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CoreSite Realty Corp (COR) Q1 2019 Earnings Call Transcript

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CoreSite Realty Corp  (NYSE: COR)
Q1 2019 Earnings Call
April 25, 2019, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to CoreSite Realty's First Quarter 2019 Earnings Call. At this time all participants' are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Carole Jorgensen, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Carole Jorgensen -- Vice President of Investor Relations and Corporate Communications

Thank you. Good morning and welcome to CoreSite's First Quarter 2019 Earnings Conference Call. I'm joined here today by Paul Szurek, President and CEO; Steve Smith, Chief Revenue Officer; and Jeff Finnin, Chief Financial Officer.

Before, we begin I would like to remind everyone that our remarks on today's call may include forward-looking statements as defined by federal securities laws, including statements addressing projections, plans or future expectations. These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons. We assume no obligation to update these forward-looking statements, and can give no assurance that the expectations will be obtained. Detailed information about these risks is included in our filings with the SEC.

Also, on the conference call, we refer to certain non-GAAP financial measures such as funds from operations. Reconciliations of these non-GAAP financial measures are available in the supplemental information, that is part of the full earnings release, which can be accessed on the Investor Relations pages of our website at coresite.com.

And now I'll turn the call over to Paul.

Paul E. Szurek -- President and Chief Executive Officer

Good morning, and thank you for joining us. Today, I will share our first quarter highlights; discuss our development pipeline and cover a couple of significant recent events. Steve will cover our sales results and discuss how we continue to evolve our customer offerings. And Jeff will take you through our financial results including our recent financing activities.

Let me start with summarizing our accomplishments in the first four months of the year. We're executing well on our 2019 imperatives to create the momentum necessary to accelerate growth in 2020. These include substantial progress on our development pipeline, additional financing to fund new capacity, strong sales execution with the highest core retail colocation sales in 10 quarters, preleasing of two phases of our new SBA purpose built data center and financial results consistent with where we are in the development cycle and in line with our expectations. All of which we believe positioned us well for achieving higher growth in 2020.

Turning to our financial highlights for the quarter. We grew operating revenue 7.2% year-over-year, delivered a $1.25 of FFO per share and grew adjusted of 2.2% year-over-year. Consistent with our forecast for the first quarter, our results reflect higher-than-normal churn and interest in operating expenses associated with recently completed developments now in lease-up.

Moving to sales, we did a good job of achieving momentum this quarter. Our sales were driven by our core retail colocation and included $6.6 million of annualized GAAP rent, compared to $4.2 million last quarter.

Turning to our customer offerings, we launched our new CoreSite Interconnect Gateway, a fully managed service designed to help enterprises achieve their digital strategies, which Steve will talk more about. We also made substantial progress on our development pipeline. During this quarter, we launched a 20,000 square foot data center expansion in Boston and a 35,000 square foot data center expansion at NY2. We began construction on the first phase of CH2 in downtown Chicago. We advanced our ground-up developments at VA3 Phase 1B in Virginia and SV8 Phase I in Santa Clara and we expect to achieve our targeted completion dates for both data centers. At LA3, we continue to work with the local power company and government and expect to know more in the permitting progress later this quarter.

Turning to a few of our notable subsequent events in April. On April 12, we closed on the purchase of the Santa Clara property that we refer to as SV9, where we anticipate constructing an estimated 200,000 net rental square foot data center in the future. On April 15, we preleased both Phases I and II at SV8 for 108,000 square feet. As a result we're accelerating construction of Phases 2 and 3, into targeting completion in late Q4 2019 for Phase 2, and the first half of 2020 for Phase 3. On April 17, we closed on $400 million of senior notes, $325 million of which were issued immediately, and we expect to issue the remaining $75 million by mid-July.

As I discussed previously, 2019 is a transition year for us. We entered the year with leasable capacity at lower levels, compared to our historical norms, and we plan to end 2019 with leasable capacity plus quickly developable incremental capacity at the higher levels we experienced in previous years. To ensure a successful transition, our 2019 priorities include translating new construction into more abundant sales; acquiring additional new customer logos; bringing new connectivity and customer service products online to drive sales,; and delivering great customer experience and operational efficiencies. I'm pleased that we are executing effectively on these priorities as evidenced by our year-to-date accomplishments.

That said, we still have much work ahead of us, including scale leasing at VA3, keeping construction on a good pace CH2, and SV8. Finalizing power and permits for LA3, and obtaining entitlements power and permits for SV9. I have confidence in our teams, which are working diligently and effectively on all of these activities.

With that I'll turn the call over to Steve.

Steven J. Smith -- Chief Revenue Officer

Thanks, Paul. Today, I'll start off with a summary of our quarterly sales and leasing results, and then talk more about our new customer solutions and growing connectivity offerings.

Moving to our sales, for the quarter we had sales of $6.6 million of annualized GAAP rent, which included 32,000 net rentable square feet, at an average rate of $207 per square foot, and was comprised entirely of core retail colocation sales. A few highlights on our sales; our $6.6 million annualized GAAP rent, represented the highest quarter of annualized GAAP rent for core retail colocation sales in 10 quarters; and our sales included 30 new logos, compared to 32 last quarter, and while revenues from new logos were down from prior quarter, enterprise sales with quality brands that we expect to drive future growth remains strong. We also see a strong pipeline for future new logo wins as we continue in our strategic effort to bring new growth engines to the platform.

Turning to pricing, for the quarter pricing on new and expansion leases was consistent with the trailing 12-month average on a per kilowatt basis for core retail colocation sales. Renewals were also another key aspect of our leasing. During the first quarter our customer renewals included annualized GAAP rent of $11.9 million with rent growth of 3.2% on a cash basis and 5.9% on a GAAP basis. And as previously forecasted, rental churn of 2.7% was higher-than-normal for the quarter, reflecting churn of two larger deployments.

Moving to the mix of retail and scale colocation leasing. The first quarter leasing represented all retail colocation sales. However as Paul mentioned in April we preleased a majority of our SV8 data center through hyperscale leasing, a valuable ecosystem component at our Santa Clara campus. As our development pipeline turns up new capacity, we look forward to the opportunity to having greater contiguous space available for additional scale leasing.

