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DigitalBridge Group, Inc. (DBRG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was an operational inflection: fee revenue rose 37% year over year to $101.6 million, fee-related earnings (FRE) increased 34% to $35.4 million, and distributable earnings (DE) were $19.9 million; GAAP EPS was a loss of $0.12, driven by carried interest reversals, while non-GAAP operating metrics strengthened .
  • Record fundraising totaled $9.0 billion for 2024 with $4.8 billion in Q4, led by data center co-invest capital; management emphasized that the higher co-invest mix dampened in-period catch-up fees but supports long-term carry value and platform scale .
  • 2025 guidance: end-of-year FEEUM targeted at ~$40 billion, FRE growth of +10–20%, and ~200 bps margin expansion, with performance expected to be more front-loaded owing to catch-up fees timing; net FEEUM growth pipeline of $4+ billion is tied to finishing flagship and credit funds and launching digital energy and stabilized data center offerings .
  • Strategic catalysts: scaling a 16 GW power bank and ~4 GW leased capacity across seven global data center platforms, a strong credit/private wealth fundraising cadence, and ecosystem investments in towers/fiber (e.g., Verizon towers bolt-on; Zayo’s pending acquisition of Crown Castle Fiber Solutions) that position DBRG for AI inference workloads .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP operating momentum: Q4 fee revenue of $101.6 million (+37% YoY), FRE of $35.4 million (+34% YoY), with FY 2024 fee revenue of $329.8 million (+23%) and FRE of $107.1 million (+31%); management said revenue and earnings were “in line” with revised guidance .
  • Fundraising outperformance: $4.8 billion in Q4, $9.0 billion in 2024 (28% above the $7.0 billion target), expanding FEEUM to $35.5 billion at year-end; co-invest raised $5.5 billion supporting rapid data center expansion .
  • Strategic execution: acquisitions/commitments in data centers and towers (Yondr, JTOWER; Verizon towers) and capital formation for growth platforms (e.g., DataBank $2.0 billion equity raise led by AustralianSuper), reinforcing AI/cloud positioning .
  • Quote: “Management fees grew over 20% this year and over 35% in the fourth quarter, while fee-related earnings grew over 30%...with margins expanding” — CEO Marc Ganzi .

What Went Wrong

  • GAAP optics: Q4 GAAP total revenues were $66.2 million (down due to carried interest reversals); GAAP EPS was a loss of $0.12 (driven by carry accounting), which can obscure strong non-GAAP performance .
  • In-period FRE shortfall vs earlier-year targets: composition skewed to co-invest and invested-capital fee structures reduced catch-up fees in 2024, deferring revenue realization into 2025 .
  • Admin expense noise: Q4 administrative expenses were elevated by fundraising-related costs (CFO cited “a bit anomalously high”), with quarterly admin in the $17–19 million run-rate range (cash/FRE basis) .

Financial Results

Summary Operating Metrics (Non-GAAP) vs Prior Quarters

MetricQ2 2024Q3 2024Q4 2024
Fee Revenue ($USD Millions)$72.8 $78.7 $101.6
Fee-Related Earnings (FRE) ($USD Millions)$19.6 $26.0 $35.4
Distributable Earnings (DE) ($USD Millions)$2.23 $19.63 $19.90
FEEUM ($USD Billions)$32.5 $34.1 $35.5
LTM FRE Margin % (period-end)33% 32% 32%
GAAP EPS (Basic) ($USD)($0.28) $0.44 ($0.12)

Notes: Q4 fee revenue includes ~$9.8 million catch-up fees; total 2024 catch-up fees were ~$19.5 million .

Fundraising/New Capital Formation

MetricQ2 2024Q3 2024Q4 2024
New Capital Formation ($USD Billions)$1.2 $1.8 $4.8

FEEUM Segment Breakdown ($USD Billions)

FEEUM CategoryQ2 2024Q3 2024Q4 2024
DBP Series (sum of I/II/III)$13.1 (DBP I $3.571 + DBP II $6.219 + DBP III $3.230) $14.7 $15.9
Co-Investment Vehicles$9.86 $9.55 $11.54
InfraBridge$5.12 $5.16 $3.69
Core, Credit & Liquid$2.90 $2.86 $3.18
Separately Capitalized Portcos$1.52 $1.17 $1.17

Liquidity & Capital Structure (Quarter-End Snapshots)

MetricQ2 2024Q3 2024Q4 2024
Available Corporate Cash ($USD Millions)$127.3 $127.3 $140.0
Revolver Availability ($USD Millions)$300.0 $300.0 $300.0
Preferred Stock ($USD Millions)$821.9 $821.9 $821.9
Corporate Debt ($USD Millions)$372.4 $300.0 $300.0

GAAP Results (Q4 2024 highlights)

MetricQ4 2024
GAAP Total Revenues ($USD Millions)$66.2
Net loss attributable to common stockholders ($USD Millions)($19.7)
GAAP EPS (Basic/Diluted) ($USD)($0.12)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ending FEEUMFY 2025n/a~$40B New
FRE Growth vs 2024FY 2025n/a+10% to +20% New
FRE MarginFY 2025n/a+~200 bps; 1H>2H given catch-up timing New
Net FEEUM GrowthFY 2025n/a~$4B+ pipeline (finish flagship/credit; launch digital energy & stabilized DC; PW 2nd offering) New
Long-term FEEUM target2028$60–$70B (Investor Day) MaintainedMaintained
Common DividendQ4 2024 Declaredn/a$0.01 per share Maintained level

