Thank the Head of Telecom, Com Infrastructure, and Com Software Research here at the bank. Really happy to be part of the REIT conference again. Thank you to the REIT team for inviting us. Jeff back there in the back. Really happy to have Andy Power, CEO of Digital Realty Trust, with us. I think Digital is probably the first company I covered in this space about 13 years ago. Thank you again for coming out, Andy. We have Jordan Sadler, Head of Investor Relations, as well. I'm going to kick off the Q&A. I'll leave about five minutes at the end for audience questions as well. If you have any, if you can hold them until then. Andy, thank you again. Thanks for having me. Appreciate it. Absolutely. I wanted to kick off, Andy. I relaunched in the sector earlier this year, and what struck me was something you highlighted that you'd rather have 7% growth for 10 years rather than 10% growth for two years, right? It sort of speaks to your philosophy. I think to the current market environment as well, where there are so many big hyperscale deals available and companies that choose to chase them or not chase those deals. How does that philosophy impact how you look at the market, the deals that you pursue, and the deals that you're passing on? Thanks, Mike. Just to clarify, I think we'd always want more and for longer, as a common statement. That's fair enough. Just to, I think the word your question was going was, something that I've said is, I'd rather come in this year, we've turned the corner on our bottom line, and have now called, put up a solid guidance at the beginning of the year that we've now raised throughout the year in addition to beating and on trajectory to repeat that movie into next year. The question that's come to me is, how high could it go? What's next? My euphemism back was I'd rather be compounding our bottom line, which we view as very important to our long-term strategy and our cost of capital at 7% for seven years versus just having two years at 10%. That was in the context of there's levers that we can pull in our business beyond execution in the broader market that go to the risk we have on our balance sheet and how we fund our business model. That goes back to we've evolved our funding strategy, first from called one-off joint ventures, now to our first novel hyperscale fund. How much of development projects we keep on our balance sheet versus share with private capital has a near-term dilutive impact, but a longer-term extension of that runway, more projects that could return further down the runway. Two, how much of the recycling of those hyperscale projects we move into private capital vehicles and lose NOI and FFO in large quantities when you do $1.5 billion or $2 billion joint ventures like we've recently done. Those are the levers I'd say, I think you were highlighting that I'm referring to is becoming a consistent compounder at the bottom line per share growth and having that runway for growth supported by our backlog and our execution, but also the arrows in our quiver, or levers to pull for our funding model. That's a great answer there, Andy. You know, right or wrong, the market's become very mobily focused on large AI, hyperscale deals in the last couple of years. You reported record numbers last third quarter, right, Jordan, for AI-related deals. You're going to break that out for us. Thank you. Recently we've seen more of those deals that can go to markets that I would describe more as third tier, not primary, secondary data center markets. What are you seeing in the current market in terms of demand from those hyperscale customers? Do you think that demand comes back to the markets where you choose to compete, where you think you actually get a good return on your capital? The most important thing I think about our strategy is, we believe, we don't believe all data centers or all data center strategies are going to be created equal here. We focus on markets that not only have robust demand, but diverse demand. They have workloads that are locationally or latency sensitive. Ultimately, many of these markets have some form of barrier to supply. For those hyperscale customers that you were referring to, which is in addition to our enterprise business, which you love to talk about as well, it gives us a value proposition to those customers and allows us to generate outside returns. We've intercepted AI demand in those core markets while that demand had, in the training phase, did not have to go there. The customer's feedback to us is why they choose us, why they chose these markets is the fungibility of the workload. If they get their AI demand wrong, they have other real business use cases, cloud computing that they can put into that capacity blocks. The cloud does not live anywhere or everywhere, I should say. It is locationally sensitive. There's architectures with availability zones in major metropolitan areas with radius restrictions within that metro. A vacant data center in a called, hinterland market cannot be backfilled necessarily with cloud computing versus a vacant data center in Ashburn, Santa Clara, Frankfurt, Singapore, Tokyo has the ability to serve cloud needs. Andy, you mentioned the enterprise business, the zero to one business. You've been increasingly highlighting as an important metric for investors to follow. How does a zero to one business strategy fit into the growth algorithm that you mentioned earlier, and balance your business better than a pure hyperscale strategy? Our results in the zero to one megawatt enterprise colocation and interconnection category are not an overnight phenomenon. It took massive investments over many years, spreading our business across now 50 metropolitan areas, supporting 5,000 plus customers on six continents, the full product suite, investments in our go-to-market, investments in our business processes. It also took a strategic pivot to make that the priority and the focus of the company. We have now, in the last several quarters, started to see the fruits being born, whereby we have been in the $50 million per