Digital Realty Trust (DLR) 16 Feb 232022 Q4 Earnings call transcript

Good afternoon and welcome to the Digital Realty Fourth Quarter 2022 Earnings Call. Please note this event is being recorded. [Operator Instructions] I would now like to turn the call over to Jordan Sadler, Digital Realty’s Senior Vice President of Public and Private Investor Relations. Jordan, please go ahead.

Thank you, Andrea and welcome everybody to Digital Realty’s fourth quarter 2022 earnings conference call.

call Mercier. and today’s and Andy on Matt CFO, me are CEO, President Power; Joining Officer, Wright; also Investment Revenue and Chief Greg be Officer, and Chris will Corey Chief Sharp; Dyer for are available on call Chief the Q&A. Technology Officer,

forward-looking make and guidance including today’s underlying statements, on call. may Management assumptions

expectations involve to differ and are that uncertainties statements Forward-looking that could based materially. on risks cause results actual

will see discussion the supplemental our SEC risks included our non-GAAP call XX-K SEC. website. our subsequent further related are of available a and Reconciliations business, For package information. with and filings This income the to contain financial to on furnished net to the in

Before a I let Andy, takeaways call quarter. me to few turn offer from the over key our fourth

of are that demand forecasting of spread which strong price improvements, expectations levels tightening in translating growth we inflection reflected positive broad-based stabilized combination in increased supply is and NOI and are First, the re-leasing XXXX. into the for the

remain fresh remains both the ahead. lies and we has and as bring the expected, history team the we energy the on important, been as roles achieving this our to have improvement is you made have last evident know, third, the most about to new team already returns progress seamless. management and some perspective some of development highest on reported. in as with opportunity Andy Matt focused our on also sequential they yields. in and transition since we long And front Second, investment pipeline their changes a potential Digital and excited But that just

to Power. President turn like call the that, our Andy over and CEO, With to I’d

for call. thanks joining to everyone Thanks, Jordan and our

for am lies I Stein, his XXXX Board is optimistic we most these support about earnings in and many met over to the that and thank their Bill the this confidence am provide pretty ahead. in team I both for our opportunity that honored probably my worked I lead Digital’s I and of who the CEO in they of voice ever excited first first IPO you, Digital leadership thank Realty’s want Digital global to Realty. to my executing incredible While and call on as me together is years. as familiar as strategy

But brought be. has we where path the are want us not today that and to spectrum our we laurels we to in. joined that us I will we’ve of the and to want be Since a now on as needs extremely primarily members company we XXX on have another of X,XXX the and support growing our footprint centers data have serve with provider encouragement customers, the to shareholders evolved to over megawatts a XX the success unmatched X am thank received leader past and load proud construction. the under center metro than provider. Globally, co-location Digital over in Finally, global then, more XX interconnection in X.X of of global scale kind an data we have center Digital plus portfolio we Today, XXXX, comprises X IT the XXX over of to is numerous I the and of in are position had data rest the of customers. to that When not North partners, gigawatts I the that months. for words continents. the time full team I of solutions plus where are get scale, our better American is areas countries

fronts. we In taken swiftly on action few that being, have a

multiple decade, has Matt strategy. and for Digital’s global a and the well integration including across with long-time a the for operations provide finance finance CFO that of will role of foundation backfilled evolving quickly Matt Mercier. systems the organization partner, we implementation acquisitions played First, my our platform the over of successful leadership role

combined our segments making order meeting team enterprises. right in aligned business place to right deliver we for investments the Second, providers the the strategy and and that of and and capabilities investments are we to have global assure service

Third, fabric, potential our we journey of both moved appointed together to support our technology and our product company. real Information including Chief align a Chief Recent innovation identity drive Technology estate including technology Officer of a to the Officer, all bringing as and demonstrate acceleration CISO will the growth. under launches, technology customers’ and service our our recently which help and

maximize the potential of trusted with record plus agenda on bringing Realty’s of priorities. our our And together. capabilities of hand centers is global teams top streamlined strategic operations the further XXX a and of a track next data what’s the global Digital we here long-time leader terms the in to under Lastly, people digital

by we Slide which our the demonstrably meeting strategy service First, proposition. X, will strengthen and translate long-term. continued better over delivering our enterprise solutions as connectivity-rich medium provider organic our sustainable the depicted on to place customer into execution of customers, and will value Through growth

announced campus, a the renewable Direct markets consumption across and with highest we one our Digital construction Connect adding purchase energy, coast-to-coast earlier landing locations sustainability new of advanced portfolio of commitment solar the AWS yesterday, in Direct for EMEA. a power our a XXX at new existing megawatts agreement to this supporting coverage Germany. of new of And lines, AWS these park robust U.S. Connect on-ramp XX-year Along Realty’s we month, to Ashburn

of the innovation efforts new to our capabilities integrating platform are benefit our unmatched world. platform topped center our unifying asset leading they our have Second, Many we internal open network complex own value deploy innovating and team, market. and customers workloads will across data largest integration and and portfolio entire our these and to global seek in to the on ability deliver as both the the

our capital diversify rapidly to growing bolster with plan while improving Lastly, many digital for mantra. needs, familiar this poles capital efficiency Realty my infrastructure Digital sources many support the further of investors. and of water you are vein, fishing to and returns order in And customer’s our we in in

tremendous. The before opportunity us is

for fingertips the digital at Realty a sector, our growth. today, have long its within assessed runway the key including fundamental I’d is and Digital the say how I ingredients following. positioned We then infrastructure landscape this When and prospects all

