Good afternoon, and welcome to the Equinix Fourth Quarter Earnings Conference Call. All lines will be on listen-only until we open for questions. Also today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Katrina Rymill, Senior Vice President of Corporate Finance 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 we're making 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 19, 2021, and 10-Q filed on November 4, 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 for our disclosure, is Equinix's policy not to comment on the financial guidance during the quarter unless it is done through an explicit public disclosure. In addition, we will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures in today's press release on 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 on Equinix in 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' 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 following questions to just one. At this time, I'll turn the call over to Charles.

Thanks, Katrina. Good afternoon, everybody, and welcome to our fourth quarter earnings call. We had a great finish to the year with our best booking performance ever driven by an exceptional demand backdrop for our business with continued strength across our platform, but more specifically in the Americas low churn and continued momentum in our digital services portfolio. For the full-year, we achieved over $6.6 billion of revenue, marking our 76 consecutive quarter top line increases and amazing 19 years of continuous revenue growth while driving attractive AFFO per share to the bottom line. Amidst the dynamic and complex global landscape, we continue to deliver against our vision and our fiscal year results demonstrate both the increasing relevance of our platform and our uniquely differentiated value proposition. Businesses globally continue to prioritize digital transformation as a foundational source of competitive advantage and the secular drivers for our business have never been stronger, as digital leaders demand infrastructure that is more distributed, more ecosystem powered, more flexible, more sustainable and more interconnected than ever before. Increasingly, Equinix represents a critical point of Nexus customers implement hybrid and multi cloud as a clear architecture of choice. And as a global market leader, we continue to innovate and expand our portfolio to respond to these evolving customer demands, and capture the enormous opportunity ahead. As we look to 2022, the trajectory and underlying momentum in our business is exceptionally strong, with a solid demand pipeline, stable churn and a rising price trend, resulting in a revenue outlook for the year that is at or above the high end of our long-term guidance range. And an AFFO per share outlook is still within our long-term guidance range, despite pressure at the gross margin line associated with power price volatility in Singapore. Absent these specific…

Thanks, Charles. Good afternoon to everyone. I'll start my prepared remarks by saying our business is performing extremely well. Frankly, better than our expectations for both the quarter and year. And we're bringing our momentum into 2022. We had a great end for the year delivering record gross and net bookings with very strong channel activity, while recording our highest ever recurring revenue step up in a quarter. For the year without any major acquisitions revenues were up over $600 million. [Indiscernible] over 17,500 deals in 2021, highlighting the tremendous scale and reach of our business, the philosophy of our go-to-market engine. The Americas region continues to pick up stream growing 10% over the prior year effective double the rate approval from last year benefiting from strong leadership and is distributed portfolio of highly interconnected IBX assets resulting in record bookings and lower churn. For the company, our churn settled at the lower end of our guidance range of 2% to 2.5% per quarter, or an average of 2.1% per quarter for the year. Our lowest level since 2016, which is highly reflective of our strategy to put the right customer with the right applications into the right IBX. Quite simply, the decisions we're making are stressing and extending our leadership position as the world's digital infrastructure company. Now, as previously discussed perhaps top of mind for you, there are a number of macro-economic factors that we continue to proactively manage, such as supply chain, power costs, interest rates, and inflation. As it relates to power costs, we're seeing approximately 130 basis points in your margin pressure, due to the temporarily inflated power rates in Singapore, and the lapping of the favorable vPPA settlements from Texas last February. For 2022, we're predominantly hedged to meet our global parties, but intends…

