In the latest round of earnings calls for Q4 2021, most of the large colocation firms posted strong results.
Despite seeing revenues drop slightly quarter-to-quarter, Digital Realty finished the year strongly with Q4 revenues above $1 billion
Equinix announced 17 new development projecting in its earnings call, amid another quarter of growth.
In its likely final earnings before going private, CyrusOne posted a small net loss it said was down to merger costs and expenses in Europe.
Switch Inc. announced a net loss, and said it settled a lawsuit with Cobalt Data Centers at a cost of $35 million paid in stock
Iron Mountain beat its 2021 leasing target.
DigitalBridge is planning a massive CapEx spending spree in 2022.
Cyxtera, is due to announce results in the coming days.
Digital Realty: down on Q3, up on 2020
For Q4 2021, Digital Realty reported revenues of $1.1 billion, Adjusted EBITDA of $584 million. These were down on the previous quarter, but a slight increase against Q4 2020.
"Digital Realty delivered record bookings in the fourth quarter and for the full year, with over $500 million of new business globally in 2021, demonstrating the strength of our global value proposition," said Digital Realty CEO A. William Stein. "Demand for data center solutions remains robust, and we are investing organically as well as strategically to expand our global platform to provide customers the capacity and communities they require to execute their digital transformation strategies around the world."
Digital Realty also signed renewal leases representing $151 million of annualized GAAP rental revenue during the quarter: $96.6m in deals worth more than 1MW, with more than three-quarters of that in EMEA.
CFO Andy Power noted that the “lag between signings and commencements was unusually high at nearly 14 months primarily driven by long-term leases on recent development starts in EMEA as customers accelerated efforts to secure a long-term runway for growth against a backdrop of steadily dwindling inventory.”
The company noted that it acquired 16 acres of land in Northern Virginia for approximately $23 million during the quarter. Its Medallion subsidiary acquired two land parcels in Lagos, Nigeria; Digital Realty's share of the purchase price was approximately $22 million.
The company’s previously announced investment in AtlasEdge was valued at $21.95 million. Power said the company’s CapEx for 2021 was around $2.2 billion.
Equinix: 17 projects announced
Colocation giant Equinix announced $6.636 billion in revenue for the year, $1.108 billion in operating income, and Adjusted EBITDA of $3.144 billion for the year 2021.
“While achieving our 76th consecutive quarter of top-line growth in 2021, Equinix also made significant progress in scaling and transforming our data center business and in accelerating our digital services portfolio to deliver on the promise of physical infrastructure at software speed,” said Charles Meyers, president and CEO, Equinix.
For Q4, the company announced revenues of $1.7 billion, operating income of $249.7 million, and Adjusted EBITDA of $787.5 million.
The company said it was expanding with 17 projects across the Bordeaux, Calgary, Dubai, Frankfurt, Kamloops, Los Angeles, Osaka, Paris, Salalah, Singapore, Sofia, São Paulo, Toronto, and Washington, D.C. metro areas.
The company said it saw costs of $15 million related to acquisition integration, and expects $20 million in 2022.
On its hyperscale xScale facilities, the company managed to lease 7MW of São Paulo 5x and 12MW of Frankfurt 11x during Q4. The company is also leasing a portion of Madrid 3x from the EMEA 2 JV for the retail IBX Madrid 6.
Sydney 9x is due to come online this quarter, while London 11x-2 and São Paulo 5x (both Q4) Madrid 3x-1 and Frankfurt 9x-2 (both Q3), as well as Frankfurt 11x-1, Dublin 5x-1, Osaka 2x, and Mexico City 3x-1 (all Q2) are all due to come online this year.
During the quarter Equinix opened IBX data centers in Genoa, Munich, and Perth, as well as an xScale facility in Osaka. It closed HE1 in Helsinki, Finland. During the earnings call the company said it purchased land for development in Dublin and Istanbul.
CyrusOne: a net loss in final earnings call
In what will likely be its last earnings report in the wake of being acquired by KKR and GIP, CyrusOne reported $318.4 million in revenue for the quarter and a net loss of $7 million. Adjusted EBITDA for Q4 was $148.4 million.
The company leased 101MW and 530,000 colocation square feet (“CSF”) in the fourth quarter, totaling $104.3 million in annualized GAAP revenue, all quarterly company records.
It noted the net loss included $20.9 million in transaction, acquisition, integration and other related expenses associated with the pending merger. Additionally, it said general and administrative expenses for the fourth quarter of 2021 included $5.8 million related to losses in Frankfurt, London, and Paris for settlements with subcontractors associated with the insolvency of a general contractor.