quarter or $200 million per year, called inflecting, 60s, 70s. We just had a record 2Q, which was $90 million, 18% higher than our prior record. I can tell you why we value that, because we are offering tremendous value to those customers. Those customers are not building data centers on their own. Those customers are buying a platform with us with propensity to grow in more locations with us. Those customers are benefiting from our expertise in higher power densities and liquid cooling. We can generate outside value for the customers and outside returns for our shareholders. The most satisfying piece of that is, despite seeing the success come to fruition, it does not feel like we are anywhere near done where we could be generating that category. I say that with we are making significant investments in our systems, our business processes, our tooling for our sales teams, our penetration with partners and alliances. We are not top ticking or anywhere near in that piece of our business today. I want to skip over to pricing, Andy. You know, when I last covered these companies before moving to software for a few years, releasing spreads were viewed as a negative for Digital Realty Trust. We were still working through some legacy contracts. They were largely flat to negative across your portfolio. In more recent years, they've obviously ticked positive in a very strong way. Can you just walk us through your view on releasing spreads, how long they can remain positive in the range where they are, and the contribution to growth? Let's bucket again the business in the enterprise colocation zero to one megawatt for a second. We have inflected in that category, but to a lesser extent, but that's on the backs of years and years of consistent inflation or inflation plus like growth in our mark to markets. We're now called 4.5%-ish mark to markets in that category, end-signing new deals, uplifting pricing, normalizing pricing for our product set because we are a product of M&A and integration and adding more value to the customer and getting paid for that value from the customer. I see that runway from a long, long way to go here because the addressable market is large. There's a long fragmented tail behind ourselves and one other competitor in the leading positions in the market. We are in many of those markets that connect with our top competitor, but other markets we're playing catch-up. We're maximizing that price volume equation to essentially make sure we're not sacrificing our velocity of volume at the detriment of price where we may not have the leading ecosystem in that market. On the beta stuff, you've had legacy demands, digital transformation, cloud computing, now AI build upon each other. It's come at a time when supply constraints have arisen to the greatest extent, quite honestly, probably in the history of data centers. It's multifaceted. It's power generation. It's power transmission. It's supply chain or power equipment like substations. It's data center supply chain. It's use of water. Last but not least, it's governmental pressures, moratoriums, and NIMBYism in the space. Going back to it's harder and harder to deliver that capacity. Hence, those things and also a mild inflation backdrop that's come through our space and our build costs have pushed rates to much healthier levels they are today from a certainly lower rate on the backs of a lower interest rate environment. I don't think this is going to last in a perfect state forever. That's not how we operate our business, hence my description of how we fund our business. I believe in many markets that are most important to our customers, there will be a continuation of these themes in various shapes and forms. How we operate in those markets, our history, our involvement deep and consistent with power companies, the community, all sorts of folks with a long form approach, long data approach is going to pay dividends to us because they're going to separate the people that came into data centers for a trade, broke some glass versus those who are here permanently. I think our focus on these markets is insulating. One market may get some power relief while another tightens up and vice versa. I want to come back to your comment in a bit about the players that are in there for the trade or a quick buck versus the longer-term durable operators. I'm going to table that for the moment because I want to continue to address what I think are a lot of the questions I get from investors and concerns. Another one is the future proofing of data centers, right? Obviously, AI is more compute power intensive. We've been talking about power densities increasing significantly in at least the next five or 10 years. Can you explain to us how your current facilities and then future facilities can address the rising demands for power, the greater need for cooling that those power densities bring? I hear from a lot of investors that while the legacy facilities just can't carry the next generation workloads and require material capital investment to bring them up to spec. From my vantage point, power densification is a trend that's happened in our industry for a while and has been accelerating recently. At the same time, I am not subscribing to this view that all compute GPUs are going to have to be at the most scientific experiments power density out there on the planet. I think there will be, we're in an environment when one particular provider is pushing the envelope of invention and power densities and cooling features, but you have a whole host of others that are building their own types of chips or trying to compete and are looking for efficiencies in the infrastructure from a power density standpoint. I think that there's a world where numerous types of workloads from network to compute towards GPU AI today and training ML, ultimately inference, incorporating private data sets will be in various private forms of power densities. We're a 20-year-old company. Every investment we made over those 20 years wasn't the perfect investment, and we acknowledged