Digital Realty Trust, Inc.

Good afternoon and welcome to the Digital Realty First Quarter 2026 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'll 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 will now turn the call over to Jordan Sadler, Digital Realty Senior Vice President of Public and Private Investor Relations. Jordan, please go ahead.

Thank you, Operator, and welcome everyone to Digital Realty Trust's First Order 2026 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 further discussion of risks related to our business, CR10-K, subsequent filings of 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 first quarter results. First, we delivered the second highest bookings quarter ever for digital realty, underscoring the diversity and durability of demand across our platform. We signed the largest megawatt lease in company history, while simultaneously setting another quarterly record in the zero to one megawatt plus interconnection category. Second, the zero to one megawatt signing boosted our 2026 outlook, while a greater than a megawatt leasing increased our total backlog to a total $1.8 billion, or $1 billion as digital realty share, providing strong visibility for our growth into 2027 and 2028. Third, our development pipeline increased by over 50% sequentially to 1.2 gigawatts under construction and is now 61% pre-leased at an 11.4% average expected yield, mainly driven by successful leasing, and our continued efforts to position capacity to support our customers' growing requirements. And finally, we exceeded our earnings expectations, posting core FFO of $2.04 per share for the first quarter, delivering strong double-digit year-over-year growth. Given strong execution across our product offering, visibility from our backlog, and confidence in our operating outlook, we are raising our 2026 core FFO per share guidance range, supplying 9% growth, at the midpoint. With that, I'd like to turn the call over to our president and CEO, Andy Cox.

