ALM Business Growth Q: Is ALM growth driven by volume or pricing, and what are the prospects? A: The ALM business saw 30% organic revenue growth, with about two-thirds driven by volume and one-third from price improvements from record lows 12–18 months ago. Pricing is expected to trend higher, and we anticipate the ALM business to comp organically in the 40s in the back half of the year or higher.

Data Center CapEx and Funding Q: Are data center CapEx assumptions changing, and will you consider issuing equity? A: We are running ahead of the expectations shared at our 2022 Investor Event, generating more revenue, EBITDA, and cash. While we may see a continued ramp in capital for data centers, we have a fully funded plan and do not see any need to raise equity, feeling confident in funding our growth without it.

Hyperscalers and AI Impact Q: Are hyperscalers releasing more equipment, increasing ALM volumes? A: Yes, hyperscalers are refreshing their data centers to bring in the latest GPUs and be AI-ready, leading to an uptick in decommissioned equipment volumes, which boosts our ALM business.

Global RIM Volume and Pricing Q: What are your expectations for RIM volumes and revenue growth? A: We expect physical volumes to be flat to slightly up, with organic revenue growth in RIM storage of 7–8% in the back half, driven mainly by revenue management. Year-to-date, our Global RIM business is running at 7.5% growth, outperforming initial expectations of around 6%.

Pricing Trends Amid Inflation Q: Is pricing growth transitioning to mid-single digits as inflation wanes? A: We are pleased with 7.7% organic constant currency growth in storage rentals. While mid to upper single-digit growth is appropriate over the longer term, our pricing remains 300–400 basis points above normal inflation due to the added value we provide to customers.

Data Center Construction Lead Times Q: Are there issues with data center construction lead times? A: We have managed lead times effectively, keeping them similar to historical norms by standardizing components across markets as we scale. This flexibility allows us to have the right equipment for customers and manage the supply chain efficiently.

Storage Gross Margin Improvement Q: How did storage gross margin improve despite higher costs? A: Storage gross margin increased to 70%, driven by our Global RIM business and operational productivity. While "all other storage costs" rose due to power inflation, storage rent expense decreased thanks to improved warehouse efficiencies.

Regency Technologies Utilization Q: Is there room to improve productivity at Regency Technologies? A: Yes, we have considerable capacity to expand the business and further utilize Regency at relatively low CapEx. The highly capable team is poised to manage a much larger business, and we expect further utilization over time.

Currency Exchange Headwinds Q: How are currency fluctuations impacting your guidance? A: FX continues to be a headwind with the stronger dollar, likely impacting reported results in the third quarter by a similar or slightly greater magnitude than the second quarter.

Increased Depreciation Q: Why did real estate depreciation increase by $14 million? A: Depreciation is ramping up due to our CapEx investments in data centers, new warehouses, and digital innovation initiatives.