ca48f00b88d8dd6454f1ab80b0d3aa06f793039030924e34efe587dc135099e5

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

9fc8a50ccc49ff964567bbebb17f8276bd07045c925d335334ceef8b57c111b3

Digital Realty Trust, Inc. is a leading global provider of data center, colocation, and interconnection solutions, serving a diverse range of industry verticals including cloud and information technology services, social networking, communications, financial services, manufacturing, energy, healthcare, and consumer products **[0001558370-24-014149_dlr-20240930x10q.htm:18]** **[0001558370-24-001575_dlr-20231231x10k.htm:4]**. Operating as a Real Estate Investment Trust (REIT) for U.S. federal income tax purposes, the company conducts its business through Digital Realty Trust, L.P., which owns, acquires, develops, and operates data centers **[0001558370-24-014149_dlr-20240930x10q.htm:18]** **[0001558370-24-001575_dlr-20231231x10k.htm:4]**. As of December 31, 2023, Digital Realty's portfolio consisted of 309 data centers across the United States, Europe, Latin America, Africa, Asia, Australia, and Canada **[0001558370-24-001575_dlr-20231231x10k.htm:4]**.

1. **Data Centers** - Owns, acquires, develops, and operates strategically located properties with infrastructure such as redundant electrical supply systems, multiple power feeds, and high-level security systems to support data center and technology industry customers.
2. **Colocation Solutions** - Provides space, power, and cooling for customers' IT equipment, enabling them to scale their operations efficiently.
3. **Interconnection Solutions** - Offers connectivity services that facilitate the exchange of data between different networks and cloud service providers, enhancing operational efficiency and performance.

8c84759ade1c0da5df1e49d47f130cd47f6c3023ba3fc63055f0a0e7029d2b1a

| Metric [Unit] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Total Revenue [$B] | **1.2**  **[0001558370-23-001449_dlr-20230216xex99d1.htm:6]**  | **1.3**  **[0001558370-23-007069_dlr-20230427xex99d1.htm:6]**  | **1.4**  **[0001558370-23-012400_dlr-20230727xex99d1.htm:7]**  | **1.4**  **[0001558370-23-016866_dlr-20231026xex99d1.htm:7]**  | N/A | **1.3**  **[0001558370-24-006558_dlr-20240502xex99d1.htm:7]**  | N/A | **1.431**  **[0001558370-24-014149_dlr-20240930x10q.htm:50]**  |
| Interconnection Revenue [$M] | **14**  **[0001558370-23-001449_dlr-20230216xex99d1.htm:7]**  | N/A | N/A | **107**  **[DLR_3362192_6]**  | **106**  **[DLR_3373641_5]**  | N/A | **14**  **[0001558370-24-010180_dlr-20240725xex99d2.htm:1]**  | N/A |
| 0-1 Megawatt Segment [$M] | N/A | N/A | N/A | N/A | N/A | N/A | **39.6**  **[0001558370-24-010180_dlr-20240725xex99d2.htm:1]**  | N/A |
| Greater than 1 Megawatt Segment [$M] | N/A | N/A | N/A | N/A | N/A | N/A | **110.2**  **[0001558370-24-010180_dlr-20240725xex99d2.htm:1]**  | N/A |
| Other Revenue [$M] | N/A | N/A | N/A | N/A | N/A | N/A | **0.3**  **[0001558370-24-010180_dlr-20240725xex99d2.htm:1]**  | N/A |
| Rental and Other Services Revenue [$M] | N/A | N/A | N/A | N/A | N/A | N/A | N/A | **1,413.727**  **[0001558370-24-014149_dlr-20240930x10q.htm:12]**  |
| Fee Income and Other Revenue [$M] | N/A | N/A | N/A | N/A | N/A | N/A | N/A | **17.487**  **[0001558370-24-014149_dlr-20240930x10q.htm:12]**  |

39b72eb86f403ef9b7fb10c99fd9fa81fde169b70a22092425e121e90f810878

Rental and Other Services

- Stabilized Properties

- Pre-Stabilized and Other Properties

Fee Income and Other

Tenant Reimbursements

Stabilized Portfolio

Non-Stabilized Portfolio

Total Revenue

8f0a4f60e2c46e4b7dcc4c881b92a4e1e359bcf08c8066b6b55558d0dc731f5f

0f23335dc2b368d37d22a6c4584b8403c1c7da5b22ea2b41329f0b661e74744a

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Inside the U.S.      | N/A     | **712.5**  **[0001558370-23-008142_dlr-20230331x10q.htm:31]**  | **704.1**  **[0001558370-23-013321_dlr-20230630x10q.htm:37]**  | N/A     | N/A     | **704.8**  **[0001558370-24-006671_dlr-20240331x10q.htm:32]**  | **714.6**  **[0001558370-24-010734_dlr-20240630x10q.htm:38]**  | N/A     |
| Outside the U.S.     | N/A     | **626.2**  **[0001558370-23-008142_dlr-20230331x10q.htm:31]**  | **662.2**  **[0001558370-23-013321_dlr-20230630x10q.htm:37]**  | N/A     | N/A     | **626.3**  **[0001558370-24-006671_dlr-20240331x10q.htm:32]**  | **642.1**  **[0001558370-24-010734_dlr-20240630x10q.htm:38]**  | N/A     |

c25c1b29f4ad9f637e13880a581838f0875454d139a593109d5f00a335475dbc

1. Given that about **50% of your total bookings this quarter were driven by AI-related demand**, how confident are you in the **sustainability of this growth**, and what steps are you taking to prepare for potential fluctuations in AI-driven demand?

