CyrusOne Inc.
Q4 2019 Earnings Call Transcript

Published: 20 Feb 2020

[Operator:]

Good day and welcome to the CyrusOne LLC Fourth Quarter 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Michael Schafer, Vice President, Capital Markets and Investor Relations. Please go ahead.

[Michael Schafer:]

Thank you, Sean. Good morning everyone and welcome to CyrusOne’s fourth quarter 2019 earnings call. Today I’m joined by Tesh Durvasula, President and CEO; and Diane Morefield CFO. Before we begin, I would like to remind you that our fourth quarter earnings release along with the fourth quarter financial tables are available on the Investor Relations section of our website at cyrusone.com. I would also like to remind you that comments made on today’s call and some of the responses to your questions deal with Forward-Looking Statements related to CyrusOne and are subject to risks and uncertainties. Factors that may cause our actual results to differ from expectations are detailed in the Company’s filings with the SEC, which you may access on the SEC’s website are on cyrusone.com. We undertake no obligation to revise these statements following the date of this conference call except as required by law. In addition, some of the Company’s remarks this morning contained non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release, which is posted on the Investor Section of the Company’s website. I would now like to turn the call over to our President and CEO, Tesh Durvasula.

[Tesh Durvasula:]

Thanks, Michael. Good morning everyone and welcome to CyrusOne’s fourth quarter earnings call. As we announced this morning, our long time CEO and my good friend and mentor Gary Wojtaszek is separating from CyrusOne. Let me pause for a moment. Words cannot describe Gary’s contributions and accomplishments for this Company. He has had a tremendous vision in building Cyrus, taking it public over seven years and expanding it globally to become the third largest data center REIT. On behalf of our Board of Directors and the entire CyrusOne family and team, we thank Gary for the Company and culture he probably created. Also, I’m both humbled and incredibly excited to take the role of President and CEO on an interim basis. I’m fully focused on continuing to execute on our strategic vision. We had an outstanding financial results in 2019 and a number of significant accomplishments that put us in a very good position as we begin 2020. Beginning with Slides 4 and 5. We closed out the year with strong financial performance including high revenue, adjusted EBITDA and FFO per share growth. The $105 million in leasing for the year was diversified across markets and product types. We had significant contributions from Europe and enterprises and the $52 million backlog de-risks our 2020 outlook, while also contributing to our 2021 growth.

[Diane Morefield:]

Thanks Tesh. Good morning everyone. I too would just like to take a minute to recognize Gary for his amazing vision in leading CyrusOne since its inception. It was a pleasure and quite frankly a lot of fun to be CFO partner, since joining the company in 2016. I now look forward to partnering with Tesh in the future. As Tesh mentioned, we are very pleased with our 2019 results and achieved a number of key strategic objectives. As Slide 13 shows, in the fourth quarter, we maintained high growth rates across our all of our key financial metrics. Churn was low at 0.7%, and our full-year churn finished at 4.4% and was our second lowest annual total since our IPO. For this year, we do expect churn to be in the 5% to 7% range, and as is our practice, in addition terminations, we also include the impact of rate reductions in our total churn metric. Turning to Slide 14. NOI growth grew 15% on an adjusted basis and the margin was essentially flat year-over-year. Adjusted EBITDA grew in-line with NOI and the increase in normalized FFO was driven primarily by the increased in adjusted EBITDA and lower interest expense. Slide 15 shows, the market level revenue contribution which is relatively balanced across the portfolio. Our European portfolio is up nearly 50%, compared to the end of 2018 and the revenue contribution from these markets will increase as pre-leased development projects are put in service. The percentage lease for the stabilized properties was down slightly year-over-year, but remains a healthy 88% despite 11% increase in capacity. Slide 16 shows our development pipeline as of the end of 2019, with nearly a 100 megawatts of capacity expected to be delivered this year. The construction pipeline is slightly weighted towards our four European markets and the overall pipeline is nearly 50% pre-leased on a square footage basis, with significant sales pipeline activity currently in these markets. On a completion of these projects, the size of our footprint will be 20% bigger with more than 4.5 million co-location square feet. We also have nearly one million square feet of powered shell under development across seven markets, both domestically and internationally. And combined with our existing powered shell, this will give us nearly three million square feet of shell capacity, position us to deliver data house quickly in response to the demand from our customers.

[Operator:]

Thank you. Our first question today will come from Erik Rasmussen with Stifel. Please go ahead.