Thanks Keith. In closing, we're immensely pleased with the underlying performance of our business and are as optimistic as ever about the opportunity in front of us. Although the transitory effects from power pricing impact elements of our 2022 guidance, our normalized results would indicate a business trajectory that puts us meaningfully ahead of our Analyst Day expectations. We continue to work hard to further mitigate the end year impacts of the Singapore car volatility. And in parallel, intend to continue to strengthen our market leading position as the world digital infrastructure company by scaling and transforming our data center business, while also accelerating our digital services business to deliver on the promise of physical infrastructure at software speed. And we intend to continue to advance a bold ESG agenda, addressing the urgency of climate change with a commitment to climate neutrality by 2030. And fostering a culture in workplace where every person every day can confidently say I'm safe, I belong and I matter. Of note, we were thrilled to recently receive a perfect score from the Human Rights Campaign and be recognized as a best place to work for LGBTQ plus quality. And are proud to be ranked number one in real estate in JUST Capitals 2022 rankings of America's most JUST companies. Overall nearly 25 year history, we have created and cultivated a foundational set of advantages to period lower reach, now expanding 66 metros in 27 countries. Advantage access to the world's most powerful digital ecosystems with more than 10,000 customers, and over half the Fortune 500, the world's most comprehensive and advanced interconnection platform, and a track record of service excellence that gives our customers the peace of mind they deserve. These advantages are strongly aligned to market trends and nearly impossible to duplicate. A dynamic that continues to feel strong growth and a rapidly expanding addressable market that we are confident will translate to compelling long-term value creation. As we strive to fulfill our purpose, to be the platform where the world comes together, enabling the innovations that enrich our work, our life in our planet. We will continue to show up every day remaining in service to our stakeholders. To each other, to our customers, to our communities, and to you, our shareholders. And let me stop there and open it up for questions.

Our first question comes from Jordan Sadler, KeyBanc Capital Markets. Your line is open.

Thank you. And good afternoon, first I would like to just touch on maybe some of the macro factors that you identified Keith, in your prepared remarks, first, just maybe on the margin impact related to the power costs that you're seeing in Singapore, I think you said it was 130 basis points impact year-over-year, but what specifically was the impact that you're seeing within the 46% margin related to Singapore? And then separately, can you maybe discuss how you might be dealing with any other exposures for example, in Europe, and if you were able to push through price increases to customers there to offset some of the exposure you might have had?

Sure, hey Jordan it's Charles. Let me step back and give you some additional color on the power pricing dynamics. And then keeping that in bolt-on that we can sort of tag discussion on the broader inflationary aspects of the business as well. There's aspects of the power dynamics that are quite complex, but the net of it all is pretty easy to summarize. So other than Singapore, which I'll talk about, we continue to be really wellheads around the world. And our bridges show, you'll see there the impact of really the 130 bps which I'll touch on here in a minute. Other than that, we're really seeing limited margin impact from that in markets with higher volatility, we've really been able to offset the increased rates through a combination of some targeted price increases, which as we've talked about in the past, we have the contractual ability to pass through and offset a part also by strong operating leverage in the business, which we're very pleased about how that's materializing. But Singapore is clearly an outlier. Last Fall, as we looked at the historical trends in that market and other factors, we, alongside our power advisors, decided that we were going to defer on locking in Singapore. And we were pressing one, given the rates where the rates were at that time, and two given an ongoing negotiation of trying to get to a multi-year sort of hedge or locked position. Then really the fundamentals of the Singapore power market just dislocated, really driving an unprecedented level of volatility. And so counterparties weren't really able to offer rate lock, exposed temporarily to the spot rates and leaves us a bit out of sync with what customers are experiencing in the market. So that's where that exposure through the course of the year is what we're estimating at about 100 bps, then there's an additional 30 bps that on a year-over-year compare basis an impact of favorable dynamics from our Texas VPPA last year, and so the combination of those factors account for about the 130 bps on margin. So again, absent that, you'd be talking about a margin guide that 47 and change. And I think in the broader context, would really reflect a tremendous health of the business. So, that's where we are on the margin issue. And across the Rest of Europe, yes, there's volatility. As I said, we've sort of managed that through increasing, targeted price increases, in some cases, those price increases, we're going to phase them over a couple of years, because we feel like they're just too big to roll through and one plug, but again the pressure that we -- any pressure that we are seeing from that is being offset by nice operating leverage in the business. Keith, maybe you can comment on broader inflationary sort of factors in Europe and elsewhere?