2. With the **increased power densities required for AI workloads leading to higher build costs**, how are these **higher costs impacting your development yields**, and what measures are you implementing to **maintain or improve these yields** in the face of rising construction expenses?

3. Considering the **significant acceleration in your development pipeline**, increasing capacity under construction by almost **50% to 644 megawatts**, how are you managing the **funding needs** for these developments while **maintaining your leverage targets**, especially in the current interest rate environment?

4. Despite the strong bookings and record **$66 million in 0-1 megawatt interconnection business**, how are you addressing potential **pricing pressures and renewal fatigue** among enterprise customers to ensure this momentum continues and **maintain margins** in this competitive segment?

5. You've emphasized focusing on core markets with robust and diverse demand while **avoiding markets with less long-term visibility**; can you elaborate on how this strategy impacts your **growth prospects**, and how you balance the risks and opportunities when expanding into **new markets**?

f7261e80153bd8ddd3bb5a1d081969ab67ab8f40559f1dce11379e728e770a90

Inside the United States

Outside the United States

- United Kingdom

c1c0a814a634b56da3780ec3575828ae804007676f65000066617152f55d0d8b

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO Guidance**: Raised to **$6.65 to $6.75 per share**.
  2. **Total Revenue Guidance**: Adjustments for lower utility expense reimbursements.
  3. **Adjusted EBITDA Guidance**: Increased due to better leasing volumes and pricing.
  4. **Cash Renewals**: Increased to **8% to 10%** from **5% to 7%**.
  5. **Same-Store Guidance**: Tightened to **2.75% to 3.25%**.
  6. **Net Share Development Spend**: Tightened to **$2.2 billion to $2.4 billion**.
  7. **Recurring Maintenance CapEx**: Ranges maintained  **[DLR_3403681_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO Guidance**: Maintained at **$6.60 to $6.75 per share**.
  2. **Total Revenue and Adjusted EBITDA Guidance**: Maintained.
  3. **Operating, Investing, and Financing Expectations**: Maintained  **[DLR_3394340_7]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO Guidance**: Maintained at **$6.60 to $6.75 per share**.
  2. **Total Revenue and Adjusted EBITDA Guidance**: Maintained.
  3. **Cash Re-leasing Spreads**: Expected to increase **5% to 7%**.
  4. **Same-Capital Cash NOI Growth**: Expected to increase by **2.5% to 3.5%**  **[DLR_3382231_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO per Share**: Initial guidance of **$6.60 to $6.75**.
  2. **Total Revenue Growth**: Expected to grow by **2%**.
  3. **Adjusted EBITDA Growth**: Expected to grow by **4%**.
  4. **Normalized Growth**: Total revenue and adjusted EBITDA to grow by **7%** and **10%**, respectively.
  5. **Cash Re-leasing Spreads**: Expected to increase by **4% to 6%**.
  6. **Same Capital Cash NOI Growth**: Expected to grow by **2% to 3%**.
  7. **Total Portfolio Occupancy**: Expected to improve by **100 to 200 basis points**.
  8. **Capital Recycling**: Expected to raise **$1.25 billion**.
  9. **Net Development CapEx Program**: Expected to be **$2 billion to $2.5 billion**  **[DLR_3373641_6]** .

6444bca955e61829844c6bd652fe4a4a0ca899488a0ada7de78e68dccb7b9128

bd02b6aeb96100702c4c8edc1520efbe94adfa3eea061107c36fef7f2bd54f09

**Annual guidance for FY 2024:**
- **Core FFO**: $6.65 to $6.75  **[DLR_3403681_5]**  (raised from $6.60 to $6.75  **[DLR_3394340_7]** )  
- **Total Revenue**: Adjusted for lower utility expense reimbursements  **[DLR_3403681_5]**  (lowered from prior guidance  **[DLR_3394340_7]** )  
- **Adjusted EBITDA**: Increased due to better leasing volumes and pricing  **[DLR_3403681_5]**  (raised from prior guidance  **[DLR_3394340_7]** )  
- **Cash Renewals**: 8% to 10%  **[DLR_3403681_5]**  (no prior guidance)  
- **Same-Store Guidance**: 2.75% to 3.25%  **[DLR_3403681_5]**  (no prior guidance)  
- **Net Share Development Spend**: $2.2 billion to $2.4 billion  **[DLR_3403681_5]**  (no prior guidance)  
- **Recurring Maintenance CapEx**: Ranges maintained  **[DLR_3403681_5]**  (no prior guidance)  

381ee0546f5ad0961b6d2c8e7f12040e1aaac95df7dbe18c088489452083a8ee

**Net Rentable Square Feet**

**Contribution Value of Data Center Buildings to Joint Venture**

**Gain on Disposition of Data Center**

**Potential IT Load Capacity**

ff4157031d0a5205ea45d358290ca0dd36145bfbf93d4f5fc6799e7bcf7c337f

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Total Revenue [USD, Thousands]

