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DIGITAL REALTY TRUST, INC. (DLR)·Q3 2025 Earnings Summary

Executive Summary

  • Record Core FFO per share ($1.89) with double-digit revenue (+10% YoY) and Adjusted EBITDA growth; backlog rose to $852M, supporting visibility into 2026 .
  • Q3 vs consensus: revenue beat by ~$33M; Primary EPS beat by ~$0.03; on S&P’s EBITDA basis, actual was below consensus, while reported Adjusted EBITDA was strong—driven by commencements and fee income growth [GetEstimates Q3 2025]* .
  • Guidance raised again: FY25 Core FFO to $7.32–$7.38 (from $7.15–$7.25 in July) and constant-currency Core FFO to $7.25–$7.30; revenue and Adjusted EBITDA midpoints each increased by $75M .
  • Stock reaction catalysts: reiterated AI-led demand, record interconnection bookings, stronger renewal spreads (cash +8%), and largest pipeline on record; power-bank capacity of 5GW positioned for hyperscale and inference workloads .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly Core FFO per share of $1.89 (+13% YoY), constant-currency Core FFO $1.85 (+11% YoY) .
  • Strong leasing: $201M bookings at 100% share ($162M at DLR share), with $85M in 0–1MW+ interconnection and a second consecutive record in interconnection bookings; backlog increased to $852M .
  • Management tone on AI capacity and connectivity: “Digital Realty delivered strong financial results… With five gigawatts of buildable IT capacity worldwide, we are well-positioned to meet our customers' evolving needs.” – CEO Andy Power .
  • Fee income growth and releasing spreads: renewal rates up 8.0% cash and 11.5% GAAP .

What Went Wrong

  • On S&P’s EBITDA basis, Q3 EBITDA actual ($703.7M*) came in below consensus ($814.0M*), even as reported Adjusted EBITDA was $867.8M [GetEstimates Q3 2025]* .
  • Operating expense growth: utilities and G&A rose QoQ with seasonal effects and scale; Q4 expected to be tempered by higher repairs/maintenance and lower interest income .
  • Net income normalized lower vs Q2 (which benefited from a $931.8M gain on sale), highlighting volatility in GAAP earnings vs steady FFO metrics .

Financial Results

Income Statement Snapshot

MetricQ1 2025Q2 2025Q3 2025
Total Operating Revenues ($)$1,407,637,000 $1,493,150,000 $1,577,234,000
Net Income ($)$106,395,000 $1,046,946,000 $63,713,000
Net Income per Share – Diluted ($)$0.27 $2.94 $0.15
EBITDA ($)$658,400,000 $1,605,408,000 $679,912,000
Adjusted EBITDA ($)$791,156,000 $823,319,000 $867,807,000
FFO per Share – Diluted ($)$1.67 $1.75 $1.65
Core FFO per Share – Diluted ($)$1.77 $1.87 $1.89

Notes: Q2 net income included a large gain on sale ($931.8M), driving elevated GAAP EPS .

Q3 2025 vs S&P Global Consensus

MetricConsensusActual
Revenue ($)$1,527,017,430*$1,560,290,000*
Primary EPS ($)$0.30785*$0.33703*
EBITDA ($)$814,025,180*$703,738,000*
Target Price ($)$199.19*$199.19*
# of Estimates (Revenue / EPS)17 / 15*—

Values retrieved from S&P Global.*

Leasing and Segment Mix (Q3 2025 at DLR Share)

Region0–1 MW GAAP Base Rent ($000)>1 MW GAAP Base Rent ($000)Interconnection ($000)Total ($000)
Americas31,606 35,688 —67,844
EMEA28,518 26,087 —55,040
APAC4,756 14,373 —19,271
Interconnection——19,649 19,649
Total64,880 76,148 19,649 161,804

