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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon and welcome to the Equinix Third Quarter Earnings Conference Call. All lines will be able to listen-only until we open for questions. Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I would now like to turn the conference over to Katrina Rymill, Vice President of Investor Relations and Sustainability. You may begin.
Good afternoon and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements that we make today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release, and those identified in our filings with the SEC, including our most recent Form 10-K filed on February 19th, 2021, and 10-Q filed on July 30th, 2021. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call.
In addition, in light of Regulation Fair Disclosure is Equinix's policy not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. In addition, we'll provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures, the most directly comparable GAAP measures and a list of the reasons why the Company uses these measures in today's press release of the Equinix IR page at www.equinix.com. We have made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data.
We would also like to remind you that we post important information about Equinix and the IR page from time-to-time and encourage you to check our website regularly for the most current available information. With us today are Charles Meyers, Equinix 's CEO and President, and Keith Taylor, Chief Financial Officer. Following our prepared remarks, we'll be taking questions from sell-side analysts. In the interest of wrapping this call up in an hour, we'd like to ask these analysts to limit any follow-on questions to just one. At this time, I'll turn the call over to Charles.
Thanks, Kat. Good afternoon, everybody, and welcome to our third quarter earnings call. We had a great quarter, achieving our 75th consecutive quarter of top line revenue growth and a record Q3. A clear signal of strong market demand. Our results were fueled by continued strength in our Americas business and robust performance for our channel program globally as key partners continue to see Platform Equinix as a point of nexus for digital transformations solutions. The pandemic has triggered and accelerated need to digitize business models in virtually every segment of the economy.
And our strong results reflect its increasing demand for digital infrastructure and Equinix remains uniquely positioned to help customers as they shift towards distributed, hybrid, and multi-cloud as clear architecture of choice. As we continue to strengthen our position as the world digital infrastructure Company, our focus remains on creating distinctive and durable value for our customers and our shareholders, driving growth in scale and our market-leading colocation franchise, expanding our relevance in Cloud ecosystem through xScale, and tapping into massive sources of incremental demand by adapting to evolving customer needs with our rapidly growing digital services business.
Turning to our results as depicted on Slide 3. Revenues for Q3 were $1.7 million, up 8% year-over-year, adjusted EBITDA was up 4% year-over-year, and the AFFO was in line with our expectations. Interconnection revenues continued to outpace colocation revenues, growing 11% year-over-year, driven by solid fiscal cross connect growth and broad adoption of Equinix power. These growth rates are all on a normalized and constant currency basis. We process more than 4,200 yields in the quarter across more than 3,100 customers highlighting the reach, scale and predictability of our booking digits.
We have a solid demand pipeline as we look in the final quarter of the year, and we continue to add capacity in services demand with 11 major projects delivered this quarter in key markets like Frankfurt, New York, and Singapore, and 31 more major projects underway across 23 markets in 16 countries. Our global interconnection franchise continues to thrive with over 414,000 total interconnections on our industry-leading platform. In Q3, we added an incremental 7,800 interconnections now have at least 1 major cloud on-ramping, 42 metros around the world, 2 times more than the nearest competitor.
A clear indication that Equinix is the home of the interconnected cloud. Internet exchange saw peak traffic up 6% quarter-over-quarter, and 30% year-over-year to over 21 terabits per second, as traffic growth remains robust. Equinix Fabric saw excellent growth continuing significantly over index within the broader interconnection portfolio. More than 2,800 customers are now on Fabric, attach rates moving up into the right as businesses diversify their end destinations and service providers integrate Fabric into their own solutions. In September, we extended Platform Equinix into our 27th country, with the close of our GPX acquisition, entering the strategic Indian market.
Our 2 data centers in Mumbai form a network-dense campus with more than 350 international and local companies, including 6 on-ramps to the world's leading Cloud service providers and a robust network ecosystem. GPX represents an ideal entry point into this top 10 GDP country, and we expect to expand our operations significantly in India over the coming years as we tap into this rapidly growing market. In parallel with our tremendous retail success, we continue to expand our xScale business.
In October, we announced plans to expand in Australia with an agreement to establish a $575 million in joint venture with PGIM real estate to develop two data centers in Sydney, which will provide more than 55 megawatts of capacity when fully built. Also, during the quarter, we closed the first phase of our previous slide-outs to [Indiscernible] joint venture with GIC and signed 2 megawatts with the hyperscalers in Frankfurt. We currently have 8 xScale built under development, including our newly announced [Indiscernible] 3, Mexico C3 and Sydney 9 assets, which will collectively added 25 megawatts capacity when they open in the first half of 2022.
The total investment of our various hyper-scale joint ventures when closed and fully built-out, is now expected to be more than $7.5 billion across 34 facilities globally with more than 675 megawatts of power fast. Turning our [Indiscernible] recharge services, our Equinix 's metal business saw strong revenue growth at Cloud-native and service provider customers continue to embrace the ability to deploy physical infrastructure at software speed. And network-edge is our robust growth as established customers purchase more virtual network functions across additional metrics.
By year-end, we expect network-edge to be available in 25 metros around the world. So let me cover highlights from our verticals. Our network vertical continues to be a foundation for the business. With strength in the quarter in cable and satellite sub-segments and continued momentum in joint go-to-market with our top net with partners across the globe. Expansions this quarter included Zayo Group, a global communications infrastructure Company adding interconnection and colocation capacity to support demand, Vocus, Australia's leading specialist fiber and network solutions provider, building infrastructure in both Sydney and Melbourne to offer network services, and Hurricane Electric, a global network service provider, utilizing Equinix Fabric to allow Enterprise customers to access their IP transit products at scale and in real-time.
