Joint Ventures and Partnerships - Company formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses, receiving approximately $231 million in net proceeds and retaining a 20% interest[172] - Company formed a joint venture with Mitsubishi Corporation to develop two data centers in the Dallas metro area, contributing data centers valued at approximately $261 million and retaining a 35% interest[174] - Company expanded its joint venture with GI Partners by selling a 75% interest in a third facility in Chicago, contributing the data center at a value of approximately $453 million and retaining a 25% interest[175] - GI Partners increased its ownership in a joint venture from 65% to 80% through a $68 million capital contribution, reducing the company's stake to 20%[254] - The company formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses, with an estimated development cost of $3.0 billion for the first phase[256] - The company formed a joint venture with Mitsubishi Corporation to develop two data centers in Dallas, contributing $261 million and retaining a 35% interest[258] - The company expanded its joint venture with GI Partners, selling a 75% interest in a third facility for approximately $386 million and retaining a 25% interest[259] Asset Sales and Dispositions - Company sold its interest in four data centers to Brookfield Infrastructure Partners L.P. for approximately $271 million, recognizing a total gain on disposition of approximately $203.1 million[173] - Company sold an additional 24.9% interest in a Frankfurt data center to DCREIT for approximately $126 million, with DCREIT now holding a 49.9% interest[176] - The company recognized a total gain of $194.2 million from the sale of its interest in four data centers to Brookfield Infrastructure Partners L.P. in January 2024[209] - The company recognized a total gain of $172 million from the contribution of a data center to the joint venture with GI Partners in April 2024[212] - The company sold its interest in four data centers to Brookfield for approximately $271 million, recognizing a total gain on disposition of approximately $203.1 million[257] Debt and Financing Activities - Company issued and sold €850 million aggregate principal amount of 3.875% Guaranteed Notes due 2033, receiving net proceeds of approximately €843 million[178] - Company refinanced its Global Revolving Credit Facility and Yen Revolving Credit Facility, providing for borrowings up to $4.5 billion with maturity on January 24, 2029[179] - Company completed a common stock offering, selling approximately 12.1 million shares at $136.66 per share, receiving net proceeds of approximately $1.7 billion[177] - Digital Realty Trust, Inc. generated net proceeds of approximately $99 million from the issuance of 0.6 million common shares at an average price of $133.43 per share under the 2023 Sales Agreement[223] - Digital Realty Trust, Inc. generated net proceeds of approximately $983 million from the issuance of 6.4 million common shares at an average price of $154.84 per share under the 2024 Sales Agreement Amendment[224] - As of October 30, 2024, approximately $0.9 billion remains available for future sales under the 2024 Sales Agreement Amendment[224] - Digital Realty Trust, Inc. received net proceeds of approximately $1.7 billion from the sale of 12.1 million shares of common stock at a purchase price of $136.66 per share[226] - The company issued €850 million in 3.875% Guaranteed Notes due 2033, with net proceeds of approximately €843 million ($933 million) used to repay debt and for general corporate purposes[253] - Net cash provided by financing activities increased by $630.2 million, primarily due to higher proceeds from short-term borrowings and issuance of common stock, offset by debt repayments[268] - The company issued approximately 7.0 million shares of common stock under its ATM program, raising $1.1 billion, and 12.1 million shares through an equity offering, raising $1.7 billion[268] - Debt repayments included $240 million on the U.S. term loan facility, $637 million on Euro notes, $324 million on 2.750% notes, and $415 million on Euro Term Loan Facilities[268] Financial Performance and Metrics - Company targets a debt-to-Adjusted EBITDA ratio around 5.5x, fixed charge coverage greater than three times, and floating rate debt at less than 20% of total outstanding debt[170] - Total operating revenues increased by $28.8 million and $11.7 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[198] - Stabilized rental and other services revenue decreased by $35.8 million (3.2%) and $59.4 million (1.8%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[199] - Non-stabilized rental and other services revenue increased by $54.9 million (20.1%) and $54.3 million (6.8%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[199] - Total stabilized utilities expenses decreased by $58.1 million (17.1%) and $148.4 million (15.6%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[201][202] - Total non-stabilized utilities expenses increased by $29.7 million (67.7%) and $38.5 million (24.6%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[201][203] - Total stabilized rental property operating and maintenance expenses (excluding utilities) increased by $16.1 million (9.7%) and $34.8 million (6.9%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[206] - Total non-stabilized property taxes and insurance decreased by $22.6 million (70.3%) and $37.6 million (57.8%) in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[207] - Gain on disposition of properties decreased by $811.2 million and $449.7 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[209] - Interest expense increased by $13.0 million and $24.0 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[215] - Income tax expense decreased by $4.8 million and $5.0 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[216] - Net cash provided by operating activities for the nine months ended September 30, 2024 increased to $1.49 billion from $1.17 billion in 2023[265] - FFO available to common stockholders and unitholders was $520.4 million for Q3 2024, up from $481.5 million in Q3 2023[274] - Basic FFO per share and unit was $1.56 for Q3 2024, unchanged from Q3 2023[274] Occupancy and Portfolio Metrics - Company's