Colocation firms Digital Realty, Iron Mountain, Equinix, and American Tower have published their Q1 2024 quarterly earnings results.

Digital Realty saw its revenues drop both quarter-on-quarter and year-on-year for the second quarter in a row. The company sold a majority stake in a stabilized data center to GI, and acquired land for an 18MW data center in Osaka, Japan.

Iron Mountain leased 30MW of capacity over the quarter, broke ground on a new data center in Phoenix, and signed a $300 million green loan.

American Tower saw data center revenue and profit grow, and the company says it has more capacity in development than ever before.

Equinix posted a slight revenue increase, and leased 48MW of hyperscale capacity during the quarter.

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Digital Realty: Revenue drops, sells stake in Chicago data center to GI

Digital Realty reported revenues of $1.3 billion in the first quarter of 2024, a 3 percent decrease from the previous quarter and a 1 percent decrease from the same quarter last year. This is the second consecutive quarter of revenue declines.

The company delivered net income of $288 million in the first quarter of 2024; it posted Adjusted EBITDA of $711 million, up 2 percent on Q4 2023 and 6 percent on Q1 2023.

“Digital Realty saw accelerating demand in the first quarter, executing on a number of multifaceted AI-oriented opportunities, while continuing to support hybrid multi-cloud requirements. Strong demand supported a new leasing record, driven by large footprint deals,” said Digital Realty CEO Andy Power. “In support of this demand, we sourced over $1 billion of fresh capital through asset sales and joint ventures, further reducing our reported leverage while positioning the company to meet our customers' growing needs.”

Across the quarter, Digital signed bookings that are expected to generate $252 million of annualized GAAP rental revenue; the majority was in the greater than 1MW category, largely within the Americas. The company also signed renewal leases representing $248 million in revenue.

During the quarter, Digital Realty closed on the sale of 19 acres of vacant land in Sydney, Australia for approximately AU$96 million (US$63m).

The company also received approximately $92 million for an agreement with Dominion for land easements to build the Mars substation at its Digital Dulles campus in Virginia.

During the first quarter, MC Digital Realty – its joint venture in Japan with Mitsubishi – closed on the acquisition of five acres of land in Osaka which could support the development of up to 18MW of IT load, for approximately JPY1 billion ($7 million).

Digital Realty and GI Partners also expanded their existing joint venture in Chicago. GI acquired a 75 percent interest in a stabilized data center on the same campus as two others GI Partners acquired a stake in last year.

Digital Realty received approximately $388 million of gross proceeds and will maintain a 25 percent interest in the joint venture. GI Partners executed its option to increase its stake in the two original data centers from 65 percent to 80 percent in January.

Digital also closed on the sale of an additional 24.9 percent interest in a Frankfurt data center to Digital Core REIT for €117 million ($129m).

During the earnings call, CEO Power said the company leased 80MW of capacity in Loudon County. The company has around 80MW of remaining capacity available for lease within its first building on the Digital Dulles campus in Loudoun.

Colin McLeam, Digital’s chief revenue officer, said that “around 50 percent” of the company’s bookings this quarter are for AI deployments – including cloud providers and enterprises.

Power added that new AI players that are “not front of the queue” for the company’s largest capacity blocks are often able to fit in some of the “more challenging places” in the company’s portfolio due to their need to deploy quickly.

“They're going to take it because they have urgency around their business models and bringing their AI models on,” Power said.

Equinix: Leases 48MW of hyperscale capacity

Revenues for Q1 2023 were $2.13 billion, a 1 percent increase over the previous quarter, and $130 million up year-on-year.

Net Income was $231 million, up 2 percent increase over the previous quarter. Adjusted EBITDA

was $992 million, an 8 percent increase over the previous quarter. Both are down year-on-year.

"We had a strong start to the year, delivering $2.1 billion in revenue in Q1, a 6 percent increase compared to the same quarter last year,” said Charles Meyers, President and CEO, Equinix. “The rapidly evolving AI landscape continues to serve as a catalyst for economic expansion, creating immense potential for Equinix as our customers recognize the importance of digital initiatives in driving long-term revenue growth and operational efficiency. This strong demand from customers across multiple sectors positions Platform Equinix as the trusted partner for digital leaders to interconnect and enhance the foundational digital infrastructure that powers our world."

During the quarter, added new projects in Frankfurt (10x-1, due Q1 2025) , Madrid (3x-3, due Q3 2024), Osaka (5x-1 , due Q1 2027) and Silicon Valley (SV18 phase 1, 1,350 racks due Q3 2026).