Our enterprise vertical saw another strong quarter led by manufacturing in FinTech and record channel activity. New wins and expansions included a Fortune 100 -named manufacturing Company, deploying global network hubs to enable their stats analytics offering, a leading technology manufacturer deploying a custom-liquid cooled environment and solution center to support the next-generation of high performance compute, and a Fortune 250 online retailer and e-commerce platform, deploying across Platform Equinix with low latency, cloud-adjacent network hubs to support their retail branded sites.
Our cloud and IT verticals saw particular strength in the Americas, as industry-specific cloud solutions continue to be a catalyst for innovation and new growth. Expansion this quarter included Adobe, a leading cloud software provider, deploying infrastructures towards platforms and optimize sustainable participation in key digital markets and ecosystems. Wasabi, a U.S. based object storage Company expanding their offering on Equinix Fabric into APAC and EMEA, enabling customers to easily connect their bare metal workflows posted on Equinix Metal, and a top 5 global software provider deploying core metals to support their growing user base in demand in both Mexico City and Sao Paulo.
Content and digital media had a great bookings quarter with resurgence in this vertical being led by APAC and broad-based strength in the gaming and streaming sub-segments as consumer demand for at-home digital services remains strong. Expansion this quarter included Netflix, a global streaming services spanning across Platform Equinix to new and existing markets to support OTT delivery, Kingsoft, a Chinese cloud provider expanding into sand port to support rapid sales growth, and a top 3 content distributor extending coverage and scale for its growing platform in the delivery of new and existing security solutions. And our channel program continues to shine, delivering another robust quarter.
This important go-to-market notion accounted for over 35% of total bookings, nearly half of our enterprise bookings in more than 60% of our new logos in the quarter. We are benefiting from tremendous momentum in hybrid cloud adoption and seeing particular strength from joint enterprise pursuits with our key alliance partners such as AT&T, AWS, Dell, HPE, and Microsoft. Wins were across a wide range of industry verticals and included a marquee win with NVIDIA, IBM, and SBA for Continental Group, a worldwide automotive parts supplier billion - interconnected global network to optimize workloads and speed up AI training for their advanced driver assistance systems. So now let me turn the call over to Keith to cover the results for the quarter.
Great. Thanks, Charles, and good afternoon to all. Well, let me start by saying the Equinix business continues to hum, and once again, we met our expectations are better. We had a very solid quarter. The macro-environment for digital infrastructure continues to drive expanding market opportunities, as demonstrated by another outstanding bookings quarter, both at the gross and the net level from our industry leading go-to-market engine. Our bookings backlog remains both significant and elevated as we work to install the substantial volume of business close through the past few quarters. And our forward-looking pipeline is extremely healthy in all our regions.
Our channel sales activity was the best in our history and our global platform delivered healthy, inter and inter-region activity. We have firm MRR per cabinet yields with yet again, net positive pricing actions, a validation of our differentiated operating model compared to others in our space. On a year-to-date basis, our global design and construction and OPS teams have delivered more than 18,000 cabinets of retail capacity, and 40 megawatts of xScale inventory while also rolling out critical network infrastructure assets across our targeted markets with support of our Fabric, network edge, and metal service offerings. We've seen no major delays today with delivering new capacity despite general market concerns related to supply chain challenges.
A reflection of the efforts put forth by our best-in-class procurement as strategic sourcing teams. Now, let me cover the results for the quarter. Note that all growth rates in this section are on a normalizing constant currency basis. As depicted on the Slide 4, global Q3 revenues were $1.675 billion, up 8% over the same quarter last year due to strong business performance across our platform led by the Americas region. Non-recurring revenue represented about 7% of revenues due to an increase in custom installation work and EMEA xScale joint venture fees. For Q4, we expect MRR to trend downward, decreasing sequentially by approximately $12 million due to lower xScale fees and the timing of large customer installations.
Q3 revenues, net of our FX hedges included a $6 million headwind when compared to our prior guidance rates. Total Q3 adjusted EBITDA was $786 million or 47% of revenues at the high end of our guidance expectations due to timing of spend and low integration costs. Q3 adjusted EBITDA, net of our FX hedges included a $3 million headwind when compared to our prior guidance rates at $3 million of integration costs. Total Q3 AFFO was $628 million, the result of strong operating performance, consistent with our expectations. Similar to prior years, we expect seasonally higher levels of recurring capex in Q4 as our operating teams work to complete the 2021 projects.
Total Q3 MRR term was 2.1%. We continue to expect MRR turn for the full year to be at a lower end of our targeted quarterly range, up 2 to 2.5%. Turning to our regional highlights, whose full results are covered on Slides 5 through 7. APAC region's revenue grew 11% year-over-year, followed by the Americas at 7% and EMEA at 6%. As previously discussed, we expect the EMEA growth rate to return to normalized levels in Q4 as we lap interconnection price increases, and the other one-off positive adjustments from last year. The Americas region saw continued strength with our third consecutive quarter of record bookings with a broad distribution across metros, including some of our smaller markets such as Boston, Denver, Mexico City, Seattle, and Toronto.
The America sales teams continue to sell the global platform within notable increase in activity coming from our Canadian team, a benefit derived from the transaction with Dell Canada, which is outperforming our expectations. Our EMEA region had a solid quarter with strength coming from our Amsterdam, Frankfurt, and Madrid markets as enterprise customers and the channel drive bookings. And as we aim to meet high sustainability and efficiency standards while progressing towards our 2030 science-based targets, new builds like our recently opened Frankfurt IBX service a model to blended of positively contributing to the local microclimate.