Next, I would like to turn our focus on evolving our offerings in order to deepen our customer value, while providing additional forms of revenue to the company. Building on our new service and connectivity offerings delivered in 2018, here are a few of our ongoing efforts to enrich our ecosystem and help attract new customers to our data centers. In March, we launched the CoreSite Interconnect Gateway or CIG. CIG is a true gateway product to initiate and smooth a new enterprises transition into our data centers by providing a more secure, reliable and higher performance connection between the enterprise and our data centers, which can serve as a pivot point for building hybrid cloud architecture at our campuses and migrate data there too, and be scalable to add connections to other CoreSite data centers as a basis to dramatically lower customer rent costs.

In April, we announced hybrid network connections to Google Cloud available in our Denver and Los Angeles markets. This service from Google Cloud enables enterprises and network service providers that are colocated with CoreSite to directly connect to the Google Cloud platform through a high speed fiber interconnect.

In summary, we've had a solid start to sales for the year, and we are looking to build on those results by executing well on leasing our available space, driving new data center capabilities and providing exceptional customer service for our differentiated services.

With that I'll turn the call over to Jeff.

Jeffrey S. Finnin -- Chief Financial Officer

Thanks, Steve, and hello, everyone. Today, I will review our financial results for the quarter, provide an overview of our April financing and discuss our financial guidance.

Turning to our detailed results for the quarter as expected based on where we are in development and due to higher-than-normal churn, this was a relatively flat quarter. Our total operating revenues were $138.9 million for the quarter, which increased 7.2%year-over-year and were in line sequentially. Operating revenues consisted of $117.9 million of rental, power and related revenue, $18.4 million of interconnection revenue and $2.6 million of office, light industrial, and other revenue. Interconnection revenue increased 11.2% year-over-year and 2.2% sequentially.

FFO was a $1.25 per diluted share, which decreased $0.2 per share year-over-year and $0.1 per share sequentially, largely due to property tax and interest rate increases and dilution from pre-stabilized developments. Adjusted EBITDA of $74.5 million, grew 2.2% year-over-year and was in line sequentially. Adjusted EBITDA margin was 53.6% for the quarter, and we expect full year 2019 margins to be within our guidance range.

Sales and marketing expense, totaled $5.7 million for the quarter or 4.1% of total operating revenues and in line with our expectations for the full year. General and administrative expenses totaled $10.2 million for the quarter or 7.3% of total operating revenues in line with our expectations for the full year. For the quarter, we commenced 240,000 net rentable square feet of new and expansion leases at an annualized GAAP rent of $242 per square foot, which represented $5.8 million of annualized GAAP rent.

Moving to backlog, as of March 31st, the projected annualized GAAP rent from signed, but not yet commenced leases was $8.9 million or $13.6 million on a cash basis. We expect most of the GAAP backlog to commence in the next two quarters. Keep in mind, that this backlog excludes all sales activities that occurred in April.

Turning to our property operations and development. First quarter same-store monthly recurring revenue per cabinet equivalent was $1,556, reflecting an increase of 6.7% year-over-year and 0.6% sequentially. Q1 same-store turnkey data center occupancy, was 89.2%, an increase of 80 basis points year-over-year, and a decrease of 110 basis points sequentially.

We have a total of 428,000 square feet of data center capacity in various stages of development across the portfolio. With $262 million of cost incurred to date of an estimated total cost of $671 million or $409 million of cost to complete these projects. This includes all three Phases of SV8, and two new data center expansions; including one in Boston and the other at NY2 in the New York area. For more details on our development projects, please see Page 19 of our supplemental information. Capitalize interest for the quarter of $2.6 million, represented 21.7% of total interest in line with our full year estimate of 20% to 24%.

Turning to our balance sheet. As we've shared previously, we expected to access the capital markets this year for $350 million to $400 million in the form of additional debt, and to term out the outstanding balance on our revolving credit facility, which we just completed. On April 17th, we entered into a note purchase agreement and agreed to issue and sell an aggregate principal amount of $200 million of Series A notes due April 2026 with a coupon of 4.11%, and $200 million of Series B notes due April 2029 yielding 4.31%. On April 17th, we issued $200 million of the Series A notes and $125 million of the Series B notes and expect to issue the remaining $75 million of the Series B notes prior to July 17th, 2019.

The initial proceeds for the notes were used to pay down outstanding amounts on the revolving portion of our senior unsecured credit facilities. This provides us the ability to borrow $445 million under the revolving credit facility and along with the expected additional note proceeds of $75 million and $2 million in cash, results in total liquidity of $522 million, which we plan to use primarily to fund the $409 million of remaining cost on our current development pipeline.

Turning to our financial guidance. In terms of guidance changes, we've increased our annual churn expectations by 100 basis points due to a pending customer bankruptcy filing. As a result, we have arranged for the customer to vacate its deployment in the third quarter, and expect to receive payments to utilize their current capacity and terminate their current license in August 2019. Our annual guidance for 2019 churn is now 7% to 9%. As communicated previously, we continue to expect our second quarter churn to be in the range of 2% to 2.5%. We are also increasing the range of data center expansion capital expected for 2019 to $405 million to $465 million and total capital expense expenditures now expected to be $425 million to $500 million. This increase is primarily as a result of our preleasing at SV8 and the accelerated development of Phases 2 and 3. That concludes our prepared remarks.

Operator, we would now like to open the call for questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from Jordan Sadler with KeyBanc Capital Markets. Please go ahead.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Thank you. Good morning out there. So first, I wanted to just touch base on the scale leasing, you guys accomplished post quarter end, if I could. Can you talk a little bit about the type of tenant if it was one tenant and maybe any terms of the lease that you could share?

Steven J. Smith -- Chief Revenue Officer

Hey, Jordan, this is Steve. I think we've kind of shared as much as we possibly can around the lease. Obviously, most of our customers in general, but especially those larger hyperscale leases are -- have a lot of confidentiality surrounding the lease itself. So I think, we've shared about what we can there.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay and will you guys -- I mean, is it safe to assume that you guys will be able to achieve the typical 12% return hurdle?

Steven J. Smith -- Chief Revenue Officer

Yeah, I think it's safe to assume that we will maintain that expectation for SV8.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay. And is it possible that Phase 3 could see a similar type of lease, in other words, maybe same -- is this one tenant?

Steven J. Smith -- Chief Revenue Officer

It's one lease, yes.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay, and is it possible that SV -- Phase 3 could go to the same tenant as well? They have an option on it or no?

