Digital Realty Trust, Inc.

Good afternoon and welcome to the Digital Realty First Quarter 2022 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. Callers will be limited to one question plus a follow-up, and we will conclude promptly at the bottom of the hour. I would now like to turn the call over to Jordan Sadler, Digital Realty's Senior Vice President of Public and Private Investor Relations, Jordan, please go ahead.

Thank you, Operator, and welcome everyone to Digital Realty's first quarter 2022 earnings conference call. Joining me on today's call are CEO Bill Stein and President and CFO Andy Power, Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and Chief Revenue Officer 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 on today's call. 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, let me offer a few key takeaways from our first quarter. First, we kicked off the year on a high note with record bookings of $167 million, led by strength in the leases greater than one megawatt and supported by steady bookings in the zero to one megawatt and interconnection category. Second, we saw a notable and broad-based improvement in our releasing spreads in the quarter, reflecting a healthier pricing environment, but also the active engagement we are having with customers on the digital realty value proposition. Third, we remain poised to continue our expansion in Africa with plans to close our investment in Teraco later this quarter. And finally, our core FFO per share result exceeded consensus expectations despite FX-related headwinds. With that, I'd like to turn the call over to our CEO, Bill Stein.

Thanks, Jordan, and welcome to the digital team. Our formula for long-term value creation is a global connected sustainable framework. and we made further progress on each front during the first quarter. First, we continued to globalize our business with the announcement of our definitive agreement to acquire a majority stake in Terrico in early January. We also continued to grow our business organically around the world. We posted another record quarter of global bookings, totaling $167 million of annualized rent, including our second highest quarter in each of the Americas and Asia Pacific regions, together with another solid quarter in EMEA. Bookings this quarter were led by strong results in the greater than one megawatt category, particularly in the Americas, while sub-one megawatt bookings remain steady and in line with our 2021 average. Let's discuss our sustainable growth initiatives on page three of our earnings presentation. We are committed to minimizing our impact on the environment, and simultaneously meeting the needs of our customers, our investors, our employees, and broader society, while advancing our goal of delivering sustainable growth for all stakeholders. During the first quarter, Digital Realty was named one of America's most just companies, and third overall in the real estate industry by Just Capital and CNBC. We also maintained our status as a member of the FTSE For Good Index, which measures the performance of companies demonstrating strong ESG practices, continuing our record of recognition for our leading sustainability initiatives. During the first quarter of 2022, Digital Realty continued our diversity, equity, and inclusion efforts through our employee-led DEI Council, which seeks to promote inclusion and create opportunities for each of our employee communities. Through the DEI Council, Digital Realty has expanded its philanthropy and community engagement activities with strategic donations and partnerships with global charitable organizations. Digital Realty has also taken a stand in solidarity with the people of Ukraine and those impacted by the Russian invasion. We do not have any data centers or operations in Russia or Ukraine, and our company will abide by sanctions against Russia. Until the peaceful and legal resolution of this conflict We will not invest in Russia. Furthermore, we are funding philanthropic organizations to support Ukrainian refugees, those displaced within Ukraine, and the growing humanitarian crisis. Let's turn our investment activity to page four. We continue to invest in our global platform. We acquired land in three markets for organic development, including the first location for our joint venture with Brookfield in India, along with two parcels in Europe to support the strong demand in that region. After the quarter, we purchased three additional land parcels in Europe, including a beachhead in Barcelona, marking our organic entry into this complementary Mediterranean metro. Our active development pipeline reached an all-time high in the quarter, with 44 projects underway supporting over 300 megawatts of IT capacity in 28 metros around the world. 58% of this capacity is already pre-sold, reflecting strong customer demand. We've expanded our development in the Americas, adding further capacity in New York, Northern Virginia, and Toronto. Demand remains very strong in EMEA, and we are continuing to invest across this region with active development projects in 17 of our 18 markets. Frankfurt is still the most active development market in EMEA, followed by Paris. We continue to make good progress toward closing the TerraCo transaction, which we still expect to close in the first half of this year. Let's turn to the macro environment on page five. We are fortunate to be operating in a business leveraged to secular demand drivers. We are also proactively managing risks to help insulate digital reality against the impact of the current inflationary and rising interest rate environment. We are well protected against the impact of rising energy costs, given the pass-through nature of substantially all of our customer contracts, and we are effectively managing against rising input costs through our vendor-managed inventory program and the expansion of our pre-purchase equipment pool. We are constructively engaging with new and existing customers on the impact of rising costs, which is translating into better pricing. This is partly reflected in the broad-based and improved cash leasing spreads we experienced in the first quarter, but is also showing up in new lease transactions across most of our markets. Our leadership position provides us with a unique vantage point to detect secular trends as they emerge globally on platform digital. Our customers continue to solve the most complex IT infrastructure and activity and data integration challenges. We see a growing trend of multinational companies across all segments deploying and connecting large private data infrastructure footprints on platform digital across multiple regions and metros globally. Recently, industry research firm IDC updated their global data sphere forecast for 2025, predicting the annual data creation rate will exceed 180 zettabytes per year are roughly triple the 21 rate. IDC concludes that companies of all sizes will need to prioritize data sharing and security to improve business resiliency and create a differentiated experience for their customers. Earlier this week, we published our inaugural Global Data Insights Survey with strategic insights from 7,200 companies across 23 countries and nine industries about the role of data in their business agenda. According to the survey, 70% of these companies are prioritizing secure data exchange in their current plans. The global data survey will augment our data gravity index to provide critical telemetry for our customers, partners, and the respective industries as they evolve their business platforms to harness the power of data and co-located infrastructure to unlock a new era of growth through connected data communities. In addition, Digital Realty recently joined the iMasons Climate Accord as a founding member. This coalition of leading companies is united in their views on carbon reduction in digital infrastructure. The group will establish an independent governing body to define an open standard that provides transparency, traceability, and measurement of progress toward reducing carbon from source power and embodied carbon found in materials, products, and operations of digital infrastructure. This is another great example of our commitment to the continuous innovation and execution of our platform digital roadmap to provide a sustainable and differentiated value proposition for our customers, partners, and the broader industry. Given the resiliency of the demand drivers underpinning our business and the relevance of our platform in meeting these needs, we believe that we are well positioned to continue to deliver sustainable growth for customers, shareholders, 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. Thank you, Bill.