Csquare, Inc.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
CSQR$17.52+14.7%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0002105398-26-000004
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0002105398-26-000008
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 150 current paragraphs.
97 unchanged; 38 reworded; 14 added; 8 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Net Revenue Churn was 1.9% for both the three months ended September 30, 2026 and the three months ended September 30, 2025. Net Revenue Churn increased to 6.2% for the nine months ended September 30, 2026 compared to 6.1% for the nine months ended
Current report
September 30, 2025. The increase in Net Revenue Churn was primarily attributable to higher net recurring revenue losses from existing customers.
Current report
Selling, marketing, general and administrative expenses for the three months ended September 30, 2026 increased by $65.7 million, or 329%, compared to the three months ended September 30, 2025. The increase was primarily attributable to expenses recognized in connection with the IPO, including $31.8 million of stock-based compensation expense and $25.3 million of compensation expense related to the cash settlement of legacy pre-IPO incentive compensation arrangements. Selling, marketing, general and administrative expenses for the nine months ended September 30, 2026 increased by $80.9 million, or 123%, compared to the nine months ended September 30, 2025. The increase was primarily attributable to $31.8 million of stock-based compensation expense, $25.3 million of compensation expense related to the cash settlement of legacy pre-IPO incentive compensation arrangements and $8.3 million employee loan extinguishment costs. For both periods, the remaining increase was primarily attributable to higher personnel-related costs, bad debt expense and professional services expenses.
Current report
For both the three and nine months ended September 30, 2026 the Company recorded a $6.8 million loss on extinguishment of debt. The extinguishment charge related to the prepayment of debt outstanding under its Series 2020-2 Class A-2 Notes. For the three and nine months ended September 30, 2025, the Company recorded the losses on extinguishment of debt of $1.6 million and $6.8 million, respectively. The extinguishment charges related to the prepayment of long-term debt in connection with issuance of 2024 ABS Notes in March and August of 2025.
Current report
Other income (loss), net
Current report
Other income (loss), net for the three months ended September 30, 2026 increased by $4.3 million, or 915%, compared to the three months ended September 30, 2025. Other income (loss), net for the nine months ended September 30, 2026 decreased by $2.9 million, or 136%, compared to the nine months ended September 30, 2025. The changes were primarily driven by foreign currency exchange gains and losses resulting from fluctuations in foreign currency exchange rates.
Current report
Income tax (expense) benefit
Current report
(1)Transaction and other costs include cash incentive compensation and loan extinguishment costs associated with the settlement of legacy pre-IPO incentive compensation arrangements in connection with the IPO. The cash incentive compensation and loan extinguishment costs associated with the settlement of legacy pre-IPO incentive compensation arrangements totaled $25.3 million and $33.6 million for the three and nine months ended September 30, 2026, respectively, and were recorded within Selling, marketing, general and administrative expenses in our unaudited condensed consolidated statements of operations. No such costs were recorded during the three and nine months ended September 30, 2025.
Current report
The following information is presented solely as supplemental financial information to assist investors in evaluating certain components of our financial results and cash requirements. The individual items are not intended to represent, and should not be aggregated or considered, a separate financial performance or liquidity measure:
Current report
(1)Net favorable/unfavorable leasehold interest amortization represents the periodic amortization of favorable and unfavorable lease terms associated with operating leasehold interests acquired in conjunction with business acquisitions. A favorable leasehold interest is recorded when the acquired lease terms are below current market rates. Conversely, an unfavorable leasehold interest is recorded when the acquired lease terms are above current market rates. These amounts are amortized on a straight-line basis over the remaining lease term, including renewal periods that are reasonably certain to be exercised. For operating leases, the favorable and unfavorable lease terms are recognized as a component of operating lease cost and presented within cost of revenues, excluding depreciation and amortization in the Consolidated Statements of Operations.
Current report
(2)Transaction and other costs include cash incentive compensation and loan extinguishment costs associated with the settlement of legacy pre-IPO incentive compensation arrangements in connection with the IPO. The cash incentive compensation and loan extinguishment costs associated with the settlement of legacy pre-IPO incentive compensation arrangements totaled $25.3 million and $33.6 million for the three and nine months ended September 30, 2026, respectively, and were recorded within Selling, marketing, general and administrative expenses in our unaudited condensed consolidated statements of operations. No such costs were recorded during the three and nine months ended September 30, 2025.
