Digital Realty Trust, Inc.

Good afternoon and welcome to Digital Realty third quarter 2026 earnings call. Please note, this event is being recorded. During today's presentation, all parties will be in 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, Seniors by President of Public and Private Investor Relations. Please go ahead.

Thank you, Operator, and welcome everyone to Digital Realty's third quarter 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 materially differ. For further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain certain non-GAAP financial information. Reconciliation is the most directly comparable gap measures 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, exceptionally strong execution across our global platform drove upside to revenues, adjusted EBITDA, and core FFO. 11% core FFO per share growth exceeded our expectations. and we are raising our full year guidance range by almost 2%, now anticipating nearly 13% bottom line growth. Second, total leasing for the quarter was a blowout at $855 million or $627 million at our share with new records set across several metrics. Signings in the zero to one megawatt plus interconnection category exceeded last quarter's record by 40%. Total greater than a megawatt leasing reached $689 million or $474 million at our share, driven by a new high watermark in pricing. Third, these bookings pushed our total backlog to a new record of $2.5 billion or $1.8 billion at digital realty share, which provides us with strong visibility through next year and into 2028. bolstering our confidence in our multi-year double-digit growth expectation. And lastly, we achieved another important milestone within our strategic private capital initiative in the last week, closing over $1.4 billion of initial cornerstone equity commitments to our new perpetual capital strategy focused on stabilized hyperscale data centers in North America. This capital will further fuel our efforts to support our customers' fast-growing requirements for digital infrastructure. 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. Digital Realty delivered an outstanding quarter, highlighted by strong execution across our global platform, robust financial results, record leasing activity, and continued progress against our long-term growth strategy. The digital infrastructure industry continues to evolve rapidly. The adoption of artificial intelligence is driving unprecedented demand for capacity, while simultaneously increasing the value of highly connected environments, strategic locations, and global reach. As enterprises, cloud providers, network operators, and AI innovators continue to expand their digital infrastructure footprints, they increasingly require the partners that can provide capacity and connectivity Together with the capital, expertise, and operational capabilities necessary to execute at scale. Uniquely, our global platform spans six continents, bringing together co-location and connectivity hubs, hyperscale data centers, and strategic private capital capabilities. Over the past several years, we have deliberately strengthened these three core growth pillars to better serve our growing customer base. Together, they create a differentiated platform that combines global scale, connectivity rich environments, development expertise, and capital flexibility together with a 20 plus year track record that is increasingly important as development, power procurement, community engagement, and operations become more complex. This combination distinguishes digital realty in a market where reliable execution, speed to market, and connectivity have become just as important as capacity itself. The third quarter's record leasing activity demonstrated the power of this differentiated global platform and the value proposition it delivers to customers around the world. We achieved record total bookings of approximately $855 million or 627 million at Digital Realty Share, driven by record performance in each of our leasing categories. Importantly, demand was broad-based across geographies, customer segments, and deployment types, demonstrating the growing appeal of platform digital. We continue to see the benefits of artificial intelligence extending well beyond large-scale training deployments and into enterprise adoption, We believe this broadening demand profile further strengthens digital realty's competitive position and long-term growth outlook. Pricing was strong throughout the quarter, particularly within our greater-than-1-megawatt category, reflecting robust and sustained demand and growing constraints around the development of new capacities. These results add to our already substantial backlog and provide additional visibility into our growth over the next several years. The strength of our results this quarter reflects contributions from each of our three core growth pillars, starting with co-location and connectivity. Connectivity is becoming increasingly important as digital infrastructure architectures grow more distributed and data intensive. Today, that trend is being accelerated by AI, cloud adoption, and the increasing need to move, access, and exchange data across multiple environments. While AI is often discussed in terms of large-scale compute deployments, the reality is that AI workloads increasingly depend on a broader digital infrastructure architecture that connects compute and storage with cloud platforms, networks, customers, and Inference Locations. As AI deployments become more distributed, connectivity becomes increasingly important to performance, user experience, and scalability. AI agent and coding workloads make many round trips per task. Placing capacity close to end users and cloud zones improves performance and supports in-region data handling. Today's AI infrastructure build-out is driving demand for our connected environments in strategic locations around the world. Digital Realty's growing global footprint of connectivity-rich environments and growing roster of more than 6,000 customers position us to help customers deploy increasingly distributed enterprise, cloud, and AI architectures. These trends were clearly reflected in our results during the quarter. Bookings within our zero to one megawatt plus interconnection category exceeded 150 million at Digital Realty Share, increasing 80% year over year and 40% from the second quarter, marking our fourth consecutive quarterly record in this category. Matt will provide additional details in a few moments. These results reinforce our conviction that co-location and connectivity will continue to be a critical driver of long-term growth. Turning to our second growth pillar, hyperscale data centers. Demand for large-scale deployments was exceptionally strong during the quarter, reflecting the continued expansion of cloud platforms, AI infrastructure, and larger enterprise deployments. While AI is driving unprecedented levels of demand, delivering that capacity has become increasingly challenging. Customers today increasingly recognize the value of experienced partners with the technological and engineering capabilities, development expertise, and financial position required to deliver and operate critical infrastructure at scale. Our leasing results during the