Cost of Goods Sold (COGS) [USD, Thousands]

SG&A [USD, Thousands]

R&D [USD, Thousands]

D&A [USD, Thousands]

Interest Expense [USD, Thousands]

Operating Income (EBIT) [USD, Thousands]

Net Income [USD, Thousands]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

6591baca12ac763f02452711a6359c2188c5cc938adf814cc549eba189ab6646

| Name                  | Position                                      | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Andrew P. Power       | President & Chief Executive Officer           | December 2022    | Andrew P. Power has been with Digital Realty since 2015, serving in various roles including CFO. He has over 20 years of investment, financial, and management experience, previously at Bank of America Merrill Lynch  **[0001308179-24-000607_ldlr2024_def14a.htm:16]** **[0001308179-24-000607_ldlr2024_def14a.htm:20]** **[0001308179-23-000815_ldlr2023_def14a.htm:17]** .               |
| Matthew Mercier       | Chief Financial Officer                       | January 1, 2023  | Matthew Mercier joined Digital Realty in 2006. He was previously SVP of Global Finance and Accounting. He holds a Bachelor of Science and an MBA from UC Berkeley  **[0001308179-24-000607_ldlr2024_def14a.htm:20]** .                                                                          |
| Cindy Fiedelman       | Chief Human Resources Officer                 | January 2016     | Cindy Fiedelman joined Digital Realty in 2015 as Interim Global Head of HR. She previously worked at American Airlines and Avaya, Inc., focusing on talent management and HR integration  **[0001308179-24-000607_ldlr2024_def14a.htm:20]** **[0001308179-23-000815_ldlr2023_def14a.htm:22]** .                                                |
| Christine B. Kornegay | Chief Accounting Officer                      | January 1, 2024  | Christine B. Kornegay oversees global accounting at Digital Realty. She was previously CAO at McAfee and has held positions at Dynata, SomnoMed, and MetroPCS  **[0001308179-24-000607_ldlr2024_def14a.htm:21]** .                                                                              |
| Jeannie Lee           | Executive Vice President, General Counsel     | January 2022     | Jeannie Lee joined Digital Realty in 2010. She has held various legal positions and was previously a corporate attorney at Latham & Watkins LLP  **[0001308179-24-000607_ldlr2024_def14a.htm:21]** **[0001308179-23-000815_ldlr2023_def14a.htm:22]** .                                                                                         |
| Jeannie Lee           | Secretary                                     | March 2022       | Jeannie Lee has been serving as Secretary since March 2022  **[0001308179-24-000607_ldlr2024_def14a.htm:21]** **[0001308179-23-000815_ldlr2023_def14a.htm:22]** .                                                                                                                                       |
| Christopher Sharp     | Chief Technology Officer                      | August 2015      | Christopher Sharp leads global design and engineering at Digital Realty. He has over 20 years of experience in the technology industry, previously at Equinix, Inc.  **[0001308179-24-000607_ldlr2024_def14a.htm:21]** **[0001308179-23-000815_ldlr2023_def14a.htm:23]** .                                                                     |
| Gregory S. Wright     | Chief Investment Officer                      | January 2019     | Gregory S. Wright leads investment and acquisition activities at Digital Realty. He was previously Co-Head of Americas Real Estate at Bank of America Merrill Lynch  **[0001308179-24-000607_ldlr2024_def14a.htm:22]** **[0001308179-23-000815_ldlr2023_def14a.htm:23]** .                                                                     |

a829545ac85531960398d999546596119b4daf06e4d793f94b999160780924e3

| Name     | Start Date | End Date | Reason for Change |
|----------|------------|----------|-------------------|
| KPMG LLP | 2004  **[0001558370-24-001575_dlr-20231231x10k.htm:128]**  | Present  | Current auditor   |

9547f6a7a25df57ea0702902c4960abda35f8def4a42412f527ddf2e8a131d8f

- Total Revenue: $1,431.2 million (+2% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:12]** **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]** **[0001558370-23-018593_dlr-20230930x10q.htm:5]**   
- **Fee Income & Other**: $17.5 million (+124% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]**   
- **Operating Income**: $168.3 million (+189% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:12]** **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]** **[0001558370-23-018593_dlr-20230930x10q.htm:5]**   
- **Net Income**: $40.1 million (−94% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:12]** **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]** **[0001558370-23-018593_dlr-20230930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:17]** **[0001558370-23-018593_dlr-20230930x10q.htm:10]**   
- **Diluted EPS**: $0.09 (−96% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:12]** **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]** **[0001558370-23-018593_dlr-20230930x10q.htm:5]**   
- Interest Expense: $123.8 million (+12% YoY)  **[0001558370-24-014149_dlr-20240930x10q.htm:12]** **[0001558370-24-014149_dlr-20240930x10q.htm:5]** **[0001558370-23-018593_dlr-20230930x10q.htm:12]** **[0001558370-23-018593_dlr-20230930x10q.htm:5]**   

