Financial Data and Key Metrics Changes - The company reported record financial performance with revenue increasing 13% to $1.8 billion, adjusted EBITDA growing 16% to $660 million, and AFFO rising 18% to $393 million [2][15][22] - Adjusted EBITDA margin improved by 110 basis points to 37.6% year-on-year, reflecting enhanced profitability in data center and asset lifecycle management (ALM) businesses [15][21] Business Line Data and Key Metrics Changes - The global records and information management (RIM) business achieved record quarterly revenue of $1.34 billion, up 6% year-on-year, driven by revenue management and higher digital revenue [15][16] - Data center revenue surged 33% year-on-year to $204 million, with organic storage rental growth increasing 32% [17][18] - ALM revenue increased 65% year-on-year to $169 million, with 36% organic growth attributed to strong operational execution and enterprise volume [19][20] Market Data and Key Metrics Changes - The data center market remains robust, with leasing activity and pipeline growth driven by hyperscale customers focusing on cloud capacity [8][9] - The company has a pre-leasing backlog and a strong pipeline, with 450 megawatts available for sale over the next 18-24 months [9][40] Company Strategy and Development Direction - The company aims to sustain industry-leading revenue and earnings growth, with a focus on expanding its growth portfolio, which is expected to contribute nearly 30% of total revenue by the end of 2025 [4][12] - Recent acquisitions, such as ACT Logistics, are intended to strengthen market leadership in ALM and expand geographic footprint [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining data center revenue growth, projecting over 25% growth in 2026 based on signed leases [3][9] - The company anticipates continued strong performance in the fourth quarter, with revenue expected to reach approximately $1.8 billion, reflecting a 14% increase year-on-year [21][22] Other Important Information - The board of directors authorized a 10% increase in the quarterly dividend, marking the fourth consecutive year of dividend growth [5][20] - The company secured a significant five-year contract with the U.S. Department of the Treasury valued at up to $714 million, which is expected to ramp linearly with seasonal volume peaks [7][24] Q&A Session Summary Question: Can you talk more about the planned phasing of revenues for the Treasury contract? - Management indicated that the revenue will ramp linearly with slight growth, influenced by tax season volume [24] Question: What are the expectations for the ALM business regarding volume versus price? - Management confirmed strong performance in ALM, with 36% organic growth expected to continue, driven by enterprise volume [28] Question: Can you elaborate on the data center pipeline and demand? - Management noted a marked uptick in demand from hyperscale customers, with a strong pipeline for cloud buildout and inference [31] Question: What drives client decisions to shift leasing locations? - Management explained that customer needs dictate such decisions, emphasizing a customer-centric approach [48][52] Question: What are the expectations for volumes and pricing in the RIM storage business? - Management anticipates continued organic volume growth and mid-single-digit revenue management actions for the upcoming quarter [56]

Financial Performance - The company achieved record financial performance with revenue increasing 12% to $1.7 billion, adjusted EBITDA growing 15% to $628 million, and AFFO increasing 15% to $370 million [6][21][22] - Adjusted EBITDA margin improved to 36.7%, up 120 basis points year on year, reflecting operational strength across the business [23] Business Line Performance - The Global Records and Information Management (RIM) business achieved record revenue of $1.32 billion, driven by revenue management and digital solutions, with organic storage revenue up 6% year on year [24] - The data center business reported total revenue of $189 million, a 24% increase, with organic storage rental growth of 26% [26][27] - The Asset Lifecycle Management (ALM) business saw total revenue of $153 million, a 70% year-on-year increase, with 42% organic growth [29] Market Performance - The data center market remains strong, with pricing trends favorable and a leasing backlog in key markets such as Northern Virginia and Richmond [14][17] - The company is positioned to capitalize on significant growth opportunities in India through the acquisition of CRC India, enhancing its digital product portfolio [12][13] Company Strategy and Industry Competition - The company is focused on driving double-digit revenue growth supported by cross-selling opportunities in fragmented markets [35] - The strategic emphasis on AI-powered digital solutions is positioning the company as a leader recognized by customers and industry analysts [6][12] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit revenue and profit growth, supported by strong customer relationships and operational execution [20] - The company increased its financial guidance for the year, expecting total revenue between $6.79 billion and $6.94 billion, reflecting strong second-quarter results [32][34] Other Important Information - The company invested $477 million in the second quarter, with $442 million allocated to growth CapEx [30] - The quarterly dividend was declared at $0.0785 per share, maintaining a payout ratio of 63% [30] Q&A Session Summary Question: Data center signings came in lighter than expected; can you elaborate on the slowdown? - Management noted that while the market remains strong, customers have prioritized large campuses for AI, which has shifted focus back to the company's offerings [37][38] Question: Is the slowdown in data center leasing just timing? - Management confirmed that the focus on large language models has impacted leasing but expressed confidence in future growth due to available power and upcoming projects [40][42] Question: Can you break down the ALM growth in the quarter? - Management indicated that growth was balanced across enterprise and data center channels, with volume being the primary driver [50][51] Question: What are the dynamics in the hyperscale decommissioning sector? - Management highlighted the company's competitive advantages in secure chain of custody and global presence, which are appealing to customers [56][59] Question: Can you discuss the growth in the digital business? - Management emphasized the unique capabilities of the DXP platform in managing unstructured data, driving strong growth in the digital segment [86][88]