And finally, the Asia Pacific region had a solid quarter with momentum across all of our metros led by Singapore. New deal activity focused on small to medium-sized deployments with firm pricing and continued strength in our cross-border zone. Our Hong Kong markets saw a nice rebound in bookings performance, although continues to feel constrained given the market uncertainty. And now looking our capital structure, please refer to Slide 8. We ended the quarter with cash of about $1.4 billion and our net debt leverage ratio remains low, particularly relative to our industry peers. Our balance sheet remains highly flexible in liquid and we have our low AFFO cash payout ratio.
With regards to our outstanding debt, we have minimal near-term exposure to potentially rising interest rates with 95% of our debt fixed at a weighted average maturity of over 9 years. Turning to Slide 9 for the quarter, capital expenditures were approximately $678 million, including recurring CapEx of $48 million. We opened 11 new projects this quarter, including new [Indiscernible] in Frankfurt, Osaka and Singapore, and purchased land for development in Barcelona, Frankfurt and Helsinki. On the Zale side of the business, we opened our Sao Paulo 5 and Frankfurt 9 assets.
We also closed the first phase of our media 2 joint venture with GIC for net cash proceeds after 20% equity contribution of approximately $140 million, including 30 more $4 million coming from the contribution of our Sao Paulo 5 asset into the joint venture after quarter ends. On a separate note, we continue to actively manage our practices, suppliers and have built up an appropriate inventory of parts and components, as we hedge against supply chain challenges in support of our business needs. Finally, total recurring revenues for more asset stepped up 59% due to the acquisition of our Sydney 1 and Sydney 2 IBXes. Our capital investments delivered strong returns as shown on Slide 10.
Our 153 stabilized assets increased recurring revenue by 3% year-over-year on a constant currency basis. These stabilized assets are collectively 86% utilized and generate a 27% cash-on-cash return on the gross PP&E invested. We expect to exit the year closer to the top end of our stabilized asset growth range, and part due to strong Americas revenue growth. And please refer to Slides 11 to 50 for our updated summary of 2021 guidance and bridges. Do note, our guidance now includes the anticipated results from the GPX India acquisition, which closed in September. For the full-year 2021, we expect revenues to grow approximately 8% on a normalized and constant currency basis.
Our updated revenue guidance implies our largest ever quarterly step-up in recurring revenues on a normalized basis. A reflection of our continued strong execution. Revenues include about $5 million from the GPX acquisition and reflect updated FX rates. We expect 2021 adjusted EBITDA margins, before integration costs to be greater than 47% and now include about $3 million from GPX Acquisition and reflect updated FX rates. We expect to spend $80 million of integration costs in 2021. And we expect 2021 AFFO to grow 10% to 11% on a normalized and constant currency basis compared to the prior year and to deliver AFFO per share growth of 9% to 10%.
Our AFFO guidance includes some AFFO impacting accelerated spend, including recurring CapEx, an elevated cash commissions associated with our strong bookings performance. 2021 CapEx is expected to range between $2.7 billion and $3 billion including about $450 million of on-balance sheet xScale CapEx, a significant portion of which has been or will be reimbursed by the JVs, and $193 million of recurring CapEx spend at the midpoint. So let me stop here and turn the call back to Charles.
Thanks, Keith. Our business continues to perform exceptionally well delivering strong and consistent results throughout the changing times. The pandemic has been a driving force for digital transformation and as businesses seek to respond to this imperative, the infrastructure underpinning these services must keep pace. We continue to prosecute multiple compelling growth factors, expanding our platform geographically, scaling our go-to-market engine to capture new customers, and bringing new services to bear that will expand our addressable market.
We're evolving the way we design, create, and deliver our products and services to fuel our growth and meet the changing needs of our customers. To that end, I'd also like to welcome Ron Guerrier to our Board of Directors. As a veteran CIO to Fortune 500 corporations and government, Ron brings a unique perspective to the Equinix board as we continue to innovate our digital infrastructure offerings for the digital leaders of today and tomorrow.
I'd like to close by expressing my gratitude to our more than 10,000 employees, whose commitment to keep our customers at the center of everything we do continues to drive our market leadership. They embody our commitment to show up every day with an in-service to mindset, starting by being in service to each other, which in turn allows us to be in service to our customers, to our communities, and to you, our shareholders. So let me stop there and open it up for questions.
Thank you. We would now like to open the phone lines for question. [Operator Instructions]. Our first question comes from Ari Klein from BMO Capital Markets. Please go ahead.
Thanks. It sounds like new customer net adds have been up a fair bit this year and the channel partnerships are doing really well. Can you provide some additional color on what you're seeing there, maybe where you're seeing the most traction from new customers, and also in the channel from a regional standpoint.
Sure, yes, I mean,-- I think we're seeing strength across the board, but really the enterprise side of the business, I think is where a lot of the new customer ads are coming from. And most of those, about 60% are coming through channel, as we talked about in the script. So we're seeing a big uptick that said more than 35% percent of the bookings coming through the channel. And I think it's been really encouraging, We're really seeing strength with our top channel partners and really our top alliance partners in particular, who are really engaged in joint enterprise pursuit with us. In terms of pursuing hybrid multi-cloud opportunities and people implementing hybrid architectures. And so -- in fact, I'll give you a start. We had our top 4 alliance partners in this quarter accounted for 10% of the total bookings.
