QTS - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to the QTS Realty Trust Q4 and Year-End Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Stephen Douglas, Vice President of Investor Relations. ahead. go Please

Stephen Douglas

here Hello, our and operator. Douglas, welcome QTS's Officer I'm to of Chairman Williams, Thank Chief Financial and XXXX everyone Officer. earnings quarter Executive joined and QTS year-end Relations Jeff Stephen by conference fourth Chad Investor our Berson you, and at and today Chief call. Head I'm

We able to be Team who are also will joined by in additional Q&A. members of our Executive participate

website Relations at financial supplemental information posted section and Investors of Investor our centers.com release earnings Our tab. www.qtsdata in are the under the

also them We which available the webcast presentation it provided will easier our hope website, our with today. slides and follow to made and we make on

are to described in that risks Before information future include this as provided based we a and vary assumptions uncertainties filings during SEC that results may on are and number may let start, materially. certain remind of subject you actual and some call our statements me forward-looking

I and in Investor today, call the now website. EBITDA measures adjusted issued Forward-looking release available on adjusted press financial undertake are further for SEC to of information statements that actual FFO, GAAP Relations will with reconciliation EBITDA. reports with update non-GAAP Chad. over that turn these and remarks include to MRR, results. measures, page them operating our regarding to filed non-GAAP you our made on our events no Return we certain use of documents are or refer issued our FFO, periodic yesterday including we of duty our also the as the And FFO, furnished These our of them and a we Capital, today along to yesterday, Today's as unfold. operating the Invested press release We remarks and

Chad Williams

welcome QTS's fourth Thanks, earnings and Stephen. and year-end XXXX Hello quarter to call.

has announced to that achieved the on what discuss I plan would team like our QTS's restructuring past year. reflect yesterday, release with I in we during conjunction the Before earnings

Turning key $XXX to of XXXX, the X, up year-over-year, adjusted revenue we grew growth year-over-year up $XXX across metrics. million to operating NOI financial per achieved XXXX, and diluted million, was FFO for was of share million record continued year-over-year, Slide X% XXXX over $XXX grew EBITDA full-year XX% We XX% X%. deliver $X.XX healthy of

Over the course for had key QTS to deepened opportunity. business position long-term Chicago our we continue of numerous growth presence growth. and the We in markets existing year, investments see we in Atlanta, strong to Dallas, where like the

in our Hillsboro Hyperscale We commenced Oregon about also center are mid-XXXX. development excited Phoenix, in Virginia, in we which acquisitions key expanded markets land we like our opening and through on footprint newest mega-data Ashburn

our a We innovator also the our made and capability and we position in believe leader solution to and platform sector. that numerous QTS enhancements as accelerate the in market differentiation

and expect is what provides providers. customers to This to related infrastructure experience, QTS of we second announced to the customers our X of platform and the a XXX a Hyperscale their Hyperscale SDP, data official of access locations. can we single big product, interact base. ability megawatt first deliver a resources the or information during requirements HyperBlocks. with deployment, which center their like our solutions, seen quarter a view, customer industry's HyperBlock specific service by environment second metrics quarter cloud and meet platform. and days HyperBlocks represents of customers service operational During Hyperscale-ready, to fully less delivery view. enabling than integrated specifically manage, in SDP QTS approximately availability data on-demand from remote, real time represents XXXX, Each in to engineered all mega-data launching demand across center our have data announced Since of and Also center approach we software-defined optimize XXXX, increasingly aggregating in orchestration from the data sources multiple in which the consistent launch the QTS

QTS fact, logo quarter, the In during key decision platform in signings. factor a fourth software-defined served a multiple new as

connectivity. of steps carrier part a in We to as provider expand our deliberate approach took to multiphase service ecosystem. XXXX neutral Moving cloud

the and network across mega-data able we direct of cloud-based integrating During these center two the and with cloud largest exchange time the footprint connectivity partnerships providers using offer interface. with Hyperscale year, QTS leading infrastructure, world's SDP networking we announced seamlessly customers the control platforms, network Through of PacketFabric real to providers; visibility are our Megaport. application to

next-gen to provider our solve in the its largest Our connectivity ability requirements. chose technology, the for is through to integrated reason seamlessly SDP primary go-to-market AWS, like QTS partner Hybrid world integrated colocation infrastructure a and the why cloud deliver solutions public as

ways, incorporate we additional are strong future believe by from in excited market differentiated are a demand and of Hyperscale positioned many are onboarding, During CloudRamp differentiated quarter, marketplace. terms, our we we this for flexible to momentum the in for turnkey, and year CloudRamp AWS over the XXXX solution seeing AWS partnership Amazon. AWS strongest pre-built, industries QTS's were colocation transformational automated cloud to for purchase with the as customers. And In is solutions to our the this fourth launch collaboration is opportunity. only service CloudRamp platform features marketplace. validation officially on online segments Hybrid for QTS solutions This Colocation. our AWS strategic QTS to the truly that with featured pre-configured we expect technology and market, growth on business we colocation expand provider pleased integrated is cloud two first our was We providers. solutions available an It and time, services. represents the enabled deliver is

a colocation exchange our in the for performance customer logos not prior and our Next to non-recurring charge fourth lease new a with strategic outlook, approximate several lease leases end of million tenant deal QX mega-data and our rent. on quarter, our modified slipping to largest Texas payment a customer center results up the facility annualized performance was a quality QTS signed in in only quarter, portability. market, large vacated communicated incorporated Reported into leasing Slide existing we for XXXX. Leasing early our approximately megawatt signed year-over-year. the was due unique XX The was options, expansion CX-Wholesale able incremental are largely business XX% an a quarter quarter Hyperscale retain operating the Subsequent do going this as X, strength was fourth to signed we of in and we a lagging the net This of been high capacity and two our on to new facilities data by to in contractor in replacement. Irving volume Virginia. we the opportunity were $X CX in center. to had previously include CX into the Northern a $X.X of totaling one This our a the HyperBlock revenue XXXX quarters if volume new deal find from included by of net for Hyperscale two million XXXX government driven revenue an

quarter a and with solution million. would this stepped sales yet deal We our a market. closed strength the as our approximately logos experienced of are with $XX performance fourth up previously enhancing have leasing new Piscataway the in value ended number We particular found that each fourth of demand net signed this annualized $XX revenue At and expected, Atlanta, QX in for exceeded quarter and but in the of million. commenced Chicago We backlog the quarter not team space. federal during pleased

differentiation. the during continue new and pricing with spreads strong rational dynamics quarter and footprint Lastly, our across renewal competitive to X.X% modified side. in X% pricing increase With to positive and leases average QTS reflect on

are in we're our Slide opportunity momentum the we the pleased seeing pipeline. Turning with next X, although

