Digital Realty Trust (DLR) 27 Apr 232023 Q1 Earnings call transcript

Good afternoon, and welcome to the Digital Realty First Quarter 2023 Earnings Call. Please note, this event is being recorded. [Operator Instructions]

I would like to turn the call over to Jordan Sadler, Digital Realty’s Senior Vice President of Public and Private Investor Relations. Please go ahead.

operator. you, Thank to Call. everyone, First XXXX Quarter And Digital Conference Earnings welcome, Realty’s

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

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

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

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

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

resonating our strongest interconnection and in of we bookings, push as revenue delivered proposition yet for zero million helping million the the record segment, over our our quarter value to interconnection First, time. strong $XX first in in leasing to EMEA of of plus bookings including customer nearly is interconnection quarter $XXX another quarter one second

the for Second, a X.X% remain XXXX. in delivered fundamentals quarter growth. third, on guided NOI in for And, stabilized to increase our plan and we X.X% confident the spreads have on XXXX first we by demonstrated and funding as inflection re-leasing renewals portfolio cash

with in we multiple transactions. and new process finalize buyers, once engaged update existing deeply specifics we’ll the are on We partners institutional and you including the

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

and a our focused our included quarter joining global strong strategic another uncertainty. with on for plan everyone our Digital and call. the center to strong delivering X,XXX milestone while Thanks Realty customers industry. trends major Jordan. reaching strong supporting despite disciplined This first while focused remained EBITDA revenue, in executing customers adjusted supporting sequential data and secular our allocation, benefiting posted We from growth remained worldwide. AFFO, on now platform Thanks, capital

as Last one quarter, I proposition priorities. strategic key value our of identified strengthening our customer

this been order Let to our spectrum acquired has Realty provide on and footprint center of in Telx the a me since expand when data a full our customers. journey Digital we to global expand to product XXXX bit. offering on solutions

At in about and mix than to were the interconnection that presence time, we we the annual segment. the to announced one zero seeking last our $XX posted plus our said the is we which that When attractive million, the quarters less in revenues megawatt expand bookings two deal, were colocation space. colocation product in and we interconnection

soon Since the XXXX, we’ve Westin X-X annualized oriented total acquisitions, segment XX organically that including and Helix, expect new connectivity in we colo Medallion including across Building, expanded underway to rent, facilities, station oriented IT, landing [indiscernible] through billion over are to well continents. presence few represent and portfolio, revenues other Today, additions $X market and countries are colocation and subsea a cable and important of XX% have Altus megawatt than organic six more Lambda both connectivity capabilities, a and currently Teraco. Interxion, the our our

and region. ranked Data within Europe with their operators data and within spot two owners to Digital slots cloud based in and in are East North on ranks Leaderboard footprint top and center which top providers Middle Africa according Ecosystem HX, Center Cloudscene’s America the service taking the performance Importantly, focus Results, XXXX their ecosystem, on LATAM Realty the a

and world institutions capabilities, connectivity-related we’ve centers. own, added capital noncore of to Meanwhile, we’ve way, also assets, product shed operate develop some of such core leading around ventures assets stabilized out and joint Along with recycled as data created of the the cloud our our the customer bolstered additions last and results and Connect, world. data initiatives to meaningfully around colo the centers summer, and while owners segment. Cloud our propositions These connectivity improved Exchange, in Service value ServiceFabric, within the have targeting the

the while colo now have XXX%. across do. bookings increase period. grown have connectivity XXX%, XXXX, XXX,XXX more cross our Since is interconnection increased of XXX% almost our over nearly and portfolio, revenue end there has connects But over the our same an We of to

customer for come. technological Our focused business vision digital advancements our today, and and base at transformation and serve large to global empowering through years is is to on their growing scale that tomorrow

solutions infrastructure their a providing that, advancements. connectivity full of scale line do meeting the deployments and solutions of sight as future our capacity to capacity serve data we spectrum colo with multi-cloud to place support of hybrid the To offering enabling customers also needed and center globally, availability and

as with joins us following our nearly Smith Officer. our of Managing are Chief announce strengthen value pleased hiring we where CoreSite, recently priority Steve our customer most proposition, the as Revenue of Consistent to to strategic years Americas served Director Steve region. he at eight

segment We Steve in an colo as accelerate connectivity be the within in team, our expertise look welcome and to the market. experienced and invaluable largest the upcoming enhance July. will look in Steve’s the start offering and we and U.S. to forward

to move quarter our first results. Let’s

as scheduled positive This spreads across a we all stabilized translated same all in quarter our price in capital and in portfolio marks year-over-year. and inflection recovery escalations the regions, into an core inflection have were been important in portfolio, products growth anticipating re-leasing our fundamental positive

the to representing best New quarter plus $XX history. XX% led X signings, a quarter interconnection by the X of helped was interconnection science company strong leasing during leasing, megawatt million, total in of by

over quarter our inflation rate escalators We with new fixed increases new with continue length containing of on leases the balance. signed XX% the the in to CPI-based over-index towards within escalators leases

XXX XXX quarter, that new remained since at low first quarter with strength added logos customers, each Interxion X.X%, During we and churn added we’ve the closing new of the continuing transaction. the plus

from a was to a insurance Global customer ensure differentiator exiting connectivity for provider, a XXXX doing digital A included platform capabilities. European services distribution expansion together key their multi-cloud new and this compliance; robust resilience provider. migration key competing legacy who expanding governance sourcing with and XXX improved incumbent wins the and centers over and data provider, Our pharmaceutical on company, campus data a Global are

the companies for new to One its infrastructure public of network control logo AI, improve power This modernize company and embrace and U.S. data Realty a with to hubs. Digital modernizing leveraging customers. infrastructure and in largest provide BXB PlatformDIGITAL is its is analytics, to its the

