in the delivery of data center equipment. These challenges have driven us to invest in and commit to future purchases in advance of our standard practice to mitigate risks associated with these supply chain issues. These constraints could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows and the growth opportunities presented by the adoption of new technologies, including AI.

Previous wording

Our business is primarily based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to five years in length, and thereafter automatically renews in one-year increments. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 90% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for both the three months ended March 31, 2025 and 2024. Our 50 largest customers accounted for approximately 36% of our recurring revenues for the three months ended March 31, 2025 and 37% of our recurring revenues for the three months ended March 31, 2024.

Current wording

Our business is primarily based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to five years in length, and thereafter automatically renews in one-year increments. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 90% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for both the three and six months ended June 30, 2025 and 2024. Our 50 largest customers accounted for approximately 36% of our recurring revenues for both the three and six months ended June 30, 2025 and 2024.

Previous wording

On March 19, 2025, we paid a quarterly cash dividend of 4.69 per share. On April 30, 2025, we declared a quarterly cash dividend of $4.69 per share, payable on June 18, 2025, to our common stockholders of record as of the close of business on May 21, 2025. We expect all of our 2025 quarterly distributions and other applicable distributions to equal or exceed our REIT taxable income to be recognized in 2025.

Current wording

On June 18, 2025, we paid a quarterly cash dividend of $4.69 per share. On July 30, 2025, we declared a quarterly cash dividend of $4.69 per share, payable on September 17, 2025, to our common stockholders of record as of the close of business on August 20, 2025. We expect all of our 2025 quarterly distributions and other applicable distributions to equal or exceed our REIT taxable income to be recognized in 2025.

Previous wording

•In March, we issued SGD500 million, or approximately $370 million, at the exchange rate in effect on March 13, 2025, aggregate principal amount of 3.500% senior notes due March 15, 2030. See Note 9 within the Condensed Consolidated Financial Statements.

Current wording

•In March, we issued SGD500 million, or approximately $370 million, at the exchange rate in effect on issuance, of senior notes due in 2030. See Note 9 within the condensed consolidated financial statements.

Previous wording

Americas Revenues. During the three months ended March 31, 2025, Americas revenues increased by $62 million or 7% (9% on a constant currency basis). Growth in Americas revenues was primarily due to:

Current wording

Americas Revenues. During the three months ended June 30, 2025, Americas revenues increased by $38 million or 4% (5% on a constant currency basis). Growth in Americas revenues was primarily due to:

Previous wording

EMEA Revenues. During the three months ended March 31, 2025, EMEA revenues increased by $16 million or 2% (3% on a constant currency basis). The increase in EMEA revenues was primarily due to an increase in orders from both our existing customers and new customers during the period and approximately $9 million of incremental revenues generated from IBX data centers which opened within the twelve months ended March 31, 2025.

Current wording

EMEA Revenues. During the three months ended June 30, 2025, EMEA revenues increased by $46 million or 6% (5% on a constant currency basis). Growth in EMEA revenues was primarily due to:

Previous wording

Asia-Pacific Revenues. During the three months ended March 31, 2025, Asia-Pacific revenues increased by $20 million or 4% (7% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Current wording

Asia-Pacific Revenues. During the three months ended June 30, 2025, Asia-Pacific revenues increased by $13 million or 3% (1% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Previous wording

Americas Cost of Revenues. During the three months ended March 31, 2025, Americas cost of revenues increased by $10 million or 2% (4% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Current wording

Americas Cost of Revenues. During the three months ended June 30, 2025, Americas cost of revenues increased by $21 million or 5% (6% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Previous wording

•$5 million of higher utilities costs.

Current wording

•$7 million of higher utilities costs; and

Previous wording

EMEA Cost of Revenues. During the three months ended March 31, 2025, EMEA cost of revenues decreased by $33 million or 8% (6% on a constant currency basis). The decrease in our EMEA cost of revenues was primarily due to lower utilities costs, driven by both decreases in power costs and lower utility usage in the United Kingdom offset by increased costs to provide non-recurring services.

Current wording

EMEA Cost of Revenues. During the three months ended June 30, 2025, EMEA cost of revenues decreased by $33 million or 8% (9% on a constant currency basis). The decrease in our EMEA cost of revenues was primarily driven by decreases in power costs.

Previous wording

We expect cost of revenues to increase across all three regions in line with the growth of our business, including from the impact of acquisitions.

Current wording

We expect cost of revenues to increase across all three regions in line with the growth of our business.