Our lease and quarter. full-year related X.X% initial leasing came business, quarter within expectations. CX partially It to in in This which which also the signings, in includes churn anticipated. and continued reported our multiple in not liquidation, sequential pipeline. performance by during was in a which a remain QX, the XXXX decline X.X% customers MRR reflects wholesale revenue Services our Managed the experienced We CX below volatility event driven delays churn which fourth Cloud X% in was of performance fourth

delivered a infrastructure. pressure strategy to While us is across growth return our our performance. impacted has the Since overall unpredictability, center XXXX, opportunity technology founded the profile, providing has CX tradeoff on on enabled for been combination the was increasing of QTS higher capital, mega-data generate our in business platform and foundation which of offers a lower margin the been

cyber platform As it us yes, This integrated saying to technology quite entrepreneurial to how QTS to enterprise The are challenges. roadmaps. that IT rising shifting customer variety cloud security IP our this smaller by combined focused the is around typical customers and growth led required XC simply services increasing transformation trends companies, service manage the infrastructure technology the sector. provide vulnerabilities concern on to led has with enabled and of flexibility our our accelerated within we formulate product subsequent with in outsourcing to

customized has CX-Wholesale Through significant Megascale meet their require However, this within Colocation demonstrate customers IT and leverage significant operating products. deployments to been CX our complexity have Hybrid to as we our requirements. transformation shifting added infrastructure, able consistently

due rising Cloud challenged CX been continued has profitability. Managed to scale technology, Services it However, to being business complex our in and changes

our implemented plan announcement started turning yesterday, and deemphasizing that specifically in the Slide initiative. contributing This restructuring success result, level to at process our are to X, November deem areas same the or we focusing as is may at seeing of we're either now that we on at business the businesses where and strong a Day expanding Investor as you in directed long-term So have that those have seen strategic not are we QTS. a momentum not

shareholder team in levels reach a Company, the and performance. of believe as As can growth management new and QTS significant we executive the

the to relatively expect reduce in restructuring initiated to are of and our ability results. returns our this shareholders. we main bottom plan There financial ultimately And have accomplish elements plan. this better modest our near-term a and impact three with line We business profitabilities restructuring to accelerate complex our growth to drive

around First, in of this in and primary XXX% our enabled commit these allows Hybrid business. QTS Colocation. drivers realignment we're our our Hyperscale verticals and opportunity. demand sales realigning significant internal of including momentum that towards our of traction force We're to two maximizing organization resources in seeing the each

business an and Service remove technology CX and to overall in Next, Managed direct to Colocation complexity business of serve the and focus we're Cloud margin further business the that enhance products on our our complements exclusively predictability to as improve narrowing effort a scope in profile.

Lastly, broader reduction of and realignment initiative closely our implementing cost that more will narrowed we the model. cost structure be the will align products part with more business a in as simplified

are we and discussed largest that Hyperscale we've aligning in in business. position to you driven Whose previously. We steps Starting our in our with the demand value demand, opportunities to and is these ultimately technology our QTS at are Hybrid On And Media closely today growing in businesses We X, deliberate this are will shareholder maximize increasing enabled more enhance XX demand their vertical Colocation. Social growth Cloud long-term of opportunities center expect data business world. and the our as overall has two that an creation. drivers see has by and companies pace. these which ways primary it Slide and largely transforming IT unprecedented Hyperscale

underlying scale, locations technology some to will scale in speed vertical platform largest for Hyperscale mega developing and build operating for that the not that data segment customer to and The size massive provide growth advantages. come operating centers their significant of data the since in center Hyperscale our strategic QTS but cost looking and has natural pace inception in our cost leverage. relative continue customers world infrastructure. the a that just solutions focus, in deliver are their operate provide build be of QTS center on their also of data with Given scale and in businesses, given

footprint data see Phoenix opportunities steps In increasingly We broaden conversations taken and land increased Hillsboro markets based critical through Ashburn, addition opportunity. the to expand customers. the vertical the center partner recent our our ongoing Hyperscale ecosystem an Hyperscale these acquisitions on and to like we've our as view with key to and

CloudRamp, through are providers Hybrid Moving Hybrid the and the with approach to QTS provides on advantage business a our technology our attractive a CX enabling premium take Enterprise outsourcing security allow that solutions economics from infrastructure ranging this will Colocation. connectivity differentiation from we've core to in key source delivery and continues increasingly customer of lead demand business. continues together. the Colocation support time for and cloud during a to requirements. colocation when At customers leverage our of focus We technology they them innovator service transform flexibility Enterprise will the combined IT dedicated within integrated to compliance, believe in solutions remain looking that customers service. platform, QTS made colocation enhancements seamlessly vertical. require infrastructure our platform through to continue as position and to our

we've X, customer steps now refocusing building excess have a established to capacity moving mid-XXXX of ourselves seeing in take we of preferred deliberate in our segments. Now and at X momentum Hyperscale closer these we Hyperscale Slide let's are megawatts market the on foothold the XXXX to momentum look are Since efforts to with as on signed partner customers. and Hyperscale of the customers. Hyperscale in in deepen in each took specific our QTS a

the extended a HyperBlock Solution anchor X rapidly capacity. metro leases. megawatt center. data scalable We've of comprised blocks tenant in Since of quarter signed during officially X we of customer addition key In first Hyperscale launching XXXX of total our a Atlanta HyperBlock quarter available the

key future with and updating As number what at X the only remain in the XXXX. individual participate Hyperscale it fourth markets in customers active expanded quarters opportunities the in and opportunity to an Hyperscale the the from to market look in with discussions potential ranging quarter acquisitions megawatts forward the additional XX the multiple was needs of driven of on success end quarters. is third following our XXXX We year-ago. part announcement of of to Hyperscale In by a Xx opportunity fourth in land pipeline

quarter, customers. CloudRamp this Subsequent of and and based each QTS in assist the New in to Turning AWS' move diverse top Aligned conduct requirements to their Piscataway industry. our local we in hear customers clients transportation to a in data apart compliance our signed the a solutions customers reselling center deployed. announce in Communications, fourth Logistics technology strategic to and we the the have their on who strategic are to data QTS's end that leading platform proof to public York IT a is both firm our multiple to that of It Company infrastructure the through the projects. of is together the provider AWS partners; of and for Chicago to this AWS win tool during software-defined we technology collaboration the customers largest Colocation a QTS solutions two with technology-enabled our chose Slide enabled a center services continue platform is as customers to cloud packaging migration center ability platform, XX, financial and integrate effectively have using workloads go-to-market includes our due in our comprehensive facility where the are to can from fourth now particular, it QTS utilizing customer to opportunity of using connectivity us Align Through data sitting CloudRamp examples AWS. the and a CloudRamp Aligned channel including peers solutions solution. large integrated to four seamless quarter. hospital strategic migration as provider them infrastructure from on a SDP including enable with directly two concept we set partner markets collaboration initially GDT enable with global of for world. our solution of site. and and infrastructure CloudRamp part clients provides our multiple GDT platforms a in recent are university the layer our IT more is is global Hybrid services platforms CloudRamp This There their AWS, services.