Current report
(3)Recurring capital expenditures represent capital expenditures associated with maintaining and extending the useful lives of data centers and other assets that support current revenues.
Current report
Comparison of nine months ended September 30, 2026 to nine months ended September 30, 2025
Current report
During the third quarter of 2026, the Company used a portion of the net proceeds from its IPO to repay in full the $773.9 million outstanding under its revolving credit facility, the $75.5 million outstanding under its promissory note, the $75.3 million outstanding under its Series 2024-1 Variable Funding Notes, and $219.8 million outstanding under its Series 2020-2 Class A-2 Notes, with each amount including accrued and unpaid interest through the repayment date.
Removed paragraphs (8)
Previous report
Net Revenue Churn decreased to 2.4% for the three months ended June 30, 2026 compared to 2.9% for the three months ended June 30, 2025. Net Revenue Churn decreased to 4.2% for the six months ended June 30, 2026 compared to 4.4% for the six months ended June 30, 2025. The decrease in Net Revenue Churn was driven by the increase in recurring revenue driven by strong sales performance across existing customers and 2025 Portfolio Acquisition.
Previous report
Income tax benefit (expense)
Previous report
Selling, marketing, general and administrative expenses for the three months ended June 30, 2026 increased by $12.5 million, or 55%, compared to the three months ended June 30, 2025. Selling, marketing, general and administrative expenses for the six months ended June 30, 2026 increased by $15.2 million, or 33%, compared to the six months ended June 30, 2025. The increases were primarily driven by $8.3 million employee loan extinguishment costs. The remaining increases were due to higher personnel-related costs and increased professional services expenses.
Previous report
The loss on extinguishment of debt for the six months ended June 30, 2026 decreased by $5.3 million compared to the six months ended June 30, 2025. The decrease in loss on extinguishment of debt is attributable to a loss incurred during the six months ended June 30, 2025 associated with the prepayment of long-term debt in connection with issuance of 2024 ABS Notes in March of 2025, with no comparable loss incurred during the six months ended June 30, 2026.
Previous report
Other (loss) income, net
Previous report
Other (loss) income, net for the three months ended June 30, 2026 increased by $4.9 million, or 252%, compared to the three months ended June 30, 2025. Other (loss) income, net for the six months ended June 30, 2026 increased by $7.2 million, or 442%, compared to the six months ended June 30, 2025. The increases in other loss relates mainly to unrealized foreign currency losses.
Previous report
As we continue to grow, we may pursue additional capital expenditures focused on, but not limited to, investments within our existing portfolio, disciplined customer acquisition, and selective support of evolving enterprise workloads. We have identified approximately $4 billion of potential expansion capital expenditure opportunities within our existing portfolio. To the extent that we obtain accretive contracts to commercialize our potential expansion opportunities, we may elect to fund these growth initiatives by accessing the debt capital markets from time to time opportunistically, particularly if financing is available on attractive terms. We will continue to evaluate our operating requirements and financial resources in light of future developments.
Previous report
Comparison of Six Months Ended June 30, 2026 to Six Months Ended June 30, 2025
Reworded paragraphs (38)
Previous wording
Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among others, changes in general economic conditions; our concentration in certain geographic areas; demand for colocation and connectivity services; competition; the availability of utility power, fiber connectivity and other critical infrastructure; customer demand and retention; our customer concentration; the pace and extent of AI adoption; a long sales cycle for our products and services; the Company's ability to execute its growth strategy and expansion projects; capital market conditions; regulatory developments; cybersecurity incidents; and the other risks described in the Company's filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” of our IPO Prospectus.
Current wording
Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among others, changes in general economic conditions; our concentration in certain geographic areas; demand for colocation and connectivity services; competition; the availability of utility power, fiber connectivity and other critical infrastructure; customer demand and retention; our customer concentration; the pace and extent of AI adoption; a long sales cycle for our products and services; the Company's ability to execute its growth strategy and expansion projects; capital market conditions; regulatory developments; cybersecurity incidents; delays in planned development projects; and the other risks described in the Company's filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” of our IPO Prospectus.
Previous wording
As of June 30, 2026, our platform is comprised of 62 sites across 21 major metropolitan markets, delivering approximately 385 MW of Sellable Power Capacity and over 35,275 interconnection products.