product our strong remains for digital supported compute. the demand and overall centralized towards well the First, and quite to cloud, by migration ongoing evolution transformation,

next has innovation technology advances the growth it compute As growth productivity goes, that of spur overall over driven and in driving lives. the to of quality in wave high-performance many begets technology time, tends hopefully, in technology. And improvement that the to infrastructure respects, our

now last the of we demand decade. sector enjoyed the may drive have wave precipice decade our continue, for be the on we drivers demand the While next of next will for the that

could demand adoption of with Google all of use the which wave like requirements Bard on ultimately and cases those the launch machine technologies. week, technology drive but of potential AI, specific of tied X.X artificial there for important suggest For into specific years, of and introduction Bot is that launch have last Ernie Baidu’s we over broader incorporation scale. demand, a and learning a of coming have The been ChatGPT are proliferation of infrastructure relatively of to drivers the at seemingly workloads referenced infrastructure intelligence spawn and as a Microsoft’s is compute we few forefront new Bing ChatGPT identifiable milestone.

our This expertise. domain is

diligently incorporate days and very partners understand yet introduction sector, its the how early the to are effects see our of of to are working have latest designs. data but and this in these positioned we to the are to We evolve technology and and center support sure we our requirements potential will and its their making in into well customers

experience extended Importantly, as out with the the technology advent play of we can a over cloud, very timeframe. new

mind plan our with existing in to be Digital timeframes growing these future. built have and base support there across and the the in We Realty customer globe to

to move the quarter. Let’s

as prior signed nice our rebound segment guidance landed is momentum. X of range Our the in continued strong interconnection by term that we that record our in to achieved the quarter core record in and core moderated another FFO off highlighted X a and new but provided to bookings, from remained leases year quite portfolio last implied shape gain were taking we bookings. within the Capping the record quarter, megawatt

the seeing customers. from Demand and our business, and was effort to ongoing momentum strong deliver this are our contributions place reflection geographically the EMEA. in breadth that demonstrates meeting we and the Americas This APAC, enterprise for broad-based which provider of with is a service

added the During continuing that of ago. quarter, closing new the since the X customers, quarter XXX fourth each new years we streak InterXion nearly plus have transaction we added logos XXX

enables on PlatformDIGITAL wins for of deployment XXX. computing provider was fourth globally Northern One the Silicon relationship complexity. global This risk and Fortune an of technology trading HPE our IT Valley. IT, significantly A high-performance, while and during initial networking Avnet, member effective A leading leading facilities quickly service and and unrivaled our has three from manufacturer with of Dallas GreenLake PlatformDIGITAL computing X Avnet XX Integrated Realty more. the leveraged standardized and expansion ability market PlatformDIGITAL, to an the Realty’s deployed leveraging key solutions Europe the global complex can seeking in distributor solution and market a a chose Digital ranging largest be major asset that and Virginia, cost global mitigating in alliance to in X complexity. solutions and Digital global partnership institutions, network-oriented Realty’s of Digital financial and support data manage footprint provider automotive largest selected deployments. internationally to deploying manager world’s hybrid reduce high-performance infrastructure including of quarter

again our XXXX. the marking Importantly, segments, quarter of signed pricing in improvements in business on price quarter increased leases fourth yet the new each consecutive fourth in of

of rate escalators the quarter We containing on CPI-based the also increases with leases more inflation-linked to with add newly the fixed in XX% signed balance. approximately escalators continue

full fourth positive another renewals positive inflection to XXXX. We saw in the leasing quarter support for helping of year quarter, on the spreads a also

excuses X driven took point the overall strength as in that the that X of and megawatt beyond to to rents whole. highlight we the acknowledge place forest and re-leasing than spreads inflection we renewals, prefer a While in are the us XXXX the point turn and the trees to by and was market rather call in the

We supportive few will and guidance as minutes. this reflects a lay our in market inflection positive expect trend to out Matt conditions year remain further in this a

to pricing, of market better our Speaking provide largest Virginia. an in I’d Northern update like on

the we expect able are position with be we pipeline. to in commitments our a work that our that to we power pleased have to constructively this to We within the deliver now in say made development and on market to have provider be to continued fully customers

of needs far we work days are to be continue and mutual to the provider So utility encouraged remain business our from a will able by as this last that usual progress the the to made local support conditions in growing are over market, while customers. XX we hopeful with

our to on Moving investment activity.

the million the $XXX Germany The generated XX% During quarter, data a at in we in million interest a facility sold of transaction core about was and $XXX REIT. center fourth digital nearly Frankfurt, for proceeds Digital Realty. to valued

acquired Rome is for [ph]. metros new by also future but into data Rome X population, one Europe of been cities market X international entries land center in Akra essentially providers. by We organic in largest has development, ignored and different including the

that in We coast make future cables the hub thereby country. have enhancing land in acquired a a point subsea for interconnection while an in serving connectivity parcel position middle that the within our the it ideal Mediterranean of XX Rome, off kilometers the as will

you. XXXX of I’d variety over year, the our focus some Light Before sustainability. organizations Matt, the Data success, Sustainalytics our with were like my company recently sixth for recognized We reiterate turning to by Award for with ESG a Realty for of Digital share ESG list. included including the to was ESG on recent progress top-rated NAREIT Center it in Digital by the recognized consecutive in Leader and

of Newsweek responsible Digital America’s Companies. and companies one Most JUST Digital XXXX again, recently one as Capital’s the JUST once of named for most is

keenly In projects. the importance these given sustainability, development of addition power on and Digital to energy awards, availability renewable security, focused of remains supporting the

already megawatts portfolio XXXX. we added energy another our to energy in contracted of of XXX and grid in megawatts and of green to power XXX for we solar a the During XXXX, total renewable access

committed sustainable impact for growth all our are We while to on the of minimizing our environment stakeholders. delivering

at our joined him. already review in to Before me I to Matt introduce who Matt has of results, you Mercier IR me run turn it CFO don’t FP&A, every man, been let to Matt team. over to our of involved and intimately XXXX Digital things right-hand finance in know helping new and my capital has all Digital’s those markets nearly financial been from finance global facet Digital finance. M&A,