Steven J. Smith -- Chief Revenue Officer

I'm not sure that we can disclose any of those details as we mentioned in the prior remarks, we are in construction, planning to kick that off here soon. So that will be available.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay. And then maybe just moving to the bankruptcy, that's pending. Anything Jeff that you could share as it relates to that tenant exposure or that churn event? So is that a -- will churn just be an average or a lower number in 3Q versus 1Q and 2Q still or is that going to be elevated? And is there anything else you can kind of share about this tenant, maybe in your location or? Thank you.

Jeffrey S. Finnin -- Chief Financial Officer

Yes, you bet. I think in general, as you think about churn for the third quarter based on what we expect today inclusive of the customer, I would expect churn in the third quarter to be up in that same range as we've given for the first half, which would be somewhere 2% to 2.5%. So keep that in mind as you think through it, again that would be inclusive of this particular customer. I think just some other color and commentary we've obviously had received some questions prior to the call regarding the customer name and can we give visibility to that. I just think in general, we're really not in a position to comment on who the customer is. We just don't think that, that's our position to do so.

I would say, however, that the particular customer will be vacating an entire computer room in our data center. And as we think about it, there's very little, if any capital that's needed to get that room ready to release it to the market. It is in a market where we've had some good results over the past 18 months, and Steve and his team have a strong funnel currently in that particular market. And obviously we hate to see any customers going into bankruptcy, but we wish them well they've been a good customer for us and that we wish them as they continue their future business plan.

The only last thing I'd add is, just due to the customer vacating the space that obviously adds some turmoil in terms of their operations, and we have been working with them to the extent any of those customers didn't want to leave that particular location, we have accommodated them and have taken them, some of those customers on directly and made them just direct customers of CoreSite. So we're currently working closely with the customer helping them out where we can and we're helping them out vice versa wherever we can make a -- make ends meet.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Is it a service provider or third-party reseller of sorts then?

Jeffrey S. Finnin -- Chief Financial Officer

Yes, I think that's a fair description, absolutely.

Steven J. Smith -- Chief Revenue Officer

Jordan, I think, I'll just add a little more color from Jeff's comments there. We continue to have further conversations with some of our client base there to make sure that there is a smooth transition and if there's an opportunity to have them remain in the building those are active conversations.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay. Last one to Jeff on financing sources of capital. I know you took your CapEx guidance up a little bit here. What would you estimate leverage would be at year-end on a net-debt-EBITDA basis?

Jeffrey S. Finnin -- Chief Financial Officer

Yeah. Great question Jordan. Obviously, we executed on the financing in April, and I think as we had said we assumed, we would accomplish a majority of that financing for the year here in the first half. I think we probably went a little bit more than expected just due to pricing and the economics in the private placement. Having said that, I think from a leverage perspective, today our stated policy is to be somewhere around 4.5 times to debt-to-EBITDA. We ended the quarter at 4.1 times debt-to-EBITDA, and I think as you look at the capital expectations for the rest of the year, it's likely we will exceed 4.5 times.

Obviously, it's also dependent on adjusted EBITDA growth. We are comfortable taking that leverage in excess of 4.5 times probably up to 5 times. However, just keep in mind as we've said previously that's ultimately a Board decision and we'll continue to have those conversations with our Board, and to the extent that, that formal policy changes, we'll get that communicated. But I would expect it to increase over 4.5 times throughout the end of the year, and we'll continue to have that conversation with our Board in terms of the formal policy itself.

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Okay. Thank you.

Jeffrey S. Finnin -- Chief Financial Officer

You bet.

Operator

Thank you. Our next question comes from Sami Badri with Credit Suisse. Please go ahead.

Sami Badri -- Credit Suisse -- Analyst

Hi. Thank you. My question actually pertains to the interconnection revenue growth that we saw in the quarter. And could you help us understand the dynamics here regarding why interconnection revenue has grown so much faster than rental revenue in the quarter? And it's almost a multiplier of 2 times, as far as growth rate specifically in this quarter. And this dynamic hasn't really occurred in your model for about eight quarters, and I just want to understand why it's happening specifically now, and then I have a follow-up.

Jeffrey S. Finnin -- Chief Financial Officer

Good morning, Sami. Let me try and address that as best I can for you. And just something to think about for modeling, but in general, the interconnection revenue growth is from a pure quantity perspective is dependent upon the types of deployments we sell in quarters. Probably, I'd say anywhere between one to two years preceding that particular quarter, and the reason for that is you typically get a trail of increased in interconnections as that customer is deploying and so it's always follows the ultimate deployment of the customer's particular deal.

So it's important to just understand the composition the type of deployments and ultimately what that means in terms of interconnection revenue growth. When we have higher retail colocation leasing it will lead to a higher density of cross-connects per every kilowatt we sell, as compared to the scale leasing. So just keep that in mind as you think about it. And in terms of revenue growth, keep in mind when you look at the numbers as we've said publicly about two-thirds of that revenue growth comes from growth in pure quantity of our cross-connects.

The other one-third of revenue comes from customers, who are shifting due to volume needs on our Open Cloud Exchange or possibly the Any2 Exchange, where they just need higher bandwidth and those pricing step -- it steps up pricing without increasing quantities just to the higher volumes needed in those particular segments, so you get about two-third coming from pure quantities about a third of our revenue growth comes from a composition or a higher price product mix.

Steven J. Smith -- Chief Revenue Officer

Yes. I mean, I guess the final piece of that is in Q4, as you think about 2018 in general there was quite a bit of disconnects relative to M&A activity and consolidation there of which you saw a fair amount of that in Q4 of which we did see some leveling off and actually less of that as we came out of Q1. So that obviously had a positive impact.

Sami Badri -- Credit Suisse -- Analyst

Got it. Thank you. And then the follow-up related kind of to this is I'm assuming that a lot of your tenants are transitioning their switches from 10 gig speeds to 100 gig speeds. Could you give us an idea on where we are in this entire transition or this process? And then are you seeing any form of gig deployments, given your customer compositions?

Steven J. Smith -- Chief Revenue Officer

Yes, I mean so as far as the interconnection product itself is concerned, the 100 gig migration has been going on for quite some time, and we haven't seen a material impact to that as far as the overall number of cross-connects. As you know the growth in overall IP traffic and data traffic in general has continued to ramp up in wealth for the foreseeable future.