Thanks, Jordan, and thanks to everyone for joining our call. Digital Realty got off to a record start in the first quarter of 2026, a clear continuation of the momentum we built throughout 2025. Demand for digital infrastructure remains robust. Execution across platform digital remains crisp. and our strategy continues to resonate with customers who are navigating increasingly complex power, performance, and connectivity requirements, as well as mission-critical on-time delivery challenges. We continue to gain market share in our zero to one plus interconnection product category, while providing needed hyperscale capacity in our greater than a megawatt category on an expanding playing field. As the global economy continues to digitize, data center infrastructure has moved from being a supporting layer to being foundational. AI adoption is accelerating compute intensity, cloud demand remains resilient, and enterprises are continuing to embrace technology to improve productivity and efficiency across their core operations. At the same time, power availability, labor and supply chain risks, and community concerns have become meaningful constraints on our industry, creating a widening gap between theoretical demand and deployable capacity. Against that backdrop, only a limited number of providers can deliver fit-for-purpose capacity, future scalability, and deep connectivity across multiple metros and regions with the certainty that customers require. Customers are coming to Digital Realty seeking capacity close to users and clouds to interconnect within and cross-market, and the ability to scale as requirements evolve, particularly as AI-driven workloads move from experimentation to production. This demand environment translated into strong leasing activity during the first quarter, reflecting both the breadth of customer needs and the value of our global platform. We signed over 700 million of new leases in the quarter, or 423 million at our share. representing digital's second highest leasing quarter and nearly 70% above our next highest quarter. Strength was broad-based in the quarter with another record of 98 million of leasing within our zero to one megawatt plus interconnection product where proximity, connectivity, and access to relevant enterprises and service providers matter most. Notably, a record 21% of 0 to 1 megawatt booking for AI-oriented requirements. We continue to increase our market share in this category while growing our customer base, with 116 new logos added in the quarter. During the first quarter, we continue to see both enterprises and hyperscalers continue to spread across platform digital. A few examples include A global biotech company is optimizing its AI infrastructure on Platform Digital to enable AI modeling, factory design, and diagnostics for safety and reliability. A global social and AI platform is expanding on Platform Digital with a new AI inference node to serve a regional customer base and also expanding edge capabilities across global metros, while deploying a new substitute cable interconnection node. A multinational pharmaceutical company is deploying its AI infrastructure on platform digital to meet growing R&D, infrastructure, and computing needs. A leading technology services company is leveraging platform digital to create a distributed AI-ready ecosystem to support advanced AI workloads for growing enterprise demand. A global cloud computing and content distribution provider is expanding their footprint on platform digital by leveraging the market-leading connectivity available to support edge top extensions. And a technology services company chose platform digital to enable cloud-based platforms by leveraging their available connectivity, security, and architecture to support their future growth. These deployments highlight the strength of platform digital in supporting increasingly distributed, connectivity-intensive workloads enabling customers to deploy, connect, and scale critical infrastructure across a global interconnected platform. The momentum in our interconnection-led product set is being reinforced by the continued expansion of our global connectivity footprint. In Europe, we expanded our footprint in the quarter by entering Sofia, Bulgaria, through the acquisition of Telepoint, one of Southeast Europe's most important emerging interconnection hubs. This addition deepens our presence along the Eastern Mediterranean Connectivity Corridor and complements our existing markets in Southern Europe. At the same time, recent land acquisitions in Portugal and Milan position us to extend this connectivity-rich capacity along critical subsea and terrestrial routes, complementing existing assets in Marseille, Athens, Crete, and our soon-to-be-opened facility in Barcelona. reinforcing our ability to serve customers that require low-latency access, geographic diversity, and scalable interconnection across the region. In APAC, we are taking a similar approach to expanding connectivity in strategically important markets. Our entry into Malaysia will add a highly network-dense facility in Cyberjaya that complements our established presence in Singapore, Jakarta, and other key regional hubs. This expands our customers' ability to deploy infrastructure close to end users while maintaining seamless connectivity across markets and provides a clear path for future scalability as requirements continue to evolve. Taken together, these investments reflect a consistent strategy globally, building interconnected campuses in the right locations to support customers as their IT architectures are infused with AI-oriented workloads, become more distributed, more latency sensitive, and increasingly connectivity driven. Switching gears to the greater than a megawatt category, we signed the largest single lease in digital realty history this quarter. A 200 megawatt AI inference oriented lease with a AA rated hyperscaler in Charlotte. This was a milestone transaction for digital realty, representing the largest lease in our history and our first hyperscale deployment in this market, validating our hub expansion strategy in Charlotte and complementing the connectivity hub we have long operated and are currently expanding in Uptown. The breadth of our greater than one megawatt activity in the quarter was also notable, as signings in this category exceeded the level achieved in the prior three quarters, even when excluding the record lease. We signed 10 plus megawatt leases in each of Dallas, Sao Paulo, and Tokyo during the quarter, highlighting the accelerating pace at which large AI workloads are moving into scaled production environments and the continued global appetite for compute. Given record low vacancies in most of our existing data center markets, we continue to target land and power opportunities adjacent to our connected campuses, allowing us to support large-scale deployment while remaining connected to core cloud and connectivity networks. To meet those needs, we're expanding our ability to deliver hyperscale capacity where land, power, and certainty of execution matter most. In the first quarter, we demonstrated the ability and expertise necessary to source, position, and then lease hyperscale IT capacity for development in less than 18 months. Building on this success in Charlotte, We have a second 200 megawatt building that will follow building one, and we launched construction on another 200 megawatt development site in Atlanta. We also have in position today or are preparing substantial capacity for development in Dallas, Northern Virginia, Hillsborough, Sao Paulo, Frankfurt, Paris, Tokyo, Osaka, and Seoul. Given the significant development starts in the first quarter, the development pipeline scaled by more than 60% to $16.5 billion at 100% share, at strong double-digit unlevered returns. While this marks a historic ramp in our ongoing activity, we remain disciplined and well-positioned to continue to meet this opportunity. As we think about our ability to support our customers' long-term growth needs, the combination of land holdings, power availability, supply chain execution, and capital all matter, and each must be sourced in a deliberate and scalable manner. Over the last several years, we have been strengthening each of these disciplines so that we can continue to deliver capacity reliably, particularly as projects become larger, more capital-intensive, and thereby more complex to execute. That same discipline has guided the evolution of our capital strategies. In early 2023, we announced a plan to diversify our capital sources by utilizing more private capital, including joint ventures, in our plan. We then involved that approach with our first U.S. hyperscale closed-end fund, significantly expanding the pool of capital available to support hyperscale development while preserving alignment through our retained ownership and management role. During the first quarter, we continued to scale our strategic private capital platform. shifting to broaden our foundation to support the capitalization of stabilized hyperscale data centers. The objective is straightforward, to align long-duration institutional capital with the long-lived nature of our assets and our customers' digital infrastructure needs. By continuing to diversify, evolve, and expand our capital sources, we are enhancing our ability to secure land, power, and equipment, to scale development responsibly, and to deliver capacity when and where our customers need it, while continuing to drive attractive risk-adjusted returns for our shareholders. And with that, I'll now turn the call over to our CFO, Matt Mercer.