[Erik Rasmussen:]

Yes. Thank you. Just on your guidance towards the end of your prepared remarks, you talked about timing of few large deals being pushed back. You know obviously, 5.5% on the top line was a little bit of a surprise. But, what sort of impact is that having, and then just also talking about demand in general in hyperscale, are we still sort of being pretty conservative in expectations for hyperscale leasing, especially in U.S. markets? Thanks.

[Diane Morefield:]

Sure. Thanks, Eric. I will let Tesh to dress of demand from the hyperscalers, but if you compare the third quarter backlog commencement and then our fourth quarter disclosure that we just put out last night. You will see that there was a push back and most of those deals that got pushed back more from the first half of year and into the third and fourth quarter are European construction projects. You know it just takes longer to develop in Europe, and I think where we might have been a bit optimistic of when those would commence when we initially put them in backlog. So, that is the largest portion, but as you know, as revenue recognition gets pushed back it affects our 2020 revenue growth, but will be a full-year impact in 2021.

[Tesh Durvasula:]

Hey Eric. Tesh here. How are you? Yes, so I think just to follow-up on Diane’s comment, we have definitely seen heavy spend in the last 18 months over there. We saw a lot of movement in the markets in terms of construction and zoning and lots of people making different commentary on what you can and cannot do. So, we have done really well in working through those environmental situations across Europe, but we just need to push some of these things out a little bit. On the overall demand at hyperscale is I think it is, right when you said, it is still a conservative outlook. We have seen some more activity, like I said in my comments early in the year around some bigger footprints that are being talked about. But as we know, these things can take months, quarters, sometimes years to actually get fulfilled. Even though we are dealing with the world’s greatest companies, they don’t always act at the speed, we want them to act at. And so but we have seen, we have seen some - like I said, earlier in the year, we have seen some bigger size footprints being requested across some of our key markets.

[Erik Rasmussen:]

Thank you.

[Operator:]

Our next question will come from Frank Louthan with Raymond James. Please go ahead.

[Frank Louthan:]

Great. Thank you. So, Tesh, the sales effort has been a little weaker since you moved out of that role. And going forward for this year, clearly down a bit. What do you plan to do to kind of revive that? And now you have a little bit more operational control?

[Tesh Durvasula:]

Well, Frank, first, good morning. Good to talk to you. I have been commercial since I was born. So I think that we are looking forward to 2020 that has some really interesting announcements. Like I said earlier in our comments, we have seen some interesting pickup in some of the hyperscale stuff. But more importantly, we have seen it across all of our markets and all of our customer types. So I think both enterprise is what always made or separated, I think Cyrus from a lot of our competitors and what we have been able to do is the way we attack all of the Fortune 1000. The hyperscalers were just happened to be bigger Fortune 1000 that just bought bigger chunks. Whether they are an insurance company, a pharmaceutical and financial services company, we treat them all with the same kind of care and feeding. So I’m expecting for us to be able to continue that in 2020.

[Frank Louthan:]

Does that implies the range of guidance is conservative?

[Diane Morefield:]

No, the range of guidance is where we feel we are going to be able to execute this year.

[Frank Louthan:]

Okay, great. Thank you very much.

[Operator:]

Our next question will come from Simon Flannery with Morgan Stanley. Please go ahead.

[Simon Flannery:]

Great. Thank you very much. Good morning. And Tesh congratulations on the new role. I wonder if you could share a little bit with - I know there is a search ongoing, but in your interim role, what are the priorities that the Board has set out for you and your priorities? And particularly, as it regards any strategic options? Thanks.

[Tesh Durvasula:]

Sure. So, Simon, thank you. You are the first one to say congratulations. I really appreciate that. Second, I will look forward to seeing you again at your conference. But in terms of - our strategy is to say, the Board has asked me to execute what we have started. The foundational elements that Gary put in place are sound and it is our opportunity, me and the team to continue to grow on that opportunity. We talked about how excited we are about Europe. I think that will continue to be a major theme as we execute in 2020. And that is the way I think about it. In terms of the interim status, I think it is common for all boards in this type of a transition to want to conduct a search. But I think you know that I’m a candidate for that. So we will put up a good fight for it.

[Simon Flannery:]

Great. Thank you

[Tesh Durvasula:]

Thanks.

[Operator:]

Our next question will come from Sami Badri with Credit Suisse. Please go ahead.