Current wording
As of September 30, 2026, our platform is comprised of 62 sites across 21 major metropolitan markets, delivering approximately 397 MW of Sellable Power Capacity and over 36,189 interconnection products.
Previous wording
Contracted Power Capacity represents the aggregate amount of Sellable Power Capacity, measured in MW, that is subject to executed customer contracts as of the end of the applicable period. Contracted Power Capacity includes both revenue-generating capacity and capacity that has been contracted but is not yet in service. The period between contract execution and the commencement of billing varies based on customer requirements and can range from one to twelve months, primarily depending on the combination of deployment size and level of customer-specific design requirements.
Current wording
Contracted Power Capacity represents the aggregate amount of Sellable Power Capacity, measured in MW, that is subject to executed customer contracts as of the end of the applicable period. Contracted Power Capacity includes both revenue-generating capacity and capacity that has been contracted but is not yet in service. The period between contract execution and the commencement of billing varies based on customer requirements and typically ranges from one to twelve months, primarily depending on the combination of deployment size and level of customer-specific design requirements.
Previous wording
Contracted Power Capacity increased by 34 MW, or 9%, as of June 30, 2026 compared to December 31, 2025. This increase was driven by positive quarter-over-quarter growth in sales due to organic growth from newly acquired and existing customers.
Current wording
Contracted Power Capacity increased by 52 MW, or 14%, as of September 30, 2026 compared to December 31, 2025. This increase was driven by positive quarter-over-quarter growth in sales due to growth from newly acquired and existing customers.
Previous wording
Sellable Power Capacity decreased by 4 MW, or 1%, as of June 30, 2026 compared to December 31, 2025. This decrease was primarily due to the strategic exit of certain locations.
Current wording
Sellable Power Capacity increased by 8 MW, or 2%, as of September 30, 2026 compared to December 31, 2025. This increase was primarily due to the deployment of additional power infrastructure partially offset by the exit of certain non-strategic locations.
Previous wording
Contracted Power Sold increased to 107% as of June 30, 2026 compared to 97% as of December 31, 2025. This increase was driven by strong sales performance across existing customers and newly acquired customers.
Current wording
Contracted Power Sold increased to 108% as of September 30, 2026 compared to 97% as of December 31, 2025. This increase was driven by strong sales performance across existing customers and newly acquired customers.
Previous wording
Bookings increased by $15.3 million, or 31%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Bookings increased by $35.8 million, or 38%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase reflected broad-based strength across indirect and direct sales channels, increasing demand for newly acquired and existing customers and accelerating growth in bookings of one MW or greater.
Current wording
On an annualized basis, bookings increased by $16.6 million, or 34%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Bookings increased by $52.4 million, or 37%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase reflected broad-based strength across indirect and direct sales channels, increasing demand for newly acquired and existing customers and accelerating growth in bookings of one MW or greater.
Previous wording
The following table sets forth the monthly recurring revenue generated from bookings in each of the three month periods presented, which is used in our calculation of Bookings (in thousands):
Current wording
The following table sets forth the annualized monthly recurring revenue generated from bookings in each of the three month periods presented, which is used in our calculation of Bookings (in thousands):
Previous wording
We derive the majority of our revenues from recurring revenue streams, consisting of: (i) enterprise colocation services, which include fees for the licensing of cabinet space and power; (ii) interconnection services, which includes cross connects and exchange ports; and (iii) other revenues including but not limited to lease income from tenants and/or subtenants and revenue for additional services such as remote hands and eyes support, equipment installation and removal, cabling and cross-connects, hardware troubleshooting, monitoring, and other on-demand technical assistance. Our colocation and interconnection service offerings are generally billed monthly and recognized ratably on a straight line basis over the term of the contract.
Current wording
We derive the majority of our revenues from recurring revenue streams, consisting of: (i) enterprise colocation services, which include fees for the licensing of cabinet space and power; (ii) interconnection services, which include cross connects and exchange ports; and (iii) other revenues including but not limited to lease income from tenants and/or subtenants and revenue for additional services such as remote hands and eyes support, equipment installation and removal, cabling and cross-connects, hardware troubleshooting, monitoring, and other on-demand technical assistance. Our colocation and interconnection service offerings are generally billed monthly and recognized ratably on a straight line basis over the term of the contract.
