Digital Realty Trust(DLR) - 2025 Q1 - Quarterly Results

Corporate Information Corporate Profile Digital Realty Trust, Inc. operates as a global provider of data center, colocation, and interconnection solutions, with a portfolio of 308 data centers and additional space under development - Digital Realty owns, acquires, develops, and operates 308 data centers globally, including 78 held in unconsolidated joint ventures, totaling approximately 41.8 million square feet[4] - The company's portfolio includes an additional 9.5 million square feet under active development and 5.1 million square feet held for future development[4] Investor Relations & Analyst Coverage The company provides contact information for investor relations and lists numerous financial institutions offering analyst coverage, indicating broad market interest and transparency - Investor Relations contact information is available via their website, and the company is covered by analysts from over 20 financial institutions including Bank of America Merrill Lynch, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan, and Wells Fargo[6][7] Upcoming Conference Schedule Digital Realty has scheduled participation in several investor conferences in May and June 2025, with webcasts available for these events | Date | Conference Name | Location | | :------------ | :-------------------------------- | :------------- | | May 5-7, 2025 | Wells Fargo Real Estate Securities | Charleston, SC | | May 13, 2025 | BMO North America Real Estate | New York, NY | | June 3-4, 2025| NAREIT REITweek | New York, NY | | June 10, 2025 | Mizuho Technology Conference | New York, NY | Stock Listing & Credit Ratings Digital Realty's common stock and preferred stocks are listed on the NYSE. The company maintains investment-grade credit ratings with a stable outlook from Standard & Poor's, Moody's, and Fitch | Stock Type | Symbol | | :--------------------- | :------- | | Common Stock | DLR | | Series J Preferred Stock | DLRPRJ | | Series K Preferred Stock | DLRPRK | | Series L Preferred Stock | DLRPRL | | Rating Agency | Corporate Credit Rating | Preferred Stock | | :---------------- | :---------------------- | :-------------- | | Standard & Poor's | BBB (Stable Outlook) | BB+ | | Moody's | Baa2 (Stable Outlook) | Baa3 | | Fitch | BBB (Stable Outlook) | BB+ | Common Stock Price Performance Digital Realty's common stock (DLR) experienced fluctuations in price during the first quarter of 2025, with a closing price of $143.29 at quarter-end, down from $177.33 in the prior quarter. The indicated annualized dividend per common share remained stable at $4.88 | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :-------------------------------------- | :--------- | :--------- | :--------- | | High price | $187.74 | $198.00 | $154.18 | | Low price | $139.27 | $155.16 | $130.00 | | Closing price, end of quarter | $143.29 | $177.33 | $144.04 | | Average daily trading volume (1) | 2,529 | 1,911 | 2,108 | | Indicated dividend per common share (2) | $4.88 | $4.88 | $4.88 | | Closing annual dividend yield, end of quarter | 3.4% | 2.8% | 3.4% | | Shares and units outstanding, end of quarter (1) (3) | 343,092 | 342,772 | 319,009 | | Closing market value of shares and units outstanding (4) | $49,161,653| $60,783,759| $45,950,001| Key Quarterly Financial Data Selected Financial and Operating Data The company reported a decrease in total operating revenues quarter-over-quarter but an increase year-over-year, alongside a significant increase in Adjusted EBITDA. FFO and Core FFO per diluted share also showed positive growth. Occupancy remained stable at 84.0% | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Shares and Units at End of Quarter | | | | | Total Shares and Units | 343,092 | 342,772 | 319,009 | | Enterprise Value | | | | | Total