Equinix (EQIX) 25 Oct 232023 Q3 Earnings call transcript

Good afternoon, and welcome to the Equinix's Third Quarter Earnings Conference Call. [Operator Instructions] Also, today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Chip Newcom, Senior Director of Investor Relations. Sir, you may begin.

Good afternoon, and welcome to today's conference call.

risks I statements to today we in and started, some everyone are get nature the of will involve we would remind like that forward-looking Before uncertainties. and be making by XXXX. identified February vary most may X, recent including filed today's statements be identified from Actual XX, filings XX-Q the and with August results we've those significantly risks release our filed XXXX, our and and Form those may XX-K affected in press SEC, in the Equinix and statements update on obligation assumes comment this or to no intend not does on made forward-looking call.

light Fair through to done during In of addition, policy financial quarter Equinix' the it an not explicit in on guidance its Regulation Disclosure, public it's is disclosure. unless comment

provide directly those to today's the reasons measures In Relations addition, we'll press GAAP provide comparable why non-GAAP these on measures list reconciliation We the the measures a of most on in release and call. page measures a today's uses the at www.equinix.com. Investor company of Equinix conference

We've financial important made this certain to that website and Keith time Taylor, from time to post on IR Equinix' President; the and us Meyers, the with you website our CEO about available data. along discussion, to Equinix page of supplemental presentation remind today page Chief designed and would a also regularly most information. With Officer. accompany and other check encourage current we to We like the available information information you IR our for are on Charles Financial

like the to up I'd we'll one. At follow-on to of the like in remarks, questions analysts time, to hour, questions Charles. In we'd to limit interest ask these our sell-side this be from over turn taking to any prepared call call analysts. this X wrapping Following

per dividend and share earnings value AFFO increasingly full the our quarter creation, raising results call. Despite Thank year. to both you, macro third delivered we solid Good welcome complex of and to an another drive continue environment, afternoon, quarter outlook our our for and Chip. strong

is to and designing optimizing see reliance as continue a interest characterized commitment capabilities infrastructure in digital priority, continue across spend caution and digital a focused to on balanced by critical a an growing caution, this data-centric and and remain accelerating as Equinix to we multi-cloud environment partner clear critical architectures. Customers a and While they operate in AI by customer implementing remains existing other Demand and cloud, in strong. hybrid, on and categories. transformation network

is shareholders. In our optimism solid engine density strong and our accelerating, differentiated well solid net pipeline of demands services to pricing our to evolving center our bookings to of the driven is growth logo QX, continued and yields us highly in higher our turn, forward allowing compelling revenue to by ability a to growth, go-to-market New price, a and environment, power value deliver cabinet interconnection see strong deliver continued demand. favorable MRR per and execute The our customers we customers, result customers about more strong highlighting logos aspects services, more all deals new reach. of with across saw our quarter We power and our performance X,XXX from global X,XXX than including coming targeted than customers. all address digital in high-value together with platform across xScale, data and the strategy record the cross-regional unmatched to

Gartner organizations of and significant front, cultivate recent existing opportunities poll AI XX% found with mode are across production win and base continue A with AI-specific generative to AI. pilot or in prospects. the On our we customer

capture high-value technology the portfolio build-out of along with key in the the the evolving us AI from offerings value across have broad partners demand and interest between enterprise our our cloud both seeing architectures manifest that customers to similarities opportunities see tandem emerging that to strong providers AI in accelerated service for vectors. multi-tiered And from believe this years. characterized X will demand. this past looking and service chain We are We X key the allow

First, on-ramps, we in magnetic nodes our retail scale business, support inference deployments will needs. training smaller and provider aggressively AI pursue service to

positioned a the expanded generative Awards specialized cloud an customers networking on-ramps of a multi-cloud and with large Google technology. language at well proud AI here Key AI the security key nodes this Wheat, leveraging recognized and Google XX% QX our nearly been Equinix cloud, market higher in in And providers, GPU networking included for work models Cloud are workloads. performance, in service AI area wins enterprise-grade ecosystem. We to have for share selecting deploying network major to QX, players and Platform we're the supporting XXXX Equinix to Customer at on-ramps our provider, metros. And regional across Lambda, GPU connectivity, unique for dedicated Core connectivity offer cloud multiple scale winner to

top augment xScale serve meaningfully pursue deployments to the the intend America portfolio, including strategic including targeted hyperscalers demand. our players, ecosystem key other potential we and training Second, AI with in enterprise large-scale AI to highly North to

where seamlessly to data allowing advantages announced larger-scale resources capabilities, in our all Equinix and builds to locations asset We cloud will enterprise demand, while campuses public to proprietary control significant happens, Platform to access in with leverage Silicon leverage campuses our coupled capacity. And with position as compute in expect AI some customers burgeoning while place builds maintaining of finally, be other data. we power XXx newly Valley retail private response will tightly AI our place like high-value will to proximity unique be the

reach, derived and a inference in from economic also well deliver our We dramatic anticipate adjacency. and see as and workloads Equinix acceleration cloud positioned network density benefits to performance

verticals, Equinix capacity leaders radiology that transportation, intelligence not with values. Harrison.ai, education, developing specific broad-based aligns in digital for by exciting pathology. in business, sector including public and While clinician-led our tools from seeing we're limitations our but to wins private still addressing only inequality An care opportunity health healthcare healthcare with the in clearly and AI-powered is and system, that AI drives artificial a demand the dedicated early, company

we and accelerates, response our evolving product portfolio platform in demand to AI are customer physical adapting requirements. our As

evaluate Ashburn already in direct-to-chip to solutions to cooling for commercialized liquid area In we're co-innovation in power are including center data this X with work in have escalating technologies terms supportable our of XX early our that cooling liquid and markets, regions. in support across facility support design, requirements all using markets all

in We sharing cool significant sizes our we space. deployments deployment look you liquid densities on are more forward our already supporting and range of progress across to and this with

strong growth Turning year-over-year, share and $X.XX was increases. price billion, per depicted up to growth revenue for Slide revenues driven EBITDA our was AFFO X, X% power were as XX% year-over-year on results, by and recurring our operating QX recurring are up and a Adjusted grew with than strong revenues expectations to Equinix constant timing due X% from year-over-year better and normalized of currency on Fabric. Interconnection These performance CapEx strength basis. all rates continued spend.

