Digital Realty Trust, Inc.

Good afternoon and welcome to the Digital Realty third quarter 2025 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 and we will aim to conclude at the top 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 third quarter 2025 earnings conference call. 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. 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, CR10-K, and subsequent filings with the SEC, this call will contain certain non-GAAP financial information. Reconciliations to the most directly comparable GAAP measure are included in the supplemental package furnished to the SEC and available on our website. Before I turn the call over to Andy, let me offer a few key takeaways from our third quarter results. First, we posted $1.89 in core FFO per share, a quarterly record, and 13% higher than the third quarter of last year. Constant currency core FFO per share was $1.85, 11% higher than last year. Other profitability metrics surged as well, with AFFO per share and adjusted EBITDA up 16% and 14% year-over-year, respectively. These strong earnings results were comfortably ahead of expectations resulting in our third quarterly guidance increase so far this year. Second, we have strong visibility to continued growth given our near record backlog and crisp execution. Our backlog grew to 852 million with the lion's share slated to commence to the end of next year while organic growth continues to accelerate. as demonstrated by 8% same capital cash NOI growth year over year. Third, we continue to execute across the full product spectrum and our footprint, with over 200 million of bookings at 100% share, near record 0 to 1 megawatt plus interconnection bookings in the quarter, with a leading power bank of 5 gigawatts of IT load to support our customers and Digital Realty's future growth. With that, I'd like to turn the call over to our President and CEO, Andy Power.

Thanks, Jordan, and thanks to everyone for joining our call. As digital transformation, cloud, and AI continue to grow, our ability to deliver scalable, connected infrastructure across key metros worldwide is more critical than ever. Platform Digital's global reach and full-spectrum product offering are key differentiators enabling us to support the evolving needs of cloud providers, enterprises, and service partners around the world. Over the past two years, the data center industry has experienced unprecedented demand, fueled by the digitization of enterprise business processes, the expansion of cloud, and the ongoing proliferation of AI, resulting in complex hybrid IT architectures. Demand for scalable, connected infrastructure remains robust across a wide range of customer segments, from global cloud platforms to regional service providers and multinational enterprises. Meeting this demand within our markets, however, is becoming increasingly challenging. Power availability, permitting challenges, and infrastructure constraints are making it harder to bring new supply online at the pace our customers require. Digital Realty's established presence in the world's leading metros, deep relationships with utilities and local governments, and proven development track record give us a distinct advantage in navigating these challenges and delivering capacity efficiently and reliably where and when our customers need it. In an attempt to help frame how we see the abundance of data center infrastructure announcements we are all seeing in the markets, I want to make a few comments. It is clear that the world is engaged in a full-scale technology race with a handful of key players aiming to build the most advanced AI models or perhaps even AGI. Three years post-launch, ChatGPT holds the title of the fastest growing app and is already among the most highly used applications in the world with more than 800 million weekly users. Several others, including Meta, Google, Baidu, and XAI, have also developed AI with meaningful scale. With each passing week, we continue to see massive investment announcements and partnerships aimed at scaling the infrastructure necessary to support the world's most powerful AI training models. Given the scale of these announcements, the ongoing development and proliferation of AI offerings the opportunity still appears to be in the very early innings. The preponderance of gigawatt campus announcements to date have generally fallen outside of the major metro markets in digital realty's strategic footprint, as model builders and their providers have urgently sought locations that offer readily available and abundant power, as power is the limiting factor for scaling AI. The anticipated pace and scale these developments are largely unprecedented. Given our experience and track record in the space, we are intrigued as several new market entrants have launched the development of massive and complex remote campuses, often to support a similar use case, workload, or customer. These facilities hold the promises of developing life-changing technologies, and we are optimistic about their prospects. Training workloads geared toward developing the AI models can be described as latency tolerance, as the development of the AI takes precedent over the utilization of the technology, at least for now. Based on conversations that we are having with our customers and industry participants, as well as what we are seeing in our broad portfolio, we are increasingly confident that connectivity will become increasingly important over time. as model success drives implementation and usage requiring lower latency, inference-oriented deployments. Israel Realty has landed a meaningful share of AI-oriented deployments over the last two years. Since mid-2023, AI has averaged more than 50% of our quarterly bookings, and we continue to expect that the 5 gigawatts of IT load that we have in our power bank will be significantly weighted toward AI workloads over the next several years. Critically, our data center capacity is situated in and around the world's most highly connected cloud zonal markets with the highest concentration of population and GDP, and we currently maintain five gigawatts of large contiguous capacity blocks situated across 40 of our strategic metros across the globe. It is harder to build in these locations for a growing list of reasons, and we expect this capacity will continue to be highly sought after as new applications