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DIGITAL REALTY TRUST, INC. (DLR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.44B (+0.3% QoQ, +4.8% YoY); diluted EPS was $0.51 (vs $0.09 in Q3 and $0.03 in Q4 2023), and Adjusted EBITDA was $751M (−0.9% QoQ, +7.4% YoY) .
  • Core FFO/share was $1.73 (vs $1.67 in Q3 and $1.63 in Q4 2023); AFFO/share was $1.36 (vs $1.52 in Q3), with a quarterly dividend of $1.22 and an AFFO payout ratio of 89.5% .
  • Bookings totaled $100M annualized GAAP rent, including a record $76M from the 0–1MW plus interconnection category; backlog ended at $797M (signed-not-yet-commenced) .
  • Introduced 2025 constant-currency Core FFO/share outlook of $7.05–$7.15, with total revenue of $5.8–$5.9B and Adjusted EBITDA of $3.1–$3.2B; leverage declined to 4.8x and liquidity exceeded $6B (capital raised via exchangeable notes, ATM equity, and post-quarter EUR notes) .

What Went Well and What Went Wrong

  • What Went Well

    • “Record leasing” in 0–1MW plus interconnection with $76M bookings; 166 new logos added (platform expansion) .
    • Strong renewal pricing: cash rental rate increases of 4.7% (GAAP +9.1%), supporting same-capital growth trajectory .
    • Balance sheet strengthened: net debt/Adj. EBITDA 4.8x; over $2B raised in debt/equity in Q4; liquidity >$6B (post-quarter further EUR issuance and repayments) .
    • CEO on strategy: “global, full spectrum data center strategy” driving “accelerating earnings growth” with AI momentum and interconnection solutions .

  • What Went Wrong

    • Adjusted EBITDA dipped slightly QoQ ($751M vs $758M), reflecting mix and transaction/revaluation impacts despite YoY growth .
    • AFFO/share fell to $1.36 from $1.52 QoQ, lifting payout ratio to 89.5% (watch cash coverage vs capex cadence) .
    • Net income benefited from $145M gains on sale; underlying Opex elevated (utilities/rental property operating) which can compress core margins in some periods .
    • Company cited FX headwinds and lower utility reimbursements versus 2023 that temper reported growth translation (Q&A and prior calls) .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Operating Revenues ($USD Millions)$1,369.6 $1,431.2 $1,435.9
Net Income Avail. to Common ($USD Millions)$18.1 $41.0 $179.4
Diluted EPS ($USD)$0.03 $0.09 $0.51
Adjusted EBITDA ($USD Millions)$699.5 $758.3 $751.3
FFO/share - Diluted ($USD)$1.53 $1.55 $1.61
Core FFO/share - Diluted ($USD)$1.63 $1.67 $1.73
AFFO/share - Diluted ($USD)$1.30 $1.52 $1.36

Segment and bookings detail:

New Leases (Annualized GAAP Base Rent)Q4 2024
0–1MW (All Regions) ($USD Thousands)$61,748
>1MW (All Regions) ($USD Thousands)$22,573
Interconnection ($USD Thousands)$14,587
Grand Total ($USD Thousands)$99,507

Key KPIs (end of Q4 2024):

KPIQ4 2024
Backlog (Annualized GAAP Base Rent) ($USD Millions)$797
Renewal Cash Rent Change (%)+4.7%
Occupancy (Portfolio) (%)84.1%
Cross-Connects227,000
WALT (Years)4.8
Net Debt / Adj. EBITDA (x)4.8x
Fixed Charge Coverage (x)4.2x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core FFO/share (Constant Currency)FY2025N/A$7.05–$7.15 New
Total RevenueFY2025N/A$5.8–$5.9B New
Adjusted EBITDAFY2025N/A$3.1–$3.2B New
G&AFY2025N/A$500–$510M New
Same-Capital Cash NOI GrowthFY2025N/A3.5%–4.5% New
Year-end Portfolio OccupancyFY2025N/A+100–200 bps New
Dispositions/JV CapitalFY2025N/A$500–$1,000M New
Net Development CapEx (net of partners)FY2025N/A$3.0–$3.5B New
Long-term Debt IssuanceFY2025N/A$900–$1,500M (5.0–5.5%) New
Net Income/share (GAAP)FY2025N/A$2.10–$2.20 New
FFO/share (NAREIT)FY2025N/A$6.60–$6.70 New
Core FFO/share (Reported)FY2025N/A$7.00–$7.10 New
FX Translation Adj. to Core FFOFY2025N/A+$0.05 New
Cash Renewal Spreads (Cash)FY2025N/A4%–6% New
Dividends per share (quarterly)Q4 2024$1.22 $1.22 Maintained
Core FFO/share (Full-Year 2024)FY2024$6.65–$6.75 $6.65–$6.75 Maintained