Mercier. the call pleased that, CFO, new With our to over turn am to I Matt

to privileged am I succeed to Andy. Andy lead you, as incredibly by team. Thank humbled opportunity CFO an the capable and

of have forward catching to spend meet up you I are and chance I a that of events next attend. look course with years, you and several had and with time all to conferences of industry at we over the the many Over to the months slated

a to me of interconnection leases in and Let record increasingly the landed which accounted Japan, of than base. the right We saw greater XX outside X North results. of nature megawatt quarter Europe, South $XXX particularly Africa, by quarter, X Americas, customer geographically diverse, in strong the which a across total jump largest fourth segment, EMEA regions. for new and footprint into quarter even of the strong megawatt of America our Demand Latin X demonstrating signed our America, million APAC the signings, from our contributions our rebound XX% of and highlighted in and segment global total nearly within contributions deals with was bookings. fourth

the highest somewhat smallest the on second last At the X our Geographically, seen we in segment call, which record and XXXX to quarterly strengths to under within plus setting contrast X X for our kilowatts, customer quarterly the back year. other megawatt of our volume all XXX best Americas end the nice X to of megawatt scale, bounce our EMEA deals average a hesitation leasing saw to at interconnection the rate delivered a in noted we bookings. with play EMEA

marking our of X regions. the tightening requirements to and quarter, decreasing. greater reflecting and consecutive of increase, is conditions just experienced prospect nearly the retention X.X%, we level to In X availability new nearly leases to a in and on a fundamentals our infrastructure lowest continue XX% than quarter digital each reduction megawatt customer pricing increased segments, the churn further in X for fourth Importantly, improving as across signed our the years, in future but fourth customers’

backlog due the current signed, other offset backlog. commencements but The were yet at our principally not $XXX to and X, the XX remained relative throughout and months a slated is elevated historical build-outs. year, to of record commenced term to inclusion to On million slightly longer but XX% in evenly record to throughout lag the halves. moderated that quarter, signings as due our Turning nearly leases commence commencements. split leases few this between to increased by require signings Page backlog Teraco end, second of levels at largely Approximately, first larger of a fairly year the

the XX, of Page during $XXX renewal quarter signed to increases on we a Moving million of on pricing leases basis. X.X% with fourth cash

touch strongest year, regions than $XXX quarter renewals renewed for each X megawatt basis, existing revised overall, X.X% Renewal of X.X% rates since in fourth up increase across X the positive the our remained of three to strong interaction. quarterly cash million were and adding upwardly increase XXXX. slightly guidance a the For of full at business on nearly for a better we a our

As on quarter, due category single in lease decline greater entirely a Andy the megawatt referenced, a in we did the at renewals single see than a to a asset. X.X%

saw market rents spreads in However, re-leasing better-than-anticipated XXXX. inflection an a improvement we and in in

market conditions last improved this More XXXX throughout guidance and importantly, positive our the for year trend. reflects

our expectations, Turning quarter results. that our performance, Digital progress returns to and in and toward increased was with delivered enhancing core investment our consistent performance improving largely by operating Realty fourth liquidity. the highlighted financial operating on

on Page XX. Let’s jump into metrics the

with quarter consistent of the X% FFO on end and terms fourth acquisition August uptick and the for seasonal a Teraco a in full In quarter earnings reported expenses, on sequential both guidance dilution a of core a rates range our in the X. share of implied down quarter’s interest per given of and we growth, with associated acceleration year-over-year low significant $X.XX, fourth basis, operating

year-over-year. On a but FFO basis, X% core sequentially, down constant X% was currency was up

to full our the best which fourth performance out constant currency improved year, half gauged The representing was stripping of the the core particularly FFO FX. X% challenged but quarter over the share of noise by first meaningfully is For in second related capital XXXX, growth we operating the when the year XXXX. half same per portfolio, in $X.XX, in improvement stabilized reported in

data benefit line, by on commencements quarter that increasing we XQ The flagged a constant X.X% the throughout turn basis currency outpace well by as center to was re-leasing of top revenue improvement steadily X% an the compared in interconnection quarter. last demonstrating on to positive growth revenues. our sequential occupancy from as XXXX step-up as largely spreads XQ the in a fourth and year-over-year growing in driven in XX point churn Focusing improved first the basis decline core operations quarter,

seen currency our in in revenue The X% in in dollars to was the throughout yen. slide course removing euros, on EBITDA negatively have reported our dollar XX% piece. on U.S. dollars, pounds, year, operating basis of adjusted denominated British the our a with we Nevertheless, dollar XX% was and versus revenue it quarter U.S. XXXX, growth. of growth sequential in Turning the impacting growth months XX. XXX first was X% stronger Japanese reversed the X fourth than Page headwind from approximately X% Singapore strength meaningfully the reported points by and