pipeline of our connectivity of to forward expected We cabinet an a partnership connectivity to by and results. XXXX about size potential regarding during delivering build comprised at this well. QTS solutions. impact positive tangible as deals, coming and announcement larger earlier but it partners, critical the within of transforming had and two with a new or providing handful this continues to the Our also on and Seamless look one a made remain the financial solution mostly we enthusiasm AWS both the update our have encouraged and remains this PacketFabric. progress enabled quarters. as spoke on leading in is SDN SDN also with Colocation component Megaport we QTS's collaboration Hybrid I story opportunities

the XXXX was our Following onto XX% these introduction the fourth in year-over-year. revenue of exchanges virtual platform, quarter the QTS connectivity up

are of pleased an calls. accelerant validate facilities opportunity federal the discussed mentioned in Lastly, previous have a and we with This previously, focus on we the to one as potential going vertical our Northern the in sign agreement as lease business on refill vacated Virginia in space to our forward. I to agreement the that January serves

XX acquisition, XX in fourth the facility customers deployed to including of existing increased logos seven the or CloudRamp quarter with total we've from our Piscataway total, new AWS. turn Slide just to how backlog. either Piscataway. has since including bought in site, initial of have in pre-built space acquiring In provide our drive to significant we our mid-XXXX, existed on solution of through recall focus Piscataway now model. an across and we acquired in infrastructure that integrated on Let's example of enabled higher driven returns our XX, revenue since sites we've Hybrid technology the providing collaboration each quarter. were touch When solutions success signed customers colocation number the and and leases execution new in In convinced in a power four higher to we one where And within is expanded side the opportunity efficiency top customers the our

$XX.X at capital approximately return acquisition We does additional the include our And raised of market, XX%. which $X.X XX,XXX square and currently million we The represents this approximately of success feet on MRR example we to power of have well from an that can XX,XXX than from incremental already including feet Hybrid X% of of the floor annualized cost service now we've at model. increased develop to a capacity doubled under a experienced premium in square million more not construction. enabled QTS prime below the have Colocation Piscataway invested

customer, process providers customer the gone getaway new was involving to One referenced I dynamic and future about in by a Once with defined enabled shifted space software earlier. path this multiple Piscataway had our to showed broad Colocation our controlled logo, access a wins that customer from talking - this empower. This RAM provide just them the ability a same AWS hospital connection cloud RFP university we our through conversation combined quarter AWS. pre-built of quickly and required solution, a the our platform to seamless

deals I'd pipeline build beginning detail more the look in to forward opportunity value Piscataway of and incremental continues footprint. Our now New in to Slide in to on continue our plan restructuring review our we Jersey like drive to to XX.

we're discussed, enabled just tangible Hybrid momentum and I've experiencing Colocation. in Hyperscale As both

realigning verticals. leasing advantage our target have our purpose a we to customer volume and sales restructured the to of these organization directly accelerating are our Starting definitive full key with result, more of As sales with our our opportunities we take revenue force, teams growth.

former require CX-Wholesale of a well on organizations Hyperscale of focus to have of the sales We narrowed scope suited These the focus XX dedicated for customers and Hyperscale attention level sales large team. accounts. now diverse are exclusively strategic top the team our

strategic with looking partners top executive sponsorship. are customers level for these addition, In

taken was a the in sales have team, personally last as year, much I Hyperscale As process. more role which late of the Hyperscale result, part significant acceleration on formed

team, that removed CX and commercial all cap include their on XXXkW to placed addressable enterprises. we artificial opportunity opportunities previously our was market brought non-Hyperscale in former have Regarding sales the the

on customers solutions, believe our internal opportunity. for team, enterprise our which well the increasingly Hybrid this to As are the take we resources Colocation as sales expanded represents solving sales of bulk suited

the and from in seeing to deals with already are the group X pipeline We XXXkW in success multiple megawatt signed range. this

seamless technology Operations planned and I'd the to role. leads a organization. Operating a part steps to Jim thank of Reinhart, in currently our QTS mission to the of organization succeed experience. Hyperscale Marketing, XXXX Development, taking Dan In him prior Engineering years who the mega-data within has variety Dave a Organization our people. voice in to of on year. leading will execute joined retire Engineering I forward an and we like transition Chief for out David who has of of Revenue QTS' Robey career. our of Greason, critical stage a David I service Officer. in of a EVP wish leadership as for look him. in our Sales Hyperscale, addition, center his in next Jim continue as has Development in to Hyperscale a and member XX will management Bennewitz, our Robey, assume and succeed Dan operations will sales Sales role Property remain be expanded Officer the of our site had effort. roles transitioning his a facilities Richmond the the search his ensure dedication his in will will organization his of a and critical IPO and and leadership been and to the Chief well QTS years Sales joined and many COO will the QTS QTS David Property Property to of of and to continued and position Jim acquisition be and Tag leadership nearly this the deliberate lead

that the who look leads Lastly, organization. a and will on a of our enable go-to-market our take to of leads past Technology for this Colocation offer additional solutions differentiator It will more QTS have the our the technology responsibility platform enhanced he their Many forward of is key to Jon our you and within business. strategic a an impact natural believe to We lead Hybrid through to vision. technology leaders, to spoken QTS, is QTS, enable ability realignment leasing the and expectation role which Chief Jon choice makes strategy Hybrid with drive in growth. Colocation know a streamlined our groups currently Greaves, IT-related the several to into Officer, business. positive the Hybrid step operational seeing and opportunity advanced Jon, excited I'm momentum all

restructuring colocation. in Moving narrowing scope we exclusively products to Managed We product started XX, the Cloud next reduce predictability. to as further direct to this to are Investor complexity complement increased Slide the phase our conversation shared of this November Services by our business in of focus serve expanding committing a are within profitability in on product. To element cloud at CX a and significantly exit initiative Day effort Yesterday we to we announced an and our in business.

we this XXX reduce part plan of within products XX. As from initiative to our than approximately more to number CX the business total of

business as served differentiation fourth by also in business evidenced adding CX historically QTS. strong and of quarter. It Our the as complexity churn source is for a the as volatility our to

during our relative CX months particularly the at focused several of costs of amount consumes the disproportionate of the the impact review the on more course past have the become that and those strategic we resources business the scale. Over of

and the to center capabilities, software include While solutions. support more CloudRamp are that managed Hybrid critical customer Products technology aligning security our products to our data and we defined we are narrowing closely our capability enabled services. this compliance and maintaining support platform, and strategic high-end Colocation business and are full-time platform, of scope

approximately Colocation capabilities with that The non-core Hybrid at colocation attached CX not to to are sign it impact of to as products portion run specific million. partner. AWS that referring exiting the customer expect to to XX position we certain revenue million fact, retain. these This on cloud represent in we as a includes that associated QTS agreements was rate we're put XX a what In revenue would

CX affected by complete strategic anticipate are the XXXX the currently our products predictability. non-core to from our and we seek CX business By less We of from services that will exit customer contract and will customer partner the a and to consistent narrowing end expect maintain to support. the products to greater complexity benefit transition

a support continuing While to product. differentiated colocation

investments we the center made expect continued operating yield we in in improvement efficiency. addition, to software data platform overall our defined In our have

final XX, our share initiative the a broader reduction third Turning to enable size in cost and right structure restructuring involves to to performance. and per plan ultimately Slide business expense model more of step enhanced growth a our simplified OFFO

costs we majority indirectly hardware We Service to Cost the within businesses either areas the previously. data Cloud discussed or license, Managed come and narrowed those including multiple cost centers with of to with our within across to multiple have associated initiated and from that I've expense reduce business directly scope the certain related rent a communication tied areas process are expected products software expense, savings that lease depreciation personnel expenses. of