Realty, services it high entirely latency firms performance. building the trading new an and happens. trading with include driving One ecosystem is platform to low new Digital capture of as global largest requirements financial Their a

its rearchitect their network largest diversified transit and retailers local One joined of also nodes presence, global to the business topology. PlatformDIGITAL support

power last in to market, able constructively with our the customers. be over we made pleased confirm to in our divider commitments Moving market. And work continued to Northern to transmission this the that have were quarter, power issue to largest Virginia. we We’ve the

we our overarching have market to XXX-plus partnership changed, the in megawatt conditions footprint. in While this with to the availability providers continue local work potential within maximize

remain we capacity provide development uniquely this we optimistic opportunities. for new select to able our will that growth be and And churn cautiously in market customers through

highly reflecting of pricing constrained center Ashburn remains is availability now, decreased capacity. the For and data

our activity. to investment on Moving

venture in quarter, the Realty development. a Osaka, MC to first X-acre support our land During joint Japan, parcel future we acquired Digital through

alongside monetized venture the in in our the partner. joint XX% interest also the center data Ashburn, We quarter Virginia, in

development today This a and for value which market of megawatt capital driven not While asset creation. is appetite cost substantial strong premium to a meaningful a plan the valuation recycling was represents valuations. it demonstrate data for $XX of did our by sold partner component our for centers data the this centers our significant XXXX, well-located and transaction nearly was at in million per new and indeed

last the our sale the capital few hyperscale weeks, similar sheet, appetite a Notably, remain of balance ongoing European have last are we that well-known on of confident institutional a announcement investor seen we with have to multiples few Given consistent the are increase and platform platforms over where to invest efficiency bolster traded center global to the the the over data that years. the institutional process in of our course data of in we centers. undertaking the sources

We progress, will updates And to to transaction we another recapitalization witnessed institutional platform we data we eager the provide that those a once our are hear announce. by investors. know other have have on and of center investors

concerns demand, supply been customers, our including periodically in relatively is and about nascent class. have raised XXXX, Since various data par obsolescence. technology, centers, IPO for and asset This somewhat for potential to a risks growing course the

the those upon down. year we misinformation cast Over seeing by interested of the sector witnessed stock goes or price data campaign the last center the have our latest so, in

clarify I’d few like points. to important a

over all data data world. First, and exchange we centers of between of enterprises, providers individuals service a facilitate and carrier-neutral global to the and communication and cloud-neutral operate and among information portfolio the

enterprise While of service focused place we customers in who the architectures. hybrid pursuit are IT building on call and are meeting for multi-cloud we what end-state providers

facilitating of service also by These connectivity provider. the are aren’t communities platforms. single stand-alone latency-sensitive applications center serviceable are cloud that a on-prem a happen cannot We data in things and interest and and supporting

lower, to turned. Second, hyperscalers a the contrast is have in of the same-store few negative narrative that after prices forced years growth, tide

for have low-cost our been As With supportive environment higher data that have capital and same rates our releasing now meaningfully precious. capacity driven XX which abundant years, in core rents. the metrics. capital capital much the continued absorption as that center has demand, net slowed is center exists strong has has robust vacancy positively lower, Accordingly, more data spreads supply growth inflected of are [indiscernible] of

objectives recoveries for Our the and team we reiterate delivered XXXX. anticipate we on our first quarter, the these for metrics in

from a driven pipeline, center other XXXX for transformation by soon claims record would year partly was hyperscale demand from by intelligence demand soon ago believe a Digital that within We and hyperscalers data leasing our digital the resource customers. despite almost and robust. Lastly, remains driven customers year their requirements, artificial these Realty,

technology growth improving of living, the and support overall of center evolution the quality our lives. our productivity of Data standard and is that

sustained a we We pullback pullback today. years have and that meaningful nearly are and seeing in business, not in now XX been witnessed demand in we’ve a the

trend to benefit crisis. Customers data financial the outsourcing. thing the rather lease economic of slow titans than availability the While great an from could recession build capital the towards during make spending, often decision We centers same capital on saw third-party also [ph]. the

lower of enhance productivity. customers, even centers For can help facilitate our many revenue drive overall data or growth will costs also

to remain in will business our resilient that optimistic years XXXX for and come. are We

Before turning touch Matt, to the during over on it like progress our to ESG quarter. I’d

quarter, their in list, ESG top-rated in XXXX company the included and region. X.X% in provider ratings Digital U.S. companies first Canada ESG are the Realty leading of noting we top that During a the

a the to XX Top new EPA’s power commitment Protection to of Green Environmental In addition, by by project to Digital sustainability XX-year Realty solar our total share incorporate in continues We our purchase Partners. resources. power over of Agency Power its and renewable solar were renewable Germany capacity. under furthered agreement the one energy States of United gigawatt wind to efforts named signing as a contract XXX-megawatt for increase We X

Subsequent announced of portion Japan its to renewable quarter end, support procurement renewable Australia, we portfolio our while a in also our announced business for in portfolio. to additional

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

With to our call turn to Matt that, over the I’m CFO, pleased Mercier.

