Csquare (NYSE:CSQR) reported second-quarter 2026 revenue growth of 14.5% and record annualized bookings, as the data center operator cited broad-based demand, improving pricing and continued expansion by existing customers.
Revenue totaled $280.4 million for the quarter, while revenue excluding metered power was approximately $260.2 million, according to Chief Financial Officer Steve Cook. Metered power revenue can fluctuate with customer electricity consumption and generally has little effect on profitability, he said. About 95% of quarterly revenue was recurring, supported by long-term customer relationships, contractual escalators and retention.
The company recorded a net loss of $48.8 million, compared with a $13.9 million loss in the prior-year quarter. Cook attributed the larger loss primarily to higher interest expense tied to debt issued in the second half of 2025 and debt assumed in a 2025 portfolio acquisition.
Bookings Reach Record as Demand Remains Broad
Annualized bookings reached a record $64.7 million, representing Csquare’s 13th consecutive quarter of sequential bookings growth. Chief Executive Officer Spencer Mullee said the results reflected demand across enterprise customers, cloud and network providers, healthcare, financial services, technology companies and larger infrastructure deployments.
Mullee said customer discussions have become more strategic, with companies planning capacity requirements further in advance and placing greater emphasis on power availability, low-latency applications, distributed computing and AI inference. He said demand extends beyond AI-related workloads, as customers continue to invest in resilient and highly connected infrastructure.
“Demand remained diversified” across customer types and markets, Mullee said, including both major metropolitan areas and secondary markets. He added that constrained power availability in parts of the industry has increased the urgency for some customers to secure capacity.
About 35% of second-quarter bookings came from existing customers expanding their deployments, including some that added capacity at new Csquare locations. Cook said new deployments were being signed at higher market rates, while renewal pricing and contractual escalators also continued to contribute to growth over time.
During the question-and-answer session, Mullee said Csquare’s preferred customer deployment range remains below 20 megawatts. While the company has historically found a “sweet spot” in the one- to five-megawatt range, it is willing to support larger customer expansions, including a recently signed approximately 14-megawatt deal. He said the company does not intend to pursue deployments in the 30- to 50-megawatt range and likely would not take on 20-megawatt projects.
Capacity Additions and Deployment Timing
Csquare added just over one megawatt of installed capacity during the second quarter, which Cook characterized as a holding-pattern quarter for the installed base. The company expects several larger projects to come online during the second half of the year.
Mullee said the quarter was focused on installing capacity that had already been sold. He said customers can require additional time to complete Basis of Design work before deployments begin, particularly as projects become more technically complex. The company views those longer timelines as a reflection of deployment complexity rather than weaker underlying demand.
The company is installing more than 30 megawatts of customer deployments and expects interconnection revenue to continue increasing as customers enter the ecosystem. Mullee said it can take six to 12 months for customers to become fully involved in that ecosystem.
Csquare also said it expects churn to return to its previously discussed range. Mullee noted that one large customer exited during the second quarter, but said the associated space had been re-leased at a higher rate and higher capacity.
Balance Sheet and Capital Spending
At quarter-end, Csquare held approximately $120.8 million in cash and cash equivalents, $209.5 million in restricted cash and about $4.9 billion of long-term debt. Following the end of the quarter, the company completed its initial public offering and used all net proceeds to repay debt.
Cook said the IPO reduced pro forma net leverage to approximately 8.2 times and is expected to lower annualized interest expense by about $63 million. The company continues to target its previously communicated year-end 2027 leverage objective through EBITDA growth, disciplined investment and lower interest costs.
Growth capital expenditures were approximately $128 million in the second quarter, while recurring capital expenditures totaled roughly $15 million. Cook said major growth projects generally require customer commitments before construction begins and are subject to underwriting that assesses customer credit, construction costs, returns, timelines and execution risks. Historically, the company has deployed growth capital at EBITDA multiples generally in the four- to five-times range, he said.
Management said a gain on lease modification during the quarter was a one-time event tied to the decision not to renew a lease on a non-strategic facility.
Full-Year Outlook Maintained
Csquare issued full-year guidance based on its current view of commercial activity, customer deployment timing and development execution. Its outlook calls for:
- Total revenue of $1.13 billion to $1.17 billion;
- Adjusted EBITDA of $460 million to $480 million;
- Recurring capital expenditures of $55 million to $65 million; and
- Growth capital expenditures of $610 million to $660 million.
Mullee said the company is monitoring competition for experienced construction, commissioning and technical personnel, particularly workers familiar with operating in live data center environments. He said Csquare can find the necessary personnel but must work to retain and motivate them as infrastructure investment accelerates.
Looking ahead, management said it expects continued demand across its portfolio, supported by pricing strength, constrained supply in some markets and customer interest in connected infrastructure.