Previous wording
Transaction and other costs primarily consist of expenses related to the 2024 Portfolio Acquisition and the 2025 Portfolio Acquisition. These expenses include closing costs, commissions, and professional fees, such as legal and accounting fees, as well as certain non-recurring integration costs. Transaction and other costs also include expenses associated with the Company's initial public offering, including consulting, accounting, and legal fees.
Current wording
Transaction and other costs primarily consist of expenses related to the 2024 Portfolio Acquisition, the 2025 Portfolio Acquisition, and the Company's IPO. These expenses include closing costs, commissions, and professional fees, such as legal and accounting fees, as well as certain non-recurring integration costs.
Previous wording
Income tax benefit (expense) is primarily comprised of income taxes in certain federal, state, local and foreign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates from those in the United States.
Current wording
Income tax (expense) benefit is primarily comprised of income taxes in certain federal, state, local and foreign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates from those in the United States.
Previous wording
Comparison of the Three Months and Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of the Three Months and Nine Months Ended September 30, 2026 and 2025
Previous wording
Revenues for the three months ended June 30, 2026 increased by $35.6 million, or 15%, compared to the three months ended June 30, 2025. This growth was primarily due to a:
Current wording
Revenues for the three months ended September 30, 2026 increased by $61.6 million, or 26%, compared to the three months ended September 30, 2025. This growth was primarily due to a:
Previous wording
$31.3 million increase in colocation revenues, driven by organic growth from both existing and new customers, as well as inorganic growth of $8.6 million resulting from the 2025 Portfolio Acquisition
Current wording
$47.8 million increase in colocation revenues, driven by organic growth from both existing and new customers, as well as inorganic growth of $12.5 million resulting from the 2025 Portfolio Acquisition.
Previous wording
$3.1 million increase in other revenues, driven by tenant rent revenue resulting from the 2025 Portfolio Acquisition.
Current wording
$4.1 million increase in other revenues, driven by tenant rent revenue resulting from the 2025 Portfolio Acquisition.
Previous wording
$7.1 million increase in metered power revenue, primarily driven by customer contracts entered into throughout 2025 and the six months ended June 30, 2026, including agreements with metered power billing structures in addition to inorganic growth resulting from the 2025 Portfolio Acquisition.
Current wording
$11.7 million increase in metered power revenue, primarily driven by customer contracts entered into throughout 2025 and the nine months ended September 30, 2026, including agreements with metered power billing structures in addition to inorganic growth resulting from the 2025 Portfolio Acquisition.
Previous wording
These increases were partially offset by a $2.5 million decrease in interconnection and non-recurring revenues. The decrease in interconnection revenues was primarily attributable to customer churn and a reduction in active month-to-month cross connects.
Current wording
These increases were partially offset by a $2.0 million decrease in interconnection and non-recurring revenues. The decrease in interconnection revenues was primarily attributable to customer churn and a reduction in active month-to-month cross connects.
Previous wording
Revenues for the six months ended June 30, 2026 increased by $73.3 million, or 15%, compared to the six months ended June 30, 2025. This growth was primarily due to a:
Current wording
Revenues for the nine months ended September 30, 2026 increased by $134.9 million, or 19%, compared to the nine months ended September 30, 2025. This growth was primarily due to a:
Previous wording
$59.4 million increase in colocation revenues, driven by organic growth from both existing and new customers, as well as inorganic growth of $25.5 million resulting from the 2025 Portfolio Acquisition
Current wording
$107.2 million increase in colocation revenues, driven by organic growth from both existing and new customers, as well as inorganic growth of $38.0 million resulting from the 2025 Portfolio Acquisition
Previous wording
$16.5 million increase in metered power revenue, primarily driven by customer contracts entered into throughout 2025 and the six months ended June 30, 2026, including agreements with metered power billing structures in addition to inorganic growth resulting from the 2025 Portfolio Acquisition.
Current wording
$28.2 million increase in metered power revenue, primarily driven by an increase in customer contracts entered into throughout 2025 and the nine months ended September 30, 2026, containing metered power billing structures, and additional metered revenues from the 2025 Portfolio Acquisition.