Turning Page balance to on sheet XX. the

end quarter Our at charge while ratio was X.Xx. X.Xx, reported leverage was at coverage fixed

adjusted debt the exchange using the and mark for inflated turns our mark debt calculated sharp approximately is used and average quarter the fourth the our the calculated at average spot the was recovery year-end. the our leverage euro pound X.X to convention rate EBITDA in year-end, and at debt adjusted exchange to rate net Given with of in the by EBITDA to how used rate

EBITDA. adjusted X.Xx leverage Our be to would debt net

to Since outstanding XXXX notes million It’s million. offering rating that closed were with we on last X.XX% extension a X-year affirmed with stable bond year-end, an three call, and our XXXX X-year for million since raised $XXX drew $XXX investment our last credit the grade also also our term worth loan agencies total to from forward $XXX ratings million equity call. additional option. the amount $XXX all that tapped bring we mentioning by our Since remaining a outlooks our

average While course target, liquidity, leverage target towards to we XXXX. is above intend our our and and long-term over reduce bolstered the our leverage of we have our long-term historical

growth dollar average debt is XX% average is our of of X weighted years, Over is reflecting is debt net and and denominated, weighted the our X.X%. rate ample Our fixed Approximately recycling. non-U.S. XX% global capital our our is maturity platform. XX% providing of our over debt coupon unsecured, of flexibility for debt

we Finally, with maturities debt near-term well-laddered with have minimal maturing together $XXX a only in million schedule. maturity XXXX,

our to XX. guidance turn on let’s Lastly, Page

We of to XXXX the an flat $X.XX, midpoint for the balanced as at $X.XX is year impact guidance growth FFO per expense recycling. capital core have and of our higher range. by initial recovery interest range the portfolio of the provided share full the reflecting stabilized in

re-leasing X%, total NOI basis to forecast in year-end. point XXXX, growth capital improve organic portfolio XX uplift the our of cash by of same and we recovery in X% to to Focusing Cash expect occupancy range greater for we the X% an on spreads than and midpoint GAAP expected at

our efficiency referenced geared one at and while returns our which is long-term Andy leverage target. to reducing capital diversify and bolster priorities as is of capital Importantly, key further our our towards increasing towards investment the sources, outset,

ventures throughout dispositions, a development ventures non-core capital combination guidance, core in and assets As from recycle of we this core of expect joint scale joint select XXXX, markets. to reflected in of

addition, benefit single-digit headwinds. adjusted to moderation of growth, from EBITDA recent retention currency the cash and In flow free of the we high expect

your to prepared our Operator, please concludes be remarks. Q&A the would begin now, session? will we pleased you This And take questions.

Capital come ahead. our from [Operator go Klein Ari will And of Please BMO Instructions] first Markets. question

wide the the congrats, sheet, Maybe pretty the Matt timing on the in on the on and new Andy year. balance Can and assets, you the additional targeted some a range? split Thanks and that just front? on add role. $X types for can of billion is is pricing between the us color Anything asset give the sales you and two, starting JV

Greg I we receive broader don’t I’ll it will Ari. and is Andy. Why asset This then class. on, and call it off, valuations to kick it, a in Thanks, hand

midpoint So it’s $X as billion the at funding our plan.

As several of part a playbook has for reminder, years. our been this

numbers, of either or selling we’ve threefold: disposition outright are in assets venture think our the and on midpoint. of over around $X ventures our the $X handful the say, our outright around of completion want and the last joint stabilized program; or I billion the and Greg, on really billion taking other in buckets ballpark one sold of the ventures assets; probably non-core area two up years. at development three, assets, The the joint XXX-ish broader? I come are majority valuations therapies is to non-core to program. Rough called would competition do close you joint to rounding dispositions

couple when the base. And the data Thanks, attention Ari. those lower markets of of seen at mention over and we’ve markets with investors’ at capital fact, the hard last really seeing the quite really of mean, private I strong in strong those you income gotten let’s the the think stability improvement at space secular strong of I look of JVs, for to rotation first a development vacancies look assets and asset major in bid significant given years. all demands the assets, assets. The – creditworthiness have private Yes. our terms in that’s have from for potential. stabilized a growth Not the pricing are the a stream, the in quality Look, customer center demand class frankly, strong the JVs we of clearly,

transactions. think that there. we has front seen still the in market held transactions We’ve been some some pricing There on in recently. is So smaller

equity hyperscale are where and sellers who sizable that what their is value. sophisticated, backers, I are us three understand. staying tells think that But strong of strong pricing what it platforms is we aware from seeing also We’re the

money on put simply So opportunities. sideline is the investment outweighing the

all clearly, seen the to with like be we’ve the past. rates they the terms asset sales, are in to over then I in cap mean, respect of place And going non-core

the non-core I last at billion left. over billion talked we’ve to $X recall, at these understand And many different at few assets these having it’s years, you $X.X sold you about assets. when look that of important some point, think, this, stages. roughly we roughly are of As But look,

right up So at in a range, rates it and conditions. cap depends X% look and now clearly range on XX%, will to you end our at specific

For example, right, sell cap if we land, zero rate. that’s a

range So there wide is it a on asset. depends the and

Got where Thanks. do it. And follow-up if then do the this, gets a maybe on all just think just that you leverage, you XXXX? you to exiting

Yes. Ari, this the Matt. for is Thanks question.