it. We pruned our portfolio and sold outright 100% billions of dollars of data centers over the years. We exited numerous markets along the way that didn't have the attributes of where we're focusing today. What we found in the infrastructure arena, put aside the called legacy telco hotels that may not support an AI cluster at massive power densities or liquid cooling, but are running the internet of New York City or Chicago or the Southeast. Those aside and have other uses, our campuses with larger format builds, contiguous capacity in terms of area, substations on site, runway for growth, that infrastructure we found that we can, of our own volition, go and densify the power. We've done that for years in different shapes and forms. We've been doing liquid cooling for customers in the quantitative trading segment for at least seven years, well before AI was all over the press. Every two and a half years, we probably brought more power into that same exact suite for that customer. I think we have a track record of that. We've done that on data centers that have been 15, 20 years old. We've done that on brand new data centers when they wanted to change the mix of air versus liquid on the fly. I think we've got the track record and experience to do that. I don't think there's going to be a world where we're going to have the luxury to just say all the existing data center stock, no good. We can only move into new data centers. I just don't, from the tech, the data center is one piece of the broader technology, telecommunications, IT infrastructure. Remember, you got the servers and the compute, but then you have the distribution, the fiber optic networks, and actually the consumption that goes all the way to your various devices today, in the past, and what will you consume this on in the future. You touched on power as well. There are a few key parts to a data center, and probably the most important is availability of power, right? We know it's very difficult today to procure more power. Can you talk about the advantage Digital Realty Trust has with the contracted power in some of your key markets like Northern Virginia? We're very fortunate that we made some very forward big bets well before this inflection in demand happened. I was just in the D.C. area recently, and what we put together next to the Dulles Airport sounded like a crazy bet in 2018. Spending $250 million on dirt next to the airport is now turning into some of the most precious capacity in that market. Being there early, being there consistently, being a good partner to all the partners that are delivering the capacity has been key. Northern Virginia is our largest market. We're very large in that market, and our runway for growth in that market could more than double what we have today. We're doing that same playbook in the Chicago market, Dallas, Atlanta, Frankfurt, Amsterdam, London, Paris, Asia Pacific, South America, and South Africa. Can we move for a minute to also managing growth? You already mentioned before kind of selling assets, but you also have the off-balance sheet arrangements. You have the joint ventures, which you could also use. How do you utilize those to also manage the growth of Digital Realty Trust, or is there even a component to managing growth? Is this a better financial structure for you? We made a decision that based on the fact that when it came to hyperscale, the opportunity was large and only getting larger with capital intensities, more long-term, every piece of it was just getting bigger. It was going to be bigger in multiple stages, the development stage, on stabilization stage, that we needed to evolve our capitalization and funding of the company. Having relied mostly on the public company track record of raising public equity, we need more called levers to pull for our business. We started with some great joint venture partners. This year, I had just recently announced our inaugural data center fund for hyperscale in the U.S., north of $3 billion, upsized, oversubscribed. That was a vehicle that tactically we seeded a billion and a half of stabilized assets at an attractive valuation of high five caps, but also seeded with some great development opportunities. We not only did this, we shared opportunities that we had on our balance sheet before the vehicle. I look at that as a massive milestone on what we're building in strategic private capital. That strategic private capital can be a funding mechanism for our own initiatives or also to scale other businesses or assets in hyperscale that we think are going to come to need natural homes. We think there's an avenue like our LP saw of a business like Digital Realty Trust that is solely dedicated to data centers, skin in the game financially with these vehicles, true owner-operator experienced, and not a co-mingled vehicle. We're not investing in data centers plus office multifamily, etc. We're not investing in data centers plus bridges and roads and airports. It's solely the swim lane that is our expertise. We think that we have a good opportunity to scale that that I think is going to help continue to allow us to support our customers' growth and grow our bottom line in an attractive fashion. You mentioned earlier, I said I want to come back to it. There are some companies that are basically just, you know, mantra of move fast and break things. It may not be long-term competitors. They're simply there for the trade in the space. I wanted to separate those from some of the private companies that are more established. We're seeing much higher levels of leverage in some of these companies. I'm seeing 10 to 15 times leverage. We're also seeing higher private market valuations in a lot of instances than public. Two questions here, Andy. Does your lower public market leverage level, does that disadvantage you at all when you're bidding on these deals? Second, is there a case to be made for identifying and selling more stabilized assets into the private market and creating some financial alchemy of the valuation disconnect between public and private? I