Enterprise Value | $66,932,932 | $78,253,136 | $63,725,341 | | Total debt / total enterprise value | 25.4% | 21.4% | 26.7% | | Selected Operating Data | | | | | Total operating revenues | $1,407,637 | $1,435,862 | $1,331,143 | | Total operating expenses | $1,211,887 | $1,291,540 | $1,181,776 | | Net income | $106,395 | $185,688 | $287,837 | | Financial Ratios | | | | | Adjusted EBITDA | $791,156 | $751,276 | $710,556 | | Net Debt-to-Adjusted EBITDA | 5.1x | 4.8x | 6.1x | | Interest coverage ratio | 5.3x | 4.5x | 4.3x | | Fixed charge coverage ratio | 4.9x | 4.2x | 4.0x | | Profitability Measures | | | | | Net income / (loss) per common share - diluted | $0.27 | $0.51 | $0.82 | | Funds from operations (FFO) / diluted share and unit | $1.67 | $1.61 | $1.41 | | Core funds from operations (Core FFO) / diluted share and unit | $1.77 | $1.73 | $1.67 | | Adjusted funds from operations (AFFO) / diluted share and unit | $1.78 | $1.36 | $1.68 | | Dividends per share and common unit | $1.22 | $1.22 | $1.22 | | Portfolio Statistics | | | | | Data Centers | 308 | 308 | 309 | | Net rentable square feet, excluding development space | 41,778 | 41,326 | 39,839 | | Occupancy at end of quarter | 84.0% | 84.1% | 82.1% | | Weighted average remaining lease term (years) | 4.9 | 4.8 | 4.5 | Definitions and Notes This section provides detailed definitions and calculation methodologies for key financial metrics such as EBITDA, Adjusted EBITDA, FFO, Core FFO, and AFFO, along with explanations for various ratios and portfolio statistics, ensuring clarity on non-GAAP measures - EBITDA is defined as earnings before interest expense, loss on debt extinguishment and modifications, tax expense, and depreciation and amortization[17] - Adjusted EBITDA includes adjustments for unconsolidated joint venture depreciation & amortization, interest and tax expense, severance, transaction and integration expenses, gains/losses on sale, impairment provisions, and other non-core items[17] - FFO and Core FFO are presented in accordance with Nareit standards, with Core FFO further excluding certain non-core revenue and expense streams. AFFO assesses the ability to fund dividend and distribution requirements[17] Earnings Release & Highlights First Quarter 2025 Financial Highlights Digital Realty reported Q1 2025 revenues of $1.4 billion, a 6% increase year-over-year, with Adjusted EBITDA growing 11% year-over-year to $791 million. Core FFO per share increased to $1.77, driven by robust demand and strong leasing activity - Revenues for Q1 2025 were $1.4 billion, a 2% decrease QoQ but a 6% increase YoY[21] - Net income available to common stockholders was $100 million, or $0.27 per share, compared to $0.82 per share in Q1 2024[21] - Adjusted EBITDA reached $791 million, up 5% QoQ and 11% YoY[22] - Core FFO per share was $1.77, an increase from $1.73 QoQ and $1.67 YoY[23] Leasing Activity Digital Realty achieved strong leasing activity in Q1 2025, signing new leases expected to generate $242 million in annualized GAAP rental revenue. The backlog of signed-but-not-commenced leases reached a record $919 million, and renewal leases saw a 5.6% cash basis rate increase - Total bookings in Q1 2025 are expected to generate $242 million of annualized GAAP rental revenue[24] - The backlog of signed-but-not-commenced leases reached a record $919 million of annualized GAAP base rent[25][27] - Rental rates on renewal leases increased by 5.6% on a cash basis and 7.1% on a GAAP basis[26][27] | Region | 0-1 MW Annualized GAAP Base Rent | > 1 MW Annualized GAAP Base Rent | Interconnection Annualized GAAP Base Rent | Total Annualized GAAP Base Rent | | :---------- | :------------------------------- | :------------------------------- | :---------------------------------------- | :------------------------------ | | Americas | $23,219 | $163,390 | N/A | $187,916 | | EMEA | $24,906 | $3,626 | N/A | $28,630 | | Asia Pacific| $5,997 | $5,113 | N/A | $11,110 | | All Regions | $54,122 | $172,129 | $14,649 | $242,305 | Investment Activity Digital Realty expanded its development pipeline through land acquisitions in Charlotte and Atlanta, and launched its U.S. Hyperscale Data Center Fund, raising over $1.7 billion in equity commitments. The company also entered the Indonesian market via a joint venture - Acquired a 48-acre parcel for $20 million and two adjacent parcels for $16 million in Charlotte, North Carolina, expanding potential IT capacity to 400 megawatts[30] - Formed the U.S. Hyperscale Data Center Fund, raising over $1.7 billion in equity commitments, targeting $2.5 billion for operating hyperscale data centers and development sites across leading U.S. markets[31] - Entered the Indonesia market with a 50% stake in Digital Realty Bersama for $95 million, acquiring a connected campus with two data centers in Jakarta, including CGK11 with expected capacity up to 32 megawatts[32] - Subsequent to quarter-end, acquired approximately 100 acres of land in the Atlanta metro area for $120 million, expected to support over 200 megawatts of IT capacity[33] Balance Sheet & Financing As of March 31, 2025, Digital Realty had $17.0 billion in total debt, with a net debt-to-Adjusted EBITDA ratio of 5.1x and a fixed charge coverage of 4.9x. The company completed financing transactions including issuing €850 million in notes and repaying £400 million in senior notes - Total debt outstanding was approximately $17.0 billion as of March 31, 2025, comprising $16.2 billion of unsecured debt and $0.8 billion of secured debt[35] - Key financial ratios at quarter-end were: Net debt-to-Adjusted EBITDA of 5.1x, debt-plus-preferred-to-total enterprise value of 26.6%, and fixed charge coverage of 4.9x[35] - Issued €850 million of 3.875% notes due 2035 for net proceeds of approximately €841 million ($867 million) in January[37] - Repaid £400 million ($501 million) of 4.25% senior notes in January[37] 2025 Outlook Outlook Summary Digital Realty raised its 2025 Core FFO per share outlook to $7.05 - $7.15, reflecting an increase from the previous guidance. The company also updated its total revenue and Adjusted EBITDA outlooks, while maintaining expectations for rental rate increases and same-capital cash NOI growth - Raised 2025 Core FFO per share outlook to $7.05 - $7.15 (from $7.00 - $7.10)[38][39] - Maintained 2025 Constant-Currency Core FFO per share outlook at $7.05 - $7.15[38][39] | Metric | As of February 13, 2025 | As of April 24, 2025 | | :------------------------------------ | :---------------------- | :------------------- | | Total revenue | $5.800 - $5.900 billion | $5.825 - $5.925 billion | | Adjusted EBITDA | $3.100 - $3.200 billion | $3.125 - $3.225 billion | | Rental rates on renewal leases (Cash basis) | 4.0% - 6.0% | 4.0% - 6.0% | | Rental rates on renewal leases (GAAP basis) | 6.0% - 8.0% | 6.0% - 8.0% | | Year-end portfolio occupancy | +100 - 200 bps | +100 - 200 bps | | "Same-Capital" cash NOI growth (2) | 3.5% - 4.5% | 3.5% - 4.5% | | Development CapEx (Net of Partner Contributions) (3) | $3,000 - $3,500 million | $3,000 - $3,500 million | | Long-term debt issuance pricing | 5.0% - 5.5% | 4.0% - 5.5% | | Net income per diluted share | $2.10 - $2.20 | $2.15 - $2.25 | | Funds From Operations / share (NAREIT-Defined) | $6.60 - $6.70 | $6.65 - $6.75 | | Core Funds From Operations / share | $7.00 - $7.10 | $7.05 - $7.15 | Consolidated Quarterly Statements of Operations Quarterly Operating Results Digital Realty's Q1 2025 operating revenues were $1.408 billion, a slight decrease from the previous quarter but an increase from Q1 2024. Net income available to common stockholders was $99.793 