Core Insights - Digital Realty Trust exceeded earnings expectations in Q4 2024, with strong operational performance reflected in its funds from operations (FFO) reaching $1.61 per share, but revenue fell short at $1.44 billion compared to the projected $1.46 billion [2][6]. Financial Performance - Earnings per share (EPS) for Q4 2024 was $0.51, significantly higher than the estimated $0.27 and up 1600% from $0.03 in Q4 2023 [3]. - Revenue for Q4 2024 was $1.44 billion, slightly below the estimate of $1.46 billion, but up 4.8% from $1.37 billion in Q4 2023 [3]. - Funds from operations (FFO) per share increased by 5.2% year-over-year to $1.61, while core FFO per share rose 6.1% to $1.73 [3][7]. Operational Highlights - The company operates 308 data centers globally, supporting various sectors and critical to cloud services and IT outsourcing [4]. - Digital Realty Trust has focused on expanding its global footprint and maintaining high occupancy levels through strategic investments [5]. - Significant leasing activities were executed across the Americas, EMEA, and Asia Pacific regions, contributing to strong cash flows [7]. Future Outlook - For the upcoming year, Digital Realty Trust forecasts a constant-currency core FFO per share between $7.05 and $7.15, indicating a bullish outlook on growth through strategic investments [9]. - The company anticipates ongoing expansion and initiatives to enhance its data center capabilities, despite facing increased costs from construction and sustainability measures [8][9].

Core Insights - Digital Realty Trust (DLR) reported a fourth-quarter 2024 constant currency core funds from operations (FFO) per share of $1.73, exceeding the Zacks Consensus Estimate of $1.69, with a year-over-year increase of 6.1% [1][4] - The company experienced steady leasing momentum with improved rental rates, although higher operating expenses impacted performance [2][6] Financial Performance - Operating revenues for the fourth quarter were $1.44 billion, slightly below the Zacks Consensus Estimate of $1.46 billion, but up 4.8% year-over-year [3] - For the full year 2024, constant currency core FFO per share was $6.72, a 2% increase from the previous year, surpassing the consensus estimate of $6.71 [4] - Adjusted EBITDA for the quarter was $751.3 million, reflecting a 7.4% year-over-year increase [7] Leasing and Revenue Growth - Total signed bookings in the fourth quarter are projected to generate $100 million in annualized GAAP rental revenues, with significant contributions from various categories [5] - Renewal leases signed during the quarter accounted for $250 million in annualized cash rental revenues, with rental rates increasing by 4.7% on a cash basis and 9.1% on a GAAP basis [6] Operating Expenses - Total operating expenses rose 4.5% year-over-year to $1.29 billion, driven by increased costs related to property operations, taxes, insurance, and general administration [6] Portfolio Activity - During the fourth quarter, DLR acquired several land parcels totaling approximately $201 million and disposed of three facilities for a total of $100 million [8][9] - The company also sold a 15.1% interest in a data center in Frankfurt for $74 million [9] Balance Sheet and Capital Management - DLR ended 2024 with cash and cash equivalents of $3.87 billion, up from $2.18 billion at the end of Q3 2024 [10] - Total debt outstanding was $16.7 billion, with a net debt-to-adjusted EBITDA ratio of 4.8X and a fixed charge coverage of 4.2X [11] 2025 Guidance - For 2025, DLR expects constant currency core FFO per share to be in the range of $7.05-$7.15, with total revenues projected between $5.80-$5.90 billion [13] - The company anticipates rental rates on renewal leases to increase by 4-6% on a cash basis and 6-8% on a GAAP basis [14]