Notes: 2024 guidance items (Q3 call) included cash renewal spreads raised to 8%–10% for FY2024 and tightened same-store cash NOI to 2.75%–3.25% . FY2025 introduces a full guidance framework (new baseline) .

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
AI demand (training & inference), HD ColoRolled out HD Colo 2.0; AI workloads densifying; cloud/AI global demand ~50% of record bookings AI-related; HD Colo across 170+ DCs; NVIDIA engagement 38% of MW signed AI-related; private AI/inference expected to grow; HD Colo supports up to 150kW/rack Strengthening and broadening
Supply chain & power constraintsLong-term power solutions (SMR/nuclear) noted; pipeline pre-leased; supply tight Power tight; Ashburn/Dallas pricing rising; delivery slots precious Power availability remains tight; tariffs risk; delivery timelines managed via relationships Persistent constraint → pricing support
Pricing & renewals0–1MW & >1MW renewals positive; interconnection revenue record; WALT and escalators supportive 15% cash re-leasing spreads (package deals); ex-deals ~5.8%; escalators ≥4% prevalent 4.7% cash and 9.1% GAAP in Q4; guidance for 2025 cash 4%–6% Elevated but normalizing from Q3 peak
Development yields & pipelinePipeline 10.4% blended yields; pre-leasing rising 12% avg yields; Americas ~13.6%; 644MW under construction; 74% pre-leased ~12.1% overall; Americas ~13.7%; 644MW, ~70% pre-leased Yields trending up; pipeline steady
Capital recycling & liquidity~$500M proceeds; ~$2B equity; deleveraged to 5.3x ATM, bonds; liquidity ~$5B; net debt/EBITDA 5.4x $1.15B exchangeables; $923M ATM; post-quarter €850M notes; leverage 4.8x; liquidity >$6B Liquidity up; leverage down
Interconnection & 0–1MW bookingsNear-record 0–1MW & interconnection; new logos record 0–1MW + interconnection records; 149 new logos Another record $76M in 0–1MW plus interconnection; 166 new logos Momentum building globally
Regional trends & exportsSlough acquisition (UK), Azure OnRamps in EU Record exports; transatlantic bookings; NoVa/Chicago strength EMEA exports at record; Americas/EMEA 0–1MW strength Cross-region demand rising

Management Commentary

  • “2024 was a remarkable year… record leasing driving impressive growth in our revenue backlog… accelerating earnings growth” — Andy Power (CEO) .
  • “We raised over $2 billion of new debt and equity… boosting our liquidity to over $6 billion and reducing our leverage to 4.8x at year-end” — Jordan Sadler (IR) .
  • “Demand for data center capacity remains robust… 0–1 megawatt plus interconnection bookings… record of $76 million… record 166 new logos” — Andy Power .
  • “We are establishing our core FFO guidance range for the full year 2025 at $7.05 to $7.15 per share on a constant currency basis… Same-capital cash NOI is expected to grow 3.5% to 4.5%” — Matt Mercier (CFO) .
  • “Supply chain… power remains incredibly tight… we’re insulated via scale and procurement” — Andy Power .