revenue primarily consists of rental income from data centers, with occupancy rates being a key factor in revenue generation[181] - North America data center occupancy decreased from 85.4% to 83.8% from September 30, 2024, to December 31, 2023, with net rentable square feet increasing slightly from 20,003 to 20,150[182] - Europe data center occupancy dropped from 77.3% to 75.8%, with net rentable square feet decreasing from 9,363 to 8,873 during the same period[182] - Asia Pacific data center occupancy fell from 81.8% to 76.7%, while net rentable square feet remained stable at 1,667 and 1,652 respectively[182] - The company's consolidated portfolio occupancy decreased from 82.6% to 79.8%, with net rentable square feet dropping from 32,644 to 32,203[182] - Average remaining lease term as of September 30, 2024, was approximately five years, reflecting the long-term nature of data center operations[184] - Renewals for leases >1 MW showed a significant rental rate increase of 31.9%, from $133 to $175 per square foot[185] - Northern Virginia accounted for 18.5% of total annualized rent as of September 30, 2024, making it the largest contributor among metropolitan areas[189] - The stabilized portfolio increased from 22,600 to 24,642 net rentable square feet, while the non-stabilized portfolio decreased from 9,603 to 8,002 from December 31, 2023, to September 30, 2024[196] Capital Expenditures and Investments - The company expects to incur approximately $0.4 billion to $0.6 billion of capital expenditures for consolidated development programs during the remainder of 2024[239] - Cumulative investments in current development projects as of September 30, 2024, totaled $5,198,446, with future investments estimated at $4,340,581[243] - Capitalized interest for the nine months ended September 30, 2024 increased to $84.4 million from $83.8 million in 2023 due to higher qualifying activities and interest rates[246] - Total capital expenditures (excluding indirect costs) for the nine months ended September 30, 2024 were $1.93 billion, down from $2.31 billion in 2023[251] Debt and Interest Rate Exposure - Total outstanding debt as of September 30, 2024 was $17.1 billion, consisting of $15.2 billion fixed rate debt and $1.9 billion variable rate debt[279] - A 10% increase in interest rates would increase annual interest expense on variable rate debt by $6 million[280] - A 10% decrease in interest rates would decrease the fair value of fixed rate debt by $153 million[280] - The company's consolidated debt as of September 30, 2024, was $17.109 billion, with fixed rate debt (including interest rate swaps) at $15.187 billion and variable rate debt at $1.922 billion[279] - A 10% increase in interest rates would result in a $2 million increase in the fair value of interest rate swaps and a $6 million increase in annual interest expense on variable rate debt not subject to swaps[280] - A 10% decrease in interest rates would lead to a $2 million decrease in the fair value of interest rate swaps and a $6 million decrease in annual interest expense on variable rate debt not subject to swaps[280] Foreign Currency and Risk Management - The company's primary currency exposures are to the Euro, Japanese yen, British pound, Singapore dollar, South African rand, and Brazilian real, with limited exposure to the Brazilian real through its share of the Ascenty entity's financial position[282] - The company uses cross-currency interest rate swaps and foreign currency forwards or options to hedge against currency fluctuations, but there is no assurance these will be effective[282] - The company is exposed to foreign currency exchange risks, primarily to the Euro, Japanese yen, British pound, Singapore dollar, South African rand, and Brazilian real, which may affect future costs and cash flows[282] - The company mitigates foreign exchange risk by financing in local currencies and using cross-currency interest rate swaps and foreign currency forwards or options[282] Internal Controls and Legal Proceedings - The company maintains disclosure controls and procedures to ensure timely and accurate reporting of required information, but recognizes that these controls can only provide reasonable assurance of achieving desired objectives[282] - The company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures were effective at the reasonable assurance level as of the end of the quarter covered by the report[282] - There were no material changes in the company's internal control over financial reporting during its most recent fiscal quarter[282] - The company is not currently a party to any legal proceedings that would have a material adverse effect on its operations or financial position as of September 30, 2024[287] - The company's disclosure controls and procedures are designed to ensure timely and accurate reporting of required information under the Securities Exchange Act of 1934[282][283] - The company's management, including the chief executive officer and chief financial officer, concluded that the disclosure controls and procedures were effective at the reasonable assurance level[282][284] - There have been no material changes in the company's internal control over financial reporting during the most recent fiscal quarter[282][285] - The company has investments in unconsolidated entities, which are accounted for using the equity method of accounting, and its disclosure controls and procedures for these entities are more limited[282][283] - As of September 30, 2024, the company was not a party to any legal proceedings that would have a material adverse effect on its operations or financial position[287] Derivatives and Hedging - The company does not use derivatives for trading or speculative purposes and only enters into contracts with major financial institutions based on their credit ratings and other factors[278]

Core Viewpoint - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Group 1 - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3]. - There is a clear disclaimer regarding the lack of any stock, option, or derivative positions in the companies mentioned, indicating a neutral stance [2]. - The article expresses that past performance does not guarantee future results, reinforcing the need for careful consideration by investors [4].

