Group 1: AI Investment Landscape - Artificial intelligence (AI) investing has been a key market theme for the past two and a half years and is expected to remain significant in the coming years due to the ongoing need for massive AI infrastructure [1] - Despite many stocks having risen significantly, there is potential for continued substantial returns for certain stocks, which could lead to considerable wealth for investors [2] Group 2: Company-Specific Insights - **Nvidia**: Nvidia has been a leading AI stock due to its graphics processing units (GPUs) that are essential for AI model training and operation. The company may see a revenue growth boost if allowed to export GPUs to China, potentially increasing its growth rate from 50% to 77% [4][5] - **Taiwan Semiconductor**: As the world's leading chip foundry, Taiwan Semiconductor manufactures chips for companies like Nvidia. The company anticipates AI-related revenue growth of 45% starting in 2025, indicating strong future prospects [6][7][9] - **Digital Realty**: Digital Realty is a real estate investment trust (REIT) focused on data centers, which are crucial for supporting AI demand. The company offers a 2.7% dividend yield, providing a balanced investment opportunity for AI investors [10][11] - **Amazon**: Amazon's cloud computing platform, Amazon Web Services (AWS), is a leader in the market and is experiencing rapid growth, with a 17% revenue increase in the latest quarter. AWS accounted for 63% of Amazon's total Q1 profits, highlighting its significance beyond e-commerce [12][13]

Financial Performance - Digital Realty Trust (DLR) reported quarterly funds from operations (FFO) of $1.87 per share, exceeding the Zacks Consensus Estimate of $1.74 per share, and up from $1.65 per share a year ago, representing an FFO surprise of +7.47% [1] - The company posted revenues of $1.49 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.45%, compared to revenues of $1.36 billion in the same quarter last year [2] Market Performance - Digital Realty Trust shares have increased by approximately 1.1% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The company has surpassed consensus FFO estimates three times over the last four quarters, but has only topped consensus revenue estimates once in the same period [2] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $1.77 on $1.5 billion in revenues, and for the current fiscal year, it is $7.04 on $5.88 billion in revenues [7] - The estimate revisions trend for Digital Realty Trust was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Other industry, to which Digital Realty Trust belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Financial Data and Key Metrics Changes - Digital Realty reported $177 million in new bookings for the quarter, with $135 million attributed to Digital Realty's share, marking a record performance in the zero to one megawatt plus interconnection product set with $90 million in bookings [5][9] - Core FFO reached a record $1.87 per share, a 13% increase year-over-year and 6% higher than the previous quarter, contributing to an increase in revenue, adjusted EBITDA, and core FFO per share guidance for the full year 2025 [6][10][26] - The backlog at the end of the quarter stood at $826 million, providing strong visibility through 2025 and beyond [10][24] Business Line Data and Key Metrics Changes - The zero to one megawatt plus interconnection category saw bookings of $90 million, an 18% increase over the previous record set two quarters ago, with over $300 million booked in the past four quarters, up from approximately $200 million in 2023 [9][10] - Leasing results included $45 million in the greater than one megawatt category, with average pricing skewed lower due to an expansion option exercised by a large enterprise customer [24][26] - Total churn declined to just 1%, with negligible churn in the greater than one megawatt category [26] Market Data and Key Metrics Changes - Demand for data center capacity remains strong across all regions, with significant contributions from EMEA, The Americas, and APAC [9][12] - In North America, near-term capacity blocks are in high demand, with discussions focused on late 2026 and early 2027 deliveries [12] - AI deployments are growing in EMEA and APAC but still lag behind the U.S., with larger capacity blocks in these regions being smaller than those in the U.S. [13] Company Strategy and Development Direction - Digital Realty is focused on enhancing interconnection capabilities and services, with a strategy to double colocation bookings [8][16] - The company is positioning its large capacity blocks to support the growing needs of hyperscale customers, aligning development deliveries with power availability [12][16] - The U.S. Hyperscale data center fund has received over $3 billion in LP equity commitments, enabling the company to meet the diverse needs of hyperscale customers without overtaxing its balance sheet [15][29] Management's Comments on Operating Environment and Future Outlook - Management highlighted the acceleration of enterprise digital transformation, cloud computing, and AI adoption as key drivers for growth [7][11] - The company expects continued strength in the zero to one megawatt category and substantial hyperscale capacity to bolster its backlog and extend core FFO growth into 2027 and beyond [16][35] - Management expressed confidence in the company's ability to capture market share and drive sustainable growth, with a focus on maintaining a robust backlog of signed but not yet commenced leases [35][90] Other Important Information - Digital Realty was recognized as one of the world's most sustainable companies of 2025, reflecting its commitment to clean energy and resource conservation [18][19] - The company reported a 9% increase in renewable energy usage, with 185 data centers matched with 100% renewable energy [19] Q&A Session Summary Question: What is driving the growth in the zero to one megawatt category? - Management indicated that the growth is due to a combination of a growing market and Digital Realty capturing market share through strategic enhancements in its global footprint and go-to-market strategy [38][39][40] Question: Can you comment on interconnection bookings and pricing? - Management noted record interconnection bookings driven by sustained demand and global pricing standardization, with a positive outlook for the second half of the year [44][45][47] Question: What is the impact of large capacity block market dynamics? - Management highlighted strong demand for large capacity blocks, particularly in North America, with ongoing discussions about future capacity coming online [55][60] Question: How will the U.S. Hyperscale fund impact the financial model? - The fund is expected to ramp up contributions over the next few years, with asset management fees providing near-term benefits and development returns aligning with current balance sheet performance [92][97][98]

Financial Data and Key Metrics Changes - The company reported core FFO of $1.87 per share, a 13% increase year-over-year and 6% higher than the previous quarter [9][25] - New bookings for the quarter totaled $177 million, with Digital Realty's share at $135 million, marking a record performance in the zero to one megawatt interconnection product set with $90 million in bookings, an 18% increase from the prior record [4][8] - The backlog at the end of the quarter stood at $826 million, providing strong visibility through 2025 and beyond [9][24] Business Line Data and Key Metrics Changes - The zero to one megawatt plus interconnection category saw bookings of $90 million, contributing significantly to the overall new bookings and reflecting a 36% increase compared to the prior April average [8][22] - The greater than one megawatt category generated $45 million in new leases, with steady to improved pricing despite some pricing pressure from a large enterprise customer exercising an expansion option [22][25] - Total churn declined to just 1%, with negligible churn in the greater than one megawatt category, indicating strong customer retention [25] Market Data and Key Metrics Changes - Demand for data center capacity remains strong across all regions, with notable contributions from North America, EMEA, and APAC [10][12] - In North America, near-term capacity blocks are in high demand, with discussions focused on late 2026 and early 2027 deliveries [11] - EMEA and APAC are experiencing growing demand for AI deployments, although they still lag behind the U.S. in terms of hyperscale capacity [12][78] Company Strategy and Development Direction - The company is focused on enhancing its interconnection capabilities and services, which are critical for supporting hybrid multi-cloud IT and AI workloads [7][15] - The U.S. Hyperscale data center fund has received over $3 billion in LP equity commitments, allowing the company to meet growing customer needs without overextending its balance sheet [14][29] - The strategic objective includes positioning for long-term sustainable growth through colocation and interconnection categories, with expectations for continued momentum into 2026 and beyond [15][34] Management's Comments on Operating Environment and Future Outlook - Management highlighted the strong demand environment driven by digital transformation, cloud computing, and AI adoption, positioning the company well for future growth [6][10] - The company expects to exit 2025 with significant momentum and a sizable backlog, having increased guidance for revenue and adjusted EBITDA for the year [21][33] - Management expressed confidence in the ability to scale quickly and securely across regions, enhancing the company's value proposition [15][34] Other Important Information - The company maintained strong execution against sustainability goals, achieving a 9% increase in renewable energy usage and a 14% reduction in water usage intensity year-over-year [19] - The company has a robust balance sheet with over $7 billion in liquidity and leverage below target levels, allowing for continued investment in growth initiatives [6][29] Q&A Session Summary Question: What is driving the growth in the zero to one megawatt category? - Management indicated that a combination of a growing market and improved execution has led to increased market share, with a focus on enhancing the global footprint and interconnection capabilities [37][39] Question: Can you comment on interconnection bookings and pricing? - Management noted record interconnection bookings driven by sustained demand and global pricing standardization, with expectations for continued momentum in the second half of the year [42][44] Question: What is the outlook for large capacity blocks in the U.S.? - Management highlighted strong demand for large capacity blocks, particularly in Northern Virginia, with ongoing discussions about future capacity needs [51][56] Question: How will the U.S. Hyperscale fund impact the financial model? - The fund is expected to ramp up contributions over time, with asset management fees providing near-term benefits and development returns expected to grow in the coming years [87][93] Question: What is the impact of the executive order on permitting data center infrastructure? - Management expressed optimism that the executive order will streamline permitting processes and promote infrastructure development, benefiting the company in the long term [64][66]

Financial Highlights - Record Core FFO per share of $1.87[6] - Net Income per share for 2Q25 is $2.94[7] - Total Revenue guidance updated to $5.925 - $6.025 billion[39] - Adjusted EBITDA guidance updated to $3.200 - $3.300 billion[39] - Core FFO per Share guidance updated to $7.15 - $7.25[39] Bookings and Backlog - Record 2Q Bookings from 0-1MW + IX (Interconnection) reached $90 million[10] - 66% of total 2Q bookings came from 0-1 MW + IX[10] - Total bookings at DLR share amounted to $135.3 million, with 0-1 MW contributing $72.5 million (54%), Interconnection $17.3 million (13%), and >1 MW $45.0 million (33%)[17] - Record commencements of $228 million[6] - Total bookings at 100% share reached $177 million[19] Capital & Sustainability - First U S Hyperscale Data Center Fund secured >$3 billion in LP Equity Commitments[6, 12] - The company has contracted 1.5 GW of renewable energy[13] - The company issued $7.2 billion in aggregate principal amount of green bonds[13]