Thank you, Andy.

quarter a total nearly the into new quarter, the EMEA, strength second last particularly We Let first and in million by first consecutive of highlighted X-X continued record of matched signings $XX level in quarter. record me quarterly in our from which right in leases interconnection category, a jump the signed megawatt results.

total accounted interconnection plus of bookings. X-X for a robust XX% megawatt

Our a U.S., broadly dispersed South signed quarter. nothing megawatt Africa, $XX throughout with activity greater was this Though global Europe leases the Virginia. million moderated in but the portfolio our Mexico, and than in Northern bookings to Toronto, in

than signed megawatts in and downtick greater lumpy leases. the record which the new a more year be than million can in of and leasing deals we a $XXX in follows These megawatt XXXX, XXX

number remains strategic a funnel our actively of seeking highly our quite our global portfolio. remain are customers demand engaged Importantly, capacity strong and across to add as

last summer. course, we constraints the market, result issues have as Of transmission capacity calls Virginia, of discussed as Northern scale a that is few experiencing our power largest on last emerged the

years, Over this Virginia, per of million the XQ signed approximately in of signed including versus of last the $XX XXXX we course second the three leases XXXX. in $X.X half new new in market of million quarter Northern leases

new up better in we to to volume including I’ll expand spreads. pricing lower As ballast expect on a show moment, renewal in the lease

commencements partly The current million, at backlog commenced over not but end, was balanced leases new our as $XXX slide. to again yet by backlog well million Turning once signed leasing. quarter were $XXX

quarter lag We between few of that expect due was in million the in XX commencements The require to somewhat remaining throughout be XXXX long-term signings buildouts. $XXX-plus evenly commencements of months, to the a year. and the the weighted larger leases balance principally

on signed increases and strength $XXX the basis, our first days products of early quarter, both renewal renewal three pricing also regions. our pandemic. since leases pricing with of cash shared the X.X% strongest the million of quarter we During The across was across a

the the So and roll full than $XXX XXXX category, in remain basis were pleased X-X by strong first increased we’re the $XX XXX faster than were year quarter off XXX see million X.X% full for on of of re-leasing points guidance. Renewal also X.X% spreads year. we accelerating XXXX, similarly in but in megawatt in category first of in to a continued it also rest about the to to than Greater good megawatt leases quarter quarter on potential quarter, our renewals XXXX. spreads points relative optimistic this the as We was in year basis up better than nearly volume, up this the more of a final XXX% of renewals. signed million the the cash start

Turning our operating to results.

a in in core our interconnection performance our returns operating Our revenue. development performance, the expectations, was and bit first record in than continued a highlighted the better quarter by improvement higher quarter

FFO In to a year. we of and a of we $X.XX first terms earnings light core to the relative quarter reported in $X.XX of currency growth, per was relative versus better quarter per $X.XX $X.XX reported last quarter basis, share, XXXX. first prior FFO core the share constant $X.XX On

and up revenue Total year-over-year sequentially. X% XX% was

call, is somewhat in significant as growth reimbursements the this costs increases impact due last energy into revenue January. year’s full effect of distorted As and the last the went discussed to on increases utility price in

the large through of are you As our customers. directly majority passed costs most understand, energy of to

consistent at utility while year-over-year relatively expenses up XX%. was of a utility Excluding reimbursements sequentially, and reimbursements, total X% remained XX% revenue percentage

utilities, more prices Due below between and customers. expenses, utility million forecast, customers to contained the well year-over-year directly reflecting as Other performance. but fourth from original core our directly energy our quarters, utilities, was up than remained our the expenses than top were ongoing in these reimbursements borne a expenses mirrored EBITDA resulting of by revenue our decline lower-than-expected revenue was since utility our XX% and sequentially, in NOI line operating spot in first are steady, including Interconnection was this $XX by sequentially. improvement growth X% adjusted excluding margins, X%

core point from The compared benefit discussing. commencements the step-up a re-leasing to the that and driven turn in On our was that occupancy highlighted we further spreads. calls, strengthened operations grew portfolio, same-store demonstrating X.X% NOI started in Same-capital trends year-over-year improvement first XXXX, rent of basis our XX we’ve escalators headwinds. performance the the headwinds. to FX cash These continued last in by have first stabilized with been operating our in but in emerge improvement two XQ quarter upside churn, positive capital same was despite by largely the quarter outpace positive as currency masked annual

results. Turning dollars, pounds, and and South X% of our a yen. to revenue Singapore year-over-year in African quarter but of was the in strength U.S. in the in euros, X% the with continued X% in operating XX% currency dollars, tailwind, slight XXXX first to Brazilian U.S. of in The much sequential British a dollar denominated slide, in real resulted in first X% of each XX% through quarter headwind the Japanese provided dollar’s rand our weakening

share on As and our basis, XXX whereas XXX points the core points EBITDA revenue by a FFO adjusted basis year-over-year dollar basis headwind. just strength under a result, impacted reported per saw growth negatively about apiece growth

sheet. balance the to Turning

was extension term fixed $XXX two charge XX, we March coverage a end Our quarter year reported million an January, and initial was ratio times. date an with a XXXX, In of plus X.X%. completed year X.X loan times, leverage X.X while rate effective at maturity option at one

long-term leverage target our and of above remains toward Leverage course and long-term our target, reduce average our to intend historical we over XXXX. the our

plan Our changed. hasn’t

on the and that the of remain course venture in active plans sale back execute asset by We so these our the year discussions six on and are leverage joint area moves times ability our our plans towards over year-end. in to confident