So that continues to offset any kind of efficiency that you start getting out of 10 gig to 100 gig or even greater than that. As far as the traffic that we see on those interconnections, we really don't see the traffic, because those are fiber connections that we now pass between our customers and the traffic that they move on that, whether it's 1, 10, 100 or more is really dependent upon the gear that they put on either end of that light. So we do see some higher speeds in that and some gear that's coming out to support that, but nothing material at this point.

Sami Badri -- Credit Suisse -- Analyst

Got it. Thank you for the color. And then I have just a model clarification question for you regarding real estate taxes and insurance. The percentage of revenues of that expense went up to 4.5% of revenues versus prior quarter. As you just kind of stood out, is that because of the new facilities or anything else. This is pertaining mainly to real estate insurance. Maybe if you could just help me understand what is going on regarding the step-up?

Jeffrey S. Finnin -- Chief Financial Officer

Yeah. Sami, just really two things. We've talked a couple of times over the last probably a year or so. Just some commentary related to taxes and I think in general, we've seen a general increase in real estate taxes through our portfolio that's largely driven by each of those municipalities as they're looking at in estimating overall assessed values. And so I think that's going to continue.

The other item is as we complete development of certain computer rooms and in the fourth quarter, we completed DC2, the -- any taxes associated with properties that come out of development, obviously we start absorbing that into our income -- our operating results as it was being capitalized during the development should it be in those results. So just keep that in mind, insurance is up a little bit, but the majority of that increase is really being driven by the property tax increases.

Sami Badri -- Credit Suisse -- Analyst

Perfect. All right. Thank you very much.

Jeffrey S. Finnin -- Chief Financial Officer

You bet.

Operator

Our next question comes from Colby Synesael with Cowen & Company. Please go ahead.

Colby Synesael -- Cowen & Company -- Analyst

Great. Three quick ones. One, is I'm wondering, if you can disclose the GAAP rental revenue that you got from your customers and said something you do typically obviously give us each quarter. Just -- if you're giving us megawatt, I was hoping you can give us the GAAP rental revenue. And then secondly, as it relates to that customer churn, just wondering what the termination fees are that you're anticipating, getting from that customer, and I assume you'll recognize those as rental revenue, but just confirming that. And then lastly on SB9, can you just tell us what's on that land right now and how long, in broad brush strokes, you think you could take before you could actually get a facility up and running there? Thanks.

Paul E. Szurek -- President and Chief Executive Officer

Colby, I guess, I'll take those. When we report our second quarter sales results will include all the GAAP revenue from the April lease -- pre lease in those results. But as Steve mentioned, we can't disclose that on an individual basis. The same kind of confidentiality provision applies to the termination fees we've negotiated with the tenant that's going into bankruptcy. So I apologize, but we can't disclose those items of information. SV9, similar to SV8 currently has a building on it, it's a single story multi-tenant office building, service office type of building, all the leases will expire before or will be terminated pursuant to their terms before we have to develop our critical path really starts with the entitlements, process and then the -- and the power process and then the specific permitting process. On SV8 that took about 12 months to get through. I would estimate it's going to be about 10 to 14 months in the case of SV9, because as you probably are aware, there are new power provisioning practices in California that add a little bit more time to your design before you can get into environmental reviews.

And then once we start demolition and site work, it typically takes about 12 months from that point to deliver the datacenter. Obviously, there's a lot we can't predict or control in these processes, but our team has been very proactive in doing a good job trying to line up everything for as seamless process as we can have. But I think that's kind of the right range to put soft expectations around.

Colby Synesael -- Cowen & Company -- Analyst

It sounds like broad brush strokes maybe mid-2021 we can get something there. And then just answering the first two questions so quickly. VA3, I think there's been expectations for several quarters now, to be honest that, that would've gotten preleased by now and we still just haven't seen that. And you mentioned in your own prepared remarks that, that being a focus. Why do you think that that has taken so long and just kind of give us a little bit more color on what the pipeline for that potential opportunity is right now? Thank you.

Steven J. Smith -- Chief Revenue Officer

Yes. Thanks, Colby. I'll take that one. As far as VA3 is concerned, we've actually had some good retail leasing in VA3 already in our initial phase there. So, that continues to show good traction and great quality brands that we brought into that building. So, the VA3 campus itself is often running and to a good start. So, it's 1B which I think you're referring to, we're nearing completion, but I think as you look at that overall market, as you know, there's a -- more inventory in that market and I think as you look at preleasing, any market that has more available inventory is going to have a shorter window of time to prelease. We continue to see a robust pipeline there and are in active conversations with customers. But we -- as we've mentioned on other calls, we are disciplined on how we approach these larger leases to ensure that they either contribute to or value our ecosystem and are also a good return for our investors. So, it's a balance of all those things to ensure it's a good fit.

Colby Synesael -- Cowen & Company -- Analyst

So, you still are pursuing a hyperscale lease for Phase 1B. And I guess based on what you're seeing, you think there's a good shot, we can get that done once that facility opens?

Steven J. Smith -- Chief Revenue Officer

Again, we balance those things between the scale of a hyperscale lease with the return that we expect to drive for the overall campus. So, it's both of those things. And scale leasing and hyperscale leasing comes in all forms and fashions and as well as size. And we continue to evaluate those and work with our pipeline of customers to try to drive a good fit there. So, it is important to us. We know we need to drive greater traction there and that's a focus from me and the team.

Colby Synesael -- Cowen & Company -- Analyst

Awesome. Thank you.

Operator

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

Aryeh Klein -- BMO Capital Markets -- Analyst

Thank you. Maybe just following-up on that last question within VA3, do you still expect to deliver those 12% returns? Or do you think it might go lower from here?

Paul E. Szurek -- President and Chief Executive Officer

As Steve mentioned that and as we've mentioned on quarterly calls for some time, from a pricing standpoint is our most competitive market. And while we still think it's achievable to hit our targeted returns on VA3 as a whole, it is going to be a bigger push in -- at VA3 than it is in our other markets.

Aryeh Klein -- BMO Capital Markets -- Analyst

Okay. Maybe turning to Chicago, it looks like occupancy dropped a little bit in the quarter. Can you talk about what's happening there? And then you have -- sorry.

Paul E. Szurek -- President and Chief Executive Officer

It was just one of those churn events.

Aryeh Klein -- BMO Capital Markets -- Analyst

Okay. But with CH2 coming online in the first half of next year, do you feel any differently about the opportunity in Chicago than maybe you did a few quarters ago?