Overview [Corporate Information](index=3&type=section&id=Corporate%20Information) Digital Realty operates a global portfolio of 310 data centers and holds investment-grade credit ratings from major agencies - Digital Realty owns, acquires, develops, and operates **310 data centers globally**, with a portfolio of approximately **42.5 million square feet**, serving a diverse customer base across various industries[7](index=7&type=chunk) Credit Ratings as of Q2 2025 | Agency | Rating | Outlook | | :--- | :--- | :--- | | Standard & Poor's | BBB | Stable | | Moody's | Baa2 | Stable | | Fitch | BBB | Stable | Common Stock (DLR) Performance - Q2 2025 | Metric | Value | | :--- | :--- | | Closing Price (30-Jun-25) | $174.33 | | High Price (Q2 2025) | $178.85 | | Low Price (Q2 2025) | $129.95 | | Indicated Annual Dividend | $4.88 | | Closing Annual Dividend Yield | 2.8% | [Key Quarterly Financial Data](index=6&type=section&id=Key%20Quarterly%20Financial%20Data) The company reported strong Q2 2025 results with $1.49 billion in revenue, significant net income, and improved Core FFO per share Key Financial Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Operating Revenues | $1,493.2M | $1,356.7M | | Net Income | $1,046.9M | $74.7M | | Core FFO per Share | $1.87 | $1.65 | | Adjusted EBITDA | $823.3M | $726.9M | Enterprise Value and Leverage (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Enterprise Value | $79,637.6M | | Total Debt | $18,452.1M | | Total Debt / Total Enterprise Value | 23.2% | | Net Debt-to-Adjusted EBITDA | 5.1x | Portfolio Statistics (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Data Centers | 310 | | Net Rentable Square Feet | 42,529k | | Occupancy at End of Quarter | 84.8% | | Space Under Active Development | 9,848k sqft | | Weighted Avg. Remaining Lease Term | 5.1 years | Consolidated Statements of Operations [Earnings Release](index=8&type=section&id=Earnings%20Release) Q2 2025 featured strong revenue and EBITDA growth, record bookings, positive renewal spreads, and an increased full-year outlook Q2 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1.49B | $1.36B (approx) | +10% | | Adjusted EBITDA | $823M | $727M (approx) | +13% | | Net Income per Share | $2.94 | $0.20 | +1370% | | Core FFO per Share | $1.87 | $1.65 | +13.3% | - Signed total bookings expected to generate **$135 million of annualized GAAP rental revenue** at Digital Realty's share, including a record **$90 million** from the 0-1 megawatt plus interconnection category[27](index=27&type=chunk)[30](index=30&type=chunk) - Rental rates on renewal leases signed during the quarter increased by **7.3% on a cash basis** and **9.9% on a GAAP basis**[29](index=29&type=chunk) - Acquired land parcels in Atlanta, Dallas, and Chicago to support future development of over **700 megawatts** and raised over **$3 billion** for its U.S. Hyperscale Data Center Fund[34](index=34&type=chunk)[35](index=35&type=chunk) [2025 Outlook](index=12&type=section&id=2025%20Outlook) The company raised its full-year 2025 guidance for revenue, Adjusted EBITDA, and Core FFO per share, reflecting strong performance Updated 2025 Full-Year Outlook (as of July 24, 2025) | Metric | Previous Outlook (Apr 24) | Current Outlook (Jul 24) | | :--- | :--- | :--- | | Total Revenue | $5.825 - $5.925B | $5.925 - $6.025B | | Adjusted EBITDA | $3.125 - $3.225B | $3.200 - $3.300B | | Core FFO per Share | $7.05 - $7.15 | $7.15 - $7.25 | | Constant-Currency Core FFO / Share | $7.05 - $7.15 | $7.10 - $7.20 | | Renewal Rental Rates (GAAP) | 6.0% - 8.0% | 7.0% - 8.0% | [Consolidated Quarterly Statements of Operations](index=14&type=section&id=Consolidated%20Quarterly%20Statements%20of%20Operations) Q2 2025 operating revenues reached $1.49 billion, with a substantial net income of $1.05 billion driven by gains on asset sales Q2 2025 vs. Q2 2024 Statement of Operations Highlights | Line Item (in thousands) | Three Months Ended 30-Jun-25 | Three Months Ended 30-Jun-24 | | :--- | :--- | :--- | | Total Operating Revenues | $1,493,150 | $1,356,749 | | Operating Income | $211,697 | $9,889 | | Gain / (loss) on sale of investments | $931,830 | $173,709 | | Net Income | $1,046,946 | $74,668 | | Net Income Available to Common Stockholders | $1,021,975 | $70,039 | | Net income / (loss) per share - diluted | $2.94 | $0.20 | [Funds From Operations and Core Funds From Operations](index=15&type=section&id=Funds%20From%20Operations%20and%20Core%20Funds%20From%20Operations) Core