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

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

Lastly, let’s turn guidance. to our

XXXX share $X.XX. constant year our per to We FFO $X.XX and core for are maintaining FFO full of ranges core guidance the currency

And this quarter with consistent our first results were range.

affirming adjusted utility at passed of to guidance in spot $X.X as expenses midpoint EBITDA year to are by electricity driven lower due revenue We our overall our rates guidance billion adjustment our purely the downward also directly are is lower customers. full [ph] the that on

We to the relative rate are tweaking modestly the the appreciation reflect U.S. year expectations to year-to-date. also year for euro dollar of our exchange

meaningful quarter, made supporting in including X%, on re-leasing XX%. year-end over same-capital to progress the year spreads guidance, also support to turn fundamentals cash growth the and metrics the X% full XX% operating X% our organic and strong and of during occupancy between portfolio cash We NOI our providing GAAP

mentioned plan ago, our few remain for we in confident moments As year. a I funding the

guidance our So dispositions we and have for capital. reiterated JV

session? we the prepared core And in take month, Operator, This by begin have since consistent which tweaked our our would seen questions. be with your now you be to banking last saw our quarter. upside we FFO remarks. be fall pleased versus first rate please the Q&A concludes expectation will will the financing the largely We sector to mitigated the debt cost move out expectation

of will Del from Nick come Deo ahead. Please go Instructions] [Operator question MoffettNathanson. our And first

questions. my taking for Thanks guys. Hi,

into Obviously, bit First, bit. X-megawatt a been I Ashburn QX, and in to the a leasing called as that’s than greater below of drill you driver that. want history a out

the can drivers decisions bit in maybe back was a versus dial maybe you the expand which upon about or the result to of change the other conditions to thinking guess, the of I that just conscious there, factors? making given some other of capital market degree cost

Hey, Nick. thanks

kick business I hand there’s or to conscious and off would in back dialing it say waving it decisions I’ll Corey. off necessarily. So no I’ll

capital You life most cycle, and we’ve fine-tuned could our bar strategic to continued development see our raise projects the from allocations. on

a won’t it But bit I The – over-index to lumpiness we other to don’t kilowatt. the had was per record a look year, pricing. was record I in a the I’d say in do typical pricing run had and than I you below was a at if deal – prior it little that you quarter, prior $XXX the terms rates. was anything in than – lower single have of bit third I category. there may wouldn’t say But you it quarter which in It call think healthy expand? want Corey, think a

our you the Yes, category. Nick. – with position megawatt really our I hyperscalers would tell in or Nothing’s relationship than X greater changed that these thanks, fundamentally

as did customer, just I’d little Andy hyperscale record I the globe. by in and it’s issue, maybe think, but Matt, a mentioned, this healthy timing off, probably is really the across Coming a so prepared broad-based and bit demand one-quarter varies remains year, remarks you, our tell a

going more demand, execute. scrutiny some And their deals environment in relationships I’d demand digestion say last to signals but macro little really in they’re that with mind, bit the do this that of macro through a and Keep quarter. didn’t on our the confident maybe we Ashburn

connectivity with and last mind; quarter our we this And keep hyperscalers highest quarter. in the our largest had

markets, that their deployments expand suggest of as across doesn’t and winning like just trend. trends new we’re globe. just nodes the I’d well they advent AI products I at one a you new look that so the edge in as quarter And say the and make multi-quarter new

in perspective really a Nick. good We’re a pipeline them Thanks, position with demand. from and

space pretty obviously, about where in XX XX versus your XX raising And the and on or deals That’s for you market interested how I and relationships. customers kind new you’re conditions more price or Okay. guess, holistically you business guess, I’m prices the environment balancing not your you put allow top favorable thoughts relationships globally, is Thank generally, them alienate right helpful. I now. it on guys. with your of to with renewal do thinking or between trying

Nick. Yes,

locations. a mean, from top we’re all our customers our So these customer largest XX, – with we can trying approach holistic you I be to XX, And different – as take always relationships. XX, to list, see XX

At pricing the more markets supply/demand dynamic is inventory that to we’ve And and dynamics. move same in the precious, as our seen various become in pricing favor. pendulum more overall time,

be shooters everything in expansions, – to bring We to fashion. We’ve terms business, in try the this and done new bringing all-in-one table straight the with We holistic a to customer. try the of all holistic renewals approach. before

this think of – These doing in themselves build I labor. are customers business is cost construction hyperscale are self seeing them of Many not big And or going inflation these new. costs up. see and

pricing think a towards out I bit the is dynamic that understanding in a is playing the fashion. So providers the natural shifting little

The go question Please of from Jonathan comes RBC. next ahead. Atkin

Thanks.