XXXX. next per QTS more And adjusted of on rate run detail. turn growth costs restructuring structure of and restructuring the XX% We our in of achieve enabled it over in EBITDA to bottom demonstrating forward that, approximately based reduce OFFO A the expect of Jeff? plan an achieve with will only to efficient future Jeff center its to financial we share our to operating additional Berson, time. years. outlook more now scale the results leverage we our the in details discuss I'll model meaningfully line in plan excess modest Officer and which operating execute expect previous platform several near-term enable financial our Chief that impact over support go Financial anticipate With QTS to data margin cost core over on business

Jeffrey Berson

go performance business we'll XX, our in trends plan our Starting of as forward guidance course financial morning. part announced the XXXX we of disclosure non-core XXXX Slide and out isolate around core metrics the separate good and our business to on restructuring Chad Thanks unit plan. with guidance over key of focus business. to And our

end we core XXXX the to As XXXX should non-core on of so mentioned exit beyond be expect by and based the exclusively services go forward Chad fully products business.

and cloud During financial pace on and non-core change the We on will outside time over XXXX subject fully year around of performance businesses, decline see the the core you plan will course and will and the partners. our of the the impact potential restructuring of on with non-core revenue the expense, process to and to discussions restructuring, our based transparent remain which the results.

XXXX, For we between million. million expect core and $XXX revenue $XXX

part portion reminder, as been our to service which plan. loss and stripped revenue attached revenue estimated out colocation non-core cloud includes a this products certain deals. revenue Non-core well a as as managed the restructuring As excludes CX of CX of has

you the which from have discussed, As strategic million our growth facility throughout a in option remind Hyperscale sequential that for to the impact will $X one-time recognized you QX, Chad about QX from growth year, QX. a we I core would think shape of the customer of in portability exchange as payment

to $XXX million. core reflects EBITDA midpoint, range an adjusted XXXX, of of excess guided a million $XXX At margin For adjusted in this the EBITDA XX%. were range to

for annual of which business to X%, X%. X% Our rental assumes guidance consolidated range churn is historical the between core between on our the lower to target business range of X%

Finally, we of diluted $X.XX operating $X.XX. and between per expect core XXXX share FFO

diluted core and any not tax non-cash FFO XXXX. in business benefit share the operating guidance include FFO of does Our operating assumption per for

which primarily operating which benefit recognized non-cash subsidiary. by per FFO the FFO in REIT in share the metrics the business Over sits was our past two tax CX taxable our and generated years, we've operating

we Ashburn, plan, future we expenditures and tax non-cash As XXXX Piscataway going to in part core new forward. Virginia. To to expect $XXX between in to significant mega-data in expect deliver our spend realize cash do business Dallas, restructuring growth, our support opening announced million as well $XXX as in our center of not our a in newest Chicago, capacity Atlanta, million capital and benefit

the facility loaded to front-end in evaluate which over leverage will maintain to potential XXXX Our range and In course development our due QTS mid-XXXX. financing, our open capital in the including ATM plan, is the divestitures. Ashburn, program, expects of to structured JV expected new mid-X options year in capital times of partnerships, asset is in our financing fund part to ongoing plan range the and in of a order

Revenue XXXX. initial an back like implied $XXX of would XX% we November, our amounts of million light million $XX in provide I XX, million revenue comprised million of and at some related Investor directly exiting, our Slide approximately we $XX year-over-year which to million to revenue associated attached is At potential details expectation cloud ranges announced $XX on of to in to XXXX growth $XX our Day services with revenue to approximately that colocation $XX guidance to Turning risk products restructuring are non-core to million discussed products. CX $XX plan. million to and of managed in for that additional non-core

XXXX. experienced In to earlier, amounted late Chad customer an churn related impact $X in QX, liquidation million discussed in additional we approximately to event addition, as

CX of leased guidance Lastly, results in net partially $XXX lower wholesale significant driven The million downgrade activity $XXX these of in impact QX our million in approximately deal by revenue finance related $XX adjustments core delays approximately incremental than XXXX. and $X to to several million average in has million.

results in year-over-year demonstrating Slide exiting approximately that margin EBITDA is X% in in fall versus guidance than guidance in reduction EBITDA the Now Day diluted in non-core meaning Day. and implied approximately future a $X.XX I higher, how million target, implied per of of these guidance points OFFO our loaded in that line. share will more to guidance at our XX our $XX share expansion of our EBITDA which projected of adjusted only Investor of $X.XX is Investor growth year-over-year, points XXXX. the but we adjusted bottom margin relative The our drive review net EBITDA Investor basis moving This $X.XX EBITDA more adjusted for to still less adjusted our This FFO result XX, has $XXX growth million is than the Again, XX% to XXXX. of diluted at adjusted down XXXX margin a XXX basis midpoint will XXXX. fully business, at discussed Day, factors the XXXX our

guided EBITDA discuss to XXXX, through XXXX annual implemented points we've the margin OFFO plan, Relative anticipate that leverage and By an expect margin XXXX, saving drives low removing profile the growth mid-teens XXXX mid-teens result incremental in we OFFO XX, XXXX exceed approximately compared ramp Day. our of double-digits of revenue XXXX Slide by on more we achieve growth end growth from Investor performance approximately by the XX% EBITDA business and Starting growth ramping of in to at profitability, range prior annual margin versus to like initiatives we growth adjusted per profitability quickly we margin line expected XX an forward model, with through accelerated prior prior perspective, XXXX. of that a Finally, our Chad. EBITDA basis operating with $X.XX, to of with out over Said through achieve basis to result higher an XX% growth we to business. XXXX. now of our From as Day, share from volatility. Investor improved an in adjusted model. expect approximately which in I'd assume of continued is OFFO back which with XXXX. plan plan. This expect an to rate of now to a our at time ramp adjusted margin cost the what in way, XXXX excess growth XXXX turn for less XX% per I'll at We and diluted expansion our our business by call achieve core a higher prior the implies expect go plan share expansion or margin Investor by over XX anticipate laid to points and XXXX Day consolidated business and XXXX, run supported non-core our growth to per in the with we revenue, to implied By the our was share products business. core but year-over-year another mid-teens our

Chad Williams

Thanks, Jeff.

around includes seeing we value that aligning CX are our the refocusing Colocation to XX, out The that our business By of to Hyperscale Slide Hyperscale creation to laid Company's the and the in are business Turning products more Cloud we Hybrid by XXX% and and decisive a for momentum complexity enhance restructuring momentum in core Hybrid a and shareholders. we our that be related have Colocation, efficient model. removing taking resources accelerate further businesses. plan ultimately cost are encouraged we to steps structure

in us performance little leasing like performance. questions. to was call open I'd with OFFO that detail up longer joining achieve it to to of deliver now enhanced this important can Operator? some expect ultimately and the the growth share discuss initiatives and know like morning, on everyone less long-term higher improved per but growth I'd in than thought call thank and I we volatility revenue the and profitability We this a details to we ran behind XXXX. usual morning our strategic for to

Operator

[Operator Instructions] The Gutman first Guggenheim go Robert question Please Securities. is of from ahead.