Yes, Jordan, when it comes to the inflation aspect, I just said, we've really invested heavily over the last couple of years in as I said, procurement and strategic sourcing team and work getting ahead of many of the inflationary issues. In some cases, we've bought substantial inventory that we're hosting, at the supplier of the partners location, and then we draw down on that over time. So by locking in that commitment, we've been able to mitigate some of the inflationary risks that others might be experiencing. But to mention that we've got the supply available, where in some cases, others will not have the supply available, I think we've got a real good job locking it in, we're working on an extended basis over many years, we look forward with what our buying commitments are going to be over that time period. And that's another aspect of again, our increased sophistication around what we're doing, when and where and what we need when and where, and so the team is doing a good job of sourcing the larger material items for that. I'm going to say though, the other area that is probably a little bit more difficult to just the human capital side. And that's one of the greatest risks that you see all across the world and just sourcing humans not only to do the construction, but all the manufacturing. And so getting ahead all of that just means that you have to commit earlier than you might otherwise have done before so that you can get yourself in the appropriate queue in the manufacturing cycles. All that to say is I think we are in really good spot, we have seen limited delays thus far. Certainly prices have gone up in times in different sets of circumstances that Charles sort of alluded to, on his prior comment that we're putting through appropriate price increases into the marketplace, and it would depend solely on the market, but we're putting appropriate price increases into the market accordingly. And one of the things you've heard us say and I maybe I didn't, just to repeat it. This quarter again, we had meaningful net price positive pricing action, and I can't even think of the last time we talked about flat to negative pricing increases, so as an organization our pricing increases are more than offsetting our price decreases which has served us very well in our operating plan.

Thank you.

Our next question comes from Michael Rollins. Your line is open.

Mike, are you there?

We may have lost, Michael.

Let us go to the next person in the queue, please.

Thank you. Our next question comes from David Barden, Bank of America. Your line is open.

Hey guys, thanks so much for taking the questions. Appreciate it. I guess two if I could. The first one maybe Charles, or Keith, you kind of highlighted some of the vertical strengths that we're seeing across different markets. I think what we're trying to get our arms around is, as we kind of come out post-pandemic and you've got this kind of global vision of where people who are still mired in COVID, are doing one thing, and maybe other economies are doing a new thing. Could you kind of elaborate a little bit on how we're watching the vertical demand evolve? What's going up? What's going down? And I guess the second question is now that we've got the Singapore Moratorium lifted, it did kind of put a spotlight on this progression towards kind of green power. Could you kind of comment on what, if any other geographies you see are kind of concerned about this issue. And obviously, you've been a leader on this, but I'd be interested to see what that leadership might be getting you from a demand standpoint? Thanks.

Sure. David, I will take the first one, and then I think Keith, and maybe Kat can weigh in on the sustainability side as well, given she's so close to that, I will tell you that we're seeing just tremendous strength across the board really, in our verticals, essentially, because as I've looked at the last few scripts, it seems like every time we say we have strength somewhere else, so it's not like we're saying it. And as it relates to, and I think that's really driven by this, this really strong movement towards digital transformation, and people saying, hey, that is a critical source of competitive advantage, or at least keeping up. And they're making investments accordingly, and how they think about their infrastructure, how they think about their mix between cloud based workloads and private infrastructure, I think is really moving in ways that the wind is at our back. And I think the team has done a great job of articulating our relevance to those buyers. And, frankly, sales execution has been super strong. As it relates to COVID, I would tell you that we're not really it is, obviously, as you've seen, we are having ups and downs, and they're operationally challenging, so we are constantly dealing with sort of different mandates and mask mandates, and when we have to be doing sort of testing people, and when we're in the facilities, when we get an exposure dealing with that, et cetera. But the team has just done an amazing job on that. And I wouldn't say that I think we're seeing anywhere around the world that says, oh, they're kind of stuck in a pause mode due to COVID. People seem to be powering through that and saying, we got to move forward, regardless. And so I think we've seen really broad strength, Keith do you want to take the Singapore Moratorium and sustainability questions?

Yes, I'll kick that off. I'll tell you, David, we're very excited to see the moratorium lifted over in Singapore. That is actually one of our strongest markets. And it is a chance to highlight our focus on sustainability, you're seeing us really try to get in front of this, we're actually the first data center to announce a commitment to climate neutrality, which by 2030, we rolled out science based targets. Now underlying that is a very deep green program, whether it's enhancing our renewable energy coverage includes looking at areas like energy efficiency, which I am certain our investors are going to love as well, because there's returns around those projects, as well as just broadening our commitments and talking with customers. We've seen a huge uptick in customer outreach around this, we used to talk to about 50 customers a year, we're now up to a run rate of 1,000 customers reaching out asking for all sorts of data to help them really green their supply chain. So well, it certainly is getting a lot of focus around the world. And you believe it's an opportunity. And there's markets whether particularly the European markets are heavily focused on this. And you're seeing us react to certain areas, like in Germany, Germany is if you go to any of our new German sites, they all have green facades on front of them, as well as implementing new renewable energy coverage. So I think you'll see us continue to lean in heavily around this.

