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'd now like to turn the call over to Katrina Rymel, 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 we'll be 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 ks filed on February 21, 2020 and 10 Q filed on July 31, 2020. 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, it 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 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'd also like to remind you that we post important information about 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's CEO and President and Keith Taylor, Chief Financial Officer.
Following our prepared remarks, we'll be taking questions from sales by the 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.
Thank you, Katrina. Good afternoon, and welcome to our Q3 earnings call. This year has been an exceptionally challenging one as we all continue to navigate the economic, health and societal changes happening in our world. Despite these challenges, we find Equinix in a unique position to help our customers adapt, respond and accelerate digital transformation, a key priority for business across every sector and a critical driver for economic recovery. With over 10,000 customers cultivating and curating ecosystems that enable digital business remains central to our strategy and has been accelerated by COVID as businesses shift to operating, selling and expanding online.
As we respond to these shifts, we remain focused on driving disciplined growth, extending our global leadership and effectively scaling our business. We are augmenting our capabilities and enhancing our service portfolio in targeted ways to expand our addressable market, responding to evolving customer requirements and ensuring that we remain well positioned for the future. We continue to complement and extend our global platform both organically and through acquisitions, enhancing cloud and network density and offering our customers the richest range of options to support their adoption of hybrid and multi cloud as the architecture of choice. Platform Equinix allows our customers to more effectively distribute infrastructure, putting connectivity, data, security and applications where they need them and interconnecting them easily to the cloud, delivering the performance required to service increasingly global digital businesses. In October, we closed the acquisition of Bell Canada's data center portfolio, positioning Equinix as a leading national provider in Canada, while giving Canadian customers the global reach they need.
We also announced our long awaited entry into India, one of the world's largest economies and fastest growing data center markets, and now the 27th country served by platform Equinix. Once completed, our GPX acquisition will add 2 highly interconnected data centers in Mumbai and will serve as a critical foundation for Pan Indian expansion. Our global reach remains as important as ever, combining unparalleled facilities based coverage with integrated systems, delivery and care. This competitive differentiation continues to drive our business, with revenues from multi region customers region customers increasing 1% quarter over quarter to 74% and revenues from customers across all three regions remaining at a healthy 62%. The Americas continues to lead in exporting business to our other regions as network, cloud, financial and manufacturing customers take advantage of our reach.
We continue to deepen our penetration of the Fortune 500 and Global 2,000 and the consistent growth of our top accounts demonstrates the depth of our addressable market and the stability of our business despite the pandemic, with over 90% of our top 50 accounts increasing their business with Equinix quarter over quarter. As we grow the business, we are also investing in our future by making Equinix a place that attracts and inspires diverse talent and making sure that our mission reflects our responsibility to leave our world better than we found it. Equinix was recently recognized as one of the top companies for diverse talent and received the 2020 Green Power Partner Award from the U. S. EPA, recognizing our contribution to helping advance the development of the nation's green power market.
In September, we issued our 1st Green Bond offering as a mechanism to further invest in innovative designs and technologies, meaningfully increasing our efficiency and resource consumption to ensure we continue to operate sustainably and advancing our commitment to reach 100% clean and renewable energy across our portfolio. Turning to the quarter, in Q3, we continued to adapt our selling engine, tapping into a healthy demand environment to deliver another strong bookings performance. These results were driven by continued strength in channel bookings, solid interconnection growth and firm pricing. And the quality and quantity of our pipeline looks strong as we close out the year. We continue to instrument and automate our business to support high deal volumes, closing over 44 to 100 deals in the quarter across more than 3,100 customers with a significant quantity of these orders serviced through digital interfaces, giving our business superior predictability and creating a huge opportunity to drive rates for interconnection and other incremental services.
Turning to our results as depicted on Slide 3, revenues for the Q3 were 1,520,000,000 dollars up 9% year over year. Adjusted EBITDA was up 11% year over year and AFFO was again meaningfully ahead of our expectations. Interconnection revenues grew 15% year over year as both unit volume and pricing continue to trend favorably. These growth rates are all on a normalized in constant currency basis. We now have over 386,000 interconnections with 14 of our top metros having ecosystems with over 10,000 interconnections and growing.
In Q3, we added an incremental 8,500 interconnects more than the next 15 competitors combined, driven by work from home, video streaming and enterprise cloud connectivity. Internet exchange saw peak traffic up 43% year over year with a 7% quarter over quarter step up, albeit returning to a more normal revenue growth rate after the surge of capacity buying in the previous quarter. Equinix Fabric also had a great quarter, eclipsing the $100,000,000 in annualized run rate with over 2,300 customers, fueled by broad based adoption across all verticals and geographies. As cloud adoption continues accelerate, we are also making great progress extending our leadership in the cloud ecosystem, capturing new cloud on ramps and continuing to expand our Xscale business. We're seeing strong demand for our assets in our initial European JV and are on track to close our new JV in Japan with GIC in Q4, adding locations in Osaka and Tokyo.