– the – if So Greg to the spend in year. I our looking that the for X% also think Andy this have deleveraging growth you as bulk at at that will of billion look, in we’re for this plan we’re I our with look joint way sales of we adjusted and looking And plan left. a EBITDA, think terms our at which for big ventures, our midpoint development X% mentioned, then $X part really be and at funding being year, asset of the

So without down giving to going by of a our the to well specific year. on back leverage number, closer Xx I bringing say way be the we’re end to would

The Fargo. ahead. go Please question Eric of Wells comes from Luebchow next

like some question. in a heard just nice colo wanted you demand base Great. on seems environment. pickup about to a remains growth, see bookings. the talk that I what of you to touch obviously of kind Thanks it bit could you the for demand touch in couple for some enterprise kind could pretty We revenue see slowing robust, Maybe a just a of but the general taking talking and the of us? on hyperscale of about It’s maybe hyperscalers funnel. in

to on want first? the overall Corey, do you demand hit

really recognition for for demand and of the what hit not These I’ll Look, enterprise like still pipeline on really as all, out around our we’re on our also and advantages as the demand looks come Eric. and the hyperscale happy the improvement for first ever, question, starting X interconnection are still enough thanks say the options. that end build, strong megawatt. across than our enterprise, remains plays demand we’ve kind whether to on of portfolio for across the large It’s support got needs. seeing really just But or and I up with them. more strong the actually the should other to Yes. Thanks, but traditional globe, and the overall. some demand some their connectivity we’re hyperscalers

that as continue to a demand requirement. place from as platform them, grow our enhance their they We’re that seeing utilizing meeting to connectivity need

hyperscalers so places. seeing activity And the I around getting across that we see our also you’re right the you from for difficulty When build up you with to of tell opportunity continue that these perspective And cost that merits them. the have relationship you the the through our and both and now, would relationship think power them to evolve.

drive of back the our we demand across as as come Eric. that think to them see pipeline well are and for all continue on really enterprise as happy so to with continue regions, lot, the a us and value will that we on bring the improved I Thanks to well. the where build

base than X those how throughout the Virginia to on the really will this where you’re year. are in X provide on starting renewal megawatt rental guided improvements just of year? just out category? there versus versus the big where touch I’m sub megawatt limited, markets see to the to kind And is greater extremely any Any Thanks. follow-up, supply material And Northern you that color spread I wanted can Great. shake one you

not led steam, proposition demand, our this combination a started broad-brushed think XXXX, resonating it’s only on probably for really I the with you base. some in our which of bring larger pendulum overall way. the as The as It on portion less much is a negative – several quarters of value we quarters. moving obviously harder power beginning becoming our honestly, never was and more the and territory. asset we’re backdrop, ended became X now plan. but we’ve well I customer I We This net. slightly to is greater pricing In larger revenue been mean quite Sure. positive think a megawatt, if procure seen the had quarters. favor gain had some our than of than capacity, base We year move supply it and in at positive

to overall we’re we’re X% the look down, in for and it’s terms obviously I again, tied are our close moving pull X making predominant This where cash just and It deals than inflection And cash that mark-to-market guiding I in years value category as XX favor. first greater think I several deal takes a you literally at and is XXXX it one the positive when for of excuses. just to those territory. called know call business, territory proposition to moving year just to If in the in it’s increasingly as will mentioned really to years, best mark-to-markets single well in amount. megawatt, in all our supply/demand to dramatic our inflection be things positive

is it. Ashburn – Virginia, excuse or a Northern me, example prime is of

deliveries more tightness almost to, it. of not could either that capacity. Ashburn signings almost of quarter, a super And due call it, did in million XX had on the say XX last have This the nil amount coming XXX or you or megawatts bringing gap, market, quarter large

much of But out, new So the statistical are in what go swiftly to. set more moving customers to firmer have point ways still into that data interactions these to terms rates past runway. a territory seeing on going quotes the is with and hundreds don’t we well of we’re have water the the

Markets. from Please ahead. comes Atkin Jon question next RBC go The Capital of

Thanks.

CEO, contemplate So around into in any first to action picture, strategy. putting changes changes to things operating focus underscore was be of your I product principles in big overall conference call in of to just kind practices, as things and interested kind

I the midpoint to based just overall just think picture items the of get but upper kind that spreads, what’s per pricing already of maybe FFO might you sort look or on then for Thanks. year, for renewal but as about think that kind talked allocation, capital operating pipeline we at commencement you of kind hitting secondly, of but what call identify I the can comes? share when your at catalysts you to the of range? cover the see the Matt, midpoint are the your hit you neutral maybe any guidance big And out? over that end

John. beat put guidance ago time we’re to Thanks, tell an first we that to tackle out one. how one the then just and hour real you going in Matt the I’ll let

platform with So inorganically provider is customer several and that key. – to doing I made years, this scale sort of lot customers But local with in I together of demonstrably little firmly in Barcelona, days. in see of thoughts what all top and delivering customer Day won’t the spectrum to Mexico the true believe able for full our our to rehash a a array with preschool be and harnessing time capabilities that expertise strengthening across we’re likes so is a of I it it is important power in the the what global consistency the priorities, collection three Africa. with Israel, on some time had is assembled team greater assets tell was outlined home bit in an diverse even just script going organically the innovating with and of our enterprise had the foremost to detail. and over taking number prepared of I can remarks. that of accelerating and in that XX power, and in the them was growth. obviously Rome, be in Valentine’s that which one City the M&A playful We’ve pricing is integrating vein of the regions place Two, priority the the rearview digital really organic customers, metros you, X rehash two. XX put both a value all all become with of plus for continents, That meeting XX years for first and able is throughout of internal last preliminary and our of north both to what’s proposition. growing for reason. But customers countries in mirror. last I Obviously, place and We’ve service in number

all and frankly, as share. internal the than integration work need innovation, transformation, customers our it Just We what the off connectivity taken we and complete and also have for infrastructure and front. more that easier quite advancing it both to on the well to digital and as physical our comes puzzle complete do I fair think critical got board when been we on our making own external the continue pieces