quarter clearly reflected these dynamics. Total hyperscale bookings of $689 million or $474 million at Digital Realty Share set another quarterly record. Hyperscale demand was broad-based across our footprint, further demonstrating customers' expanding needs for capacity beyond the U.S. In addition to two sizable hyperscale leases signed in early July in Northern Virginia, leasing was strong in APAC and exceeded our prior regional record by more than 600%. When combined with the record pricing achieved in this category, and our growing backlog of contracted leases, these results provide increased visibility into our future growth. Turning to our third growth pillar, strategic private capital. Unprecedented demand for digital infrastructure and the extraordinary scaling of AI have clearly driven a corresponding increase in capital requirements across our industry. As infrastructure deployments grow larger, More complex and more capital intensive, access to capital is becoming an increasingly important competitive differentiator. While newer entrants to the hyperscale data center field have emerged, most lack the scale, balance sheet strength, or funding sources necessary to pursue opportunities at the scale required by hyperscale customers today. In this sense, digital realty has spent the last two decades positioning for the current opportunity. We received our first investment grade ratings in 2009, completed our first private capital venture in 2013, and have spent the last four years scaling our strategic private capital franchise to support the massive growth in hyperscaler demand that appeared on the horizon. Further accelerating these efforts, in the third quarter we closed on the acquisition of Columbia Capital, a 30 plus year digital infrastructure focused investment platform. Columbia's experienced investment team and established portfolio complement Digital Realty's global platform and strengthen investment capabilities to take advantage of the expanding AI infrastructure ecosystem. Today, our strategic private capital platform provides additional sources of capital, enhances our investment flexibility and financing options, and enables us to pursue a broader set of opportunities, all while accelerating Digital Realty's core FFO growth and maintaining its balance sheet strength. Subsequent to quarter end, we successfully completed our initial cornerstone closing on a new strategy focused on stabilized hyperscale data centers in North America, and we welcome these partners to Platform Digital. Thank you for your partnership. We expect our strategic private capital platform to play an important role in the perpetual capitalization of hyperscale data centers and to drive long-term value creation for both our private institutional partners and digital realty shareholders. During the third quarter, we continue to see enterprises and hyperscalers expand across platform digital as AI inference continue to emerge around the world. A few examples include a major AI platform is leveraging platform digital's robust interconnection capabilities and global footprint by deploying inference and low latency edge hubs and 15 different metros to enhance their ability to serve their customers' needs. A global medical device and services provider is deploying distributed AI data hubs in four locations across our three global regions to enable faster capture and analytics. A global financial services company chose to deploy on platform digital in three major financial centers around the world to meet low latency requirements and support increasing demand from a growing customer base. And a leading global auto manufacturer is expanding on platform digital to support their immediate growth needs for computing infrastructure while leveraging robust network and cloud connectivity to meet growing demand. Together, these wins show the value of a single platform that can serve customers wherever demand takes them. From large-scale AI capacity to low latency edge and that breadth is what converts today's demand into durable long-term growth. Before turning the call over to Matt, I'd like to address the increased public attention our industry is receiving and how digital realty approaches its responsibility as a member of the communities where we operate. The concerns we hear from communities, elected officials and regulators are understandable and we welcome these conversations. The scale of the data center build-out is historic, and it is only natural that people want to know how data centers affect their utility bills, water resources, air quality, noise, and the overall fabric of their communities. And they want to understand the benefits created by a data center project in their city or town. At Digital Realty, we believe those are the right questions to ask, and we are at the table answering them openly and with transparency. We believe stakeholders should expect responsible development, the highest level of resource stewardship, job opportunities, and a committed partner in return for welcoming us into their community. Our perspective is informed by more than 20 years of developing and operating data centers around the world. During that time, we have learned that successful projects are built on transparency, partnership, and a commitment to creating tangible community benefits alongside long-term shareholder value. That experience also led us, together with other like-minded providers, to launch Infrastructure for America, recognizing that our industry needs to do a better job of engaging transparently with communities, listening to their concerns, and sharing the facts about both the impacts and benefits of digital infrastructure. One of the most common concerns involves energy consumption and electric grid capacity. It is undisputed that data centers require significant power, which is why we work closely with utilities, regulators, and local stakeholders long before construction begins. We have also signed the Ratepayer Protection Pledge, reflecting our commitment that the cost of infrastructure required to serve new data center demand should not be borne by residential customers and small businesses. We also procure renewable energy to support our operations and continue to invest in solutions that improve efficiency and support grid reliability. Last year, 93% of our global electricity consumption was covered by clean energy. For 25 years, the grid in America has been starved of investment. Today, due to demand for digital products and services, billions of dollars are being invested in the grid across the nation. Everyone will benefit from these infrastructure investments in the form of a stronger and more resilient grid. We can support grid reliability during peak demand events by relying on on-site backup generation, reducing our demand on the grid, thereby helping preserve capacity for other users. Water usage is another area of focus. Approximately 75% of our data centers utilize highly efficient closed-loop cooling systems or do not use water for cooling. Closed-loop systems are designed to limit the amount of water consumed to cool data centers. As technology continues to evolve, we remain committed to responsible water stewardship and ongoing efficiency improvements across our portfolio.