We've already signed our first XScale deal in Japan, securing a key anchor tenant who will take the full Phase 1 capacity of Tokyo 12. And in Q3, we topped the final domino to give Equinix direct cloud on ramps for all 5 of the top clouds across 11 of the metros most critical for global infrastructure deployments, Silicon Valley, DC, Chicago, Sao Paulo, Amsterdam, London, Frankfurt, Hong Kong, Singapore, Sydney and Tokyo, 9 more global markets than any other provider. We continue to adapt Platform Equinix to the evolving needs of our customers. And despite the significant challenges of integrating a new team during COVID, we effectively merged our packet in Equinix roadmaps and launched our integrated Equinix metal offering in 4 global metros with plans for an additional 10 by early 2021. Equinix Metal is a feature rich and fully automated bare metal service, giving our customers the option to deploy the physical infrastructure of their choice at software speed across our platform, enabling digital leaders to place infrastructure where they need it, when they need it.
Equinix Metal is also directly integrated into Equinix Fabric, helping enterprises quickly interconnect to thousands of networks, enterprises and clouds on platform Equinix, advancing our vision to make Equinix the world's digital infrastructure company. Now let me cover highlights from our verticals. Our network vertical continues to be the foundation of the platform, achieving its 2nd best bookings, driven by carriers expanding capacity for digital business. New wins with local telcos included AirTech Internet, a Latin American fiber Internet provider deploying a network hub to improve peering and performance and Mint Telecommunications, a British regional network provider deploying infrastructure for increased performance, security and scale. Our financial services vertical had a solid quarter led by EMEA and the insurance sub segment.
New wins included a Fortune 500 commercial bank simplifying their digital ecosystem as well as expansion with Bitfx, a subsidiary of Singapore Exchange Group, adding new qualifications for its FX trading solutions. Our content and digital media vertical saw particular strength in markets catalyzed by the shift to virtual, including video, social media and gaming. New wins included Rakuten Mobile, selecting Equinix as the foundation to deliver its communication platform to global operators and enterprise customers, as well as an online real estate brokerage interconnecting to enrich digital experiences for our customers. Our cloud and IT vertical continued to over index significantly with strength in the Americas and in infrastructure and software sub segments as adoption of hybrid cloud continues to accelerate. We remain focused on enhancing our market leading cloud density, adding 8 cloud on ramps this quarter alone and bringing us to 160 direct cloud on ramps at Equinix or 42% market share in our metros.
Our enterprise vertical had another great quarter with particular strength in healthcare and manufacturing. New enterprise wins included healthcare companies Maxor Pharmacy Services, Sandata Technologies, as well as Guardant Health, a leading precision oncology company. Our channel program continues to deliver great results, accounting for over 30% of bookings and generating over 60% of all new logos. We had great wins with reseller and alliance partners, including Cisco, Microsoft, Oracle, WWT and Zen Layer across a wide range of industry segments. Channel partners are also contributing to the success of our new market expansions.
We're excited to expand our relationship with Bell Canada as a strategic partner, working to deliver industry leading joint efforts, joint offers in Canada and globally. This partnership also allows Equinix to engage with Bell resale partners to build stronger relationships across the Canadian channel ecosystem. Other notable wins this quarter included Alestra in our recently acquired Mexican assets for an upscale retail chain and Capgemini in Sao Paulo for a Fortune 100 farmer firm, both transitioning from on premise data centers to hybrid multi cloud solutions for elasticity and scale. Now let me turn the call over to Keith to cover the results for the quarter.
Thanks, Charles, and good afternoon to everyone. I hope you and your families are doing well during these unique times. As Charles noted, despite the challenges in 2020, our team continues to deliver. Equinix leadership is so very grateful and thankful for the almost 10,000 employees that come to work every day to make Equinix a success. We have a fabulous team and culture.
This makes a huge difference. As it relates to the quarterly financials, we delivered another strong quarter with revenues, and once again benefited from net positive pricing actions. Performance against virtually every key operating metric was positive. Interconnection activity remained healthy with net adds towards the higher end of our targeted range, resulting in strong MRR per cabinet step ups in each of our 3 regions. In September, we entered into our 3rd debt financing initiative in less than a year, raising another 1,850,000,000 dollars We used the proceeds of this debt raise to refinance a portion of our existing debt on a net present value positive basis.
Effectively, the interest savings more than offset the redemption premiums and unamortized debt issuance costs, creating a financially attractive outcome for the company. As part of this capital raise, we issued our inaugural green bonds demonstrating Equinix's continued long term commitment to green our data center footprint and deliver wide reaching environmental benefits not only for ourselves and our communities, but also for our customers. And we established a green finance framework that raises the bar for sustainability in the data center industry. This new framework targets lead gold or better on new construction and objective to design average annual power usage effectiveness or PUE to 1.45 or better, which also exceeds industry benchmarks. To date, our refinancing activities has resulted in annualized interest savings of approximately $125,000,000 We have another $1,800,000 of debt to refinance, which at current rates could result in another almost $50,000,000 of annualized interest savings.
