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DigitalBridge Group, Inc. (DBRG)·Q3 2025 Earnings Summary

Executive Summary

  • Strong quarter on core metrics: Fee Revenue $93.3m (+22% YoY), FRE $37.3m (+43% YoY, 40% margin), and DE $21.7m ($0.12/share), underpinned by higher co‑invest fee rates and expense discipline .
  • Strategic milestone: FEEUM reached $40.7B, exceeding the $40B full‑year target one quarter early; new capital formation of $1.6B in Q3 (YTD $4.1B) supports 2025 objectives .
  • AI/power-bank flywheel: Record 2.6GW of portfolio leasing (about one-third of U.S. hyperscale leasing for the quarter) validates the 20.9GW secured power strategy and underpins multi‑year value creation and carry potential .
  • Estimates context: Primary EPS of $0.09 modestly missed S&P Global consensus of $0.103; GAAP total revenue ($3.8m) diverged from the $96.5m revenue consensus due to a large unrealized carried interest reversal, while Fee Revenue of $93.3m tracked much closer to Street expectations (see tables; values with asterisk from S&P Global) .

What Went Well and What Went Wrong

What Went Well

  • Secured power strategy driving record leasing: “We put that power bank to work and leased a record 2.6GW…representing one third of total record U.S. hyperscale leasing” .
  • Monetizable growth in platform economics: Co‑invest fee rates expanded (70 bps YTD in Q3), supporting FRE margin expansion to 40% and FRE growth of 43% YoY .
  • Capital formation and targets: FEEUM hit $40.7B (vs. $40B goal) one quarter early; Q3 new capital formation of $1.6B with $173m in available corporate cash enhances flexibility .

What Went Wrong

  • GAAP revenue optics impacted by carry: A net $19.8m carried interest reversal depressed GAAP total revenues to $3.8m, creating a large optics gap to consensus even as Fee Revenue remained strong .
  • DE volatility quarter to quarter: Though Q3 DE was $21.7m, Q2 DE was a loss of $18.6m (driven by realized loss at InfraBridge), highlighting ongoing non‑core and carry-driven variability .
  • InfraBridge drag and runoff dynamics: InfraBridge continued its transition (fees stepping from committed to invested capital), and management reiterated monetization timing will be prudent and episodic until vintages mature .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
GAAP Total Revenues ($m)$43.1*$(3.2) $3.8
Fee Revenue ($m)$90.1 $85.3 $93.3
GAAP Diluted EPS ($)$(0.01) $0.10 $0.09
Primary EPS Consensus Mean ($)$0.0029*$0.0702*$0.1033*
Revenue Consensus Mean ($m)$102.1*$101.6*$96.5*
Fee‑Related Earnings (FRE) ($m)$35.0 $32.0 $37.3
FRE Margin (%)39% 37% 40%
Distributable Earnings ($m)$54.7 $(18.6) $21.7
DE per Basic Share ($)$0.29 $(0.10) $0.12

S&P Global values marked with *; Values retrieved from S&P Global.

Notes:

  • Q3 EPS ($0.09) vs cons. ($0.103) = modest miss; GAAP revenue optics diverged from Street given large carry reversal. Fee Revenue ($93.3m) tracked much closer to the revenue consensus construct that many analysts implicitly benchmark for DBRG’s business model .

Segment/Strategy Breakdown – Fee‑Earning Equity Under Management (FEEUM, $bn)

StrategyQ3 2024Q2 2025Q3 2025
DBP I3.650 3.569 3.534
DBP II6.568 7.295 7.344
DBP III4.530 6.402 6.707
Co‑Invest Vehicles10.049 14.842 15.324
InfraBridge5.051 3.701 3.558
Core, Credit, Liquid3.047 2.758 3.057
Separately Capitalized Portcos1.191 1.172 1.171
Total FEEUM34.086 39.739 40.695

KPIs and Balance Sheet

KPIQ2 2025Q3 2025
New Capital Formation ($bn)1.3 1.6
FEEUM ($bn)39.7 40.7
Available Corporate Cash ($m)158.3 172.8
Net Carried Interest (Reversal) ($m)(11.6) (19.8)
Principal Investment Income, Net ($m)21.5 25.3
Common Dividend per Share ($)0.01 0.01
Corporate Debt ($m), avg cost300 @ 3.9% 300 @ 3.9%
Preferred Stock ($m)821.9 821.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent CommentaryChange
FRE growth YoYFY 202510%–20% (reiterated Q1) Tracking to achieve or exceed guidance; Q3 FRE +43% YoY; LTM FRE margin 38% Maintained / likely exceed
FRE MarginFY 2025~34.5% (Q1 discussion) Q3 at 40% (ex catch‑up still rising); LTM 38% Above prior run‑rate
FEEUM targetFY 2025≥$40B Achieved $40.7B in Q3 (one quarter early) Achieved early
DividendQuarterly$0.01/sh maintained$0.01 declared for Q3 Maintained
New strategies2H25Launch energy and stabilized DC strategiesFormal launch/anchor commitments targeted in Q4/Q1; private wealth channel launched with Franklin Templeton On track/expanded channels