services perform Our well. portfolio continues to data center

for capacity footprint. xScale duration capacity, XXX countries, across markets once the XX investing to underlying that long builds Given currently We pricing major delivering digital more will and trends, factor the demand projects a our we're opened. continues that infrastructure XX than including of in deliver XX across strong underway megawatts XX broadly have global new drive positive in

now strong to over interconnections customers stepped up is X XX% supporting More into have to total from our capacity healthy X,XXX with deployed interconnection, move added more thanks On quarter-over-quarter to as Recurring offset distributed revenues to gross in we continue have XXX,XXX in activity more bandwidth interconnections connections. rates. adds, we continued higher consolidations by in X% architectures. grooming to metros fill region expansion of capital QX customers than visibility our where major XX% than net somewhat and

interconnection saw XX% up another provision APAC port Cross, Internet the and peak Warsaw to first network LAX offer strong X than trading orders New the cable by quarter on in more Southern and continued and bandwidth, to with subsea surpassing Americas X% X% Exchange, per quarter-over-quarter traffic Fabric their with into Equinix Stock Globally, had trading Equinix' traffic engine more XX%. And in NEXT Zealand and IBX matching capacity their to Equinix and enhanced system XXX U.S. by relationship their growth ecosystem significant peak wins and with quarter-over-quarter performance. momentum second. SX expanding nearly time. record up primary region, capabilities XX deploying Australia the our year-over-year to Exchange migrating their to for aggregate per second. boost the Recent IBX terabits was to terabits in Warsaw include

of keeping from control enterprise consideration Equinix leading clouds by including our stack to their our of We network to Metal, seeing latency a over-indexing full growth adoption offering data, access the continue while invest business, momentum behind platform all with our strategy expanding workloads. revenue significantly storage an integrated announcement solution edge digital NetApp for which technology portfolio on to AI We're provides strong with including in recent partnerships customers low companies, the also customers. that enterprise broader our services critical of is relative

services digital product Network major gaming this via to providers a wins company, Fabric. leading markets a hubs Hill, company across quarter included using Equinix significant win a using educational key a Edge cloud McGraw virtual connect publishing with to Equinix launch. deploying to support new Key multiple Metal And global

initiatives. amplifying with delivered a program and the range focusing over of of transformation logos industry our XX% wide accounting strong digital sales segments for channel quarter, reach across another Our of wins team new on

school Managed HPE. Key Dell network connectivity deliver a executed key This while We ImpEx to infrastructure seeking and Cisco, with partners, top while expenses. cybersecurity. continue modernize IT uptime improving and Technology to wins operational district and Carasoft multi-cloud U.S. to see access growth low lowering enhancing AT&T, and from resources X public Services, partners win latency, like ecosystem secure Dell will technologies, included aging systems

over the me quarter. to from let Now the results cover call and Keith the turn

and to Charles, Great. good Thanks, everyone. afternoon

hope families I saying and your doing by well. start me Let you are

about difficult these and to as ahead hard to complex the and work bullish our remain and times, position in the expand notwithstanding we preferential business our continue marketplace. we opportunities Now strategic

capacity shareholder core of X closely creation. we into work pricing value maintain diligently revolves future. continue and our enhance while that will our long-term that know, our all markets platform to continue you we positioning mind, build decisions. tenets strategy in differentiate to With Also, around strategies with to rigor of our the the offerings in spending our As overseeing

access gives we've relates and been the under opportunistically able highly As capital maintain balance and conditions the ample advantaged flexibility capital liquidity terms our to beneficial us. with structure, that This markets a to to sheet to lower leverage. us are it

including and where our addition, investments sustainability both important around chain, costs, supply energy highly our working operating support to for matters in actively strategic our source first our including while increasing In initiatives, how we're customers. future other we goals, and

our and rates. with our to exposure efforts interest remain we currencies risks, derivative including manage Lastly, pleased to our foreign

business. the to on Moving

well. to strong with solid QX, we perform customer bookings had We demand. net continue In and gross

our increase of sold. per bookings QX, within largely power meaningful due metric, at MRR our customers well Our the pricing of $X,XXX positive. to was to is deployment, yield including up the dynamics currency metros, cabinet, cabinets range. timing of and to respect the we very and in constant are net quarter-over-quarter Also, it a remains and on to for cabinet environment across per flat the of ways higher and basis. With This density given cabinet look the the increase billing invested supply cabinets to a increasing density quarter. $XX of XX% end our to the year-on-year churn our improved on targeted many Global line drives bottom profitability on capital. churn MRR tight optimize our return continue compared

but of ratios support not We year. strong and booked have depth close related performance bookings coverage the cabinets to expected a backlog solid our pipeline an installed and yet our out of the