[Sami Badri:]

Hi, thank you very much. Also Tesh, congratulations. That makes me the second person to congratulate you on this conference call. Now I wanted to focus in on Texas and I see that you are under development capacities at nine megawatts and historically major cloud providers and other internet companies have actually come in and taken large capacities at a time. And obviously CyrusOne has done very well. Is there a reason why the under-development capacity in Texas from where we are standing today is relatively low? Is this a REIT across into where demand is flowing into? Is it going into LatAm and maybe Arizona, Vegas instead of Texas? Or maybe you could just give us more color on why the under-development is relatively low to where a market like Texas should be.

[Diane Morefield:]

Yes. No. We have a fully built out data hall and Allen, but it is not showing under development because that data hall is finished. So we have inventory in the Allen. We have also completed the last two data halls in the Carrollton, and there is still not a lot, but I think a couple of megawatts available in Carrollton. So, once it is out in the active development and it is finished, it goes into CIP. So, we definitely have adequate inventory. And then I think in total we can build out like six or seven data halls and we have only built out one. So, we have plenty of capacity for hyperscale between actual inventory and shell in the Dallas market.

[Sami Badri:]

Got it. Thank you. I will stick to one question.

[Tesh Durvasula:]

Thank you.

[Diane Morefield:]

Thank you.

[Operator:]

Our next question will come from Nick Del Deo with MoffettNathanson. Please go ahead.

[Nick Del Deo:]

Okay. Thanks for taking my question and congratulations Tesh.

[Tesh Durvasula:]

Thanks Nick.

[Nick Del Deo:]

You know in the past you guys were a little skeptical of the JVs. And I think in part because you said investors wanted too much development on side. Obviously, digital has recently saw some stabilized assets, pretty appealing cap rates. Has the market for stabilized facilities shifted such that asset sales or JVs might make more sense than they once did?

[Diane Morefield:]

You know, look, we have talked about JVs and some of us at the company come from REIT background or have done JVs at other places. So I think, it is the right opportunity particularly for a stabilized came up, we are always going to consider that. We just haven’t had anything to announce to-date. So, it is certainly something we would consider and rule out.

[Nick Del Deo:]

Okay. Thank you.

[Operator:]

Our next question will come from Eric Luebchow with Wells Fargo. Please go ahead.

[Eric Luebchow:]

Alright. Thanks for taking the question and congrats Tesh. I just wanted to check in on the European demand environment since you spent a lot of time over there. It seems fairly concentrated in Frankfurt this year, but maybe you could give us an outlook on what the leasing environment will look like in 2020 in terms of, you know, what kind of deal size requirements we are seeing and in addition, are there any other markets in Europe where you might want to establish a footprint? I believe Paris was one where, you had indicated some interest. Thanks.

[Tesh Durvasula:]

Sure. Thanks Eric. I appreciate the question. Europe has been tremendous for us. I think like I said in my comments 36% and 38 million. It really was - we did much better there than I think we even anticipated, when we walked in. I think there is two things for us in particular. One, as you recall, we kind of got delayed with the regulatory filings and so we have to wait to get our team and our brand out there and our momentum and do what we do really, really well. After the full-year got going, then was a challenge with Brexit in one market (Ph). Now we have seen they have got that solved and let’s see if that will take care of some more activity in London. But, Frankfurt has been extremely strong. We have got a lot of interest in Amsterdam and Dublin. So, all four markets right now or are coming together nicely. And, it just takes so long to do stuff that I think our patience and our speed and that sound like they are on the opposite sides of the spectrum. But, it is our ability to kind of deliver our product once we get the permits, but our patience who work through all of the issues that you need to work through and their individual issues with each market have, I think are going to pay-off really well in 2020. In terms of new markets, I think those are right. I think out of the traditional flat markets, Paris is not on our - we don’t have Paris, so that might be a nice thing to look at in the future. We have seen some activity in Zurich. We have had some customers ask us about some Madrid and Warsaw. But I think at the end of the day, we have got plenty in our portfolio. And if we focus on that, we will do just fine.

[Operator:]

Our next question will come from Richard Choe with JP Morgan. Please go ahead.

[Richard Choe:]

Hi. I just kind of wanted to go through the guidance again. You talked about how things are back-end loaded. But in terms of the pipeline and development both the development is still aggressive and you talked positively about the pipeline. How should we think about the exiting growth rate as we go through the year? I think the lease termination might make for a tough comp, but overall, going from this 5.5%, 6%, do you think, we can return to double-digit going into next year and exiting 2020? Thank you.