Previous wording

EMEA General and Administrative Expenses. Our EMEA general and administrative expenses did not materially change during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

EMEA General and Administrative Expenses. Our EMEA general and administrative expenses did not materially change during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Previous wording

Asia-Pacific General and Administrative Expenses. Our Asia-Pacific general and administrative expenses did not materially change during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Asia-Pacific General and Administrative Expenses. Our Asia-Pacific general and administrative expenses did not materially change during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Previous wording

Transaction costs. During the three months ended March 31, 2025 and 2024, we did not record a significant amount of transaction costs. See Note 5 within the Condensed Consolidated Financial Statements.

Current wording

Transaction Costs. We did not record a significant amount of transaction costs during the three months ended June 30, 2025 and 2024.

Previous wording

EMEA Income from Operations. During the three months ended March 31, 2025, EMEA income from operations increased by $42 million or 24% (23% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, as described above.

Current wording

EMEA Income from Operations. During the three months ended June 30, 2025, EMEA income from operations increased by $72 million or 43% (44% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, and lower utilities costs as described above.

Previous wording

Interest Income. Interest income was $47 million for the three months ended March 31, 2025 and was $24 million for the three months ended March 31, 2024. The increase was primarily due to interest income earned on time deposits as well as on the AMER 2 Loan further described in Note 5 within the Condensed Consolidated Financial Statements.

Current wording

Interest Income. Interest income was $52 million for the three months ended June 30, 2025 and was $29 million for the three months ended June 30, 2024. The increase was primarily due to interest income earned on a higher average balance of cash, cash equivalents and short-term investments as well as on the AMER 2 Loan further described in Note 5 within the condensed consolidated financial statements.

Previous wording

Interest Expense. Interest expense increased to $122 million for the three months ended March 31, 2025 from $104 million for the three months ended March 31, 2024, primarily due to the following debt issuances:

Current wording

Interest Expense. Interest expense increased to $135 million for the three months ended June 30, 2025 from $110 million for the three months ended June 30, 2024, primarily due to the following debt issuances:

Previous wording

•the issuances of the 3.650% Euro Senior Notes due 2033 and the 1.558% Swiss Franc Senior Notes due 2029 in the third quarter of 2024;

Current wording

•the issuance of the 3.650% Euro Senior Notes due 2033 and the 1.558% Swiss Franc Senior Notes due 2029 in the third quarter of 2024;

Previous wording

•the issuances of the 3.250% Euro Senior Notes due 2031 and the 3.625% Euro Senior Notes due 2034 in the fourth quarter of 2024; and

Current wording

•the issuance of the 3.250% Euro Senior Notes due 2031 and the 3.625% Euro Senior Notes due 2034 in the fourth quarter of 2024;

Previous wording

•the issuance of the 3.500% SGD Notes due 2030 in the first quarter of 2025.

Current wording

•the issuance of the 3.500% SGD Notes due 2030 in the first quarter of 2025; and

Previous wording

During the three months ended March 31, 2025 and 2024, we capitalized $11 million and $9 million, respectively, of interest expense to construction in progress. See Note 9 within the Condensed Consolidated Financial Statements.

Current wording

During the three months ended June 30, 2025 and 2024, we capitalized $14 million and $9 million, respectively, of interest expense to construction in progress. See Note 9 within the condensed consolidated financial statements.

Previous wording

Other Income or Expense. We did not record a significant amount of other income or expense during the three months ended March 31, 2025 and 2024. See Note 5 within the Condensed Consolidated Financial Statements.

Current wording

Other Income or Expense. We did not record a significant amount of other income or expense during the three months ended June 30, 2025 and 2024.

Previous wording

Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax years ending December 31, 2025 and 2024, respectively. As such, other than certain state income taxes and foreign income and withholding taxes, no provision for income taxes has been included for our REIT and QRSs in the accompanying condensed consolidated financial statements for the three months ended March 31, 2025 and 2024.

Current wording

Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax years ending December 31, 2025 and 2024, respectively. As such, other than certain state income taxes and foreign income and withholding taxes, no provision for income taxes has been included for our REIT and QRSs in the condensed consolidated financial statements for the three months ended June 30, 2025 and 2024.

Previous wording

For the three months ended March 31, 2025 and 2024, we recorded $49 million and $46 million of income tax expense, respectively. Our effective tax rates were 12.5% and 16.6%, for the three months ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate for the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to higher income in the U.S. that is not subject to U.S. corporate income taxes, either due to the release of a valuation allowance or the REIT's lower tax rate.

Current wording

For the three months ended June 30, 2025 and 2024, we recorded $38 million and $47 million of income tax expense, respectively. Our effective tax rates were 9.4% and 13.5% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate for the three months ended June 30, 2025 as compared to the same period in 2024 was primarily due to higher income in the U.S. and Canada that did not result in higher tax expense in the current period due to the REIT status in the U.S. and the utilization of net operating loss carryforwards in Canada.

Previous wording

EMEA Adjusted EBITDA. During the three months ended March 31, 2025, EMEA adjusted EBITDA increased by $37 million or 11% (12% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, as described above.