Paul E. Szurek -- President and Chief Executive Officer

No, I think we feel the same and maybe probably a little bit better. What do you say, Steve?

Steven J. Smith -- Chief Revenue Officer

Yes, I think so too. I mean, we did have a couple of customers that we expected that churn to have, but the overall pipeline still remains strong even before CH1 for that matter. So, I think Chicago is one of those markets where it will be especially our position there, which is downtown and providing a modernize scalable facility that's connected to a heavily interconnected site of CH1. We think, we've got to a very unique value proposition in a great market.

Aryeh Klein -- BMO Capital Markets -- Analyst

Great. Thanks.

Jeffrey S. Finnin -- Chief Financial Officer

Thanks, Aryeh.

Operator

Next question comes from Jonathan Atkin with RBC Capital Markets. Please go ahead.

Jonathan Atkin -- RBC Capital Markets -- Analyst

Thanks. So interested just real quick as a point of clarification on the CoreSite, Interconnect Gateway. To what extent does that leverage third-party partners versus being an entirely homegrown product?

Jeffrey S. Finnin -- Chief Financial Officer

Sure. Thanks for the question. It's difficult to try to give the full color of that in our prepared remarks, but it really is a service that we've worked with our partners on to provide essentially a rack of equipment that the customer would have fully managed from one of our partners there would reside in our data center. So, that starts their colocation experience with CoreSite. And that can then support the customer in a multiple ways. The first is providing a secure high-performance connection between our data center and their enterprise location. That then provides an efficient and secure and high-performance way for them to connect to all the native on-ramps that we've worked very hard to establish within our data centers. So, it gets them onto those cloud on-ramps very quickly and securely, which they otherwise wouldn't have from their enterprise location. And then from there they can either access other data centers that we may have in order to diversify their cloud ramp experience and give them access to other availability zones, or act as we expect it to, as to be really kind of a stepping stone for them to expand their colocation footprint within our data center into more of the hybrid enterprise deployment that we have seen more of.

Jonathan Atkin -- RBC Capital Markets -- Analyst

But you wouldn't leverage other parties SDN offering. It's really your own homegrown products from a connectivity standpoint it sounds like?

Jeffrey S. Finnin -- Chief Financial Officer

As far as the data center itself, it's obviously our data center, but as far as the equipment and the management of that equipment, we are working with our partners to provide that service. So we're not providing a managed service directly to our customer that's through one of our partners.

Jonathan Atkin -- RBC Capital Markets -- Analyst

Okay. And then on SV8, any kind of color you can share around the commencement schedule around that commitment and kind of over multiple years or multiple quarters, yes.

Jeffrey S. Finnin -- Chief Financial Officer

Yes. I think I can give you a little bit of color there without any issue with the confidentiality components that we mentioned earlier. So, as you think about the two phases that this customer signed up for we expect the first phase of that to commence late Q3 and the second phase of that to commence late Q4 of this year.

Steven J. Smith -- Chief Revenue Officer

Very consistent with our construction completion, Jon.

Jonathan Atkin -- RBC Capital Markets -- Analyst

But presumably, there will be a ramp -- moving ramp. And so, would there be further kind of additive commencements that take place in subsequent quarters associated with that? Or is it pretty much once it's completed, you're getting full rent contribution?

Jeffrey S. Finnin -- Chief Financial Officer

I don't know that I can give you any more color than what I just gave you.

Jonathan Atkin -- RBC Capital Markets -- Analyst

Okay. And then lastly, I was just interested in the -- kind of more of a broad question because we've kind of touched on Virginia and Chicago and a little bit LA, but just as you see the pipeline and an overall demand profile across the company, what are some of the markets going forward where you see potential for scale at leasing?

Jeffrey S. Finnin -- Chief Financial Officer

Well, I think as you look at where we are investing in capital and building new facilities, as well as expanding in place capacity, we have a lot of opportunity ahead of us. The top four markets as we've historically provided and displayed growth in, I think we remain strong. So, we think about LA, the Bay Area, Virginia, as well as New York, and we've even seen some growth in Boston as well. Chicago really has been hampered by not having a modernized facility that can support it. And we look to have some of that growth come out of Chicago as well. So, we look to see more diversity across the platform as more of that capacity comes online. But in each of those cases we do expect some scale type of leasing.

Jonathan Atkin -- RBC Capital Markets -- Analyst

Thank you, Jeff.

Jeffrey S. Finnin -- Chief Financial Officer

Thanks, Jonathan.

Operator

Next question comes from Erik Rasmussen with Stifel. Please go ahead.

Erik Rasmussen -- Stifel -- Analyst

Yeah, thanks for taking the questions. First, the outlook for next year, based on your comments may be trending somewhat higher revenue growth, can you just help us reconcile what that means and how it compares to your previous expectations for low-double digit growth?

Jeffrey S. Finnin -- Chief Financial Officer

Yes. Good morning, Erik. Obviously, consistent with what we've outlined for 2019, where we got a lot of things ahead of us in terms of trying to work through and obviously through the first four months of the year we've made a lot of good progress. I think Paul touched on that and probably we'll try and summarize a little bit more. So, I don't want to get too far out ahead of our skis in terms of declaring victory on 2020 guidance at this point in time. I would just say that obviously in our forecast and ultimately embedded into that guidance we gave is for us to execute on some portion of scale leasing, which Steve and his team are focused on. And I'm not sure today as we sit here today, I would just confirm where we are marching toward in 2020 and that is to hit low-double digit revenue adjusted EBITDA and FFO per share growth. I wouldn't modify anything from what we've said to date.

Erik Rasmussen -- Stifel -- Analyst

Okay, great. And then maybe, you know, you do talk a lot about your new logos and new logo wins, but I think last quarter you talked about existing customers and what you could be doing. Can you give us an update there and the initiatives you're planning to kind of really accelerate growth from this segment and some of the things you can comment on the quarter and maybe upcoming for Q2?

Steven J. Smith -- Chief Revenue Officer

Yes, as it relates to our existing base, is that the question?

Erik Rasmussen -- Stifel -- Analyst

Right, yes.

