Digital Realty Trust, Inc.

Good afternoon and welcome to the Digital Realty second quarter 2020 earnings call. Please note this event is being recorded. During today's presentation, all parties will be in a listen only mode. Following the presentation, we will conduct a question and answer session and callers will be limited to one question plus a follow up. Due to time constraints, we will conclude promptly at the hour. I would now like to turn the call over to John Stewart, Digital Realty's Senior Vice President of Investor Relations. John, please go ahead.

Thank you, Andrea. The speakers on today's call are CEO Bill Stein and CFO Andy Power. Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and EVP of Sales and Marketing Corey Dyer are also on the call and will be available for Q&A. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. 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 SEC and available on our website. Before I turn the call over to Bill, I'd like to hit the tops of the waves on our second quarter results. We delivered record bookings, more than 50% higher than our previous all-time high. We beat consensus by 7 cents, driven by operational outperformance, and the beat flowed through to upward revisions to guidance for revenue, EBITDA, and core FFO per share. Third, we extended our sustainability leadership with the publication of our second annual ESG report and official recognition as the first data center Energy Star Partner of the Year. Last but not least, we further strengthen the balance sheet with the issuance of $645 million of common equity and 500 million euros of 10 and a half year bonds at one and a quarter percent. With that, I'd like to turn the call over to Bill.

