Csquare Grows Revenue 25.6% to $302.3 Million in Q3 2026

Csquare (NYSE:CSQR) grew third-quarter 2026 revenue 25.6% year over year to $302.3 million, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 44.3% to $132.1 million. The net loss widened to $88.1 million from $29.8 million a year earlier, driven by approximately $58.6 million of IPO-related transaction costs, post-IPO stock-based compensation and charges to terminate certain pre-IPO compensation agreements, Chief Financial Officer Steve Cook said.

The results rest on accelerating commercial momentum. Annualized bookings reached $66.1 million, the 14th consecutive quarter of sequential bookings growth. Annualized revenue backlog rose to approximately $114 million from about $76 million at the end of the second quarter, with roughly $104 million expected to commence over the next 12 months — the backlog grew by half in a single quarter.

What is driving bookings and pricing?

Chief Executive Officer Spencer Mullee said enterprise customers are planning further ahead and committing to capacity earlier as they seek certainty over delivery times and costs. Demand spans financial services, health care, technology and communications, he said.

Many third-quarter deals carry short deployment timelines because they use existing space or require targeted infrastructure improvements rather than larger expansions. Mullee expects a number of those deals to come online in the fourth quarter.

Pricing data reinforces the trend. Cook reported:

• Renewal spreads (the percentage difference between new contract rates and expiring rates) of approximately 17%, the highest in five quarters
• Booked pricing up by double digits year over year
• Net revenue churn of 1.9%

Mullee attributed the renewal increase in part to supply and demand, noting some legacy customers remain below market rates. A significant renewal involved Csquare's largest customer, and he does not foresee another of that size on the horizon. Asked for a normalized figure excluding that deal, he cited a historical renewal spread of approximately 8% but did not provide an adjusted third-quarter number. Roughly one-third of the portfolio is addressable for renewals every 12 months, Cook said. Csquare also raised portions of its rate card near the end of the quarter.

How does the expansion model affect capital spending?

The company holds access to nearly 2 gigawatts of utility feeder capacity, compared with about 1 gigawatt of installed transformer capacity and roughly 400 megawatts of installed sellable uninterruptible power supply capacity. About two-thirds of available floor space is currently sold.

Management sees an opportunity to add power and cooling infrastructure inside existing buildings at lower capital cost than building new shells or developing new sites — the difference between fitting out a standing warehouse and constructing one from scratch. Csquare sold 21 megawatts of new deals in the third quarter, split between existing and new capacity, and Mullee estimated the future cost of those sales at about $3.8 million per megawatt.

Cook said larger under-roof expansions tend to sit at the upper end of the targeted $4 million to $8 million net capital expenditure range per megawatt. Mullee called that range reasonable for current deals, though individual projects can fall outside it.

The fleet is also densifying: the company is installing 150-kilowatt and 250-kilowatt racks across multiple data centers. Strictly AI-related deals represented about 30% of third-quarter deals measured by monthly recurring revenue, while more than 85% of monthly recurring revenue comes from core enterprise customers. Mullee described AI inference as an incremental demand source rather than the foundation of the business.

Where does the balance sheet stand?

Csquare repaid approximately $1.1 billion of debt after its IPO, including its entire revolving credit facility balance. It ended the quarter with approximately $1.1 billion in available liquidity and net leverage of about 8.4 times annualized year-to-date adjusted EBITDA.

Cook reiterated a target leverage range of 6 to 7 times, with adjusted EBITDA growth from contracted deployments as the primary driver of progress. Substantially all outstanding debt is fixed-rate, at a weighted average interest rate of approximately 5.4%, he said.

On funding, Mullee and Cook ruled out issuing equity. Cook said the business was free-cash-flow positive before growth capital spending and expects to direct substantially all of that free cash flow to incremental growth, alongside available liquidity lines where appropriate.

What is the full-year outlook?

For full-year 2026, Csquare expects revenue of $1.14 billion to $1.16 billion and adjusted EBITDA of $490 million to $500 million. It projects growth capital expenditures of $620 million to $640 million and recurring capital expenditures of $50 million to $60 million.

Executives did not provide 2027 capital spending guidance. Mullee said the company is steering sales toward already built and powered space, which could help reduce capital spending, while Cook said project selection would balance demand against capital intensity.