Yes, one more comment, interestingly is a big deal for talent as well. Talent wants to be working for companies that they believe are committed to sustainability and are doing the right things and so and I think maybe that's unique or particularly true in the end. But we're seeing that across the board.

Awesome, all right, thank you guys. Really appreciate it.

Okay.

Our next question comes from Michael Rollins of Citi. Your line is open.

Thanks. Can you hear me now?

We can.

Great, well, thanks for taking the questions, two if I could, first going back to the organic constant currency revenue guidance, I'm curious if you can just unpack some of the relative strength to the annual target, how much might be coming from some of the pricing actions, versus the pickup in demand for services or if there's any other areas of strength that we should be mindful of? And then the second question is for number of quarters now, you've been discussing the evolution in the contribution to logos and bookings from the indirect channel. And as you've had more experience with that channel, I'm curious, once the customers come in through that channel, how do they look relative to the customers that you get from your direct sales force? Are they adding services expanding or their different characteristics of their revenue lifecycle versus in indirect versus direct?

Thanks, Mike. So on the organic constant currency guide, I would say, it's a combination factors, obviously there is a, we did say we're in a rising sort of price environment, but that's not a major factor, there's actually not a ton of that also, that is associated with price increases on the power front, there's some in there, but that's not a major factor. We are seeing obviously, digital services outpaced the broader business, but it's a small portion, right, I mean the broader and traditional core business is so big, that that's really the driving force. And so I point mostly to just momentum in the core business, I think we just continue to win, geographic expansion is going well, our acquisition assets are outperforming without exception. GPX is doing great, Bell is doing great, [indiscernible] is doing great. When we're building on that geographic advantage, we're selling into the hybrid and multicloud opportunity. And again, both customer demand is strong, and sales execution has been excellent, so I think it's driven mostly by I think the core, but we really are, but we're also excited about the trajectory and the momentum that we see. And in digital services, and how that's going to allow us to really respond to the evolving needs of the customer. In terms of channel, I would not say off the top my head a channel, channel acquired customer is meaningfully different, they often come in with a very solution oriented mindset, because typically, we're working with a channel partner who's already selling to that customer, something that he's done better at Equinix. And so they it's, I would say that the mix of business through the channel is quite good. So it's really in that sweet spot. And but they don't, I don't think they look meaningfully different. They all, I think they grow at newly acquired customers, writ large, grow faster. But that's true of both channel as well as non-channel customers. So I don't think they differ dramatically. But those we're going to continue to really look at that, in fact, it's one of the priorities for the year ahead is continuing to refine our segmentation, and make sure that we're delivering the right services to the right segments through the right channels and I think increased sort of sophistication on that front is going to continue to pay dividends both on the revenue line and the margin line.

Thanks.

Our next question comes from Colby Synesael, Cowen and Company. Your line is open.

Hi, this is Michael on for Colby. Two questions, if I may. First we've seen key interconnect assets in Africa, namely Telco, get acquired by one of your peers. And there's also another large global data center company that's reportedly for sale, given you still have that incremental turn of leverage that you can deploy opportunistically and just wanted to get your latest thoughts on how you're thinking about M&A. And then also the second question you did 10% year-over-year, Americas growth in the fourth quarter, real acceleration there, just wondering what you would expect to see from that business in 2022? Thank you.

