Digital Realty Trust, Inc. Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Strong quarter with sequential growth in revenue, adjusted EBITDA, and core FFO per share.
  • Leasing momentum remained robust: $114M in new leases, up from Q1, with 43% coming from the 0–1MW + interconnection segment.
  • Releasing spreads reached their strongest levels in three years:
    • Cash releasing spreads +6.9% (vs. prior quarter ~5%).
    • Zero to 1MW: +4.8%, sixth straight improvement.
    • Greater than 1MW: +8.7%, strongest since 2019.
  • Stabilized same-capital cash NOI grew 5.6% YoY, best in nearly 9 years and second straight positive quarter.
  • Liquidity strengthened to over $4B following:
    • $2.2B+ asset sales and JVs, mainly stabilized hyperscale assets.
    • $1.1B raised via ATM equity issuance.
  • Leverage improved to 6.3x pro‑forma (down from peak levels), moving toward the near‑term 6x goal.

Demand Trends and Market Commentary

  • Continued strong global demand for data center capacity with constrained supply due to utility and power limitations.
  • AI demand accelerating across both training and inference needs; early-stage growth across customer segments.
  • Record interconnection revenue growth (+12% YoY), with ServiceFabric activations doubling.

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Operator: Good afternoon, and welcome to the Digital Realty Second Quarter 2023 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'll aim to conclude 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. Please go ahead. Jordan Sadler: Thank you, operator, and welcome everyone to Digital Realty's second quarter 2023 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 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 certain 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

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