[Diane Morefield:]

Well, thanks Richard for asking for 2021 guidance. Just tried to get through the day actually. But that is why I kind of gave some of the bridge for the ending fourth quarter and FFO the lease term fees are probably worth about $0.04. That property tax accrual that we were reduced or reversed rather was a couple times, and then there is probably another full penny impact if you would have assumed the equity, the a $105 million of equity was asked the whole quarter. So there was a number of things that on the margin inflated four quarters. So going into the year, if you back those out, it would be a lower run rate. But again, back to, if you look at the backlog table that is in a supplemental, there is some significant backlog coming on the last half of the year, which really will be a benefit to 2021. And a lot of the development table, again, particularly in Europe is back-ended, as well as, I want to point out San Antonio hasn’t shown up on our development table yet - I’m sorry thanks for the correction Tom. I meant Santa Clara has not shown up on the development table because right now it is just basically a moving dirt. But once the actual shelf starts coming out of the ground, that will be on the development table. But it is a definitely end of the year delivery of the shell and any build out data halls, we have any pre-leasing. So you combine all those factors, it really does point certainly to a healthier 2021 regarding more like full-year revenue recognition from a lot of these developments.

[Richard Choe:]

Got it. Thank you.

[Diane Morefield:]

Welcome.

[Operator:]

Our next question will come from Colby Synesael with Cowen and Company. Please go ahead.

[Colby Synesael:]

Great. Also, congratulations Tesh. Hopefully it is a permanent appointment. Secondly, I guess my question - last year you had suggested that you still expect $20 million to $25 million in quarterly leasing and you did the $105 million for the full-year. Just curious what the guidance or what your expectations are for 2020? And if that is what is assumed in the 2020 revenue guidance. Thanks.

[Diane Morefield:]

Yes. Again, we kind of get locked into that guidance number, but don’t really guide to quarterly leasing. We are just saying over sort of four year averages as was evident last year, we have leasing and larger if we do some large cloud deals and more muted one it is more enterprise. But, over the course of the last four quarters, it is definitely averaged in that 2020 -.

[Colby Synesael:]

Well, let me ask it differently then. Do you think based on the commentary Tesh that you made that you are seeing an uptick in demand or at least conversations already now in the first quarter of 2020, based on what you are seeing, would you guys expect to see greater leasing in 2020 versus 2019?

[Tesh Durvasula:]

Yes, like I said, well, first Colby, thank you. I appreciate the congratulations and the well wishes towards a permanent. Colby, like I said, just because there is interest, which I believe that was really nice to see it coming out of the year. They don’t always operate at the same timeline we do. So, my guess is some of these things can take quarters and some of them can take years to get done, especially as they get bigger, and if they are in Europe, they can even be more complicated, when you think about all the unique laws around different markets that you have to accommodate. Especially something that is bigger and multi-year and just generally larger. So, like I said, we are really happy about the new interest, but we are not ready to comment on when it is going to translate to 2020 yet.

[Colby Synesael:]

Great, thanks.

[Tesh Durvasula:]

Thank you.

[Operator:]

Our next question will come from Michael Funk with Bank of America. Please have a head.

[Michael Funk:]

Great. Yes, thank you for the question. Tesh, and once again congratulations on the new role. Putting together the kind of the comments from the 8-K earlier this year talking about a more prolonged downturn in the hyperscale. I mean, some of your comments in the call where I think you were referring to kind of low hyperscale in a past tense. Just wondering if your strategic vision is more of a repositioning of the salesforce, I mean, towards the enterprise, less hyperscale customers in 2020, 2021. And if that is potentially maybe what we are seeing here in the leasing as well as the revenue guidance as well.