01bc8365c9c425d5e04a5901e035b5845f55cb87180b6fc24d7d369c581eb195

27ae12e7ded0311dba3a20dbeb53af3c0b17b3ecf78c694d426dd007186b1b97

eded842d82d394ed36e2b75cc5416c54bf20015a07f12ff7c32ddf0856fe453f

| Year | Amount Due (in $ millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|----------------------------|-----------|-------------------|-----------------|
| 2025 | 2,177.191 **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | 4.25% Senior Notes, 0.625% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 4.25, 0.625 **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 12.7% = (2,177.191 / 17,109) * 100 **[0001558370-24-014149_dlr-20240930x10q.htm:66]** **[0001558370-24-014149_dlr-20240930x10q.htm:26]** |
| 2026 | 1,649.340 **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | 2.50% Senior Notes, 0.20% Senior Notes, Unsecured Revolving Credit Facility, Yen Facility, USD Term Loan **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 2.50, 0.20 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 9.6% = (1,649.340 / 17,109) * 100 **[0001558370-24-014149_dlr-20240930x10q.htm:66]** **[0001558370-24-014149_dlr-20240930x10q.htm:26]** |
| 2027 | 1,419.752 **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | 1.70% Senior Notes, 3.70% Senior Notes, Euro Term Loan **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 1.70, 3.70 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 8.3% = (1,419.752 / 17,109) * 100 **[0001558370-24-014149_dlr-20240930x10q.htm:66]** **[0001558370-24-014149_dlr-20240930x10q.htm:26]** |
| 2028 | 2,484.856 **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | 1.125% Senior Notes, 4.45% Senior Notes, 5.55% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 1.125, 4.45, 5.55 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** **[0001558370-24-014149_dlr-20240930xex10d1.htm:272]** | 14.5% = (2,484.856 / 17,109) * 100 **[0001558370-24-014149_dlr-20240930x10q.htm:66]** **[0001558370-24-014149_dlr-20240930x10q.htm:26]** |
| 2029 | N/A | 0.55% Senior Notes, 3.60% Senior Notes, 3.30% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 0.55, 3.60, 3.30 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | N/A |
| 2030 | N/A | 1.50% Senior Notes, 3.75% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 1.50, 3.75 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | N/A |
| 2031 | N/A | 1.25% Senior Notes, 0.625% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 1.25, 0.625 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | N/A |
| 2032 | N/A | 1.00% Senior Notes, 1.375% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 1.00, 1.375 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | N/A |
| 2033 | N/A | 3.875% Senior Notes **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | 3.875 **[0001558370-24-014149_dlr-20240930xex10d2.htm:250]** | N/A |
| Thereafter | 9,377.767 **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | Various **[0001558370-24-014149_dlr-20240930x10q.htm:26]** | N/A | 54.8% = (9,377.767 / 17,109) * 100 **[0001558370-24-014149_dlr-20240930x10q.htm:66]** **[0001558370-24-014149_dlr-20240930x10q.htm:26]** |

a3165693cd3a6dc6c61b6d7bc019282f412f89e8cc29b4a666dd5d9d7117c7ab

- Digital Realty's same capital cash NOI growth is expected to decelerate significantly to **2% to 3%** in 2024 from **7.5%** in 2023 due to normalization of energy prices, higher property taxes, and tougher comparisons.  **[DLR_3373641_8]**
- The company acknowledged that existing lease clauses may limit its ability to fully capitalize on rising market rents, potentially capping rent increases on renewals for certain large customers.  **[DLR_3373641_13]**
- Digital Realty plans to increase its gross development CapEx by approximately **15%** in 2024 to over **$3.5 billion**, which could increase financial risk and strain cash flows amid slowing NOI growth.  **[DLR_3373641_20]**

034706d4484e6d6bde86cf3639e48c1cbead8b591e02306ada978687e69b31af

1. **AI's Impact on Business**  
   **Q:** How is AI contributing to your growth?  
   **A:** AI is significantly boosting our business, with **close to 50%** of this quarter's signings attributed to AI-related demand.  **[DLR_3382231_10]**  This includes both enterprise and hyperscale customers, driving growth in our greater than 1 megawatt category.

2. **Pricing and Mark-to-Market Potential**  
   **Q:** What's the mark-to-market opportunity for your portfolio?  
   **A:** In our greater than 1 megawatt category, in-place rates will tick down to the **$130s** and even hit **$100** upon expiration in a few years.  **[DLR_3382231_13]**  With market rates gravitating towards the mid-**$100s**, we anticipate significant mark-to-market opportunities as these contracts renew.  **[DLR_3382231_13]** 

3. **Northern Virginia Market and Rates**  
   **Q:** What's the update on Northern Virginia capacity and rates?  
   **A:** Dominion's transmission upgrades are on track to deliver power by early **2026**.  **[DLR_3382231_9]**  We're benefiting from higher rates, with Manassas and Loudoun County converging around **$165 to $180** per kW per month.  **[DLR_3382231_9]**  Our largest signing occurred in this market, reflecting strong demand amid supply constraints.  **[DLR_3382231_9]** 

4. **FFO Growth Outlook**  
   **Q:** Any updates on next year's core FFO growth rate?  
   **A:** Our optimism has improved based on strong first-quarter results.  **[DLR_3382231_8]**  Successful leasing of **$250 million** and a shorter signed-to-commence lag of **7 months** position us for accelerating revenue and bottom-line growth into next year.  **[DLR_3382231_8]**  We expect mid-single-digit and greater growth moving forward.  **[DLR_3382231_8]** 