Robert Gutman

Thanks for taking the question.

Hyperscale to Hyperscale new tends the be On still Hybrid. and is being lumpy. model

And forward per what you and that sort of Hyperscale business? historically? rate and compared blended, the returns top on growth consider how the just normalized So would of to look do then Hybrid going

Chad Williams

our with And at We last and is love more appeal This in will same Thanks. Hyperscale on business integrated to the the as set from business, the the the see complement that the why mid-teens customer the of end the profile the consistency them Colo actively will option profile it we and still really Hyperscale model. we compete on go services base Hybrid growth of of Rob. one of Hey, Chad. that lumpy focus resented business year. of at from Hyperscale diversity reasons for revenue, enterprise Yes, to be is forward. that continue business. broad Colocation we of a more the the we of much growth It's think to a of the time the that

will we business to So business, Hyperscale but pipeline in continue that and we go. see going see to are expansion the come continue

on across giving deployments across locations We're different just and But complement to a around power access of profile. consistently returns the returns cheaper for the our business that Hybrid Although Colo is attractive be in opportunity in well-disciplined year-ago. today the new with we XX% the bigger that's to of the for our much dramatically with opportunities. were a than are are X% think the activity us pretty portfolio Hyperscale since business. strategic conversations different we consistency the announcement in continue Hyperscale country that to Returns us going the return to that Hyperscale growth area - Hyperscale profile it

on put capital real over any pressure more in. as Although those matures returns business competition comes and could more time estate

trial love our we we Suwanee Colocation to You and and some very for could want to of Hybrid market but why see to business we a Colo power seeing to drive behaved that power well location, our our QTS to is continue think we on just a to Metro that's offering. where space robust And that our a to of returns markets part mature ability returns business in for time mid-teens of that on combine some and be the combination. the Atlanta the that share and tightening our sites drives the those key Hyperscale in it complement great in to continue is limited cost effective. of is together. locations lot portfolio group returns The profile highest We see And have poster business the foster Colocation volume the we're a and that, just that. continue opportunity

Jeffrey Berson

And Rob, this Jeff. is

growth that business. accelerating lot one talk of business XXXX there are Colo stress that is the what The through there Investor growth be When the rate of doing quickly Colo is when growth to you that Hybrid fact what and the going to contribution on accelerate that about Hyperscale around to was that to now in and pull growth. deal during because we'll we next aspect beyond. down reason restructuring to that the that XXXX we XX% is driven growth for largely profile. XX% rate that continue is Hybrid core top of know Hyperscale to and enhance really on and this minus layering business lot to And whole focus a reason plus of from on the There we to ramping the we're big going growth that to to talked CX plus the get when year. more of was has we're that three mid-teens accelerate years doing get that Day rate that you and in Chad XXXX, is over business about accelerate the in refocusing or the purpose over growth an to mid-teens here Just exactly growth saw what rate

Chad Williams

implementing. thing mention complexity the Rob, is part strategy of which that I'll that the One runs through work the other of simplification business and

have on As sales are you the that benefit where Hyperscale keep resources business more I from Dan have really that the we're decisively in to CX at on and going is amount us opportunity position another that mind momentum and to engineers the the and sales to people does I tremendous refocus business. of resources of are in Hybrid our to the grow focus and on will and it's freeing intention take organization realignment resources organization be clearly focus things it a up the of seeing and Colo sales unleashing more that for growth and give tremendous more current whether force the dropping to sales pointed think more the

Robert Gutman

much. Thank you it. very Got

Operator

Atkin from next The Capital is go question of Please RBC Jonathan ahead. Markets.

Jonathan Atkin

then Thanks. you through exit to the to the non-core you year know sales businesses. Did it asset as anything be what that terms of is can timing CX actual that clarify Thanks. you the wanted that related a And would little in state? about bit to you

Chad Williams

seamless regards the services timing concentrate on providing to the right Thanks Jon. partner in part, of customer us at smooth that one because have This for that we're on important is handoff are to some business. buying the this very can today to that we're first we they services a very handoff Chad. multiple a I'll looking in take the important customers

the as we have exit that we great a to handoff. that sure we make business So want non-core

pick partners partnership for value pick is with much to and have like want customers our current with AWS partner public cloud opportunity that a we the us Another options. to

partnerships Colocation. to back complementing also sure So do with make our enable our business as are to that we Hyperscale the around we core customers Hybrid to want and those business

have to So confidence look the handoff months core we've to prioritize the that's business from the to also that XXXX next QTS. and us be tremendous and over experience and transition smooth with that that. grow done do by But and that for can end to for of of look be the going number partnership customer committed we

cloud to So more complement that the That's ramp partnerships future be type two business. focuses that exiting going on growth. will of

portfolio, more more looking as something that are stabilized, assets opportunities we capital have look so is and in core asset everybody's to that of divestitures, we're mature, to that like redeploy focus some at harvest strategic subscale, at. some As far more maybe and that going

Jonathan Atkin

wondering was lease there? customer then going that Carpathia. from Thanks. doesn't noticed was finally there is I a your that just going rents, I And to be saw on what to then write-off it step goodwill so And going largest down on guess, last is be, relating like question, to there appear the CX, I was in standard, wondered

Jeffrey Berson

goodwill a We're not related write-off Jon. Hi, to Carpathia. of expecting Yes.

a you talked licenses, see little that exit about will with headcount rent costs will as software in some involves one-time which the bit from both licenses, the X-K well communications expenses as we et in restructuring the and - the cetera. We associated recent release see

got location is of looking that we where on at to demand, QTS another, some we've is facilities capacity $X upside in an customer benefit from we are those portability, the we that and that one-time incremental opportunity know the where that. able to new and taking, infrastructure to was really by in was get where and basis relates move of facilities situations that looking customers one into QX, question put on and so movement face that driven it had existing from the be there As have for benefit the a optionality to core the their million to

Jonathan Atkin

you. Thank

Operator

question from The ahead. of next Please comes Richard JPMorgan. go Choe

Richard Choe

Hi.

from is that's to second see backlog forex of deals closed the to Just a expecting it sense And get in in margin the then half given from should be improvement, or it XXXX. take the and longer to Hyperscale in cutting? in more going half of much the versus is the closing cost shift mix deals first coming we of wanted how terms backlog,

to sense close? knowing a when getting deals a get of of to we sense kind should trying those Just that's lumpy, expect but