Corey’s the strength to of of and the curious on kind of us response going at So telling kind multi-quarter prior look there. interconnection kind trends forward volumes the the given about leasing trend, about

of or to on of you’re more from interconnect-rich deserting how focus point a shift of format kind your to may And is logos existing that could lot targeting opportunities? be any sales there kind that you mix coming customers your

that are then, a lot deploying given secondly, the many front, And I companies hyperscale so pipeline the of all? sector. your at that privately-backed guess, affect on into Does sales capital competitive

Sure. Jon. Thanks,

was including less the overall the it’s was XX% a whether customers. There’s On think One, contributions, than plus Sharp quarter. quarter-over-quarter, I the high team approach – results to this the megawatt interconnection good inflecting it lot mean several a make quarters, I’ll that. a which I new logos, up regional of in first whether standout a quarter, few a tag a I question, look it’s holistic at for these signings, interconnection things. and

been for that is It’s a now. over time this quarters building mention several And momentum. building also I’d

customers I the across our together, of the XX-plus servicing platform power coming six continents. it’s on metros think

further done the work I’d that and number It’s the a call say, one I with we interaction interconnection time. got has go-to-market. still into And win, great even let’s particular quarter lumpier progress signings. results better over the team to deliver category have Corey put did even it, would say This it

So I’m necessarily that’s build doing not that it’s the sure But quarter Chris another I up can continue think on, next to repeatable record. from we’re service touch pick with to that work it please? with I going think providers, of some momentum. But Chris, that,

Andy. to, for by its Jon. it, direct led question logos Appreciate the we’ve And both, where is right? I existing or question, I here products. it dynamics thanks it’s core existing, new think A couple your Yes. of think our And

really another how XXX,XXX cross access of physical out to something know and Andy investing want referenced sure customers emphasize and we reaching fact this important right, constantly value the connects one have it’s the looked to making to is the at us. growing that and deployment get to growing, that the that I platform, further earlier, absolutely

it’s with so on do early of complexity removes going where customers because going right, we’re really built really to brought just it other precluded able to how our a it’s it way over evolves lot value we that’s simplistic out in the the to innings, from has be that in to for virtual, more that being they’re see ServiceFabric advent that being multiple and to market, married purpose the to product full now And the that and of just to that access able the the fashion, be growth destinations of getting technical to deployment. a starting where future And of time. watching customers, but market what – bringing

those we’re closer strong of balanced on talked the Germany one all pricing parity sure some markets where delivering just about in just the new we this markets those I’m inside these the been of bringing even value customers around But within pleased making the France, the and We’ve and customer-led or of in – that growth past capabilities about see is markets to Europe. that these globe. to in critical things where we’ve very approach really doing

pleased history, to Digital And just with in fact I the lastly, that of representative signings say and the value company’s we’re been interconnection of quarters of greatest able the customers. that’s to provide would bringing I’m just the really the one has

about not for, private just it back, been years the some that’s call new that against been one, phenomenon. a been them. competition it, for ones And private players from then, question have private some Jon, competing of private for time second multiple around We’ve call taken and your now they’ve

for of of constraints, supply changed this the our competitors. global has what’s ability certainly scale. think whether harder friend deliver is a and cost I certainly, some And harder, to and chains and business power, access a at to our customers gotten just and – it’s staffing, has capital been not

customers given our in us arena turn our permanence the largest in And think to space. our hyperscale I

probably gone those private versus more here, in I of environment for our we’re the for invested long names make tomorrow, we’re future-proofing not think constantly today. suppliers an We’re and that all bit a some things growth building leave run, little we’ve it advantageous with like growth, bank that those

The Jon go comes Jefferies. Please next from question ahead. Petersen of

leverage I hoping was you. Thank about if could we Great. target. talk the

billion that You on guys to can the pieces these to reiterated transactions. target? just six getting give of complete transactions. down you to various the if does working through mean, moving leverage, times guess I, us and get you But getting Like, that $X I know times? you’re six you I

thanks. Yes,

simple yes. I So is, answer the mean,

of XX%, that will which in that largely this a back end plan, as noncore from our this opportunities dispositions. on, the shy joint as based And six items our well believe that it, year. of and laid recycling as the as I we year, quarter, our as So capital for times EBITDA two out year, we potential venture call $X-plus area expected comes is the quarter, this it billion capital growth last us coming of is into think, in those little really by changed hasn’t get as capital towards well

And just yield? Like, you if I’m like much shift about it I today how then or for great. so? of a Or curious, have year you requirements just return on the does minimum given in expectations? guys maybe the capital, last in you Okay, cost what development. the of those what’s moved development broadly terms guys ask development to in take could start for talk

granular Jon. market-by-market I mean, incredibly we here. Thanks, do an assessment

not a it market took that our depends relative as So, and we only risk I allocation prioritize fee not just long-term this growth the risk almost, bar three large, well. posture and also premiums. quarters projects on high call up basically quarter, ago raise this is highest really return, in rates strategic capital something and generate would approach by the on but the need to return, it, showed that and projects, we most our highest to and just the

have you can through don’t higher table you I to – and get tell give development number come So growth territory, returns into more but think our there, inching I a are projects. strategic single see that I you long-term to will answer those numbers at as

Great. Thank you.

Okay.