Core Insights - Digital Realty Trust (DLR) reported third-quarter 2024 core funds from operations (FFO) per share of $1.67, matching the Zacks Consensus Estimate and showing an increase from $1.62 per share a year ago [1] - The company experienced healthy leasing activity, with over $520 million in new leasing, more than double the previous record set in the first quarter, leading to a backlog increase of nearly 60% [2] - Operating revenues for the quarter were $1.43 billion, slightly below the Zacks Consensus Estimate of $1.44 billion, but up 2.1% year over year [1][3] Leasing and Revenue Details - Total signed bookings in the third quarter are estimated to generate $521 million of annualized GAAP rental revenue, with significant contributions from the 0-1 megawatt category and interconnection [2] - Renewal leases signed during the quarter accounted for $258 million of annualized cash rental revenues, with rental rates on renewal leases increasing by 15.2% on a cash basis and 27.5% on a GAAP basis [3] Financial Performance - Adjusted EBITDA for the quarter was $758.3 million, reflecting a 10.5% year-over-year increase [3] - Rental property operating expenses rose by 12% to $249.8 million, while interest expenses increased by 11.8% to $123.8 million [3] Balance Sheet Overview - As of September 30, 2024, Digital Realty had cash and cash equivalents of $2.18 billion, down from $2.28 billion at the end of the second quarter [4] - The company reported total debt of $17 billion, with a net debt-to-adjusted EBITDA ratio of 5.4X and a fixed charge coverage ratio of 4.1X [4] 2024 Guidance - Digital Realty raised its guidance for 2024 core FFO per share to a range of $6.65-$6.75, while lowering total revenue expectations to $5.55-$5.60 billion [5]

Financial Highlights - Record leasing and backlog reached $521 million[1] and $859 million[1] respectively - Total bookings amounted to $520.9 million[8], with >1 MW bookings contributing $449.7 million, representing 86% of total bookings[8] - Strong pricing environment with renewal spreads of 15.2% cash and 27.5% GAAP[14], driven by >1MW - Signed renewals representing $258 million of annualized rental revenue[14] Operational Performance - Added a record 149 new logos in 3Q24[3] - Record 3Q bookings from 0-1MW + Interconnection reached $66 million[3] - Record 3Q bookings in the 0-500kW tranche reached $40 million[3] - Increased development pipeline by approximately 50% QoQ[1] Sustainability Initiatives - Contracted 1.4 GW of renewable capacity[4] - Issued €850 million in green bonds in September 2024[4] - Refinanced and upsized sustainability-linked credit facility to $4.5 billion[5] Global Capacity - Total buildable IT capacity exceeds 3,000 MW[2] - IT capacity under construction is 644 MW[2] - Delivered 36 MW in 3Q and started 244 MW of new projects in 3Q[2] - In-place IT capacity is approximately 2,700 MW[2]

Financial Data and Key Metrics Changes - New leasing volume reached $521 million, surpassing previous records and expectations, with a backlog of nearly $860 million in signed but not commenced leases [3][4][17] - Core FFO was reported at $1.67 per share, with data center revenue growing by 7.5% year-over-year [20][21] - Adjusted EBITDA increased by 11% year-over-year, driven by improved pricing and higher revenues [21][25] Business Line Data and Key Metrics Changes - Greater than 1 megawatt leasing volume was a significant driver, with bookings in North America up more than 75% from the previous record [7][16] - The 0-1 megawatt interconnection segment saw record bookings of over $66 million, a 20% increase from the prior record [8][9] - Cash renewal spreads increased by 15.2% on a cash basis, with overall renewal spreads at 10.5% year-to-date [18][19] Market Data and Key Metrics Changes - The development pipeline increased by nearly 50% to 644 megawatts under construction, with 74% pre-leased at an average expected yield of 12% [4][23] - The backlog now represents 20% of the quarter's annualized data center revenues, with significant future commencements scheduled [17][25] Company Strategy and Development Direction - The company is focused on capitalizing on strong demand for data center capacity, particularly in core markets, and enhancing its value proposition [5][6] - Digital Realty aims to maintain a robust land bank to support over 3 gigawatts of incremental development [6][10] - The company continues to lead in ESG initiatives, issuing a EUR850 million green bond