You’ve seen its great service to states the got likes of many at And growth infancy. fabric, just which is come. in still it’s

capital our the – landed about sure our our bolster approach space completing that talked yesterday, consumption diversify for it’s a in what’s our bar development private with and we’ve both in about sources. class capital to partnership is mind to are of non-core with and making data-driven shareholders. or dispose assets then front and our again, a digital leadership elevating our and lifting for the Direct asset growth stabilized with market Connect, enhancing for business. and we world our see You’ll least, facets AWS in. and the doing all programs things we about pressing along hyperscale and All of our power but live as expanding not efficiency, high such right as returns customers just about announced we capital on like It’s sustainability that accelerating industry Last that the and that well

and I’ll second nuts the that’s So the question. plan, of X-point and bolts tackle Matt your let

I just could quick, the in Maybe see direction. quickly just if just Yes. yes,

What finally development economics? my just Is – done pipeline, it Is sort of might are am to the interested, recently. funding hard the of not And the you which think expense governance? are factors the third-party of are the it through some that you from development it’s I there need challenges your partner pipeline? kind projects? right lower of JV recollection particular or I On have that the some around on what that right

had is just in already, our parts rotation is enough have been it, world, terms capital capital Africa capital the places not a that use there really tap in the and this expanding coming assets Latin is or you infrastructure. But – of partner of traditional we our And into for that. America these of And be of to as history the Jon. hyperscalers monetize versions of now. Greg efficiency in of with and the resources platform right We’ve questions or done there call – it growth We’ve accelerate great playbook. built digital markets for to and there, or think on a had of a into dramatic touched six I of we’re the more it to put partnership. runways long

So piece I we’re any there all to together confident playbook, limiting is don’t mind think – games. simple trying about this in fiduciary

partners in So I’m talking others deliver to quickly we’re are our that going because really out. a day day investors that space want appreciate well. few we the value as got in you that to have like-minded approach we to for be looking Maybe of customers in and the already Jon’s long-term sure been Matt, question do and do

Yes.

So, we think I business. Jon, of the fundamentals about look, feel to brief, good be pretty the

then lease that, And capture strong to back again, we about pipeline, mark-to-markets And top same of have associated that pricing goes to demand cash good. that. growth in the therefore, have talked strong we terms where in development us of cycle help demand think the our talked feeling capital that about, feel that are continuing have drive our up that. NOI going and on about, and our number on us to are of that to, leads to I ability conviction and a

are leaves what based I is tailwind, we neither are to where would around nor So, the that’s and that in maybe have that capital FX we something close. come headwind timing dispositions could the last, a year can’t And control now, about on the Right I is venture FX a joint know a but when year. assuming also we that economy. we talked say last lot influenced remaining, next

comes Michael & Elias question Please ahead. go Cowen from next of Co. The

first Great. do is, this have Thanks then platform that I Telko mean establishing the have question also steps questions. taken you InterXion taking talked you for [ph]. and and Telx, interconnection My global with you for to about

my then be, for And we what asset adding interconnection on is sounds that? front, we most platform the next about As are the about dispositions accelerate And coming now non-core billion would quarters. for it your could is in doing over question it think you second take are at $X.X of the like, steps the it more you the what on past, million. Is traction cloud meaningful guys, you to talked you ramps? steps capabilities, building $XXX

the of timing, want? changed just is rate on in your Just was supportive or valuations it of environment getting you. that what wondering you the you not Thank dispositions, cap view terms the

in in reverse, why done versus what hit take we calendar Greg, don’t don’t you gets program why So, so XXXX. the on

I hope Michael. well. I you want Look, Thanks be Sure. clear. are to

assets all, was of previously. talked we what about we $X.X it First of hope made clear the estimate I billion remaining. non-core that’s

we billion We said So, going quarters, wouldn’t a ago we was we over that we that whether $X.X And said we sold the $X suggest instead, time. billion. to quarters all several sell next didn’t and had two another it over we left. were quarter suggest or that But that.

and same XX%, to to was ‘XX, rate whether ‘XX, or whether you activity, for that changed. of roughly as over off, the It’s the from to that $XXX front year as was really And back this changed. I it just $X.X ‘XX. it’s the how billion years. it million our ‘XX, going volumes next. range different our it year in look look start at roll whether year. earmarked haven’t year perspective, So, But never look, at run X has zero the and half don’t frankly, of from July, if back or again, not my volumes level cap the that it’s think Quite is obviously it’s of is the those you perfect. year, we half last May to to there And Things matters say of

years it’s – articulated we with we say years it’s a program now. ago. have that we execute good couple like I to done And look, market it. I job again, So would that upon been a think pretty would ago to to the Actually, are X-plus of continuing