think this is more germane to the hyperscale business. Sorry, yes, it is. I should have stayed clear on that. Going back to our strategy of not judging ourselves on market share for hyperscale, like we do with enterprise colocation, of course, we pick our spots. We're in 50 metropolitan areas, 30 of them. We have something we can add a lot of value, we can generate outside of return. That value could be they've installed a tremendous amount of capacity with us. They've got a great operational relationship. We've got a runway for growth that no one else has. It's a tougher place to do business. They need to connect on our campus to somebody else that's a customer, whatever it is, that's our angle having played. In that arena, we don't just look at the minimum. It's not just about the cost of capital of the commodity competitor. We're looking for alpha in those returns. You can see that in our development schedule. I believe we're probably generating returns better than the average private capital that's taken the cost of debt and the cost of equity in what we're doing when it comes to hyperscale. It's intentional. That's sacrificing volume. We're saying in this market, we can't do that. We're not going to be in that market. To be a good steward of capital, to your point. Now, even with that playbook, we federate capabilities. There are certain markets where we bring alongside private capital. When we went to Latin America, we brought a financial partner with us. When we went to Japan, we came together with Mitsubishi Corporation to create MC Digital Realty. In the last couple of years, we did financial joint ventures, including development joint ventures. We tried to, especially with the fund, taking it to the next level, have the best of both worlds, have the benefits of the public company, the access to capital, all the benefits of being a public company that gives to our team members, our shareholders, our partners, and customers, but also have capital for hyperscale that is the same level playing field as anyone else in private capital when we use that. That example of leverage, our fund is not high lever, but it's a higher leverage attachment than Digital. Makes sense. Sorry, Jordan, please go ahead. You don't know why the $3 billion hyperscale data center fund would just stabilize assets. I think we would have been successful based on, and I'm albeit unbiased, based on the portfolio we put together, tremendous diversity. This is a hard asset class to get diversity in because the assets are so big. I would say when we approached moving from joint ventures and one-off vehicles to a fund, which I think is better for the investors, better for our platform, and ultimately our shareholders, I think we had said, you know what, we could spend a longer time going down the road that you described to get successful, or we could bring something that solves a problem because we needed to fund some of our development, have some stabilized assets, and we can really start with a great foundation and build our brand when it comes to private capital, and then build upon that with other vehicles more akin to what you described. Space building to be, we know we're at for the way of thinking and sliding values to find multiple solutions. I think I'm not going to take a 50 minus and just to the one that I love since I'm leading, that would be a better. I think that's, to me, that's not just a data center phenomenon. The overall robustness of the desire of capital moving towards core, core plus types of vehicles relative to, quite honestly, investments in certain segments of real estate has left that less desirable than going towards the development. That's a product of risk, demand drop, demand supply, interest rates. I don't think that is a permanent fixture. I think we at Digital Realty Trust have a role to nurture that, not necessarily 100% with this vehicle, but incremental vehicles as we scale private capital. Circling back to Mike's point about the disadvantage versus private capital, the disadvantage really is one more of not of returns, but of, not of growth, but really returns to equity holders. Because ultimately, their leverage you just get from higher returns to equity holders, not. They don't necessarily own the price you get because their cost of capital is necessarily better or worse than you. I think in this current environment, we have very sophisticated financial private equity firms backing platforms in the space, many of which we partner with. They are not tone deaf to the supply and demand dynamics, right? They are not necessarily cutting to their cost of capital minimums. I think the nuance of, you could say, difference or potential disadvantage of solely being in the public markets, going after hyperscale is something we lived in. The cycle of development, you spend money in the public wrapper, it doesn't earn any earnings for a while, especially as projects take longer digestion periods. Land is becoming a bigger portion of that. Getting that algorithm in a development field growth model, I think is challenging. Hence, we said we needed to tweak our model in many shapes. We needed to make that colocation interconnect the engine that led the business. We needed to fund when it comes to hyperscale with private capital partnerships in order to get that growth algorithm that I don't think private capital aren't looking at the% growth algorithms. Their growth is higher. The growth can be higher, but the returns aren't. Overall return for the total investment capital isn't necessarily higher, but the growth, as you're pointing, the growth they're using a long time to develop and get there with the private capital guys who are going to. We have a development partnership with a little famous group over on Park Avenue, and we haven't gone to them and said, "Hey, we want to quote the customer this and say, no, cut the rate, go lower return." They understand they're economic animals. On the enterprise business, how long of a tail to growth do we have for the zero to one megawatt? Is that a five-year