Previous wording
These increases were partially offset by a $5.7 million decrease in interconnection and non-recurring revenues. The decrease in interconnection revenues was primarily attributable to customer churn and a reduction in active month-to-month cross connects. The decline in non-recurring revenues was driven mainly by an increase in revenue reserves, associated with an increase in customer churn during the period.
Current wording
These increases were partially offset by a $7.7 million decrease in interconnection and non-recurring revenues. The decrease in interconnection revenues was primarily attributable to customer churn and a reduction in active cross connects. The decline in non-recurring revenues was attributable to customer churn.
Previous wording
Cost of revenues, excluding depreciation and amortization for the six months ended June 30, 2026 increased by $23.5 million, or 10%, compared to the six months ended June 30, 2025. This increase primarily consisted of a $6.5 million increase in property taxes, a $5.3 million increase in personnel costs, a $17.7 million increase in utilities costs, a $1.1 million increase in repairs and maintenance costs, and a $6.5 million increase in other costs, partially offset by a $13.7 million decrease in real estate costs.
Current wording
Cost of revenues, excluding depreciation and amortization for the three months ended September 30, 2026 increased by $12.8 million, or 10%, compared to the three months ended September 30, 2025. This increase primarily consisted of a $2.9 million increase in property taxes, a $3.3 million increase in personnel costs, a $6.1 million increase in utilities costs, a $2.9 million increase in repairs and maintenance costs and a $3.2 million increase in other costs, partially offset by a $5.6 million decrease in real estate costs.
Previous wording
Cost of revenues as a percentage of revenue decreased from 50% for the three months ended June 30, 2025 to 48% for the three months ended June 30, 2026. The decrease was primarily driven by positive operating leverage from revenue growth.
Current wording
Cost of revenues as a percentage of revenue decreased from 54% for the three months ended September 30, 2025 to 47% for the three months ended September 30, 2026. The decrease was primarily driven by positive operating leverage from revenue growth.
Previous wording
Cost of revenues, excluding depreciation and amortization for the three months ended June 30, 2026 increased by $10.6 million, or 9%, compared to the three months ended June 30, 2025. This increase primarily consisted of a $3.0 million increase in property taxes, a $3.3 million increase in personnel costs, a $7.9 million increase in utilities costs, and a $3.7 million increase in other costs, partially offset by a $6.8 million decrease in real estate costs.
Current wording
Cost of revenues, excluding depreciation and amortization for the nine months ended September 30, 2026 increased by $36.3 million, or 10%, compared to the nine months ended September 30, 2025. This increase primarily consisted of a $9.4 million increase in property taxes, an $8.5 million increase in personnel costs, a $23.8 million increase in utilities costs, a $4.0 million increase in repairs and maintenance costs, and a $9.9 million increase in other costs, partially offset by a $19.3 million decrease in real estate costs.
Previous wording
Cost of revenues as a percentage of revenue decreased from 52% for the six months ended June 30, 2025 to 49% for the six months ended June 30, 2026. The decrease was primarily driven by positive operating leverage from revenue growth.
Current wording
Cost of revenues as a percentage of revenue decreased from 52% for the nine months ended September 30, 2025 to 48% for the nine months ended September 30, 2026. The decrease was primarily driven by positive operating leverage from revenue growth.
Previous wording
Depreciation and amortization for the three months ended June 30, 2026 increased by $25.4 million, or 40%, compared to the three months ended June 30, 2025. Depreciation and amortization for the six months ended June 30, 2026 increased by $46 million, or 36%, compared to the six months ended June 30, 2025. The increases were primarily attributable to additional property and equipment placed in service, the purchase of previously leased properties throughout 2025, and the depreciation and amortization associated with property and equipment and intangible assets acquired in the 2025 Portfolio Acquisition.
Current wording
Depreciation and amortization for the three months ended September 30, 2026 increased by $21.9 million, or 35%, compared to the three months ended September 30, 2025. Depreciation and amortization for the nine months ended September 30, 2026 increased by $68.0 million, or 36%, compared to the nine months ended September 30, 2025. The increases were primarily attributable to approximately $14 million and $47 million of depreciation and amortization associated with the 2025 Portfolio Acquisition and approximately $7 million and $20 million related to additional property and equipment placed in service and the purchase of previously leased properties for the three- and nine-month periods, respectively.