“We closed out 2021 with the strongest leasing quarter in the history of the company, with demand-driven primarily by hyperscale customers across our US markets, and we are well-positioned for continued growth with a company-record quarter-end backlog totaling more than $175 million in annualized revenue,” said David Ferdman, interim president and chief executive officer of CyrusOne. “We are also excited to execute on our capital recycling initiative, further optimizing our portfolio as we redeploy capital into accretive developments across core markets with diverse hyperscale and enterprise demand in the US and Europe.”
In the fourth quarter, the company completed construction on 48,000 CSF and 9MW of power capacity across Northern Virginia and London, UK.
The company also recently announced it has achieved 100 percent renewable power at the company’s Dallas, Texas, headquarters and added the site to CyrusOne’s existing net water positive building portfolio. It is the company’s first location that is both using 100 percent renewable energy and net water positive.
Iron Mountain: beats leasing target for 2021
The data center and document records company announced revenue of $1.16 billion for the quarter; Net Income was $61 million, and Adjusted EBITDA was $431 million. For 2021 as a whole, the company recorded revenues of $4.492 billion, Net Income of $453 million, and Adjusted EBITDA of $1.635 billion.
“We are pleased to have delivered exceptional performance in the fourth quarter, marking a record year both in terms of revenue and profitability - in spite of COVID still impacting some of our traditional services. This record result is reflective of our expanding and broad offerings, continued resiliency in our storage businesses, deep customer relationships, and strength of our team," said William L. Meaney, President and CEO of Iron Mountain.
IM’s data center business revenue increased 24.7 percent in the fourth quarter, or a 25.3 percent increase compared to the fourth quarter of 2020; the business makes up around 7 percent of the company’s total revenue.
The company executed 27MW of new and expansion leases in Q4, bringing total new and expansion leasing activity to 49MW for the full year 2021 against a target of 30MW. Iron Mountain has 19 facilities in 16 markets, totaling 176.4 leasable megawatts, and its portfolio is 89.3 percent leased in total.
IM has 55.1MW currently under construction, and another 372.2MW held for development.
For expansions, 2.2MW at FRA-2 Phase 1 is due to come online in Q1 2022, 12MW at VA-2 Phase 3 is due to come online in Q2, and 7MW at AZP-2 Phase 5 due in Q3. For new developments, Frankfurt-1 Phases 2 and 3, totaling 18MW, are due to come online in Q4 2022.
The company said its data center CapEx for 2021 was $309 million. For 2022, data center development will represent around $550 million in CapEx, according to CFO Barry Hytinen. It is targeting leasing 50MW of capacity.
American Tower: becomes a data center firm
American Tower, the new owners of CoreSite, announced revenues of $2.445 billion for the quarter, a 15 percent increase. Net Income increased 22 percent to $441 million, and Adjusted EBITDA increased 10.2 percent to $1.515 billion.
For 2021 as a whole, the company revenues of $9.357 billion, Net income of $2.568 billion, and Adjusted EBITDA of $5.983 billion.
Tom Bartlett, American Tower’s CEO, said: “We drove another year of strong performance in 2021, including double-digit AFFO per Share growth, record new site construction activity and the closing of key acquisitions that we believe will enhance our future growth as digital transformation accelerates. Concurrently, we grew our common stock dividend, prudently managed our balance sheet and diversified our sources of capital in Europe with multiple high-quality strategic partners.
The company noted it spent $400 million on acquiring two data centers as part of the DataSite, Inc. acquisition, along with nearly 700 communications sites. The company also spent $10.4 billion acquiring CoreSire and its 20 data centers. For the full year 2021, it spent approximately $20.8 billion to acquire nearly 33,000 communications sites and more than data centers.
Switch Inc.: settles litigation with Cobalt
For the quarter, Switch Inc. reported Q4 Revenue of $161.4 million, a Net Loss of $18.5 million, and Adjusted EBITDA of $85.8 million. For the year, the company reported Annual Revenues of $592 million, Net Income of $14.8 million, Adjusted EBITDA of $315.1 million.
"Switch's strong fourth-quarter results capped off a transformational year for the company, highlighted by record financial and bookings performance, the launch of our fifth PRIME Campus, the successful acquisition and integration of Data Foundry, and our announcement to pursue a REIT conversion effective January 1, 2023," said Rob Roy, Founder and CEO of Switch. "During Q4, we signed a two-megawatt commitment for LAS VEGAS 15, and expect the first sector to be substantially committed to clients upon its scheduled opening in Q2 2022. Looking ahead to 2022, we see one of the strongest sales pipelines in the company's history driven by robust client demand for our world-class exascale data center infrastructure."
DataFoundry’s revenue repented $12.1 million of Q4’s total, largely unchanged from Q3 2021. The whole company’s net income losses grew from $900,000 in Q3, despite revenue increasing by more than $3 million. Adjusted EBITDA increased by $9 million.