that So, front. it that’s on

the our as it a leading puzzle look demonstrably we grow would in the customers XX of irreplaceable listen, seen the continents. your world metropolitan have of their north coverage attractiveness but a capabilities. Internal areas, our together with question, parts based need been many variety, of I full versions of of meeting platform And world Three, here. at for to think next-generation Michael, to And categories the coming of critical across and to countries for have some Two, six technology destinations second curation I have on of base One, those talked player customers about. across say, magnetic has adding Others community. press magnets. bear. locations platform on that pieces broadest no solution, that really, the we ensuring legacy less technology multiple our those released And customer our been I or I adding XX-plus numerous hardest then,

the local of better And experiences We our with local the together Exchange which one the tying then procurement can been likes for for Chris internal offering of best that our most both has digital when have been which as our their But that own doing it add on platform, friction have maybe elements together true platform And all a from experience. Service and to expertise to their our team that of connectivity and $XX-plus billion comes with it ServiceFabric evolving combined customers in some global and and largest essentially to business. cooking the ultimately provides we remove transformation lastly, eating tying and this the the enterprise members, innovation, external in scale worlds, platforms. doing harnessing serving on-the-ground well. customers technology customers

the the deployment It’s enhances broader facilitates for of Andy’s an appreciate value and have for it, our frankly, time our purpose-built a remove of traction mean things accelerates Michael, are solve and customers are the quite been can see on And And of frankly, it you, ecosystem key I you starting think to we highlighting. and that to a more I experience. driving for more I they use hyperscale that’s and that we open even lot the customers. And data of enterprise also our as that an easier markets quite into yesterday of PlatformDIGITAL. to And couple cases enterprise element the largest position something growth aligning to it’s the question. the a our that’s that have XX now. announcement about metrics. ServiceFabric, the that centers thank of underpin product process with of complexity. Realty some to aligning one with Ashburn. That’s the think for today. on-ramp we of coming Digital one the just markets with largest I one to That’s talked customer XXX-plus underpin around the reach, kind cloud I customers operators just of both Andy. really megawatts. And Yes, Yes. And And think

further think created in So, is value to that’s that be going and that, the slow market demonstrable. down be about you if to and you created

are brought and ServiceFabric why don’t is have market customers. underpinning to we We in of investing the so software in to where complexity piece the compete last our with moving And we really them. developers, that want purpose-built we

the today are what be of do on will enablement, enterprises press of set customers metals, we coming a broad looking core see security, the with quite will frankly, not-too-distant that in which to servicing bare likes IT further it’s you are a and So, of that we out of full hybrid swath culmination future. the servicing is releases that to

of from comes Michael question next Citi. The Please go Rollins ahead.

also looking good new want from deck. and the at roles. Andy I and the just Slide ask two to Matt am in questions. If congratulations And XX afternoon. extend financial just Thanks I can my to I

to question you for you holding what midpoint you growth if back as impact? guidance EBITDA, share unlock in for what at and of do? you of EBITDA portion then split you mix per profit Realty the have assets are core per and parts and a holding look revenue have growth the the consistent the investing should break energy kind between for relative relationship share the what growth? will And get and a just organic acquisitions growth have relative EBITDA, revenue, M&A EBITDA look and piece at core divestitures that can Digital the organic ones? of see revenue then back the new and the out share and look in of the as the recycling growth, growth future And growth stuff per second been is at of more the FFO And So, Thanks. first will you is FFO on back question, the opportunities to core the to you that

Mike. Sure,

bit the revenue got one are you in when about talk more let’s looking for think that’s So, that’s year-over-year. unpack a little more it I to – because

us a been as and to has think of power topic. continue I expect know, to So, – be be a topic, we most big

like are, in We other particularly power seeing operators increases EMEA. in costs,

full it’s reminder, soon. we the of to say growth, pass-through, pass-through. that from XX%, majority done to either ability of tied full the of have roughly are do expected is those will correlated for price the to utility that have I around higher those, at And majority a look you we or we which if XX% increases, our not the that pass So, contracts reimbursements even have we the contracts are on midpoint XX% expect just power costs. XX%, And majority – would

are costs. expecting line not minimal or our to So, from power results very we any ‘XX bottom higher impact in

you interconnection then in X% there have which talking that are – business, coincides as and down, the revenue adjusted as as done EBITDA the about do with well. our net So, the – also will rental driven that speaking, also you math roughly see in when you growth you you by that growth

FFO, having are accrue is balance part being should stronger demonstrated of that so stabilized that we year then of as able set down flow to to our forward and that see favor down that being fundamentals is terms of us be the to ‘XX. improve our plan up that leverage to by sheet and portfolio, think continue get when able position, we the to in growth continuing a to the and able I going leverage this look, going the forward, for that In core to in do to what’s

that the of and a that rates XXXX? deal, revenue recycling did, the impact for XXXX over that those on are divestitures neutral PowerCo EBITDA does the you kind And growth mean

it, venture like the So, consideration the those we timing call – guess in a plan have dispositions. our – range of disposition, – that are we obviously, I is I answer that capital joint but takes laid out, the factor, into terms will potential

question next Please from Bank. go Niknam of Deutsche ahead. comes The Matt

me less your engaged actively times. Thanks giving one constraints Matt then about chain. I in. a guys. ask both in or if just Hey squeezing and seeing more. about customers the And on in roles. question you supply years had shortening I congrats I several out they larger need Andy I your could lead maybe to the supply for maybe wanted sneak wondering space loosening, some just of new was moving with chain slower procuring dividend. are