Financial Data and Key Metrics Changes - The company achieved a record $1 billion in total leasing completed in 2024, marking a significant increase in leasing activity [6][10] - Core FFO per share grew by 6% year-over-year in the fourth quarter, indicating strong financial performance [8][39] - The leverage ratio was reduced to 4.8 times by year-end, down from 6.2 times, enhancing the company's financial stability [7][32] Business Line Data and Key Metrics Changes - The 0 to 1 megawatt plus interconnection segment saw a record $76 million in bookings for the fourth quarter, a 16% sequential increase [14][35] - Lease renewal activity approached $1 billion in 2024, with cash rents rolling up by an average of 9% [10][37] - The company expanded its total portfolio capacity by over 200 megawatts in 2024, with a development pipeline that is 70% pre-leased [11][41] Market Data and Key Metrics Changes - Strong growth was observed in both the Americas and EMEA regions, with record bookings achieved in both areas [14][15] - The backlog of booked but not yet billed leases increased to approximately $800 million at year-end, providing strong revenue visibility for 2025 and beyond [18] - The company reported a healthy mix of various-sized deployments within the 0 to 1 megawatt business, reflecting a diverse customer base [15][87] Company Strategy and Development Direction - The company aims to enhance its customer value proposition and diversify capital sources to support growth and reduce leverage [9][12] - New products and services were rolled out, including high-density Colo 2.0% and private AI Exchange, to meet evolving customer needs [11][12] - The company is focused on organic development opportunities while maintaining flexibility for potential inorganic activities [81][83] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the robust demand for data center capacity, particularly driven by AI and digital transformation [13][20] - The company anticipates continued strong growth in core FFO and revenue, with guidance for 2025 indicating a 5.7% year-over-year growth [46][47] - Management highlighted the importance of maintaining a strong balance sheet and liquidity to capitalize on future opportunities [34][45] Other Important Information - The company is committed to sustainability, with initiatives including the construction of a solar power plant and AI-driven water conservation solutions [26][30] - Digital Realty was awarded NAREIT's Leader in the Light award for the eighth consecutive year, reflecting its commitment to sustainability [31] Q&A Session Summary Question: Insights on DeepSeek and its impact on Digital Realty's outlook - Management noted that the demand for AI infrastructure remains strong, with significant investments expected from top customers [55][56] Question: Cash renewal outlook and potential for exceeding guidance - Management indicated that while the guidance for cash renewals is set at 4% to 6%, there is potential for outperformance similar to the previous year [63][64] Question: Future bookings expectations - Management acknowledged the lumpiness of bookings but expressed confidence in maintaining a strong pipeline, particularly in the 0 to 1 megawatt segment [66][71] Question: Factors influencing core FFO growth - Management highlighted that while mid-single-digit growth is expected for 2025, there are opportunities for acceleration in subsequent years due to a strong backlog and development pipeline [75][78] Question: Characteristics of the under 1 megawatt business - Management noted broad-based momentum in the under 1 megawatt segment, with strong demand from both enterprise and service provider customers [81][87] Question: Capital recycling and joint ventures - Management provided a breakdown of expected capital recycling activities, emphasizing a focus on non-core asset dispositions and private capital expansion [125][126] Question: Potential derailments to growth thesis - Management acknowledged that while demand is strong, execution in filling vacancies and managing large capacity blocks will be critical for maintaining growth [129][130]

Digital Realty Trust (DLR) Q4 2024 Earnings Call February 14, 2025 08:28 AM ET Company Participants Jordan Sadler - Senior Vice President-Public and Private Investor RelationsAndrew Power - President & Chief Executive OfficerMatt Mercier - Chief Financial OfficerDavid Barden - Managing DirectorChris Sharp - Chief Technology OfficerRichard Choe - Vice PresidentIrvin Liu - Vice PresidentJonathan Atkin - Managing DirectorColin McLean - Chief Revenue OfficerAri Klein - Director - Equity ResearchDavid Guarino - ...

4Q24 FINANCIAL RESULTS February 13, 2025 Global. Connected. Sustainable. The meeting place for companies, technologies and data Executing on Key Strategic Priorities Positioned for Long-Term Sustainable Growth 5,000+ Customers 227,000+ Cross Connects 50+ Metros 300+ Data Centers Capacity Host What You Need, How You Need Coverage Deploy Where You Need Connectivity Connect How You Need to Whom You Need Control Implement and Operate the Way You Need Strengthen Our Customer Value Proposition 1 2 3 Innovate & In ...