[Tesh Durvasula:]

Thanks Michael for the question and the well wishes. Yes, so we have always had a strong enterprise salesforce. It is what we pride ourselves on, whether it was oil and energy or large financial services, we have always been focused on that. And if you kind of look back on 2019, like I said in my comments, if it weren’t for strong enterprise, demand and our ability to sell into the enterprise market, across multiple markets. We would not have had that $100 million a year. So, we are going to continue to focus on that and always have focused on it. Like I said, we are probably the ones, I don’t know anyone else who reports Fortune 1000 logos. We are the ones who constantly talk about that. It is something that we pride ourselves on. It is a metric that our salesforce takes great pride in and they have done a great job of having success in that. In terms of hyperscale, it is so difficult to determine when that is going to start getting back up. I mean, 2018 was such a big year for everybody. Globally that to hit those types of levels again might not happen right away. But like I said in my comments, we had seen some really good activity and interest around many of our key markets. We have seen some really good activity and interest in our European markets specifically So I feel, what we did and what the Company did to expand into Europe in 2018 and then operating, there all of 2019, I think was exactly what we needed to do from a strategic vision perspective. And I think, we will be able to do well in both hyperscale and enterprise long-term.

[Michael Funk:]

Okay. Thank you and good luck.

[Tesh Durvasula:]

Thank you.

[Operator:]

Our next question will come from David Guarino with Green Street Advisors. Please go ahead.

[David Guarino:]

Hey guys, question for you on the full-year churn guidance that is elevated. Is that - maybe you can give a breakdown on if that is being driven more by tenant departures or rent roll downs, and then if that is maybe a current in one particular market and that would be great.

[Diane Morefield:]

You know churn is - generally the trend is every year roughly half comes from just non-renewals and about half from rent reductions. So I don’t think the trend this year will be materially different than that. First of all, we have an account management team that all they work on is renewals that are coming due over the next 12 months to 18 month period. And we do bottoms-up if we are aware of specific customers that will be turning in some manner. The other thing is just reduced space and power, like they say a customer, but if they are not fully utilizing their space and power, they may - the margin reduce it. So we are always in front of all of our customers and particularly, again this account management teams in front of all the renewals that are coming up. And again, based on the bottoms-up, we feel, we will be in the 5% to 7% range again this year, and yes, probably roughly half again, non-renewals and some type of rate reduction. The other thing, I talked about this before and it is true at times they will do a rate reduction, but actually it is because they are going to take space at another data center. And or some other concession that we are willing to give a break on rate if there is additional business associated with the overall negotiation.

[David Guarino:]

Okay, thanks.

[Diane Morefield:]

You are welcome.

[Operator:]

Our next question will come from Jon Petersen with Jefferies. Please go ahead.

[Jon Petersen:]

Great, thanks. It feel like it is getting may be little cliché, but I will say congratulations anyway, Tesh. Glad to see that you are still part of the CyrusOne team. It is a bit of a housekeeping question on G&A. Obviously you guys announced the workforce reductions and I assume there was going to be some severance costs associated with that. And now, I assume there will be some are related to Gary. Can you give us some indication on the timing and amount that we should expect throughout the year?

[Diane Morefield:]

Well, anything that is pure severance cost, gets added back to NFFO, which is common at all the REITs. So that wouldn’t affect the run rate SG&A. Run rate SG&A we do will be going down this year compared to last year as a result of the reduction in force that we took earlier this year. The agreements for both Gray and Tesh will be filed as an 8-K sometime in the next 48-hours basically.

[Jon Petersen:]

Okay. We will watch for that. Thank you.

[Diane Morefield:]

You are welcome.

[Tesh Durvasula:]

Thanks Jon.

[Operator:]

Our next question will come from Jordan Sadler with KeyBanc Capital Markets. Please go ahead.

[Jordan Sadler:]

Thanks, and thanks for having me on. I guess Tesh, I do want to offer congratulations on the position, but also really on the ability to step up on a moment’s notice for a call like this, your first a public company CEO speaking on a quarterly call. So, congrats on that.

[Tesh Durvasula:]

Thank you.

[Diane Morefield:]

To be fair me and really pressed him a lot.

[Jordan Sadler:]

Well, I was going to say most of the credit was probably due to Diane here, but...

[Tesh Durvasula:]

A lot of scaffolding here around me.

[Jordan Sadler:]

My question really is what is going on here? Gary is leaving Tesh you were leaving a month ago, now you are staying, there is speculation that there is a renewed M&A talks. Can you guys maybe give us a little bit more color on what is going on here and why maybe Gary wouldn’t be on this call?

