Q2 2024 Digital Realty Trust Inc Earnings Call

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Operator: Good day, and welcome to the Digital Realty Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode.

Speaker Change: Good day and welcome to the Digital Realty Second Quarter 2024 Earnings Conference Call.

Operator: Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then 1 on the telephone keypad.

Speaker Change: All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key, followed by zero.

Speaker Change: After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then 1 on your telephone keypad. To withdraw your question please press star then 2. Please note this event is being recorded.

Operator: To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Jordan Sadler. Please go ahead.

Speaker Change: I would now like to turn the conference over to Mr. Jordan Sadler. Please go ahead. Thank you, Operator, and welcome everyone to Digital Realty's second quarter 2024 earnings conference call.

Jordan Sadler: Thank you, operator, and welcome everyone to Digital Realty's second quarter 2024 earnings conference. Joining me on today's call are President and CEO Andy Power and CFO Matt Mercier. Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and Chief Revenue Officer Colin McLean are also on the call and will be available for Q&A. Management will be making forward-looking statements, including guidance and underlying assumptions, on today's call. Such statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially.

Speaker Change: Joining me on today's call are President and CEO Andy Power and CFO Matt Mercier, Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and Chief Revenue Officer Colin McLean are also on the call and will be available for Q&A.

Speaker Change: Management will be making forward-looking statements including guidance and underlying assumptions on today's call. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially.

Jordan Sadler: For a further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain non-GAAP financial information. Reconciliations to net income are included in the supplemental package furnished to the FTC and are available on our website.

Speaker Change: For a further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain non-GAAP financial information. Reconciliations to net income are included in the supplemental package first to the SEC and available on our website.

Jordan Sadler: Before I turn the call over to Andy, let me offer a few key takeaways from our second quarter. First, we continue to execute within a very favorable demand environment, with $164 million of new leasing executed in the quarter. Again, marking one of the top quarters in our history, which together with last quarter's record leasing drove a record first half of the year. Second, our operating momentum continued through the second quarter as a record level of commencements translated into meaningful improvement in both total and same capital occupancy, while cash-releasing spreads remained firmly positive, and continued growth and cross-connects drove interconnection revenue to a new record in the core, and Third.

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

Andy: First, we continue to execute within a very favorable demand environment with $164 million of new leasing executed in the quarter, again, marking one of the top quarters in our history, which together with last quarter's record leasing drove a record first half of the year.

Andy: Second, our operating momentum continued through the second quarter as a record level of commencements translated into meaningful improvement in both total and same capital occupancy.

Andy: All cash-releasing spreads remained firmly positive and continued growth, and cross-connects drove interconnection revenue to a new record in the quarter.

Sarah Roots: and Sarah Roots.

Speaker Change: Through capital recycling and demand-driven equity issuance in the quarter, we reduced our leverage to 5.3 times at quarter end, below our long-term target level, helping to position digital realty to the opportunity that we continue to see in front of us.

Jordan Sadler: Through capital recycling and demand-driven equity issuance in the quarter, we reduced our leverage to 5.3 times at quarter end, below our long-term target level, helping to position digital realty for the opportunity that we continue to see in front of us. With that, I'd like to turn the call over to our President and CEO, Andy. Thanks, Jordan. Thanks to everyone for joining us. The momentum we experienced in the first quarter continued in the second quarter.

Sarah Roots: With that, I'd like to turn the call over to our President and CEO , Andy Power.

Andrew Power: Thanks, Jordan. Thanks to everyone for joining our call.

Andrew Power: The momentum we experienced in the first quarter continued in the second quarter.

Andrew Power: In the first half of 2024, our new leasing was up over 100% from the activity we saw in the first half of 2023, with a strong and steady contribution from our 0 to 1 megawatt plus interconnection cycle. Demand for data center capacity remains as strong as we've ever seen, especially for larger capacity blocks in our core market. We are well positioned to take advantage of this favorable demand environment, given our track record of execution across six continents.

Speaker Change: In the first half of 2024, our new leasing was up over 100% from the activity we saw in the first half of 2023.

Speaker Change: With a strong and steady contribution from our zero to one megawatt plus interconnection segment.

Speaker Change: Demand for data center capacity remains as strong as we've ever seen.

Speaker Change: especially for larger capacity blocks in our core markets.

Operator: We are well-positioned to take advantage of this favorable demand environment, given our track record of execution across six continents, a robust land bank and shelf capacity that could support three plus gigawatts of incremental development, reduce leverage, and are growing in a diverse array of capable partners.

Speaker Change: We are well positioned to take advantage of this favorable demand environment, given our track record of execution across six continents.

Andrew Power: A robust land bank and shelf capacity that could support three plus gigawatts of incremental development. Additionally, reduced leverage and our growing and diverse array of capital partners. During the second quarter, we remained focused on our key priorities.

Speaker Change: A robust land bank and shelf capacity that could support 3 plus gigawatts of incremental development, reduce leverage, and our growing and diverse array of capital partners.

Operator: During the second quarter, we remain focused on our key priorities. We signed a 164 million newbies in the second quarter, which excluded another 16 million of bookings within one of our newest hydroscaled private capital metrics. While bookings in a greater than a bagelot category, once again the primary driver, there was no confirmation from our largest hydroscaled market Northern Virginia, as Dallas led away in the second quarter. Importantly, we posted one of our strongest quarters ever in the zero to one bagelot plus interfinition segment, with the record new loadings and near record bookings in each of the zero to one bagelot and interfinition category.

Speaker Change: During the second quarter, we remained focused on our key priorities.

Speaker Change: We signed $164 million of new leasing in the second quarter, which excluded another $16 million of bookings within one of our newest hyperscale private capital ventures.

Andrew Power: We signed $164 million of new leasing in the second quarter, which excluded another $16 million of bookings within one of our newest hyperscale private capital ventures. All bookings in the greater-than-a-megawatt category were once again the primary driver, and there was no contribution from our largest hyperscale market, Northern Virginia.

Speaker Change: While bookings in the greater-than-a-megawatt category were once again the primary driver, there was no contribution from our largest hyperscale market, Northern Virginia, as Dallas led the way in the second quarter.

Andrew Power: As Dallas led the way in the second quarter, Importantly, we posted one of our strongest quarters ever in the zero to one megawatt plus interconnection segment, with record new logos and new record bookings in each of the zero to one megawatt and interconnection categories. This leasing strength is a positive reflection of the value that our 5,000 and growing base of customers realize from our full-spectrum product strategy. We also delivered strong operating results, with 13% data center revenue growth year over year performance for the capital recycling activity completed over the last year.

Speaker Change: Importantly, we posted one of our strongest quarters ever in the zero to one megawatt plus interconnection segment.

Speaker Change: with record new logos and near record bookings in each of the 0 to 1 megawatt and interconnection categories.

Operator: This leasing strength is a positive reflection of the value that our 5,000 and growing base of customers realize from our full spectrum product strategy. We also deliver strong operating results, with 13% data center revenue growth in our v-year, pro-former for the capital recycling activity completed over the last year. In addition, we have enjoyed healthy growth in recurring v-income associated with our new hyperscaled ventures. In the first half, v-income was up 26% over the first half of 2023, primarily reflecting the formation of almost 10 billion of institutional product capital ventures over the last year. And we would expect this wide out to continue to be able to momentum.

Speaker Change: This leasing strength is a positive reflection of the value that our 5,000 and growing base of customers realize from our full-spectrum product strategy.

Speaker Change: We also delivered strong operating results, with 13% data center revenue growth year-over-year performer for the capital recycling activity completed over the last year.

Andrew Power: In addition, we've enjoyed healthy growth in recurring fee income. Associated with our new hyperscale venture, and first half fee income was up 26% over the first half of 2023, primarily reflecting the formation of almost 10 billion in institutional private capital ventures over the last year. And we would expect this wide item to continue to gather momentum, with record commencements in the second quarter and a healthy backlog of favorably priced leases ready to commence in the second half.

Speaker Change: In addition, we have enjoyed healthy growth in recurring fee income.

Speaker Change: Associated with our new Hyperscale Ventures

Speaker Change: And the first half fee income was up 26% over the first half of 2023, primarily reflecting the formation of almost $10 billion of institutional private capital ventures over the last year.

Speaker Change: And we would expect this wide item to continue to gather momentum.

Operator: With the record commences in the second quarter and the healthy backbone of figurably priced leases ready to commence in the second half, we are well positioned for accelerating top line and bottom line growth for the remainder of 2024 and into 2025.

Speaker Change: With record commencements in the second quarter and a healthy backlog of favorably priced leases ready to commence in the second half, we are well positioned for accelerating top-line and bottom-line growth for the remainder of 2024 and into 2025.

Andrew Power: We are well-positioned for accelerating top-line and bottom-line growth for the remainder of 2024 and into 2025. To boost revenue at the quarter end, we also strengthened our value proposition in Europe through our entrance into the slough sub-market of London with the acquisition of a densely connected enterprise data center campus, which we expect to be highly complementary to our existing co-location capabilities in the city and the docks. A new campus supports an existing community of more than 150 customers, utilizing over 2,000 cross- Consistent with our key priorities, we continue to innovate and integrate, as we unveiled our HD Column 2.0 offering in the second quarter.

Operator: To have screened a quarter in, we also strengthened our value proposition in Europe. There were entrants into the Slaw; some work in a one minute. With the acquisition of a densely connected enterprise data center campus, which we expect to be highly complementary toward existing co-location capabilities in the city and the documents. The new campus supports an existing community of more than 150 customers utilizing over 2,000 cross-connects. To sit with our P priorities, we continue to innovate and integrate. As an unveil, our HD column 2 out of offering in the second quarter. With advanced high density deployment support for liquid chip cooling across 170 of our data centers globally.

Speaker Change: To upscrew the quarter end, we also strengthened our value proposition in Europe through our entrance into the Slough sub-market of London.

Speaker Change: with the acquisition of a densely connected enterprise data center campus, which we expect to be highly complementary to our existing co-location capabilities in the city and the docklands.

Speaker Change: The new campus supports an existing community of more than 150 customers, utilizing over 2,000 cross-connects.

Speaker Change: Consistent with our key priorities, we continue to innovate and integrate, as we unveiled our HD Column 2.0 offering in the second quarter.

Speaker Change: With advanced high-density deployment support for liquid-to-chip cooling across 170 of our data centers globally.

Andrew Power: In addition, just last week, we announced the deployment of a new Microsoft Azure ExpressRoute Cloud OnRamp at our Dallas campus, along with the launch of the new Azure ExpressRoute Metro service in the Amsterdam and Zurich markets.

Operator: In addition, just last week we announced the deployment of a new Microsoft Azure ExpressRoute cloud on rep at our Dallas campus. Along with the launch of the new Azure ExpressRoute mental service in the afternoon in Zurich, more.

Speaker Change: In addition, just last week we announced the deployment of a new Microsoft Azure ExpressRoute Cloud OnRamp at our Dallas campus.

Speaker Change: along with the launch of the new Azure ExpressRoute Metro service in the Amsterdam and Zurich market.

Andrew Power: We also bolstered our balance sheet and significantly diversified our capital sources, availing digital realty of more than $10 billion of private capital over the past year through our new hyperscale ventures and non-core dispositions. During the quarter, we expanded our existing Chicago Hyperscale Venture with the sale of a 75% interest in CH2, the remaining stabilized data center on our Elk Grove campus. We also sold an additional 24.9% interest in a data center in Frankfurt to DigitalCoreReach, increasing their total position in the campus to just under 50%.

Speaker Change: We also bolster our balance sheet and significantly diversify our capital sources.

Speaker Change: availing digital realty of more than 10 billion of private capital over the past year through our new hyperscale ventures and non-core dispositions.

Speaker Change: During the quarter we expanded our existing Chicago hyperscale venture with a sale of a 75% interest in CH2, the remaining stabilized data center on our Elk Grove campus.

Speaker Change: We also sold an additional 24.9% interest in a data center in Frankfurt to Digital Quarry.

Speaker Change: increasing their total position in the campus to just under 50 percent.

Andrew Power: These two transactions together raised over half a billion dollars. Finally, we have raised approximately $2 billion of equity since our last earnings call, including a $1.7 billion follow-up offering in early May and proceeds raised under our ATMs. These transactions, together with the others of the past year, have positioned our balance sheet to capitalize on this unique environment and construct the capacity that our customers demand. AI innovation is reshaping the global data center landscape.

Speaker Change: These two transactions together raised over half a billion dollars.

Speaker Change: Finally, we raised approximately $2 billion of equities since our last earnest call, including a $1.7 billion follow-up offering in early May, and proceeds raised under our ATM.

Speaker Change: These transactions, together with the others of the past year, have positioned our balance sheet to capitalize on this unique environment and construct the capacity that our customers demand.

Speaker Change: Artificial intelligence innovation is reshaping the global data center landscape.