million, resulting in diluted EPS of $0.27 | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Rental revenues | $960,526 | $958,892 | $894,409 | | Tenant reimbursements - Utilities | $271,189 | $302,664 | $276,357 | | Interconnection & other | $112,969 | $112,360 | $108,071 | | Total Operating Revenues | $1,407,637 | $1,435,862 | $1,331,143 | | Utilities | $313,385 | $337,534 | $324,571 | | Rental property operating | $238,600 | $273,104 | $224,369 | | Depreciation & amortization | $443,009 | $455,355 | $431,102 | | General & administration | $121,112 | $124,470 | $114,419 | | Total Operating Expenses | $1,211,887 | $1,291,540 | $1,181,776 | | Operating Income | $195,750 | $144,322 | $149,367 | | Net Income | $106,395 | $185,688 | $287,837 | | Net Income / (Loss) Available to Common Stockholders | $99,793 | $179,388 | $271,327 | | Net income / (loss) per share - diluted | $0.27 | $0.51 | $0.82 | Funds From Operations and Core Funds From Operations Reconciliation of Net Income to Funds From Operations (FFO) Digital Realty's Funds From Operations (FFO) for Q1 2025 increased to $570.7 million, or $1.67 per diluted share, up from $1.41 per diluted share in Q1 2024, primarily due to adjustments for real estate related depreciation and gains/losses on real estate transactions | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Net Income / (Loss) Available to Common Stockholders | $99,793 | $179,388 | $271,327 | | Real estate related depreciation & amortization (1) | $432,652 | $445,462 | $420,591 | | Unconsolidated JV real estate related depreciation & amortization | $55,861 | $49,463 | $47,877 | | (Gain) / loss on real estate transactions | ($1,111) | ($137,047) | ($286,704) | | Funds From Operations | $570,715 | $544,616 | $451,273 | | Funds From Operations per share - diluted (2) (3) | $1.67 | $1.61 | $1.41 | Reconciliation of FFO to Core FFO Core FFO for Q1 2025 was $608.4 million, or $1.77 per diluted share, showing an increase from both the prior quarter and the same quarter last year. This reflects adjustments for non-core revenue, transaction expenses, and other non-recurring items | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Funds From Operations | $570,715 | $544,616 | $451,273 | | Other non-core revenue adjustments (4) | ($1,925) | $4,537 | $3,525 | | Transaction and integration expenses | $39,902 | $11,797 | $31,839 | | (Gain) / Loss on FX and derivatives revaluation | ($2,064) | $7,127 | $33,602 | | Core Funds From Operations | $608,354 | $586,816 | $532,153 | | Core Funds From Operations per share - diluted (2) | $1.77 | $1.73 | $1.67 | Adjusted Funds From Operations (AFFO) Reconciliation of Core FFO to AFFO Digital Realty's Adjusted Funds From Operations (AFFO) for Q1 2025 was $610.1 million, or $1.78 per diluted share, an increase from the prior quarter's $1.36. The diluted AFFO payout ratio improved to 68.6% from 89.5% in Q4 2024 | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Core FFO available to common stockholders and unitholders | $608,354 | $586,816 | $532,153 | | Non-real estate depreciation | $10,356 | $9,894 | $10,511 | | Non-cash stock-based compensation expense | $16,700 | $13,386 | $12,592 | | Straight-line rental revenue | ($9,692) | ($18,242) | $9,976 | | Recurring capital expenditures (1) | ($35,305) | ($130,245) | ($47,676) | | AFFO available to common stockholders and unitholders (2) | $610,108 | $463,682 | $535,073 | | AFFO per share - diluted (3) | $1.78 | $1.36 | $1.68 | | Dividends per share and common unit | $1.22 | $1.22 | $1.22 | | Diluted AFFO Payout Ratio | 68.6% | 89.5% | 72.8% | Balance Sheet Information Consolidated Balance Sheets As of March 31, 2025, Digital Realty reported total assets of $45.08 billion, a slight decrease from the previous quarter. Total liabilities stood at $21.90 