Know Now on quarter. the a and the from all me constant cover are that in let section comments currency this basis. normalized highlights

$X.XXX remained same revenues As increases. XX% prior QX strong revenues price flat to depicted the quarter and on last X, Slide global revenue over the due compared year recurring were quarter. growth to billion, power up Nonrecurring

this to quarter. QX step-up inherently a revenues Although expected business last to of XX% QX across EBITDA nonrecurring Global it million to same guidance nonrecurring a revenues, quarter close compared prior $X operating attributed of lumpy, deals our hedges FX rates. to our implies attributable a performance. QX, of headwind net xScale included before not revenues $XXX our strong different on guide million meaningful revenues, number to when for was over particularly due year X% was up adjusted or those markets are our the

and spend to $X and when our forward, expected costs. compared million FX timing to EBITDA, rates costs to guidance attributed estate is adjusted hedges, activities. our remain $X Looking flat the QX net due prior our our onetime roughly adjusted of of corporate headwind real includes QX of EBITDA a specific FX million to integration

expect spend. with above turned Global Global to lower of timing MR step the to QX when million, MR recurring business of impact CapEx our QX and rates. to our guidance range. to QX compared half X.X% and minimal levels AFFO performance prior QX $XXX FX AFFO was to we our X% included expectations churn down due QX our X.X%, in remain quarterly consistent guidance strong

X. and to EMEA XX%, currency region key public we growth. regional are basis, results our Americas many our and highlights, at normalized were across through Slides of year-over-year our sector followed On X Turning had year-over-year activity. respectively, quarter our by constant metros, whose Americas a at covered X% full solid experienced region and XX% and on a The fastest-growing strong regions APAC

this Americas the as training, inference mix Charles, remarks, As for of it we with AI, won footprint. AI the sales is vast the and deployments majority And to of relates to demand pipeline anticipated by discussed follow. deals destined quarter, a networking highlighted of in Charles' activity

future Our a sustainability operate. quarter and support led where into into communities we to highlighted Helsinki EMEA heat and Paris implementing by communities previously, our business our innovative other including lean strategy, other first while initiatives continue strong Frankfurt, U.K. and Dutch we as environmental and initiatives export many to In digital bookings. had services supporting EMEA, record markets

discipline And supply power drive finally, Capacity India and performance region solid by the constraints and these help Singapore strong Asia markets, Singapore. saw particularly pricing number exist a These our deal markets. a will our across in led Kong, of constraints Hong Pacific markets.

expanding of During markets in Malaysia, be APAC pursuit in platform our the XXXX, and given opening new Indonesia and demand for India, opportunities ecosystems infrastructure. we'll larger digital

Please to structure. And now capital X. looking our refer Slide at

leverage to relative our remains X.Xx net Our our EBITDA. peers at adjusted low annualized

of increased Our balance approximately including slightly over to unrestricted billion $X.X $XX.X billion. cash balance sheet an

cash and the offset quarter-over-quarter flow remained activity quarterly balance financing investment cash our dividend. cash and flat operating as our Our strong by was growth CapEx in

previously opportunistically of X-year $XXX attractive raised at to we that reduced looking debt X.XXX% I've rate. additional As in end, capital noted, raise September, paper denominated To we've rate environments. been Franc in an million Swiss

we QX the which will of flexibility. executed $XXX alongside initiatives, contract forward XXXX equity while Additionally, of other sales, quarter, expect incremental ATM our to growth maintain XXXX. settle financing forward transactions help million during we sources allowing capital in ATM to our These an strategic late alongside fund us our

Also our XXXX report. we allocation in green published September, bond

more the report, we now in highlighted proceeds footprint. green create allocated with data bonds center fully efforts net the our have commitment our As friendly from a aligning our financing environmentally to

to X. Turning Slide

projects, capital For X in centers opened Since $XX the quarter, new last our retail million, expenditures recurring call, million. CapEx we and of including were including data Dubai X earnings Montreal. new $XXX

Montreal from of revenues for purchased Manchester quarter. and X land also XX% in D.C. and recurring Dublin We for our Revenue IBX Washington, X assets development were the assets in owned

capital Our Slide delivered returns shown on strong as XX. investments

year-over-year on by increased assets revenues a X% constant Our XXX stabilized currency basis.

XX% PP&E and cash-on-cash gross invested. generated a collectively are assets return on stabilized XX% the Our utilized

please a for updated XX XXXX growth guidance Do Slides of XX our and to constant refer rates all finally, normalized currency are note, through bridges. summary and on basis. And

our the XXXX, continued of passed For with or a XX% excluding our underlying our X% customers, top through full strong the maintaining reflection revenue of growth, growth line costs expected impact to we're year to XX% execution. outlook power approximately of

prior expected into range, we we on-balance $XX JVs year. now XX% the of CapEx compared We to costs million integration the year expected these to grow and per $X.X share $X.X underlying quarter to XX% of due EBITDA to including million guidance $XX assets and to to when remain approximately CapEx we're to raising are now is for billion sheet XX%. our spend, xScale $XXX $XXX AFFO costs XXXX between spend, the by underlying million and over about billion AFFO is spend increase grow as an guidance to and reimbursed lower operating raising which XX% early adjusted recurring and our between accelerate previous by favorable in million expect transferred next QX. be are

historically QX operating year. dividend strong of of our of performance and this we've into increase QX cash timing next given AFFO payout our from accelerated the ratio, Lastly, our low year

result, this dividend quarterly XX% increase a to per As the cash $X.XX by share will quarter.