Q&A Highlights

  • Bookings sustainability: Management views $1B annual bookings (2024) as strong and repeatable over time; larger capacity blocks push commencements into 2026+, while 0–1MW can set incremental records in 2025 .
  • Renewal outlook: 2025 cash renewal guidance 4%–6% excludes 2024-style packaged deals; underlying mark-to-market remains positive .
  • Inference/private AI demand: Expect more inference and private AI deployments, benefiting both >1MW and 0–1MW segments; HD Colo aligned to high-density needs .
  • Capital recycling: $500M–$1B planned in 2025 via non-core dispositions and private capital initiatives; JV development fees shift to recurring asset management fees as projects stabilize .
  • Supply/power: Persistent constraints (NoVa, global) support pricing; delivery timelines are actively managed via vendor relationships and owned land/shell capacity .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable due to access limits at the time of analysis; therefore, beat/miss versus estimates cannot be assessed. We anchor to company-reported results and published outlooks .
  • Company provided 2025 outlook: CC Core FFO/share $7.05–$7.15; revenue $5.8–$5.9B; Adjusted EBITDA $3.1–$3.2B .

Key Takeaways for Investors

  • 0–1MW plus interconnection momentum is a structural growth driver (record $76M in Q4; 166 new logos), reinforcing pricing power and platform stickiness .
  • Backlog ($797M) provides multi-year visibility with ~two-thirds of 2025 commencements by midyear; expect accelerating bottom-line conversion in 2025–2026 .
  • Development yields remain attractive (Americas ~13.7%); tight power/supply underpin rising rates and support sustained ROIs .
  • Balance sheet positioned offensively: leverage 4.8x, liquidity >$6B, diversified capital sources (exchangeables, EUR notes, ATM) to fund $3.0–$3.5B net capex in 2025 .
  • Watch AFFO coverage near-term: AFFO/share fell to $1.36, payout 89.5%; dividend maintained at $1.22/qtr; expect improvement as backlog commences and interconnection scales .
  • Pricing/renewals normalization: Cash renewals guided to 4%–6% (vs elevated 2024), but underlying mark-to-market remains favorable amid constrained supply .
  • Trading catalysts: Continued JV/private capital updates, large capacity block pre-leasing announcements, and proof of 2025 guidance execution; risks include FX headwinds and lower utility reimbursements vs 2023 .
Sources:
- Q4 2024 8-K and Financial Supplement: **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:4]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:7]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:8]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:9]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:10]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:14]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:15]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:16]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:18]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:35]** **[1297996_0001558370-25-000945_dlr-20250213xex99d1.htm:46]**
- Q4 2024 earnings call transcript: **[1297996_DLR_3416022_0]** **[1297996_DLR_3416022_1]** **[1297996_DLR_3416022_2]** **[1297996_DLR_3416022_3]** **[1297996_DLR_3416022_4]** **[1297996_DLR_3416022_5]** **[1297996_DLR_3416022_6]** **[1297996_DLR_3416022_8]** **[1297996_DLR_3416022_9]** **[1297996_DLR_3416022_13]** **[1297996_DLR_3416022_17]** **[1297996_DLR_3416022_20]** **[1297996_DLR_3416022_21]** **[1297996_DLR_3416022_23]**
- Q3 2024 earnings call (trend context): **[1297996_DLR_3403681_1]** **[1297996_DLR_3403681_4]** **[1297996_DLR_3403681_5]** **[1297996_DLR_3403681_7]** **[1297996_DLR_3403681_8]** **[1297996_DLR_3403681_19]**
- Q2 2024 earnings call (trend context): **[1297996_DLR_3394340_1]** **[1297996_DLR_3394340_5]** **[1297996_DLR_3394340_6]** **[1297996_DLR_3394340_7]**
- Press release for Q4 results (supporting tables identical to 8-K exhibit): **[1297996_20250213LA19169:0]** **[1297996_20250213LA19169:3]** **[1297996_20250213LA19169:6]** **[1297996_20250213LA19169:7]** **[1297996_20250213LA19169:9]** **[1297996_20250213LA19169:10]** **[1297996_20250213LA19169:11]** **[1297996_20250213LA19169:15]**