Equinix opened three IBX projects in Mexico City (MX2 phase 3, 1,200 racks), Mumbai (MB4 phase 1, 350 racks), and Paris (PA10 phase 2, 700 racks). It also launched KL1 phase 1 in Kuala Lumpur (450 racks) and SL4 phase 1 in Seoul (475 racks).

The company also purchased its previously leased Dublin 2, Mumbai 2, and Stockholm 3 sites. Terms were not shared. It also exited MA2 in Manchester, UK.

On its xScale hyperscale brand, the company pre-leased 48MW of capacity across its Frankfurt 10x-1 (14MW), Osaka 4x-1 (14MW), and Osaka 5x-1 (19MW) assets, including 34MW leased in mid-April. The company also leased 7MW at Mexico City 3x-1 (and brought forward the go live date to Q4 2024),

At time of writing, the company has not yet held its earnings call.

Iron Mountain: Leases 30MW in Q1, signs green loan for Virginia build-out

For Q1 2023, Iron Mountain’s data center unit posted total revenues of $143.9 million and Adjusted EBITDA of $61.5 million. The previous quarter saw the company’s data center business post revenues of $137.1 million; Q1 2023 saw the unit post revenues of $112.3 million.

For the company as a whole, total reported revenues for the first quarter were $1.5 billion, compared with $1.3bn in the first quarter of 2023. Net Income for the quarter was $77 million, compared with $65.5m in 2023. Adjusted EBITDA was $518.9 million, compared with $460.8m the year before.

"We are pleased to report a strong start to 2024, resulting in all-time record Revenue and a record first quarter Adjusted EBITDA," said William L. Meaney, president and CEO of Iron Mountain. "Our business is performing well and we are positioned to continue our growth trajectory. Our team remains laser-focused on delivering the best-integrated set of solutions and services for our customers. Our consistently strong performance is evidence that our strategy, through Project Matterhorn, is working."

The company signed 150 new or expanded leases totaling 30MW during Q1 2023. The company renewed 190 leases totaling 5.7MW.

During the earnings call, CEO Meaney said the company had signed a 24MW, 12-year contract with a global technology company for data center space at its campus in Manassas, Virginia.

“This is an existing North American records customer that required space in Virginia to support their high-performance computing needs and to expand their footprint,” he said.

The company also signed a 4MW deal with an existing cloud storage customer.

With regards to expansion, the company has commenced construction and aims to launch AZP-3 in Phoenix, Arizona, with 10MW in Q4, 2025. The facility can offer a total of 30MW.

The launch of Phases 2 and 3 of FRA-1 in Frankfurt, Germany, has been pushed back from Q1 to Q2 of this year. Expansions to LON-2 in London, UK were pushed back from Q1 to Q3 and Q4.

The company also announced a $300 million green loan executed in April to support its data center build-out in Virginia.

American Tower: Revenue and profit up slightly

American Tower’s data center unit posted revenues of $225 million for Q1 2024 and an operating profit of $115 million.

The previous quarter saw the unit post revenues of $215 million and a profit of $107 million; Q1 2023 saw revenues of $203 million, and an operating profit of $102 million.

“Revenue in our data center business increased by 10.6 percent, continuing the outperformance versus our initial underwriting plan, as strong demand for hybrid and multi-cloud IT architecture continues, and the backlog of record new business signed over the last two years begins to commence in a meaningful way,” company CFO Rod Smith said during the earnings call. “We've got more megawatts under construction today than we ever have before at CoreSite. So, we're planning for that demand cycle to continue. But I'll just reiterate that a large portion of that's pre-leased more than we ever have before.”

The company posted total revenues of $2.8 billion for the quarter. Net income was $922 million, and Adjusted EBITDA was $1.8 billion.

Steven Vondran, American Tower CEO, said: “The strong performance we saw in 2023, underscored by robust demand across our asset platforms, continued into the first quarter, resulting in Attributable AFFO per Share growth of nearly 10 percent. With visibility into accelerating activity across the US and Europe, a continuation of elevated new business growth across many of our emerging markets, positive collection trends in India, and another strong quarter of signed leasing at CoreSite, our global business is positioned to deliver quality, recurring growth as we move through the year and over the long-term.”

The company currently has 40MW of capacity under construction, totaling 294,455 sq ft. Another 223MW is held for future development, totaling 2.1 million sq ft.