KPIs and Operating Metrics

MetricQ1 2025Q2 2025Q3 2025
New Bookings at DLR Share ($000)$242,305 $135,320 $161,804
Backlog ($000)$919,000 $826,000 $852,000
Renewal Cash Rent Uplift (%)5.6% 7.3% 8.0%
Churn (%)——1.6%
Occupancy (Portfolio, end of quarter)84.0% 84.8% 84.8%
Same-Capital Cash NOI YoY Growth (%)——8.0%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($)FY 2025$5.925–$6.025B (Jul 24) $6.025–$6.075B (Oct 23) Raised
Adjusted EBITDA ($)FY 2025$3.200–$3.300B (Jul 24) $3.300–$3.350B (Oct 23) Raised
Core FFO per Share ($)FY 2025$7.15–$7.25 (Jul 24) $7.32–$7.38 (Oct 23) Raised
Constant-Currency Core FFO ($)FY 2025$7.10–$7.20 (Jul 24) $7.25–$7.30 (Oct 23) Raised
Renewal Retention – Cash (Uplift %)FY 20255.0%–6.0% (Jul 24) 5.75%–6.25% (Oct 23) Raised
Renewal Retention – GAAP (Uplift %)FY 20257.0%–8.0% (Jul 24) 7.75%–8.25% (Oct 23) Raised
Same-Capital Cash NOI Growth (%)FY 20253.5%–4.5% (Jul 24) 4.25%–4.75% (Oct 23) Raised
Recurring CapEx + Capitalized Leasing ($)FY 2025$320–$335M (Jul 24) $300–$320M (Oct 23) Lowered
Net Income per Diluted Share ($)FY 2025$3.45–$3.55 (Jul 24) $3.57–$3.62 (Oct 23) Raised

Management also noted Q4 core FFO per share will be tempered by higher repairs/maintenance, non-core asset sale headwinds, and lower interest income with lower rates and cash balances .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2 2025)Current Period (Q3 2025)Trend
AI / Technology InitiativesLaunched U.S. Hyperscale Data Center Fund; strong leasing, backlog to $919M AI averaged >50% of bookings since mid-2023; record interconnection bookings; 5GW power bank positioned for inference Strengthening demand; rising inference focus
Product Performance (0–1MW + Interconnection)Record 0–1MW+ interconnection in Q2; bookings $90M in 0–1MW category $85M new 0–1MW+ interconnection; $20M interconnection; near-record new logos Continued momentum
Macro / Power ConstraintsFunding model evolved; oversubscribed $3B fund; visibility via backlog $826M Power availability and permitting constraints; exploring bridge solutions incl. behind-the-meter in select markets Constraints persist; proactive mitigation
Regional TrendsLand acquisitions in Atlanta, Dallas, Chicago; strong activity across Americas/EMEA/APAC Diversified leasing across Americas/EMEA/APAC; top markets: Silicon Valley, Amsterdam, Singapore (>1MW pricing >$200/kW) Broad-based demand
Regulatory/Legal / Sustainability2024 Impact report; sustainability commitments EcoVadis Gold rating; renewable energy contracts in Ohio River region; local solar in IL ESG execution improving
Funding / JV ModelInitial fund commitments; contributions of assets; >$900M gross proceeds ~$7B liquidity excluding ~$15B private capital for hyperscale; leverage down to 4.9x Ample capacity to fund growth

Management Commentary

  • “Digital Realty delivered strong financial results this quarter, featuring record Core FFO per share and double-digit revenue and Adjusted EBITDA growth… With five gigawatts of buildable IT capacity worldwide, we are well-positioned to meet our customers' evolving needs.” – Andy Power, President & CEO .
  • “We posted double-digit growth in revenue, adjusted EBITDA, and core FFO per share… increased guidance again… begin 2026 with significant momentum and a sizable backlog.” – Matt Mercier, CFO .
  • “Interconnection leasing… marked a second consecutive record quarter… underscoring the growing recognition of our connectivity-driven value proposition.” – Andy Power .
  • “Power availability, permitting challenges, and infrastructure constraints are making it harder to bring new supply online… our presence and relationships give us a distinct advantage.” – Andy Power .