Earnings Call Themes & Trends

TopicPrior Two Quarters (Q2 & Q3 2024)Current Period (Q4 2024)Trend
AI infrastructure and inferenceQ2: Detailed thesis on AI training/inference and diversified ecosystem (data centers, towers, fiber); capex accelerating; power and proximity emphasized . Q3: Reinforced multi-strat approach; private wealth sidecar traction; pipeline strength .Q4: “Age of Inference” framing; hyperscaler 2025 capex raised to >$300B vs $250B; 16 GW power bank; ~4 GW leased capacity in 2024 .Strengthening focus; explicit inference TAM and capacity build-up.
Fundraising composition (co-invest)Q3: Back-end loaded fundraising; co-invest and invested-fee structures shifted catch-up fees into 2025 .Q4: $4.8B Q4, $9.0B FY; co-invest $5.5B, high-margin incremental revenue; expect less co-invest mix in 2025 (30–35%) .Mix normalizing in 2025; scale supports carry accrual.
Carried interest cadenceQ3: Net carry reversal; portfolio conservatively marked; focus on DPI to recycle capital .Q4: Net carried interest reversal of ~$18.2M in Q4; carry asset grew to $167M in 2024; aim to make carry more steady with exits/DPI .Building toward steadier realization path; investor education ongoing.
Credit & private wealthQ2: Credit platform scaling; private wealth sidecar launched . Q3: PW exceeded initial $600M expectation; multi-product cadence .Q4: 2025 roadmap includes finishing Credit II; launching second PW product; broader multi-strat scaling .Scaling both channels as durable fundraising engines.
Towers/fiber ecosystemQ2: Strong tower/fiber performance; M&A multiples holding; securitizations robust . Q3: Verizon towers bolt-on; Zayo performance; macro densification thesis .Q4: Best January ever in U.S. tower leasing; fiber pipelines up 50% YoY; ecosystem delivering for AI workloads .Demand strengthening; densification cycle into 2026–2029.

Management Commentary

  • “We had record fundraising of $9 billion in 2024, including $4.8 billion in the fourth quarter…Management fees grew over 20% this year and over 35% in the fourth quarter, while fee-related earnings grew over 30%” — Marc Ganzi, CEO .
  • “We recorded $102 million of fee revenue in the fourth quarter…FRE of $35 million in the fourth quarter and $107 million for the full year 2024…FEEUM stood at $35.5 billion” — Thomas Mayrhofer, CFO .
  • “Updated hyperscaler 2025 capex…is actually 20% higher than it was just 6 months ago, rising from $250 billion to over $300 billion…It’s about an ecosystem…not just data centers” — CEO .
  • “By the end of this year, we expect capacity to have grown at a 68% CAGR…we’ve got a secured power bank…over 16 gigawatts” — CEO .
  • “Grow FEEUM to over $40 billion…FRE between 10% and 20%…improve our FRE margins by approximately 200 basis points” — CFO .

Q&A Highlights

  • Leasing pipelines: data center proposals up ~22% YoY; fiber pipelines up >50% YoY; single-tenant yields stable, double-digit cash yields targeted; ABS/CMBS access supports levered yields — CEO .
  • DPI/carry trajectory: Management anticipates more DPI in 2025 with selective exits; aim to make carry delivery more regular as Fund I/InfraBridge I mature — CEO/CFO .
  • Preferreds/capital allocation: No preferred repurchases in 2024; may opportunistically address preferreds if sub-7% debt capital available; focus on higher-IRR fund co-invests — CEO/CFO .
  • Sales infrastructure/private wealth: Global fundraising team scaled to ~35–38; PW channel exceeded $1B; further hiring and product launches planned — CEO .
  • Small cells/towers densification: Macro leasing uptick; 5G densification likely 2026–2029 with potential doubling of U.S. nodes to ~2 million — CEO .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q4 2024 revenue/EPS/EBITDA were unavailable through our data service at time of analysis; management stated Q4 revenue and FRE were delivered “in line with revised guidance,” and 2025 performance is expected to be more front-loaded due to catch-up fee timing .
  • Given the lack of consensus data, we cannot classify Q4 as a beat/miss versus Street; however, non-GAAP operating trends (fee revenue, FRE, FEEUM) suggest positive estimate-revision risk if fundraising activation and catch-up fees materialize as guided .

Key Takeaways for Investors

  • Operating momentum is robust beneath GAAP volatility: focus on fee revenue, FRE, and FEEUM to assess core performance; Q4 non-GAAP metrics strengthened and FY 2024 ended with expanding LTM margins .
  • 2025 setup: earlier activation of catch-up fees and finishing flagship/credit funds should front-load earnings; target ~$40B FEEUM and +10–20% FRE growth with ~200 bps margin expansion .
  • AI inference cycle favors DBRG’s ecosystem breadth (data centers, fiber, towers) and secured power bank advantage; capacity and power bottlenecks are likely share-gain catalysts for portfolio platforms .
  • Co-invest mix normalized in 2025 should improve in-period fee realization while still compounding carry; expect less reliance on co-invest vs. 2024’s outlier composition .
  • Balance sheet/liquidity support opportunistic capital allocation (e.g., preferred optimization if sub-7% debt achievable) while funding GP co-invests in high-IRR strategies .
  • Watch fundraising cadence in H1 (flagship and credit closings) and new product launches in H2 (digital energy, stabilized data centers, second PW offering) as near-term stock catalysts .

Appendix: Additional Q4-Relevant Announcements

  • Q4/late Q4 portfolio actions: Agreement to acquire Yondr Group (hyperscale data centers, >420 MW leased, >1 GW potential) ; taking JTOWER private (largest independent towerco in Japan) ; DataBank ~$2.0B equity raise led by AustralianSuper .
  • Post-Q4: Zayo (DBRG portfolio company) agreed to acquire Crown Castle’s Fiber Solutions business for ~$4.25B, expanding metro fiber footprint; further evidence of DBRG’s fiber strategy to support AI/cloud demand .

All data and statements above are sourced from company documents and transcripts as cited.