And that's not 10% of the channel book, is that 10% of the total bookings. So really strong momentum with the channel partners and it's across a number of verticals and it's across a number of use cases, but real strength in terms of how people are thinking about using corporate data to draw insights, how they, therefore, want to store that data centrally, act on it from a variety of cloud resources, and then, also AI as a key driver. In fact, we had a big win -- big joint win with NVIDIA on that front as we talked about in the script, and so really great progress there, and I think the range of use cases is really strong. We had -- in fact we had an event today that we call Connects (ph) that was -- we had I think about 500 registrations for that event -- for enterprises talking about a variety of use cases implemented on Fabric and so we're seeing some really good momentum.
Thanks. And then just on churn, it's tracking well below where it's been in historically. What's driving that and how sustainable do you think that is moving forward?
Again, I do think that that's a durable trend. I would always comment that there's some potential lumpiness in churn at times. But I think if you look at the trend line on that, it's been the line of best fit is clearly downward there. And so we've had a good year. And as we said, we expect our full-year churn to be toward the bottom end of the range that we talked about, %2 to %2.5. And I think the big driver of that is really mix of business. We're getting the right time deployments, right kinds of customers, right kind of use cases.
And I think that's a lot of credit to our sales and marketing team in terms of what they're doing from a targeting perspective, and to our commercial teams in terms of how we're really sort of focusing the business. I do think it's durable and I think that's going to be a -- continue to be a key driver in the business going forward.
Thanks for the color.
Our next question comes from Jordan Sadler from KeyBanc Capital Markets. Please go ahead.
Thanks. Wanted touch base on some of the inflationary pressures that have been affecting folks. First, just maybe you could talk about the impact, if any, rising power costs may have had in the quarter on your full-year guide. And maybe elaborate if you could, your hedging protocol by region.
Sure. I'll start and then Keith can jump in if he wants to add anything, but I'd say this, other than some small 1-time items on the power side that had a slight impact on our Q4 guide, we're seeing power cuts pretty much come in where we expected for the remainder of the year and into early next year, I think there's more going to be the longer-term volatility into 2022 that we're really looking at. But as you said, similar to currency we've got a pretty extensive hedging program that really feathers in our hedges over a multiyear period. And we're about 85% hedged in the unregulated markets which represent most of our largest markets.
And so our contracts do allow for us to adjust pricing based on underlying costs. And we're actively working to implement adjustments where we think that's appropriate. But, again, you guys, I think recognize our businesses is different in they were more heavily circuit based on our power mix. So whereas it's a little more seamless and pass through those costs in immediate power environment, takes a little more finesse to do that in the circa base power environment.
But I would say that we act -- as I've said, we're actively working that in terms of how to do it. And I'd say that our experience in Europe with the cross-connect pricing increases over the last couple of years, really give us some confidence that we'll be able to go get that done effectively. So no doubt there's more volatility in the energy markets. So we're watching those closely, and we're going to continue to adapt our strategies accordingly.
And just I guess as a follow-up, just one, what would the presenting the portfolio is sort of circuit billing oriented. And then when you factor in some of the ability to pass some of this through, what's sort of the benefit that you may be layered in there in terms of top-line?
About 80% of the -- about 80% of the portfolio is circuit based. And again, that's been a key to our -- that's part of our overall return story. We've been very effective in terms of driving sort of aggregate returns across space and power because of that circuit based power component of the business, and so in terms of its really more a matter of how effective can we be in terms of passing through price increases, underlying costs increase increases in the form of price to the circuit based power environment. So again, we have the contractual ability to do that, and it's just a matter of whether we -- I do think it won't be like circuit power we're going to where we are going to get every bit of that path. So but I think that we'll look at that market-by-market and assess what the rate approaches.
Okay. Thank you.
Our next question comes from Jon Atkin from RBC Capital Markets. Please go ahead.
Thanks. I was interested in xScale, and if you can maybe highlight any major differences with PGI and compared to GIC. And then more broadly as we sort of think about 2022 growth drivers for revenue -- revenue's margins CapEx, as well as AFFO, perhaps coming from xScale. But anything to keep in mind -- I know you're not going to give guidance on this call, but from a qualitative perspective, tailwinds and headwinds to keep in mind for next year. Thanks.
Why don't I take the first one? And then, I think, Charles might take the second one. As it relates to -- the deal structuring between PGIM and GIC is very similar. In many ways the construct was developed off of contracting structure with the GIC while we work ed with PGIM. Again, delighted to have another partner in a different market in support of our Australian business. As it relates to our ability -- to the performance this quarter, again, as you've heard from some of our prior calls we basically sold out most of the capacity that we've delivered to market.
And so we're very eager to continue our builds. We have eight builds currently underway in xScale, and the team is working very hard to identify customer appropriate customers for that capacity plus more. So I'll just leave you with is an exciting time for us in the xScale space. We're putting the money, the work, and as Charles alluded to in his prepared remarks and was $7.5 billion of capital is going to be deployed across 34 assets. And it's -- we still have more to talk about. So why don't I leave it there and just recognize that xScale in of itself right now is not a big component of our revenues or AFFO.
But it does create some lumpiness that you've seen in the non-recurring line, which we highlighted in our prepared remarks Q4, we just don't expect as much of that non-recurring revenue as we've seen before. But certainly as we look into '22 and beyond, those start to see that step-up again from a non-recurring perspective. Then you also see more of the recurring piece come into play for xScale.