Q&A Highlights

  • 2026 outlook and growth drivers: targeting ~10% top-line growth supported by ~$555M commencements scheduled for 2026; early headwinds from €1.1B notes maturing and lower interest income expected with rate cuts .
  • Hyperscaler demand in major metros: largest pipeline on record; diversity of customers; preparing large capacity blocks in tight, cloud-zonal markets .
  • Releasing spreads: >1MW renewals saw ~20% cash uplift in Q3; structurally tight supply supports mark-to-market opportunity through 2026–2029 .
  • Funding strategy and leverage: balance-sheet flexibility around 5.5x target; scaling private capital initiatives to fund larger builds while preserving EPS accretion .
  • Power strategy: considering behind-the-meter solutions as bridge in constrained markets; long-term preference for utility sources .

Estimates Context

  • Q3 revenue beat: $1,560.3M* actual vs $1,527.0M* consensus (~$33M beat) [GetEstimates Q3 2025]*.
  • Q3 Primary EPS beat: $0.337* actual vs $0.308* consensus (~$0.03 beat) [GetEstimates Q3 2025]*.
  • Q3 EBITDA (S&P basis) miss: $703.7M* actual vs $814.0M* consensus; management emphasized Adjusted EBITDA at $867.8M (non-GAAP) and strong YoY growth [GetEstimates Q3 2025]* .
  • Target Price consensus: ~$199.19* [GetEstimates Q3 2025].
    Values retrieved from S&P Global.

Where estimates may need to adjust: upward for Core FFO, revenue, and releasing spread assumptions given backlog and raised FY guidance; potential downward adjustments to GAAP EBITDA expectations if consensus does not reflect DLR’s non-GAAP adjustments and higher seasonal opex in Q4 .

Key Takeaways for Investors

  • Backlog and commencements provide visibility: $852M backlog with $165M slated for Q4 and ~$555M for 2026 supports durable revenue and FFO growth .
  • AI/inference shift favors connected metros: DLR’s 5GW power bank in cloud-zonal markets and liquid-cooling readiness (Colo 2.0 to 150kW/cabinet) align with densifying workloads .
  • Pricing power intact: renewal cash spreads +8% and GAAP +11.5% in Q3; >1MW renewals posted ~20% cash uplift in key markets .
  • Funding capacity robust: ~$7B liquidity and ~$15B private capital platform to fund hyperscale while balancing leverage (~4.9x net debt/Adj. EBITDA) .
  • Expect Q4 seasonality: higher repairs/maintenance and lower interest income may temper per-share results; FY guidance raised mitigates near-term concerns .
  • Dividend continuity: $1.22/share quarterly dividend declared for Q4 2025; payout ratios remain manageable given AFFO .
  • Watch power/permitting dynamics: DLR exploring bridge solutions and adjacencies in tight markets—execution on capacity blocks is a key medium-term catalyst .

Additional Reference Tables

Revenue, EBITDA, FFO Progression (YoY/Sequential Drivers)

MetricQ2 → Q3 ChangeYoY Q3 Change
Total Operating Revenues+$84.1M QoQ +$146.0M YoY
Adjusted EBITDA+$44.5M QoQ +$109.5M YoY
Core FFO/diluted+$0.02 QoQ +$0.22 YoY

Drivers: commencements from backlog, stronger releasing spreads, fee income growth; GAAP net income normalized as Q2 had outsized gain on sale .

Balance Sheet and Leverage

MetricQ2 2025Q3 2025
Total Debt ($)$18.45B $18.23B
Net Debt / Adjusted EBITDA (x)5.1x 4.9x
Fixed Charge Coverage (x)4.7x 4.6x

Dividends

InstrumentAmountRecord DatePay Date
Common$1.22/share Dec 15, 2025 Jan 16, 2026
Series J Pref.$0.328125/share Dec 15, 2025 Dec 31, 2025
Series K Pref.$0.365625/share Dec 15, 2025 Dec 31, 2025
Series L Pref.$0.325/share Dec 15, 2025 Dec 31, 2025