billion, and total equity was $21.72 billion | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Assets | | | | | Investments in Real Estate | $32,990,319 | $32,762,112 | $31,733,877 | | Net Investments in Real Estate | $26,836,631 | $26,760,582 | $26,123,605 | | Cash and cash equivalents | $2,321,885 | $3,870,891 | $1,193,784 | | Goodwill | $9,174,165 | $8,929,431 | $9,105,026 | | Assets held for sale and contribution | $953,236 | — | $287,064 | | Total Assets | $45,080,562 | $45,283,616 | $42,633,089 | | Liabilities and Equity | | | | | Unsecured senior notes, net of discount | $14,744,063 | $13,962,852 | $13,190,202 | | Total Liabilities | $21,902,406 | $22,107,836 | $21,792,866 | | Total Stockholders' Equity | $21,295,598 | $21,340,397 | $19,019,850 | | Total Equity | $21,718,834 | $21,742,595 | $19,489,487 | | Total Liabilities and Equity | $45,080,562 | $45,283,616 | $42,633,089 | Components of Net Asset Value (NAV) The company's annualized total consolidated cash NOI was $3.15 billion, with an additional $280.8 million from unconsolidated joint ventures. Total other assets amounted to $8.36 billion, while total liabilities were $23.14 billion, including preferred stock and JV debt | Metric | 31-Mar-25 | | :---------------------------------------- | :----------- | | Total Consolidated Cash NOI, Annualized | $3,151,534 | | Digital Realty's Pro Rata Share of Unconsolidated Joint Venture Cash NOI (3) (6) | $280,820 | | Development and Management Fees (net), Annualized | $82,571 | | Pre-stabilized inventory, at cost (7) | $231,885 | | Land held for development | $69,089 | | Development CIP (8) | $4,973,266 | | Cash and cash equivalents | $2,321,885 | | Total Other Assets | $8,359,012 | | Global unsecured revolving credit facilities | $1,121,628 | | Unsecured senior notes | $14,849,815 | | Preferred stock | $755,000 | | Digital Realty's share of unconsolidated JV debt | $1,697,287 | | Total Liabilities | $23,138,462 | Debt Analysis Debt Maturities Digital Realty's debt maturity schedule shows significant amounts maturing in 2025 ($703 million) and 2026 ($1.59 billion), with a weighted average interest rate of 2.647% and a weighted average term to initial maturity of 4.4 years | Debt Type | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :---------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Global Unsecured Revolving Credit Facilities | — | — | — | — | — | $1,121,628 | $1,096,931 | | Unsecured Term Loans | — | — | $405,600 | — | — | — | $404,335 | | Senior Notes | $703,040 | $1,473,694 | $1,169,622 | $2,090,800 | $2,807,449 | $6,605,210 | $14,744,063 | | Secured Debt | $49,067 | $605 | $232,319 | $364,014 | $9,278 | $44,126 | $695,355 | | Other Debt | — | $5,915 | $4,505 | $1,065 | $5,108 | — | $16,593 | | Mandatorily Redeemable Preferred Shares (Teraco) | — | $62,764 | — | — | — | — | $59,002 | | Total Debt | $703,645 | $1,591,439 | $1,812,046 | $2,455,879 | $2,821,836 | $7,770,964 | $17,155,809 | | Weighted Average Interest Rate | 2.600% | 0.633% | 3.062% | 4.362% | 2.307% | 2.324% | 2.647% | | Summary Weighted Average Term to Initial Maturity | | | | | | | 4.4 Years | Debt Analysis and Covenant Compliance Digital Realty demonstrates strong compliance with its debt covenants, with actual ratios well within required limits. The total outstanding debt to total assets ratio was 33% (Global Unsecured Credit Facilities) against a requirement of less than 60%, and the fixed charge coverage ratio was 4.5x against a requirement of greater than 1.50x | Debt Covenant Ratios | Required (Global Unsecured Credit Facilities) | Actual (Global Unsecured Credit Facilities) | | :---------------------------------------- | :-------------------------------------------- | :------------------------------------------ | | Total outstanding debt / total assets | Less