Core Insights - Digital Realty Trust (DLR) reported $1.44 billion in revenue for Q4 2024, a year-over-year increase of 4.8% [1] - The company's EPS for the same period was $1.73, significantly up from $0.08 a year ago [1] - Revenue fell short of the Zacks Consensus Estimate of $1.46 billion, resulting in a surprise of -1.47% [1] - The EPS exceeded the consensus estimate of $1.70, delivering a surprise of +1.76% [1] Revenue Breakdown - Rental revenues were reported at $958.89 million, compared to the average estimate of $972.55 million, reflecting an 8.3% year-over-year increase [4] - Tenant reimbursements for utilities totaled $302.66 million, slightly below the estimated $304.23 million, marking a -4.4% change year-over-year [4] - Tenant reimbursements for other categories were $38.59 million, compared to the average estimate of $43.45 million, representing a -16.9% year-over-year decline [4] - Combined tenant reimbursements (utilities + other) were $341.26 million, against an estimate of $347.68 million, showing a -6% change year-over-year [4] - Fee income reached $23.32 million, exceeding the estimate of $15.72 million, with a notable increase of +62.7% year-over-year [4] - Other revenues were reported at $0.04 million, significantly lower than the estimated $1.52 million, indicating a -72.2% year-over-year decline [4] - Interconnection and other revenues were $112.36 million, slightly below the estimate of $114.07 million, but reflecting a +5.6% year-over-year increase [4] Stock Performance - Digital Realty Trust's shares have returned -6.7% over the past month, contrasting with the Zacks S&P 500 composite's +3.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Digital Realty Trust (DLR) reported quarterly funds from operations (FFO) of $1.73 per share, exceeding the Zacks Consensus Estimate of $1.70 per share, and showing an increase from $1.63 per share a year ago [1][2] Group 1: Financial Performance - The company achieved an FFO surprise of 1.76% for the quarter [1] - Digital Realty Trust's revenues for the quarter ended December 2024 were $1.44 billion, which was 1.47% below the Zacks Consensus Estimate, compared to $1.37 billion in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus FFO estimates three times but has not beaten consensus revenue estimates [2] Group 2: Stock Performance and Outlook - Digital Realty Trust shares have declined approximately 8% since the beginning of the year, while the S&P 500 has gained 2.9% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][6] - The current consensus FFO estimate for the upcoming quarter is $1.73 on revenues of $1.46 billion, and for the current fiscal year, it is $7.07 on revenues of $6.01 billion [7] Group 3: Industry Context - The REIT and Equity Trust - Other industry, to which Digital Realty Trust belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Digital Realty Trust may also be influenced by the overall outlook for the industry [8]

Digital Realty Trust (DLR) Q4 2024 Earnings Call February 13, 2025 05:00 PM ET Company Participants Jordan Sadler - Senior Vice President-Public and Private Investor RelationsAndrew Power - President & Chief Executive OfficerMatt Mercier - Chief Financial OfficerDavid Barden - Managing DirectorChris Sharp - Chief Technology OfficerRichard Choe - Vice PresidentIrvin Liu - Vice PresidentJonathan Atkin - Managing DirectorColin McLean - Chief Revenue OfficerAri Klein - Director - Equity ResearchDavid Guarino - ...