Chad Williams

directly Chad. Hyperscale, reports team is this now. the to me that Richard, I'll take

like customers, because really should higher for unleashed dynamics that the go expansion. compliment, to We the CX XX we pipeline to really of at reorganize tremendous end that. be providers the to year team that a just to CX that going who but fact the two that customer. because has and is that in be I day that kept to transition CX expect business we've consider Hyperscale what obviously, seeing last time, year Hyperscale megawatt are in towards the the commercial of focused a unleash a type organization enterprise and traditionally are returns in momentum XXXKW partly We XXXKW to weren't. CSP on pricing for in that you that, previously chase four in the that be customer We conversations to business been We to world. for in mean love to enterprise the which continue kind and expansion all dedicated in team level megawatt of business used we of We're this top exclusively we're and be sales kind used been us long year. but now just see to artificially

in that have new power and lot way that that's very so that's and We opportunity can we cheap prop of at we more active tremendous footprints whether growth them. And of talk in a Phoenix, very be about that whether as Ashburn. is strong with in docs deal more the Hyperscalers strong Atlanta, momentum value in just in scale, for we a to a expansion Hillsboro, team have because in partly focus Richmond, CX where Irving, locations we that's whether bought in a continues have whether for

margin the about to talk do that. cost want as you far improvements, As Jeff

Jeffrey Berson

of about point headcount. better terms was and share Day. other course of a still To by growth the saving the we that guidance be on us and from to we going mix Investor model the provided important end fact bit while at business we cost around is million talked of and is Sure. in top $X.XX, or expect you're margin provided we've going by Richard, we're of a business. little the Day savings the last there as thing on XXX enabled going EBITDA line. from around and growth Investor there, the down maintain next same over an related in specific Day. to $XX that there, basis. a on talked and cost the then business. it that of which that OFFO to going along $XX margin bridge, that We of any the - implied focused from business, having don't - that million we takeout get top the not we're means core to and we're the like being between that in were licenses, forward. to there that your level forma way, and about and model from thing of pro in very that where CX looking mix, XXXX rental by on the versus the now basis revenue from expense software the the It's on cost cost higher XXXX but bottom focused from a the Because through And high by the we're that we that the different identified and terms walking - the that drop focus complex on Investor revenue to specific basis that at points the in couple is business number by pull we're long-term And probability through But that rate cost down takeout margin. incorporate $XX what's getting the is rates we're like And the visibility, in higher enables higher takeout earlier very with very is million business say over per the people a out saving to growth in years, of down from and savings intensity we takeout with I in feel to getting here in on predictability which drop, more would communications of based grow significant that our of XXXX margin and see higher EBITDA in

Jeffrey Berson

into the it services. around thing delivery having Hey, us provide we to we customers might from cloud enable from of Investor improvement gave story about November? shift thinking well Rich, partners start of the the We're QTS margin the public use in had type that That series it. it to of inside cloud public going driven the platform or those our were the kind Once had. the products service with services cloud to ability for really for to our People say customers one a Well, what to into public really or I to we might shared to opportunity long cloud opportunity. announced happened add that enterprise as in-services cloud, Day time. integrated conversations like accelerate public cloud instead started that a dramatically

the the digitizing say I with really on with ramp say in what's that as digitization years and done the using visibly and of that AWS. is it all improvement to the for the over we more that was bottom we've way get to digitized that automating see about most public can were and work with can think using is were efficiency But change that we being the profile talking we're we accelerating into margin So are set last in quicker. we announcement the automation - that and that that tangible in why November, that you that what's line, out that about to growth in celebrating really couple

much our I the think in through So customer we acceleration it's about of we're people feedback combination come deliver and to but we're opportunity because of the about way. that the back way things we point, more expanded very driving a can focusing decisive of we versus this in at unique having of of why and about that services, lot talk and now celebrated enablement XX our think we business a about services basis is the it that a talking it and getting margin margin thought talked in on improvement a are

Richard Choe

you. thank Great,

Operator

from Please The go Fargo. ahead. next is Eric Wells question of Luebchow

Eric Luebchow

question. Hi, for thanks the taking

Given your more enhanced focus return. now X% like on XX% Hyperscale you to that as said or

Hyperscale then costs curious to particularly outlook returns up to ability help your all have As your to deals your really the ones be you market enhance large changed these returns? speed on with at larger for build to and your or stabilized XX general megawatts? you more XX% mentioned efficient any Do

Chad Williams

Chad. this Eric, Absolutely. is

and need. taking out table now that I get with the of sit every Robey and Mr. and cost chain how I are the great We is about with the to construction What's times supply what that they Hyperscale we've Dave can't that day. and tell here many management deliver got customers that you about team innovation. talking at Hyperscale

it in that them they works making drive for to product is them the trying out take customer. QTS ability and and cost the going and box do our a box, to we're for So in that need fit the instead of and participate we still how enhancing

cost that, and So take continues of we speed out continue the to execute. to

think time Joshua on the last I builds the than a size. our is more example that of of build shining that new that on in took efficient is time XX% we

two focus very driving speed Location and cost that of opportunity the to in key are direct Hyperscale we focus to will input positive on direction. decisions drivers, on speed kind continue a at that economics and We and drive continue to and right. what's make

X% comfortable double-digit the to see reasons business returns, for one Hybrid the power why still returns, of do model. reason returns the fully of stabilized on the as Hyperscale part question on the outlook Colocation of other mid-teens the a The basis with return we of XX% type It's we're is business. a the

strength attract customers. that as federal to on group the of for. is So customers long example build to the the diversification and known It can as of customers best is that continue continues XXXkW the has momentum. of one our been the megawatt focus Probably we enterprise type QTS

can customer So we that last if Hybrid in this to business we Colocation got about could in having and right find the the about customer profile and to customer the the call that replace we and returns and that quarter the million we $X that to took patience a talk wait talked early find cure happened replacement event year megawatts two drive about doing of revenue. right

why that's feel in still mid-teens Colocation So we fully of in security platform can via combination. We example overlay unique experience combine business can a Hybrid largely drive and use the we and our came the where fit our that being double-digit our the very still stabilized from in like value business achievable federal corporate when and with strategic compliance you team. this this example our

examples. We the will we a Hyperscale roadmaps get show of definite mature Colo as our if very the have the Suwanee and more we other watch balance feel to We like us how But use Metro you business that of there. have sites and business. Hybrid and some

Eric Luebchow

when there little quick should maybe And for commence and Could environment you construction? one you bit expect you Phoenix see then just what timing and the when we actually to about pre-leasing we in Thanks. development a talk Hillsboro one.

Chad Williams

to post-acquisition in title. pretty into to Yes, that was that and Robey that team one we that reconverting process in Mr. Phoenix went a data fun a in a I'm things we Hillsboro land quick the and of down say Dave and through is happy X-month pre-positioning. and center it kind Phoenix process the took X-month land of turned took

in Hyperscale and we're water XX-month to that to work entitled now all fully Phoenix. access power about is X-month and So sit and doing and pre-designed land is talk the deliveries has to all

months Phoenix pre-positioning so on feel Hyperscalers. Phoenix, the deliveries pretty months and submarkets all can XX have and like the we're XX-month check a spot is within in center Hillsboro predevelopment southern information and that and in work examples that as and fiber that's doing we XX power are with sweet and Now megawatt that constrained the X-month uniquely if water. on Phoenix a deal as we X about to to in on we says from And of Phoenix to water, our XX acres for power standpoint channel deliver

our Phoenix market that's a a has very and the we some will success feel pre-leasing of but based pipeline dynamics those of does of sites, lot Phoenix in look market the active. not so capacity and active have that And and kind and we think well we available in is for starting Hillsboro. focus for play new in today Hillsboro been

Eric Luebchow

Okay. Thank you.

