Revenue Guidance Lowered
Q: Are macro conditions causing revenue guidance to drop to 7%?
A: Yes, due to macro conditions, sales cycles are extending, leading to deal slippage and elevated churn, which brought our full revenue guide slightly below the 8%–10% range discussed at Analyst Day. Despite these headwinds, we feel positive about strong xScale bookings and a healthy pipeline, including emerging AI opportunities.

AI Opportunities Expanding
Q: How do you view AI's impact on TAM and NVIDIA partnership?
A: AI presents a massive opportunity, likely exceeding the $21 billion TAM outlined earlier. Our NVIDIA DGX offering is distinctive, building a big pipeline with them. We're seeing early wins in AI-related services, and we expect our cloud-adjacent offerings to unlock further potential.

xScale Initiative in the U.S.
Q: Update on U.S. xScale growth—organic vs. inorganic?
A: We're focused on being more aggressive in the U.S. xScale market, primarily through organic growth. While we're open to inorganic opportunities, high asset valuations and competition make organic expansion our main path forward.

Churn and Capacity Constraints
Q: Any regions or products with notable churn?
A: Churn is slightly elevated, mainly in cabinets and power, particularly in Europe where we have larger footprints. This is due to customers resizing their deployments to align with immediate needs. Only a single-digit percentage of churn is full customer churn.

Pricing Actions Ahead
Q: Are price increases, especially for interconnection, expected?
A: We're seeing a robust pricing environment and are evaluating a price increase on interconnection in the U.S. market. Firm pricing continues to improve our profitability and AFFO per share growth.

Churn Expected to Improve
Q: What guides your expectation for churn improvement later?
A: We have good visibility into our pipeline and believe churn will abate in the second half based on customer feedback. Some customers reconsidered releasing capacity, indicating a shift in mindset toward securing space in tight markets.

Deal Slippage and Macro Impact
Q: Have delayed deals from Q4 closed yet?
A: Some deals closed immediately after the quarter, some are committed for Q1, and others have moved to Q2 or later. Collectively, there's very little loss, just timing shifts due to extended sales cycles in the current macro environment.

Competitive Environment Stable
Q: Are you losing deals to competitors or just delays?
A: While we occasionally see competitive losses, there's no meaningful change in the competitive landscape. In markets where we're capacity-constrained, some customers may seek alternatives, but overall, it's more about timing than competition.

Evolving Data Center Design
Q: How does GPU adoption affect data center design?
A: GPUs are specialized compute resources, and while we don't see a massive shift from CPUs to GPUs causing obsolescence, we are adapting. Higher power densities, especially for AI training, require enhanced cooling solutions like liquid cooling, which we're implementing where needed.

Customer Optimization Efforts
Q: Are customers seeking alternatives to your products?
A: Typically, we don't see customers substituting our products. Some are consolidating on higher-speed circuits to reduce costs, but the value of our comprehensive services remains strong, and we're seeing momentum across our offerings.