Now let me cover the quarterly highlights. Note that all growth rates in this section are on a normalized and constant currency basis. As depicted on Slide 4, global Q3 revenues were up 1.5 $2,000,000,000 up 9% over the same quarter last year, our 70 1st consecutive quarter of revenue growth. Q3 revenues net of our FX hedges q3 revenues net of our FX hedges included a $13,000,000 benefit when compared to our prior guidance rates, largely due to a stronger euro and British pound. Global Q3 adjusted EBITDA was $737,000,000 or 49 percent of revenues, up 2% compared to the prior quarter and 11% over the same quarter last year, meaningfully better than expected due to strong operating performance, favorable one time benefits including a reduction in bad debt reserves, given strong customer collection activities and timing of repairs and maintenance and other spend shifting between our Q3 and our Q4 quarters.
Adjusting for the shift in EBITDA between quarters and after our normalizing for FX and the Bell Canada asset acquisition, adjusted EBITDA was consistent with our expectations, and we expect Q1 2021 adjusted EBITDA margins to return to traditional seasonal levels. Our Q3 adjusted EBITDA performance, net of our FX hedges included a $6,000,000 net FX benefit when compared to our prior guidance rates. Global Q3 FFO was $580,000,000 above our expectations on a constant currency basis, largely due to strong operating performance and lower income tax expense, but offset in part by higher seasonal recurring CapEx spend. As a reminder, our Q4 quarter typically includes higher recurring CapEx spend compared to any of our other prior quarters. Turning to our regional highlights, whose full results are covered on Slides 5 through 7.
EMEA and APAC were our fastest growing regions by revenues on a year over year normalized basis at 16% and 11%, respectively, followed by the Americas region, which stepped up to 5%. The Americas region saw its 2nd consecutive quarter of record gross bookings with healthy pricing, favorable deal mix and record exports to the other two regions. Americas Net Cross Connect ads were the highest we've seen in several years, while we experienced negative billing cabinet additions in the quarter, largely due to timing of churn. Also in the quarter, we experienced the churn of some lower power density footprints in some of our acquired assets. This occurred a quarter earlier than expected.
America's billing cat magicians should return to traditional levels next quarter, and we expect a larger step up in the first half of twenty twenty one. After quarter end, we completed our acquisition of 12 Bell Canada data centers and expect to close the remaining asset allocated to this transaction in November, positioning Equinix as a leading digital infrastructure provider in Canada, adding 7 new metros and 500 net new customers to sell to across the platform. Our EMEA region saw strong bookings in the quarter with a healthy mix of small deals and new logo ads led by our London and Amsterdam markets. Interconnection was substantially up on a year over year basis, increasing to 12% of the region's recurring revenues due to both strong volume performance and favorable pricing initiatives. IBX asset utilization remains high and more than half of our major expansion projects are being constructed in the EMEA region, including 4 hyperscale projects related to our EMEA-one JV with GIC.
And finally, the Asia Pacific region saw another strong quarter of bookings led by the Singapore and Japan markets. We're seeing early traction with our pending acquisition of GPX India with interest across all of our customer verticals for the Mumbai market. We expect to close the GPX acquisition in Q1 2021. And now looking at our capital structure, please refer to Slide 8. Our balance sheet remains foundational to our future success.
We ended the quarter with $2,700,000,000 of unrestricted cash on the balance sheet. Our total liquidity, including our unused revolving line of credit, of $4,600,000,000 Our net debt leverage ratio remains at 3 point 3x our Q3 annualized adjusted EBITDA. During the quarter, we raised a net $197,000,000 of completing our 2018 ATM program at an average price of $7.77 per share. As we complete this year and head into 2021 and beyond, we intend to enter into a new $1,500,000,000 ATM equity program, which runs through Q4 of 2023, under which Equinix may offer and sell from time to time our common stock for working capital and general corporate purposes. As we've stated before, an ATM program is an efficient capital raising tool that we've used to fund our various business initiatives.
We continue to expect to use a balance of debt and equity to fund our future business needs and we'll continually seek to maximize the long term value attributed to our shareholders. Turning to Slide 9. For the quarter, capital expenditures were approximately $565,000,000 including recurring CapEx of 38,000,000 dollars We opened 3 new projects in the quarter, including our entree to Muscatenmaan, creating a second neutral hub along with Dubai for the region's networks and subsea cable traffic. Additionally, we added 50 new projects to our expansion tracking sheet, including our first expansion in Mexico following the acquisition in Q1, bringing our total significant builds to 41 projects across 25 markets and 18 countries, the result of a very strong customer pipeline. Approximately 75 percent of our major project spend is going to Metros, generating over $100,000,000 in annual revenues, where we leverage the established ecosystem density and our installed customer base.
And we continue to expand the ownership of land for development, including acquiring land in Bogota, Frankfurt and Paris. Revenues from owned assets were 56%, and we continue to expect this number to improve in the near term. Our capital investments delivered strong returns as shown on Slide 10. Our 148 stabilized assets increased recurring revenues by 5% year over year on a constant currency basis. These stabilized assets are collectively 85% utilized and generate a 28% cash on cash return on the gross PP and E invested.
And please refer to Slides 11 through 15 for our summary of 2020 guidance and bridges. Do note our guidance includes the anticipated financial results from the Bell Canada acquisition, excluding the Ottawa 1 facility, which we expect to close in Q4. Starting with revenues. For the full year, we expect revenues to grow 8% on a normalized and constant currency basis, which includes an incremental $39,000,000 compared to prior guidance through the acquisition of the Bell Canada assets and an expected foreign currency benefit, offset in part by packet revenues being slightly below our prior range and the deferred timing of Equinix custom order work, which we anticipate will move to early next year. MRR churn is expected to be within our target range of 2% to 2.5% for Q4.