than 60% (5) | 33% | | Secured debt / total assets | Less than 40% (7) | 3% | | Consolidated EBITDA / interest expense | N/A | N/A | | Fixed charge coverage | Greater than 1.50x | 4.5x | - The company's total unencumbered assets to unsecured debt ratio was 251% for most Unsecured Senior Notes and 275% for specific notes, significantly exceeding the 'Greater than 150%' requirement[70][71][72] Internal Growth & Portfolio Performance Same-Capital Operating Trend Summary Digital Realty's stabilized portfolio showed positive internal growth in Q1 2025, with total revenue increasing 3.0% YoY and Net Operating Income (NOI) growing 4.7% YoY. Cash NOI also saw a 3.9% YoY increase, while occupancy remained stable at 82.7% | Metric | 31-Mar-25 | 31-Mar-24 | % Change YoY | | :---------------------------------------- | :----------- | :----------- | :----------- | | Rental revenues | $719,355 | $689,987 | 4.3% | | Total Revenue | $1,053,488 | $1,022,582 | 3.0% | | Total Expenses | $470,409 | $465,874 | 1.0% | | Net Operating Income (2) | $583,079 | $556,708 | 4.7% | | Cash Net Operating Income (3) | $583,454 | $561,403 | 3.9% | | Constant Currency Cash Net Operating Income | $589,194 | $561,403 | 5.0% | | Stabilized Portfolio occupancy at period end (5) | 82.7% | 82.4% | 0.3% | Summary of Leasing Activity - New New leasing activity in Q1 2025 generated $227.7 million in annualized GAAP rent across 752 thousand net rentable square feet (NRSF) and 77.3 megawatts. The weighted average lease term for new leases was 10.4 years, with >1 MW leases having a significantly longer term | Metric | 0-1 MW (1Q25) | > 1 MW (1Q25) | Total (1Q25) | | :---------------------------------------- | :------------ | :------------ | :----------- | | Annualized GAAP Rent (in thousands) | $54,122 | $172,129 | $227,655 | | Kilowatt leased | 15,502 | 61,801 | 77,303 | | NRSF (in thousands) | 186 | 542 | 752 | | Weighted Average Lease Term (years) | 3.8 | 12.6 | 10.4 | | GAAP rent per Kilowatt | $291 | $232 | $244 | | GAAP rent per NRSF | $290 | $318 | $303 | Summary of Leasing Activity - Renewals Digital Realty renewed leases representing 39,715 kilowatts and 798 thousand NRSF in Q1 2025. Rental rates on renewed leases increased by 5.6% on a cash basis and 7.1% on a GAAP basis. The overall retention ratio was 70.3%, with churn at 1.5% | Metric | 0-1 MW (1Q25) | > 1 MW (1Q25) | Total (1Q25) | | :---------------------------------------- | :------------ | :------------ | :----------- | | Leases renewed (Kilowatt) | 37,215 | 2,500 | 39,715 | | Leases renewed (NRSF in thousands) | 499 | 26 | 798 | | Weighted Term (years) | 1.2 | 3.0 | 2.2 | | % Change Cash Rent Per NRSF | 3.8% | 4.6% | 5.6% | | % Change GAAP Rent Per NRSF | 4.1% | 11.2% | 7.1% | | Retention ratio (5) | 75.4% | 21.0% | 70.3% | | Churn (6) | 2.5% | 0.7% | 1.5% | Lease Expirations - By Size The report details lease expirations by size category and year, showing that 19.3% of total annualized rent is set to expire in 2025, primarily from 0-1 MW leases. The total annualized rent from expiring leases is $3.81 billion | Year | Annualized Rent (in thousands) | % of Total Annualized Rent | | :---------- | :----------------------------- | :------------------------- | | Month to Month | $68,208 | 1.8% | | 2025 | $734,635 | 19.3% | | 2026 | $636,127 | 16.7% | | 2027 | $420,012 | 11.0% | | 2028 | $299,863 | 7.9% | | 2029 | $387,337 | 10.2% | | 2030 | $291,163 | 7.6% | | 2031 | $175,309 | 4.6% | | 2032 | $137,102 | 3.6% | | 2033 | $104,138 | 2.7% | | 2034 | $175,064 | 4.6% | | Thereafter | $377,683 | 9.9% | | Total / Wtd. Avg. | $3,806,641 | 100.0% | Top 20 Customers by Annualized Rent Digital Realty's top 20 customers account for 50.9% of annualized recurring revenue, totaling $2.16 billion. The largest customer, a Fortune 50 Software Company, contributes 