On the M&A front, I guess what I say is, we continue to believe M&A is a very appropriate and powerful tool in the kit. We've been very successful at it, we're going to continue to look at it as an opportunity to extend our reach, scale our business in key markets and bring in critical interconnection assets. And so yes, we're actively involved in those processes, we're going to maintain a level of discipline on that, as we always do. And that means we're probably not going to win every deal. But it's really important, I think, particularly in markets with multiples that you could argue are overheated in the private markets to maintain that discipline. And in terms of the leverage, yes, we have that turn of leverage available that a lot of balance sheet flexibility, it's not burning a hole in our pockets. So we're happy to continue to have it and use it to drive the best returns in the business. And that's our capital allocation strategy is always to put it, where we think we can generate the best return. So, but I do expect M&A will be a piece of that puzzle, and I'm sure you'll hear more from us over the course of the year on that front. And as to the Americas, we don't guide on a regional basis. But what an incredible sort of momentum from that business over the last five or six quarters. And as we said, John Lin and team, your sales team and our ops team, and really the entire team just really strong execution, super excited to take John's immense capabilities and apply them more broadly across the business. But I think you're going to see, I do think that, this digital transformation demand is following sort of a typical pattern, really strong demand in America, and then emerging in other areas across the world. And we see that profile. And so but as you look at it this quarter is pretty interesting in the 10% in the America, 11% in APAC, 9% in Europe. Pretty darn strong across the board and nice rebound in Europe. And we're beginning to lap some of the -- some of the prior year increases that we saw there. And so, I think that -- I think we're really seeing strong across the board. But I do expect continued momentum in the Americas.

Great, thanks for the color.

Our next question comes from Nick Del Deo, MoffettNathanson. Your line is open.

Hi, thanks for taking my question, guys. Two for you. Maybe one for Charles and one for Keith. First, as alluded to a moment ago, we've seen a few deals happen in Africa recently, most notably you buying main one and digital buying Teraco? I'm sure you looked at all of them, maybe some of that didn't even trade? Why was main one the best asset for Equinix? And is there a path for catching up with Teraco in South Africa over time? And then for Keith, on recurring capex? It seems like it's going to be at the very low end of your target range in 2022. And it's been towards the lower end for a few years now. Should we expect, that to pick up in coming years? Or is this kind of a new normal for recurring capex?

Del let me take Africa and then I'll hand it over to Keith on the recurring capex side. Look at -- we continue to believe Africa's very attractive long-term market it is definitely more it is one that's going to evolve over many years. And we're active in that market, as you know, and I wouldn't drawn any -- draw any specific comparisons between deals, because I think they provide different value. But we're -- I'll say we're very excited about main one. And we think it's a great sort of Cornerstone to build from. Teraco is a great asset. It's a great team and a good business. And we're going to continue -- and South Africa is an important market. And so that one didn't go our way. And we're going to -- we're going to find in what we're going to continue to be we're committed to competing that market is South Africa has to be a part of any thoughtful African strategy. And there's a variety of other paths for us in that market. And we're hard at work ethic. And then Keith will take the recurring cap return.

And so it’s another recurring capex. We are -- as we tend to we are the sort of lower end of the range for fiscal year '22. Quite a bit, just timing, Nick, and recognizing that you, depending on what we have coming into the portfolio, it's going to dictate so the timing of the capex. So that'd be one thing. And so there, you saw an elevated Q4 number of roughly 5%. Recurring capex relative to revenue and steps down of course, in Q1 and then as we look through the year, it is roughly somewhere between 2% and 3%. But I think the biggest thing is really about timing and the number of new assets that we're bringing into the portfolio and as a result, when you think about the level of recurring capex that has to be made, the newer the portfolio, the better position you have in the current campaign. I would continue to model 2% to 3%, it feels like a reasonable approach, and we'll continue to guide you accordingly. But in fairness to your long-term model, I think that that would be a fair point.

Okay, great. Thank you guys.

Our next question comes from John Atkin, RBC Capital Markets. Your line is open.

Yes, a couple of kind of EBITDA questions or related questions, and then one on xScale. So I was just interested in what are the churn expectations that are embedded in your 2022 guidance? And then noting the drop in Europe and EBITDA? What are some of the factors that drove that? And how can we think about the margin development by region? And what are those special items to kind of keep be mindful on?

