Keith Taylor: So, David, let me — so I’ll take the first question and then pass to Charles. Thank you for the questions. I think it’s important for us to highlight and share with everybody how the business is performing. Very much like Charles has said, the company is performing well. And notwithstanding the comments around the billing cabinets because you can’t — you don’t grow revenues like you grow revenues as we did over $40 million quarter-over-quarter when you don’t — you’re not creating value, and it’s coming through price and volume and all the things that we do. So, as you sort of pass forward to the fourth quarter, again, a nice step-up in both recurring and non-recurring revenue. I think at midpoint of guide, we’re up $73 million over the prior quarter on a neutral basis — on a currency-neutral basis.
And so that’s an impressive increase. And so let me give you a little bit of a size on the non-recurring piece. You’ve seen non-recurring being relatively flat quarter-over-quarter. Ebbs and flows generally with a large deal done in the xScale business. But this — the xScale business, we see an order of magnitude of roughly $30 million. So, that gives you a sense of the size of the uplift in non-recurring. That leaves you with plenty of room on the recurring revenue. Again, $73 million in the midpoint of guide. So, what’s going on in the cost side of the equation? Well, there’s always some seasonality as we all know. But as we sort of said in our prepared remarks, there’s two things that I want to bring to the top. Number one, no surprise, the company is working hard to be as judicious as we need to be with our spend, including our corporate real estate assets.
And so we’ve embedded a fairly large charge inside the quarter relating to corporate real estate. And so the order of magnitude of think of that as a $20 million to $30 million range, just to size it for you. The second piece is, yes, the business, as you know, we’ve been able to deliver a good year, and we’re setting ourselves up now for 2024. And that’s where our focus is because we know we had strong bookings in the third quarter. We feel we’re really well-positioned for booking activity in the fourth quarter. And that sort of sets the stage or sets the table for 2024. And so we did accelerate some costs into the year into the last quarter, both on an OpEx basis, and you can certainly see it on a recurring CapEx basis. And so we made that decision, one because we could deliver better than the market was anticipating and simultaneously make sure that we get some of the investments behind us so we could focus 2024 on things that were important for 2024.
And so it’s a combination of those two things that really have made a difference if you look at flow-throughs. But as you then enter into the new year, you’ve really set the stage for a good start to 2024. If we deliver against those that booking expectation, I think it just — it sets the table really nicely for a 2024 start. So, let me leave that. I hope I answered your question there.
David Barden: No. Thanks Keith.
Charles Meyers: So, I’ll take the second one, David. It’s pretty simple, really, in terms of — it’s really what I was talking about there in terms of the 4 to 5.7 is really a macro average, an overall aggregate average for the for the — again, that’s for the first three quarters. We basically said, look, this is the number of cabinets that were churned out over that period of time. And this is the total contracted power that was churned out over that time, divide those two and you get four. And then here’s all the new cabinets we build — booked during the year. And here’s the new contracted power on those and to buy those and you get 5.7. And the reason I think it’s important to characterize that as an average, I actually think it will be harder for us to deal with it was all exactly 4-kilowatt cabinets being churned and all exactly 5.7 kilowatt cabinets being added.
The reality is that the workloads have quite a range. We still see meaningful demand well below that 5.7 and obvious — that’s obvious since that’s an average. And then you see some meaningfully above that, right? And you might see we might see deals that are 10, 15, 20 or more kilowatts per cab. And as we said, we may even be looking at liquid cooling to support some of those very high density requirements. And so — and I think that’s important in that I think it’s an opportunity for us as we have this dynamic of space being freed up to the extent that we can match that up with power and cool it appropriately using liquid cooling or other means or traditional air cooling means, then I think that’s an opportunity to unlock more value from the platform.
And so that’s a dynamic that we’re very focused on. But what I gave you in terms of the 4 to 5.7 is really an overall average.
David Barden: No, helpful color guys. Thank you so much.
Operator: Our next question comes from Michael Rollins with Citi. You may go ahead.
Michael Rollins: Thanks. Good afternoon. First, curious if you could discuss the factors that led to the decision to adjust capital allocation and boost the dividend per share in this fourth quarter and then just kind of the go-forward metric of how to think about dividend growth? And then I have a follow-up, if that’s okay.
Keith Taylor: Yes. Sure. Michael, the — well, just broadly speaking, clearly, we think of ourselves as very advantaged by the cash that we keep on our balance sheet, the liquidity position we have available to us and how we’re setting up our debt structure, particularly in low rate environments. And I think that will continue to hold true as we look into 2024 and certainly into 2025. No surprise. I know this wasn’t directly in your question, I’ll come to the dividend in a moment. The cost of debt is going up. And so we’re trying to be very judicious how we raise our capital, continue to find balance. But we know and we’ve set the stage, if you will, coming out of the Analyst Day for a five-year view on what we think we can accomplish as a business.
And we know how much capital incrementally we need to raise all else being equal inside that business plan. And so you’re seeing us execute against and strike where we can when it’s opportunistically favorable to the business. And that’s why you saw those rates Swiss franc put on the balance sheet right away. We’ve got the positive carry and so we move on and that’s good liquid capital for us. So, then as you look about how do we distribute some of the cash flow back to our investors. And no surprise, we are — we’ve made a commitment to pay out 100% of the taxable income inside the qualified structure. And the way that, that happens is through a distribution of the dividend. And basically, you limit your taxable income and avoid excise taxes, if you pay out that dividend.