"Switch's strategic growth initiatives continue to gain traction, producing strong double-digit organic revenue growth for 2021," said Thomas Morton, President of Switch. "We are pleased with our strong fourth-quarter sales activity and ongoing high level of engagement with top enterprise clients that continue to grow within our PRIME Campus ecosystems."
"Our fourth quarter and full-year 2021 results demonstrate the inherent strengths of Switch's business model, generating strong revenue growth, EBITDA margin expansion, and robust sales execution," said Gabe Nacht, CFO of Switch. "Our booked-not-billed backlog and highly active sales pipeline provide good visibility to another year of solid growth in 2022."
The company noted its results include a $35 million noncash litigation charge which affected both income (loss) from operations and consolidated net income (loss) for the period: during the earnings call Switch president Thomas Morton said the company had reached a $35 million settlement paid in stock related to a lawsuit filed against the company by Cobalt data centers, which filed and ceased operations in or around 2015. Cobalt had accused Switch of operating a Monopoly. The case was due to go to trial.
Capital expenditures for the fourth quarter totaled $124 million: primarily for continued construction of the first sector at Las Vegas 15 and site preparation for Las Vegas 14 and 16, construction of the Tahoe Reno 2 facility scheduled to open in early 2023, incremental power and cooling capacity at the Austin 3 and site preparation for the Austin 4 and Austin 5 data centers, additional power, cooling, and tenant improvements for the second sector at Atlanta 1 and construction of the Atlanta 3 which is scheduled to open in the second half of 2023. For 2022 the company is expecting capital expenditures in the range of $510 million to $560 million (excluding land purchases).
The company said it signed a 3MW expansion order with an existing eCommerce customer at The Citadel Campus representing $6 million; completed a 2MW deal with an existing cloud software customer at The Core Campus, representing the company’s first signing at the Las Vegas 15 facility and includes expansion options of up to 1MW of additional capacity.
It also executed a colocation and network services agreement with an existing Fortune 50 global technology customer totaling more than $6.5 million; signed a five-year renewal and expansion order with a leading semiconductor customer at The Core Campus worth a total of $25 million.
Morton noted that Data Foundry had a small outpost in a Virginia facility that they were subleasing from Equinix that the company is going to be exiting.
Corporate Office Properties Trust: every shell is leased
Office & data center REIT Corporate Office Properties Trust (COPT) reported revenues of $185 million in its latest round of results and net income of $14.965 million.
On the company’s recent sale of its Manassas data center to CloudHQ’s Cloud Capital, CEO Stephen Budorick said in the earnings call that “Recycling DC6 has been a high priority for the company for several years.”
COPT owns seven consolidated data center shells (1.57 million sq ft) and nineteen through unconsolidated joint ventures with Blackstone (3.18 million sq ft). All are 100 percent leased.
The company sold a 90 percent share in two data center shells in Virginia totaling 432,000 sq ft for $107 million, and retired a data center shell in the Fort Meade area.
The company said during the same call it had executed a 265,000 square foot data center shell build-to-suit in Loudoun County, Virginia, for a ‘cloud competing customer.’ During 2022 it plans to execute 700,000 square feet, around 1/3 of which is to be a data center shell build-to-suit with its cloud computing customer.
In total, the company has some 43 acres set aside for future data center development, totaling some 913,000 sq ft worth of building space.
DigitalBridge: Completes pivot to pure-play digital
DigitalBridge Group, Inc reported fourth-quarter 2021 total revenues of $256 million, and a net income loss of $42.8 million. It reported an Adjusted EBITDA of $20.957 million, up more than $3 million on Q3.
“2021 was a remarkable year for DigitalBridge. We finished rotating $78 billion in AUM in less than three years and at the same time doubled revenue in our digital businesses,” said Marc Ganzi, President and CEO of DigitalBridge. "During that time, we’ve established DigitalBridge as the premier global digital infrastructure investment platform, the partner of choice to investors deploying capital into this resilient, growing asset class. As we look ahead to 2022, we are leveraging our unique investor-operator model to continue building our team and our portfolio to capitalize on the many opportunities we see to support the continued growth of our customers and deliver exceptional returns for our investors."
In total across its different units – including DataBank and Vantage – DigitalBridge owns 78 data centers totaling 1.95 million sq ft; around 1.5 million sq ft is currently leased, representing a utilization rate of just under 80 percent.
During its earnings call the company said it was planning on deploying over $7 billion in growth CapEx on a global basis in 2022, including $500 million on greenfield facilities in Asia through Vantage. CEO Ganzi said Vantage leased around 200MW in 2021.
On DataBank, Ganzi said: “We have new inventory coming in, Salt Lake 5, and 6 are getting built. MSP 3 is being finished. We'll start Indy 3, Atlanta 3, Las Vegas 1 is about to be finished, and Chicago 5. We have over a sales pipeline [of] over $27 million in potential new organic bookings ”