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

of the which there just And the that better outcome yield? good to to is of recycling? is decide I topic. the forms alternative than would may terms in Thanks, for in there we are be be And what when a of capital wanted the range and a Digital And outcomes. just guidance what scenario you capital back good go would wide recycling look page, at afternoon.

then back. related, I could if And topic a take second but step a just

business business, in profound model a both the if different terms Thanks. the of stabilized and just years, of As quantum you’ve of the mindful think terms of on should investors the the change be those of year in of how about is comments just investment that in the financial next might level and of there comments couple performance development about assets this just for driving I monetization, over look investments, given and off considering a strategy you following made. financial curious you’re that more made in

well not that billion, look the wide. some six-ish ventures, the of yielding capital, projects. funding a is Mike, which majority, noncore joint ventures at were and of based stabilized the wide billion development, essentially rates sales type the, in the the is, category territory. low is XX% the we the to called due or I seeing single-digit which So that $X XX%, range you call outcome good call if $X the as asset The cap think, On is of is those but range we’re what the of it, right? get as it, development, are joint completed majority wide, stabilized on But zero is the type range development,

joint we see And What I seen with and on on based partners can by efforts. third-party what we through think we’ve transactions capital recent externally recycling recapitalize progress our not venture portfolio transactions. with on that that’s these and our

and pricing and be is, out we the longer long-term size in sheet majority it and credit development a power. piece these it term more significant as here, to new a states relates though efficient. long-term the larger is it quality that due What’s EMEA sharing producing Holistically, creation. of or are rates looking doing keep projects. remains and dispose, larger. larger, new to a to America not stabilized customers, both new call getting a our projects of of more North value projects balance drag hyperscale joint with that That the non-income that rent it, what’s And headwind, it not through hyperscale-oriented What is even have become finishing view bumps growth noncore we’re venturing is lower is

there partners with believe drop make and efficient us more revenue and we which line. accelerate to sheet work EBITDA will rapidly balance ultimately ample projects those into bottom our more And our is on

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

here. sheet taking I questions what for on first, guess double-click thanks to you balance about said just efficiency. the Great,

increase it JV, reduce Or As while follow-up. the that CapEx relates to on-balance structurally is of opportunities JV same for sheet the aside CapEx, And or of CapEx set to intention the development being a previously the the is the then from the recouping you able to have pursue? more I keep less intention can digital? spent to

to looking be we’re incremental partner time. partner over is Michael, large-scale and projects there development we answer, will jointly simple where spend The around fund our will that

is over will the the of large Hence, not be large near ultimately of the these quantities spend – that looking project megawatts. we’re for or of and entirety acreage, So it time. projects, capital where quality swaths large will the or are – entirety

the fund So they coming through quarters. would alongside us

Okay. Earlier connectivity, Maybe Clearly you’re and Smith. steps I accelerate really Thanks. focus consider the little that, appointment colo/enterprise the accelerating are we side. emphasizing need today, would megawatt the on to X changes in be question on bit. for you of a a really to colo the gears made order you just feel call it, to also shift the as on side? you’ve what internally ahead, my made Today, that Steve you you announced on for be, call X path to the mean,

and This inorganic something up roughly more of for again, mean, years I four connectivity our hubs We putting laid back both ago. the call need the motion innovating Michael, in terms we’ve globe I this prior puzzle to think together across our is call is CEO this strengthening adding first over of the took strategic our folks months been priorities advantage and we becoming I works value pieces, organic – adding three critical measures, this with started demonstrably the strengthening through that customers that’s where go-to-market proposition. ties to and customer capacity, really about in to our bringing changed So the remind something me out eight – not expanding customers, the in time.

the newly focused lead of tremendous platforms A driving very here created with piece a success. from accelerating go Steve we comes only on – that is, of our – the again, essentially board background delighted What in a Americas Steve U.S.-only previously region. colo and to interconnection that a – from of prior Smith really competitor. one to have formidable

more just that which ServiceFabric, onto going to to And as I our bring drilling partners terms table. we’re would customers. things our upon think our in bar The of customers. leadership the in more added to he’s be platform, Chris and incremental characterize out of still going I of to touched and in innovate our value very team, that we’re bringing terms value continuing doing to more terms that where of

We things the every our accelerate behind of say continue we’re that continuing host each fruits to in of are doing are think labor I’d – there’s to and the I scenes a whole quarter growth. success. our build to And terms of

are competitive colo So we and industry the And at in are I the I think interconnection be one global that angles to demands endeavor multiple our our wins moving of a also very think there’s of backdrop broader providers. short list towards that sales.

Andy, had one then just And success a of ton go-to-market from to add a thing We’ve channel. perspective. the around

the We’re continuing channel. to grow

new XX%. last this our from channel. was years, XX% Prior of I logos it the think quarter, were

We enterprises. continuing channel through being huge to success. a see as that advocate their partner the We’re all lens build and on a with the

to build. to continue we’re that So going see

So items we’re strategic doing lot we a need and of to operational do. functional that

to continuing and to we our continue to also value. going go-to-market, We’re think tweak evolve it’s add

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

Great. Thank you.

pricing any is outlook could the of longer-term se, forward up sort little by of all push the them, what were yield of last the spreads sort there of bookings particular, but in spreads, couple see the negative about you’ve with are the higher? possibly anything looking greater going down a of re-leasing but renegotiations? is bookings thinking bit, those in got per And year better, at kind with doing that what a in megawatt large we you when years then coming On the back than

Matt, term outlook spreads some take re-leasing we can it I’ll in pieces. tag longer and off let

Yes.

thanks, Frank. So

first, will feel it’s every types, we But is not think, to and stay. I’m start – confident positive we’re but great great a that that across across again, we’re single with sustainable regions. reiterate, environment back all not this we’re to obviously and I one, all here I’d re-leasing speak again, about only we’re to product necessarily spreads, off off quarter. a say, come I going positive to I’d start. here in pricing reiterate that

but reflects and to a And few not and the be I category, We positive that for a into seeing X from come also the environment for but which to the in in megawatt see again, full not in well. we only we haven’t seen only down year in see year, years. positive think as greater category that, that X the full is, stabilized than – portfolio that fundamentals megawatt something turn expect our then we we’re

part we that make do of you your question repeating want Frank, – just do mind to second correctly? you it sure hear

bit and a down pricing. coming is the are higher you you last absolute like sustainable? little does per of do bit, better obviously long se, yield even the now when though are how now bookings of forth? this leasings little mean, What were ago And the years yields in sort look bookings are couple I think so What seeing lower? a Yes.