And optimal share, am about even Andy, the per to the payout Matt are how business to through a are thinking just lever dividend levels. that help whatnot. wondering order in even be funding or We and faster? about Thanks. consider and fund pull willing talking lot would you de-lever maybe maybe to divestitures is I a you business

Thank you again.

are production but say there on not become So, to is gobbled get I seem I back we that quickly. would And chain, say to the supply up would a – available the loosening, normal. slots

board customer a been revival that And is is has think – buying supply is disconnect which both pricing business. mean wouldn’t I – between been remaining say across firm So to in outpacing I a demand some hyperscale to through our supply to is quite the I it’s for markets the behaviors is there chains. that money quite contributor for time. and frankly, the correlation has that enterprise going continue many and supply

you a shortages, things bring to today you have host it’s capacity harder efficiently and got of effectively. got got have reasons is power whole you on permitting, a environmental You municipalities, like got have impact. There why lot

correlation wait see the overall to seen and think to our I pricing don’t time they of say doing we dynamic. think feeling and business, whatsoever. time out want the given luxury consistency. it’s when I I relationships, the platform due many, taking above are wouldn’t the a And especially to our But I customers question? in on our in definitely our helping are larger our Matt, a handle customers, buying have do stand dividend you that expertise,

available to ultimately, make I XXX% we look, mean that our paying sure sure we out dispositions be we that to some include make to We that cash – the of for that need a to decision. what capital And is plans, level to in to are, business. of on add then – analysis. to then relation ratio. dividend, taxable also is And us could of I have we appropriate are part where our consider that, maximize our Sure. Board would gains on free that income. which of I generate payout that – we the an could fund of want some we it’s to potential that would dividend our want flow is the would the in objective top

James. comes of ahead. question Frank Please Louthan from next Raymond go The

can – you if on What, Ashburn. you. a Thank of Great. couple questions

Ashburn that of that of sort those kind buying then deployments of you If And you push follow-up in kind Are available to these big activity so seeing on re-architecting a us are of when can from issues that be of of through future? the the that helpful. have to outside customers? there would lots the in could of they more they and kind kind them? things Any that, avoid power you some your any be assurance the changes patterns of you walk need

Frank. Thanks Sure.

what confidence Last at quite several summer. And remarks, frankly, for just of mean same said in be we represents good development of guarantee years. I greatly of first market, quarter, basically the in go. of most remains the in power say but are which be megawatts I power our is story I I Today, power that incremental as to world, So, able into our have share working the the Ashburn, on will going in deliver we, transpired commitments, the the largest, would the cycle. to to shy it, lion’s – XX the with deliveries heard end providers prepared my restrained overall, robust have last couldn’t I customer the you we

We to customers, be able What be comes the is being those about is power still deliver next and no will concerns for to there available. determined.

given better incremental breadth a of confidence Realty, landholdings, IP, bringing do Digital So churn expirations, happens and what this to to remarket while is, region, on But our is ability obviously, uses. relative the space similar higher of I market. provide, Ashford largest is strategic guarantee given infrastructure our will say Ashburn, able I tools expected be at in year you bottleneck our prior years. would That at tool higher in I in retention, to we on just this, be a the and period. blessing experience be that I again, portion to our – which amount can’t have power lower and solid expected A I large strong it. a critical can’t promise that are of I the kit terms is our our looked top of we in at certainly in creative some XXXX our deliveries and of churn relationships answers have

So, market. greatly providers Ashford the is in and all saga for to improving the healthier of but or the pricing story it more these, other but much environment digital continues, broadly, dynamic a

of buying tremendous great of across not to amount of terms this Northern Virginia any to infrastructure other locations demand really is shifting In patterns, just stakes. part large-scale

a it we coming the or South few project region market not a shift in supposedly but and take with available this the or they title will capacity staying new are and Calgary market, still clamoring folks have from is So, the in the us and where are brining power years, seen with on for North.

Thank Great. you very Okay. much.

That back Andy concludes like and the I over call CEO, call. to the Please question-and-answer would Power, portion turn of to ahead. for his today’s go closing remarks. now President

Thank Andrea. you,

didn’t for our do of relates Digital the incremental earlier think that demand. the mention of industry it believe to is is did Realty my about and incremental Q&A, an talk tailwind as I demand wave precipice we something but remarks, in in an AI-related of we on I applications So, this on driving

would recently demand just ChatGPT, I impact As asked how result, AI a for data centers.

and and data for “The likely intelligence demand impact Here I is be of a centers the the summary response, significant is in artificial to the years. quote, of coming

potential to Realty, has phase, to the see traction benefit data businesses is excited AI-powered has continues at come also that create of to the self-serving – storage the that’s applications solutions, are trend.” new AI and significantly. in adopt this demand agree excited expected this out AI gain As this and and is fruition. AI the provided. and to centers more increase data and by certainly its as media processing companies general when Digital news, medicine, driving for data-intensive more autonomous of vehicles, personalized centers. operating Obviously, forecast innovation the data well just on space demand for we expected just trend positioned such still playing this are In ChatGPT impact you demand while reality and be but some development substantial further for from And in short, here virtual the – the AI AI in is and the certainly the to to

and like a position would for advantage XXXX. call appropriate us. Digital to you. everyone Realty today. before closing, us are to in that on believe all adjustments We incredible members team Realty of us had lies of the thank XXXX our joining strong opportunity In the and to data here this now take Thank of Digital exceptional team we making I and

Thank conference now you The attending disconnect. for presentation and may now has concluded. you today’s