or will annual expect we forward, our rate of at AFFO growth years. dividend our Looking cash growth above track per rate share a number for

So let me turn here back and stop Charles. call the to

digital currents variety and strong enabled than AI translating transformation as increases their we with expense with and Thanks, compelling These demand cross a Keith. we dynamics, ever of are see environment more continue that and discipline a increasing agendas business, in pricing advance favorable infrastructure leverage the operating cloud allowing closing, in through are distributed, and embrace continued combined cabinet is before. In per the ecosystem Despite us to focus strong healthy a into more driving more growth, connected the power deliver on bookings basis. business, share densities on yield. customers to value

customers, we remain towards our to evolving forward-looking in our steadfast 'XX strategy unique strengths, vision for out platform about sustainable As leveraging We growth us close our and and opportunity optimistic ahead our the drive road enable landscape. market amplify will operate. and XXXX, look rapidly deliver and mission, to a them and enabling expand commitment the every starting teams show in our the empower in resolve we which day our too, service up and and communities in align, them our strategy our impact to meaningful our value and shareholders with around inspire durable to to our to

up me questions. open it and there stop So let for

[Operator question Deutsche from Bank. Niknam first comes with Matt Instructions] Our

if X Just I could.

some the release given some sort adds, in that the for then additional just taking all actions color the and of rates share XQ. And of you second I cabs available be in AI. wondering if I'm First, the can the appreciate higher power of some billing share terms capacity of cabs we may color color some at expectations you to increased can billing of that softness any with appreciate density. again, of Charles, on around any there's you color you, the mark-to-market on question, metric.

us little Just them goals on with wondering play role AI timing on of sort of their if more you their any having can more material? become any this customers can in a strategy, you're helping and can what meet the when conversations bit Equinix color terms in give

growth bookings cabinet on not lack Yes, cabs, you just a key driven really bet, is might We in by in Matt. really want heard a Yes, question we've the there of been to have you solid with discussion. imagine, quarter deal script. start as topic counts we seeing. had by that flat the the would figured with overall we absolutely as the reinforcing what I line demand, in you another that

And so a I per think it's problem, se. not demand

have adds last we said of I some linked growth part of time, in the cab metric recognize As pressure to on the dynamics as alluded but quarter, business be you the to positive to look, the there. story billing really sort over other is

and a you unpack bit you a So that me detail. give little let for little more

on I as the extent highlight think the and we didn't couple of think evolution the as the pace the much appreciate of fully quarters that past force maybe I power density. the didn't or

our delta into the is really we and really found of density quarters. so that we expanding our that looked power sold newly cabinet. dug what churn at that for between this And the last an quarter and of several And cabinets

over cabs, turned X.X. we look or density period that kilowatts of per where first billing the profile average an flatter build of cabs these we've a at over we've billable back but X 'XX, new average cabinets on quarters had added we've an X and cab, So cabs of

adjusted. not factor that cab our that's is metric major a So equivalent really density

hard that So been when increase it the reality paddling is to we've in density comes against growth. cabinet

to constraints, talked some about or see this part, little seeing a level of our capacity markets. similar been we driving but in churn ones we we as somewhat we've churn. the are what churn And full and proactive on well, interconnection, optimization prior and customer calls Additionally, in on have do -- about customer at level those very cabinet talking customer certain we're some

as managing not range. I'm so of our our metric, can And or saying not well see we're -- I'm really necessarily in that wanted. the desirable definitely all activity overall churn you But within guided churn is our churn

these range as and I look uplift both about you XX -- with at mark-to-market XX% when applicable. when we general as power XX% of positive So said to I really density talked price deployments saw actually and quarter, QX, broadly at we last look that

So XX% or were average words, churn other we cabinets had churned. our above XX% what new about of in to cabinets our

we're obviously, why in growth dynamic in revenue of limited the growth And that healthy cabs. is super in so driving explaining attractive even with terms really billable

dynamics as have long seeing strong the a when per are as to drive, to said, not we very and to a because So commercial of we're we've favorable. I the growth is I of current in think, is it time, capital much us be in objective, decision-making. asset although chase results that cabinet business mean, really, game be always said going discipline solid that playing to cab, ones going I stabilized very loss often volume the process. We're return continue story our And MRR a to think to comes on growth part the to allowing we're over the really

that all really and most strong of the per think sort in are critical bottom that's of see area. into as think share growth. we I the dividend results translates really line, and AFFO So that what I And

So first on billable that's question the context on and cabs.

kind in seeing talked AI, a in with I We've working, on definitely won leaders happening for talked of through years about now. and we that lot of quarter. not AI X several a deals ML for platform. the the opportunities us. We There's AI number that. about new We are think, up. been script the about Second things digital across it show

monitor them over AI to customers they're it, with initiatives a for remember maybe and don't in X piloting get really we Launchpad really, in unique that's people us early been offering their years as in And fact, announced business marketplace. In opportunity but the AI our demand with ago. NVIDIA

service number retail an closed And Core footprint incremental us. are really this focused talked quarter. so networking and and And that service demand for the set emergent we providers of closed with of deals inference-type deals I really about providers, think sources of on we've that what a Lambda those nodes. There's of Wheat I big adjacent definitely we're We think customers data? we're the they're I them Where answer. our when do lot put advantages. about think questions And of as to X with on sort And I I seeing seeing of with most cloud plays thinking my AI. a think working is people at that right looking data in

not Secondly, those generated deliver sources words, other insights and AI compute insights with the in own then finally, of data. performance. their do other business own and that's high they bring how economically And data to data how their to users they