Previous wording
The gain on lease modification for the three months ended June 30, 2026 increased by $40 million, or 100%, compared to the three months ended June 30, 2025. The gain on lease modification for the six months ended June 30, 2026 increased by $40 million, or 78,416%, compared to the six months ended June 30, 2025. The increases were primarily attributable to the surrender of a leased premises in connection with a strategic exit initiative, which resulted in a gain on lease modification during 2026.
Current wording
The gain on lease modification for the nine months ended September 30, 2026 increased by $40 million, compared to the nine months ended September 30, 2025. The increase was primarily attributable to the surrender of leased premises in connection with a strategic exit initiative, which resulted in a gain on lease modification during 2026.
Previous wording
Transaction and other costs for the three months ended June 30, 2026 increased by $1.5 million, or 86%, compared to the three months ended June 30, 2025. Transaction and other costs for the six months ended June 30, 2026 increased by $9.2 million, or 201%, compared to the six months ended June 30, 2025. The increases in transaction and other costs were primarily due to professional service fees incurred in connection with the initial public offering.
Current wording
Transaction and other costs for the three months ended September 30, 2026 increased by $2.3 million, or 110%, compared to the three months ended September 30, 2025. Transaction and other costs for the nine months ended September 30, 2026 increased by $11.5 million, or 172%, compared to the nine months ended September 30, 2025. The increases in transaction and other costs were primarily due to professional service fees incurred in connection with the initial public offering.
Previous wording
Interest expense for the three months ended June 30, 2026 increased by $41.3 million, or 80%, compared to the three months ended June 30, 2025. Interest expense for the six months ended June 30, 2026 increased by $75.1 million, or 71%, compared to the six months ended June 30, 2025. The increases were due to the assumption of the 2021 ABS Notes in connection with the 2025 Portfolio Acquisition, as well as issuances of our 2024 ABS Notes in 2025.
Current wording
Interest expense for the three months ended September 30, 2026 increased by $11.8 million, or 20%, compared to the three months ended September 30, 2025. Interest expense for the nine months ended September 30, 2026 increased by $86.9 million, or 52%, compared to the nine months ended September 30, 2025. The increases were due to the ABS notes assumed in connection with the 2025 Portfolio Acquisition and higher outstanding indebtedness from incremental asset backed securitization issuances throughout 2025. The Company capitalized $7.6 million of interest costs related to construction projects during the three months ended September 30, 2026.
Previous wording
Income tax (expense) benefit for the three months ended June 30, 2026 decreased by $14.4 million, or 656%, compared to the three months ended June 30, 2025. Income tax (expense) benefit for the six months ended June 30, 2026 decreased by $8.1 million, or 106%, compared to the six months ended June 30, 2025. The increases in income tax expense were primarily attributable to changes in the blended state income tax rate and certain return-to-provision adjustments recorded during 2026.
Current wording
For both the three and nine months ended September 30, 2026 the Company recorded income tax expense of less than $0.1 million and $0.5 million, respectively. For the three and nine months ended September 30, 2025, the Company recorded income tax benefits of $4.6 million and $12.2 million, respectively. The increases in income tax expense were primarily attributable to changes in the blended state income tax rate and certain return-to-provision adjustments recorded during 2026.