5. **Leverage Reduction Plans**  
   **Q:** What's the plan after reaching 5.8x leverage?  
   **A:** We've reduced leverage from over **7x** to a reported **6.1x** in the past year.  **[DLR_3382231_15]**  With strong operating fundamentals and additional private capital, we're confident in achieving our goal of reaching **5.5x** leverage this year.  **[DLR_3382231_15]** 

6. **Risk from Potential Customer Ban**  
   **Q:** How do you perceive risks from a customer facing a ban?  
   **A:** While we can't discuss confidential customer information, even in a draconian scenario, any churn would occur at a favorable time with better mark-to-market opportunities.  **[DLR_3382231_16]**  We're not jumping to conclusions and believe we can manage the risk effectively.  **[DLR_3382231_16]** 

7. **Supply Constraints and Value Proposition**  
   **Q:** How are supply constraints affecting new hyperscale builds?  
   **A:** Supply constraints persist due to power transmission, generation, and supply chain issues.  **[DLR_3382231_17]**  This enhances our value to customers, as we offer global expertise to navigate these challenges, providing more value than ever before.  **[DLR_3382231_17]** 

8. **M&A Strategy**  
   **Q:** What's your appetite for acquisitions?  
   **A:** Our appetite for acquisitions is limited unless they are small, strategic tuck-ins.  **[DLR_3382231_18]**  We believe we already have the footprint, product, and team to drive our business and prefer to build organically under current conditions.  **[DLR_3382231_18]** 

9. **Expansion into New Markets**  
   **Q:** Will you consider entering unproven markets?  
   **A:** We're focused on markets with robust, diverse demand and latency sensitivity.  **[DLR_3382231_19]**  With over **3 gigawatts** of growth capacity in our core markets, we have ample runway and don't feel urgency to pursue unproven markets.  **[DLR_3382231_19]** 

10. **Future Leasing Expectations**  
    **Q:** Do you expect strong leasing to continue this year?  
    **A:** While another record may not immediately follow, we're in a different territory regarding demand.  **[DLR_3382231_20]**  With three more opportunities this year, we remain optimistic due to significant interest in our capacity blocks.  **[DLR_3382231_20]** 

14a15190c08d4fdb0b01a623d1ec559f0fd6ce9b97ca1aba0149a1468bb1ef73

- **Decrease in AI-related leasing from 50% last quarter to approximately 25% this quarter**, suggesting a potential slowdown in AI-related demand.  **[DLR_3394340_14]**
- **Core FFO per share remains at $6.65, the same as in 2019**, indicating a lack of bottom-line growth despite revenue growth, and raising concerns about the company's ability to convert top-line growth into increased earnings.  **[DLR_3394340_14]**
- **Recognition of $168 million impairment associated with non-core assets in secondary markets**, which may reflect challenges in those markets and could impact future profitability.  **[DLR_3394340_12]**

7472503b4913587f2b1991d8347c115574e11408fa1b95997b9f29256e89cb4d

- **Record new leasing activity and strong demand**: Digital Realty signed $164 million of new leases in Q2 2024, contributing to a record first half of the year, with over **148 new logos added**. This reflects robust demand across all customer segments, including AI-related workloads, which comprised approximately **25% of Q2 signings**.  **[DLR_3394340_14]** ,  **[DLR_3394340_21]**
- **Improved financial position and growth prospects**: The company reduced its leverage to **5.3x**, below its long-term target, positioning it well for future growth. Digital Realty expects accelerating bottom-line growth in the second half of 2024 and into 2025, maintaining its core FFO guidance of **$6.60 to $6.75 per share** for the full year 2024.  **[DLR_3394340_21]** ,  **[DLR_3394340_24]**
- **Significant capacity and focus on core markets**: With a **3-plus gigawatt land bank**, Digital Realty is well-positioned to meet future demand, particularly for larger capacity blocks and AI workloads. The company remains focused on its core markets, which continue to experience robust and diverse customer demand.  **[DLR_3394340_14]** ,  **[DLR_3394340_13]**

c0d67797bb5c9a3b03d43ab50226eba4015508413fa2cc0979a2fc38fdb02d49

- **Record leasing driven by accelerating AI demand:** Digital Realty achieved a record **$252 million** in new leases in Q1 2024, surpassing the prior record by more than 40%, with **50% of bookings driven by AI**.  **[DLR_3382231_20]** **[DLR_3382231_12]**  This strong demand is expected to continue, potentially following a growth trajectory similar to cloud adoption.  **[DLR_3382231_20]**
- **Significant improvement in development returns enhancing profitability:** The company has dramatically increased development yields in North America, with ROIs moving from around **7% to over 12%**, improving profitability on new projects.  **[DLR_3382231_7]**
- **Strong pipeline and customer growth indicating future potential:** Digital Realty added **128 new customers** in the quarter, the fourth highest on record, demonstrating robust demand and a diversified pipeline across enterprise, cloud, and AI sectors.  **[DLR_3382231_12]**