And areas so engaged those really deeply that our are customers. the with been we've

our that pipeline, pipeline in seen to it's factor a multi-quarter forward-looking best I probably our long think we've time. contributing a that

is very AI think in force overall. do I so a positive And the business

Our from with comes next Frank Raymond Louthan James. question

do the force, logos Just channel, of And logos of perform term same mentioned channel those on repeat a of -- from so are percentage the the business? the sales to existing there? the tend then XX% the overall question from produce What quick amount you new in they sales on channel. coming versus longer how

in range XX-ish channel. our probably the Yes. percent I bookings percentage from would I -- our is think

transparent You been do this. Frank, and we've very have about recognize, to

extensive then with channel as value It's the of identify the not sort to really broad much. sell-through really Our channel the what and market. a particularly channel in bring the a unique of relationships But is is that table. we're using meeting our to more partners our enterprise have, sell

that partners. And a in ourselves results often essentially and our selling between proposition so joint

of the And sell-through over see and to time, think provide I our more I to into terms channel business moving more would ability we them. a that model a of model. to But in par be bit even very our of do economic as on would say we wins towards that sell quality need leverage

of Sometimes more even we capture from can inside more perspective our wallet readily those of the incremental because of even share -- relationship partners channel strength a accounts. readily

so talked force a us. positive NetApp with technology Metal. And we for Storage very the say key great we about much are with And channel of relationship our examples. at on now look I'd deepening partners, NetApp Those sort offering as

with a Pure. We do offering have of similar sort

those things saying, to like our data", use, really and are the adjacency have like deeply we're as we'd would and opinion proximity "Hey, the about really so to at storage really place thinking to Equinix relevant to are cloud. customers we get to providers that And technology we where about

those be important so -- and great example channel, And we're the I think that's the business. a in the for part that to winning deals that kind of continues of an

question from Capital Atkin next Our comes Jon RBC with Markets.

accelerated call in to about which the or spreads growth. which main of Would pricing, on growth slightly I So around things you levers? And anything see pricing I then was the do in on APAC, earlier the part your versus prepared out interested saw of seem slower you think drove harmonizing in EMEA have bit to that to where a in connects kind where cabinets if there's or XXXX? notable to out think renewal call cross mentioned anything remarks, be it a

Sure. PPI, are driven obviously are Yes. EMEA I significantly mean I the when you the basis because I think as-reported mean, PPI. by on an for done adjust numbers

-- more period seeing, multi-quarter And that little to I here, think, we with. is APAC, are over I a our so has there certainly think, constraints deal regions. good a across performance is

realize deal to a information us would to transparency that continue from or Singapore EMEA in to ability, for be there's extremely also not the as think favorable. looking prominent But at feature so and about in say EMEA, I capacity we've internally. mix And I in but being a deep I that as granularity prominent And perspective, talked more a the be sort there. of example a continues

world, from the great the large I footprint over xScale greater really really demand on post and footprint the the dependency on little think team think, over a in some And xScale time. business has done a away the really time dependency the from, shunting I now sort more I what probability off of job in going was large think churn large weaning and always even of prospect has stuff enterprise a of a

deal and the in the of think, to over I I last really so that shaped couple has there to mix years, on the And happen. think team make really kudos EMEA nicely, ground the

by, I that is that that I favorable. on range speaking, say just costs price a of whole very pricing Then pricing, in a from driven just customers I is of broadly increases underlying think simply rising Part things. are across understanding driving think, would environment an

that's I so them that being us that X compelling think able effectively I more them. But then to for think, and really able to for is, being value X to the important articulate deliver And perhaps factor.

And our there's so on the it's space all where yes, services. portfolio, from, pricing think -- across do digital -- our terms and interconnection, on of I power, coming in continued and activity

And then I pricing, that well includes think as list renewals. and that the -- as on uplifts and both on

in a cabinets dynamic. X.X at says It's meaningful attractive tell seeing you're I those actually, even over entirely as you're very then interconnection if that. And you're or time. as mature cabinets new driven price dynamic further a is you X.XXx, just of when density you, x because into selling look new okay, by power not churning goes I a cabs part that's I at that show think terms -- of really that up and so -- at And

why terms show little And figure And of dynamics for to in on the it's has it all then so hard their MRR as are rates pricing you out that as think people up I the and well exactly those in head in dynamics some revenue I hold AFFO front. the that particularly the have to I dropping been a overall think per share these growth of per and seeing cab results. of you're But some there. the it think

churn? then your anything the where And quarter are about any the that's the around And logos coming side, think then new or driving penetration range MRR lastly, for you're seeing on particular to the kind mentioned, you verticals typical there might fall vertical? year within where you churn for of

get full for value questions, your always You Jon.