and achieving various sustainability certifications [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for data center capacity, driven by cloud and digital transformation trends [5][11] - The company anticipates continued strong performance in the fourth quarter, although it may not match the record set in Q3 due to seasonal factors [28][44] - Future growth is expected to accelerate beyond 2024 levels, supported by a strong backlog and favorable market conditions [25][28] Other Important Information - The company has strengthened its balance sheet, raising over $800 million in equity and maintaining nearly $5 billion in total liquidity [24] - The weighted average interest rate on debt is 2.8%, with 89% of net debt being fixed rate [24] Q&A Session Summary Question: Demand Risks and Power Readiness - Management indicated that while there may be some pull forward in demand, significant capacity remains available for future leasing [30][31] Question: AI Use Cases and Build Costs - Approximately 50% of bookings were attributed to AI use cases, with build costs experiencing inflationary trends but remaining manageable relative to rental rate increases [34][35] Question: New Normal for Bookings - Management highlighted that the current demand fundamentals remain strong, with a backlog that supports future growth [41][44] Question: Future CapEx Levels - CapEx for 2024 is expected to remain within the current range, with a focus on maintaining leverage targets [46][48] Question: Large Package Deals - Management noted that while large package deals are episodic, they contribute positively to cash mark-to-market rates [50][51] Question: Power Delivery and Capacity Blocks - Updates on power delivery indicated that significant capacity blocks are nearing completion, with a long runway for growth [54][55] Question: Enterprise Segment Performance - The enterprise segment saw improved bookings due to a strong value proposition and effective go-to-market strategies [71][72]

For the quarter ended September 2024, Digital Realty Trust (DLR) reported revenue of $1.43 billion, up 2.1% over the same period last year. EPS came in at $1.67, compared to $2.33 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.44 billion, representing a surprise of -0.28%. The company has not delivered EPS surprise, with the consensus EPS estimate being $1.67. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall S ...

Digital Realty Trust (DLR) came out with quarterly funds from operations (FFO) of $1.67 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $1.62 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this real estate investment trust would post FFO of $1.63 per share when it actually produced FFO of $1.65, delivering a surprise of 1.23%.Over the last four quarters, the company has surpassed consensus FFO estimates two times.Dig ...

[Overview](index=3&type=section&id=Overview) This section provides a comprehensive overview of Digital Realty Trust, Inc., including corporate information, key quarterly financial data, earnings release highlights, 2024 outlook, and consolidated quarterly statements of operations [Corporate Information](index=3&type=section&id=Corporate%20Information) Digital Realty Trust, Inc. is a global provider of data center, colocation, and interconnection solutions, with a portfolio of 312 data centers and investment-grade credit ratings - As of Q3 2024, Digital Realty's portfolio includes **312 data centers** (including 73 in unconsolidated JVs) with approximately **41.1 million square feet**, **9.1 million** under active development, and **4.9 million** held for future development[3](index=3&type=chunk) - The company holds stable outlook investment-grade credit ratings, with a **BBB from Standard & Poor's and Fitch**, and a **Baa2 from Moody's**[8](index=8&type=chunk)[11](index=11&type=chunk) Common Stock Performance (DLR) - Q3 2024 | Metric | Value | | :--- | :--- | | High Price | $165.17 | | Low Price | $141.00 | | Closing Price (Sep 30, 2024) | $161.83 | | Closing Annual Dividend Yield | 3.0% | | Closing Market Value | $54.66B | [Key Quarterly Financial Data](index=6&type=section&id=Key%20Quarterly%20Financial%20Data) This section provides a snapshot of Digital Realty's key financial and operational metrics over the last five quarters, showing Q3 2024 total operating revenues of $1.43 billion and net income of $40.1 million Selected Quarterly Financial Data (Q3 2023 - Q3 2024) | Metric | 30-Sep-24 | 30-Jun-24 | 31-Mar-24 | 31-Dec-23 | 30-Sep-23 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues ($M) | $1,431.2 | $1,356.7 | $1,331.1 | $1,369.6 | $1,402.4 | | Net Income ($M) | $40.1 | $74.7 | $287.8 | $19.9 | $745.9 | | Adjusted EBITDA ($M) | $758.3 | $726.9 | $710.6 | $699.5 | $685.9 | | Net Debt-to-Adjusted EBITDA | 5.4x | 5.3x | 6.1x | 6.2x | 6.3x | | Core FFO / share | $1.67 | $1.65 | $1.67 | $1.63 | $1.62 | | AFFO / share | $1.52 | $1.56 | $1.68 | $1.30 | $1.40 | | Occupancy at end of quarter | 83.9% | 82.9% | 82.1% | 81.7% | 82.8% | [Earnings Release](index=8&type=section&id=Earnings%20Release) Digital Realty announced strong Q3 2024 results with record leasing activity, Core FFO per share of $1.67, and raised full-year 2024 Core FFO outlook - The company achieved record leasing of over **$520 million in new bookings**, driving the backlog up nearly **60% to a new record of $859 million** in annualized GAAP base rent[16](index=16&type=chunk)[17](index=17&type=chunk) - Renewal leases signed in Q3 2024 saw significant rental rate increases of **15.2% on a cash basis** and **27.5% on a GAAP basis**[16](index=16&type=chunk)[17](index=17&type=chunk) - Key financing activities in Q3 included issuing **€850 million of 3.875% notes due 2033**, repaying other debt, upsizing credit facilities to **$4.2 billion and ¥42.5 billion**, and raising approximately **$806 million** through its ATM equity program[22](index=22&type=chunk) Q3 2024 Financial Highlights vs. Q3 2023 | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenues | $1.4 billion | $1.4 billion | | Net Income / Diluted Share | $0.09 | $2.31 | | FFO / Share | $1.55 | $1.55 | | Core FFO / Share | $1.67 | $1.62 | | Adjusted EBITDA | $758 million | $686 million | [2024 Outlook](index=12&type=section&id=2024%20Outlook) Digital Realty updated its full-year 2024 guidance, raising Adjusted EBITDA and Core FFO per share outlooks, and significantly increasing rental rate increase forecasts for renewals Updated 2024 Full-Year Outlook (as of Oct 24, 2024) | Metric | Previous Guidance (Jul 25, 2024) | Current Guidance (Oct 24, 2024) | | :--- | :--- | :--- | | Total Revenue | $5.550 - $5.650 billion | $5.550 - $5.600 billion | | Adjusted EBITDA | $2.800 - $2.900 billion | $2.925 - $2.975 billion | | Rental Rates on Renewals (Cash) | 5.0% - 7.0% | 8.0% - 10.0% | | FFO / Share | $6.15 - $6.30 | $6.15 - $6.25 | | Core FFO / Share | $6.60 - $6.75 | $6.65 - $6.75 | [Consolidated Quarterly Statements of Operations](index=15&type=section&id=Consolidated%20Quarterly%20Statements%20of%20Operations) The Consolidated Quarterly Statements of Operations detail the company's financial performance, showing Q3 2024 total operating revenues of $1.43 billion and net income of $40.1 million Q3 2024 Statement of Operations Summary (in thousands) | Line Item | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Total Operating Revenues | $1,431,214 | $1,402,437 | | Total Operating Expenses | $1,262,928 | $1,344,206 | | Operating Income | $168,286 | $58,231 | | Net Income | $40,134 | $745,941 | | Net Income Available to Common Stockholders | $41,012 | $723,440 | [Funds From Operations](index=16&type=section&id=Funds%20From%20Operations) This section details the reconciliation and calculation of Funds From Operations (FFO), Core FFO, and Adjusted Funds From Operations (AFFO), providing key metrics for assessing the company's operational performance and dividend capacity [Funds From Operations and Core Funds From Operations](index=16&type=section&id=Funds%20From%20Operations%20and%20Core%20Funds%20From%20Operations) This section reconciles Net Income to FFO and Core FFO, reporting Q3 2024 FFO of $520.4 million and Core FFO of $557.7 million, or $1.67 per diluted share Reconciliation to FFO and Core FFO - Q3 2024 (in thousands) | Line Item | Amount | | :--- | :--- | | Net Income Available to Common Stockholders | $41,012 | | Adjustments (Depreciation, Amortization, etc.) | $479,370 | | **Funds From Operations (FFO)** | **$520,382** | | Non-core adjustments (Transaction expenses, etc.) | $37,362 | | **Core Funds From Operations (Core FFO)** | **$557,744** | FFO and Core FFO Per Share - Q3 2024 | Metric | Per Share Value | | :--- | :--- | | FFO per diluted share | $1.55 | | Core FFO per diluted share | $1.67 | [Adjusted Funds From Operations](index=17&type=section&id=Adjusted%20Funds%20From%20Operations) This section details the reconciliation from Core FFO to AFFO, reporting Q3 2024 AFFO of $507.5 million, or $1.52 per diluted share, with an 80.4% diluted AFFO payout ratio Reconciliation to AFFO - Q3 2024 (in thousands) | Line Item | Amount | | :--- | :--- | | Core FFO | $557,744 | | Non-cash adjustments (stock comp, straight-line rent, etc.) | $17,045 | | Recurring capital expenditures & leasing costs | ($67,308) | | **Adjusted Funds From Operations (AFFO)** | **$507,474** | AFFO Per Share and Payout Ratio - Q3 2024 | Metric | Value | | :--- | :--- | | AFFO per diluted share | $1.52 | | Dividends per share | $1.22 | | Diluted AFFO Payout Ratio | 80.4% | [Balance Sheet Information](index=18&type=section&id=Balance%20Sheet%20Information) This section provides a detailed overview of Digital Realty's financial position, including consolidated balance sheets, components of net asset value, debt maturity schedules, and compliance with debt covenants [Consolidated Balance Sheets](index=18&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2024, Digital Realty's consolidated balance sheet shows total assets of $45.3 billion, total liabilities of $22.1 billion, and total debt of approximately $17.0 billion Balance Sheet Summary (as of Sep 30, 2024, in thousands) | Category | Amount | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $2,175,605 | | Net Investments in Real Estate | $27,686,662 | | Total Assets | $45,295,392 | | **Liabilities & Equity** | | | Total Debt (net) | $16,986,546 | | Total Liabilities | $22,118,781 | | Total Equity | $21,710,975 | | Total Liabilities and Equity | $45,295,392 | [Components of Net Asset Value](index=19&type=section&id=Components%20of%20Net%20Asset%20Value) This section breaks down the components used to estimate the company's Net Asset Value (NAV), starting with an annualized consolidated cash NOI of $2.92 billion Key NAV Components (in thousands) | Component | Value | | :--- | :--- | | Total Consolidated Cash NOI, Annualized | $2,916,238 | | Digital Realty's Pro Rata Share of Unconsolidated JV Cash NOI | $240,100 | | Development CIP | $5,175,054 | | Cash and cash equivalents | $2,175,605 | | Total Liabilities (including preferred stock and JV debt) | $22,735,637 | [Debt Maturities](index=20&type=section&id=Debt%20Maturities) The company's debt maturity schedule as of September 30, 2024, shows a well-staggered profile with no significant near-term maturities in 2024 and a weighted average term to initial maturity of 4.3 years - The weighted average term to initial maturity for the company's debt is **4.3 years**, extending to **4.5 years** assuming extension options are exercised[42](index=42&type=chunk) Total Debt Maturities by Year (as of Sep 30, 2024, in thousands) | Year | Amount Due | | :--- | :--- | | 2024 | $140 | | 2025 | $1,259,628 | | 2026 | $2,149,339 | | 2027 | $1,837,315 | | 2028 | $2,484,854 | | Thereafter | $9,377,769 | | **Total Debt** | **$17,109,044** | [Debt Analysis and Covenant Compliance](index=21&type=section&id=Debt%20Analysis%20and%20Covenant%20Compliance) Digital Realty remains in compliance with all debt covenants as of September 30, 2024, with key ratios like Total outstanding debt / total assets at 35% and Fixed charge coverage at 4.0x Debt Covenant Compliance (as of Sep 30, 2024) | Covenant Ratio | Requirement | Actual | | :--- | :--- | :--- | | Total outstanding debt / total assets | < 60% | 35% | | Secured debt / total assets | < 40% | 3% | | Fixed charge coverage | > 1.50x | 4.0x | [Internal Growth](index=22&type=section&id=Internal%20Growth) This section analyzes Digital Realty's internal growth drivers, including same-capital operating trends, leasing activity, lease expirations, customer diversification, and occupancy rates across its portfolio [Same-Capital Operating Trend Summary](index=22&type=section&id=Same-Capital%20Operating%20Trend%20Summary) The same-capital portfolio demonstrated positive internal growth, with Cash Net Operating Income (NOI) increasing by 0.8% year-over-year in Q3 2024 and occupancy at 83.3% Same-Capital Portfolio Performance (Q3 2024) | Metric | YoY Change (vs Q3 2023) | QoQ Change (vs Q2 2024) | | :--- | :--- | :--- | | Total Revenue | (3.2%) | 1.6% | | Net Operating Income (NOI) | 1.7% | (0.6%) | | Cash Net Operating Income (Cash NOI) | 0.8% | (3.1%) | [Summary of Leasing Activity](index=23&type=section&id=Summary%20of%20Leasing%20Activity) Q3 2024 leasing activity was exceptionally strong, with $505 million in new leases and renewal rental rates increasing by 15.2% cash basis and 27.5% GAAP basis New