Company Overview - As of December 31, 2024, Digital Realty operates 308 data centers with a total portfolio of approximately 41.3 million square feet[4]. - The company has 8.9 million square feet of space under active development and 4.7 million square feet held for future development[4]. - Digital Realty has a strong presence across multiple continents, including North America, Europe, South America, Asia, Australia, and Africa[4]. Financial Performance - Digital Realty reported revenues of $1.4 billion in Q4 2024, a 5% increase year-over-year[22]. - Net income available to common stockholders was $179 million, or $0.51 per share, compared to $0.03 per share in Q4 2023[22]. - Adjusted EBITDA for Q4 2024 was $751 million, a 7% increase from the same quarter last year[23]. - Funds From Operations (FFO) reached $545 million, or $1.61 per share, compared to $1.53 per share in Q4 2023[23]. - Total operating revenues for Q4 2024 reached $1,435,862, a slight increase from $1,369,633 in Q4 2023, representing a year-over-year growth of 4.8%[49]. - Net income attributable to Digital Realty Trust, Inc. for Q4 2024 was $189,569, compared to $28,304 in Q4 2023, marking a significant increase of 572.5%[49]. - Core Funds From Operations (Core FFO) per share - diluted for Q4 2024 was $1.73, compared to $1.63 in Q4 2023, indicating a growth of 6.1%[52]. Stock Performance - The common stock closing price at the end of Q4 2024 was $177.33, with a high of $198.00 and a low of $155.16 during the quarter[13]. - The average daily trading volume for the stock in Q4 2024 was 1,911 thousand shares[13]. - The indicated annual dividend per common share is $4.88, resulting in a closing annual dividend yield of 2.8% at the end of Q4 2024[13]. Debt and Capital Structure - Digital Realty's corporate credit rating is BBB with a stable outlook from Standard & Poor's[12]. - The company reported a total market value of shares and units outstanding of approximately $60.78 billion at the end of Q4 2024[13]. - Total debt to total enterprise value decreased to 21.4% in Q4 2024 from 28.6% in Q4 2023[22]. - Digital Realty's total debt outstanding as of December 31, 2024, was approximately $16.7 billion, with a net debt-to-Adjusted EBITDA ratio of 4.8x[33]. - The company issued €850 million of 3.875% notes due 2035, with net proceeds of approximately €841 million ($867 million) during the fourth quarter[34]. Operational Highlights - Digital Realty signed total bookings expected to generate $100 million of annualized GAAP rental revenue in Q4 2024[26]. - The backlog of signed-but-not-commenced leases at quarter-end was $797 million of annualized GAAP base rent[27]. - Rental rates on renewal leases increased by 4.7% on a cash basis and 9.1% on a GAAP basis in Q4 2024[28]. - The company added a record 166 new customers in the 0-1 megawatt plus interconnection segment during Q4 2024[25]. - Digital Realty signed new leases totaling $99.5 million in annualized GAAP base rent during Q4 2024, with an average GAAP base rent of $243 per square foot across all regions[29]. Future Outlook - Digital Realty introduced a 2025 Constant-Currency Core FFO per share outlook of $7.05 - $7.15[28]. - The company anticipates long-term debt issuance between $900 million and $1.5 billion in 2025, with pricing expected between 5.0% and 5.5%[38]. - The company’s strategic priorities include enhancing its product offerings and expanding its market presence, with a focus on data center and colocation space[149]. Challenges and Risks - The company faces reduced demand for data centers and decreased information technology spending, which could adversely affect financial performance[150]. - Increased competition and available supply of data center space may lead to decreased rental rates and increased vacancy rates[150]. - Global supply chain disruptions and heightened inflation may increase operating costs and affect overall profitability[150]. - The company must navigate risks related to joint venture investments and the integration of acquired properties[150]. - There are challenges in attracting and retaining talent, which could hinder operational effectiveness[150].

Core Insights - Digital Realty reported a revenue of $1.4 billion for Q4 2024, reflecting a 5% increase year-over-year and a slight increase from the previous quarter [2] - The company achieved a net income of $186 million in Q4 2024, translating to $0.51 per share, a significant rise from $0.03 per share in Q4 2023 [2][10] - Adjusted EBITDA for the quarter was $751 million, showing a 7% increase compared to the same quarter last year [3] Financial Results - Revenues for Q4 2024 were $1.4 billion, up 5% from Q4 2023 [2] - Net income available to common stockholders was $179 million, or $0.51 per share, compared to $0.03 per share in Q4 2023 [2][10] - Adjusted EBITDA was reported at $751 million, a 7% increase year-over-year [3] - Funds From Operations (FFO) for Q4 2024 were $545 million, or $1.61 per share, compared to $1.53 per share in Q4 2023 [3][10] - Core FFO per share was $1.73, up from $1.63 in the same quarter last year [4][10] Leasing Activity - Total bookings in Q4 2024 are expected to generate $100 million in annualized GAAP rental revenue, with significant contributions from the 0-1 megawatt category [6] - The backlog of signed-but-not-commenced leases at the end of Q4 2024 was $797 million in annualized GAAP base rent [7][10] - Renewal leases signed during the quarter represented $250 million in annualized cash rental revenue, with rental rates increasing by 4.7% on a cash basis [8][10] Investment Activity - Digital Realty acquired a 6.7-acre parcel in Richardson, Texas, for approximately $15 million, supporting up to 100 megawatts of IT capacity [12] - The company sold a 15.1% interest in a data center in Frankfurt, Germany, for approximately $74 million [12] - A joint venture with Blackstone Inc. for a $7 billion hyperscale data center development was advanced, focusing on campuses in Frankfurt and Northern Virginia [13] Balance Sheet - As of December 31, 2024, Digital Realty had approximately $16.7 billion in total debt, with a net debt-to-Adjusted EBITDA ratio of 4.8x [14] - The company issued €850 million of 3.875% notes due 2035, with net proceeds of approximately €841 million [14] 2025 Outlook - Digital Realty provided a 2025 Constant-Currency Core FFO per share outlook of $7.05 - $7.15 [15] - Total revenue is projected to be between $5.800 billion and $5.900 billion [16] - The company anticipates rental rate increases on renewal leases of 4.0% - 6.0% on a cash basis [16]