Andrew Power: As new applications are developed and proliferate across industries and around the world, AI is driving an incremental wave of demand for robust computing infrastructure. According to Gartner, global spending on public cloud services is projected to grow over 20% to reach $675 billion in 2024, and is forecast to grow another 22% in 2025, with AI-related workloads driving a significant portion of this growth. Digital transformation, the cloud, and AI are fueling demand for data center capacity worldwide.

Speaker Change: As new applications are developed and proliferate across industries and around the world,

Speaker Change: AI is driving an incremental wave of demand for robust computing infrastructure.

Speaker Change: According to Gartner, global spending on public cloud services is projected to grow over 20% to reach $675 billion in 2024.

Speaker Change: It is forecast to grow another 22% in 2025, with AI-related workloads driving a significant portion of this growth.

Speaker Change: Digital transformation, cloud, and AI are fueling demand for data center capacity worldwide.

Andrew Power: Traditional data centers were already being pushed to their limits by demand for cloud and digital transformation, where demand for AI-oriented data center infrastructure is being accommodated in upgraded suites in existing facilities and in newly built facilities. These AI workloads are taking place on specialized hardware with massive parallel processing capabilities and lightning-fast data transfer speeds.

Speaker Change: Traditional data centers were already being pushed to their limits on demand for cloud and digital transformation.

Speaker Change: Where the demand for AI-oriented data center infrastructure is being accommodated in upgraded suites in our existing facilities and in newly built facilities.

Speaker Change: These AI workloads are taking place on specialized hardware with massive parallel processing capabilities and lightning-fast data transfer speeds.

Andrew Power: Fortunately, Digital Realty's modular data center design can accommodate these evolving requirements. The growth in demand is global. We're seeing strong demand across our North American metros first, but it is spreading beyond with interest in locations like London, Amsterdam, and Paris, and Singapore, and Tokyo, and Haiti. The global footprint is well suited to capture this growing demand, whether it be for major cloud service providers adding to an availability zone, a major enterprise digitizing their business processes, or an AI model being trained or put into production.

Speaker Change: Fortunately, Digital Realty's modular data center design can accommodate these evolving requirements.

Speaker Change: The growth in demand is global.

Speaker Change: We're seeing strong demand across our North American metros first, but it is spreading beyond with interest in locations like London, Amsterdam, and Paris, and Himalaya, and Singapore and Tokyo and APEC.

Speaker Change: Our global footprint is well suited to capture this growing demand, whether it be for major cloud service providers adding to an availability zone, a major enterprise digitizing their business processes, or an AI model being trained or put into production.

Andrew Power: However, this exponential growth in data center demand is not without its challenges. The environmental impact of these energy-intensive facilities is growing alongside the scaling of user requirements. According to the IEA, data centers consumed almost 2% of global electricity in 2022, a figure that could double by 2026, absent significant efficiency improvements.

Speaker Change: However, this exponential growth in data center demand is not without its challenges.

Speaker Change: The environmental impact of these energy intensive facilities is growing alongside the scaling of user requirements.

Speaker Change: According to the IEA, data centers consumed almost 2% of global electricity in 2022, a figure that could double by 2026, absent significant efficiency improvements.

Operator: I will touch on Digital Realty's latest sustainability highlights in a moment. As we look to the future, the interplay between AI advancements and data center of a division will continue to shape the global technology landscape. IDC predicts that by 2020-7, worldwide spending of digital transformation will be nearly 4 trillion, driven by AI, further considering the demand for data center infrastructure. We believe that the providers who can officially scale their capacity while addressing sustainability concerns will be best conditioned to benefit from these three key drivers: Digital Transformation, Cloud, and AI in the years to come. Customers and partners are recognizing the value that Digital Realty can bring to their applications around the world.

Andrew Power: I will touch on digital realty's latest sustainability highlights in a moment. As we look to the future, the interplay between AI advancements and data center evolution will continue to shape the global technology landscape.

Speaker Change: I will touch on Digital Realty's latest sustainability highlights in a moment.

Speaker Change: As we look to the future, the interplay between AI advancements and data center evolution will continue to shape the global technology landscape.

Andrew Power: IDC predicts that by 2027, worldwide spending on digital transformation will reach nearly $4 trillion, driven by AI, further accelerating the demand for data center infrastructure. We believe that providers who can officially scale their capacity while addressing sustainability concerns will be best positioned to benefit from these three key drivers, digital transformation, cloud, and AI, in the years to come. Customers and partners are recognizing the value that digital reality can bring to their applications around the world. During the second quarter, we added 148 new logos, marking a new quarterly record.

Speaker Change: IDC predicts that by 2027, worldwide spending on digital transformation will reach nearly $4 trillion, driven by AI, further accelerating the demand for data center infrastructure.

Speaker Change: We believe that the providers who can officially scale their capacity while addressing sustainability concerns will be best positioned to benefit from these three key drivers, digital transformation, cloud, and AI, in the years to come.

Speaker Change: Customers and partners are recognizing the value that digital realty can bring to their applications around the world.

Operator: During the second quarter, we added 148 new levels, marking a new quarterly record. A growing number of these new levels are being sourced by our partners, who efficiently expand their sales team to reach into enterprises and around the world. A win this quarter includes a global 2000 advanced engineering and research enterprise developing a private AI sandbox on platform digital to enable experimentation and development by federal agencies and brought to us the one of our large connectivity partners, Lumen Technologies. Another partner put a new logo that is an AI-enabled SaaS provider, repatriating all public cloud to save costs and enable growth.

Speaker Change: During the second quarter, we added 148 new logos, marking a new quarterly record.

Andrew Power: A growing number of these new goals are being sourced by our partners, who officially expand our sales team to reach enterprises around the world. What's this quarter include? A Global 2000 advanced engineering and research enterprise developing a private AI sandbox on platform digital to enable experimentation and development by federal agencies and brought to us by one of our large connectivity partners, Lumen Technologies. Another partner bought a new logo that is an AI-enabled SaaS provider repatriating all public cloud to save costs and enable growth.

Speaker Change: A growing number of these new roles are being sourced by our partners, who officially expand our sales team to reach into enterprises and around the world.

Speaker Change: Or when's this quarter include?

Speaker Change: A Global 2000 advanced engineering and research enterprise developing a private AI sandbox on platform digital to enable experimentation and development by federal agencies and brought to us by one of our large connectivity partners Lumen Technologies.

Speaker Change: Another partner brought a new logo that is an AI-enabled SaaS provider, repatriating all public cloud to save costs and enable growth.

Operator: That same partner was also assisting two large financial institutions to increase their capacity on platform digital in the impact and North America. And yet another example of our growing partnerships, an AI SaaS provider and recognize later a natural language speech synthesis is going very commitment to platform digital with an expansion of current AI and workforce where proximity is the driving requirement. A global 2000 manufacturer is we are protecting their network on platform digital with a visual hub to improve efficiency, lower their network costs and implement controls while eliminating the capital costs of maintaining their own facilities.

Andrew Power: That same partner was also assisting two large financial institutions to increase their capacity on platform digital in APAC and North America. And, yet another example of our growing partnership, an AI SaaS provider and recognized leader in natural language speech synthesis is growing their commitment to platform digital with an expansion of current AI workloads where proximity is the driving requirement. A Global 2000 manufacturer is re-architecting their network on platform digital with a regional hub to improve efficiency.

Speaker Change: That same partner was also assisting two large financial institutions to increase their capacity on platform digital in APAC and North America.

Speaker Change: And yet another example of our growing partnerships.

Speaker Change: An AI SaaS provider and recognized leader in natural language speech synthesis is growing their commitment to platform digital with an expansion of current AI workloads where proximity is the driving requirement.

Speaker Change: A Global 2000 manufacturer is re-architecting their network on Platform Digital with a regional hub to improve efficiency, lower their network costs, and implement controls while eliminating the capital costs of maintaining their own facilities.

Andrew Power: Lower their network costs and implement controls while limiting the capital costs of maintaining their own facilities, and two leading financial services firms are both leveraging platform digital to extend their respective virtual desktop infrastructure environment to improve performance and user experience across the North American and Malia employee base. For Turning It Open, Matt. I'd like to touch on our ESG progress during the second quarter. We continue to make meaningful progress on ESG performance. For example, we were recognized by Time and Statista as one of the world's most sustainable companies in 2024.

Operator: And to the leading financial services firms for both leveraging platform digital to extend their respective virtual desktop infrastructure environments to improve performance and user experience across the North American and the Mayo employee base.

Speaker Change: and two leading financial services firms are both leveraging platform digital to extend their respective virtual desktop infrastructure environments.

Speaker Change: to improve performance and user experience.

Speaker Change: across the North American and Malia employee base.

Operator: Before turning it off the map, I'd like to touch on our ESC progress during the second quarter. We continue to make meaningful progress on ESC performance. We are recognized by Time and statistic as one of the world's most sustainable companies of 2024. We also released our annual ESC report in June, highlighting our ongoing efforts to develop and operate responsibly. As described in our ESC report, we further increased our renewable energy supplies, with 152 data centers now mass with 100% renewable energy. We improved water efficiency and expand the use of recycled water, with a count of 43% of our total water consumption last year.

Speaker Change: Before turning it over to Matt, I'd like to touch on our ESG progress during the second quarter.

Speaker Change: We continue to make meaningful progress on ESG performance. We were recognized by Time and Statista as one of the world's most sustainable companies of 2024.

Andrew Power: We also released our annual ESG report in June, highlighting our ongoing efforts to develop and operate responsibly. As described in our ESG report, we further increased our renewable energy supplies, with 152 data centers now matched with 100% renewable energy. We improved water efficiency and expanded the use of recycled water, which accounted for 43% of our total water consumption last year.

Speaker Change: We also released our annual ESG report in June , highlighting our ongoing efforts to develop and operate responsibly.

Matt: As described in our ESG report, we further increased our renewable energy supplies with 152 data centers now matched with 100% renewable energy.

Matt: We improved water efficiency and expanded the use of recycled water, which accounted for 43% of our total water consumption last year.

Operator: We also launched a new supplier engagement program to drive sustainability and decarbonization through our supply chain. We've made committed to minimizing digital reality impact on the environment, while delivering sustainable growth for all of our stakeholders.

Matt: We also launched a new supplier engagement program to drive sustainability and decarbonization through our supply chain.

Matthew Mercier: We also launched a new supplier engagement program to drive sustainability and decarbonization through our supply chain. We remain committed to minimizing digital realty's impact on the environment while delivering sustainable growth for all of our state. With that, I'm pleased to turn the call over to our CFO, Matt Mercier. Thank you, Andy.

Matt: We remain committed to minimizing digital realty's impact on the environment while delivering sustainable growth for all of our stakeholders.

Matthew Mercier: With that, I'm pleased to turn the poll over to our CFO, Matt Perceir. Thank you, Eddie. Let me jump right into our second quarter results. We signed 164 million new leases in the second quarter, with two thirds of that falling into the greater than megawatt category, the majority of which landed in the Americas. With healthy contributions from both the Mia and an APAC, not to be overlooked; however, with the 40 million of zero to one megawatt leasing and a standout 14 million of interconnection bookings. Our fourth consecutive quarter, exceeding 50 million in our zero to one megawatt-plus interconnection segment.

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

Matthew Mercier: Let me jump right into our second quarter results. We signed $164 million in new leases in the second quarter, with two-thirds of that falling into the greater-than-megawatt category, the majority of which landed in the United States, with healthy contributions from both BMEA and APEC. Not to be overlooked, however, with $40 million of zero-to-one megawatt leasing and a standout $14 million of interconnection. This was our fourth consecutive quarter exceeding $50 million in our zero to one megawatt plus interconnection segment.

Matthew Mercier: Thank you, Andy. Let me jump right into our second quarter results.

Matthew Mercier: We signed $164 million in new leases in the second quarter, with two-thirds of that falling into the greater-than-megawatt category, the majority of which landed in the Americas, with healthy contributions from both EMEA and APEC.

Speaker Change: Not to be overlooked, however, with the $40 million of zero-to-one megawatt leasing and a standout $14 million of interconnection bookings.

Speaker Change: Our fourth consecutive quarter exceeding $50 million in our zero-to-one megawatt plus interconnection segment.

Matthew Mercier: Turning to our backlog, we commenced a record $176 million of new leases this quarter, which was largely balanced by the strong second quarter leasing. As such, the $527 million backlog of signed but not yet commenced leases moderated by only 2% from last quarter's peak and remains robust at more than 90% of our total revenue guidance for full year 2024. Looking ahead, we have over $175 million scheduled to commence through the remainder of this year, with over $230 million already scheduled to commence next. During the second quarter, we signed $215 million in renewal leases at a 4% increase on a cash basis, driving year-to-date renewal spreads to 8.2%.

Matthew Mercier: Turning to our backlog, we commenced a record 176 million of new leases this quarter, which was largely balanced by the strong second quarter leasing. Assess the 527 million backlog of sign and not yet commenced leases, moderated by only 2% from last quarter's peak, and remains robust and more than 9% of our total revenue guidance for full year 2024. Looking ahead, we have over 175 million scheduled to commence through the remainder of this year, with over 230 million already scheduled to commence next year. During the second quarter, we signed 215 million of renewal leases at a 4% increase on a cash basis, driving near to 8 renewal spreads to 8.2%.