Steven J. Smith -- Chief Revenue Officer

Yes. So, one of the things I think you saw even coming into this quarter was a bit of a resurgence in our base expanding with us, which is good to see. That was a little bit lighter in Q4. But we continue to make that a focus not only in having them grow their space with us, but serve them in new ways, either through interconnection to the Open Cloud Exchange, for example and enhancing that. We announced our upgrade of our Open Cloud Exchange and some of the capabilities there on the last call. But also, intersite connect -- connectivity between our various campuses and we see more adoption there.

And then the other things like I mentioned earlier on the call relative to our CoreSite Interconnect Gateway and those types of things. So, part of it is having them go expand their footprint, go into new markets, but also deepen those services and, therefore, the revenue that goes along with them. So, a little early in the innings as far as those enhanced services, but we're trying to be diligent about what we roll out and ensure that it actually does provide value and is represented by demand in the market and we'll execute accordingly.

Erik Rasmussen -- Stifel -- Analyst

Great. Thanks.

Steven J. Smith -- Chief Revenue Officer

Yes.

Operator

Next question comes from Nate Crossett with Berenberg. Please go ahead.

Nate Crossett -- Berenberg -- Analyst

Hi. Thanks for taking my question. I just wanted to get your comments on a potential investment-grade rating down the road. And I know you just priced that at some attractive rates, but my question is have the conversations with the agencies changed recently now that Equinox has an investment grade rating? And is this something you are even pursuing?

Paul E. Szurek -- President and Chief Executive Officer

Yes. Good morning, Nate. Yes, let me just give you some color and maybe some observations related to that, but just in general, we've always operated our company and managed our capital in a manner for us to try and achieve investment grade rating at an appropriate time. And so that's something we're -- we've been focused on and continued to be focused on. However, in addition I should say, we meet with the rating agencies on a very regular basics, at least once a year with each of the agencies, just to continue to have those conversations and discussions. I will say that, it's been good to see some of the movements from the rating agency, specifically to our peers. I think that that's been a good sign. I know they and we have all been working hard to educate and to help keep them informed on the industry and I think they've been making some movements and I think that's all headed to the right direction. We will -- it's clearly an objective of ours and something we keep focused on. But to date, it hasn't been needed at least in the public realms, but at some point as we continue to scale the company, that's clearly something that we're focused on.

Nate Crossett -- Berenberg -- Analyst

Okay, (Multiple Speakers)

Steven J. Smith -- Chief Revenue Officer

I would only add, Nate that we do have an investment grade rating for our private bonds.

Nate Crossett -- Berenberg -- Analyst

Okay, So if you did get investment grade, would it even change the rate much that you could issue it or?

Steven J. Smith -- Chief Revenue Officer

You know, that's really driven more by our capital allocation decisions and where we have opportunities and I don't think it's essential for us to be able to fund a good rate of opportunities, that we've have been pursuing historically.

Nate Crossett -- Berenberg -- Analyst

Okay, that's helpful. Thank you.

Steven J. Smith -- Chief Revenue Officer

You bet.

Operator

Next question comes from Richard Choe with J.P. Morgan. Please go ahead.

Richard Choe -- J.P. Morgan -- Analyst

Hi. I just wanted to go kind of go into the higher churn rate, but overall revenue kind of holding the same. Can you give us some puts and takes on what's going better, despite the, kind of, increase -- the 100 basis point increase in churn that makes you feel comfortable with keeping the revenue guidance for the year? And I have a quick follow-up.

Paul E. Szurek -- President and Chief Executive Officer

Yes. Good morning, Richard. I would just say in general, as we look at our forecast through the rest of the year and obviously updated for Q1 results. You always have a lot of puts and takes throughout the operations of the company and obviously those have been updated. We've updated the guidance, as you just touched on, some of it related to churn and some of it related to our CapEx spent. Obviously, it's early in the year, but as we sit here today we -- the visibility we have, we still are affirming the guidance from a revenue perspective and expect to be somewhere in that range, but it's early in the year, we'll continue to keep you updated and apprised as we move forward. But nothing specific I could point to as we sit here today, other than we are still comfortable with the guidance we have out there today.

Richard Choe -- J.P. Morgan -- Analyst

And I don't know if you can answer this. But given the market that the SV8 prelease is done, is it fair to say that is kind of your normal rate of return for a whole sale deal or could it be higher given that it's relatively tighter market?

Paul E. Szurek -- President and Chief Executive Officer

Again, we will talk about expected returns on a property as a whole, but not as it relates to individual transactions.

Richard Choe -- J.P. Morgan -- Analyst

Great. Thank you.

Operator

Next question comes from Frank Louthan with Raymond James. Please go ahead.

Frank Louthan -- Raymond James -- Analyst

Great, thank you. You commented little bit about pricing across various markets? Where are you seeing some strengths in the market and what markets you are a little weaker. And then if you could give us a general comment about how you view M&A? Obviously lot of assets are out there in the market currently? How do you view assets that, may be where the owner owns all the underlying land and buildings and so forth versus that they don't? And how does that factor into your process as you look at that? Thanks.

Paul E. Szurek -- President and Chief Executive Officer

I'll jump in where Steve would normally cover just to make it quick. But as you can see from our results, pricing is tending to be pretty stable through all of our markets with the same thing we've have been saying about Northern Virginia for the last few quarters, where there has been a decline and scale and under-pricing over the last 18-months, it seems to be kind of stabilizing down there, but that dynamic is still there in Northern Virginia. As we've also said in our previous calls, we do evaluate M&A opportunities. We have pretty tight criteria on what makes sense and it haven't seen it, obviously yet other than that two very small one's we've have done in our history. I think everybody would value owned properties differently, than leased properties with -- that would certainly be our view of them, and we will continue to look at what's out there.

Frank Louthan -- Raymond James -- Analyst

Okay, great. Thank you very much.

Operator

Next question comes from Nick Del Deo with MoffettNathanson. Please go ahead.

Nick Del Deo -- MoffettNathanson -- Analyst

Hey, thanks for taking my questions. Number of you peers of discussing JV's or selling more matured facilities a way to recycle capital and development projects. Can you envision circumstances under which that might make sense for CoreSite? Or does the nature of your campuses and business mix make it less tenable?

Paul E. Szurek -- President and Chief Executive Officer

So, I think the simple answer is that it's not likely, it's probably a higher cost of capital than what we'll be able to achieve Just by following our historic strategy and there is a lot of value in our interconnected campuses. And remember we also include a lot of flexibility around scale and density in those campuses. And there is value for everyone to have a very comparable customer experience through common ownership. So for those reasons, I would say it's probably unlikely for us. But again, we always evaluate opportunities that are out there, just to keep an open mind.