FFO per share grew to $1.87 in Q2 2025, up from $1.65 in the prior-year period, indicating strong core business growth FFO and Core FFO per Diluted Share (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Funds From Operations (FFO) | $1.75 | $1.57 | | Core Funds From Operations (Core FFO) | $1.87 | $1.65 | [Adjusted Funds From Operations (AFFO)](index=16&type=section&id=Adjusted%20Funds%20From%20Operations%20(AFFO)) AFFO per diluted share was $1.68 for Q2 2025, with a corresponding diluted AFFO payout ratio of 72.8% AFFO Performance and Payout Ratio (Q2 2025) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | AFFO per diluted share | $1.68 | $1.78 | $1.56 | | Dividends per share | $1.22 | $1.22 | $1.22 | | Diluted AFFO Payout Ratio | 72.8% | 68.6% | 78.1% | Balance Sheet Information [Consolidated Balance Sheets](index=17&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $48.7 billion as of June 30, 2025, supported by a strong cash position and increased investments in real estate Consolidated Balance Sheet Highlights (in billions) | Account | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Investments in Real Estate | $29.3 | $26.3 | | Cash and cash equivalents | $3.6 | $2.3 | | **Total Assets** | **$48.7** | **$43.6** | | Total Debt (net) | $18.5 | $16.3 | | **Total Liabilities** | **$23.9** | **$21.2** | | **Total Equity** | **$23.4** | **$21.0** | [Components of Net Asset Value (NAV)](index=18&type=section&id=Components%20of%20Net%20Asset%20Value%20(NAV)) The company's NAV is supported by over $3.3 billion in annualized cash NOI and significant assets in development and cash Key Components of Net Asset Value (in thousands) | Component | Value | | :--- | :--- | | **Assets** | | | Total Consolidated Cash NOI, Annualized | $3,071,438 | | Digital Realty's Pro Rata Share of Unconsolidated Entities Cash NOI | $313,235 | | Development CIP | $5,080,701 | | Cash and cash equivalents | $3,554,126 | | **Liabilities** | | | Total Debt (Unsecured + Secured) | $18,603,387 | | Preferred stock | $755,000 | | Digital Realty's share of unconsolidated entities debt | $2,044,648 | [Debt Maturities](index=19&type=section&id=Debt%20Maturities) The company maintains a well-staggered debt maturity profile of $18.6 billion with a weighted average maturity of 4.6 years Total Debt Maturities by Year (in thousands) | Year | Amount Maturing | | :--- | :--- | | 2025 | $766,574 | | 2026 | $1,729,991 | | 2027 | $1,871,457 | | 2028 | $2,518,438 | | 2029 | $2,888,792 | | Thereafter | $8,828,135 | - Total debt outstanding is **$18.6 billion** with a weighted average maturity of **4.6 years**[72](index=72&type=chunk) [Debt Analysis and Covenant Compliance](index=20&type=section&id=Debt%20Analysis%20and%20Covenant%20Compliance) The company remained in full compliance with all debt covenants, demonstrating strong financial health and significant headroom Debt Covenant Compliance (as of June 30, 2025) | Covenant Ratio | Required | Actual (Senior Notes) | Actual (Credit Facilities) | | :--- | :--- | :--- | :--- | | Total outstanding debt / total assets | < 60% | 44% | 33% | | Secured debt / total assets | < 40% | 5% | 4% | | Fixed charge coverage | > 1.50x | N/A | 4.6x | Internal Growth [Same-Capital Operating Trend Summary](index=21&type=section&id=Same-Capital%20Operating%20Trend%20Summary) The Same-Capital portfolio showed solid internal growth, with a 6.1% increase in NOI and a 4.4% increase in Cash NOI year-over-year Same-Capital Performance (Q2 2025 vs Q2 2024) | Metric | % Change (YoY) | | :--- | :--- | | Total Revenue | +4.9% | | Net Operating Income (NOI) | +6.1% | | Cash Net Operating Income (Cash NOI) | +4.4% | | Constant Currency Cash NOI | +1.8% | [Summary of Leasing Activity - Signed](index=22&type=section&id=Summary%20of%20Leasing%20Activity%20-%20Signed) The company signed new leases in Q2 2025 expected to generate $118.0 million in annualized GAAP rent, driven by the 0-1 MW segment New Leasing Activity - Q2 2025 | Category | Annualized GAAP Rent (in thousands) | Kilowatts Leased | NRSF Leased (in thousands) | | :--- | :--- | :--- | :--- | | 0-1 MW | $72,517 | 21,727 | 240 | | > 1 MW | $45,038 | 23,290 | 152 | | **Total** | **$117,974** | **45,017** | **401** | [Summary