Operator

Please from of Merrill America question Michael is next The ahead. go Lynch. of Funk Bank

Michael Funk

taking Hey, for good morning, Thanks questions. the guys.

and for lesson implied the implies the XXXX by are the guidance know underlying growth for up for core but that original I'll what current growth, in back November more also square on if First, XX% guidance, they cautious growth your than XX% your I XQ. It expectations CX November? lower but were in business guidance slightly impact back similar of expectations you get

Jeffrey Berson

is Jeff. Mike. Yes, This

million restructuring be you're impact that So non-core. to what again, we that in part looking XX as CX we're and about this of the of as seeing minus is at XXXX that's or going think plus

also are it numbers our losing building be an with to solution. going the We into are customers to integrated colocation expectation for that tied you're some that

bridge that loss. million expectation - that of card revenue then you with CX so XX of or plus even these integrated be as some for at And solutions could look Colocation the

We are and core mid-teens growth still of underlying do that that benefit by the up put level. business reflect a it numbers

Michael Funk

the - Can in the on from then cost implies And that XQ, on you million Okay. lost large quarter? the even deal the that? slipping relatively a the deal million to in more deals, comment of or $XX was last impact leasing $X

Chad Williams

slippage, in what remains today. the pipeline was news deal close is end really Yes, Michael. of the end that that our in replacement around the more by year. Probably the is the everything at good the set announcement to slippage best the remained was year Chad. the federal What's of of that This examples one

aligned, that federal on timing have have have been script and signed plus yes, with that doesn't the look we're in glad for work It but As the we involved that we to government you time closed. in $XX mid-January. leasing the deal When million net about it had of the would would talked incremental at quarter. landed always

on pipeline about slipped, out couple that of versus story and Hyperscale a we're more timing those, it's still of the deals the active So last so on stuff the pipeline.

Michael Funk

Jeff, of there? I the if could more One funding Great. are your what the on thoughts options, timing

Jeffrey Berson

Sure.

the to So and the Ashburn provided, into guidance that for available the actually that is up of a ready XXXX. that good portion be going of because middle reaching loaded from facility and is CapEx Ashburn by It going is facility. we've front-end

terms financing which some So ATM you're monetization, in asset investments include and structured of CapEx, that traditional going JV, addition the options at which to to the we are is infrastructure CapEx, in see equity we others. for front-end multiple comment looking loaded did why products, in potential that

Michael Funk

guys. you, Thank Great.

Jeffrey Berson

you. Thank

Operator

The Petersen ahead. is next Please question Jefferies. Jon from go of

Jonathan Petersen

guys to your I follow-up, ways have where from capital? pipeline business more and timing opening a how delayed the Great. kind how stuff quarter, picture of going to of in are investments, to are conversation given delayed little Thanks. are you guess about of morning the the and price when you when talk how is stock some development, bigger and equity you I thinking you kind you're the just this on that different guess some talking fund of capital development going able that deliveries. fourth in guys of you not be about deliver you Maybe include guys to the deploy perspective? conservative the might that be development

Chad Williams

Chad. This Thanks is Jon.

you business. a when are the you that end people Sometimes we we're day, the will not what doing so in day, where take and breath deep it's look hope open a about

capital always on capital capital being as timing far a and is capital. conserving of a As good focus steward timing,

it's earned. get force different space constantly bad all we thing back capital is in and necessarily So if that maybe. is and of if they a saved they space where where that need areas type we from what data sales We're real think capital adjusting capital don't need time the which data can our pull back timing don't because we and

as that capital markets. want that. constantly as bit to a as little you far far talk we're doing read So I markets the capital that. do as Jeff And much the about too into wouldn't go,

Jeffrey Berson

been that still looking we're we've the as discontinuing in our we dollars any with available, love looking And that's equity. it coming from the one traditional told various so of we will back, going is because Sure. are cost into driving beyond that continue as we QX QX well talking result every development dollars capital things opportunities dollar revenue spent just team down do method. have about there we drive and discipline. the to again at you the ways business we business year. in proposed getting spent that traditional is the mentioned I've considering that's different course team are mindset heard of that be to but still flexibility in not going that we that and don't spend the near-term the capital at capital real so today as Jon, have to And in that to are still the pushed growth was of requires put the from to we pipeline. to space that can before, in and deliver, us and in near-term over have It sales still business to revenue, have fund real as That be that get the

Jonathan Petersen

given profitable you number, the as clearly CX but with what the it's a you're mean the XXXX of then And guys some not Okay. I there's as businesses, value downside keeping, that exiting, clearly are business maybe profitable there.

know won't could raise be these should you kind kind parameters how capital just raise? the us of be to thinking selling about marketing you what too that I able you be out you'll potential that, there the of businesses? of but can So on Obviously, we capital amount by specific modeling, give you're some

Chad Williams

point, Jonathan, going your I us customer line, business And drop is the think is good that in we're there's kind not value to profit is there we or monetize group. talked the a to a that to but good for of about a look portfolio in lot the of margin less, forward. and so bottom XX% profile going customers

that opportunities We versus this retain the the and customers do much value immediately grow focus Hybrid as we customers, we for mine want our that Colo seamless - portfolio. comes some continue in can current because And forward, and that delivery smooth So is right I to their will the what's great portfolio would talked across a so platform what that customers, of and QTS that's one to to our thing the be CX that third to going enable can the service think business fit it partner Cloud way deployed cases, for less how enable to on the from guess get continue. haven't business want as we is then we for that of a things needs about is some transition the overlap.

as, going have provide In where enable them. cloud? services, necessarily fact saw said Well, providing announced if were you're the we some did do people we back AWS they when vision to of how to you not AWS

this us look long-term customers be what's for looks look drivers Hyperscale for value transition biggest and the sweet on. of we're what fits that I the to QTS' and driver with would will know right business certainly in and for our we of focused what for that that profitability to growth So right primary this what's and you Hybrid and Colocation to like be execute spot,

Jonathan Petersen

it us that for move. the Okay, long think was kind of will and take finally to right QTS convince how you do then this

increasing you profitability will multiple and seeing into volumes And - or strategy? to two so I quarters leasing and a or going guys quarter start guess it this new we're it take over to settle for will take