Jon, on the other ones, I say want. Look, I haven't been -- I'm an optimist because I have never been, I guess on the business, how it's performing, what the magnitude of the opportunity ahead is. A little bit of noise in the quarter here, but I think that we had a -- we continue -- the business continues to perform. The fundamentals are very strong. 8,000 [Indiscernible] been added to add in the quarter, 3,000 billable cab ads, record bookings really for the past 3 quarters, at least seasonally adjusted in terms of this is our best Q3 ever. This quarter great degree predictability turn, as I said, at the low-end firm pricing, we added another quarter of positive pricing adjustments that Keith talked about in the script and continue to see good momentum on our new markets.
And if you look at big markets that we're relatively earlier entering in in terms of -- think places like Mexico and now India. Huge opportunities in front of us there to over-indexing growth in those markets. And then digital services is really -- Our customers are responding really well to those products even though they're at an earlier stage growth. So I think as I look into 2022 in terms of headwinds, tailwinds, etc, feel really good about the bookings momentum, feel really good about the pricing in our relevance to customers and therefore our ability to support firm price points.
A churn looks good, good deal mix is going to continue to be absolutely key to maintaining that. As I said, I think the headwinds more on making sure that we continue to -- we talked a little bit about power as a potential headwind there in some areas. We talked about, I think continuing to drive operational efficiencies in the business is going to be a key focus for us to drive operating leverage. And then continuing to work backlog. I think we've got a big backlog partially because we've got some big deals that have gone into that.
We got to continue to work through that backlog, certain deal types, tab slightly longer book-to-bill. And I think we're seeing that as part of the complexity of implementing these more multi-vendor, hybrid multi-cloud kind of deals. And so we're continuing to sort of hone our capabilities there. So if we can continue to drive those things, I think we will be able to really take advantage of the bookings momentum that's there. And obviously, we'll give you a color on all of that as we go into the 2022 guide.
And then if I could throw 1 in on M&A, whether it's networking-related or software consolidation within the bare metal space, but anything kind of non-core to the classic data center business from an M&A tuck-in perspective, what --to what degree do you regularly look at those sorts of opportunities? And is there anything that you feel would sort of augment the platform from that perspective?
Yeah. A great question, Jon. I would say that we're continuing to learn in that area and we're accelerating our kind of investment of energy in the -- understanding that landscape. And at the same time we are -- we're still digesting and learning some of the business around digital services and how to adapt our approach and build capabilities both from -- evolved capabilities, both from a design and development perspective, as well as from a deployment and go-to-market perspective.
And so we're continuing to honor our -- cut our teeth there and really learn those things in that market. But I do think there are real opportunities there. And so we'll be continue to be active in that area in terms of looking at potential opportunities, both to add talent and technology and capabilities, and really learning that landscape better over the course of this year and next year and beyond.
Thanks a lot.
Our next question comes from Phil Cusick from JPMorgan, please go ahead.
Hi, this is Richard for Phil. Just wanted to ask about the strength in the America. It went from kind of a modest growth to now it seems like a very strong growth environment. What are you seeing there, and how long can the bookings continue?
Hey, Richard, but I hope that party continues for a while. I would tell you I think we feel pretty good about that business. Again, we certainly have -- we spend more quarters than I would like talking about when the Verizon term was going to abate. And so I'm loving talking about the other side of that now. We're really the scale of that business, tremendous sales execution in the region, both for bookings into the region as well as global bookings to the platform elsewhere.
I would say we feel really good about the performance of the America's region right now and expect that growth rate is going to continue to persist at elevated levels. And then so we feel good about that fact. I think driving attach rates now to continue to increase the share of wallet with our very, very large customer base and bringing them some of our new services is some of the new area of focus and really leveraging our channel partners to do that. So anything to add Keith
The other thing I would just say, Charles and Richard, remember this region's 75% utilized, so we have substantial amount of capacity that we have built and we continue to build in core markets. And the other thing I'd just -- as Charles alluded to, normally the focus that we have on the right customers, that our sales leadership team in the Americas and beyond are doing such a great job of selling the platform. And so the opportunity that we said -- that we talked about inter-region and intra -region is very real. So overall very optimistic about what we're seeing in the Americas region.
And a quick follow-up turning, you see an issue in the Americas, are you seeing that lower now or has that not changed as much.
Well, I mean, I think it was -- I guess you'd have to obviously, you've been in the story for a long time, Richard has been, but I think there was a period of time when we had elevated churn associated with really honing our customer mix and our core competitive advantages and making sure that we were focused on those that would say that was back in the early days I was here in the 2011-12 time frame, when we really set about honing our sales process and driving greater deal commercial scrutiny, etc. And I think that -- so we had a little bit of elevated turn as we work through that process.
And then we had a little bit during the period of time when we digested some of the Verizon assets. We talked about the fact that we're a few -- several quarters ago, where we had deals that candidly just we're outside of the traditional sweet spot that we would be focused on. And I think it's the right long-term value creating decision for us to let those kind of things go and use that space and net capacity for advancing the strategy that we're really focused on.
And so now, you're seeing that, and as I've always said, the most -- the best -- the best way to avoid losing a deal is to get the right deal in the door to begin with, and so that's what our focus is. I think our sales teams are really doing an exceptional job on that. Our new sales leader [Indiscernible] in the U.S. is just a dynamite sales leader doing an incredible job, and he's got a great leadership team across the board there. And so I got to give some credit [Indiscernible] to our [Indiscernible] in America. It's just a great team really driving that thing.
Great. Thank you.
Our next question comes from David Guarino from Green Street. Please go ahead.