Nick Del Deo -- MoffettNathanson -- Analyst

Got it. And the one accounting one for Jeff. What sort of straight-line assumption have you baked into 2019 guidance. And should we think that the SV8 lease will start moving into straight-line just impact toward more normal levels?

Jeffrey S. Finnin -- Chief Financial Officer

Yes. Good morning Nick. We would expect, as you saw it coming, I think is right around $1.2 million actual add back for AFFO purposes this quarter, and that's largely been driven by the leases in which we're the actual lessee where we've got some straight line expense up in our operations. I would just say that typically, on larger scale and hyperscale leases, is where you'll typically see some straight-line effect especially once those leases commence and so as you see some of those occurring later this year, you could see that straight line impact start to moderate and possibly reverse back to the other scenario in the income statement. So I would say -- expect it to moderate this year and then possibly flip as you get into 2020.

Nick Del Deo -- MoffettNathanson -- Analyst

Okay. Got it. Thank you.

Jeffrey S. Finnin -- Chief Financial Officer

You bet.

Operator

Our next question comes from Dave Rodgers with Baird. Please go ahead.

Dave Rodgers -- Robert W. Baird -- Analyst

Yeah, maybe for Steve. Just wanted to ask a little bit of color on Boston and NY2. Those have been two slower markets to lease up and obviously, you already have some of the space available at NY2. So, may be a little color on, just kind of what do you expect and, kind of, how you are looking to tackle those two markets. And as an aside to that, it looks like this next phase at NY2 will cost about twice as much on a per-foot basis as the last phase. So could you add a little color on that as well?

Steven J. Smith -- Chief Revenue Officer

Sure. I'll just give you a little bit of color as far as the sales pipeline and the approach on those two markets and then Jeff can talk a little bit more about the cost and the financing. As far as the overall markets are concerned, we're actually very bullish in both of those markets. In fact, as you look at back through last couple of quarters, Boston has been one of our stronger market sales as it relates to sales execution there and so the growth and the build out that we are doing there is based on some of the traction we've seen there with some of our existing customers as well as the new ones that were coming in. So we've staffed a little bit higher there, as well to support that demand, and we're excited about the opportunity in Boston. New York, we have continued to see new logos comes to the door. The activity actually is very strong there and the pipeline looks very strong. So, again we're trying to align our capital based on where we see the demand and we need to execute against that demand, but we're bullish about where that heads.

Jeffrey S. Finnin -- Chief Financial Officer

Good morning, Dave. The only thing I'd add to Steve and just specifically related to the cost question is, in -- at NY2 in this particular build out it was more efficient and much more price effective to build out some more of our back -- what we referred to, I guess, just our back-plane infrastructure related to a future phase. And so we're just adding some infrastructure earlier to support another room buildup that will come later down the line and it was just more effective and efficient for us to do at this point in time.

Dave Rodgers -- Robert W. Baird -- Analyst

Got it. That's helpful. And then maybe just a border question on -- you get about 40 megawatts, I think set to complete between now and the middle of 2020. And there's been a lot of questions about different development yields by projects or even by lease. But can you kind of talk about where you expect that to shake out in the next 40 megawatts kind of -- from an earnings power perspective? How should we think about kind of that set of development yield in the aggregate in terms of what that can contribute given how you're thinking about whether it's hyperscale or colo leasing?

Steven J. Smith -- Chief Revenue Officer

Well, it's a great question. I think when you look at the chart we've got on Page 19 of our supplement on that lays that out really by particular expansion. I think the way to think of it is as follows: any time we're doing a ground-up construction, you're going to see generally lower yields in those first phases, and the yields will increase as we build up subsequent phases just due to the investment we're having to make in the first phase where we're basically investing about 50% of our overall cost of that project. So that's -- so as you think about it to the extent we have prereleasing like what we did at SV8, you'll see that come on much quicker than you might otherwise where we're leasing it up over a longer period of time. Where you've got those computer rooms just being built out inside an existing shell, obviously, those are going to deliver -- those returns on that incremental capital are going to be substantially higher. And so just think about maybe taking those two components and putting some blend in there, I don't know what it would come out on a blended basis, I haven't done the math myself, but I have better idea of where it is on a particular projects, but just keep that in your mind as you work through in your estimates.

Dave Rodgers -- Robert W. Baird -- Analyst

Alright. Thank you.

Operator

Next question comes from Robert Gutman with Guggenheim Securities. Please go ahead.

Robert Gutman -- Guggenheim Securities -- Analyst

Thanks for taking the question. So, maybe I'll ask you something that people touched on but from a different angle. With the near-term deliveries that are scheduled in the second quarter, should we expect a return of leasing of the over 5,000 square foot deployments as they have been absent for the past two quarters? So should we be expecting that to be included in the second quarter leasing, basically, and obviously excluding SV8?

Paul E. Szurek -- President and Chief Executive Officer

Well, I would say that, since we are in Q2 I'm not going to comment on where we are going to end up in Q2. But I will say that now we are actively working with customers and are working to execute against the pipeline that presents itself. So, I really can't comment on where we -- forward-looking statements and where we're going to finish the queue other than the guidance that we've already provided.

Robert Gutman -- Guggenheim Securities -- Analyst

Okay. Also out of the 32,000 square feet that was leased in the quarter, I think it looks about 5,000 was in the pre-stabilized properties. Can you talk about where the rest kind of landed and just a little color on vertical and geographies for the rest of the leasing that occurred in the quarter?

Steven J. Smith -- Chief Revenue Officer

Maybe I can just start off with the overall markets. The markets that we closed in were kind of a typical markets that you would expect from us as far as LA be in our top market; Santa Clara, Virginia. So those are really the kind of the top three for us. As far as the same-store versus other, I know Jeff is looking for that right now. I don't have that in my fingertips right now.

Jeffrey S. Finnin -- Chief Financial Officer

Yes. I think obviously from a same-store perspective Robert, there was some leasing associated with that. And as you saw sequentially, our occupancy dropped a little bit. We would expect that to come back a little bit as those deals commence and there was some of that associated with that same-store obviously.

Steven J. Smith -- Chief Revenue Officer

As far as vertical -- I'm sorry, just to maybe give you a little color as far as the verticals are concerned. I was really kind of split about half to enterprise and then the other half split between network and cloud; so that gives you a little bit more color.