of Leasing Activity - Renewed](index=23&type=section&id=Summary%20of%20Leasing%20Activity%20-%20Renewed) Lease renewals in Q2 2025 featured strong positive rent re-leasing spreads of 7.3% on a cash basis and a high retention ratio Lease Renewal Rent Change - Q2 2025 | Rent Basis | % Change (Total Portfolio) | | :--- | :--- | | Cash Rent | +7.3% | | GAAP Rent | +9.9% | - The company achieved a **retention ratio of 82.2%** (by square feet) and a low **churn rate of 1.0%** for the quarter[88](index=88&type=chunk) [Lease Expirations - By Size](index=24&type=section&id=Lease%20Expirations%20-%20By%20Size) The lease expiration schedule is well-distributed, with 13.0% of annualized rent expiring in the remainder of 2025 and 19.8% in 2026 Upcoming Lease Expirations (% of Total Annualized Rent) | Year | % of Annualized Rent Expiring | | :--- | :--- | | 2025 (remainder) | 13.0% | | 2026 | 19.8% | | 2027 | 11.2% | | 2028 | 8.3% | | 2029 | 10.2% | [Top 20 Customers by Annualized Rent](index=26&type=section&id=Top%2020%20Customers%20by%20Annualized%20Rent) Revenue is concentrated, with the top 20 customers accounting for 50.8% of annualized rent and providing stable, long-term cash flows - The top 20 customers account for **50.8% of annualized recurring revenue**, with a weighted average remaining lease term of **6.0 years**[96](index=96&type=chunk) Top 3 Customers by Annualized Rent | Rank | Customer | % of Annualized Recurring Revenue | | :--- | :--- | :--- | | 1 | Fortune 50 Software Company | 11.7% | | 2 | Oracle Corporation | 8.2% | | 3 | Social Content Platform | 5.3% | [Occupancy Analysis](index=27&type=section&id=Occupancy%20Analysis) Total portfolio occupancy increased to 84.8% in Q2 2025, with North America leading at 84.7% for its consolidated portfolio Portfolio Occupancy by Region (as of June 30, 2025) | Region | Occupancy % | | :--- | :--- | | North America (Consolidated) | 84.7% | | EMEA (Consolidated) | 79.2% | | Asia Pacific (Consolidated) | 81.4% | | **Total Portfolio** | **84.8%** | - Total portfolio occupancy increased to **84.8%** from 84.0% in the prior quarter[102](index=102&type=chunk) External Growth [Development Lifecycle](index=28&type=section&id=Development%20Lifecycle) The company has a substantial $8.9 billion development pipeline that is 61% pre-leased and expected to yield 12.2% Development Pipeline Summary (100% Share) | Region | IT Capacity (MW) | Total Expected Investment | % Leased | Estimated Yield | | :--- | :--- | :--- | :--- | :--- | | Americas | 464 | $5,305.4M | 78% | 13.5% | | EMEA | 216 | $3,066.0M | 26% | 11.3% | | APAC | 53 | $548.5M | 52% | 9.6% | | **Total** | **734** | **$8,919.9M** | **61%** | **12.2%** | [Construction Projects in Progress (CIP)](index=29&type=section&id=Construction%20Projects%20in%20Progress%20(CIP)) Total construction in progress and land held for development represents a total expected investment of $16.0 billion Construction in Progress Summary (100% Share, in millions) | Category | Current Investment | Future Investment | Total Investment | | :--- | :--- | :--- | :--- | | Future Development Capacity | $3,522.1 | $2,747.6 | $6,269.7 | | Data Center Construction | $3,515.7 | $5,404.2 | $8,919.9 | | **Total Land Held and Development CIP** | **$7,614.9** | **$8,299.8** | **$15,914.7** | [Historical Capital Expenditures and Investments in Real Estate](index=30&type=section&id=Historical%20Capital%20Expenditures%20and%20Investments%20in%20Real%20Estate) Total real estate investments in Q2 2025 were $704.3 million, primarily driven by $575.4 million in non-recurring capital expenditures Capital Expenditures - Q2 2025 (in thousands) | Category | Amount | | :--- | :--- | | Non-Recurring Capital Expenditures (Development, etc.) | $575,402 | | Recurring Capital Expenditures | $62,083 | | Indirect Capital Expenditures (Interest, Overhead) | $66,838 | | **Total Improvements to and Investments in Real Estate** | **$704,323** | [Acquisitions / Dispositions / Joint Ventures](index=31&type=section&id=Acquisitions%20%2F%20Dispositions%20%2F%20Joint%20Ventures) Q2 2025 activities included strategic land acquisitions for future growth and significant asset contributions to a joint venture - Acquired