Previous wording
We define Adjusted EBITDA as net (loss) income, excluding (i) income taxes, (ii) interest expense, (iii) depreciation and amortization, (iv) gain on lease modification, (v) loss on extinguishment of debt, (vi) bargain purchase gain, (vii) other income (loss), net, and (viii) transaction and other costs. Transaction and other costs consist primarily of acquisition and integration costs, restructuring costs, costs associated with our initial public offering, and employee loan extinguishment expenses directly attributable to specific transactions. The employee loan extinguishment costs are recorded within Selling, marketing, general and administrative expenses in our unaudited condensed consolidated statements of operations. Management uses Adjusted EBITDA as a key measure of our operating performance and to assess the results of our business excluding certain items that we believe are not indicative of our core operating results. In addition, we believe Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of data centers and other real estate companies. However, because Adjusted EBITDA is calculated before recurring cash charges, including interest expense and income taxes, which represent significant recurring cash charges necessary to operate our business, and is not adjusted for capital expenditures or other recurring cash requirements of our business, it should not be considered a measure of liquidity or an indicator of our cash flows and its utility as a measure of our performance is limited. Further, Adjusted EBITDA does not reflect our cash requirements or our ability to generate cash to meet those obligations. Other companies may calculate Adjusted
Current wording
We define Adjusted EBITDA as net (loss) income, excluding (i) income taxes, (ii) interest expense, (iii) depreciation and amortization, (iv) gain on lease modification, (v) loss on extinguishment of debt, (vi) bargain purchase gain, (vii) stock-based compensation, (viii) other income (loss), net, and (ix) transaction and other costs. Transaction and other costs consist primarily of acquisition and integration costs, restructuring costs, costs associated with our initial public offering, and employee bonuses and loan extinguishment expenses directly attributable to specific transactions. The employee bonuses and loan extinguishment costs are recorded within Selling, marketing, general and administrative expenses in our unaudited condensed consolidated statements of operations. Management uses Adjusted EBITDA as a key measure of our operating performance and to assess the results of our business excluding certain items that we believe are not indicative of our core operating results. In addition, we believe Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of data centers and other real estate companies. However, because Adjusted EBITDA is calculated before recurring cash charges, including interest expense and income taxes, which represent significant recurring cash charges necessary to operate our business, and is not adjusted for capital expenditures or other recurring cash requirements of our business, it should not be considered a measure of liquidity or an indicator of our cash flows and its utility as a measure of our performance is limited. Further, Adjusted EBITDA does not reflect our cash requirements or our ability to generate cash to meet those obligations. Other companies may calculate Adjusted EBITDA differently than we do and, as a result, Adjusted EBITDA may not be comparable to other companies’ Adjusted EBITDA. Accordingly, Adjusted EBITDA should not be viewed in isolation or as a substitute for net (loss) income or any other performance measure calculated in accordance with U.S. GAAP.
Previous wording
Adjusted EBITDA increased by $20.9 million, or 21%, to $120.3 million for the three months ended June 30, 2026, compared to $99.4 million for the three months ended June 30, 2025, and increased by $42.9 million, or 23%, to $228.6 million for the six months ended June 30, 2026, compared to $185.7 million for the six months ended June 30, 2025. This increase reflected continued improvement in operating performance across our platform, driven by growth in recurring colocation and interconnection revenues and operating leverage from our cost structure.
Current wording
Adjusted EBITDA increased by $40.5 million, or 44%, to $132.1 million for the three months ended September 30, 2026, compared to $91.6 million for the three months ended September 30, 2025, and increased by $83.4 million, or 30%, to $360.7 million for the nine months ended September 30, 2026, compared to $277.3 million for the nine months ended September 30, 2025. This increase reflected continued improvement in operating performance across our platform, driven by growth in recurring colocation and other revenues and operating leverage from our cost structure.
Previous wording
FFO decreased by $9.5 million, or 19%, to $40.8 million for the three months ended June 30, 2026, compared to $50.2 million for the three months ended June 30, 2025 and decreased by $19.7 million, or 25%, to $59.3 million for the six months ended June 30, 2026, compared to $79.0 million for the six months ended June 30, 2025. This decrease was primarily attributable to an increase in net loss, primarily driven by higher interest expense resulting from the assumption of the 2021 ABS Notes in connection with the 2025 Portfolio Acquisition and interest incurred on additional ABS notes issued during the latter part of 2025. These impacts were partially offset by improved operating performance driven by growth in recurring revenue and gain on lease modification incurred during the second quarter.
Current wording
FFO decreased by $36.5 million, or 110%, to negative $3.2 million for the three months ended September 30, 2026, compared to positive $33.2 million for the three months ended September 30, 2025 and decreased by $56.2 million, or 50%, to positive $56.1 million for the nine months ended September 30, 2026, compared to positive $112.3 million for the nine months ended September 30, 2025. This decrease was primarily attributable to an increase in net loss, primarily driven by higher interest expense resulting from the ABS Notes assumed in connection with the 2025 Portfolio Acquisition and interest incurred on additional ABS notes issued during the latter part of 2025 as well as from transaction and compensation costs related to our IPO. These impacts were partially offset by improved operating performance driven by growth in recurring revenue and gain on lease modification incurred during the second quarter.