We expect 2020 adjusted EBITDA margins of approximately 48%, excluding integration costs, an incremental $21,000,000 compared to prior guidance due to the acquisition of the Bell Canada assets and an expected foreign currency benefit. Also, we expect to incur $20,000,000 of integration costs in 2020. And we're raising our 2020 AFFO, which is now expected to grow between 16% 17% compared to the previous year through the acquisition of the Bell Canada assets and an expected FX benefit and lower interest expense. For 2020, we expect AFFO per share to now grow between 10% 11%. So with that, let me stop here and I'll turn the call back to Charles.
Thanks, KT.
We're very pleased with our results this quarter. And as Keith noted, we're immensely grateful to our teams around the world continue to keep the customer at the center of everything we do and are delivering sustained performance in the business. Even in these uncertain times, companies in every sector are embracing digital transformation as a critical business priority, and we are uniquely positioned to help our customers scale with agility and create digital advantage. Our consistently strong bookings and healthy interconnection growth give us confidence in the strength of our digital ecosystems and the depth of the addressable market created by broad scale digital transformation. We continue to invest in our strategy, evolving our platform in response to evolving customer needs, expanding our global reach to accelerate digital delivery, committing to a more sustainable future and ensuring that our culture is widely recognized as a place that attracts, embraces, inspires and develops exceptional and diverse talent.
So let me stop there and open it up for questions.
Thank Our first question is from Jordan Sadler with KeyBanc Capital Markets. You may go ahead.
Thank you and good afternoon. So first, I just wanted to touch on what you're seeing in the business and whether or not you're seeing any evidence of the enterprise positioning ahead of 2021 for a possible acceleration visavisortofthedigital transformation you referenced in the release and in your remarks?
Sure. Yes, I definitely think we're continuing to see enterprise as a very strong sort of vertical for us and cloud both cloud and enterprise which are sort of the two sides of the adoption of hybrid and multi cloud as the architecture of choice. We're seeing that show up both on the supplier side in terms of really strong cloud performance and on the demand side of the ecosystem from enterprise. And so I think what I've been really pleased with is our ability to continue to generate both new logos and enterprise bookings despite COVID. We've adapted I think very well in terms of our selling and marketing engine, our overall go to market approach in light of what is now largely virtual selling cycle.
But yes, I think we are seeing enterprise continue to pick up in terms of their adoption of cloud and I think we're going to be in a good position to continue to invest behind that. I think we're going to look carefully at the productivity of our sales teams and look to continue to add where we that makes sense. But I think there's a lot of opportunity in front of us in terms of the enterprise opportunity. And if you look at how we're evolving the platform by adding things like network edge, continued success with Equinix Fabric, which we talked about as a $100,000,000 run rate business now and then Packet, which we now have in market in 4 markets with 10 more coming. I think those are all opportunities to expand the proposition for enterprises.
And then just a one point of clarity on the guidance. You touched on a couple of factors, but I just want to make sure I'm capturing all of it. For the Q4, the implied AFFO guidance sort of suggests at the midpoint at least about a 15% decline from what you produced in 3Q. And I know there were a bunch of puts and takes. And I think the magnitude is smaller at the adjusted EBITDA line in terms of the decline.
But maybe you could just walk us through, Keith, what's sort of driving that?
Sure. Like anything in Q3, I mean, you can see that we had just an excellent quarter. And I'd like to say that things generally balance themselves out. But in Q3, we tended to have more goodies than we had baddies, if you will. And as a result, we meaningfully overperformed relative to our guide.
I'd like to try and put that in perspective for you because again, when you look at the year in totality and you look at the margin for the year, we're right where we want to be. And then you add an accretive transaction like Bell Canada, we're delighted with what's going on and then flow on top of that currency. But as it relates specifically to the operating costs, there's really 3 main things that have happened between Q3 and Q4. So let me deal with Q3 first. There's roughly $15,000,000 to $20,000,000 of what I call favorables.
And that favorable comes in 3 areas. 1, repairs and maintenance was lighter than we had planned. And because of that, we have costs moving from Q3, where you got the benefit into a quarter where we typically do more repairs and maintenance, you moved into Q4. So you have a roughly $11,000,000 swing there quarter over quarter. The second one relates to utilities.
And again, no surprise to, I think, many people on the call, utilities does move around a lot, their seasonality. But we had basically between one off rebates and other things, we had another sort of $5,000,000 of favorable going through the utility line. And then you flip that into Q4 and we're going the opposite direction where basically we have some settlement with our indirect car purchase arrangement for our sustainable energy. And so you're swinging about $10,000,000 there. And then the last thing that happened was effectively, as I said in the prepared remarks, when we started the year, as you might recall, Q1, we had basically a negative hit to revenues of $3,000,000 $14,000,000 to EBITDA.
