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]

Market Performance - The S&P 500 benchmark index was down by about 1.7% at 11 a.m. ET, while the Vanguard Real Estate ETF (VNQ) was slightly higher by 0.64% [1] - Data center REITs Equinix (EQIX) and Digital Realty Trust (DLR) were down by 7% and 12% respectively, and Iron Mountain (IRM) was down by more than 8% [2] AI and Data Center Industry - The AI boom has created a surge in demand for data centers, with U.S. tech giants investing billions in AI, particularly in data centers [4][5] - Equinix and Digital Realty are leaders in the data center REIT industry, with Equinix data centers often regarded as internet hubs [6] - Iron Mountain has been shifting its focus from paper records storage to digital records by building out data centers [6] Impact of DeepSeek's Announcement - DeepSeek's announcement of a large language model developed in two months at a cost of under $6 million has caused investors to question AI hardware and data center investments [3][7] - The news has led to a sell-off in data center REITs, but there is no evidence of tech companies pulling back on spending [7] - The announcement could also accelerate AI spending among tech giants, potentially benefiting data center REITs in the long term [8]

DALLAS, Jan. 21, 2025 /PRNewswire/ -- Digital Realty (NYSE: DLR), a leading global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today the tax treatment of its 2024 dividends for common stock and preferred stock.  The information below has been prepared using the best available information to date.  Digital Realty's federal income tax return for the year ended December 31, 2024 has not yet been filed.  Please note that federal tax laws affect taxpaye ...

Real estate investment trust (REIT) Digital Realty Trust Inc (NYSE:DLR) is up 3% at $179.15 at last glance, after an upgrade from Deutsche Bank to "buy" from "hold." The firm also lifted its price target to $194 from $185. On the charts, DLR has been moving steadily lower since its Nov. 29 record high of $198.00. Today's pop has the stock extending a bounce off the $170 level and 100-day moving average, however, as well as moving into positive territory for 2025. Year over year, the equity is up 29.3%. DLR' ...

Core Viewpoint - Digital Realty, the largest global provider of cloud- and carrier-neutral data center solutions, announced the pricing of €850 million aggregate principal amount of 3.875% Guaranteed Notes due 2035, indicating a strong capital raising effort to support its growth strategy [1][2]. Group 1: Offering Details - The Euro Notes will be senior unsecured obligations of Digital Dutch Finco B.V. and fully guaranteed by Digital Realty and its operating partnership [2]. - Interest on the Euro Notes will be payable annually at a rate of 3.875% from January 14, 2025, and will mature on March 15, 2035 [2]. - The offering is expected to close on January 14, 2025, subject to customary closing conditions [2]. Group 2: Use of Proceeds - The company plans to use the net proceeds from the Euro Notes to temporarily repay borrowings under its global revolving credit facilities, acquire additional properties or businesses, and fund development opportunities [3]. - Additional uses include investing in interest-bearing accounts and short-term securities, working capital, and potentially repaying other debt or redeeming outstanding equity or debt securities [3]. Group 3: Regulatory and Compliance Information - The Euro Notes are being sold only outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, and they have not been registered under the Securities Act [4]. - The offering is not intended for retail investors in the European Economic Area (EEA) or the United Kingdom, ensuring compliance with local regulations [7][10].

Core Viewpoint - Digital Realty (DLR) has experienced a stock price increase of 12.7% over the past three months, contrasting with a 9.8% decline in the industry, driven by strong demand for data centers and a solid operational foundation [1] Group 1: Market Demand and Growth Drivers - The growth in cloud computing, the Internet of Things, and Big Data is fueling a booming market for data-center REITs like Digital Realty, with the company signing $521 million in new leases in Q3 2024 [2] - Digital Realty has a high-quality, diversified customer base, primarily consisting of investment-grade tenants from various sectors, ensuring stable revenue generation [3] Group 2: Strategic Investments and Development - The company is expected to continue its growth trajectory through strategic investments in land, infrastructure, and acquisitions, including a recent acquisition of a 6.7-acre parcel in Richardson, TX, for approximately $15 million [4] - Digital Realty has a robust development pipeline, with 9.1 million square feet under active development and 4.9 million square feet held for future development, expecting capital expenditures of $2.0-$2.4 billion for 2024 [5] Group 3: Financial Strength - Digital Realty maintains a solid balance sheet with $2.18 billion in cash and cash equivalents as of Q3 2024, a well-laddered debt maturity schedule, and no debt maturities until early 2025 [6] - The company's net debt-to-adjusted EBITDA ratio stands at 5.4X, with a fixed charge coverage ratio of 4.1X as of the end of Q3 2024 [6]

Group 1 - Jim Chanos, founder of Kynikos Associates, has released new data that may impact investment strategies [1] - The article mentions a previous analysis from October 2022 regarding Digital Realty, suggesting it as a buying opportunity [4] Group 2 - iREIT® offers in-depth research on various investment vehicles including REITs, mREITs, and ETFs, with a focus on providing quality scores and buy targets [2] - The iREIT® Tracker includes data on over 250 tickers, enhancing investment decision-making [2]