11.7% of revenue with a weighted average remaining lease term of 8.8 years | Customer | Number of Locations | Annualized Recurring Revenue (1) | % of Annualized Recurring Revenue | Weighted Average Remaining Lease Term in Years | | :-------------------------------- | :------------------ | :------------------------------- | :-------------------------------- | :--------------------------------------------- | | Fortune 50 Software Company | 73 | $500,501 | 11.7% | 8.8 | | Oracle Corporation | 43 | $280,104 | 6.6% | 9.4 | | Social Content Platform | 30 | $233,027 | 5.5% | 3.5 | | Global Cloud Provider | 64 | $201,038 | 4.7% | 4.6 | | IBM | 36 | $114,227 | 2.7% | 2.8 | | Equinix | 16 | $92,218 | 2.2% | 5.4 | | LinkedIn Corporation | 7 | $84,500 | 2.0% | 3.4 | | Fortune 25 Investment Grade-Rated Company | 29 | $67,330 | 1.6% | 1.7 | | Meta Platforms, Inc. | 48 | $66,034 | 1.5% | 3.4 | | Social Media Platform | 4 | $63,631 | 1.5% | 6.1 | | Specialized Cloud Provider | 3 | $58,770 | 1.4% | 4.4 | | Fortune 25 Tech Company | 54 | $55,496 | 1.3% | 3.1 | | Lumen Technologies, Inc. | 130 | $54,196 | 1.3% | 8.3 | | AT&T | 77 | $49,122 | 1.2% | 2.5 | | Comcast Corporation | 43 | $45,949 | 1.1% | 3.3 | | Fortune 500 SaaS Provider | 9 | $41,652 | 1.0% | 2.6 | | JPMorgan Chase & Co. | 19 | $40,643 | 1.0% | 3.2 | | Rackspace | 25 | $38,558 | 0.9% | 8.6 | | Morgan Stanley | 13 | $37,740 | 0.9% | 4.2 | | Zayo | 121 | $36,202 | 0.8% | 1.5 | | Total / Weighted Average | | $2,160,938 | 50.9% | 6.0 | Occupancy Analysis Digital Realty's total portfolio occupancy stood at 84.0% as of March 31, 2025, with significant variations across metropolitan areas and regions. North America reported 85.0% occupancy, EMEA 77.8%, and Asia Pacific 81.8%. The company has substantial space under active and future development | Metropolitan Area | Net Rentable Square Feet (1) | Space Under Active Development (2) | Space Held for Development (3) | Annualized Rent (4) | Occupancy (5) (31-Mar-25) | White Space IT Load (6) | Data Center Count | | :-------------------------- | :--------------------------- | :--------------------------------- | :----------------------------- | :------------------ | :------------------------ | :---------------------- | :------------------ | | North America Total/Weighted Average | 20,000 | 2,779 | 1,025 | $2,034,333 | 85.0% | 1,155.3 | 101 | | Northern Virginia | 5,334 | 1,609 | 254 | $652,278 | 93.7% | 478.5 | 18 | | Chicago | 2,262 | 553 | 48 | $232,255 | 92.9% | 81.0 | 7 | | New York | 1,640 | — | 100 | $211,732 | 75.1% | 64.7 | 11 | | EMEA Total/Weighted Average | 10,851 | 4,037 | 738 | $1,446,141 | 77.8% | 769.1 | 118 | | London | 1,402 | 23 | 76 | $237,568 | 63.8% | 98.9 | 13 | | Frankfurt | 1,829 | 1,343 | — | $226,939 | 83.7% | 117.4 | 24 | | Amsterdam | 1,332 | 222 | 92 | $189,063 | 86.2% | 116.3 | 13 | | Asia Pacific Total/Weighted Average | 1,577 | 66 | 289 | $274,786 | 81.8% | 123.9 | 11 | | Singapore | 793 | — | 97 | $213,413 | 90.5% | 72.1 | 3 | | Portfolio Total/Weighted Average | 41,778 | 9,463 | 5,062 | $4,685,166 | 84.0% | 2,765.0 | 308 | External Growth & Development Development Lifecycle Digital Realty has substantial development capacity, with 3,000 MW of land and 470 MW of shell capacity globally. Data center construction projects total 814 MW, with 63% leased and an average stabilized yield of 12.5%. The Americas region leads in total expected investment | Region | Land (MW) | Shell (MW) | Data Center Construction (MW) | % Leased | Average Yields | | :-------- | :-------- | :--------- | :---------------------------- | :------- | :------------- | | Americas | 1,900 | 210 | 499 | 79% | 13.9% | | EMEA | 870 | 200 | 249 | 32% | 11.3% | | APAC | 230 | 60 | 65 | 61% | 9.8% | | Total | 3,000 | 470 | 814 | 63% | 12.5% | - Total expected investment for