and use cases continue to evolve. Our conviction in our portfolio and in our markets continue to be evidenced through our daily engagement with our 5,000-plus customers. Digital Realty continues to see a robust pipeline of demand, from AI-oriented use cases. And even without a record hyperscale lease, like the one we signed in March of 2025, 50% of our bookings were related to AI use cases in the third quarter. In Q3, we again delivered strong operational and financial performance, underscored by record interconnection bookings, near record new logos, and the second highest level of bookings ever in our zero to one megawatt plus interconnection product set. Core FFO per share set a record $1.89, a robust 13% above last year's third quarter. These strong earnings were driven by 10% operating revenue growth and continued expansion of our high margin fee income together with discipline expense management, resulting in the third consecutive guidance increase this year. Bookings in the third quarter were 201 million at 100 percent share, or 162 million at digital realty share. Like last quarter, our zero to one megawatt plus interconnection category was a strong contributor to our leasing strength, with 85 million in new leases, along with a healthy 76 million of greater than a megawatt leasing. Leasing was globally diversified, broadly consistent with our existing rent roll, with notable activity in Americas, in EMEA, and in APAC. We also added a near-record 156 new logos. Interconnection leasing of $20 million marked a second consecutive record quarter, which was 13% higher than the last quarter's record, underscoring the growing recognition of our connectivity-driven value proposition. Interconnection leasing was buoyed by strength in our AI-oriented fiber offering, reflecting the increased demand for high-volume movement of data amongst customers, as well as momentum in our service fabric product. Matt will provide more details on our results in a few moments. While there's been significant market focus on large-scale AI deployments, Digital Realty's pool of highly sought-after, larger continuous capacity blocks are slated to come online in late 2026, 2027, and beyond. We remain actively engaged with Hyperscale customers on our largest future leasing opportunities, and we continue to see strong momentum in our co-location and connectivity product offering. Enterprise demand for data center infrastructure continues to grow as organizations transition away from traditional on-prem IT environments toward more flexible cloud-connected architectures available within digital realty data centers. This shift is driven by the need to improve scalability, reduce costs, and enable faster innovation. Enterprises are increasingly deploying workloads in co-location and hybrid environments to gain proximity to cloud platforms, partners, and end users, while maintaining control over mission-critical applications and data. Digital Realty's full-spectrum product offerings combined with our global footprint allows us to support this transition providing infrastructure and connectivity enterprises need to modernize their IT strategies, accelerate digital transformation, and AI implementation. We're seeing these trends play out across our customer base as enterprises increasingly turn to digital realty to support their evolving infrastructure needs. Whether it's enabling real-time data exchange across global operations, integrating with multiple cloud platforms, or deploying AI workloads at the edge, our customers are leveraging platform digital to solve complex challenges and accelerate their digital transformation. Let me share a few examples that illustrate how our platform is helping enterprises unlock new capabilities and drive meaningful business outcomes. In September, I was honored to join the CEO and CTO of Oxford Quantum Circuits, for an important milestone during their recent deployment of New York's first quantum AI computer in our JFK 10 data center. Oxford Quantum Circus is taking advantage of Platform Digital's co-location and connectivity capabilities to expand their AI capabilities at scale, solving for efficiency and resource constraints. A leading global technology company chose Platform Digital to employ their global presence, taking advantage of liquid cooling capabilities required for their HPC AI environments. A leading healthcare analytics and technology solutions company is expanding its geographic presence on Platform Digital to solve data localization and sovereignty challenges. A leading higher education research institute is taking advantage of Platform Digital's liquid cooling capabilities required for their HPC and AI deployment. A leading European technology and network provider is expanding on Platform Digital, deploying a sovereign cloud solution in the US to support their customers' compliance needs. A global payments provider and new logo for Digital Realty chose Platform Digital to deploy infrastructure in multiple markets to utilize network and cloud ecosystems while solving for scalability and compliance requirements. And a multinational financial services company is expanding on Platform Digital, taking advantage of Digital Realty's leading financial and network ecosystems. Before I turn it over to Matt, I'd like to briefly highlight our progress on global sustainability. In the third quarter, we received the Echovatus Gold Rating, a prestigious international recognition for business sustainability. This recognition places us in the 97th percentile of all companies assessed, highlighting our position among the top sustainability performers worldwide. We expanded our renewable energy commitment in Illinois by signing additional contracts that support high-impact local community solar projects being developed by Soltage. These locally sourced solar energy projects will help support local power grids and benefit residents in the communities in and around our data centers. Additionally, in the third quarter, we announced long-term renewable energy agreements with Current Hydro to procure 500 gigawatt hours of clean baseload hydropower from three projects along the Ohio River. These agreements highlight our commitment to sourcing new, firm, 24-7, carbon-free energy in the regions where we operate, enabling us to support our customers' needs. And with that, I'll now turn the call over to our CFO, Matt Mercier.