Thanks. Hey, Charles. Can you elaborate on your comments about pricing being firm? What exactly does firm mean and maybe specifically, if that's renewals or new leases? And then also, maybe just helpful would be if you could put some data behind it on the MRR per cabinet in the U.S. Could you tell us what that was, excluding the large footprint deployments this quarter?
Sure. I mean, when we say firm pricing, one of the big things we've talked about it is when we had net positive pricing actions in the quarter. So we essentially take what we're getting in terms of uplifts on our pricing accelerators if you will increase -- price increases that are contractually built in. We offset that against any potential downward movement that might occur on a release. Our business tends to move it a little bit of a saucy within that. It's -- we'll see these price escalators over kind of 3 to 5-year contract. We'll get a renewal that might have some summary rates. And then, we will kind of go through that cycle again. But in any given quarter, we're seeing those positive pricing -- overall positive pricing adjustments.
And that's just, I think, a reflection of our ability to sustain those higher price points. As you can see in the Americas, actually in all of the world, we've been sort of moving MRR per cab up into the right for a long period of time. We've seen some really strong moving in EMEA over the last couple of years because of the interconnection price increasing. I think we were slightly down in the U.S. on a constant currency basis, but that often and depend on the timing of installs and those kind of things, and so -- I mean, 23.93 per cab is just an exceptional number.
And so I think if you look at that relative to the rest of the industry, I think you would find it to be sort of far, far away, but the best kind of yield in the industry itself. And so in terms of normalizing that for large footprint, we really aren't doing any really large footprint in the U.S. We occasionally will do an anchor deal in a facility, but we're not really active in the hyperscale or xScale space in the U.S. And we've talked about why that is in the past. And if you look at -- even in the other markets, we're doing that now almost strictly through the xScale business and through the joint venture.
And so, that's not rolling in to the results that you see here, that really only rolls into our core financials in the form of fees and other things that we think are quite creative to the overall financial picture. So that's kind of picture on pricing. Pricing, I think on xScale continues to be competitive certainly, which is why returns in that business are a little lower but that's also why we decided to go do this through joint ventures where 80% of that capital is through a financial partner.
Okay. And then maybe just one clarification too on the stabilized revenue growth at the low-end factory of 5% range and I know Keith said it's going to step up again next quarter, but would the drag this quarter just due to a timing of commencement on leases?
Could you repeat that? Is a drag, the timing of what?
Of commencements on leases was it just certain leases got push into next quarter? I guess if we're going to get to the high-end of the guidance rates. I would assume you have a pretty big step-up in near revenue growth. So I was wondering if there was something driving it or just a lease has got pushed into Q4 in terms of when you will start realizing revenue?
Well, first and foremost, as Charles alluded to in the end, we will -- just an outstanding quarter again from a bookings perspective. And more particularly in the Americas region. And as we just sort of talked about, the Americas enjoy the highest pricing environment. So there's a number of things that are going on. Part of it is sure timing, but it is also the conversion of our backlog into a billable cabinet that will make a big difference here.
And so, there's nothing that I would say overly extraordinary other than we're just seeing overall momentum of the business continues to scale. Churn starting as abated or is abating, and then you've got a good price point with your inventory. This way we could be booked, sorry, netbook. Go from backlog into a billing item.
All right. Thank you.
Our next question comes from Simon Flannery from Morgan Stanley. Please go ahead.
Great, good evening. thanks a lot. just coming back to the inflation and supply chain commentary. Could you talk a little bit about what you're seeing on the construction and the development side of things, availability of labor, raw materials? What's going on in the various markets around the world at both in terms of costs and your ability to pass that along as well as any impacts on timelines for development, and then you've been very active on the xScale, but in terms of other M&A, how are you thinking about the landscape out there or is this going to be more focused on sort of small tuck-ins from here, Thank you.
Sure. So I'd start by saying that generally, I think our team has done a just an exceptional job navigating the current realities as it relates to supply chain around the world that our bottom-line message has been and continues to be that we really aren't seeing any meaningful negative impacts to our business. But that doesn't just magically happen. It happens by our team doing really great work to go and make sure that we are mitigating the risks that are out there. The way I -- Chuck, we talked about it internally is really 4 kind of levels to the supply chain potential risks. The first one is really facility level or in other words, are there -- are those constraints out there impacting our ability to deliver projects on time and on budget? And while we've seen some modest level of delays on a few projects, those are typically actually more associated with COVID delays and they are supply-chain candidly.
As Keith noted in his script, we've actually taken on some inventory or contractual forward commits to the tune of about a $100 million, that is giving us the confidence to be able to make sure that we can deliver our projects on time. That combined with the fact that we've got a huge number of projects underway. And they are all over the world and we can move separate around. Typically, it's fundable between sort of projects. And so the team, the construction team, the procurement team, the sourcing team have just done a phenomenal job in terms of mitigating that, in terms of IBX availability and the delivery timelines.
The next level on -- is really at the services level. In other words, our underlying services check there. Our network-related services like Fabric, Connect, etc. and Metal are we -- do we have the capacity to support the forecast there? And what we've done there is we've just forward purchased several quarters of capacity to give us the confidence that we can support that. And so feeling good about that as well. The third level is really deployment level. In other words, cage materials and other things that are needed as people build out their cages. We've also stockpiled there. Occasionally, there are circumstances where people have non-standard items that caused delays.