Current wording

EMEA Adjusted EBITDA. During the three months ended June 30, 2025, EMEA adjusted EBITDA increased by $75 million or 23% (22% on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, and lower utilities costs as described above.

Previous wording

•$25 million of incremental revenues from non-recurring services provided to our joint ventures;

Current wording

•$16 million of incremental revenues from non-recurring services provided to our joint ventures; and

Previous wording

The increase was primarily offset by a decrease of $14 million in depreciation expense due to the acceleration of depreciation expense for certain assets with shortened useful lives during the comparative period.

Current wording

The remainder of the increase was driven by higher costs across various categories including decommissioning, repairs and maintenance, partially offset by a decrease of $13 million in depreciation expense due to the acceleration of depreciation for certain assets with shortened useful lives during the comparative period.

Previous wording

Asia-Pacific Cost of Revenues. During the three months ended March 31, 2025, Asia-Pacific cost of revenues increased by $16 million or 7% (11% on a constant currency basis). The increase in our Asia-Pacific cost of revenues was primarily due to $17 million of costs to provide non-recurring services.

Current wording

Asia-Pacific Cost of Revenues. During the six months ended June 30, 2025, Asia-Pacific cost of revenues increased by $31 million or 7% (7% on a constant currency basis). The increase in our Asia-Pacific cost of revenues was primarily due to:

Previous wording

Americas General and Administrative Expenses. During the three months ended March 31, 2025, Americas general and administrative expenses decreased by $8 million or 3% (1% on a constant currency basis). The decrease in our Americas general and administrative expenses was primarily due $21 million of lower depreciation expense due to the acceleration of depreciation expense for certain assets with shortened useful lives during the comparative period. This decrease was substantially offset by higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth.

Current wording

The remainder of the increase is driven by higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth.

Previous wording

We anticipate that we will continue to invest in sales and marketing initiatives across our three regions in line with the growth of our business. We expect our Americas sales and marketing expenses as a percentage of revenues to be higher than those of our other regions since certain global sales and marketing functions are located within the U.S.

Current wording

We anticipate that we will continue to invest in sales and marketing initiatives to support the growth of our business. We expect our Americas sales and marketing expenses as a percentage of revenues to be higher than those of our other regions since certain global sales and marketing functions are located within the U.S.

Previous wording

Going forward, although we are carefully monitoring our spending, we expect our general and administrative expenses to increase across all three regions as we continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. Additionally, given that our corporate headquarters is located in the U.S., we expect the Americas general and administrative expenses as a percentage of revenues to be higher than those of other regions.

Current wording

Going forward, although we are carefully monitoring our spending, we will continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. Additionally, given that our corporate headquarters is located in the U.S., we expect the Americas general and administrative expenses as a percentage of revenues to be higher than those of other regions.

Previous wording

Restructuring Charges. During the three months ended March 31, 2025, we recorded restructuring charges of $10 million primarily related to severance and other employee costs. We did not record any restructuring charges during the three months ended March 31, 2024. See Note 12 within the Consolidated Financial Statements.

Current wording

Restructuring Charges. During the six months ended June 30, 2025, we recorded restructuring charges of $12 million primarily related to severance and other employee costs. We did not record any restructuring charges during the six months ended June 30, 2024. See Note 12 within the condensed consolidated financial statements.

Previous wording

Gain or Loss on Asset Sales. During the three months ended March 31, 2025 and 2024, we did not record a significant amount of gain or loss on asset sales. See Note 5 within the Condensed Consolidated Financial Statements.

Current wording

Gain or Loss on Asset Sales. During the six months ended June 30, 2025, we did not record a significant amount of gain or loss on asset sales. During the six months ended June 30, 2024, we recorded a gain of $18 million, primarily related to the sale of the Silicon Valley 12 ("SV12") data center. See Note 5 within the condensed consolidated financial statements.

Previous wording

Americas Income from Operations. During the three months ended March 31, 2025, Americas income from operations increased by $49 million or 132% (140% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth, as described above.

Current wording

Americas Income from Operations. During the six months ended June 30, 2025, Americas income from operations increased by $38 million or 25% (29% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth. This was partially offset by the non-recurring gain recognized on the sale of the SV12x data center in the prior year and higher costs of revenue, as described above .

Previous wording

Americas Adjusted EBITDA. During the three months ended March 31, 2025, Americas adjusted EBITDA increased by $34 million or 8% (10% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth, as described above, partially offset by higher costs of revenues and higher general and administrative expenses.

Current wording

Americas Adjusted EBITDA. During the six months ended June 30, 2025, Americas adjusted EBITDA increased by $49 million or 6% (7% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth, partially offset by higher costs of revenues, as described above.