0d66e4cf25c807fac5879bbe8762de2e65f2733507b62b17ed87cc9e983c2b7a

- **Future leasing volumes may not match the record levels achieved in Q1 2024.** The company acknowledges that it's unlikely to have consecutive record quarters, and there is uncertainty in future large capacity block executions.  **[DLR_3382231_20]** ,  **[DLR_3382231_12]**
- **Ongoing supply constraints, including power transmission issues, could hinder growth.** Supply constraints are not fully resolved, and there is friction to supply due to power transmission constraints, supply chain delays, and other factors. This could impact the company's ability to meet increasing demand.  **[DLR_3382231_17]** ,  **[DLR_3382231_1]**
- **Potential risk of losing a large customer due to possible U.S. ban.** One of Digital Realty's larger customers is at risk of a potential ban in the U.S., which could lead to increased churn and impact revenue. While the company believes it could benefit from mark-to-market opportunities if this occurs, the potential loss remains a risk.  **[DLR_3382231_16]**

e76f228328a55ffdc9a5320157f822e8e355d96fb7dc0bd7b7371cc5690fb53d

- **Digital Realty reported a remarkable third quarter, setting multiple records, including leasing signings with 70% more volume and 30% higher prices compared to previous records, indicating strong demand and pricing power.**  **[DLR_3403681_1]**
- **The company has a substantial record backlog representing about 20% of its revenue base, consisting of long-term contracts with great escalations commencing in late 2025 and 2026, positioning it for sustainable growth in the coming years.**  **[DLR_3403681_1]**
- **With over 20 years of experience, strong vendor relationships, and strategic investments in supply chain and capital partnerships, Digital Realty ensures its ability to deliver projects on time and on budget, supporting its growth prospects.**  **[DLR_3403681_19]**

93b4fe44b6d578d80efbcad6603cb02d097fc361f71cbdc8a6b2db329fd304a3

- **Unprecedented Demand Driven by AI and Hyperscale Customers**: Digital Realty is experiencing robust and growing demand across its platform, particularly from AI and hyperscale customers, leading to higher leasing rates and record pipelines.  **[DLR_3373641_20]** ,  **[DLR_3373641_10]**
- **Strong Financial Performance and Deleveraged Balance Sheet**: The company posted the best same-capital cash NOI growth in nearly a decade and sourced over **$12 billion** of new capital, significantly deleveraging its balance sheet and positioning it for future growth.  **[DLR_3373641_20]** ,  **[DLR_3373641_2]**
- **Expansion of Global Footprint and Capacity**: Digital Realty is expanding its global footprint with record deliveries in 2023 and is well-positioned to meet accelerating customer needs with investments in high-density colocation offerings suitable for AI workloads.  **[DLR_3373641_20]** ,  **[DLR_3373641_15]**

de11c0227fdfaa6e1ef80d2a4a9c5b69d1ee0949b26147ef9cebdd364e6bc032

1. **AI Demand and Pricing**  
   **Q:** Is AI driving demand and improving pricing?  
   **A:** Management highlighted that the pipeline for hyperscale has grown to new heights, with **AI demand as a new wave of incremental demand**. Tightening supply-demand dynamics have shifted pricing in favor of providers like Digital Realty, leading to their **highest GAAP rate ever at $145 million**. Time to market is critical for customers launching AI services, making rent a small economic piece in their equation.  **[DLR_3373641_10]** **[DLR_3373641_18]** 

2. **Lease Renewals and Rent Increases**  
   **Q:** Can you capitalize on lease expirations to raise rents?  
   **A:** They expect positive cash mark-to-markets and potential rent increases in the greater than 1 megawatt category **for some years to come**. While they won't roll every lease up to current market rates, they anticipate a positive mark-to-market in that category over time.  **[DLR_3373641_13]** **[DLR_3373641_19]** 

3. **Future Growth Beyond 2024**  
   **Q:** What growth can you deliver beyond 2024?  
   **A:** After normalizing for transactional activity, they expect **revenue growth of 7% and EBITDA growth of 10% in 2024**. Looking ahead, they anticipate mid- to high single-digit growth, driven by same-store growth in the **3% to 4%** range and favorable pricing and yields from their development pipeline contributing an additional **1% to 2%**.  **[DLR_3373641_14]** 

4. **Leverage and Capital Allocation**  
   **Q:** How are you managing leverage and the dividend?  
   **A:** With deleveraging efforts, pro forma leverage is now at **5.8x**, aiming to reach the **5.5x** area. The plan includes capital recycling and less reliance on ATM equity issuance. They intend to grow the dividend as AFFO and cash flow increase. M&A activity will be more bolt-on, with no major acquisitions anticipated.  **[DLR_3373641_11]** **[DLR_3373641_16]** 

5. **Capacity Constraints Impact**  
   **Q:** Are capacity constraints affecting large signings?  
   **A:** They have significant opportunities to meet large capacity needs, especially in Northern Virginia, where new power is unavailable until **2026**. Their patience in 2023 allowed them to benefit from rising demand and pricing, and they now have urgency to secure deals as capacity comes online.  **[DLR_3373641_12]** 

6. **Macro Pressures on Enterprise Business**  
   **Q:** Are macro pressures affecting enterprise demand?  
   **A:** Management reports **robust enterprise demand**, with over **1,000 companies landed in Q4** and **134 new logos**. Time to close has stabilized, and they haven't seen elongated sales cycles or IT budget squeezes impacting their business.  **[DLR_3373641_15]** 

