Digital Realty Makes The Jump To Hyperspace With Lucasfilm Deal, Ups Annual Guidance To $6B
“Having grown up a ‘Star Wars’ fan, I am particularly delighted to say that Lucasfilm is expanding their presence on platformDigital taking advantage of high-performance compute and AI capabilities to solve video rendering, transfer and editing challenges,” Digital Realty CEO Andy Power said during the company’s second quarter earnings call.
“Having grown up a ‘Star Wars’ fan, I am particularly delighted to say that Lucasfilm is expanding their presence on platformDigital taking advantage of high-performance compute and AI capabilities to solve video rendering, transfer and editing challenges,” Power said on the call regarding the Digital Realty’s deal with Lucasfilm.
Digital Realty’s platformDigital is a re-architecture that lets customers security deploy, connect, and control critical infrastructure for any size workload at scale.
During the quarter, the Austin, Texas-based company earned a record $1.87 per share, a 13 percent increase over last year and up 6 percent from last quarter. Power said the company is bullish on the rest of the year as well, upping revenue guidance – again – from a top end of $5.92 billion to a top end of $6.02 billion.
Digital Realty currently has 2,850 megawatts of capacity in place, and has 5,000 megawatts in buildable capacity. The company will have 734 megawatts of capacity coming online in the next year.
“The demand environment for data center capacity remains strong and broad based, both geographically and by product type, driven by secular tailwinds in digital transformation, cloud and AI,” Power said during the call. “Demand for both sub one megawatt and large capacity blocks continues unabated. For sub one megawatt capacity, our pipeline is broad and deep across all regions, and as evidenced by our four-month book to build this quarter.”
The company’s $1.49 billion in revenue was a 6 percent increase from the previous quarter and up 10 percent year over year. Digital Realty’s net income came in at $1.05 billion.
Power said the company saw massive growth in the its zero to 1 megawatt capacity category with 90 million in bookings, and the addition of 139 new customers. He said this reflects the substantial legwork that the company has put into creating a compelling platform for those customers, including a global reach across core markets, strong interconnections, and a full spectrum of cabinet, cage and suite.
“This has been a priority for the company that we’ve doubled down on over the last several years, and now it took a long way to get here,” Power said. “We had to put the puzzle pieces together in terms of a global footprint, have the highly connected destinations, revamp our go to market. A whole host of activities has led up to this, and then I’d say it’s been a growing market where we’ve executed and taken some share over the last several quarters, accelerating with records upon records and then just in this quarter, certainly a milestone up at 18 percent over the prior record.”
Power also heaped praise on the President Donald Trump’s executive order around AI, saying it will “grease the skids” to bring infrastructure online in a more “seamless, expedited fashion.”
“They’re looking to reduce regulatory barriers for domestic U.S., data center, buildouts,” Power said. “That’s one and two, they’re promoting the U.S.’s tech stack as the dominant technologies around the world, both of which I see as only positives for the industry in this state of demand, and in particular for digital.”
Digital Realty will likely benefit from the executive order’s priorities around streamlining programming for data centers, expanding and modernizing the power grid and more, he said.
Power said the order also encourages growth in data centers globally. Digital Realty currently has 5,000 customers in 50 metropolitan areas on six continents around the world and needs to execute to meet its guidance estimates.
“The second one is really trying to enable some of our top customers to export their capabilities the full stack for American AI technologies to allies and partners worldwide,” he said. “Now, we’ve talked a lot about the AI part of that demand being very us heavy recently, but I think the second leg of the stool could certainly further accelerate the globalization of these technology trends and we’re ready for it.”