At that time, we took a very conservative view on basically what the implications of the COVID-nineteen would be on our business. And because customer collections have been very, very strong, we're in a position to release a portion of the reserves that we created. And so we had a 6 think about $6,000,000 $7,000,000 benefit in Q3. But the flip side is, as we move, as we deal with COVID and the return to office and one off payments to employees, we're moving to a negative 4. And so all of a sudden, you've got everything going from, if I can summarize it, sort of a net positive sort of $15,000,000 $20,000,000 in Q3 to a negative $15,000,000 $20,000,000 in Q4.
And that's why I was very deliberate in my comment that once you get back to Q1, we get we return to our seasonal norm, if you will, for EBITDA margins. So again, there's a lot of moving pieces, a lot of favorability. And quite openly, it's I think we've got a conservative guide on our Q4 numbers. But if everything went as anticipated, that's what you would see. And yet, we'd still deliver against our expectations for the year, plus the uptick from currency and Bell Canada.
Long winded response, I apologize for that.
That's okay. Thank you for all the color. Appreciate it.
Thank you. The next question is from Sami Badri with Credit Suisse. You may go ahead.
Hi, thank you very much for the question. I just wanted to touch on first the channel strategy and you've obviously been doing a lot of trailblazing and creating new connections and new partners and formulating a much more robust sales motion than I think many of us really thought about a couple of years ago. So I was hoping you could give us a little bit of an update, not necessarily on the percentage of revenue flowing in from channel partners, but more specifically, has this channel strategy now formulated to where you guys wanted to be? Or is there still essentially a lot more to go with more channel partners to come and to complement your business, complement how you sell through or if you guys are going to continue selling with the channel? Just so we can understand how this could potentially evolve over the next coming years.
Yes, great question, Sami. The short answer is, I think there is a long way to go still. I think a bunch of opportunity still in front of us. As you've noted, you were 30 percent of our bookings coming through the channel, but primarily on a sell with basis, a lot of success in selling alongside our cloud partners and other technology partners who I think have an aligned interest on sometimes somewhat begrudgingly, but sometimes quite in a quite embraced way on hybrid and multi cloud as the architecture of choice. So, but I think there is a way if you really look at it, we one, we probably actually have gone through a pretty normal cycle where we added a lot of partners, realized that we weren't probably having that it was a smaller subset of them were really driving productivity and have actually gleaned that a bit and more focused on the partners that are really making a significant difference in the bookings now.
But I think the areas where we have room to go is really finding those partners who have a more sophisticated selling capability and can sell on their own, create and leverage in the same machine then leave this. And then also partners who bring complementary offerings that provide a more complete solution for our customers. And I think we're definitely seeing success there. And if you look at companies like VMware, who's a great partner of ours where people have made investments in VMware as their tools of choice in terms of how they're managing infrastructure within their environment. And then sort of marrying that up with the value proposition that Equinix brings both in traditional colo and what they might be doing there, but also with services like the Equinix metal offering, which we just brought to market off the backs of what we acquired with Packet.
So I think there's a fair amount of opportunity there in terms of growing the channel and taking it to a new level.
Thank you. And then one quick follow-up regarding just the Xscale JV and initiatives. You've clearly had some new announcements in some new regions with GPX in India coming into the pipeline. Is there a potential for taking the Xscale JV, I want to say sales motion or opportunity into regions like in India into potentially, say, Latin America, where there is high growth and large opportunity for both hyperscale or just very large deals?
Yes. We I think we've gotten comfortable with our ability to navigate some of the complexities associated with these things. As you will recall, it took us a while to get there on the Xscale JVs and get them sort of fully worked through all the complexities that come with that. But I do think there's opportunity for us to extend that either directly in terms of just additional JVs, which we have commented in this script and in others that were already well underway on discussions in other markets where we think the JV structure will work effectively. And we think that includes some of the markets that you described.
But I also think there's other ways that we kind of think about potentially over time using other people's mind as a point of leverage in terms of getting financial partners who are really excited about the returns that we could offer and that would give us the ability to gain more runway out of our balance sheet and focus our firepower on the high returning investments that are really down the middle for us. So I do think there's more opportunity for that there. I think the near term focus is really going to be on coming quarters.
Got it. Thank you.
Thank you. The next question is from Ari Klein with BMO Capital Markets. You may go ahead.
Thank you. Can you unpack the performance in the Americas a little bit? The turnover was higher in the quarter. Maybe just address that, whether or not that's something that could continue. And then you noted the expectation for improvement in the Americas, but how are you viewing the organic growth profile there?
And what will specifically drive improvement from here?
Sure. Keith, maybe I'll start and you can add anything that you want there. But, look, we actually feel very good about the Americas business. We talked about over the last several calls that we expected to sort of return to about a 5% growth rate in the Americas towards the back half of this year and you're seeing that now. As you noted, churn was a little bit higher, that was associated.
Keith actually mentioned that in his script, really 2 larger deployments, one that came in a quarter earlier than we thought, the other one that was came in as forecasted in terms of churn. But candidly, those were both deals that wouldn't have met our commercial hurdle in terms of deals we would have done in terms of our focus on really ecosystem centric, interconnection oriented footprints. And so even though we're seeing some we saw a negative billable cabs that we can that we can find out there and deliver bookings on, I think we're actually going to get improvement on yields in the facilities that were impacted. So it's definitely a more mature market. We're working hard to continue to drive traction in the enterprise market and seeing good success there.