But if they're sticking within the middle of the bell curve in terms of what their needs are, we're not seeing delays there. And then customer level delays is sort of the last level, which is our customers delayed in terms of getting their IT equipment to loan into deployments. And if not, are they delaying or asking for delays for commencement and those kind of things? And again, while we've seen a few of those things, they just -- in the grand seal -- scope of things and in the scale of our business are just not particularly meaningful. So there's some, there's probably a little bit of pressure on costs in some areas.
We've been able to take advantage of our scale and I think to mitigate that, we're continuing to -- people often asked the question as to whether cost to build as inflationary or not, I would tell you that I think we've been able to keep up with it from a design standpoint and continuing to optimize our designs faster than costs are going up, so we're trying to keep ahead of the game there, but I think our team has done a really terrific job of managing those things. And I do think that we're -- we expect that things will start to stabilize over the course of 2022 from a supply chain perspective. So long answer there, but hopefully that gives you some perspective.
Great color. And the M&A?
I'm sorry, from an M&A perspective, I would say we are -- we continue to think there's opportunity out there, I mean, we talked -- I think John asked question about M&A in the -- in sort of the digital services side on the business. But there's also, we think continued opportunity in terms of extending our reach and looking for critical assets in the market that might be accretive to our strategy. And so, and we've got the balance sheet, the firepower to go after those kinds of things. And so we will continue to be active as appropriate. They're always with a high degree of certainty on getting the right deals.
Great. Thank you.
Our next question comes from Michael Rollins from Citi. Please go ahead.
Thanks and good afternoon. Curious for 2 questions. The first one is when you look at what's happening on the network side for network customers, are you seeing an increasing amount of telecom and wireless companies place their core network infrastructure in your facilities, rather than having their own mobile switching offices that it might have had it in the more legacy years of the telecom landscape? And what kind of opportunity that is for you as you -- if you look at wireless and 5G trying to take more services to the edge?
And then, the second question is, what do you make of the tower companies investing in datacenter assets? And do you believe that your datacenter business, as well as power portfolios are destined to be partners, or maybe someday fall under the same ownership structure as you look out into the future.
Great questions by for sure, I would say on the network side, I'd say it's a mixed bag. I think that there is a movement towards people viewing third-party facilities, particularly facilities like Equinix, where there's large degrees of aggregation as logical places to put portions of their core infrastructure. That said, I think these companies are also have a long history of building on in their own facilities and I think that is -- and there are still a lot of forces within those companies that want that to continue. And so I think we've been very active on the business development front and we have seen some success there.
And in terms of how they think about putting certain portions of their core 5G infrastructure, for example, into our facilities. And we have the Dallas approved concept center there that we've been actively working with both equipment providers as well as service providers on sort of proving out some of those potential value propositions. So I think we're still -- that will happen over a lot of long core stem. I do think we're more successful with people who are coming into those markets as disruptors because they think differently about it. And so -- and I do think there are some pretty interesting opportunities there.
And we're working with a few -- I wanted -- I want to say the names right now, but I'm not sure that they are public, yeah that I can't, so I won't. But there are some interesting things going on there. As to the tower side, we've been -- we believe there is some synergy between sort of companies that have broad-based real estate assets that are proximate to communications infrastructure, which is sort of the definition of tower companies, and I can see why and understand why they may have an interest in data center assets and how they fit in potentially to their portfolio. But I would tell you that for the most part, we see a strong demand for traffic at the edge there too.
A very significant majority of that traffic could go back to the aggregated edge. And that's really our sweet spot. That's where our differentiation is. Definitely there are use cases that were mobile edge compute, out further. Things like shop for automation and those kind of things. I think they are real use cases that 5G is going to be able to accelerate and we're certainly keeping our eyes on that and the active there from a business development standpoint.
But I do think that -- I think it's more likely that we would partner in some way with those folks over time. It's not necessarily obvious to me that those have to live under the same ownership structure. But I think we will just have to continue to see how the markets play out. Keith, I don't know if you have a different view on that?
[Indiscernible] Well said.
Thanks.
Our next question comes from Erik Rasmussen from Stifel. Please go ahead.
Thanks for the questions. So getting back to xScale, you've obviously made a lot of progress in Europe and APAC thus far. And recently announcing another JV partner in Australia. But I guess circling back at what point the Americas become more interesting. As you look to expand the xScale, are you seeing any characteristics that are starting to get more exciting about this market than what you're seeing elsewhere or recent in the same scenario?
Well, I think that when people start cutting each others throats on pricing. It will be real hard. It's not -- I mean, it's still a very competitive market, I think. And so I think that's different in terms of if you look at the broad Americas because I think there is opportunities in last and for us. Obviously, we already announced projects in Brazil I think we bring certain different, some very distinctive advantages there. I do think there is a ton of demand and as we've always said, we're not, we're not going to say we're religiously out of the business of doing that, but I think it would have to be under a special set of circumstances in terms of why we think that fits with the strategy.
Because we're -- a strategy as you'll recall, is that we wanted to use those as opportunities to further our position in the cloud ecosystem, continue to invest in the relationship with the major cloud service providers, and broader set of hyperscalers and use that to create this advantage overall position in cloud ecosystem.
We feel very good about our position, particularly in the U.S., and whether or not the xScale would be particularly accretive to that, I think is an open question. But we're not -- we're definitely not -- it's not out of the question that we would do that. I just think it's -- I think right now there are a lot of opportunities for us in other markets that we think are more attractive.
Okay. and maybe just my follow-up, the Americas was strong once again, this quarter, would you characterize that most of the strength is coming maybe from Bell Canada or is it other factors that you can comment on as it relates to the strength in that region.