Chad Williams

next us the sooner, simplifying think improving. you'll business, this hope right. we which that got risk our doing, our traditional our We the Investor foundation our to than customers, Colocation a out we areas We the our business. continuing we're We him that estate about to couple conversation this XXXX. we get It of see assets feel Hybrid of can Everything over wants customers which and quarters. and we I with that can more we're core only as our value quicker what the assets our ability also what I the met more the see lead think that's both takes success, enhancement. more We back make Day into you'll in think to XXXX you're we can enabling more margin services talk real do of and going to with and profile growth we estate talked work thought, in about it in and confirmation out platform want how over to confident Hyperscale with and initially would see but or a in that we're accelerate transition. to We complexity in results add started and real complexity think fundamental the service getting play to our us do, business gets taking delivery way. is

because of a markets I capital. the here know the think XX basis example, buy type Jersey an attraction Piscataway built, insurance was and financial buy deployment country. what pay the a the everyone asset. asset that's don't XXXkW and our right I knows we no is the or that is and and Hyperscalers services it world-class the are those and type using Hybrid in question to greatest New quality that necessarily good do and at terrific one megawatts turned one of power X they and go example. really - around buying largest we've We of a cost Colocation and caging largest But functions in for highest megawatt mean Tier

things the business on success that. on and going we're have drive XXXX, And perform not to done and and with this that have confident that focused commitment out job company this in lost it's Hybrid This see us. that and going to company direction we that a doing you're XXXX. we Colo in are our So on enough success has opportunity continued good the about that to obviously business the got not you is continuing is that think my we reaffirm will play of

Operator

KeyBanc The Sadler next is of Markets. Capital Please ahead. question Jordan go form

Jordan Sadler

morning. Good you. Thank

how that So so was around conviction employed just elf allocated in right you're the but this refocusing the is have enhancing how conviction out a to here shifting special and did we is that here, very from the capital direction to and today you're And you come and previously focused and business that and direction? return the seemingly business in you're the opportunistically, Carpathia? me QTS CX supposed accordingly room your of of CX guess headed the wondering I QTS in no high opportunity sauce the of strategic differentiator now the back seems being to to acquisition differentiator including it and to this of as what direction was and I'm go longer the necessary

Chad Williams

Well, see future Chad. quarters. is puts in it by ultimately This thanks. the up Jordan you'll performance of Company

unquestioned I execute aligns Company this it. of on the focus be to our an I that vision of think to number it's performance and that Company in will said investors upon from and be the community think fairly and in what us this analyst the one vindicates

away lost space the integrated and this integrated away and services in people story, translation is our your Instead I'd a the take that one was changing. and well. QTS of not aspect and a set availability to saying customers shipped that bit opportunity thing broad services highlight CX that with our an are things I which alive I we to data to in the of centers it's CX have services be in service by The is One little is gave CX I about said there's want power call be earlier that platform because think and from delivery him if locked going for services enabling of is having into transition customers. to this abundant from for this. love in

about and speak type But services I'll a him enterprise it whether second here to deployments. minute. about that ability this to it's the speak cloud of instead have give us for in the provide or could Jon So storage a

platform now think CX as with in enabling services. our I about service delivery those

at that it on did to have enabling the very ways. product across So different and probably now our way that business and our people feel the Jon differentiated that of number but to spoke a in will oh, the came is which see we something continue which a work Investor to it digitization, talent, focus by Carpathia us portfolio across from not about I is automation, Day the

service. the from is from to of I a want think to delivery versus the to partners enable having it is at CX services be of not delivery the so And end ability Jon, also CX services? life, our integration, providing standpoint QTS different it because only will but you about the some of the speak the provide do

Jon Greaves

of service kind just interesting on Chad And the of Chad. Thanks things. point. a delivery platform from actually following the We're now Absolutely. using been Jordan really for lot

So on. clicks end unable time examples with of you transaction service the takes AWS the minutes service end from I'll I CloudRamp than customer give enabled that want less couple real the being now and and to a to a active. three

to on platform. touches those in real and our aspects stack business We take our deliver making of from way turn So see in including big And terms it's do platforms. again through in automation the pretty of change those can again in our the the all of really people Chad mentioned time partners norm on platform connectivity services CX compute across now. services, network can the delivery a into partners as now service

Jordan Sadler

helpful. That's

the - and set question need the fact targets What still reaction quarter the around But which the short-term also market into the the you today. previously with sell were versus To a big you, I capital to plan. is out verses employ NAV. capital your you the the does other for in pertain come still on willingness to in have below and of that The strategy what sort leverage where intensive raise you is for to seemingly the equity and are leverage capital? today appetite it's but Jeff you your

Jeffrey Berson

Jordan. Sure

the of profile. do credit around going you as So improves way our think forward we're structuring we a the business it it part benefit

still mid-five contract, maintain customers with working up a during said predictability have intend in better being winding visibility, are longer-term turns. We better we those to leverage that

the were at in now of XX think of growth. we large think The support - the deals we backlog think looking will that and for we book-to-build additions feel right other of just help comes incredibly leverage we backlog that is level and

Jordan Sadler

Okay. Thank you.

Operator

The Vincent ahead. of from Please Deutsche Chao next Bank. is question [Operator Instructions] go

Vincent Chao

guys. Hey, good morning,

around restructuring like execute talked I the that after but. restructuring business going a lot Can to and about look costs what all this number? be here on that we the quantify Just done in are to appreciate number said what color of will kind don't on you it's and this the

Jeffrey Berson

Sure, Vin.

in that related and to So cetera, restructuring be in you're the very million to movements as could million. of to $XX charge how partner but terms some some or software million, number on one timing exist over that savings cost to will people There of it partner these million some time of be will et spread we of facilities, the the that the incremental the based license to again of be of on from $X disruptive $XX of that. going in it's headcount going a the charge this $XX during see to course year around

Operator

next of go Sami is Suisse. Credit The ahead. Please question Badri from

Sami Badri

taking Thank for you my question.

the Regarding to expected of guidance churn XXXX given visibility X% and the occurring? for facilities business churn have which guided, usually to the provide Core markets this X% to and

Jeffrey Berson

business The we X% gives very we're a making CX pretty reality think us is a again out that to of some of Yes, contracts statement is getting the X% that churn hey, simplification profile the Sami. a strong of that low. where

business the over the in downgrade. our our XX% If of you than less we're think business last and non-core represented about churn revenue the XX% CX year over existing, or that of that

that's think individual and to don't occur. such going business risk. the Hyperscale customers specific is terms customer We Colo don't of where the part churn a has of profile, we that So have Hybrid that We there's what confident target. core - are any lower have the that at much in churn

way that just profile we the business you think of So regular sort - see portfolio. across

Operator

over to Williams question-and-answer the our back closing remarks. session. Chad conference to for This turn concludes like I would

Chad Williams

we in it's you successful we be about for a hope to market. thank to and and confidence want earn trust. us time and and sorry and tremendous for restructuring. get appreciate our to this thank talk the possible have time We your and we it Ultimately, little Well, your the energy But QTS' important long for that out us to all confidence I going make for today.

and So to we to quarters look come. thank the forward talking in you to you

Operator

The today's for conference now has concluded. attending presentation. Thank you

disconnect. You may now

Qts Realty Trust (QTS) 21 Feb 182017 Q4 Earnings call transcript