I set in we're pretty the we're verticals of logos, -- really of new seeing I heavy would a varied a terms not So say, seeing across -- think -- concentration.

focus would transformation more would AI. that I I on or data-intensive consider, more, that that on think where data-centric seeing we're and industries say what -- are digital I

compliance, And so transportation, security, about a been us. have infrastructure talked cloud, Retail wins posture us. Services, healthcare, et those few strong of that manufacturing on been very but tremendously we've cetera. things like requirements, and tremendously forward-leaning by of et a some has terms in cetera, on X for we for sort there. AI, But identified strong forward-leaning distributed strong, moderated is posture of very very Financial interestingly,

and is And place data a private for so their to that all really some range be proximity broad sort wants of customer they that us continue using of options to ideal in their to of infrastructure but that. infrastructure

talking we're in And of terms about so a we performance It have logos. verticals new very across highlight on seems logos. seen, report different what new every strong I like earnings on has think,

churn, the on think And I of we kind highlights key there. gave then

more We needed buying in are adapting upside that to either to proactive to are, and the little because they're think, about and of transparency that optimization time than some the from there. architectures. they well really level customers that that being then tightening think range, need buying an to just believe 'XX, sort in at, And customers again, meaningful I a within but we're are I multi-cloud of there's a up that they churn ensure 'XX bit hybrid the we -- who little frame, we maybe what multi were environment being looking footprints I think of does or again, our have optimize receptive

have a to as and something on eye continue performing a we close think they're now, our keep really I And is so expected to churn of would MR. in right of we churn terms percentage that where have

next Barden with is David America. Bank Our caller of

if questions, I could, please. Two

voice. Just for for the kind Keith, -- takeaways trying I'm Keith, XXXX to apologies understand my my what trajectory. of

about and to XQ XQ kind a point you're bookings. through You've a in off you're stronger-than-expected of year-to-date XXXX, the weaker-than-expected into then but guiding talking strong had jumping

to does clients power when you like? literally mentioned more XXX, just X the are look in that new it's the as I'm first I the if that movement 'XX and be new for could. than dense? read fourth jumping is your second to if Or every the maybe for rather specifically? And half a what that question, And second quarter off so coming the the churn is we is looking Is that like of wondering at XK new easy Charles, for? point and Maybe X/XX too the quarter should into XX% directional then fourth half client

take -- you Charles. to So and David, I'll first the let the Thank me then so question questions. for pass

with like the around the I how you is and performing. things to creating over much think you said, price through comments because well. that revenues And volume we -- all as did do. grow has everybody -- share coming important can't cabinets for billing you the we revenues value, Charles don't Very it's is us like it's business you're $XX quarter-over-quarter grow when you million not and the the performing and notwithstanding highlight don't company and

quarter, pass So nonrecurring fourth forward again, a and step-up revenue. as in of to the nice you recurring both sort

at up midpoint a the neutral we're -- think quarter of guide, prior $XX a basis. currency-neutral on over million on I basis

an And increase. that's impressive so

let the little of nonrecurring bit And you a size on so a me piece. give

quarter-over-quarter. the the -- flat relatively Ebbs an flows being with this of in and nonrecurring generally million. deal business. large we seen roughly $XX business, xScale a magnitude xScale of You've see done order But

the the midpoint in nonrecurring. uplift you you a million in leaves room recurring guide. of Again, size the with gives of the revenue. plenty of $XX that on sense So of That

as surprise, top. as the company with there's to that be working there's be bring So Number what's equation? we said to is to remarks, judicious But we estate always to want in real one, we going assets. know. need sort seasonality including some hard as I on side no X corporate the in of as our the our our spend, the things prepared all of Well, cost

fairly so estate. a charge to large the relating we've real inside corporate quarter And embedded

think that as to magnitude order of size million a $XX the of so of for And to just you. $XX it range, million

business, bookings you where now focus The deliver second know, that's a good our the able And XXXX. to for yes, ourselves we're setting we is, is feel because of fourth well really we're activity in the the We XXXX. sets table the third we sets sort or the quarter. strong in positioned and that for year, as had been quarter. stage we've for know up piece booking And

the on so into recurring the CapEx we And it on an see costs some both quarter, accelerate year certainly basis, and basis. did OpEx a you can into last

than X made were anticipating simultaneously the was deliver could important investments decision, could we focus that things 'XX. for we make the sure that market behind because so we so XX some and better get And we of us that on

then of But combination to a you you those start. if expectation, the really have it it's start so things a a for a -- made flow-throughs. If set you've for into really think really look year, we new the booking XXXX. that deliver just that it X as difference good at I XXXX And the those enter sets against stage nicely table

your let there. So I me question I answered leave hope that.

in to divide power is on X then the booked of new contracted here's for the out and aggregate David. a this you X churned for look, It's those you time. I second average, and the it's the pretty were an really And that said, of number terms out first really power X we what simple, the in the was total churned is really, the one, basically terms macro that over build over X.X. here's get year. contracted X. overall of cabinets average that's is the take -- -- I'll for this of the cabinets about X.X and all So to the And new that get during there again, We quarters. those was those buy that period talking And -- time,

important And And to harder The it average, and cabinets is I it's us above actually deals have the churned as might XX, We cab. an was you well exactly range. added. an that, characterize the a X-kilowatt see deal see we to obvious still for -- all see quite being kilowatts XX all I be that kilowatt might meaningful it that that's right? below that exactly X.X see since with that some you And think obvious workloads reality are and think being then or reason demand average. per XX, will cabinets X.X meaningfully more that's

And density to high support even as may of be at requirements. we we liquid cooling looking some said, those very

as dynamic have and that we the I extent -- we to important up this so that's space an I being it's think that then or And in match platform. of us or for can think the appropriately air opportunity power I more opportunity means, cooling up other that and value an cool using with traditional liquid that's cooling from means unlock think it freed to

a average. And of focused so is to we're very X.X X I in on. terms that's But overall you dynamic that really what the gave an

Our next from with Rollins Citi. question comes Michael

if think follow-up, a boost dividend how the just this in about the that's discuss and you go-forward capital to metric fourth if allocation decision curious could quarter have per First, the okay. I and led the dividend share to kind of And then to of factors that then adjust growth?