Well, there was a reference in the prepared remarks just to talk about Canadian business is better than our -- it's doing better than we originally anticipating. Good on the team, and they're also selling global platform out of Canada into our other assets around the world. As it specifically relates to the Americas business, I think it's very good back to some of the fundamentals that Charles alluded to.
We're targeting the right customers with the right applications and putting in the right places. And at the same, by the same token, we've got an inventory set that they really caters to a diverse set of customers across, across the U.S. or the Americas as a whole. And so between the assets we serve, the customers we target, and the delivery of services that are additive to co-location interconnection, I just think we're in a much better space. Our position and as a result, we are going to win more than our fair share of the businesses out there.
Great. Thank you.
Our next question comes from Colby Synesael from Cowen. Please go ahead.
Charles, in response to Jon Atkin 's question regarding your outlook on 2022, my take from your response was the top-line next sign that you're concerned is around margins, whether it's operational efficiencies or in particular power costs. And as it relates to the question around power costs, I feel you may have created more questions than answers so far in this call. And I'd love to get a little bit more detail. Specifically, you guys, I think had talked about your Analyst Day in June, seeing margins go up just modestly in 2022. I'm curious if you still think that that's possible. Secondly, you mentioned that you hedge an unregulated markets around 85%. How far out are those hedges? Does it seems like you're suggesting that you're okay with power costs going into 2022, but not necessarily for the full year.
And then as it relates to the potential impact of power, do you think at the end of the day this could be up 25 basis point impact, 50 basis point impact, hundreds of basis point impact, just anything that gives us a better sense because my concern personally, is that we could now be in a situation where margins go down in 2022. And then just lastly, as it relates to AFFO, it looks like AFFO guidance implies a pretty meaningful step-down in the fourth quarter. Is that just the maintenance CapEx components that you talked about, Keith? Or is there something else there? And what's the better jump off point as we look to go to in 2022? Is it the third quarter? Or is it the fourth-quarter? Thank you.
Good questions Colby. We will be able to give you all the answers there, but I would say and obviously we're not going to kind of give you a 2022 guys. But I would say that you're -- generally I would say we continue to feel good about the momentum in the business from a bookings and demand perspective, I think that we did talk about driving efficiencies and I think the pursuit of the 50% margin target is something we continue to be focused on and that's an area where we continue to have worked -- knew exactly at what pace we can do that, and what that implies for the 2022 margin. I don't know.
And I do think it will require us to dig in deeper on power. And I don't think we're yet in a position where we can quantify any of that for you other than -- in terms of the hedging that we -- I mean, they are multiyear hedges, but they're feathered in. And so obviously do become less impactful as you look further out. And so I do think that there's more risk as you go out, but I think the good part of that is that it gives us time to determine what our approach is going to be to passing those costs through and assessing how to do that and to what degree.
That is how much of a recovery we can see there, and we don't know the answers to all those things, and so I think we're going to track those, we're going to look at the markets where there's volatility. And I think that's something where unfortunately I think we'll just have to come back to you when we look into -- as we look into 2022 guide, and give you more perspective about that.
And so Colby I just wanted to go back to again a couple of other questions. So there's 2 things that I felt I heard you ask.1. is what's happening quarter-over-quarter. What's going on in Q4? And there was a reference that we made and that we accelerated some costs into this year, so that's number one both from our recurring CapEx perspective and some operating spend. And we did that for a number of reasons, and part of it is supply chain specific. The other part is we alluded to in the prepared remarks. When you look at AFFO in and of itself, Q4 is historically one of our lower performing AFFO quarters.
That's why we don't guide on a quarterly basis, we gave you the annual number and say, this is what we will do, and we recognize things will move around, but the reality is Q4 always tends to be a higher recurring CapEx quarter, and that's what you're seeing in the guide that we've delivered at a $193 million at midpoint. So it gives you a real sense. It's a big step-up in our recurring CapEx for Q4. The other thing is, as we have said, that we have had a lot of success in the business and as a result, the cash payout attributed to commissions that is more substantial than we originally anticipated in Q4, and that's reflected in the guidance.
And that's AFFO impacting on EBITDA impacting it, so there's a lot of nuances. But overall, when you look at the fundamental business, it's performed better than we anticipated. For every single quarter of the year, we're delivering against the expectations we have set. And as you -- I think, you know well that we based our guide both on revenue EBITDA and AFFO throughout the year. And we're at a point now where we feel comfortable and now we're focusing on 2022. And that's where the energy of the business is again focused on.
Thank you.
Thank you. And our final question comes from Frank Loutsan from Raymond James. Please go ahead.
About the [Indiscernible]America has been a tougher market last year. What sort of changed there, and how long do you think you can continue to see some better results out of those markets? Thanks.
Hey, Frank. Yes, as I said earlier, I think that business has a strong trajectory. I think we expect that to continue, we don't see this as a temporary improvement. I think we're as a business, moving in a very solid direction. Strong demand from customers, good sales execution, and again we don't expect that -- and again, churn mitigating, getting the right customers right deals. I think that will continue to drive strong performance from that region. Which, obviously, is a pretty major driver of our overall performance.
Given, it can -- we expect this to be a little bit of a new baseline and kind of continue to grow from here, or how should we think about the current trend.
Yeah, I think as to whether it really accelerates, I think we have to continue to look at our success in driving new services revenues and what the rate of new customer capture and attaches and those kind of things. But again, I think we feel really good about where the business is right now and feel like that's a sustainable growth rate for us.
Right. Great. Thank you very much.
That concludes our Q3 call. Thank you for joining us.
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