[Tesh Durvasula:]

Sure. So, let me parse that out into all of those questions individually. First, thank you. We really appreciate that and it was a team effort. So we have worked very hard last night to make sure that we got ready for you guys. In terms of Gary. Gary and the Board came through a mutual decision, and that is between Gary and the Board. On me, I was fulfilling all my duties and had lots of transition duties between now and if you have read the original release, it was I was also going to be on board to consult through basically midway through the year, I think July 1st So, I was still here if you will. It wasn’t like I was - so, it was just, I think it was an easy pick. I think my mom thinks it was an easy pick for the Board. So, it was really nice that the Board saw it the same way. And so that makes sense. I mean, and then just to continue on that perspective, been here eight years, been alongside Gary since the IPO, started in two markets, expanded across North America, spent the last 14 months, 18 months in Europe, expanding across Europe, and globally and internationally. So, in terms of understanding both what we do as a business, I was involved in three out of the four acquisitions. So when you think about what we have done into the business, who our customers are, what we are trying to do with our strategy. I think it made sense that I was chosen. In terms of, I think the last question was market speculation and what was going on, you know that we don’t comment on market speculation or rumors.

[Jordan Sadler:]

Well, I guess last quarter, it seemed like - I mean, this is going on for a couple of quarters now and I think last quarter was - I think Gary said the company is not for sale or at least not running a process. Can you confirm that?

[Tesh Durvasula:]

I can definitely confirm that. If you look at the transcript from last quarter, if you said that, yes.

[Jordan Sadler:]

You are not dismissing a process at this point.

[Diane Morefield:]

We don’t comment on market speculation or rumors.

[Jordan Sadler:]

Okay, well done Di. Sorry. I think, I had to ask it. I think, It was the elephant in the room, so apologies, but this is what everybody wants to know. So I appreciate you guys taking a minute with me. Thank you.

[Tesh Durvasula:]

Absolutely. Thanks Jordan.

[Diane Morefield:]

You are welcome.

[Operator:]

Our next question will come from Aryeh Klein with BMO Capital Markets. Please go ahead.

[Aryeh Klein:]

Thanks. And congrats again, Tesh. Can you maybe talk a little bit about the 12% headcount reduction that was announced around a month ago? And how that juxtaposes with your vision for growth of the Company? Is there any sense that maybe you actually need to increase investments in sales and marketing potentially increase the leasing momentum?

[Diane Morefield:]

Let me address the reduction in force first, and then Tesh can take it from there. But yes, it was a right sizing and the company had come off double-digit growth. We clearly were working on our 22 plans and knew what was going to be in-line with the guidance that we just provided last night and today. And so with slower growth, we probably were a little bit over our skis on our total headcount and so on the margin, we did the reduction of roughly 12%. But we are still well staffed to run the business to continue to grow, again Tesh can address the salesforce. But you know look all companies from time-to-time go through a right sizing. We have all worked at companies that do it and it is a pretty common thing. It is we never had to do it at CyrusOne, so that is always painful, but we feel we are really in good shape now with our headcount and to continue to be able to grow and support the business.

[Tesh Durvasula:]

Yes, Aryeh, thanks for the question. So we have already started shifting the sales force several years ago, like three and a half, four years ago, where we had a focused hyperscale division, cloud division. We created West Coast offices, and at the time when our furthest West Coast presence from a data center perspective was Phoenix. So we had already done all of the heavy lifting on that front, like I said, three and a half, four years ago. And since then, it is just making sure that we have got the other markets covered and the most important market now would be Europe. When we took over there was effectively one salesperson in the organization, in the Europeans, in the legacy business, since then we have added people and that funnel is now contributing to about 40%, almost more than 40% of the overall funnel for the business. So I see that now it is got a really good balance of people in North America and in our up and coming market Europe. We have got coverage, we will have a full-year of operations. A lot of those people did not come on January 1, 2019. They came on in April, May and June. So we are going to get a full-year of productivity out of them, sort of full-year of prospecting, full-year of marketing getting our name out there. And with the footprint that we have and that we are building and have the capability of building, I think we have got a really good message for both enterprises and hyperscalers who are looking for North America and Europe capacity.

[Aryeh Klein:]

Thanks, appreciate color.

[Tesh Durvasula:]

Thank you.

[Operator:]

This will conclude today’s question-and-answer session. I would like to turn the conference back over to Mr. Tesh Durvasula for any closing remarks.

[Tesh Durvasula:]

Thank you everyone. As a maiden voyage, it was really nice and to quote some advice I got, avoid the iceberg. So, I think we did that. So, have a nice day everyone. We will look forward to the follow-up calls.

[Diane Morefield:]

Thank you.

[Operator:]

The conference has now concluded. Thank you for attending today’s presentation and you may now disconnect.