land in **Atlanta, GA ($120M)**, **Dallas, TX ($11M)**, and **Chicago, IL ($5.7M)** for future development[118](index=118&type=chunk) - Contributed assets to the U.S. Hyperscale Data Center Fund with a contribution price of **$1.6 billion**[120](index=120&type=chunk) [Unconsolidated Entities](index=32&type=section&id=Unconsolidated%20Entities) Unconsolidated joint ventures generated $227.2 million in NOI for Q2 2025, contributing significantly to the company's earnings Digital Realty's Pro Rata Share from Unconsolidated Entities (Q2 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Share of Debt | $2,044,648 | | Share of Net Operating Income (NOI) | $85,494 | | Share of Cash NOI | $78,309 | | Share of Core FFO | $52,184 | | Fee Income Earned | $22,409 | Additional Information [Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios](index=33&type=section&id=Reconciliation%20of%20Earnings%20Before%20Interest%2C%20Taxes%2C%20Depreciation%20%26%20Amortization%20and%20Financial%20Ratios) The company's key credit metrics, including a Net Debt-to-Adjusted EBITDA ratio of 5.1x, reflect a strong and stable financial profile Key Financial Ratios (as of June 30, 2025) | Ratio | Value | | :--- | :--- | | Net Debt-to-Adjusted EBITDA | 5.1x | | Interest coverage ratio | 5.0x | | Fixed charge coverage ratio | 4.7x | | Debt-plus-preferred-stock-to-total-enterprise-value | 24.1% | [Management Statements on Non-GAAP Measures](index=34&type=section&id=Management%20Statements%20on%20Non-GAAP%20Measures) This section defines non-GAAP measures like FFO and EBITDA, explaining their use as supplemental performance evaluation tools [Forward-Looking Statements](index=37&type=section&id=Forward-Looking%20Statements) This section provides a safe harbor statement, outlining potential risks and uncertainties that could affect future results

Core Viewpoint - Digital Realty reported strong financial results for the second quarter of 2025, showcasing significant revenue growth and improved profitability metrics compared to previous quarters and the same quarter last year [2][10]. Financial Results - Revenues reached $1.49 billion, marking a 6% increase from the previous quarter and a 10% increase year-over-year [2]. - Net income was reported at $1.05 billion, with net income available to common stockholders at $1.02 billion, translating to $2.94 per share, up from $0.27 per share in the previous quarter and $0.20 per share in the same quarter last year [2][10]. - Adjusted EBITDA was $823 million, reflecting a 4% increase from the previous quarter and a 13% increase year-over-year [3]. - Funds From Operations (FFO) totaled $600 million, or $1.75 per share, compared to $1.67 per share in the previous quarter and $1.57 per share in the same quarter last year [3][10]. Leasing Activity - The company signed total bookings expected to generate $135 million of annualized GAAP rental revenue, with significant contributions from the 0–1 megawatt category and interconnection [5]. - Renewal leases represented $177 million of annualized cash rental revenue, with rental rates increasing by 7.3% on a cash basis and 9.9% on a GAAP basis [7][10]. - The backlog of signed-but-not-commenced leases at the end of the quarter was $826 million of annualized GAAP base rent [6][10]. Investment Activity - Digital Realty acquired land parcels in three metropolitan areas, including approximately 100 acres in Atlanta for $120 million and 167 acres in Dallas for $11 million, expected to support significant IT capacity [11]. - The U.S. Hyperscale Data Center Fund received over $3 billion in equity commitments, exceeding its initial target, and Digital Realty contributed interests in five operating data centers and two development sites to the Fund [12]. Balance Sheet - As of June 30, 2025, total debt outstanding was approximately $18.5 billion, with a net debt-to-Adjusted EBITDA ratio of 5.1x [14]. - The company issued €850 million of 3.875% notes due 2034, with net proceeds of approximately $975 million, and repaid €650 million in senior notes [15]. 2025 Outlook - Digital Realty raised its 2025 Core FFO per share outlook to $7.15 - $7.25 and Constant-Currency Core FFO per share outlook to $7.10 - $7.20 [16][10].