tail, a 10-year tail? The question used to be the incremental migration of enterprise into cloud, and that was kind of 100 bps a year to accelerate it. How much more do we have for that growth tail, do you think? No one's even focusing on this, quite honestly. Should we be, or is that a bad question? I focus on it, our company's focused on it, and when you focus on it, you see the results inflect upon it. I think it's going to be paying us dividends from making that decision. I've seen competitively, the landscape has not been a focus. Part of that is we've called, there's been a lot of consolidation in that space. It's a harder road to build upon. I mean, it's been a good 10 years of Digital Realty Trust making this pivot to just getting the results we have today. You look at the addressable market in that, it is very, very large. It's still growing at a healthy clip. You look at the share ourselves and Equinix have in that market, it's still a relatively small share of that market. There's a long tail of competitors you probably never even heard of from net telcos who are still quasi in the space to one-off names. You still have an on-prem piece. You still have cloud adoption, and with cloud adoption has multi-cloud and hybrid cloud adoption. You still have AI to filter into that space. Right? I think AI is going to be different in terms of enterprise's adoption of it. I mean, you could elect, I don't think Bank of America does this, but Bank of America could elect to put their data center in this building if they wanted, or their old office buildings. We elect not to. Yeah. Not a great decision, but it's doable. If you were going to put in 150 watts per cabinet or even higher and liquid cooling, I would say this is not a great building to do this in. I think that's a nuance that I think we'll eventually see in terms of influencing enterprise adoption for its AI. I have one more quick one that I'll open it up, and I do have three questions from the REIT team that we're asking consistently across meetings I want to get to before we close, and Jordan knows this, he knows this thing. You kind of touched on it, Andy. How does the marriage of the enterprise business and the wholesale maybe create synergies that benefit Digital Realty Trust? A lot of talk about inference developing. I think we're very early stage, probably even before first inning right now on that. Other synergistic benefits as we make that transition, or is that too much of a leap to say there'd be any kind of relationship there? I think that many times in the history of our company, we had decisions well predating me, even after my joining, of which road to go down in terms of strategy. One road, the other, both. I look at it as a few simple things. Whether it's hyperscale for cloud computing or AI, it's a large, attractive, addressable market. Enterprise, you've only heard me sing the praises of, I think, of that business and what we're going to do in that business. Putting them together lets you fish in two large pools of opportunity. We're doing it in different fashions, but it allows us to scale our infrastructure, scale our platforms, scale our capital. I think there's synergies there. When we're in front of a customer and we can have discussions about network nodes, on-ramps, what they're doing in AI, megawatts of compute, etc., in a holistic fashion, we're spreading our resources and solving more for the customer in a differentiated fashion. This is a virtuous cycle. All this, I think we're not in the business of investing in island data centers. We're about numerous customers that connect on our campuses, connect to enterprises and service providers, and build upon each other's technology and innovation to support their end customers in the end of the day. That's why we focus where we focus and not go where we don't focus. I think investors miss that as we all focus too much on the headlines coming about, you know, single deals, individual transactions. It's a good point. I do want to get to the REIT team questions before we run out of time here. Let me go ahead and read these off to you. These are going to be multiple choice, Andy, so it should be simple. My favorite questions. You can't be wrong. Just go with C. Yeah, just go with C the whole way down. When the Fed starts to cut, do you expect borrowing rates for long-term debt to A, decline, B, stay flat, or C, potentially rise? I'm going to pass this over to Jordan Sadler over here. First go down, then eventually go higher? Okay. What part of the curve are you playing? I don't know if that was an answer. I'll let Jeff interpret that one and try to put that appropriately. What was it? I was going down. It was decline, stay flat, or it's decline. Decline. Decline. Okay. Thank you. It was not a good standardized test data. No, I was better at the essays. Where did you go to college then? I didn't. Okay. I went to Digital Realty University. Oh, that's perfect. Last year, the majority of companies stated they're ramping up spending on AI initiatives. How would you characterize your plans over this year? That, of course, could be internally for expense reduction or efficiency. Higher. Sorry, higher, flatter, lower is the multiple choice. I think it's going to be higher. We're very fortunate. We've been integrating our systems because we're a product of numerous mergers. We had to do this. We had to remove the friction from our internal customers, our sellers, our partners, and our external customers. It also, I think, will make us AI-ready faster and more effective when the AI tooling comes. Okay. Industry prediction. Do you believe same story in Allied for your sector will be higher, lower, or the same next year? Higher. Higher. Perfect. You answered exactly the same as Equinix earlier, by the way. That was very consistent. We have about one or two minutes left. Are there any quick questions from the audience? If not, we can let Andy and Jordan get the rest of their day back. Thank you all again for coming out. Really appreciate it. Thanks, guys. Take care. Thank you.