very have balance XXXX come we just we the your the broadly by of environments. think into the a I in we keep Yes. speaking, we rate well, clearly, to wasn't is The available certainly hold we're in look And question, -- debt setting think into continue particularly No sheet, know cost will advantaged and surprise. I'll in that of and going cash liquidity this that to us XXXX. as dividend true up. how I the position to moment. Sure. structure, our debt Michael, our as low ourselves up on directly

raise much set else And for we all capital, how a out the equal find that know we X-year trying view we to we But we're business our we've can a stage, capital balance. business. on coming and accomplish think to be continue will, inside to so Analyst very as Day what judicious And being you the of we if we how know plan. need raise incrementally

so carry franc the strike seeing the and we good where We've positive got And the when execute we business. on against that's us can away. those so opportunistically capital move saw on that's you liquid And us. and put balance favorable right sheet to rates and you're why it's for Swiss

out the cash the you the And no a of the And income So excise income we then dividend. And distribute about investors. surprise, taxes, how do through flow to basically, XXX% look a made we avoid out if your qualified that, you back taxable happens structure. that and limit inside dividend. of -- of to we've as that our commitment the taxable way distribution are is pay you some pay

positions I'm where our and it's at Now that's time certainly now you hold to of business, can't -- where that sole under a not But lately, momentum And will, year we've with the if as of is the strong the is accelerating. to, saying a business, we've to file We're been that year the we the tax the and few what tax the performance in and doing this lost the operating we quarters, which, can business, mimics longer. not -- been all we're of the this performance having and operational of And instead a what about result, we've back for mitigate the everybody. sure next our taxable that capital operational give primary, the and for the point flexibility of of performance last worry been to operational provisions course, manage any years, our makeup September through over we returning dividend. want book has XXXX. point tax teams performance distributed. of that to we on

the -- so much business. a sense and you investment business of decision. relative size and taxable the the give we growing income why of in QX just is the the is how So the sheer momentum the accelerated to it to then sort But in of the or that's distribution did we

but to needed for well. just XXXX certainly as we out ourselves, so not create release for year, and capacity that and quarter closing the this XXXX And for

on is we look that forward, to pretty have darn good taxable income we we As like. visibility going think what look

wanted just -- basically disputed the in problem XXXX, this under mitigate so solved And making decision. and we we issue we to by an

And you just other on that X mentioned thing then earlier.

in of the share improve curious if You to to in opportunity your could power the of just your on the how the cabinet try thinking existing portfolio like much density opportunity to how the the the can to And the portfolio? load portfolio? utilization us cost, utility with the And power mentioned about the take and power access you you based compares utilization existing footprint. further

right? give Yes. lower our and And that can answer does Mike. meaningfully I than we It's simple not Great capacity an represent, for I think, matter. -- productive some question, actually that unfortunately your our to utilization, is you match power question, so cabinet a utilization will But and particularly which is value we to requirements extent space unlock the have the creation if opportunity us platform. the to from appropriate cooling power

either draw -- power to facility. that the your own the of Again, available of do augment that from it's in the available you not power terms substantially cetera. ensure be super facility facility, equipment ability have different you to ability the due have very to can is distribution can et from very And you -- in to straightforward to availability to utility because our power or

think can where what And and something their X had. advantage need do exactly our to those the and working have continue reliability to of properly, superior they is understand can be I our -- is of deliver sort of manage but ensure there that to we resiliency delivering that always all in cool it we the cool factors there reliability I of simultaneously. are, are now, customers, requirements is overall that so think it dynamics And to to that opportunity terms the business kind

are power up freeing I there higher a time if augment create an perspective properly some would take capacity, space in to have then So churning think, think and can to cabinets selling over from interpreting okay, of power that you sort allow headroom and at that you're you or out opportunity ways value. you're sort action that do you well, cabinet of at them you you're I though, -- says, lower,

out to and the at how think be we'll figuring yes, work answer I hard best. is do that

X I on to add Charles said. what other maybe thing can just has Mike,

coming objectives to main efficiency Ralph's is drive IBXs. of from One into the the organization

incremental for good perpetually the customer. And looking to we're efficiency And that refers our efficiently. to. more customers. PUE cases, to and capacity drives more the PUE. new techniques to drive In capacity some -- also them ways held We're is So certain at down with run Charles PUE that for looking create and design construction we're our

components extent hopefully resell. drives an we it new we investments, that MCE to centers can with the capacity the investment. our or and make into choose the become particularly so older and create technology But available, some to business of data a the efficiency certain of And these that

I you're energy, as works expanding that the the the customer. not said, stranded that You're investment necessarily capacity frees up for or business well as footprint for an and, but making really

about that's comment Yes. large last do And Mike, very business is extremely I'd have. we that number I talking different a what a different. Because you're customers X a think this make, highlights very when of in facility,

or ranging over both represents and set So quite at that of power a we and very certain effectively. think, I relative to sort you about of an customer, to a a it manage of same facility, capabilities building doesn't you're One But sort we've as is. large numbers customers design an sometimes time, of a processes challenge it for that a I that with developed and opportunity mean when that widely X customer entire requirements, matter. talking view X to have very to an wouldn't customers and it that that power what xScale sell you it is right? example, capacity,

Luebchow is caller Wells next Our Eric with Fargo.