Robert Gutman -- Guggenheim Securities -- Analyst

Absolutely. Thank you.

Steven J. Smith -- Chief Revenue Officer

Yes.

Operator

Next question comes from Michael Rollins with Citi. Please go ahead.

Michael Rollins -- Citi -- Analyst

HI, good morning. Thanks for taking the questions. Two, if I could. So first, the development yield guidance has stayed consistent around 12% to 16%, but I was curious if you could unpack that with respect to what the expectation for development yield is for a retail deployment versus a hyper-scale deployment based on current market pricing?

And then second, as I was looking at the top 10 customer list, I noticed that half -- the bottom half with about 10% of revenue or rent is coming due on an average term of less than 12 months. And how do you look at that in terms of opportunity for up-selling or renewal pricing versus maybe some of the risks on architectural changes, et cetera? Thanks.

Paul E. Szurek -- President and Chief Executive Officer

So Michael, just as it relates to the different categories; as you know, we try to not give out that type of specific pricing in return figures. I think it's fairly common knowledge that retail leasing generates a higher return than hyperscale leasing does. And when we look at overall data center yields, we're looking at them on an expected mix; and I'll let Steve address the rest of the question.

Steven J. Smith -- Chief Revenue Officer

Yes, and I would just say as far as the mix is concerned, we do look at the difference -- obviously takes longer and more of them from a retail perspective to fill up our data centers and get to a stabilized yield for the building; so it's -- we really do try to strike that balance and look at the overall blend of the population of each data center to try to get to the yields that we've stated. So that's one probably the best way to think about it. As far as the Top 10 customers are concerned; I think you're probably referencing two of those customers that are -- have expired in the Top 10, and I would just give you some color there that we do look at this as opportunity for us to not only extend those terms, but grow them. For all of our customers, I mean for those two I would just give you some -- that we have actually renewed several other spaces, both of them have quite a few spaces with us and we've renewed some of them and expect to move forward with completing the renewal of both of them.

Michael Rollins -- Citi -- Analyst

Thank you.

Steven J. Smith -- Chief Revenue Officer

Yes.

Operator

Next question comes from Jon Petersen with Jefferies. Please go ahead.

Jon Petersen -- Jefferies -- Analyst

Thanks. I'm wondering if you could update us on kind of your sales force how well staffed that is right now, and historically for CoreSite and all of your peers that has always been a little bit of challenge with turnover in the sales force. I was just kind of curious any update there?

Paul E. Szurek -- President and Chief Executive Officer

Yes, sure. I'll give you a little color. I mean, I'm happy that we are fully staffed which is always a challenge to get staffed with the quality folks that you would like to see. We haven't really changed the overall expense component of our sales and marketing team. We have changed the mix and kind of some of the roles that we have throughout our sales organizations whereas -- as well as where some of those people are located in their focus based off where we have capacity or expect capacity to come online. So, it really is more of a mix and positioning component that we try to work with to make sure that we're hitting the market as best as possible. We shifted a couple of resources around from sales to be more technical and trying to help customers through their hybrid deployment journey. And I think that's borne some fruit for us, as well as I mentioned, putting some of the resources in markets like Boston and Chicago where we expect more capacity to come online.

Jon Petersen -- Jefferies -- Analyst

Great, thanks. And then, I was curious with all the development you guys have coming online, the first phase stuff; I would assume that's going to weigh on EBITDA margins over the next couple of years. I guess is that a reasonable expectation? And I mean, I guess -- how do you think about your kind of long-term adjusted EBITDA margin targets with the company?

Steven J. Smith -- Chief Revenue Officer

Hey, good morning, Jon. I think it's accurate that as we roll-off some of this development and start going through the lease-up, it is not going to give us the opportunity to expand those margins. I think that's the best way I'd look at it. I think they should be fairly consistent as we roll through some of this development and get it through lease-up. Having said that, I would then just say longer-term and this goes on beyond probably 2020. I think we have an opportunity to expand that margin by maybe a 100 basis points to 200 basis points, but that's something we've got to think through on exactly how to execute on it. And I think what's key to that is how can we continue to leverage inside our existing markets, and I do think we can scale off of them, but it's just getting much harder to do that in the future as it's been in the past just given the size of the company and the way we've been making some investments, but it's something we've got in our mind and something we'll work toward. But as we get through the next year or year and a half, we'll continue to provide some color and commentary around that. But I wouldn't expect it to expand as it has in the past, but it is something I think there is still some room for improvement.

Jon Petersen -- Jefferies -- Analyst

Great. Thank you.

Steven J. Smith -- Chief Revenue Officer

You bet.

Operator

There are no further questions. I would like to turn the call over to Paul for closing comments.

Paul E. Szurek -- President and Chief Executive Officer

Thank you. Carole, Jeff, Steve and I appreciate everyone's participation in this call. As you can see, we're pleased with what our colleagues have accomplished this year so far, and grateful for the opportunities ahead of us. We continue to see good demand for edge data center capacity in our markets, and now are bringing online the product to meet that demand. We have, and we'll probably always have much work ahead of us, and we have a great team pursuing all that work. We look forward to the future. Thank you. And have a great day.

Operator

This concludes today's conference. Thank you for your participation.

Duration: 67 minutes

Call participants:

Carole Jorgensen -- Vice President of Investor Relations and Corporate Communications

Paul E. Szurek -- President and Chief Executive Officer

Steven J. Smith -- Chief Revenue Officer

Jeffrey S. Finnin -- Chief Financial Officer

Jordan Sadler -- KeyBanc Capital Markets -- Analyst

Sami Badri -- Credit Suisse -- Analyst

Colby Synesael -- Cowen & Company -- Analyst

Aryeh Klein -- BMO Capital Markets -- Analyst

Jonathan Atkin -- RBC Capital Markets -- Analyst

Erik Rasmussen -- Stifel -- Analyst

Nate Crossett -- Berenberg -- Analyst

Richard Choe -- J.P. Morgan -- Analyst

Frank Louthan -- Raymond James -- Analyst

Nick Del Deo -- MoffettNathanson -- Analyst

Dave Rodgers -- Robert W. Baird -- Analyst

Robert Gutman -- Guggenheim Securities -- Analyst

Michael Rollins -- Citi -- Analyst

Jon Petersen -- Jefferies -- Analyst

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