Leases Signed - Q3 2024 | Category | Annualized GAAP Rent | Kilowatts Leased | | :--- | :--- | :--- | | 0-1 MW | $50.4 million | 16,642 kW | | > 1 MW | $449.7 million | 172,139 kW | | **Total** | **$505.2 million** | **188,781 kW** | Lease Renewals - Q3 2024 | Metric | Total | | :--- | :--- | | Kilowatts Renewed | 87,344 kW | | % Change Cash Rent | +15.2% | | % Change GAAP Rent | +27.5% | | Retention Ratio (by sq. ft.) | 83.0% | [Lease Expirations - By Size](index=25&type=section&id=Lease%20Expirations%20-%20By%20Size) The company's lease expiration schedule is staggered, with 6.2% of total annualized rent expiring in the remainder of 2024 and 23.4% in 2025, offering potential for rent roll-ups Lease Expirations by Annualized Rent | Expiration Year | Annualized Rent ($ thousands) | % of Total Annualized Rent | | :--- | :--- | :--- | | 2024 (remainder) | $233,403 | 6.2% | | 2025 | $889,196 | 23.4% | | 2026 | $481,340 | 12.7% | | 2027 | $386,851 | 10.2% | | 2028 | $231,527 | 6.1% | | Thereafter | $1,581,635 | 41.7% | [Top 20 Customers by Annualized Rent](index=27&type=section&id=Top%2020%20Customers%20by%20Annualized%20Rent) Digital Realty's customer base is diversified, with the top 20 customers accounting for 49.8% of annualized recurring revenue and a weighted average remaining lease term of 6.0 years - The top 20 customers contribute **49.8%** of the company's annualized recurring revenue, with a weighted average remaining lease term of **6.0 years**[54](index=54&type=chunk) Top 5 Customers by Annualized Recurring Revenue | Rank | Customer | % of Annualized Recurring Revenue | | :--- | :--- | :--- | | 1 | Fortune 50 Software Company | 11.2% | | 2 | Oracle Corporation | 5.7% | | 3 | Social Content Platform | 5.4% | | 4 | Global Cloud Provider | 4.6% | | 5 | IBM | 3.1% | [Occupancy Analysis](index=28&type=section&id=Occupancy%20Analysis) As of Q3 2024, total portfolio occupancy was 83.9%, an increase from the prior quarter, with North America at 85.5% and managed unconsolidated joint ventures at 93.4% Portfolio Occupancy by Region (as of Sep 30, 2024) | Region/Portfolio | Occupancy | | :--- | :--- | | North America | 85.5% | | EMEA | 77.6% | | Asia Pacific | 81.8% | | **Consolidated Portfolio Total** | **82.7%** | | Managed Unconsolidated Portfolio | 93.4% | | **Total Portfolio** | **83.9%** | [External Growth](index=29&type=section&id=External%20Growth) This section examines Digital Realty's external growth strategies, including its development pipeline, construction projects, historical capital expenditures, and activities related to acquisitions, dispositions, and unconsolidated joint ventures [Development Lifecycle](index=29&type=section&id=Development%20Lifecycle) The company has a substantial development pipeline with 644 MW of IT capacity under construction, 74% pre-leased, and an estimated total investment of $7.67 billion at a 12.0% yield Development Projects Under Construction (100% Share) | Region | IT Capacity (MW) | % Leased | Total Investment ($B) | Estimated Yield | | :--- | :--- | :--- | :--- | :--- | | Americas | 344 | 97% | $3.74 | 13.6% | | EMEA | 257 | 42% | $3.44 | 10.6% | | APAC | 43 | 71% | $0.49 | 10.4% | | **Total** | **644** | **74%** | **$7.67** | **12.0%** | [Construction Projects in Progress](index=30&type=section&id=Construction%20Projects%20in%20Progress) As of Q3 2024, the total projected investment in land held and development CIP is $12.5 billion (100% share), with Digital Realty's share at $10.4 billion Construction in Progress Summary (DLR Share, in thousands) | Category | Current Investment | Future Investment | Total Investment | | :--- | :--- | :--- | :--- | | Future Development Capacity | $2,528,053 | $1,212,408 | $3,740,461 | | Data Center Construction | $2,715,479 | $3,304,705 | $6,020,184 | | **Total Land Held and Development CIP** | **$5,744,930** | **$4,674,103** | **$10,419,033** | [Historical Capital Expenditures and Investments in Real Estate](index=31&type=section&id=Historical%20Capital%20Expenditures%20and%20Investments%20in%20Real%20Estate) In Q3 2024, Digital Realty invested $781.5 million in real estate improvements, primarily $650.9 million in development capital expenditures, with recurring capital expenditures of $67.3 million Capital Expenditures - Q3 2024 (in thousands) | Category | Amount | | :--- | :--- | | Development | $650,912 | | Enhancements and Other Non-Recurring | $7,070 | | **Total Non-Recurring Capital Expenditures** | **$657,981** | | Recurring