7. **Customer Mix Shift**  
   **Q:** How is the customer mix changing between small and large deals?  
   **A:** Accelerating growth in the **0 to 1 megawatt** and interconnection segment is a top priority. A larger representation of this segment is favorable, filling existing capacity at higher rates with multi-market enterprise customers. Fluctuations are expected as they also support large hyperscale deals.  **[DLR_3373641_17]** 

8. **Development Capital Expenditure Plans**  
   **Q:** What are your capital expenditure plans for 2024?  
   **A:** On a gross basis, they expect to spend **north of $3.5 billion** in total CapEx in 2024, roughly **15% higher** than the amount spent in 2023. This reflects their development pipeline and growth initiatives.  **[DLR_3373641_20]** 

9. **Same-Store Growth Outlook**  
   **Q:** Why is same-store growth moderating in 2024?  
   **A:** Same-store cash NOI growth is expected to shift from **7.5% in 2023 to 2%-3% in 2024** due to lower re-leasing spreads influenced by decreased inflation, higher expiring rents creating tougher comps, absence of tailwinds from FX and power pricing seen in 2023, and higher property tax expenses expected in 2024.  **[DLR_3373641_8]** 

10. **Impact of Higher Power Prices**  
    **Q:** Are higher power prices affecting demand?  
    **A:** Management does not believe higher power prices are impacting buyer behavior or their colo business. They benefited from power tailwinds in 2023, which won't repeat in 2024, but haven't seen the same budgeting impacts that peers have reported.  **[DLR_3373641_9]** 

a14d7d986b68dd05c97c778dea3b434fb3c061fee40271677fe668e9521b72e7

1. **AI Demand Outlook**  
   **Q:** How is AI affecting your leasing demand?  
   **A:** AI contributed to **about 25%** of our signings this quarter, down from **50%** last quarter, but we continue to see strong demand from traditional drivers like digital transformation and cloud computing.  **[DLR_3394340_14]**  We're signing long-term contracts, some up to **15 years**, with the largest technology companies, indicating sustained AI-related growth.  **[DLR_3394340_17]** 

2. **Market Rent Growth**  
   **Q:** Are you seeing market rent growth continue?  
   **A:** Yes, market rent growth is moving in our favor.  **[DLR_3394340_15]**  Key markets like Northern Virginia are setting new rate records, and other North American markets are catching up.  **[DLR_3394340_15]**  We expect market rent growth to outpace any inflationary cost increases, potentially improving development yields.  **[DLR_3394340_15]** 

3. **CapEx Plans and Funding**  
   **Q:** Will you increase CapEx given leasing success?  
   **A:** CapEx intensity is increasing as we pull forward development of highly leased projects with attractive returns.  **[DLR_3394340_19]**  We're leveraging public and private capital to achieve **mid-single digit per share growth** next year and further acceleration thereafter.  **[DLR_3394340_19]** 

4. **Lease Expiration Opportunities**  
   **Q:** Can you capture rent increases on expiring leases?  
   **A:** Less than half of our over 1 megawatt leases have fixed renewal options, and even fewer are renewed under those terms.  **[DLR_3394340_12]**  This allows us to bring most expiring contracts to market rates, which are higher.  **[DLR_3394340_12]**  Average rates on expiring leases are around **$140-$145** per kW monthly, stepping down to **$111** by 2029, suggesting positive releasing spreads going forward.  **[DLR_3394340_17]** 

5. **Dividend and FFO Growth**  
   **Q:** How will dividend policy align with growth?  
   **A:** We aim to maximize cash flow to fund growth opportunities.  **[DLR_3394340_21]**  As we grow bottom-line per share, we expect dividend growth to be in line with this growth, balancing investment needs and shareholder returns.  **[DLR_3394340_21]** 

6. **Power Constraints Impact**  
   **Q:** Are power constraints affecting your projects?  
   **A:** Power constraints are a pervasive issue, but we are approaching resolutions in markets like Northern Virginia by **2026**.  **[DLR_3394340_16]**  However, delivery dates may still face challenges due to the complexity of projects. This underscores the value of our offering in supply-constrained environments.  **[DLR_3394340_16]** 

7. **Demand Pipeline Strength**  
   **Q:** How strong is your demand pipeline?  
   **A:** We see a record pipeline driven by digital transformation, cloud, and AI.  **[DLR_3394340_13]**  The greater than 1 megawatt category continues to see strong demand for large, contiguous capacity blocks, with no easing of demand.  **[DLR_3394340_8]**  We also have a robust pipeline in the sub-1 megawatt segment, with consistent bookings.  **[DLR_3394340_18]** 

8. **Occupancy and Vacancy Rates**  
   **Q:** Why is your vacancy higher than industry?  
   **A:** Our portfolio includes both hyperscale and colocation assets.  **[DLR_3394340_20]**  While hyperscale facilities can be nearly **100%** leased, the overall vacancy reflects our diverse offerings. We increased same-store occupancy by **100 basis points** quarter-over-quarter, and we're actively working to improve occupancy rates.  **[DLR_3394340_20]** 