IT touch a pipeline? some U.S. rates Are quarter the moving kind recently little you the the with know on recession maybe any potential higher around seeing the of bit, you of and cloud of the that signs of in more in in Charles, stack could concerns enterprise migration costs sales being them I spend to churn any cautious any they outlook are in IT hybrid back and their of that their and as optimizing kind in at numbers? pulling an kind look they're evident your

Eric. Yes. Yes. question, Great

environment an think was thought I -- that characterized in true. that's that script, say I said we by we me caution. heard customer was you it And As the

in and data -- And partners, think et I've I as much -- very with be sales I And so cetera. the been teams, field our both I in centers, with offices, I in like as with customers, out sentiment I to out very the and to need would very leaning say that those early in of and the customers invest think cases. although in that is forward there they're transformation AI, standpoint says, endeavors I a the are they digital in recognizing digital hey, many from

environment they But more in constraints also a facing challenging macro from created are are standpoint. the natural a budgetary that

the So they're we that more we ensure two, dollars spend of fund or one, trying our to they're what to for out transformation digital they saying, IT dollars out bang they're we can more can initiatives. move broadly. do around of dollars trying buck -- get digital spend hey, And their oftentimes, the -- that to our

people seeing a as differently "Hey, understand we lot of right and you're thing really what lift of are cloud-native think about" things clouds that or we not certain we that at "Hey, determine and and the to and seeing workloads need saying, you're I may eventually a -- of to so or cloud-native sort in think there into move terms attempted people we've them". to And you're cloud, shift whether -- our get have want workloads look to that saying, that cloud and of seeing that are there that X spend mix to is

are a them. directions. digital resource I so right? is I think hard very Network -- area, product and say And responsive And in And But working certainly would to talked we I to about working their another being customers those it infrastructure. Edge we are all think is be real customers that really network offering. The can people optimize to

and to of is still most trying I higher of and on levels think save context commonly networking that deliver the in performance. rearchitecture money WAN

really to of out trying I level room to think so make think it there, And a investments that partner thinking long-term architecture, are what I the would that make hybrid, multi-cloud I X us distributed is people there that but And trusted some is say think and to to in where digital caution data-centric. right and them positions well journey. be the about I is on

follow-up. update, And just saw. curious Valley the of Great. quick a xScale X was development on I kind Silicon in

another the clear as best it made opportunities development is States. to to into Maybe in to more lever U.S. xScale? the evaluate look the the attack for of that the is that see So expand option at Or you set you continue in you you your opportunity? M&A desire that United U.S., today

don't certainly Yes, think we opposed it's I be that. a would great to question.

we terms were xScale think be there transaction were I an and reasonable assets executed likely that that, could under joint do if that we vehicle. venture believe be that perspective that available would M&A from -- of through a sort venture some would

both that And to probably those updated I development wouldn't we're on I on we'll and that. opposed so immediate focus appropriate. keep fronts But think is our -- you of not do as

Deo And from Del Nick with question comes our last MoffetNathanson.

U.S. as you cloud in you see the U.S. didn't to pursuing supply up you the support AI question where about guess, how I environment on deployments relative competitive opportunity I training given worth xScale via understand different those you -- what guess in as I if do to is? to the that the the xScale view want correctly, makes follow it

that to judgment market, was do the the we mean made at I think therefore, -- supply I and xScale in the that of couple say think things I that profile the there's I demand market would we're than U.S. that the and return the Yes. of there. time less judgment that a characteristics One, stellar. communicating

is changing. I dynamic that think

with there is profile. I which and and in now changes in landscape sort for because kind of the would training, AZ -- supply/demand of the U.S., a the sort to in -- of supply-demand demand in market for acceleration traditional think I And those do both things. AZs combined the attractive demand hyperscale I or think, of so a then sell. demand form the hyperscale think for more form of meaningful I

that thing the are did powerfully really the need other the even xScale constructive digital to that The I about continue look, well we with. think We at hyperscalers talked in the something begin is we we obviously, developed to have ecosystem. relationships more appreciate list. that now players of And said, maybe this top is we and when major and

of at that providers to in And not as hard only least on can make X so that retail to work but continue of basis, meeting leverage a we going a sure needs number we probably partner arena. the the be to xScale capacity they're need their and in to

I And maintain relevance then is in the last underappreciated supply chain. we maybe to think the and important that thing I our that it's also think is scale continue

operation. are that have two, is extraordinary And done job and there. teams -- well they so can And an part very job one we is scale the of and our well, I And of I our think the positioned there. procurement reason I supply do we think think balance strength chain that of so the sheet; our

in to regard. also continue way maintain for a xScale that is And so to us position our I think

share able partner that to I xScale? you're up you Are line for domestic about returns here? Okay. is how in any guess, anything thinking progress And terms regarding premature? Or of

digits I the think think I profile. I where think mean think, have where there overall seen it shift a last first, premature. mean I part that it was already, we single I a we probably the think is don't it Yes. while. return But see dramatic I was, in for improved I

it's think And and fee high with for get structure given seeing profile lucky, streams, I of above et returns yields the return you're us, we single where that. cetera, for If digits, were an us. some full associated you think and -- equity that in now I advantages return attractive it was even levered still sort

returns -- that think yields meaningful now. meaningfully and where that up think have seeing the I up gone more so attractive much those are digits but you're And cash-on-cash I higher, double into

our different very that, think again, return retail, extent that competitive have return that we retail the continue business, the the It's continue cultivate same while in why at recognizing can to be sheet we preserve of xScale firepower -- market. do will to balance though. It's to very going I to strategic to X our improved. continuing profile return So to which a than profile be is, a to want a has the business, time, active importance

This us. call. conference joining concludes our QX you for Thank

conference. concludes for Goodbye. you this Thank And participating. today's

this at disconnect have may You rest of and a time, great your day.