Thanks, John. Good afternoon, and thank you all for joining us. Our formula for long-term value creation is a global connected sustainable framework. Even though we haven't been physically sitting together for the past several months, we've made significant progress strengthening each of these pillars. As John just mentioned, our second quarter bookings were more than 50% better than our previous all-time high, but were also more than double our previous trailing four-quarter average. We've now seen improvement for six consecutive quarters. So we've clearly seen an acceleration in leasing velocity. We are admittedly a bigger organization today, and the bar should be higher following our combination with Interaction and as well as S&T. But our second quarter results would have been a record for standalone digital realty as well. A world of remote everything has accelerated digital transformation initiatives, and data center demand has benefited. But I believe these results also reflect the past several years of hard work putting together a highly attractive, diversified global platform, stability and capable leadership within our broader organization, coupled with solid execution. In particular, I would like to congratulate Corey Dyer and his entire sales team on their exceptional performance. We do expect the second quarter may be the high watermark for the full year. We don't necessarily expect to maintain this velocity every quarter. But 2020 is clearly shaping up to be a banner year. And we continue to capitalize on the acceleration of digital transformation strategies to build business resilience, which should continue to drive strong demand going forward. Our confidence in the forward outlook is reflected in the upward revisions to guidance for revenue, EBITDA and CORE for share. Let's turn to the current environment on page three. The COVID-19 global pandemic has changed all our lives. Our hearts go out to the global communities we serve, especially those that have been most impacted. We stand in solidarity with them. And our focus remains unchanged, keeping our employees, customers and partners safe. We are fortunate to have been as well prepared as we possibly could have been for this pandemic. Our 280 data centers in 45 metropolitan areas across 21 countries on six continents remain fully operational. We are grateful to be in a position where we can help industries, communities, and families around the globe continue to conduct business and stay in contact with each other during these uncertain times. We also want to again extend our gratitude to our employees in critical data center roles who continue to come into work every day at our data centers around the world. They make possible the service and support that we provide our customers. Stepping back, our approach to managing and leading through the COVID-19 pandemic is guided by our ESG strategy depicted on page four. We strive to lead the global data center industry in sustainable environmental performance. We are committed to minimizing our impact on the environment while simultaneously meeting the needs of our customers, our investors, our employees, and the broader society. We take this work seriously because it matters to our customers and because we think it's the right thing to do. Environmental stewardship is incorporated into almost every aspect of our business. Sustainability is a top priority for us year-round. The industry, governmental organizations, and the press are all taking note. In early April, we were honored to be the first data center provider to receive an EPA Energy Star Partner of the Year Award for Energy Management. In late April, we announced a wind energy agreement to supply approximately 30% of our power needs in the Dallas, Texas area with renewable energy. In early June, InterAction announced that it reduced its cooling system energy consumption by 20% during the first year of an ongoing project with Echosense, a data center optimization specialist. In mid-June, we were recognized as a green lease leader by the U.S. Department of Energy's Better Buildings Alliance. We also published our second annual ESG report in mid-June, providing transparency on our ESG performance for 2019 as well as a comprehensive overview of our clean energy commitment, resource conservation, community engagement and philanthropic commitments, diversity and inclusion efforts, and other sustainable business practices. In terms of our social efforts, since April, we've committed more than $1 million to partnering with charitable organizations globally, combating the COVID-19 pandemic, as well as efforts to fight racial injustice. We've also begun a doubling down on our employee matching gift program, raising an additional $100,000 on top of our corporate efforts. We are doing our best to play a constructive, proactive role in advancing our broader goal of delivering sustainable growth for all of our stakeholders, investors, customers, employees, and the communities that we serve around the world. Let's turn to our investment activity on page five. We continue to expand our global platform with groundbreaking announcements in multiple metros across APAC, the Americas, and EMEA. In early July, we announced that we would be building our second data center in Hong Kong, allowing us to cater to diverse multi-site workloads. The facility is expected to be built out and ready for global and regional customers by mid-2021. In mid-June, we broke ground on the first carrier-neutral facility in Korea with the Sangam Digital Media City in northwest Seoul. We've seen significant pent-up customer demand for a carrier-neutral offering in South Korea, and we expect to be open for business in the fourth quarter of 2021. In early June, we announced that Ascenti, Our Latin American platform and joint venture with Brookfield Infrastructure was entering Mexico with two diverse locations anchored by long-term U.S. dollar-denominated multi-megawatt agreements to support the growth of a leading global cloud provider. In April, InterAction broke ground on InterAction Paris Digital Park, a market expansion project in Paris with up to 85 megawatts of capacity. The first of four new data centers on this site will be InterAction's eighth in Paris, and the first phase is scheduled to open in late 2021. In early July, InterAction announced the opening of the first phase of MRS3, its third data center in Marseille. InterAction's Marseille campus is one of the world's leading digital hubs for intercontinental data traffic with over 150 network service providers. The new facility will offer customers expanded access to the vibrant community in Marseille, including numerous connectivity providers, digital media, and cloud segments, along with local as well as global enterprises. Last but not least, in mid-July, we announced that we had acquired the freehold to the land under our N-hour Landa-Strasse campus in Frankfurt. In addition, We are also under contract to acquire the Neckermann site, a separate parcel within a kilometer of our existing campus that will support the development of up to 180 megawatts of IT capacity. We believe that we are creating significant value by combining the leasehold and freehold positions on one of the most highly connected campuses in Europe, while the adjacent expansion capacity provides runway to support customer growth in a key European metro for years to come. We also made two significant announcements advancing our collaboration with NVIDIA. In early May, we announced the platform digital data hub featuring NVIDIA DGX A100 POD infrastructure, a joint engineered solution that brings the world's first five petaflops AI compute system to the enterprise to tackle high performance computing challenges. Most recently, in late July, we announced the joint development of an AI platform as a service offering on platform digital, combining core scientific Plexus AI workflow orchestrator with the NVIDIA Data Hub solution to address enterprise data lake performance constraints. These announcements validate our strategy of building a portfolio of engineered partner solutions to help enterprises accelerate digital transformation and remove data gravity barriers. Let's turn to interaction on page six. Integration is our top priority for 2020. And despite having to do the hard work of integration virtually during the pandemic, both teams have risen to the occasion. Andy will cover our customer wins in more detail. We are already seeing the benefits of the significant cross-selling opportunities. We said last quarter that we believe our combination with interaction has the potential to change the global data center landscape. And in the interim, we've received meaningful third-party validation of our view. In mid-July, Cloud Scene gave us the top billing in EMEA on their H1 2020 Data Center Ecosystem Leaderboard, which ranks data center operators based on the composition of their facilities, service providers, network fabrics, and cloud on-ramps. The combined organization is well-placed to meet the growing demand from cloud and content platforms IT service providers, and enterprises seeking co-location hybrid cloud and hyperscale data center solutions. These are global, long-term opportunities that we are ideally positioned to address. We've made steady progress on our corporate integration efforts, and by putting customers first, we've been able to seamlessly come together as one company. There will be more work to do over the next several quarters, but we are pleased with our progress to date. Let's turn to the macro environment. As we are all aware, the pandemic has pumped the brakes on the global economy. As you've heard me say many times before, data center demand is not directly correlated to job growth, and we are fortunate to be operating in a business levered to secular demand drivers, both growing faster than global GDP growth and somewhat insulated from economic volatility. The current environment is accelerating enterprises' digital transformation strategies, and data gravity is shaping the way enterprises will deploy, host, and connect their infrastructure globally. According to IDC, by 2025, enterprises will need to manage the integration of 175 zettabytes of data between their private infrastructure and public clouds. 451 Research conducted a global IT leader survey finding 87% of IT leaders need to maintain local copies of critical data at global points of presence to meet regulatory requirements. We see indicators of enterprises solving data gravity globally across our platform in the volume of new logos as well as expansion bookings within our enterprise vertical. Digital Realty was recently named the global leader in GigaOM's market radar for edge colocation, ranking our strategy as the only outperformer in the platform strategy subsegment, a strong validation of our vision. The roadmap for platform digital is positioned to capture the enterprise opportunity. Given the resiliency of the demand drivers underpinning our business and the relevance of our portfolio to meeting these needs, We believe we are well positioned to continue to deliver sustainable growth for customers, stakeholders, and employees, whatever the macro environment may hold in store. With that, I'd like to turn the call over to Andy to take you through our financial results.