Speaker Change: Turning to our backlog, we commenced a record $176 million of new leases this quarter, which was largely balanced by the strong second quarter leasing.

Speaker Change: As such, the $527 million backlog of signed but not yet commenced leases moderated by only 2% from last quarter's peak and remains robust at more than 9% of our total revenue guidance for full year 2024.

Speaker Change: Looking ahead, we have over $175 million scheduled to commence through the remainder of this year, with over $230 million already scheduled to commence next year.

Speaker Change: During the second quarter, we signed $215 million of renewal leases at a 4% increase on a cash basis, driving year-to-date renewal spreads to 8.2%.

Matthew Mercier: Releasing spreads were once again positive across products and regions. Last quarter, we noted that the underlying renewal spread after stripping out two outliers was 3.4%. Our cash renewal spread in the zero to one megawatt segment were up 3.8% in the second quarter, while the greater than a megawatt segment was up 3.9%. As a reminder, the zero and megawatt segment is the primary driver of our overall releasing spreads, given the heavier weight of lease expiration in this category, which are typically shorter torn leases with inflationary or better escalators. The zero to one megawatt deals renew reliably and predictably, making them track closer market over time.

Matthew Mercier: Releasing spreads were once again positive across products, and Last quarter, we noted that the underlying renewal spread, after stripping out two outliers, was 3.4%. Cash Renewal Spreads in the 0-1 MW segment were up 3.8% in the second quarter, while the greater-than-a-MW segment was up 3.9%. As a reminder, the 0 to 1 megawatt segment is the primary driver of our overall release spreads, given the heavier weighting of lease expirations in this category, which are typically shorter term leases with inflationary or better escalation.

Speaker Change: Releasing spreads were once again positive across products and regions.

Speaker Change: Last quarter, we noted that the underlying renewal spread after stripping out two outliers was 3.4%.

Speaker Change: Our cash renewal spread in the 0 to 1 megawatt segment were up 3.8% in the second quarter, while the greater than the megawatt segment was up 3.9%.

Speaker Change: As a reminder, the zero and megawatt segment is the primary driver of our overall releasing spreads, given the heavier weighting of lease expirations in this category, which are typically shorter term leases with inflationary or better escalators.

Matthew Mercier: Transcripts provided by Transcription Outsourcing, LLC. On the greater-than-a-megawatt side, renewals reflected the strong pricing environment, with leases renewed at $159 per kilowatt compared to the $133 per kilowatt achieved on greater-than-a-megawatt renewals last quarter. The key difference between the quarters was the rate on the expiring lease. This quarter, leases in this segment For the quarter, churn remained low and well controlled at 1.6%, and our largest termination was immediately backfilled at an improved rate in terms of earnings growth. We reported second quarter core FFO of $1.65 per share.

Speaker Change: The zero-to-one megawatt deals renew reliably and predictably, making them track closer market over time, thereby reducing the outsized movements that can come with larger or longer-term lease renewals.

Matthew Mercier: Thereby reducing the outside movements that can come with larger or longer-term lease renewals. On the greater than a megawatt side, renewals reflected the strong pricing environment, with leases renewed at $159 per kilowatt compared to the $133 per kilowatt achieved. On greater than a megawatt renewal last quarter. The key difference between the quarters was the rate on the expiring leases. This quarter, leases in this segment expired at 153 per KW, while last quarter's leases expired at an average of 112 per kilowatt. For the quarter, churn remained low and well controlled at 1.6% in our largest termination, with immediately backfill at an improved rate.

Speaker Change: On the greater-than-a-megawatt side, renewals reflected the strong pricing environment, with leases renewed at $159 per kilowatt compared to the $133 per kilowatt achieved on greater-than-a-megawatt renewals last quarter.

Speaker Change: The key difference between the quarters was the rate on the expiring leases.

Speaker Change: This quarter, leases in this segment expired at $153 per kW, while last quarter's leases expired at an average of $112 per kW.

Speaker Change: For the quarter, churn remained low and well controlled at 1.6%, and our largest termination was immediately backfilled at an improved rate.

Matthew Mercier: In terms of earnings growth, we reported second quarter core FFO of a dollar 65 per share, reflecting continued healthy organic operating results, partly balanced by the impact of the meaningful delivery team and capital rating activity executed over the course of the last year. Revenue growth in the quarter was tempered by the decline in utility expense reimbursements, a comparison that is likely to persist throughout this year, given that decline in electricity rates in immediate year over year, along with the impact of substantial capital recycling activity. Despite the de-leverageing headwinds, rental revenue plus interconnection revenues were up 5% on a combined basis year over year.

Speaker Change: In terms of earnings growth,

Speaker Change: We reported second quarter core FFO of $1.65 per share, reflecting continued healthy organic operating results, partly balanced by the impact of the meaningful deleveraging and capital raising activity executed over the course of the last year.

Matthew Mercier: Reflecting continued healthy organic operating results, partly balanced by the impact of the meaningful deleveraging and capital raising activity executed over the course of the last year. However, revenue growth in the quarter was tempered by the decline in utility expense reimbursements. A comparison that is likely to persist throughout this year, given the decline in electricity rates in the immediate year-over-year, along with the impact of substantial capital recycling activity. Despite the deleveraging headwinds, rental revenue plus interconnection revenues were up 5% on a combined basis year over year. Justin Ibiza also increased 5% year-over-year through the first half and remains well on track to meet our 2024 guidance, pro forma for the capital recycling completed since last July.

Speaker Change: Revenue growth in the quarter was tempered by the decline in utility expense reimbursements, a comparison that is likely to persist throughout this year, given the decline in electricity rates in the media year-over-year, along with the impact of substantial capital recycling activity.

Speaker Change: Despite the deleveraging headwinds,

Speaker Change: Rental revenue plus interconnection revenues were up 5% on a combined basis year over year.

Matthew Mercier: Adjusted EBITDA also increased 5% year over year through the first half and remains well-intracted to meet our 2024 guidance. Proformable for the capital recycling completed since last July, rental plus interconnection revenue and adjusted EBITDA rub by 13% and 14% year over year, respectively, in the second quarter. Dabilized same capital operating performance, so continued growth in the second quarter, with the area of your cash and I have 2% as 3.6% growth in data center revenue was offset by ketchup and rental property operating costs, which were flat last quarter. Year to date, same capital cash on a line has increased by 3.5%.

Speaker Change: Adjusted EBITDA also increased 5% year-over-year.

Speaker Change: through the first half and remains well on track to meet our 2024 guidance.

Speaker Change: Proforma for the capital recycling completed since last July .

Matthew Mercier: Rental plus interconnection revenue and adjusted EBITDA grew by 13% and 14% year-over-year respectively in the second quarter. Stabilized, same capital operating performance saw continued growth in the second quarter, year-over-year cash and OI up 2% as 3.6% growth in data center revenue was offset by catch-up and rental property operating costs, which were flat last quarter. Year-to-date, SANE Capital Cash NOI has increased by 3.5%

Speaker Change: Rental plus interconnection revenue and adjusted EBITDA grew by 13% and 14% year-over-year, respectively, in the second quarter.

Speaker Change: Stabilized, same capital, operating performance.

Speaker Change: saw continued growth in the second quarter, with year-over-year cash and OI up 2%, as 3.6% growth in data center revenue was offset by catch-up and rental property operating costs, which were flat last quarter.

Speaker Change: Year-to-date, SANE Capital Cash NOI has increased by 3.5%.

Matthew Mercier: As we have previously highlighted, same capital in a line growth is expected to be impacted by nearly 200 basis points of power margin headwinds year over year, given the elevated utility prices in the year in 2023. Moving on to our investment activity, we spent 532 million on consolidated development in the second quarter, plus another 90 million for our share of unconsolidated Jamie spending. We delivered 72 megawatts of new capacity across the globe for our customers in the order, while we back built the pipeline with 71 megawatts of new starts. The blended average yield on our overall development pipeline moderated 20 basis points sequentially to 10.4% as a result of a market mix shift of completion and starts in North America during the quarter.

Matthew Mercier: As we've previously highlighted, St. Capital NOI growth is expected to be impacted by nearly 200 basis points of power margin headwinds year-over-year, given the elevated utility prices in EMEA in 2023. Moving on to our investment activity, we spent $532 million on consolidated development in the second quarter, plus another $90 million for our share of unconsolidated JV spending.

Speaker Change: As we have previously highlighted, SAIT's capital NOI growth is expected to be impacted by nearly 200 basis points of power margin headwinds year-over-year, given the elevated utility prices in EMEA in 2023.

Speaker Change: Moving on to our investment activity, we spent $532 million on consolidated development in the second quarter, plus another $90 million for our share of unconsolidated JV spending.

Matthew Mercier: We delivered 72 megawatts of new capacity across the globe for our customers in the quarter. Additionally, we backfilled the pipeline with 71 megawatts of new start. The blended average yield on our overall development pipeline moderated 20 basis points sequentially to 10.4% as a result of a marked mix shift of completions and starts in North America during the quarter. In the first half of the year, we spent a bit over a billion dollars on developing capital, tracking closely towards our full-year guidance, as the second half should see a ramp from newly commenced projects along with the typical seasonal uptick.

Speaker Change: We delivered 72 megawatts of new capacity across the globe for our customers in the quarter, while we backfilled the pipeline with 71 megawatts of new starts.

Speaker Change: The blended average yield on our overall development pipeline moderated 20 basis points sequentially to 10.4% as a result of a marked mixed shift of completions and starts in North America during the quarter.

Matthew Mercier: In the first half of the year, we spent a bit over a billion dollars in developing capex, tracking closely towards our full year guidance. As the second half should see a range from newly commenced projects, along with the typical seasonal uplift.

Speaker Change: In the first half of the year, we spent a bit over a billion dollars in developing CapEx.

Speaker Change: Tracking closely towards our full year guidance.

Speaker Change: As the second half should see a ramp from newly commenced projects along with a typical seasonal uplift.

Matthew Mercier: Turning to the balance sheet. We continue to strengthen our balance sheet in the second quarter with the closing of the two transactions in April that we disclosed during last quarter's earnings report and was referenced earlier by Andy. Together, these two transactions raised just over $500 million of gross proceeds.

Matthew Mercier: Turning to the balance sheet. We continued to strengthen our balance sheet in the second quarter with the closing of the two transactions in April that we disclosed during last quarter's earnings report and was referenced earlier by Andy. Together, these two transactions raised just over 500 million of drug proceeds. Additionally, since our last earnings report, we sold 14.7 million shares, including a 12.1 million share follow-on offering in early May and incremental ATM issuance raising two billion of net pros.

Speaker Change: Turning to the balance sheet.

Speaker Change: We continue to strengthen our balance sheet in the second quarter with the closing of the two transactions in April that we disclosed during last quarter's earnings report and was referenced earlier by Andy.

Andrew Power: Together, these two transactions raised just over $500 million of gross proceeds.

Matthew Mercier: Additionally, since our last earnings report, we sold 14.7 million shares, including a 12.1 million share follow-on offering in early May and incremental ATM issuance, raising $2 billion of net profits while using cash on hand to pay off a 600 million euro bond that matured in April and a 250 million sterling bond that matured last Friday. At the end of the second quarter, we had more than $4 billion of total liquidity, and our net debt to EBITDA ratio fell to 5.3 times, which is below our long-term target.

Speaker Change: Additionally, since our last earnings report, we sold 14.7 million shares, including a 12.1 million share follow-on offering in early May and incremental ATM issuance, raising $2 billion of net proceeds.

Speaker Change: While using cash on hand to pay off a 600 million euro bond that matured in April and a 250 million sterling bond that matured last Friday.

Speaker Change: At the end of the second quarter, we had more than $4 billion of total liquidity, and our net debt to EBITDA ratio fell to 5.3 times, which is below our long-term target.

Matthew Mercier: Moving on to our debt profile, our weighted average debt maturity is over four years, and our weighted average interest rate is 2.9%. Approximately 84% of our debt is non-US dollar denominated, reflecting the growth of our global platform and our FX hedging strategy. Additionally, approximately 86% of our net debt is fixed rate, and 96% of our debt is unsecured, providing ample flexibility for capital recycling. Finally, after paying off the Euro notes in April and the Sterling notes last, we have zero remaining debt maturities through year end.

Speaker Change: Moving on to our debt profile, our weighted average debt maturity is over four years and our weighted average interest rate is 2.9%.

Speaker Change: Approximately 84% of our debt is non-US dollar denominated, reflecting the growth of our global platform and our FX hedging strategy.

Speaker Change: Approximately 86% of our net debt is fixed rate and 96% of our debt is unsecured, providing ample flexibility for capital recycling.

Speaker Change: Finally, after paying off the Euro notes in April and Sterling notes last week, we have zero remaining debt maturities through year-end. Beyond that, our maturities remain well-laddered through 2032.