territory. deals and the direct can enhancing call have improving would time and Yes. rates pressures. a our phenomenon, $XXs doubled inflationary it, dynamic our of, say that’s to pricing I an see the, development are short to It’s Frank, are call The is I’d – not of but it, into look it, in low rates table you to from moving better like line the pretty There’s at favor. I episodic to the where outpacing bottom pretty dramatically. we overnight yields. much follow, yields frankly, the mean, progression Virginia, the flowing in deals a in quite things now Ashburn, those call $XXX, market you

raise pre-leased projects the So of a capacity, progression. we those I our on progress prior yields. think got in we as add work I that, available sub they leasing But are of ability fill some because a that table is to not of to think there’s signed or out the to in it’s some which this was continue pre-leasing, lot more to price that

financial build-to-suit an triple book And lease I America North would a the that on it rated very is institution large to piece of that also say in open a highly project net has a basis.

its good in there So its our been and in at apple dramatically build time, to the way. Americas derisked in it’s terms terms revenue a lowering the EBITDA yields. same stream ongoing oranges of and of an It’s

you very much. Okay, great. Thank

ahead. of from David The Street. go comes Please next question Green Guarino

has growth real seeing broad-based but seen across or just I you’re commercial saying translating like that into why and definitely firmly you it swung reduced just data we’ve demand think like center quoted elsewhere. wondering, feels rising that was landlords, the rents rates back as self-storage? we’ve the data release, seen sectors isn’t rental you in press outsized Andy, estate do in availability. to like other And like pendulum industrial aren’t center were

seeing would is I which a it. asset class, mean, still, of it’s I but the phenomenon new centers, we I’d terms in are recent of say, data call a history nascent

an from E call know Virginia, region plus there, And there, from at, and up, signings, call or you, is a Americas in critical rates one is it particular I rates And most but going look it, you example run. row. well. to $XXX massive gave quite picking the our example, our the If I’m market market largest megawatt signings, out $XX [ph] have a diverse been that E. plus four quarters it, a in where market new That the EMEA region I as there’s less consistent largest than out either Ashburn,

Santa to up flanks And continue other of favor. incumbents. good rates going now you’re I’m healthier phenomenon going the the just And to and power going the to know I to student having for that’s real years we’re a a had rate pricing environment before but it’s years. is for this happen David, saying classes. teeing continue feels was few see centers, had but the a renaissance it’s power I industrial traditional more comes And you’re same having data constraints to in to the it XX been the is U.S. when asset parts move outpace way more estate last West of I where the low think growth like constraint that mean, in experienced think power Coast ourselves those not world, no that’s Virginia. not online the in I likely Clara the East And with a with problem, Coast it

That’s similar and chatter encouraging you in the on I’ve Chicago radar been difficulty that securing with even hearing some markets. to said about some other possibly hear. sticking And we’ve heard then kind of also maybe power theme, now. come Hillsboro

of it means mean, things think we saw your So – what are in just feels are happen years unlikely the everywhere up going to the do probably given you popping that given power across the new I these leasing for past like industry, forward? constraints? pace activity just the

Yes, of when if of contiguous us of a look committed got time, could you zones exhaust at we’ve outside capacity call the markets. amount and available it, will land in these, kilowatts But same term, half sizable sell we financials, that’s to and our doing power to that have you’re phenomenon. eventually you rates, At that disruption. certain business you longer twice the at the have

continue. So, power. to of I’m that agree new going this based it’s capabilities with terms disrupted in sure and all pacing in But near table and this signings assessment you not on that I our top-line what have will the be term estimated on we

we’re other is, higher, managing The and essentially always use for emphasize applicable. platform I’d better to we’re our reproductize thing and looking when capabilities, actively our

like higher if opportunities which is don’t waves, company that’s the a better business, at It’s that. some capacity provides footprint. towards have granular probably a big it on we And manage our how of see totally that we top terms of not customers. uses digital, not opportunity oriented static So release higher churn, to you and rate enterprise colocation but often in this happening

Thank you. Great.

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

Hey guys. Thanks for squeezing me in here.

could. I if two, Just

made about to buckets can different just you’ve laid progress engaged across I’m capital but the if the thus recycling, share the being on process. talk beat wondering there’s more far First, the that a any in on did you dead out? deeply not color horse, you

I On they with months. focus just AI gears. heard about switching plans over we’ve plans maybe the deployment this increased so much think then Thanks. as customer I’m conversations wondering over and how last next mean, your And on the impacted several your leasing AI, about year? the them