Well, I think as it relates to churn first and foremost, as I said, in the prepared remarks, churn for the business was 2.1%, on average per quarter for 2021. 2%, in the fourth quarter, which was great. In many ways, Charles sort of alluded to in his comments on revenue, part of the reason the revenues were so strong is, and I like to say, there's no pass through rates to our revenue dollar than these eliminating churn. And churn was a very, very low level. As we look into 2022, there's not going to be a meaningful shift. We've gotten used to that sort of the range of 2% to 2.5%, that's indicative of what we think will happen. I think the midpoint is probably a fair approach at this stage. And we'll continue to update you on it. But there's nothing meaningful that -- there's nothing meaningful, that will guide you differently at this point, John. As it relates to European EBITDA, there's a number of things that are going on in Q3 one example, is just the timing of costs more specifically, but if you look at the implications of Q4 relative to Q3, there's a German power rebates in the third quarter, until we -- you'll add that into the fourth quarter, and then you've got higher seasonal costs in q4, particularly with the winter months in Europe, you've got higher utility consumption. And so as a result, it has an impact on the margin, when you look at it more specifically. And then there was just some services and an increase hiring costs in the quarter, but there was nothing fundamentally different about your going on. And overall, our belief is the trajectory to our target of 50% EBITDA margins. We're still well on that path notwithstanding, the comments that Charles made related to Asian power, that's going to be very much a transitory matter. And we'll get the other side of that would probably by the second half of the year.

And then, on xScale, just curious, any update on your kind of capex and growth assumptions, pricing assumptions as well, given the hyperscale demand that we've seen in the sector, as well as the high level of investment seen by a number of competing platforms? Just curious how you view hyper scale demand pricing, and then your level of participation in terms of CapEx?

Yes, John, we've seen some increases in build costs, but we're striving to offset those one by just continuing to be accretive on the design front, and continuing to sort of design, try to get some of those out from a design perspective. And then also on the sourcing front, and really working on the strategic sourcing side. So we're, and I think we're seeing returns relatively stable. I think, pricing is aggressive, but stable. I think that there -- yes, there is plenty of supply in the market, but there's even more demand. So I would say, I think, supply demand is quite balanced in the xScale realm right now. It's very chunky and very market specific. And so it's a little bit different than our retail business. But as you've seen our uptake, in lease up has been super strong, thus far, I mean teams executed really well. And we feel good about that. And so there's a lot of megawatts coming down the road and a lot of customer demand. So it's an exciting time, I think for xScale, and we're pleased with the performance of that piece of the business. And that, I mean, it's important to just remind everybody that our exposure on the capital side is, we have gearing of 10 to one on that capex, right. So, because we're only 20% of it, and there's always leverage involved there. And so it really allows us to have a relatively modest overall exposure to that capital and so. So we're putting the bulk of our capital to work on the retail side with really stronger John.

Thank you.

Our next question comes from Simon Flannery, Morgan Stanley. Your line is open.

Great. Thank you very much. Good evening. I wonder if I could come back to the margin question. You talked a couple of times about margin trends improving the second half of '22, perhaps just to help us with what gives you the visibility into that? Is that mostly Singapore? And how much clarity you have there? And then you reiterated the 50% from by 2025? So given the move here on '22? Do we see it going up fairly linearly from '23 through to '25? Are there other puts and takes there, as we think about that goal long-term goal?

Yes, well, what I would say yes, the big factor on the margin profile in 2022 is Singapore, as I said, 100 bps of that, and you have 30 bps associated with the year-over-year compared on the benefits we got from the vPPA last year. And so that's the bulk of it, I mean, you can see in the bridge, there's 1.4 there a margin in step down, 1.3 of that is explained between those two factors. And so there's not the rest is a series of puts and takes with some expenses and investments and really solid operating leverage in the business. And so I would say, it is mitigating the sandboard impact. It is operating the driving operating leverage in the business, which is going to be a key focus for John and the team, and it continues to drive the scale on the business. And then a strong pricing environment. So I think we're continuing to see a solid pricing environment, we've demonstrated our ability to deliver distinctive value our customers. And so as the prices were -- I mean, as some of the inflation goes, we're going to go ahead and offset that some degree on the pricing. So I think all those factors, sort of will lead us to some solid progression there from margin standpoint. And I wouldn't guide on where it goes from there and how linear it is or not. I think it's going to, we're going to make judgments in the business, as we always do about investments and how to maximize long-term value creation. But I think what you heard loud and clear is a level of confidence on our part about the 50% target. And again, as we really dug in hard, which is to some degree, the Singapore dynamic was a real catalyst for us to do. It gave us I think an increased level of confidence about how operating leverage is materializing. And that gives us confidence to sort of reiterate that 50% by 2025.