Matthew Mercier: Beyond that, our maturities remain well-laddered through 2032. Let me conclude with our guidance. We are maintaining our core FFO guidance rates for the full year of 2024 at $6.60 and $6.75 per share.

Speaker Change: Let me conclude with our guidance.

Speaker Change: We are maintaining our core FFO guidance range for the full year of 2024 of $6.60 and $6.75 per share.

Matthew Mercier: Reflecting the continued strength in our core business, hardly balanced by the front half-weighted capital recycling and funding activity, which helped to reduce our reported leverage by a full turn to better position the company to fund development in 2024 and beyond. We're also maintaining our total revenue and adjusted EBITDA guidance ranges for 2024, as well as the operating, investing, and financing expectations that we've previously provided. Looking forward, the balance of 2024 core FFO per share remains poised to increase in the second half, as the backlog commences and the impact of prior deleveraging moderates. This concludes our prepared remarks, and now we will be pleased to take your questions. Operator, would you please begin the Q&A session? Thank you.

Speaker Change: Reflecting the continued strength in our core business, partly balanced by the front-half weighted capital recycling and funding activity, which helped to reduce our reported leverage by a full turn to better position the company to fund development in 2024 and beyond.

Speaker Change: We are also maintaining our total revenue and adjusted EBITDA guidance ranges for 2024, as well as the operating, investing, and financing expectations that we have previously provided.

Speaker Change: Looking forward to the balance of 2024, Core FFO per share remains poised to increase in the second half as the backlog commences and the impact of prior deleveraging moderates.

Speaker Change: This concludes our prepared remarks and now we will be pleased to take your questions.

Speaker Change: Operator, would you please begin the Q&A session?

Operator: We will now open the call for questions. In the interest of time and to allow a large number of people to ask questions, callers will be limited to one question. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: Thank you. We will now open the call for questions. In the interest of time and to allow a large number of people to ask questions, callers will be limited to one question.

Speaker Change: To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: If at any time your question has been addressed and you'd like to withdraw your question, please press star then 2.

Operator: If at any time your question has been addressed and you'd like to withdraw your question, please press star then 2. Your first question comes from Richard Coe with J.P. Morgan. Please go ahead. Hi, I wanted to ask about the long-term pipeline, the over one megawatt category, you know. I think there's some concerns that right now we should see the complete disclaimer at https://sites.google.com or at https://sites.google.com/in English. Thanks, Richard. So I would say, in the greater than megawatt category, we're seeing a continuation of the trend we've been playing out for the last several quarters. The biggest customers are desiring one contiguous capacity block that is very large. Two, they want them right now or as soon as possible.

Speaker Change: Your first question comes from Richard Coe with J.P. Morgan. Please go ahead.

Richard Coe: Hi, I wanted to ask about the long-term pipeline you're seeing for the over one megawatt category.

Richard Coe: You know, I think there's some concerns that right now we might be in a kind of pull forward or kind of elevated cycle and just wanted to get your sense of how far out this pipeline of deals that you're looking at in the current environment could last. Thank you.

Speaker Change: Thanks Richard. So I would say in the greater than megawatt category we're seeing a continuation of the trend we've been playing out for the last several quarters. The biggest customers are desiring one

Speaker Change: Contiguous Capacity Blocks that are very large. Two, they want them right now or as soon as possible.

Andrew Power: And three, the desire of fungible markets, i.e., markets where they can service certainly Gen-AI workloads, trading, and ultimately inference, but also, if they miss the measure, they can support their cloud computing needs as well. So we have not seen the pedal ease in terms of the demand for those attributes in the market. The next question comes from Irvin Liu with Evercore ISI. Please go ahead. Please go ahead,

Speaker Change: And three, the desire of fungible markets, i.e. markets where they can service certainly Gen-AI workloads, trading and ultimately inference.

Speaker Change: But also, if they miss the measure, they can support their cloud computing needs as well. So, we have not seen the pedal ease in terms of the demand for those attributes in the market.

Operator: The next question comes from Irvin Lue with Evo Kool ASI, so it's going ahead. It's going ahead, Irvin.

Speaker Change: The next question comes from Irvin Liu with Iwakur ISI. Please go ahead.

Irvin Lue: I was sorry; I was muted, so I wanted to double-click on renewal rates. So, I guess a couple items stood out. One in the Americas, the $146 per kill a lot, monthly rate, for the greater than one mega lot segment. That marked a sequence; we'll decline similarly. We've seen rates on new leases decline sequentially as well. So can you help us understand what's driving the sequential declines versus a quarter ago? Was this step down mostly a function of markets and mix, or were there other sort of industry dynamics that we should be thinking about?

Jordan Sadler: Oh, sorry, I was muted. So I wanted to double click on the renewal rates. So I guess a couple items stood out, one in Americas, the $146 per kilowatt monthly rate for the greater than one megawatt segment that marked a sequential decline. Similarly, you know, we've seen rates on, http://www.youtube.com.uk versus a quarter ago. Was this step down mostly a function of markets and mix, or were there other sorts of industry dynamics that we should be thinking about? Hey, thanks, Jordan.

Speaker Change: Please go ahead, Irvin.

Jyhhaw Liu: Oh, sorry, I was muted. So, I wanted to double-click on renewal rates. I guess a couple items stood out. One, in the Americas,

Speaker Change: The $146 per kilowatt monthly rate.

Jyhhaw Liu: for the greater than one megawatt segment. That marked a sequential decline. Similarly, you know, we've seen rates on new leases decline sequentially as well. So can you help us understand what's driving the sequential declines versus a quarter ago? Was this step down mostly a function of markets and mix, or were there other sort of industry dynamics that we should be thinking about?

Operator: Hey, that's everything.

Jordan Sadler: So I think the one deal or the one market you were pointing to was just North America greater than megawatt. Now it's just a mix of competition for deals. This quarter, in particular, the Dallas market really led the way. It had outside strength.

Operator: So I think the one more thing you have to point to is just the North America greater than what? Now it's just a mix of a coefficient of deals.

Jyhhaw Liu: Hey, thanks for listening. So, I think the one...

Jordan Sadler: The one marker you were pointing to was just the North America Grain on the megawatt.

Operator: This quarter, in particular, Dallas market really led the way. It has outside strength, and this is actually a quarter where we didn't actually have any sightings into our northern Virginia market, with not a lack of demand for that market. We still have some great options for customers available in large capacity blocks, in two ports of that market. But we just didn't have anything that this particular quarter. So if you look there properly, I think almost all the other reasons in both segments had an uptick in rates. And that's always not as as was the mix in the region could be different, different metrics like that one example stayed you.

Speaker Change: Now it's just a mix of composition of deals.

Speaker Change: This quarter in particular, Dallas market really led the way. It's had outside strength.

Jordan Sadler: And this was actually a quarter where we didn't actually have any signings into our Northern Virginia market, which was not a lack of demand for that market. We still have some great options for customers available in large capacity blocks in two parts of that market. But we just didn't have anything in this particular quarter.

Speaker Change: And this is actually a quarter where we didn't actually have any signings into our Northern Virginia market, which, with not a lack of demand for that market, we still have some great options for customers available in large capacity blocks.

Jordan Sadler: So if you look more broadly, I think almost all the other regions in both segments had an uptick in rates. And that's always not apples to apples, because the mix in the region could be different metros, like that one example I just gave you. But those would be the only outliers in what I just described.

Speaker Change: in two parts of that market, but we just didn't have anything this particular quarter, so.

Speaker Change: If you look more broadly, I think almost all the other regions in both segments had an uptick in rates, and that's always not apples to apples, because the mix in the region could be different metros, like that one example I just gave you, but that would be the only outliers in what I just discussed.

Operator: But that would be only an out loud or someone that's just going to stick.

Jordan Sadler: Your next question comes from Michael Rollins with Citi. Please go ahead. Thanks, and good afternoon.

Michael Roland: The next question comes from Michael Roland for City. So he's going to hit. Thanks and good afternoon. And curious if he could talk about some of the ideas that you shared in the past around working on ways to participate in private capital recycling, whether it's trying to establish mechanisms to be able to react to when some of your private capital partners are going to hit their kind of maturity date to those investments. What to do with those, as well as maybe other opportunities in the category where there's private investments in other data center assets. But that's like a little bit of a great concern to spend upon this.

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

Andrew Power: I'm curious if you could talk about some of the ideas that you shared in the past around working on ways to recycle private capital, whether it's trying to establish mechanisms to be able to react to when some of your private capital partners are going to hit their, what to do with those as well as maybe other opportunities in the category where there are private investments in other data. Thanks, Michael. Maybe I'll kick off, and Greg can expand upon this.

Michael Ian Rollins: Thanks and good afternoon. I'm curious if you could talk about some of –

Speaker Change: The ideas that you shared in the past around working on ways to participate in private capital recycling, whether it's

Speaker Change: I'm trying to establish mechanisms to be able to react to when some of your private capital partners are going to hit their

Speaker Change: kind of maturity dates of those investments, what to do with those, as well as maybe other opportunities in the category where there's private investments in other data center assets.

Andrew Power: So this topic is not new. I think we embarked on this journey at least 18, at least a year and a half ago and made great progress by accumulating more than $10 billion of hyper-scale private ventures with numerous parties. We've seen that in a few places, which we called out in the prepared remarks, seeing our fee revenue step up on a recurring revenue basis in the P&L, too. And on the balance sheet, those private capital initiatives have obviously moved our balance sheet from a defensive posture to an offensive posture and allowed us to now pull forward some of these great projects in our land bank that's more than 3 gigawatts of runway growth for our customers. And Yeah, thanks, Andy.

Speaker Change: Thanks, Michael. Maybe I'll kick off and Greg can expand upon this. So, this topic is not new. I think we embarked on this journey at least 18, or at least a year and a half ago.

Operator: So this topic is not new. I think we've worked on this journey. At least 18 or at least a year and a half ago. I mean great progress. Called people in order to 10 billion of college. Hover scale, private ventures, numerous parties. We've seen that few places, which we've called out in the prepared reports. Seeing our fee revenue, having stepped off of a recurring revenue basis in the P&L. Two, you see that in the balance sheet. Those private capital initiatives have obviously certainly moved our balance sheet from a defensive posture to an offensive posture. And allow us to now pull forward some of these great projects in our land bank.

Speaker Change: and made great progress called accumulating more than $10 billion of hyper-scale private ventures.

Greg: You've seen that a few places, which we call out in the prepared reports.

Speaker Change: I'm seeing our fee revenue having a step up of a recurring revenue basis.

Speaker Change: and the P&L.

Speaker Change: [inaudible]

Operator: That's not the three gigawatts. But one way of growth for our customer.

Speaker Change: in our land bank that's north of 3 gigawatts of runway growth for our customers.

Greg: And maybe I'll have Greg just give you a slightest preview of what's next in that evolution when it comes to our private strategic product accounting initiatives. Yeah, thanks, Andy. Thanks for the question, Michael.

Andrew Power: Thanks for the question, Michael. I think the first thing I would say is consistent with what Andy said we laid out a year ago, January. We're going to continue to bolster and diversify these private capital sources. And that's just what we're doing.

Greg: I think the first thing I would say is consistent with what Andy said we laid out, you know, a year ago, January , you know, we're going to continue to bolster and diversify these private capital sources. And that's just what we're doing. As he said, we did a lot of transactions over the last 18 months.

Gregory S. Wright: As he said, we did a lot of transactions over the last 18 months, and we're continuing to evolve that strategy. And you know, when we have something to report, we will. I think it's important to note the importance of that capital, because if you take a look at the main profile for the business right now, the hyperscale business in itself between now and 2030 is expected to grow almost three times. And that includes AI hyperscale and non-AI hyperscale.

Speaker Change: We're continuing to evolve that strategy, and when we have something to report, we will.

Speaker Change: I think it's important to note the importance of that capital because if you take a look at the main profile for the business right now, the hyperscale business in and of itself between now and 2030 is expected to grow almost three times, and that includes AI hyperscale and non-AI hyperscale.

Gregory S. Wright: So look, we think that the strategy that Andy laid out that we embarked upon was the right strategy. But we're not done yet. And as we said, it's continuing to evolve. And when we have some news on that front, we'll tell you. Your next question comes from John Atkin with RBC. Please go ahead. Yeah, good afternoon. I'm wondering about the speed at which you can kind of deliver on your new starts that you've commenced recently, the supply chain, access to energy, access to heavy equipment, and so forth. Any, any kind of color there?

Speaker Change: So, look, we think that the strategy that Andy laid out and that we embarked upon was the right strategy, but we're not done yet. As we said, it's continuing to evolve, and when we have something to report on that front, we'll tell you.

Speaker Change: Your next question comes from Jon Atkin with RBC. Please go ahead.

Jonathan Atkin: Good afternoon. I'm wondering about the speed at which you can deliver on your new starts that you've commenced recently, supply chain, access to energy, access to heavy equipment, and so forth. Any kind of color there?

