On April 10, 2024, the company executed an agreement to form a joint venture in the form of a limited liability partnership to develop and operate an xScale data center in the Americas region. The partner contributed $102 million of cash in exchange for an 80% partnership interest.

The company has expanded its total global footprint to 260 IBXs, including 17 xScale data centers and the MC1 data center that are held in unconsolidated joint ventures, across 71 markets around the world.

Company is making significant investments of resources in expanding our digital services portfolio. The company acquired Packet Host, Inc. (“Packet”), a bare metal automation company to facilitate a new “as-a-service” product offering for us.

The company is leveraging artificial intelligence and machine learning capabilities for employees to use in their day-to-day operations. The company believes that failure to invest adequately in such capabilities may result in lagging behind competitors in terms of improving operational efficiency and achieving superior outcomes for our business and our customers.

The company continues to monitor its REIT compliance in order to maintain its qualification for U.S. federal income taxation as a REIT. For this and other reasons, as necessary, the company may convert some of our data center operations in other countries into the REIT structure in future periods.

The company is currently undergoing expansions or evaluating expansion opportunities outside of the U.S. Undertaking and managing expansions in foreign jurisdictions may present unanticipated challenges to us.

Inflation is impacting various aspects of our business. We are also experiencing an increase in our costs to procure power and supply chain issues globally. Rising prices for materials related to our IBX data center construction and our data center offerings, energy and gas prices, as well as rising wages and benefits costs negatively impact our business by increasing our operating costs.

Despite our efforts to protect against cyber-attacks, we are not fully insulated from such threats. For example, in September 2020, we discovered ransomware on certain of our internal systems. While the incident was resolved and did not cause a material disruption to our systems nor result in any material costs to us, we expect we will continue to face risks associated with unauthorized access to our computer systems, loss or destruction of data, computer viruses, ransomware, malware, distributed denial-of-service attacks or other malicious activities.

We are subject to various federal, state and local environmental and health and safety laws and regulations in the United States and at our non-U.S. locations, including those relating to the generation, storage, handling and disposal of hazardous substances and wastes.

The global multi-tenant data center market is highly fragmented. It is estimated that we are one of more than 2,200 companies that provide these offerings around the world. We compete with these firms which vary in terms of their data center offerings and the geographies in which they operate.

Some of our competitors may adopt aggressive pricing policies, especially if they are not highly leveraged or have lower return thresholds than we do. As a result, we may suffer from pricing pressure that would adversely affect our ability to generate revenues.

Similarly, with growing acceptance of cloud-based technologies, we are at risk of losing customers that may decide to fully leverage cloud infrastructure offerings instead of managing their own.

Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions.

We could face power limitations in our IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center. This could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows.

The current global supply chain and inflation issues have exacerbated many of these construction risks and created additional risks for our business. Some of the risks associated with construction projects include construction delays, lack of availability and delays for data center equipment, including items such as generators and switchgear.

We have begun leveraging artificial intelligence and machine learning (collectively, “AI”) capabilities for our employees to use in their day-to-day operations. Failure to invest adequately in such capabilities may result in us lagging behind our competitors in terms of improving operational efficiency and achieving superior outcomes for our business and our customers.

As we embark on these initiatives, we may encounter challenges such as a shortage of appropriate data to train internal Al models, a lack of skilled talent to effectively execute our strategy of leveraging Al internally, or the possibility that the tools we utilize may not deliver the intended value.

We are carefully monitoring our spending, we expect our general and administrative expenses to increase across all three regions as we continue to invest in our operations to support our growth, including investments to enhance our technology platform, to maintain our qualification for taxation as a REIT and to integrate recent acquisitions.

As a result of our various IBX data center expansion projects, as of March 31, 2024, we were contractually committed for approximately $2.1 billion of unaccrued capital expenditures, primarily for IBX infrastructure equipment not yet delivered and labor not yet provided, in connection with the work necessary to open these IBX data centers and make them available to our customers for installation.

We deduct recurring capital expenditures, which represent expenditures to extend the useful life of IBX data centers or other assets that are required to support current revenues.

We expect to make additional acquisitions in the future, which may include (i) acquisitions of businesses, products, solutions or technologies that we believe to be complementary, (ii) acquisitions of new IBX data centers or real estate for development of new IBX data centers; (iii) acquisitions through investments in local data center operators; or (iv) acquisitions in new markets with higher risk profiles.

We have prioritized sustainability and ESG objectives, including long term goals of procuring 100% clean and renewable energy coverage and reducing our GHG emissions from our operations and supply chain.

We also face pressure from our customers, stockholders and other stakeholders, such as the communities in which we operate, who are increasingly focused on climate change, to prioritize renewable energy procurement, reduce our carbon footprint and promote sustainable practices.

There is also a risk that our ESG and sustainability objectives will not be successful. It is possible that we may fail to reach our stated environmental goals in a timely manner or that our customers, stockholders or members of our communities might not be satisfied with our sustainability efforts or the speed of their adoption.

Inflation is impacting various aspects of our business. We are also experiencing an increase in our costs to procure power and supply chain issues globally. Rising prices for materials related to our IBX data center construction and our data center offerings, energy and gas prices, as well as rising wages and benefits costs negatively impact our business by increasing our operating costs.

The ongoing military conflicts between Russia and Ukraine and in the Middle East could negatively affect our business and financial condition.

Government regulation related to our business or failure to comply with laws and regulations may adversely affect our business.