Great, thank you.

Thanks Simon.

Our next question comes from Sami Badri, Credit Suisse. Your line is open.

Hi, thank you very much for the question. I'm looking at your same-store growth. And that definitely came in a little bit above people's expectations. And I'm trying to take some of your prior comments where you talked about if there was no Singapore utility impact, you would probably grow or be able to comment adjusted EBITDA margins of 47% and change. And this is making me think about the long-term picture on the road to 50%. The same-store has to grow a 5% plus for you to get to 50% adjusted EBITDA margin long-term by 2025. Or can you just maybe unpack that growth rate or that vector for us?

Sure. Yes. I don't think the short answer is no. We said, we've typically guided in 3% to 5% on the recurring revenue range. Obviously really pleased with 5% up into that range for the stabilized assets. They move around a little bit depending on a variety of factors, but I think overall, we're continuing as business, churns in those markets. We're replacing it with a strong, sort of sweet spot business, continuing to drive interconnection, continuing to expand fabric into more locations, that drives more interconnection. And so I think that's going to drive good results. But I don't think that's it, I don't think, it's incumbent on us to have that happen to get to the 50%. I think there's a variety of sources of operating leverage in our business as we examine our ability to simplify, automate, digitize our business that I think will give us the trajectory that we need on the -- to get to that 50%.

Got it. Thank you.

Our last question comes from Ari Klein, BMO Capital Markets. Your line is open.

Thank you. Charles, you mentioned some of the challenges in the hedging in Singapore, as you look at other markets, where energy prices are elevated, and hedges roll off. Are you hedging at these higher prices? And just you also mentioned passing on some of those costs? What has been the response on the customer side from that?

Yes, look, I mean, undoubtedly, customers aren't excited about it. But it is, it is the reality that, and it's different. The reality is in deregulated markets, everybody's in the same boat. We're all exposed to the regulated rate. And if the rate rises more than a certain percentage, our contracts allow us to pass that through. And that's the baseline expectation of the customer. And so while they may not love it, they -- that's just an expectation. I think, in deregulated markets, it's a little more complex, we've have these multi-year hedges, which essentially allow you to dampen volatility, and adapt to in a rising rate environment more gradually. And so that's typically what we've seen. That's the way hedging works in a, you're either, you're kind of chasing it down or following it up, because your hedges work either a plus or minus around a range. And so I think we're going to be implementing it gradually over time, as hedges roll off, and sort of hedging into the new market rates, as we roll those hedges out into future years. So, and it's important to remember, we've been doing this for many, many years. And so it's not really a new dynamic, there are definitely some markets that were more volatile and more spiky. And then you have to make a judgement about if that if your rate increase and the potential price increase that if the price increase, you reflect something that doesn't feel right, from a long-term customer relationship standpoint, and we always take the long lens on our customer relationships, then we'll adjust accordingly. And that could mean that we have some pressure from that. But as you see in the bridges, we've been able to offset that with other operating leverage. And so we expect that to continue to be the case, this is an area where the scope and the scale of our business really helps us. And so yes, there are factors out there that we have to deal with, and we deal with them carefully and with the customer in mind. And I think as you can see, we feel confident that we'll be able to manage through it.

Got it. And are those price increases permanent, so if I guess if pricing or energy costs normalized, can that turn into a tailwind from your standpoint?

Yes, very good question. Here's what I'd say, there's different types of price increases, we're actually implementing some baseline sort of new pricing for new deals, because of a broader set of inflationary characteristics and a deep confidence in the value that we deliver to customers. Those I view as more structural. But then in other markets, there are more temporal pricing adjustments associated directly with the utility, volatility, and I wouldn't expect those to be permanent. If it retrenches, then we would want to give that back to the customer. So we are -- but we've been hedged, our hedging strategy allows us to really dampen that volatility out typically, we have definitely seen more volatility, so I wouldn't say we're going to just think regardless of what happens power prices in future. But I do think that for all those and I do think there is a level of them that are more -- level of those that are more structural in terms of new price points on new deals.

Got it, thank you.

You bet.

Thank you. That concludes our Q4 call. Thank you for joining us.