Andrew Power: Thanks, John. So I mean, we are. You almost think it was like a continuous conveyor belt trying to deliver time and product for the customer's needs. That's certainly playing out in our enterprise co-location markets and now more than ever on the larger capacity block. This quarter, the book to sign the commencement was elongated to about 20-ish months.

Speaker Change: Thanks, John . So, I mean, we are, you can almost think of it as like a continuous conveyor belt of trying to deliver a timely product for the customer's needs. That's certainly playing out in our enterprise co-location markets and now more than ever on the larger capacity blocks.

Speaker Change: This quarter, the book to...

Speaker Change: Simon Convention was elongated.

Andrew Power: That was based on one particular customer that we serviced, and they had a very location-sensitive need; they had a radius restriction, and the only thing we had in that radius was land. Luckily, it was on a campus where we owned the land, and we were ready to get moving on, so that obviously elongated the call delivery time for that particular signing. If you excluded that, we were basically called to sign the contract commencing like four-and-a-half-type months.

Speaker Change: We serve about 20-ish months. That was based on one particular customer that we serviced and they had a very location-sensitive need. They had a radius restriction. And the only thing we had in that radius,

Speaker Change: with the land state. Luckily it was on a campus where we owned the land and we were ready to get moving on, so that obviously elongated the call delivery timeline for that particular signing. If you excluded that, we were basically called for a signing commencing in four-and-a-half-time months.

Andrew Power: So, we're continuously obviously delivering capacity and adding new capacity, whether it's from land to shelves to active suites, and making sure we're maintaining our production slots and vendor relationships for that time of delivery in our 50-plus metros around the world. Your next question comes from Jon Petersen with Jefferies. Please go ahead.

Speaker Change: So we're continuously obviously delivering capacity and adding new capacity whether it's from land to shelves to active suites and making sure we're maintaining our production slots and vendor relationships from that time of delivery in our 15 plus metros around the world.

Speaker Change: The next question comes from Jon Petersen with Jefferies. Please go ahead.

Jordan Sadler: Oh, great. Thank you. I was hoping you could talk about some of the larger, you know, greater than one megawatt lease expirations that are coming up in the coming quarters. You know, how many of those have fixed renewal options and how much can be marked to market rent? If I can sneak in a follow-up question, I think there's a $168 million impairment in the income statement. Just curious what that is.

Jonathan Michael Petersen: Okay, thank you. I was hoping you could talk about some of the larger, you know, greater than one megawatt lease expirations that are coming up in the coming quarters. You know, how many of those have fixed renewal options and how much can be marked to market rents? If I can sneak in a...

Speaker Change: Follow up question. I think there's $168 million dollar impairment in the income statement. Just curious what that is related to.

Jordan Sadler: Sure, Jonathan. So, in terms of lease separation, what I'd say is, you know, less than half of our greater than a megawatt leases have options with fixed increases on them. But I would call it, significantly less than that are typically renewed pursuant to those options. And that's generally for a few reasons. One, our customers must provide us notice of renewal within the proper period. That doesn't always happen.

Speaker Change: Sure, thanks Jonathan. So, in terms of lease operations, so what I'd say is, you know, less than half of our greater-than-a-megawatt leases have options we call fixed-increase settlement.

Speaker Change: But I would call it significantly less than that or typically renewed pursuant to those options.

Speaker Change: And that's generally for...

Speaker Change: A few reasons. One, our customers must provide us

Speaker Change: Notice of renewal within the proper period.

Jordan Sadler: Two, renewals must come, in essence, without any changes. So if there's any additional space, term, or anything changes, that opens up the contract. I think, as we've talked about in the past, and third, some of those customers also end up churning. So that all gives us an ability to be able to bring those contracts to market for the majority of what ends up rolling within a given period. On your second point on impairment, yes, we did have impairment associated with a few of our non-core assets, which are part of our disposition plans, and those are all located in the secondary market.

Speaker Change: That doesn't always happen. Renewals must come.

Speaker Change: In essence, without any changes, so if there's any additional space, term, anything changes, that opens up the contract, I think as we've talked about in the past, and third.

Speaker Change: Some of those customers also end up churning, so that all gives us an ability to be able to bring those contracts to market for the majority of what ends up rolling within a given period.

Speaker Change: Au revoir!

Speaker Change: On your second point on impairment, yes, we did have...

Speaker Change: We do have a parent associated with a few of our non-core assets, which are part of our disposition plans, and those are all located in the secondary market.

Jordan Sadler: I'd also put that in context to the fact that we've generated... collects close to, I think, over $1.3 billion of gains from the capital recycling efforts that we've done over the last year. Your next question comes from Aryeh Klein with BMO Capital Markets. Please go ahead.

Speaker Change: Where you and I'd also put that in context to the fact that we've generated Quite close to I think over a billion three of games from the capital recycling efforts that we've done over the last year

Speaker Change: Your next question comes from Aryeh Klein with BMO Capital Markets. Please go ahead.

Colin McLean: Thank you. I guess the comments on the pipeline coming up with very strong quarters of leasing and with the development pipeline 66%, least including 80% of the Americas. How should we expect CapEx to trend from here? And then what's your appetite to add new domestic markets given what seems like a broad... Hey, thanks. Why don't I first let Colin just speak about the pipeline overall and kind of talk about a little bit of the development side of that, as well as new markets? Yeah, thanks.

Aryeh Klein: Thank you. I guess the comments on the pipeline coming up to very strong quarters of leasing and with the development pipeline, 66% lease, including 80% in the Americas.

Speaker Change: How should we expect CapEx to trend from here and then what's your appetite to add new domestic markets given what seems like broadening of demand?

Speaker Change: Hey thanks, why don't I first let Colin speak to the pipeline overall and kind of talk about

Colin: A little bit of the development side of that, as well as new markets.

Colin McLean: Sorry, I appreciate the question. The easy highlight is strong performance over one megawatt. Pipeline overall for one megawatt is trending positively. Below one megawatt, which we deem as important as heading in the right direction as well.

Colin: Thanks, I appreciate the question. Easy to highlight, it's strong for 1 megawatt. Pipeline overall for 1 megawatt trends is trending positively. Below 1 megawatt, which we deem as important as heading in the right direction as well, record pipeline driven from digital transformation, cloud, AI.

Colin McLean: You saw that trending positively in our results, both directly and indirectly. Indirect executions just picked up in the last quarter, and we're now at 23% of our pipeline being indirect, which we think is a positive sign of the value proposition there. One of the things that Andy highlighted is the key value of metros with the demand cycle. We're seeing enterprises and hyperscalers alike see real value in proximity, and the metro play that we have in key metros across the globe is particularly important.

Colin: You saw that trending positively in our results, both directly and indirectly. Indirect executions just picked up via last quarter and we're now at 23% of our pipeline being indirect, which we think is a positive sign.

Colin: to value proposition there. One of the things that Andy highlighted is the key value of metros.

Andrew Power: With the demand cycle, we're seeing enterprises and hyperscalers alike see real value in proximity and the metro play that we have in key metros across the globe being particularly important. Finding the ability both for enterprises and hyperscalers to grow in scale and capacity is of keen value.

Colin McLean: Finally, the ability both for enterprises and hyperscalers to grow in scale and capacity is of keen value really across the spectrum of low and above a megawatt. Then Aryeh, on the second part of your question, I would say we remain very focused on our core markets, more than 50 of them around the world, nearly 30 countries on six continents. Those markets, we continuously see robust and diverse customer demand for cloud commute from numerous CSPs, enterprise hybrid IT and service providers, and Marcus, where we see really long-term barriers.

Andrew Power: really across the spectrum of low and above a megawatt.

Andrew Power: Then Aryeh, on the second part of your question, I would say we remain very focused on our core markets, more than 50 of them around the world, nearly 30 countries on 6 continents.

Andrew Power: Those markets we've continuously seen robust and diverse customer demand. I'm talking cloud commute from numerous CSPs, enterprise hybrid IT and service providers.

Colin McLean: And speaking to our actions on those, a sizable piece of our activation in shells, moving from our three plus gigwatt land bank into shells and ultimately to be delivered in suites, is all in those same core markets. The next question comes from David Barden with Bank of America. Please go ahead.

Andrew Power: And markets where we see really long-term barriers.

Andrew Power: and to be speaking to our actions on those, a sizable piece of our activation and shells moving from our three plus gigwatt land bank into shells and ultimately to be delivered in suites is all in those hidden core markets.

Andrew Power: The next question comes from David Barden with Bank of America.

Andrew Power: Hey, guys, thanks. So, I guess, two, if I could. Andy, I guess last quarter you talked about how 50% of these records... bookings were roughly 50% were AI related. It obviously stepped down.

Speaker Change: Please go ahead.

David Barden: So, I guess two, if I could. Andy, I guess last quarter you talked about how 50% of these record bookings were roughly 50% were AI related. It obviously stepped down.

Speaker Change: Sequentially, but you know to your point about the lengthening of the delivery period, it seems like there's still some very large...

Andrew Power: Transcription by Transcription Outsourcing, LLC, customers in what was the new leasing number this quarter. Could you kind of revisit, on an apples-and-apples basis, how 2Q unfolded versus 1Q from an AI versus non-AI type of New Leasing Pattern? And how do we think about this? You know, is there going to be a seasonality to this sort of thing?

Speaker Change: customers in what was the new leasing number this quarter. Could you kind of revisit, you know, on an apples-and-apples basis, how 2Q unfolded versus 1Q from an AI versus non-AI type of

Andrew Power: That would be kind of my first question. And then, the second question is... going back, you know, to 2019. You guys generated $6.65 of core FFO, which is kind of what you're guiding to for 2024. And, and I know that you've, you know, laid out a hope that there will be growth, more meaningful growth in the forward-looking periods. Also, you said that, you know, your balance sheet is now less than a defensive and more than an offensive position.

Speaker Change: new leasing pattern and how do we think about this? You know, is there going to be a seasonality to this sort of thing? That would be kind of my first question. And then the second question is,

Speaker Change: I was just going back, you know, to 2019, you guys generated $6.65 of core FFO, which is kind of what you're guiding to for 2024. And I know that you've

Speaker Change: You know, laid out a hope that there will be growth, more meaningful growth in the forward-looking periods.

Speaker Change: Also, you said that, you know, your balance sheet is now less in a defensive and more in an offensive position, and historically, when you've been offensive, it's meant dilution to secure future growth opportunities. So, I was wondering if you could kind of...

Andrew Power: And historically, when you've been offensive, it's meant dilution to secure future growth opportunities. So I was wondering if you could kind of, Andy revisit, you know, the bull case for growth to take all these great things that are happening at the top line and turn it to the bottom. Thanks, Dave.

Andrew Power: Andy Revisit, you know, the bull case for growth to take all these great things that are happening at the top line and turn them into bottom line growth. Thank you.

Andrew Power: So I would say, closest apples to apples, from a 50% contribution last quarter to this quarter is probably closer to a quarter of our size. We would say we really focus on AI use cases. But I would caveat that in a few ways. One, That's in a quarter that's not our record quarter, but I think the top four quarter overall signings, great contribution, both zero to one and plus one megawatt, as well as a near record in connection signings, and that means we're still winning with the traditional demand drivers, digital transformation, cloud computing, and the like, that that demand has not nearly exhausted itself or played out.

Speaker Change: Thanks, Dave. So, I would say closest apples to apples from a 50% contribution last quarter to this quarter is probably closer to a quarter of our science we would say we really pin on AI use cases.

Speaker Change: But I would caveat that in a few ways.

Speaker Change: That's in a quarter that's not our record quarter, but I think the top four quarter overall signings, great contribution of both zero to one and plus one megawatt, as well as a near record in interconnection signings.

Speaker Change: And that means we're still winning with the traditional demand drivers, digital transformation, cloud computing, and the like, that that demand is not nearly as exhausted as several play down.

Andrew Power: I would also say that there was certainly a deal that I didn't count in the category of AI that is certainly pushing the envelope on power density and post-ink drying. I'm already thinking about involving that capacity block or signing with them to support AI down the road, my guess, which I think speaks to the modularity of design and how we're able to scale infrastructure to the demands of our customers as they need it. The second part of your question: first off, I don't want to confuse the word offense with M&A.

Speaker Change: I would also say that...

Speaker Change: There was certainly a deal that I didn't count in the category of AI.

Speaker Change: that is certainly pushing the envelope on power density and post-ink drying, already thinking about evolving that capacity block we're signing with them in towards what will ultimately be supporting AI down the road, is my guess.

Speaker Change: which I think speaks to the modularity of design and how we're able to scale infrastructure to the demands of our customers as they need it.

Speaker Change: The

Speaker Change: The second part of your question...

Speaker Change: First off, I don't want to confuse the word offense with M&A. I think we've not done any real...

Andrew Power: I think we've not done any real M&A or external growth for several years now. You can maybe say the resolution of the six-payer relationship, but that was, I think, making lemonade out of lemons more than anything. And when I use the word offense, I mean that's converting this three-plus gigawatt land bank, which we've assembled over the years; I didn't just buy that yesterday, and turning that into a great product for our customers to land on and expand and get great returns on our investment.

