Q2 2023 saw the major publicly-listed colocation providers post gains from last year but largely incremental growth compared to the first quarter of 2023.

Equinix launched a new data center in Bogota, Colombia, and is now set to build new facilities in Lisbon, Monterrey, Mumbai, and Kuala Lumpur. It also exited SV13 in Silicon Valley.

Digital Realty saw the largest increases from Q1, and raised nearly $2 billion from selling stakes in its data centers.

Iron Mountain leased just under 3MW of capacity, but is set to see data centers in London and Virginia launch next quarter.

American Tower’s CoreSite unit’s growth was largely flat and the company had little to say about its Edge ambitions.

Equinix: Exits SV13 in Silicon Valley, new data centers approved in Mexico, India, and Malaysia

Q2 2023 revenues were $2.02 billion, up 11 percent year-on-year but largely flat from Q1. Operating income was $332 million, up five percent on last year but down some $50 million on Q1.

Net income was $207 million, down four percent from the same quarter last year, which the company said was primarily due to lower income from operations and higher income tax expense given a favorable tax settlement in 2022. It was also down more than $50 million on Q1.

Adjusted EBITDA was $901 million, up five percent over the same quarter last year, but down more than $40 million on Q1 2023. Capital expenditures for the quarter were $638 million.

Charles Meyers, president and CEO of Equinix, said: "We continue to see momentum in our business as digital transformation accelerates the pace of innovation and changes the way business is done.”

The quarter saw Equinix launch its second data center in Bogota, Columbia, as well as further expansion phases of facilities in Atlanta, Georgia, and Calgary, Canada.

In Q2, Equinix added 12 new projects including new International Business Exchange (IBX) data center builds in Lisbon, Monterrey, Mumbai, and Kuala Lumpur.

In Monterrey, Mexico, phase 1 of MO2 will offer 725 racks by Q1 2025; in Portugal, phase 1 of LS2 in Lisbon will offer 625 racks by Q1 2025; in India, MB4 phase 1 in Mumbai is set to offer 315 racks by Q4 of this year; and in Malaysia, KL1 phase 1 in Kuala Lumpur will offer 450 racks by Q1 2024.

On its xScale portfolio, the company increased its total leased capacity in operation by 10MW at Osaka OS2x – to a total of 148MW – but didn’t sign leases for any capacity in development over the quarter.

The company may be considering potential hyperscale data center acquisitions in the US. In the earning calls, Meyers said of xScale expansion: “We do think that there are markets in the US that we would like to have an xScale presence. And so I think we're looking at how we would do that and potentially through a combination of organic and potentially inorganic pursuits.”

In Silicon Valley, Equinix exited SV13; an H5-owned facility at 2030 Fortune Drive in San Jose, California. The company announced the planned exit back in May 2021.

Digital Realty: Revenues up, company gets creative in Virginia

Digital Realty reported revenues for the second quarter of 2023 of $1.4 billion, a two percent increase from the previous quarter and a 20 percent increase from the same quarter last year.

Net income for the quarter was $116 million, while adjusted EBITDA was $697 million, a four percent increase from the previous quarter and a 14 percent increase year-on-year.

“Digital Realty’s second-quarter results demonstrate the positive momentum in our operating business, with improving fundamentals highlighted by strong enterprise leasing activity along with robust renewal spreads and healthy organic growth,” said Digital Realty president & CEO Andy Power.

“We advanced our funding plan by completing two capital recycling transactions that generated more than $2 billion in gross proceeds, helping to position Digital Realty for the opportunity that lies ahead.”

The company signed bookings totaling $114 million for the quarter; around half of that was in EMEA, and the majority in the greater than 1MW bracket. It signed renewal leases totaling $211 million.

The company acquired the land and building shell of a previously leased 15MW data center (AMS7) for $18 million. As previously reported, it also acquired a nine-acre land parcel located nearby AMS7 on its existing Amsterdam Schiphol campus for $28 million, which can support a 40MW facility.

Digital also acquired land in Johannesburg, South Africa, for $4.5 million. The company didn’t outline how much land it had acquired.

On power constraints in Northern Virginia, Power said during the earnings call that the company had been able to mitigate some of the impacts through new development and ‘select churn opportunities’: “Over the course of last several months with the support of our local utility partners, we've been able to identify nearly 100MW of incremental billable capacity that we expect to be able to bring to market prior to 2026. This includes 40MW of available capacity underway within the current development pipeline and the potential to move forward on almost another 60MW.”

CFO Matthew Mercier added: “We opportunistically took back 8MW of lease capacity from an existing customer [in Ashburn] and released it to another customer at a substantial premium.”

Mercier also noted that the company’s rental revenues in the second quarter included a $25 million one-time write-off of non-cash straight-line rent and a $6 million bad debt reserve related to a tenant that declared bankruptcy during the quarter – likely Cyxtera.

Iron Mountain: Signs ~3MW of leases in the quarter, new data centers in London and Virginia to launch soon

Iron Mountain posted data center revenues of $118 million, up 17.9 percent year-on-year and up slightly from $112 million in Q1. Adjusted EBITDA for the unit was $53.8 million, up from $50.6 million in Q1.

Total reported revenues for the second quarter were $1.4 billion, net income for the second quarter was $1.1 million, and Adjusted EBITDA for the second quarter was $475.7 million.

"We are pleased to have delivered strong performance in the second quarter, resulting in all-time record Revenue and Adjusted EBITDA," said William L. Meaney, president and CEO of Iron Mountain. "The dedication and drive of our team is unwavering. We remain grateful to our Mountaineers for their service to our customers, which has delivered these outstanding results today. The resilience of our business model and the success of Project Matterhorn are fueling our sustained growth trajectory."

Iron Mountain’s data center unit leased 2.7MW of capacity in the quarter, for a total of 55MW in the first half of the year. The company was targeting 80MW for the year. The company’s portfolio now totals 221.2MW across 24 facilities and is 92.2 percent utilized.

One of this quarter’s deals is with a “multinational media processing company” to provide almost 1MW of storage capacity at Iron Mountain’s Mumbai data center with the potential to add a further 5MW at the facility as well as further capacity at other locations in India.

In London, LON2 phase 1 – totaling 9MW – is set to go live in Q3 2023. It is entirely pre-leased. Both phases 2 and 3 – again 9MW each – are set to go live in 2024, with a further 25MW of development potential in the future. In Virginia, VA-3 Phase 1 – totaling 10MW – is also set to go live in Q3 of this year.

American Tower: Flat growth, no Edge updates

For Q2 2023, American Tower’s data center unit posted revenue of $205m and an operating profit of $103m.

Q1 revenue and profit were $203m and $102m, respectively.

For the company as a whole, total revenue increased 3.6 percent to $2.772 billion, net income decreased 48.2 percent to $462 million, and adjusted EBITDA increased 4.7 percent to $1.749 billion

Tom Bartlett, American Tower CEO, said: “The momentum from the start of the year carried on into the second quarter, as our customers continued to invest in their networks to meet growing demand. We saw consolidated organic tenant billings growth exceed 6 percent for the second consecutive quarter, solid leasing in our US data center segment, and demonstrated a focus on cost controls, all supporting strong growth and attractive margin expansion.”

In the earnings call, Bartlett added: “Following record levels of signing new business in 2022 and Q1 of 2023, we continue to see demand for data centers outstripping supply in our initial underwriting expectations, elevated pre-leasing in a pipeline that points to an extended opportunity for increasingly profitable growth.”

The CEO added there was ‘nothing to report’ around the company’s planned Edge deployment as it continues to work on its development.