Stock Recommendations - Honeywell's stock is down 5% despite solid earnings, beating topline and bottom line, and raising guidance, considered a sum-of-the-parts story with nothing not to like [1] - Digital Realty is anticipated to have a good earnings night due to nearly 1 billion dollars worth of backlog contracts they're scrambling to fulfill [2] - Applied Materials is expected to benefit from continued spending on data centers and the need for chips and chip factories following Google's news about more capex [2] - Carlyle Group reached a new all-time record high, positioned in the right sector at the right time [3] Industry Trends - Private equity is gaining momentum, evidenced by Blackstone's positive performance [3]

Core Viewpoint - Digital Realty is collaborating with Oracle to enhance the adoption of hybrid IT and AI solutions through Oracle Cloud Solution Centers, aiming to accelerate deployment and reduce time to market for organizations globally [1][2]. Group 1: Collaboration and Benefits - The partnership emphasizes a shared commitment to simplifying the complexities of hybrid IT and AI adoption, leveraging Digital Realty's Pervasive Data Center Architecture (PDx®) alongside Oracle's technologies [2]. - Customers are experiencing significant benefits, such as Grupo Anaya reducing latency and network costs by approximately 75% and improving end-user performance by up to 40%, achieving these results a year ahead of schedule [3]. Group 2: Infrastructure and Solutions - Oracle Solution Centers provide a secure environment for customers to design, test, and validate hybrid and AI architectures, available globally through Digital Realty's PlatformDIGITAL® [7]. - A library of 15 infrastructure configurations has been developed to assist customers in modernizing their IT and leveraging the latest AI and cloud innovations [7]. Group 3: Industry Perspective - The collaboration is highlighted as a strong example of how ecosystem partnerships can facilitate the real-world adoption of data-driven infrastructure, helping enterprises reduce complexity and shorten deployment timelines [5].

Core Insights - Wall Street analysts forecast Digital Realty Trust (DLR) will report quarterly earnings of $1.74 per share, reflecting a year-over-year increase of 5.5% [1] - Anticipated revenues are projected to be $1.44 billion, indicating a 6.4% increase compared to the same quarter last year [1] Earnings Projections - The consensus EPS estimate for the quarter has been adjusted upward by 0.1% over the past 30 days, showing analysts' reassessment of their initial projections [2] - Revisions to earnings projections are critical for predicting investor behavior and are linked to short-term stock price performance [3] Revenue Estimates - Analysts estimate 'Revenues- Rental revenues' will reach $987.46 million, representing an 8.2% year-over-year change [4] - 'Revenues- Tenant reimbursements- Utilities' are expected to be $274.21 million, showing a slight decrease of 0.1% from the previous year [5] - 'Revenues- Tenant reimbursements- Other' is projected at $43.52 million, indicating a 3.7% increase year-over-year [5] - Combined 'Revenues- Tenant reimbursements (Utilities + Other)' are forecasted to be $317.73 million, suggesting a 0.4% year-over-year change [5] Additional Revenue Metrics - 'Revenues- Fee Income' is expected to be $20.36 million, reflecting a significant increase of 30.1% from the year-ago quarter [6] - 'Revenues- Interconnection and other' are projected to reach $115.34 million, indicating a 5.3% year-over-year increase [6] - 'Depreciation and amortization' is estimated to be $436.92 million [6] Stock Performance - Over the past month, shares of Digital Realty Trust have returned +1.5%, compared to the Zacks S&P 500 composite's +5.4% change [6] - DLR currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [6]