Speaker Change: M&A or external growth for several years now. You can maybe say the resolution of the six-payer relationship but that was I think making lemonade out of lemons more than anything.

Speaker Change: And when I use the word offenses, I mean that's converting this 3 plus gigawatt land bank, which we've assembled over the years, i.e. we didn't just go buy that yesterday, and turning that into a great product for our customers to land and expand and great returns on our investment.

Andrew Power: And you've been seeing that play out now with our analyzed development schedule, crescendoing into the double digits. You've seen that in price and power, and you've seen our value proposition really resonate in all of our customer segments across our core markets. And lastly, our eye on the prize of accelerating the bottom line, that's where we reoriented our strategy 18 months ago to our value proposition, integrated innovation, bolstering, and diversifying our capital sources.

Speaker Change: And you've been seeing that play out now with our ROIs in the development schedule, crescendoing into the double digits, you've seen that in the pricing power, and you're seeing our value proposition really resonate in all of our customer segments across our core markets.

Speaker Change: And lastly, our eye on the prize of accelerating bottom line, that's where we reoriented our strategy.

Andrew Power: And all those things were about making sure we're driving per share FFO per share growth that is accelerating, and it's going to be continuously compounding for years to come. So there's been no divergence in that conviction of what comes next for the rest of 2024.

Speaker Change: 18 months ago.

Speaker Change: about our value proposition, integrating, innovating, bolstering, diversifying our capital sources, and all those things were about...

Speaker Change: called Making Sure We're Driving.

Speaker Change: per share FFL percentage growth, that's accelerating and it's going to be continuously compounding for years to come. So there's been no divergence in that conviction of what comes next for rest of 2024. And we'll be set about 2025 next year.

Eric Thomas Luebchow: And what we've said about 2025 next year. Your next question comes from Eric Luebchow with Wells Fargo. Please go ahead.

Speaker Change: Your next question comes from Eric Luebchow with Wells Fargo. Please go ahead.

Andrew Power: I appreciate it. Thanks for taking the time to answer the question. So, Andy, could you maybe comment on what type of market rent growth you're seeing right now and in some of your key metros on an apples-to-apples basis, relative to last year, whether that's, you know, continued to evolve as this year has progressed. And then, you know, as you look out into the future, do you see an opportunity for market rent growth to, you know, continue to outstrip your development costs? And we can see the 10 to 12% development yields you have in your pipeline move even higher. Thank you.

Eric Thomas Luebchow: I appreciate it. Thanks for taking the question. So, Andy, could you maybe comment on what type of market rent growth you're seeing right now in some of your key metros on an apples-to-apples basis?

Speaker Change: Andrew Power, Jordan Sadler

Andrew Power: Thanks, Eric. I mean, I would say that market rent growth is continuing to move in our favor. You've seen two elements happening.

Andrew Power: Thanks, Eric.

Andrew Power: I would couch that market rent growth is continuing to move in our favor. You're seeing two elements happening.

Speaker Change: The most precious capacity blocks in the key markets like Northern Virginia continue to set new records in terms of rates.

Speaker Change: And you've also seen a catch-up phenomenon where other markets in North America or outside of the U.S. are catching up a fair bit in terms of their trajectory of growth. Listen, I look at this...

Andrew Power: The most precious capacity blocks in the key markets, like in Northern Virginia, continue to set new records in terms of rates, And you've also seen a catch-up phenomenon where other markets in North America or outside of the U.S. are catching up a fair bit in terms of their trajectory of growth. Listen, when I look at this, you've got these waves of demand, big cloud computing, digital transformation, hybrid IT, and now AI that are just getting going on some of these.

Speaker Change: You've got these waves of demand, cloud computing, digital transformation, hybrid IT, and now AI that are just getting going in some of these. They're large and dynamic, and it's happening in a supply-constrained backdrop.

Andrew Power: And they're large and dynamic, and it's happening in a supply-constraint backdrop for numerous avenues of supply-constraint. And those elements are ultimately resulting in the increases in rates that we've been able to execute on for several quarters, and I believe it will be quarterly in common. And I also believe they will likely outstrip whatever inflationary costs we see in terms of bill costs and at least maintain these ROIs, if not continue to notch them up slightly higher. The next question comes from Jim Snyder with Goldman Sachs. Please go ahead.

Speaker Change: from numerous avenues of supply constraint. And those elements are ultimately resulting in the increases in rate that we've been able to execute on for several quarters and I believe it will be quarters to come.

Speaker Change: And I also believe they will likely outstrip the whatever inflationary costs we see in terms of bill costs and at least maintain these ROIs, if not continue to notch up slightly higher.

Speaker Change: The next question comes from Jim Snyder with Goldman Sachs. Please go ahead.

Andrew Power: Good afternoon and thanks for taking my question. On the topic of power constraints and the supply environment you see relative to transmission, you know, with the time horizon of, let's say, 12 to 18 months, do you think the outlook for power availability is getting more constrained, less constrained, or staying about the same relative to new projects you have either under development or contemplating? Jim, I think that there are a few phenomena happening.

Jim Snyder: Good afternoon and thanks for taking my question. On the topic of power constraints and supply environment you see relative to transmission, you know, with the time horizon of let's say 12 to 18 months, do you think the outlook for power availability is getting more constrained, less constrained, or staying about the same relative to new projects you have either under development or contemplating?

Andrew Power: One, you're, we're getting close, I mean, some of these constraints popped up now a year or years in the rearview mirror, and we're obviously inching our way close to destinations of resolutions, be it in northern Virginia, which I think 2026 is supposedly a bogeyman, or things like in Santa Clara, and there are other non-US markets as well. At the same time as we approach the power constraints, there's obviously a good potential that the delivery dates may not be met. These are multifaceted projects that require easements, substations, and construction projects.

Speaker Change: Jim, I think that there's a few phenomenons happening.

Jim Snyder: 1. Some of these constraints popped up now years in a rear-view mirror, and we're obviously inching our way close to destinations of resolutions, be it in Northern Virginia, which I think are. 2. I think we're getting there. 3. I think we're getting there. 4.

Speaker Change: 2026 is supposedly a Bowie.

Speaker Change: , Sam McClaren, and there's other non-US markets as well. At the same time as we approach the power constraints, there's obviously a good potential that the delivery dates may not deliver on time.

Speaker Change: These are multifaceted projects that require easement, substations, construction projects. At the same time, the demand can stand still while the power was constrained. The second phenomenon I think we're seeing is...

Andrew Power: At the same time, demand didn't stand still while the power was constrained. The second phenomenon I think we're seeing is that this is becoming a more pervasive topic. It was very focused on one called the Center of the Universe Market with Northern Virginia, and we're hearing more and more about other markets. And lastly, I wouldn't pin it just on power.

Speaker Change: This is becoming a more pervasive topic.

Speaker Change: It was very focused on one called Center of the Universe Market with Northern Virginia, and we're hearing more and more about other markets.

Speaker Change: And lastly...

Andrew Power: Yes, the power's got broader generation issues in an economy that we're trying to green. It's got transmission issues that affect municipalities and substation deliveries and transmission lines coming through the backyards of folks that would rather have them not be there. But there are also other elements of sustainability concerns, moratoriums in certain parts of the world. And so I think that this is a multifaceted supply constraint, and I would also mention that even if it does get fixed, there is a propensity that history could repeat itself here.

Speaker Change: I wouldn't pin it just on Power.

Speaker Change: Yes, the power's got...

Speaker Change: Broaden our generation issues in an economy that we're trying to green. It's got transmission issues that navigate municipalities and-

Speaker Change: Substation delivery and transmission lines coming through the backyards of folks that would rather not have them out there.

Speaker Change: But there are also other elements of sustainability concerns, moratoriums in certain parts of the world. And so I think that this is a multifaceted supply constraint, which I would also mention that even if it does get fixed.

Andrew Power: So I think this is going to make our value proposition with what we deliver to our customers even more compelling and valuable at the end of the day. Your next question comes from Bertrand from Hopra with Mizzou. Please go ahead. Afternoon or evening.

Speaker Change: That's a propensity that history could repeat itself here. So I think this is going to make our value proposition with what we deliver to our customers even more compelling and valuable at the end of the day.

Speaker Change: Your next question comes from Bethen Hofra with Mizzou.

Andrew Power: Thanks for the question. I guess just... Okay. You know, bigger picture, you've talked about leasing spreads for greater than one megawatt improving over time, given the differential of what's expiring versus, I guess, the market, but you also referenced market rent growth improving quite a bit. With that, and just some recent comments from hyperscalers, just talking about the risk of oversupply or just too much capex, can you sort of just frame the near-term opportunities for greater than one megawatt from a, you know, maybe bookings, but more so a pricing standpoint versus the puts and takes over time just from a demand supply standpoint?

Bethen Hofra: Please go ahead. Afternoon or evening, thanks for taking the question. I guess just...

Bethen Hofra: You know, bigger picture, you've talked about leasing spreads in greater than one megawatt improving over time, given the differential of what's expiring versus, I guess, market, but you also referenced market rent growth improving quite a bit. So

Andrew Power: I'm just wondering, is there a risk that, you know, the spreads theoretically improve, but there's a lot of supply coming down? I'll take the second part of your question and I'll ask Matt to comment on our outlook for leasing sprints and really kind of talk about the stair step in our expiration schedule, which does become even more attractive in the coming years. I think the heart of your second question is the broader AI theme question you're hearing more about in the mainstream media: is AI overdone? Is this a bubble?

Speaker Change: With that and just some recent comments from hyperscalers just talking about the risk of over supply or just too much capex

Speaker Change: Can you sort of just frame the near-term opportunities that in the greater than one megawatt from a you know maybe bookings but more so pricing standpoint versus the puts and takes over time just from a demand supply like I'm just wondering Is there a risk that?

Speaker Change: You see the spreads theoretically improve, but there's a lot of supply coming down the pike.

Matt: I'll take the second part of your question, Matt, to comment on our outlook on leasing sprinters and really kind of talk about the stair step in our expiration schedule, which does become even more attractive in the coming years.

Matt: I think, Victor, I think the heart of your second question is the broader AI theme question you're hearing more on in the mainstream media of is AI overdone, is this a bubble, what could come next?

Andrew Power: What could come next? I think some of that is not necessarily 100% surprising to what we're seeing. And the reason I say that is, in our business, when it comes to AI. We are signing long-term contracts, I'm talking 15 years, with some of the largest, most established technology companies ever. Two, and I mentioned before, we're doing that; we're not chasing this out to unproven territories.

Speaker Change: I think some of that is not necessarily 100% surmane to what we're seeing. And the reason I say that is in our business, when it comes to AI,

Speaker Change: We are signing long-term contracts, I'm talking 15 years, with some of the largest, most established technology companies ever.

Speaker Change: And I mentioned before, we're doing that, we're not chasing this out to unproven territories. We're focused on core markets with robust and diverse customer demand, where traditional use cases, be it cloud computing from numerous CSPs, enterprise, hybrid IT, and service provider demand are continuing to grow.

Andrew Power: We're focused on core markets with robust and diverse customer demand, where traditional use cases such as cloud commuting from numerous CSPs, enterprise hybrid IT, and service-friendly demand are continuing to grow over time, even if the AI has peaks and valleys, and we're doing it in markets that we believe are real-term, real long-term supply constraints. And lastly, all this is happening probably at the most supply constrained moment in the last 20 years of data.

Speaker Change: Over time, even if the AI has peaks and valleys, and we're doing it in markets that we believe are real-term, real long-term supply constraints.

Speaker Change: And lastly, all this is happening probably in the most supply-constrained moment in the last 20 years of data centers.

Andrew Power: So I'm not sure or convinced that even if AI takes a breather on its long-term innovation trajectory, I think that volatility, we are somewhat insulated in our sector from that volatility based on how we're pursuing it. But Matt, why don't you hit on the Colesia expiration?

Speaker Change: So...

Speaker Change: I'm not sure or convinced that...

Speaker Change: Even if AI takes a breather on its long-term innovation trajectory, I think that volatility, we are somewhat insulated in our sector from that volatility based on how we're perceiving it. But Matt, why don't you hit on the Colesian expression.

Matthew Mercier: Sure, so what I call it is, if you look at the greater than a megawatt leases that are expiring in the next 18 months, the rate, the average rate on that's in the 140 to 145 area, but then it steps down pretty gradually to as low as 111 by the time you get to 2029. And so I think you're gonna see a continued positive trajectory on our release spreads, not only in the greater than a megawatt category but, I think, also across all categories. So I think you'd also recall that within our zero to one spreads have been positive. I think throughout our history, those are typically more regular, steady inflationary type increases are better.

Matt: Sure, so what I look what I call it is you if you look at the greater-than-a-megawatt leases that are expiring called the next 18 months the rate

Matt: Average rate on that's in the 140 to 145 area, but then it steps down pretty gradually to as low as 111 by the time you get to 2029.