Earnings Call Themes & Trends

TopicQ1 2025 (prior)Q2 2025 (prior)Q3 2025 (current)Trend
AI/power bank & leasingScaling pipeline; resilience despite tariffs; 100+ DCs under construction 20.9GW secured power; portfolio capex $43B (’25–’26) Record 2.6GW leasing; ~1/3 of U.S. hyperscale in Q3 Strongly positive
Private wealth channelDeveloping differentiated offering for AI ecosystem clients —Partnership launched with Franklin Templeton; evergreen, earlier carry Initiated
Digital power strategy—Takanock platform with ArcLight; powered land/microgrids Behind‑the‑meter plus grid hybrid model; multi‑deal pipeline Accelerating
Carried interestEpisodic near term; conservative marks; aim for consistency Net carry reversal in Q2 Net carry reversal $19.8m; 3–5yr realization cadence; $1.55/share per GW framework Building pipeline
Fundraising/FEEUMOn track; credit SMA flywheel Co‑invest fees +30% vs avg; DBP III >$6.9B raised YTD $1.6B Q3; FEEUM $40.7B achieved early Positive
Macro/tariffs3–7% tariff build‑cost impact manageable; escalators protect Markets recovered in Q2; AI capex rising —Neutral
Tenant credit selection——Selective on “neo‑cloud” credits; diversify by customer/workload Prudent risk mgmt

Management Commentary

  • “We exceeded our full-year FEEUM target in 3Q—one quarter early—reaching $40.7 billion…reflecting institutional recognition of platform value and execution capabilities.” — Marc Ganzi, CEO
  • “We put that power bank to work and leased a record 2.6GW…one third of total record U.S. hyperscale leasing for the quarter.”
  • “Fee revenues reached $94 million, up 22% year over year…FRE grew 43% to $37 million…with continued margin improvement.” — Prepared remarks
  • “Franklin Templeton…is about democratizing access…evergreen capital…earlier carry realization than traditional institutional structures.”
  • “To fully realize [carry] takes anywhere from three years to five years…accrued at entitlements, lease signing, first and final data halls; realized on sale/continuations.”

Q&A Highlights

  • Carried interest economics and timing: Management reiterated a 3–5 year realization profile with accrual at entitlement/leases/delivery milestones; the “$1.55 per share per GW” framework was reaffirmed as developments stabilize and monetize .
  • Scale and pipeline durability: Gigawatt campuses are difficult; expect more 250–800MW and distributed inference deals; current sales funnel >7GW while Q3 leased 2.6GW .
  • FEEUM activation and co‑invest margins: Significant co‑invest commitments tied to mega‑projects will contribute over the next two years; improved co‑invest fee rates support sustained FRE margin expansion .
  • Digital power strategy: Behind‑the‑meter plus grid integration model with long‑term IG offtake; microgrids and storage enable faster time‑to‑power; large opportunity set as AI power needs ramp .
  • Tenant credit discipline: Selective on newer “neo‑cloud” credits; diversified exposure across hyperscalers/AI providers mitigates concentration risk .

Estimates Context

  • EPS: Q3 Primary EPS $0.09 vs S&P Global consensus $0.1033 — modest miss largely explained by non‑cash carry dynamics in the GAAP P&L; management steers investors to Fee Revenue/FRE where performance exceeded YoY goals (see table) .
  • Revenue: S&P Global revenue consensus $96.5m vs GAAP total revenues $3.8m reflects carry reversal impact; Fee Revenue of $93.3m better reflects the fee‑based model and tracked closer to Street expectations .

S&P Global values marked with *; Values retrieved from S&P Global.

Key Takeaways for Investors

  • DBRG’s secured power strategy is translating into outsized leasing (2.6GW in Q3), underpinning multi‑year fee growth, carry generation, and platform differentiation in AI infrastructure—this is a core medium‑term value driver .
  • Core execution remains strong: Fee Revenue +22% YoY, FRE +43% YoY with 40% margin; higher co‑invest fee rates and disciplined costs are compounding operating leverage .
  • Optics vs estimates can diverge on GAAP revenue due to carry marks; Fee Revenue and FRE are the more decision‑useful comparators for the fee‑based model .
  • Capital formation and liquidity are supportive: $1.6B Q3 formation, FEEUM $40.7B achieved early, and $173m cash provide dry powder; energy and stabilized DC strategies, plus private wealth, expand distribution and product breadth into 2026 .
  • Carried interest runway building: Expect more consistent carry monetization as earlier vintages mature (2026–2028) and mega‑projects stabilize; accrual/realization milestones outlined give line‑of‑sight .
  • Risk management: Selective tenant underwriting (neo‑cloud caution), diversified logos/workloads, and hybrid grid/microgrid power architecture mitigate execution/credit and time‑to‑power risks .
  • Near‑term implication: Focus on FRE momentum and FEEUM activation cadence; medium‑term thesis hinges on translating the power bank into recurring fees and carry across a broadening product/distribution platform .
Citations:
- Q3 2025 8‑K/presentation and press items: **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:3]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:4]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:5]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:6]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:8]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:10]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:12]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:13]** **[1679688_0001679688-25-000096_digitalbridge-3q25xearni.htm:16]**
- Q3 2025 earnings call transcripts: **[0001679688_2215979_0]** **[0001679688_2215979_1]** **[0001679688_2215979_4]** **[0001679688_2215979_6]** **[0001679688_2215979_13]** **[0001679688_2215979_14]** **[0001679688_2215979_15]** **[0001679688_2215979_22]** **[0001679688_2215979_23]** **[0001679688_2215979_24]** **[0001679688_2215979_25]** **[0001679688_2215979_26]**
- Q2 2025 8‑K/presentation: **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:5]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:7]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:9]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:11]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:13]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:16]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:19]** **[1679688_0001679688-25-000081_digitalbridge-2q25xearni.htm:29]**
- Q1 2025 call transcript: **[1679688_DBRG_3424717_2]** **[1679688_DBRG_3424717_3]** **[1679688_DBRG_3424717_5]** **[1679688_DBRG_3424717_7]** **[1679688_DBRG_3424717_9]** **[1679688_DBRG_3424717_10]** **[1679688_DBRG_3424717_11]** **[1679688_DBRG_3424717_15]** **[1679688_DBRG_3424717_16]** **[1679688_DBRG_3424717_17]**