Previous wording

Asia-Pacific Adjusted EBITDA. During the three months ended March 31, 2025, Asia-Pacific adjusted EBITDA increased by $4 million or 2% (5% on a constant currency basis), primarily due to IBX data center expansion activity and organic growth, as described above.

Current wording

Asia-Pacific Adjusted EBITDA. During the six months ended June 30, 2025, Asia-Pacific adjusted EBITDA increased by $7 million or 1% (2% on a constant currency basis), primarily due to IBX data center expansion activity and organic growth, as described above.

Previous wording

In presenting AFFO, we exclude certain items that we believe are not good indicators of our current or future operating performance. AFFO represents FFO excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, stock-based charitable contributions, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain (loss) from the disposition of non-real estate assets, gain (loss) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income (loss) from discontinued operations, net of tax, and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. The adjustments for installation revenue, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the condensed consolidated statement of operations. We exclude the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with debt financings that have no current or future cash obligations. We exclude gain (loss) on debt extinguishment since it generally represents the write-off of initial costs incurred in connection with debt financings or a cost that is incurred to reduce future interest costs and is not a good indicator of our current or future operating performance. We include an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances, uncertain tax positions and deferred taxes that do not relate to current period's operations. We deduct recurring capital expenditures, which represent expenditures to extend the useful life of IBX data centers or other assets that are required to support current revenues. We also exclude net income (loss) from discontinued operations, net of tax, which represents results that may not recur and are not a good indicator of our current or future operating performance.

Current wording

In presenting AFFO, we exclude certain items that we believe are not good indicators of our current or future operating performance. AFFO represents FFO excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, stock-based charitable contributions, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain (loss) from the disposition of non-real estate assets, gain (loss) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income (loss) from discontinued operations, net of tax, and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. The adjustments for installation revenue, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the condensed consolidated statements of operations. We exclude the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with debt financings that have no current or future cash obligations. We exclude gain (loss) on debt extinguishment since it generally represents the write-off of initial costs incurred in connection with debt financings or a cost that is incurred to reduce future interest costs and is not a good indicator of our current or future operating performance. We include an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances, uncertain tax positions and deferred taxes that do not relate to current period's operations. We deduct recurring capital expenditures, which represent expenditures to extend the useful life of IBX data centers or other assets that are required to support current revenues. We also exclude net income (loss) from discontinued operations, net of tax, which represents results that may not recur and are not a good indicator of our current or future operating performance.

Previous wording

Our revenues and certain operating expenses (cost of revenues, sales and marketing and general and administrative expenses) from our international operations have represented and will continue to represent a significant portion of our total revenues and certain operating expenses. As a result, our revenues and certain operating expenses have been and will continue to be affected by changes in the U.S. dollar against major international currencies. There were no significant impacts from currencies that were comparably stronger to the U.S. dollar during the three months ended March 31, 2025 as compared to the same period in 2024. During the three months ended March 31, 2025 as compared to the same period in 2024, the U.S. dollar was stronger relative to the Euro and Japanese Yen, which resulted in an unfavorable foreign currency impact on revenue and operating income, and a favorable foreign currency impact on operating expenses. In order to provide a framework for assessing how each of our business segments performed excluding the impact of foreign currency fluctuations, we present period-over-period percentage changes in our revenues and certain operating expenses on a constant currency basis in addition to the historical amounts as reported. Our constant currency presentation excludes the impact of our foreign currency cash flow hedging activities. Presenting constant currency results of operations is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, we have presented this non-GAAP financial measure to provide investors with an additional tool to evaluate our results of operations. To present this information, our current period revenues and certain operating expenses denominated in currencies other than the U.S. dollar are converted into U.S. dollars at constant exchange rates rather than the actual exchange rates in effect during the respective periods (i.e. average rates in effect for the three months ended March 31, 2024 are used as exchange rates for the three months ended March 31, 2025 when comparing the three months ended March 31, 2025 with the three months ended March 31, 2024).

Current wording

In order to provide a framework for assessing how each of our business segments performed excluding the impact of foreign currency fluctuations, we present period-over-period percentage changes in our revenues and certain operating expenses on a constant currency basis in addition to the historical amounts as reported. Our constant currency presentation excludes the impact of our foreign currency cash flow hedging activities. Presenting constant currency results of operations is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, we have presented this non-GAAP financial measure to provide investors with an additional tool to evaluate our results of operations. To present this information, our current period revenues and certain operating expenses denominated in currencies other than the U.S. dollar are converted into U.S. dollars at constant exchange rates rather than the actual exchange rates in effect during the respective periods (i.e. average rates in effect for the six months ended June 30, 2024 are used as exchange rates for the six months ended June 30, 2025 when comparing the six months ended June 30, 2025 with the six months ended June 30, 2024).