Matt: and so I think you're going to see a continued positive trajectory on our releasing spreads not only not only the greater than a may walk that category but I think also across across all categories so I think I think you'd also recall within our zero to one you know spreads have been positive

Matt: I think throughout our history, those are typically more regular, steady inflationary type increases or better.

Matthew Mercier: So I think this puts us in a good position considering where market rates are, where some of the supply constraints are, to where we'll see market rates now continue to remain positive and grow and continue to accrue benefits to our release spreads as we go through time. Your next question comes from Frank Louthan with Raymond Chain. Please go ahead.

Matt: So I think this puts us in a good position considering where market rates are, where some of the supply constraints are, to where we'll see

Matt: Market rates now continue to remain positive and grow and continue to accrue benefits to our releasing spreads as we go through time.

Frank Garrett Louthan: The next question comes from Frank Louthan with Raymond Change.

Colin McLean: Great, thank you. Um, so in talking before, you mentioned prioritizing retail COLA over hyperscale, how should we think about that practically and kind of track that? Is that part of the reason sub-a megawatt bookings have remained a little bit elevated? And how should we think about that trend? Colin, why don't you, that's a great question because we're obviously spending a lot of time on the bigger deals right now, but Colin, why don't you give a walkthrough on the highlights of the quarter?

Frank Garrett Louthan: Please go ahead.

Frank Garrett Louthan: Great, thank you. So in talking before, you mentioned you prioritizing retail COLO over hyperscale. How should we think about that practically and kind of track that? Is that part of the reason the sub-megawatt bookings have remained a little bit elevated? How should we think about that trend going forward?

Speaker Change: Paul, why don't you?

Carl: That's a great question because we're obviously spending a lot of time on the bigger deals right now. But Colin, why don't you give a walk-through on the highlights of the quarter? Sure. Thanks for the question. I'm not sure I'd use the word prioritize. We definitely want to emphasize a full platform to have an offering set. So as highlighted in Andy's opening remarks, performance in

Colin McLean: Sure. Thanks for the question. I'm not sure I'd use the word prioritize. We definitely want to emphasize a full platform to have an offering set. As highlighted in Andy's opening remarks, performance in Q2 was particularly strong. 0-1, fourth consecutive quarter, over 50 million, which I think is also the third highest ever from 0-1.

Colin: Q2 is particularly strong, 0-1, fourth consecutive quarter, over 50.

Colin McLean: We think this consistency is really driven from our ability to serve the full spectrum of requirements for our enterprisers and service providers across the global 5,000 focus of customers. New logos are also pretty strong as well, the most solid ever in terms of 1.48, with 40% of that coming from the indirect side. Channel, also, which I highlighted earlier, was a particular strong point with over 20% booking contribution from the indirect side overall.

Colin: A million, which I think is also the third highest ever from zero to one. We think this consistency is really driven from our ability to serve the full spectrum of requirements for our enterprisers and service providers.

Speaker Change: across the global 5,000 focus of customers. New logos are also...

Colin: Pretty strong as well, most solid ever in terms of 148, with 40% of that coming from the indirect side. Channel, also which I highlighted earlier, was a particular strong point with over 20% booking contribution from the indirect side.

Colin McLean: So, we view this segment as continuing our value proposition out to our client set. And a lot of the drivers Andy talked about around digital transformation, cloud, and AI are also playing out in the 0-1 segment across enterprises and service providers. And Andy highlighted a couple of those key wins in his opening remarks, namely Fortune 500 client – Fortune 5,000 client, excuse me, offering their virtual desktop requirements and the global manufacturing win we have on the enterprise side.

Colin: So we view this segment as continuing our value proposition out to our client set.

Speaker Change: And a lot of the driver's aims talked about around digital transformation, cloud, and AI also playing out in 0 to 1.

Speaker Change: segment across enterprises and search spiders. And Andy highlighted a couple of key wins.

Andrew Power: on opening remarks, namely Fortune 500 client, Fortune 5000 client, excuse me, offering their

Speaker Change: Virtual Desktop Requirements and Global Manufacturing.

Colin McLean: I also want to highlight the particular highlight of the Microsoft ExpressRoute launch into Dallas, which we feel like is a really strong representation of our platform. Your next question comes from Michael Elias with TD Cowan. Please go ahead.

Speaker Change: I'm also going to highlight the particular highlight of the Microsoft ExpressRoute launch into Dallas, which we feel like is a really strong representation of our platform.

Speaker Change: Your next question comes from Michael Elias with TD Cowan. Please go ahead.

Michael Elias: Great, thanks for taking the questions guys. Andy, in the past, you've talked about CapEx being an accordion that you expand and contract to the end of solving for consistent bottom line growth. As I'm thinking about it, given the leasing success that you've had over the last two quarters and also, as part of that, the market opportunity in both hyperscale and enterprise, is now the time to be expanding that accordion and really hitting the gas on CapEx? And if so, I just want to be clear, what is the explicit FFO for share growth that you guys are solving for as part of that algorithm? Thank you. Thanks, Michael.

Michael Elias: Great. Thanks for taking the questions, guys. Andy, in the past you've talked about CapEx being an accordion, that you expand and contract to the end of solving for consistent bottom-line growth.

Michael Elias: So as I'm thinking about it, given the leasing success that you've had over the last two quarters, and also as part of that, like, the market opportunity in both hyperscale and enterprise,

Speaker Change: Is now the time to be expanding that accordion and really hitting the gas on CapEx? And if so, I just want to be clear, what is the explicit FFO for share growth that you guys are solving for as part of that algorithm? Thank you.

Andrew Power: So, just to clarify, I would say CapEx is the core, and I think it's how we fund it, which is the same concept you're outlining in your question. The CapEx intensity is being pulled forward, right? You talked about this greenlighting more shell capacity and ultimately suites in a highly leased, pre-leased development pipeline at very attractive returns. So we're seeing the CapEx intensity increase, we're investing at great rates, great returns for our business, and supporting great customers in numerous markets.

Speaker Change #100: Thanks, Michael. So, just to clarify, I would say CapEx is the quality, and I think it's how we fund it, which I think is the same concept you're outlining in your question.

Speaker Change #101: The CapEx intensity is being pulled forward. We talked about this greenlining more shell capacity and ultimately sweeps in a highly leased, pre-leased development pipeline at very attractive returns.

Speaker Change #101: So, we're seeing the CapEx intensity increase, we're intersecting at great rates, great returns for our business, supporting great customers in numerous markets.

Andrew Power: And we've now positioned ourselves in a balance sheet position of greater strength, not only from our leverage standpoint but from our liquidity and our diverse sources of capital. And what we're trying to do is essentially use the levers of using our public capital and our private capital to get back to and call it mid-single digits, call it floor-to-hour growth next year, and then there's further acceleration on top of that, and do that in a consistent method of compounding that growth for numerous years to come. So it's really those levers of using public and private capital to drive that bottom line to new levels and on a consistent framework. Your next question comes from David Guarino on Green Street. Please go ahead.

Speaker Change #101: And we've now positioned ourselves.

Speaker Change #101: and a balance sheet position of greater strength, not only just from our leverage standpoint, but from our liquidity and our diverse sources of capital.

Speaker Change #101: And what we're trying to do is essentially use the levers.

Speaker Change #101: of using our public capital and our private capital to get back to and call it mid-signal digits, call it four-hour growth next year, and then there's further acceleration on top of that, and do that in a consistent year method of compounding that growth for numerous years to come.

Speaker Change #101: So it's really those levers of using public and private capital to drive that bottom line to new levels and on a consistent framework.

Speaker Change #101: Your next question comes from David Guarino with Green Street. Please go ahead.

David Anthony Guarino: Thanks, I appreciate the industry statistics you guys included in your investor presentation, and I wanted to ask specifically about the declining global vacancy you highlighted, which is around 6%. But when I look at your stabilized portfolio, the vacancy level is about three times higher than that. So I guess first, why is it so much higher? Second, given the record demand we're seeing across the industry, how long do you think it's going to take before digital's portfolio resembles more like the industry's? Thank you, guys.

David Anthony Guarino: Thanks, I appreciate the industry statistics you guys included in your investor presentation, and I wanted to ask specifically about the declining global vacancy you highlighted, which is around 6%.

David Anthony Guarino: But when I look at your stabilized portfolio, the vacancy level is about three times higher than that. So I guess first, why is it so much higher? And then second, given the record demand we're seeing across the industry, how long do you think it's going to take before Digital's portfolio resembles more like the industry is?

Andrew Power: I think the... You've got to remember that our portfolio is not all just called hyperscale, and the hyperscale portion of the business can literally be 100% leased in many buildings or markets, right? And my gut tells me that chart, which I think Davis and Arhok, to do the best they can, is very much about more of a hyperscale lens. I was actually pretty pleased on the occupancy front. We're up 100 basis points in the same store occupancy quarter over quarter, and we have a big same store pool. It's not nothing.

Speaker Change #103: I think the...

Speaker Change #104: You've got to remember that our portfolio is not all just called hyperscale. And the hyperscale portion is business.

Speaker Change #105: Can literally be a hundred percent leased in many buildings or markets, right? And I my gut is that chart Which I think Davis and our block Which to do the best they can Is very much about more of a hyperscale lens

Speaker Change #106: I was actually pretty pleased on the occupancy front. We're up 100 basis points in the same-store occupancy quarter over quarter. And we have a big same-store pool. It's not nothing.

Andrew Power: We're also actively taking it one step backwards sometimes on occupancy to take two, three, four steps forward. When vacant suites come back on scale, we convert those to COLA and reels for our customers' COLA growth as well. So this was the year we said that with occupancy, we're going to be moving the needle, and we have been moving the needle. But we've got more to do in that arena. So I think you're going to see it move up. And if you look at it, you can also see how many apples are to apples.

Speaker Change #106: We're also actively taking it one step backwards sometimes at Occupy to take two, three, four steps forward. When vacant suites come back on the scale and we convert those to COLA and reveals for our customers COLA growth.

Speaker Change #106: as well. So this is the year, we said, that

Speaker Change #106: With Occam see we're going to be moving the needle and we have been moving the needle. We got more to do in that arena So I think you can see it move up and if you look at

Andrew Power: If you look at their occupancy, we show by market. There are certain markets with way less than 6% vacancy that are just very much heavily weighted towards our hyperscale business. They just have a much smaller cold footprint.

Speaker Change #107: You can also look to get a number of Apple's apps. If you look at their occupancy, we show five markets.

Andrew Power: Like Northern Virginia, if you look through it, especially on a megawatt basis, I wish I had that type of vacancy to sell right now. But we just don't. Your next question comes from Matt Niknam with Dutch Show Bank. Please go ahead. Hey guys, thanks again, Rian. Here are two follow-ups. First, on the Colo side, you cited the record new logo is 148 this quarter. I'm just wondering, from a macro perspective, any change in terms of macro impact. Transcripts provided by Transcription Outsourcing, LLC. Matt, why don't you hit the dividend question first, and Colin and I can hit a little bit on what we're seeing in the enterprise demand piece of the puzzle. Yeah, sure. So, thanks, Matt.

Speaker Change #107: There are certain markets with way less than 6% vacancy that are just very much heavily weighted towards

Speaker Change #107: [inaudible]

Speaker Change #108: I wish I had that type of vacancy to sell right now, and we just don't.

Speaker Change #108: Your next question comes from Matt Niknam of Deutsche Bank. Please go ahead.

Unknown Attendee: Hey guys, thanks for getting me on. Two follow-ups. First, on the Colo side, so you cited the record new logo is 148 this quarter. I'm just wondering, from a macro perspective, any change in terms of macro impacts

Speaker Change #110: across different customer sizes within that sub-one megawatt base.

Speaker Change #111: And then secondly, you talked about leverage getting back under five and a half turns, the prospect of improving bottom line growth next year. How do you think about the dividend and the potential for forward growth in the dividend relative to some potential incremental investment in the business? Thanks.

Speaker Change #112: Why don't Matt, why don't Matt you answer the dividend question first and Colin and I can hint a little bit on what we're seeing in the enterprise demand piece of the puzzle.

Matthew Mercier: So, you know, in terms of the dividend, you know, look, I think it's back to kind of what we've said historically. I think we've got a unique opportunity here to take advantage of what we see as tremendous growth opportunities throughout our global portfolio. And one of the easiest and cheapest forms of capital within that is internally generated funds.

Speaker Change #112: Thanks Matt. In terms of the dividend, I think it's back to what we've said historically. I think we've got a unique opportunity here.

Speaker Change #113: to take advantage of what we see as tremendous growth opportunity throughout our global portfolio.

Speaker Change #114: and one of the, one of the...

Speaker Change #115: The easiest and cheapest forms of capital within that is internally generated funds.

Matthew Mercier: And so, as we've also mentioned throughout this call, we're keenly focused on growing the bottom line and accelerating that growth in our years. So, as we grow the bottom line, which is going to benefit and accrue benefits to not only Core FFO but then down to AFFO, we then look to keep our dividend growth in line with that bottom line per share growth as well. On the new logo question, there are a couple of trends we might just highlight in that question. So, first, we really believe it's in the hybrid world.