9. **New Customer Growth**  
   **Q:** Any changes in sub-1 MW customer trends?  
   **A:** We had a record **148** new logos this quarter, evenly split between commercial and Global 5000 accounts.  **[DLR_3394340_21]**  We're seeing continued demand across customer sizes, with no significant macro impacts affecting this segment.  **[DLR_3394340_21]** 

10. **Guidance and Financial Outlook**  
    **Q:** Is your FFO guidance conservative?  
    **A:** We are confident in achieving the midpoint of our core FFO guidance.  **[DLR_3394340_23]**  While the first half included some pressure from capital recycling efforts, we expect acceleration in the second half as our deal backlog commences.  **[DLR_3394340_23]** 

eca978a3bcc9c46a413a386307ced8f9197b59025f763f3c22be9c663b00278a

- **Volatility in Quarterly Bookings**: The company experienced a record quarter in Q1, a far from record quarter in Q2, and an exceptionally strong Q3, causing uncertainty about what the 'new normal' is and whether such leasing volumes are sustainable.  **[DLR_3403681_8]** **[DLR_3403681_6]**
- **Rising Build Costs**: Increased build costs due to higher power density requirements for AI workloads may impact profitability, even though rental rates have improved.  **[DLR_3403681_7]**
- **Avoiding High-Demand Markets**: By avoiding certain markets with high data center demand due to less clear long-term visibility, the company may be missing out on growth opportunities and potentially impacting future revenues.  **[DLR_3403681_15]** **[DLR_3403681_12]**

f905440bb5527d376af4ea54ec6a19ee1820b20540d86d093bce1d9c17636793

1. **AI Impact on Demand**  
   **Q:** How is AI affecting demand and design requirements?  
   **A:** About **50%** of our bookings came from **AI use cases**, significantly impacting demand. We've introduced offerings like **HD Colo** to meet higher power densities required by AI workloads. This supports up to **150 kilowatts per rack**, accommodating advanced systems like **NVIDIA H100**.  **[DLR_3403681_7]** 

2. **Sustainability of Record Bookings**  
   **Q:** Is this record quarter a new normal? What's driving growth?  
   **A:** While we can't promise record quarters every time, strong fundamentals are driving sustainable growth. Both **volume and price** are contributing; this quarter saw **70% more volume** and **30% higher prices** versus the prior record. Our backlog now represents **20%** of revenue, derisking future growth.  **[DLR_3403681_8]** 

3. **Future CapEx and Leverage**  
   **Q:** What are future CapEx implications and leverage goals?  
   **A:** CapEx for **2025** is likely to at least match **2024** levels due to ongoing demand. We're at our leverage targets with **$5 billion** in liquidity and expect to stay within these targets while funding growth plans.  **[DLR_3403681_9]** 

4. **Capacity Runway and Expansion**  
   **Q:** How will you maintain capacity amid strong leasing?  
   **A:** We have over **3 gigawatts** of buildable capacity in existing markets. We're focusing on buying land primarily in these markets to support growth. In Northern Virginia, we have significant capacity coming online between **2025** and **2027**, supporting a long runway of growth.  **[DLR_3403681_11]** 

5. **Customer Composition for AI Demand**  
   **Q:** Is AI demand from new customers or existing ones?  
   **A:** AI demand is broad, coming from all segments, not just hyperscalers. We hosted **NVIDIA's CEO** to launch the largest **DGX supercomputer**, highlighting the relevance of private AI deployments.  **[DLR_3403681_17]** 

6. **Rental Rates and Yields**  
   **Q:** Are hyperscale rental rates reaching $225–$250/kW?  
   **A:** GAAP rental rates in **Ashburn** have surpassed **$200 per kilowatt** for large capacity blocks. Other markets, like **Chicago** and **Dallas**, are catching up over time, indicating strong pricing power.  **[DLR_3403681_18]** 

7. **Enterprise Segment Growth**  
   **Q:** What's driving growth in enterprise bookings?  
   **A:** A multiyear transformation and platform enhancements are attracting enterprises. We had **149 new logos**, with **52%** of bookings from large enterprises. Exports were a record **43%** in the 0–1 MW segment, showing customers expanding across our platform.  **[DLR_3403681_15]** 

8. **Large Deals and Escalations**  
   **Q:** How many more large package deals can you do? Is 4% escalation for all deals?  
   **A:** Large package deals are episodic but contribute when possible. We're pushing higher escalations across all deals, including larger contracts, contributing to higher weighted escalation rates.  **[DLR_3403681_10]** 

9. **Potential Upside to Growth Expectations**  
   **Q:** Is there potential upside to mid-single-digit growth in 2025?  
   **A:** We remain confident in accelerating growth in **2025** and beyond. Our record backlog for **2026** is **$300 million**, up **$200 million** from last year, derisking our growth plans and providing a solid foundation for future acceleration.  **[DLR_3403681_13]** 

10. **Development Yields and Returns**  
    **Q:** Are development yields rising, and is there a cap?  
    **A:** We're maintaining or improving yields despite higher CapEx. We're selling capacity that will commence in **late 2025 and 2026**, aiming for better returns as developments progress. We are not capping renewals when contracts come due.  **[DLR_3403681_16]** 

52c42444ceb1cd867204dbbcf38cacccc3234e98b38db4c2e6d3368240fb2c80

Digital Realty Trust Inc (DLR)

Financials