I do think there is organic growth opportunity for us, particularly in the enterprise market. And also, by the way, using that selling force to export business to our other regions which is playing a very, very key role in doing. So I think that's the quick snapshot in the Americas. And again, definitely a more mature market, has returned to growth pretty nicely. I think we are going to see some of those turns come out that were deals that we wouldn't have really targeted prior.
And I think as we stabilize, we'll see continued improvements in yield.
Charles, I would just add a couple of comments I would just add to what Charles said is, number 1, when Charles made the reference to the fact these aren't deals that we necessarily would have done ourselves, Having now churned it, churned those deals, what you've actually effectively seen is our MR per cabinet increase. And it's part of the reason for that increase. The second thing that's really important is we are dealing with a mature market. The two points are worthy of note that were in our commentary. Number 1, America has had one of its best quarters ever.
So that's another positive. But the interconnection activity continues to be exceedingly strong, and that's on a net basis. And so you've got a very healthy ecosystem that's being developed. And on top of that, we're investing around our new products and services. So I only think over some period of time, you're going to see an acceleration of that opportunity, but you also will see a higher attach rate.
And so despite some of the negatives that you see, there's some real positives that are coming down the road. The last thing is in my prepared remarks, I did make the comment that the Americas has been choppy. It's been choppy for a few years, But we are anticipating a return next quarter to a more normal billing quarter. And then we do anticipate a more meaningful step up in the first half of next year.
Thanks. And then just if I can briefly on the Packet acquisition. Can you just talk about what the customer response has been to metal? And then I think, Keith, you noted in the guidance that the growth has been a little bit lower than you expected, maybe address that too.
Sure. You bet. I'll tie those together. Yes, we had previously guided 32 to 40, and I think that we're going to come in a little below that prior range. It's really an artifact of a decision that we made in terms of focusing on when we first did the acquisition, our belief was that we would kind of let the existing packet offering run for period of time and then seek to launch a fully integrated Equinix metal offer in early 2021.
But the response frankly from customers was super positive in terms of our intentions to offer metal as an offering. And they were really encouraging us to bring together the feature set that we envisioned in our in the organic product that we had underway when we bought Packet. And so we decided to bring the teams together, but then we waited a bit in terms of we wanted to make sure we had the offering in market before we put the real wood behind the arrow from a sales enablement perspective. And so I think that resulted in us being slightly behind in terms of where we had hoped to be from a bookings and revenue standpoint. But if you look at it in terms of what we expect to deliver in Q4 and what that implies on an annualized run rate of about 38%, it's really not too far off expectation.
And I think the encouragement that we're getting from customers about what they believe is possible, with the extra expense offering as we add to end markets over the course of the first half of twenty twenty one, I think there's great opportunity there. So we feel very good about it. We bought that business primarily because of the technology and the team, and to really give us some credibility in a market we thought was super additive to our value proposition. And I would say along all three of those dimensions, it has been what we hoped for. The team is terrific.
We've seen very little turnover in that team. I think they're a great cultural fit. They've come together with our engineering team to really develop, I think, an Equinix metal offer that's going to be very successful in the market and we feel very optimistic about the path forward.
Appreciate the color. Thanks.
You bet.
Thank you. The next question is from Michael Rollins with Citi. You may go ahead.
Thanks and good afternoon. I was just curious as you're getting into the 2021 budgeting process, if you could give us a preview on how you're thinking about balancing top line growth with the company's long term margin goals to get above 50%. And then just secondly, in the quarter, I was curious if you can un pack some of the strength in non recurring revenue sequentially and year over year and how to think about that level going forward?
Sure. Keith, maybe I'll take the first one and you can comment on the second one, if that works. You can add anything you want on the budget too. But we're well underway on that. We do believe that it's and you have heard from us Mike over the years the same old song and dance if you will which is we really think about this as a long term value creation is our objective.
And we want to maximize market opportunity and leverage our significant differentiation to do that. And I think that does require that we continue to evolve our service offerings and our platform to be adaptive to what our customers are asking for and I think that will require investment. But we also have a focus on continuing to drive operating leverage in our business and converting that into margin expansion. And so we continue to believe that that 50 percent is an achievable long term target, and we want to drive margin expansion where we can. I think if you look at the operating performance and the sort of EBITDA levels that our mature markets operate at, it's something that we ought to be able to achieve.
And we're very focused on trying to make some investments in automation to drive operating leverage. And then we'll trade off when we drop to the bottom line and give margin expansion versus putting that in and doing things like adding additional services to the platform and investing in further automation. So we'll come back to you obviously with more clarity as we align that, but that is the approach that we take and I do think it's going to be a journey still for us. And my on balance, I would say, I believe the opportunity is such we ought to continue to invest in the business and I think it would be a mistake for us not to do that. But we also need to make sure that we don't lose sight of the importance of operating leverage.
And Michael, as it relates to the second question, so this quarter we did roughly 5.8% of our revenues came from non recurring. And in fact that was a meaningful step up as you know over the prior year and also over the prior quarter. In fact, we actually did a little less than we anticipated. We thought we'd do $4,000,000 to $5,000,000 more this quarter than we actually did here. That all said, I did make the comment that deferred custom work that we do as a company will likely push into the 1st part of next year.