Speaker Change #115: And so we continue to look to try to maximize our cash flow as part of our funding strategy on that front. And on top of that, I think as we've also mentioned throughout this call, we're keenly focused on

Speaker Change #115: Growing the bottom line and accelerating that growth and out of years. So as we grow the bottom line, which is going to benefit and accrue benefits to not only core FFO but then down to AFFO, we then look to keep our dividend growth in line with that bottom line per share growth as well.

Speaker Change #116: On the new logo question, a couple of trends just maybe to highlight in that question. So first, we really believe it's in the hybrid world, so we're seeing that continued trend in the new logo base.

Colin McLean: So, we're seeing that continued trend in the new logo-based hybrid work cloud data that our new logo requirements really serve well across our global platform. Number two, the mix of that 148 was very much split between commercial and global 5,000 accounts. So, we're seeing continued interest in the platform across the larger customers who buy with more frequency in the smaller end of the spectrum. Not sure that we can necessarily point to a growing density in that particular base of clientship or capacity, but I can tell you this particular base of clients sees real value, as I mentioned, in our global platform, which really serves well across their requirements. And just one, Chris, why don't you just chime in on the early news about the HD cloud and 3.0.

Speaker Change #116: Hybrid Work Cloud Data

Speaker Change #116: that our new logo requirements really serve well across our global platform.

Speaker Change #116: The mix of that 148 was very much split between commercial and Global 5000 accounts.

Speaker Change #116: We're seeing continued interest in the platform across the larger customers who buy with more frequency in the smaller of the spectrum. Not sure that we can necessarily point to a growing density in that particular base of clients yet, or capacity, but I can tell you this particular base of clients sees real value, as I mentioned, in our global platform.

Speaker Change #116: And just one, Chris, why don't you just chime in on the early reads on HD412LL and some of the, I mean, that is, I would say, an uptick.

Christopher Sharp: I mean, that is, I would say, an uptick in the enterprise segment. I think I agree with you, Andy, on the macro trend of what we're doing with HD Colo. It's just really aligning the right capability to cool some of these higher power density requirements coming into the market. And so, you see a lot of the capabilities that we've brought in across 170 facilities. We can execute these higher-density solutions in 12 weeks or less.

Andrew Power: , and the Interpol Dissemination Coalition. I think I agree with Andy on the macro trend of what we're doing with HDCOLOR. It's just really aligning, you know, the right capability to cool some of these higher power density requirements coming into the market. And so, you see a lot of the capabilities that we brought in across 170 facilities. We can execute these higher density solutions in 12 weeks or less.

Christopher Sharp: And I think what's interesting about that is the capacity blocks are getting larger, but the capabilities that customers are trying to bring to market are definitely challenging for a lot of your traditional Colo offerings where we've really started to see that come to market, you know, about six to seven months ago.

Speaker Change #117: And I think what's interesting about that is the capacity blocks are getting larger, but like the capabilities that customers are trying to bring to market are definitely challenging for a lot of your traditional colo offerings where we've really started to see that come to market.

Christopher Sharp: And so we've been able to pre-procure a lot of these capabilities to get ahead of that challenge. But, you know, just the current rack densities in the market today are six to eight kilowatts. And I think one of the things you're really hitting on is like, what are some of these new requirements coming in? And so health care, we're seeing 10 kilowatts a rack, gaming, we're seeing 15 kilowatts a rack this last quarter. And then some of the AI software capabilities, 40 kilowatts. But at the end of the day, we can, you know, meet a customer requirement of 150 kilowatts. So we have a lot of runway with that.

Speaker Change #117: about six to seven months ago. And so we've been able to pre-procure a lot of these capabilities to get ahead of that challenge. But just kind of current rack densities in the market today are six to eight kilowatts. And I think one of the things I think you're really hitting on is like, what are some of these new requirements coming in? And so healthcare, we're seeing 10 kilowatts a rack. Gaming, we're seeing 15 kilowatts a rack this last quarter. And then some of the AI software capabilities, 40 kilowatts. But at the end of the day, we can meet a customer requirement of 150 kilowatts. So we have a lot of runway with that. And to put a little context to it, in the most recent state-of-the-art NVIDIA GP200, we can support that requirement in an under-12-week fashion with our current HD Colo offering. So...

Anthony Ho: And to put a little context on it, with the most recent state-of-the-art NVIDIA GP200, we can support that requirement in an under 12-week fashion with our current HD Colo offering. So definitely seeing a lot of growth in that market. Your next question comes from Anthony Ho with Truist Securities. Please go ahead.

Speaker Change #117: Definitely seeing a lot of growth in that market.

Speaker Change #118: Your next question comes from Anthony Ho with Truist Securities. Please go ahead.

Andrew Power: I noticed that the average commencement period for new leases is 20 months away. I'm assuming most of these leases are probably for 2026 deliveries, but are customers looking to sign leases for 2027? If they are, what type of customers are looking to take up space this far out? I think so.

Speaker Change #122: Great. Thanks for taking my question. I noticed that the way average commencement period for new leases is 20 months away. I'm assuming most of these leases are probably for 2026 deliveries, but are customers looking to sign leases for 2027? If they are, what type of customers are looking to take up space this far out?

Andrew Power: I mean, customers are, especially when it comes to larger capacity blocks, they're really trying to future-proof, and that's where three gigawatts of growth comes in handy. So certainly, the nearest term deliveries are precious, but they're thinking years ahead. Now, that particular example, as I mentioned, the 20 months was elongated because that customer, one particular customer, had very much their eyesight on a particular market, and they had radius restrictions about where they could grow, and when we could support that growth, we were literally at layout capacity. So we were able to deliver as fast as we could, but it certainly elongated it. The next question comes from Brandon Nispel with KeyBank Capital Markets. Please go ahead.

Speaker Change #119: I think so. I mean, customers are, especially when it comes to larger capacity blocks, they're really trying to future proof. And that's where our three gigawatts of growth comes in handy.

Speaker Change #120: So they certainly did the nearest term deliveries are precious, but they're thinking years ahead. Now, that particular example, as I mentioned, the 20 months was elongated because that customer, one particular customer had

Speaker Change #120: Very much their eyesight on a particular market and then radius restrictions about where they could grow and where we could support that growth we're literally at lab capacity, so that we were able to do deliver as fast as we could, but it certainly elongates it.

Speaker Change #120: excluding that one outlier when it goes to four and a half months and I think you'll I wouldn't count on those outliers consistently popping up there to be more sporadic.

Speaker Change #120: The next question comes from Brandon Nispel with KeyBank Capital Markets.

Matthew Mercier: Thanks for taking the question. Question for Matt: can you talk about not updating the guidance at all? Maybe there's some moving pieces from FX and the recent acquisition that you call out. Just as I was looking at it, you know, If you look at the first half of the year and annualize it, revenues really need to accelerate, while just DVDOT would need to move backwards, actually, to hit the midpoint of your guide. So the question is, is the DVDOT FFO guide just conservative? Are there some uncertainties in terms of the timing of commencement or unusual expenses? I was hoping you could just unpack that for us.

Speaker Change #121: Please go ahead.

Brandon Lee Nispel: Thanks for taking the question. A question for Matt. Can you talk about not updating the guidance at all? Maybe there's some moving pieces from FX and the recent acquisition that you call out. Just as I was looking at it, you know,

Speaker Change #124: If you look at the first half of the year and annualize it, revenues really need to accelerate well, just as they would need to be backwards, actually, to hit the midpoint of your guide. So the question is...

Speaker Change #125: Is the EBITDA FFO guide just conservative? Are there some uncertainty in terms of timing and commencement, unusual expenses? I was hoping you could just unpack that for us. Thanks.

Matthew Mercier: Sure, I don't look there's a, I would, again, I'd probably focus, you know, kind of on the bottom line. If you look at where we are halfway through the year, we're a little less than halfway through the midpoint of our core FFO guidance. And we talked about how we expected this quarter would have a little bit of pressure because of the capital recycling efforts that we've concluded with closing CH2 and having the related income from that come out this quarter.

Speaker Change #126: Sure, I don't, there's a, I would, again, I'd probably focus, you know, kind of on the bottom line, you know, if you look at, if you look at where we are halfway through the year, we're a little less than halfway through the midpoint of our core FFO guidance.

Speaker Change #126: And we talked about, we expected this quarter would be, would be, would have a little bit of pressure because of the

Speaker Change #126: Capital Recycling efforts that we've concluded.

Speaker Change #126: with closing CH2 and having the related income from that come out this quarter. And so, you know, look, what we're going to see is in the second half, growth, we're expecting to improve and accelerate.

Matthew Mercier: And so, you know, look, what we're going to see in the second half of growth; we're expecting it to improve and accelerate as the backlog of deals and signings come online, as we expect, you know, as we haven't changed the guidance, we've obviously given a wide range, but if you look at where we are this year and the expectations for accelerating in the back half, which I think will set us up very Thank you. That concludes the Q&A portion of today's call. I'd like to now turn the call back over to President and CEO Andy Power for closing remarks. Andy, please go ahead.

Speaker Change #126: As the backlog of deals and signings come online, as we expect, as we haven't changed the guidance, we've obviously given a wide range, but if you look at

Speaker Change #126: I think where we are this year and the expectations for accelerating in the back half, which I think will set us up very nicely for 2025, we feel pretty good about the midpoint of guidance and being able to achieve that.

Operator: Thank you. They can close the Q&A portion of today's call. I'd like to now turn the call back over to President and see your any calls for closing your mind. Any, please go ahead. Thank you, Digital Realty, post in another strong quarter in QQ, with record leasing in the first half. They're frustrating how Digital Realty is positioned to support the elevated level of demand. We continue to see for data center infrastructure. Fundamental strike continued through the second quarter, with the role-must leasing volume, healthy pricing, and record commencement, employees to drive an acceleration in bottom line growth.

Speaker Change #126: Thank you. That concludes the Q&A portion of today's call. I'd like to now turn the call back over to President and CEO Andy Power for closing remarks. Andy, please go ahead.

Andrew Power: Digital Realty posted another strong quarter in 2Q with record leasing in the first half, demonstrating how Digital Realty is positioned to support the elevated level of demand we continue to see for data center infrastructure. Fundamental strength continued through the second quarter, with robust leasing volume, healthy pricing, and record commencements poised to drive an acceleration in bottom-line growth. We continue to innovate and integrate with the rollout of HD and Colo 2.0 and the addition of new cloud on-ramps to platform digital in the quarter.

Andrew Power: Thank you.

Andrew Power: Digital Realty posted another strong quarter in 2Q with record leasing in the first half, demonstrating how Digital Realty is positioned to support the elevated level of demand we continue to see for data center infrastructure.

Andrew Power: And we have repositioned the balance sheet by recycling capital out of stabilized assets, diversifying our capital sources, and reducing our leverage. All this was done with an eye toward improving our growth profile while supporting our customers' growing needs. We are excited about this quarter's results and will remain optimistic about the outlook for data center demand and our position in the market. I'd like to thank everyone for joining us today, and we'd like to thank our dedicated and exceptional team at Digital Realty, who keep the digital world turning. Thank you. The conference is now concluded. Thank you for joining today's presentation. You may now disconnect. Copyright 2020, New Thinking Allowed Foundation; BF-WATCH TV 2021

Andrew Power: Fundamental strength continued through the second quarter with robust leasing volume, healthy pricing, and record commencements poised to drive an acceleration in bottom line growth.

Operator: We continued to innovate in the end of rate with the well out of HD, Colo 2.0, and the addition of new cloud environments to platform digital in the quarter. And we have repositioned the balance sheet by recycling capital out of state-wise assets, diversifying our capital sources, and reducing our leverage. All this was done with an eye toward improving our growth profile while supporting our customers' growing needs. We are excited about this portion of results, and it remains optimistic about the outlet for data center demand and our position in the market.

Speaker Change #127: We continue to innovate and integrate with the rollout of HDColo 2.0 and the addition of new cloud on-ramps to platform digital in the corner.

Speaker Change #127: And we have repositioned the balance sheet by recycling capital out of stabilized assets, diversifying our capital sources, and reducing our leverage.

Speaker Change #127: All this was done with an eye toward improving our growth profile while supporting our customers' growing needs.

Speaker Change #127: We are excited about this quarter's results and will remain optimistic about the outlook for data center demand and our position in the market.

Operator: I'd like to thank everyone for joining today, and we'd like to thank our dedicated and exceptional team of Digital Realty, who came to Digital World Turning. Thank you.

Speaker Change #128: I'd like to thank everyone for joining us today, and we'd like to thank our dedicated and exceptional team at Digital Realty, who keep the digital world turning. Thank you.

Operator: The conference is now concluded. Thank you for joining today's presentation.

Operator: You might now disconnect.

Speaker Change #129: The conference is now concluded. Thank you for joining today's presentation. You may now disconnect.

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