Capital Expenditures | $67,308 | | **Total Direct Capital Expenditures** | **$725,289** | [Acquisitions / Dispositions / Joint Ventures](index=32&type=section&id=Acquisitions%20%2F%20Dispositions%20%2F%20Joint%20Ventures) In Q3 2024, Digital Realty acquired two properties in the UK and Amsterdam for $247.9 million and disposed of a non-core property in Eagan, MN for $6.25 million - Acquired two properties in Q3 2024: a leasehold in Slough, UK for **$200 million** and buildings in Amsterdam for **$47.9 million**[67](index=67&type=chunk) - Disposed of one building in Eagan, MN for **$6.25 million** during the quarter[66](index=66&type=chunk) [Unconsolidated Joint Ventures](index=33&type=section&id=Unconsolidated%20Joint%20Ventures) The company's unconsolidated joint ventures hold $11.7 billion in assets and $4.0 billion in debt, generating $171.7 million in total NOI for Q3 2024 Digital Realty's Pro Rata Share of Unconsolidated JVs - Q3 2024 (in thousands) | Metric | Amount | | :--- | :--- | | Debt | $1,479,468 | | Net Operating Income (NOI) | $61,616 | | Cash Net Operating Income (Cash NOI) | $60,025 | | Core FFO | $21,316 | [Additional Information](index=34&type=section&id=Additional%20Information) This section provides supplementary financial details, including the reconciliation of EBITDA and key financial ratios, management's statements on non-GAAP measures, and important forward-looking statements [Reconciliation of EBITDA and Financial Ratios](index=34&type=section&id=Reconciliation%20of%20EBITDA%20and%20Financial%20Ratios) This section reconciles Net Income to EBITDA and Adjusted EBITDA, reporting Q3 2024 Adjusted EBITDA of $758.3 million and key ratios like Net Debt-to-Adjusted EBITDA at 5.4x Reconciliation to Adjusted EBITDA - Q3 2024 (in thousands) | Line Item | Amount | | :--- | :--- | | Net Income Available to Common Stockholders | $41,012 | | Interest, Taxes, Depreciation & Amortization | $598,863 | | **EBITDA** | **$639,875** | | JV adjustments, transaction costs, impairments, etc. | $118,421 | | **Adjusted EBITDA** | **$758,296** | Key Financial Ratios - Q3 2024 | Ratio | Value | | :--- | :--- | | Interest coverage ratio | 4.3x | | Fixed charge coverage ratio | 4.1x | | Debt to total enterprise value | 23.5% | | Net Debt-to-Adjusted EBITDA | 5.4x | [Management Statements on Non-GAAP Measures](index=35&type=section&id=Management%20Statements%20on%20Non-GAAP%20Measures) This section defines non-GAAP financial measures like FFO, Core FFO, AFFO, EBITDA, Adjusted EBITDA, NOI, and Cash NOI, used by management for supplemental performance insight - **FFO (Funds From Operations):** Calculated per Nareit standards, it excludes real estate depreciation and gains/losses from property sales to show trends in occupancy, rental rates, and operating costs[74](index=74&type=chunk) - **Core FFO:** Adjusts FFO for non-core items like transaction expenses and currency revaluation to capture trends in the core business operating performance[75](index=75&type=chunk) - **AFFO (Adjusted Funds from Operations):** Adjusts Core FFO for recurring capital expenditures, straight-line rent, and other non-cash items to assess the ability to fund dividend requirements from operations[76](index=76&type=chunk) [Forward-Looking Statements](index=37&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, cautioning that forward-looking statements involve risks and uncertainties, and directs readers to SEC filings for a complete discussion

Digital Realty Trust, Inc. (NYSE: DLR ) will be reporting earnings after the close on October 24, 2024, with consensus estimates calling for $1,429mm in revenue and AFFO/share to come in at $1.50/share. Analysts have revised their estimatesMichael Del Monte is a buy-side equity analyst with over 5 years of industry experience. Prior to working in the investment management industry, Michael spent over a decade in professional services working in industries that range from O&G, OFS, Midstream, Industrials, In ...

Digital Realty Trust (DLR) is slated to report third-quarter 2024 results on Oct. 24 after the closing bell. The quarterly results are expected to reflect year-over-year growth in both revenues and funds from operations (FFO) per share. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. This Austin, TX-based data center real estate investment trust (REIT) reported a core FFO per share of $1.65 in the prior quarter, outpacing the Zacks Consensus Estimate of $1.63. The quarterly results ...