And I think it's fair to assume for all the different reasons that somewhere between 5% 5.5% 6% is a reasonable non recurring revenue expectation. We'll certainly update that when we give the full annual guide in February. But that's a reasonable assumption to make visavis our non recurring revenues. And again, it's relatively it's 5.8 percent on average for the year. It is for the quarter and it's not a meaningful departure from where we were year to date last year.
So I think we're about $245,000,000 year to date last year at this point, and we're about $242,000,000 to $243,000,000 year to date in 2020. So again, I'm comfortable in the 5.5% to sort of 6% range, and then we'll update that accordingly.
And Keith, just to understand the business activity under those dollars, can you describe what's happening in terms of is this representative of some of your customers that can't get to your facilities and they need your smart hands or they need your installation services more than they did in the past? Or is this tied to just the normal course installations and what you're processing? Just curious if you can unpack a little more of what that is.
Yes, sure. There's a number of things that certainly go on in that particular line. 1st and foremost, of course, there's the deferred installation revenue that we realize with every sale that we make. And certainly, there's a drag along effect for every MRR dollar that we book. There's an NRR dollar as well.
And so you defer that over basically the relationship of that contract. Then in addition to that, there are at times, there's goods for resale. There's custom work that we do as well. And think about a large perhaps a large hyperscaler or a large customer who's looking for build out of their environment. And so we do some of that work and we do a fair bit of the work, particularly for the hyperscalers.
And as a result, it can be a little bit lumpy and it'd be custom cabling and installation work for the customer. So effectively, they move in, put their servers and their equipment into the racks and they're good to go, but we do all the prep work. Again, it's a great line of business for us. It varies in margin return. Again, we use, in some cases, our own workforce.
But that's a line of business that generates roughly 30% 25% to 30% margins. And it appears on the non recurring revenue line.
The next question is from Colby Synesael with Cowen. You may go ahead.
Great. Just a few numbers oriented questions. First off, just to make the point, so we should be adding, if I'm correct, dollars 15,000,000 to $20,000,000 back to our Q1 2021 EBITDA when we're modeling before taking into other considerations like seasonality. Is that correct?
You say there's certainly take away the seasonal aspects, Colby. As you know, we have the FICA reset in Q1 and we also have our annual sales conference. So if you put that aside and that's why I wanted to say back to traditional seasonal margins, that has ranged anywhere from 40 sort of 48% to give you a sense over the last few years. But suffice it to say, they're absent any investments that we've made we'd make given Charles' comments, that is you're talking about $15,000,000 to $20,000,000 that would come out of the Q4 numbers.
Great. And then we add it back into the 4th into the Q1 number?
Yes.
Okay. And then secondly, you guys gave guidance back in 2018 at your Analyst Day of 8% to 10% revenue and 8% to 12% AFFO per share. And you gave that guidance for each year through 2022. You normally have an Analyst Day every 2 years. It would have been in June of this year, but you didn't.
Is that guidance that you gave back in 2018 in terms of how to think of the business still valid? And then if I could just sneak one extra question in there. You gave guidance earlier this year for $0,000,000 to $50,000,000 impact from COVID-nineteen. Curious where are we in terms of the actual impact year to date and what the thinking is for the Q4? Thank you.
Just Charles, you want me to take those or? Yes, there's a few of
them there. The why don't we why don't you go
ahead and yes, jump in where
you want there and I'll add.
Okay. Okay. Well, 1st and foremost, Colby, as it relates to the Analyst Day guide, the 8% to 10% was a number that we embarked upon again in June of 2018. And as you know, we've done very well against those expectations, particularly around AFFO per share. Again, 8% to 10%, there's been a lot of activity.
And so we've done a good job of normalizing both for currency and then for the acquisitions. And suffice it to say, we are a 3rd well, I guess, our 3rd year into it and we're running ahead of what we originally told the market at that point in time. As it relates to the next 5 years, it's probably a little early to give you a sense. But generally speaking, I feel very good about sort of the ranges that we were giving at that time. A lot has changed since then and we'll update you accordingly, including some of the acquisitions we've made and we've been very active as a business.
But overall, I feel very good that we can deliver against that profitability target that we set for ourselves visavis on a per share basis to make sure that the shareholders recognize the value that we've delivered. I'm sorry, I have
no COVID-nineteen.
As it relates to COVID, again, you're right. We basically said a relatively wide range, as you know, but then we targeted around midpoint. And you can see us starting to peel back some there's definitely some impact even as we talk a little bit about the Packet acquisition and just the difficulty on making sure that we could pull a lot altogether, as Charles said, in a COVID world. That certainly slows it down a little bit. But put that aside for a second, I think overall, the things that we were most worried about is what customers were going to go out of business, what payments were we not going to receive, what were the incremental costs.
Certainly, as a business, again, we said $14,000,000 of costs in Q1 at the EBITDA line. For all intents and purposes, we wrote back 6 $1,000,000 of that in the Q3 and then we're going to book another $4,000,000 of new costs in Q4. So net net, you're sort of somewhere in the $10,000,000 to $15,000,000 range on EBITDA. And I would say I feel pretty good about that. As it relates to the top line, we it's hard to quantify.