Previous wording
As of June 30, 2026, we had $356.0 million of available liquidity, which was comprised of $330.4 million of available cash and cash equivalents and restricted cash, $54.0 million of undrawn and available capacity under our corporate Revolving Credit Facility and our variable funding notes, less $28.3 million due to the issuance of any letters of credit. Our primary source of liquidity and capital resources are contractual cash flows generated from over 1,700 customers, most of whom we have long-standing relationships.
Current wording
As of September 30, 2026, we had $1,115.7 million of available liquidity, which was comprised of $244.0 million of available cash and cash equivalents and restricted cash, $900.0 million of undrawn and available capacity under our corporate Revolving Credit Facility and our variable funding notes, less $28.3 million due to the issuance of any letters of credit. Our primary source of liquidity and capital resources are contractual cash flows generated from our customers.
Previous wording
As of December 31, 2025, we had $522.5 million of available liquidity, which was comprised of $403.4 million of available cash and cash equivalents and restricted cash, $166.0 million of undrawn and available capacity under our corporate Revolving Credit Facility and our variable funding notes, less $46.9 million due to the issuance of any letters of credit. Our primary source of liquidity and capital resources are contractual cash flows generated from over 1,800 customers, most of whom we have long-standing relationships.
Current wording
As of December 31, 2025, we had $522.5 million of available liquidity, which was comprised of $403.4 million of available cash and cash equivalents and restricted cash, $166.0 million of undrawn and available capacity under our corporate Revolving Credit Facility and our variable funding notes, less $46.9 million due to the issuance of any letters of credit. Our primary source of liquidity and capital resources are contractual cash flows generated from our customers.
Previous wording
Net cash provided by operating activities was $33.6 million for the six months ended June 30, 2026 as compared to $65.5 million for the six months ended June 30, 2025. The decrease was driven primarily by unfavorable changes in working capital related to the timing of customer billings, collections, and vendor payments.
Current wording
Net cash provided by operating activities was $103.4 million for the nine months ended September 30, 2026 as compared to $118.9 million for the nine months ended September 30, 2025. The decrease was driven primarily by unfavorable changes in working capital related to the timing of customer billings, collections, and vendor payments.
Previous wording
Net cash used in investing activities was $150.4 million for the six months ended June 30, 2026 as compared to $113.2 million for the six months ended June 30, 2025. The increase in cash outflows was driven primarily by higher capital expenditures to support customer demand and growth initiatives across the platform, including investments in expansion and upgrades of existing facilities.
Current wording
Net cash used in investing activities was $315 million for the nine months ended September 30, 2026 as compared to $183.9 million for the nine months ended September 30, 2025. The increase in cash outflows was driven primarily by higher capital expenditures to support customer demand and growth initiatives across the platform, including investments in expansion and upgrades of existing facilities.
Previous wording
Net cash provided by financing activities was $50.2 million for the six months ended June 30, 2026 as compared to $85.4 million for the six months ended June 30, 2025. The decrease was primarily attributable to financing activity in the prior-year period that did not recur in 2026. During the six months ended June 30, 2025, the Company received net proceeds of approximately $113.6 million from long-term debt and revolving credit facility borrowings. During the six months ended June 30, 2026, financing activity consisted primarily of $112.0 million of borrowings under the revolving credit facility and $75.0 million of borrowings from a related party, partially offset by distributions to the member of $130.5 million.
Current wording
Net cash provided by financing activities was $58.3 million for the nine months ended September 30, 2026 as compared to $406.3 million for the nine months ended September 30, 2025. During the nine months ended September 30, 2025, the Company received net proceeds of approximately $707.6 million from long-term debt and revolving credit facility borrowings and made $250.0 million of distributions to its member. During the nine months ended September 30, 2026, financing activity consisted primarily of $1,151.4 million of net proceeds from the issuance of common stock, partially offset by $219.5 million of prepayment of its Series 2020-2 Class A-2 Notes, $734.0 million net repayments under the revolving credit facility and Series 2024-1 Variable Funding Notes and $130.5 million of distributions to the member.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
$7.2 million increase in other revenues, driven by tenant rent revenue resulting from the 2025 Portfolio Acquisition.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
EBITDA differently than we do and, as a result, Adjusted EBITDA may not be comparable to other companies’ Adjusted EBITDA. Accordingly, Adjusted EBITDA should not be viewed in isolation or as a substitute for net (loss) income or any other performance measure calculated in accordance with U.S. GAAP.