Greg then going one. have first I both I’m and Sharp second can the Matt. one and the Thanks, tackle tackle to

and initiatives, characterize $XXX we’re multiple good and of it’s it call And say received say, from still significant without much, the you in estate too sovereign it, $XXX track making partners, call outlined earnings look, our I’d would JVs with pension we million was respect the February. we’ve like. JVs. from wealth should core funds, our the I’d to dispositions, from we’re that that capital $XXX is development Thanks, saying I funds, on these million funds, real Matt. roughly plan whether But Look, And funds, recall with institutional noncore interest million companies in the in early infrastructure PE, transactions. progress insurance

we we’re way characterize these And it about where I’d is into So good plan. on feel we are processes. the executing

every – still to – that, your thing thriving we’re Yes, power the into for The use we misnomer to have GBT increasing of lot lend going give doing towards are And cooling to densities that’s the cases, as supporting that and data [ph] think going intelligence. opinion, is to be one one that a to in turn speak. turn a AI. the Chris quick center just themselves environments to and I be applications, that and turning data exist my required, within we going The workloads today be artificial here footprint on second that many over his data thinks centers that question supporting I is everyone view the digital. global center will

hybrid demand, of even why from have data yet demand don’t need you demand But this sits next picture more view multi-cloud wave to long-term on-prem major Chris, is around AI? will two to moving an it. wave this certainly second and behind little incremental it the to But wave the locations first your of is while – at is haven’t bigger shore I a the today. proximity hit AI that waves And major locations of the the of look speak falling that of that on

pieces. appreciate Yes. the A of question. No, absolutely. couple I

of R&D pockets what the lot the customers technological happening efficiently. within it and we’ve evolve the are which of us pieces And Just applications, has this and AI has lot to from our bringing that we because one a rather watching empowering said, something also to cloud hyperscalers to allowed to there the existing many, infrastructure think of have And the able Andy adjacent the emphasize the digital, providers that is it’s a demand. cloud would to are years. infrastructure I many I that it’s try reiterate for of today, with we’re of from is the AI way I market support been reiterate always been

and are technologies. is the support And that’s to really Digital’s this important cooling of broader more something seeing I spectrum with some of digital but work been and that R&D with of for AI It’s the and requirements, continue the think requirements the to traditional customer designs association we’ve show unique doing specific us digital that to not up transformation. transformation, their customers type with so only more we

of partners fashion with back base then the why early right only open simplistic And a of implications to emphasizing understand the an interconnectivity. but differentiated the a AI that is these deployments the is, customer design And really in power, last Digital lot the one ability to successful. the to interconnect and very making in we what’s not of the to the just value manner from believe is to is circle

in and continue to so a And focus bringing how very market we the to repeatable core that’s that on of AI fashion.

sales recent infrastructure how to a talking you’ll tie together on And so see some we’ll you publicly tools start global visualize basis. this about

coming and demand to within customers case the see more our that studies and market, are out you’ll exciting the having more about Platform on success of additive So and this use Digital. very cases coming

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

late Digital base guys to sounds line to Thanks Ashburn, touch been wanted transmission like Hey. for squeezing year it me has in by service I at approved in. be Dallas. the XXXX on

Ashburn? of rents as I related to seeing high levels you impacts that So where in start front, the think additional And you do additional seeing markets you terms able submarkets any or think guess development you’re when And be on that in because $XXX. as do might mentioned you’re that you’re activity the market? pricing spillover to I tightness you seeing other just in think of

at of or rents Ashburn lot are $XX think I a $XX. rolling in your

on expect forward? if across have any on just market going the seen you Thank color what that you’ve wondering So you. and spreads you re-leasing what

the Thanks region little to Eric. good power news sorting And on that remarks. region we in bit prepared ways the the bring XXXX. to powers touched that are the is be out this by a The in incremental

move to region had becomes be us much to the – And which our keep freely. record more I to providers quarter, and of going there, deliver that see queue having then is rational the providing do – and to market. more of it’s a working power from to that in I power I think track a you’ll fortune with commitments, of think now history ourselves think top to our be on Between fantastic. we worked customer local good able all is last going when

do this We will on some development through bring to growth some we churn. now as market XXXX incremental that well between capacity believe in called as and able be

be have go of resources and in all capacity. able are not may to suites that power some at using customers spare excess to the We we be working terms sites, through their

our some of support we’ll customers years. able fine customers. hyperscale Certainly Digital be the our point colocation customers Ashburn in believe have So our to I and quantity, I coming with don’t will shelves at in a able grow Digital to will bearing, our be and we the be but don’t of

leasing certainly capacity, to that we share. probably with finer a as then point get we’ll on in quantities in the be happy And lockstep

don’t Virginia – always packing effect, Ashburn we’ve front spillover the seen leaving In auction. and markets greatest there’s to see terms spillover is I real. would non-Northern think of Loudoun that’s County spillover a the to point. some But of is pinch market their wagons spillover But to I center say potential the at of think will continue don’t the Manassas, this. I I anyone – effect. due but

in its customers. its I the think and velocity years, criticality the to it’s momentum building out industry escape center has data terms called been and of for

Thank Great. you.

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

start Thank year. to you, a Andrea. the Digital Realty is off strong to

by logo with Our category signings, our our results resonating the strong continued in record confirmed is X-X interconnection demonstrate that and additions. new customers strength value megawatt which proposition was

taking expect we year and will continue our accelerate progress. our operating the are We that through steps will momentum the further

confident also and in We this front with the developments plan, you forward further appropriate our at I to remain updating funding time. look on

crossroads this The is and the from network, data the very meeting are of The the XXXX to partners bring year Marketplace at We excited our gain and event. community digital bring place. XXth May to together our entire together XXth strategies world virtually around digital and life. theme the customers to world, inspiration digital Live will on come their realty

can register marketplacelive.com. at Please us, join you

I’d and like and the team for a Realty help today world to hard thank running. thank everyone to Digital say and digital special keep you joining to Thank working us exceptional you. our

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