There's certainly some impact from COVID. I think I'd size it in the $20,000,000 to $30,000,000 range. And here's how we got there. For a number of reasons, we've had very good success in being able to book, particularly on the gross line. There absolutely will be some there has been some fallout from COVID where companies have gone out of business and we've made concessions and other things.
And so we're absorbing that. But I also think there's been a timing implication. And the timing implication, particularly in Q2 and less on Q3, customers were having difficulties getting to sites and doing deployments and all that. And so the knock on effect on the revenue line, again, our estimate, again, as we share with our internally and also with our Board is probably at a $20,000,000 to $30,000,000 number. And so that sort of gives you a sense of the ranges that we've absorbed.
Again, we're delighted with where we are visavis all the what could have been when we first started here in Q1 and started locking things down, clearly, we've done meaningfully better than we originally anticipated from that original guide. But that's, I think, because the company has been running exceedingly well and our customers have been paying their bills as they come due, absent a few concessions that we've been making here and there.
I'll just add a little color on all of them. One, just backing up to the very first question you had in terms of, again, just to be clear, I think that what we're saying here is that the Q4 downtick, which is apparent in the guide, is really a matter of movement between Q3, which obviously significantly over performed on EBITDA that was pulled forward and shift in. I think if you take that and you sort of adjust for that, between quarters, I think you would see a much smoother trajectory. And then we would expect that to sort of continue to roll into Q1, with a margin profile that's more consistent with kind of what we typically see. So that's, I guess, I think, that's a with kind of what we typically see.
So that's I guess clarification I'd offer on that one. In terms of the multi year guide, we're going to come back and obviously provide that in a hopefully, we'll get back to an Analyst Day here this year and we can offer that. But I do think that we continue to believe that our addressable market opportunity continues to grow and I think we're going to continue to find a way to invest behind that. And then again on COVID, I think Keith gave the color, but there were a number of hard costs that we continue to see in that. There are definitely trade offs and there are some things that are better, but we're also putting we've made significant investments in terms of trying to address our employee well-being during this period of time, putting investments in making sure that work from home is a good experience for our employees.
And so there's been some hard dollars that have hit that. It's tough to put all of the revenue impacts fully into play, but into perspective. But overall, I got to say, I think we're extremely happy with the team has performed despite the pandemic.
Thank you.
Thank you. The next question is from David Guarino with Green Street. You may go ahead.
Hey, guys. Thanks for taking the questions. I've actually got 2 legislative focused questions for you. The first one, with Prop 15 on the California ballot in November, could you help give us an idea of what the increase in Equinix's property tax bill would be if that measure were to pass? And then the second one, in New Jersey, I'm just curious if you started having any conversations with some of your financial tenants as a result of the proposed financial transaction tax there?
And if you could just remind us of what percentage of your cash gross profit comes from New Jersey, that would be great also. Thanks.
Yes. Let me jump on the second one first and give a little bit of color. And then Keith, maybe you can take Prop 15 and add any color on sizing potential impacts from the New Jersey thing. But what I would tell you is, yes, obviously, we're deeply engaged with our financial trading customers. We have very healthy ecosystem globally and certainly New Jersey is an important one.
I would tell you that those companies are designed with in partnership with Equinix to be highly resilient. And I think that they're going to make it clear that they can move their trading platforms around as they need to. Traditionally, that has been in response to a disaster. I think some of them would consider the New Jersey tax a disaster that they would respond to. And I think we just and we are there as a partner to support them in terms of making sure that they can continue to run their business effectively.
So I think that it would be there would be a potential impact to that, but I think it would be a movement around the ecosystem, I think in terms of being able to restabilize that trading volume in other venues. And so, I personally think that I think people are cooler heads are going to prevail and I think we will realize that that's probably not a great outcome and it wouldn't accomplish what people had hoped for. But we are very closely aligned with our trading customers and I think in a coordinated approach to try to make sure people are thinking clear headed about that.
Thanks, Charles. And so I would say that as it relates generally to the legislative matters that come in front of us, particularly around tax, 1st and foremost, as we I think we all know, Equinix is a REIT, U. S. REIT. And because of that, no matter what the outcomes are, I think we're not going to pay much in the form of corporate income tax.
I don't think there will be a meaningful change. As it relates to some of the propositions, Charles, I think, has highlighted well what our position on the New Jersey financial transaction tax or the potential for that. Prop 15 in California, again, we have roughly 11 triple net leases to give you a perspective. We own some of our properties. If it move forward, Prop 15 move forward, we would estimate good.
It's not going to be a huge number, but it's probably going to be in the $5,000,000 to $10,000,000 range. That's the or at least our estimate today of what could be. Again, we're paying very close attention to this. And again, we'll know over the coming quarters what basically on the outcome, and then we'll update the investors accordingly on the future analyst future earnings calls.
Great. That's helpful. Thank you very much.
Thank you. And that was our last question. Speakers, I will turn it back to you for closing remarks.
Thank you for everyone joining the Q3 call. That concludes the call.
Thank you for participating in today's conference. All participants may disconnect at this time.