Digital Realty Trust, Inc. Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Record quarterly bookings of $176 million (third time in four quarters exceeding $150 million), driven largely by >1MW deals in North America.
  • Core FFO per share of $1.67, up 1% year-over-year but down 3% sequentially due to FX and interest rate headwinds.
  • Backlog increased to $466 million, partially offset by $90 million in commencements.
  • Global portfolio occupancy increased by 80 basis points sequentially.
  • Data center revenue on a constant currency basis improved 120 basis points sequentially.
  • Closed acquisition of a majority stake in Teraco, establishing leadership in South Africa.

Demand & Market Dynamics

  • Strong secular demand driven by digital transformation, hybrid cloud adoption, and cloud provider expansion.
  • Sales cycles lengthening due to macro uncertainty, but overall demand remains healthy.
  • Pricing power increasing across markets due to tightening supply and rising construction/power costs.
  • Significant power delivery constraints in Northern Virginia expected to last through 2026, supporting pricing strength.
  • Record customer additions with 103 new logos in the quarter.

Leasing Performance

  • Large build‑to‑suit transaction with a top-5 global financial services company across multiple metros.
  • Sub‑1MW and interconnection leasing accounted for 24% of bookings.

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Operator: Good afternoon, and welcome to the Digital Realty Third Quarter 2022 Earnings Call. Please note, this event is being recorded. [Operator Instructions]. 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. Jordan Sadler: Thank you, operator, and welcome, everyone, to Digital Realty's Third Quarter 2022 Earnings Conference Call. Joining me today on the 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, 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 GAAP net income are included in the supplemental package furnished to the SEC and available on our website. One important item to note this quarter, while Teraco's results are consolidated into our financial statements since closing on August 1, we have excluded the platform's contribution from leasing backlog and other portfolio statistics that will be cited o

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