data center construction (100% share) is $9.34 billion, with Digital Realty's share at $6.97 billion[98] Construction Projects in Progress As of March 31, 2025, Digital Realty's total land held and development construction in progress (CIP) amounted to $14.997 billion (100% share), with $7.122 billion already invested. Data center construction represents the largest component, with $3.674 billion in current investment | Construction Projects in Progress | Current Investment (100% Share) | Future Investment (100% Share) | Total Investment (100% Share) | | :-------------------------------- | :------------------------------ | :----------------------------- | :---------------------------- | | Future Development Capacity | $2,992,474 | $2,037,362 | $5,029,836 | | Data Center Construction | $3,673,621 | $5,666,085 | $9,339,706 | | Equipment Pool & Other Inventory | $216,089 | — | $216,089 | | Campus, Tenant Improvements & Other | $239,564 | $171,892 | $411,456 | | Total Land Held and Development CIP | $7,121,748 | $7,875,339 | $14,997,087 | | Total Land Held and Construction in Progress | $7,169,086 | $7,925,720 | $15,094,806 | - Digital Realty's share of total land held and construction in progress is $12.155 billion, with $5.993 billion in current investment[103] Historical Capital Expenditures and Investments in Real Estate Total direct capital expenditures for Q1 2025 were $727.5 million, primarily driven by development spending of $686.6 million. Recurring capital expenditures were $35.3 million, a significant decrease from the previous quarter | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Non-Recurring Capital Expenditures | | | | | Development (2) | $686,622 | $528,356 | $549,522 | | Enhancements and Other Non-Recurring | $5,588 | $13,384 | $7,738 | | Total Non-Recurring Capital Expenditures | $692,210 | $541,740 | $557,260 | | Recurring Capital Expenditures (3) | $35,305 | $130,245 | $47,676 | | Total Direct Capital Expenditures | $727,515 | $671,985 | $604,936 | | Capitalized Interest | $30,095 | $34,442 | $28,522 | | Capitalized Overhead | $29,693 | $28,983 | $25,857 | | Total Indirect Capital Expenditures | $59,788 | $63,425 | $54,379 | | Total Improvements to and Advances for Investment in Real Estate | $787,303 | $735,410 | $659,315 | Acquisitions / Dispositions / Joint Ventures In Q1 2025, Digital Realty completed acquisitions totaling $130.8 million, including land parcels in Charlotte, NC, and a 50% interest in a joint venture for two data centers in Jakarta, Indonesia. No dispositions or joint venture contributions were closed during the quarter | Acquisition Property | Property Type | Metropolitan Area | Date Acquired | Purchase Price (1) | | :------------------------ | :---------------- | :---------------- | :------------ | :----------------- | | Moores Chapel Road | Land | Charlotte, NC | 2/18/2025 | $20,000 | | CGK10 & CGK11 (5) | Land and Buildings| Jakarta, Indonesia| 3/13/2025 | $94,731 | | 712 E 5th St & 725 E Trade St | Land | Charlotte, NC | 3/26/2025 | $16,100 | | Total | | | | $130,831 | - The acquisition of CGK10 & CGK11 in Jakarta, Indonesia, represents a 50% interest in a joint venture for approximately $95 million[118] Unconsolidated Joint Ventures Digital Realty's unconsolidated joint ventures reported total assets of $13.3 billion and total liabilities of $6.74 billion as of March 31, 2025. For Q1 2025, these JVs generated $357.2 million in total revenues and $199.4 million in Net Operating Income (NOI). Digital Realty's pro rata share of JV Cash NOI was $70.2 million | Metric | 31-Mar-25 (Total at JV's 100% Share) | | :---------------------------------------- | :----------------------------------- | | Gross cost of operating real estate | $11,216,480 | | Total Assets | $13,295,902 | | Debt | $4,863,726 | | Other liabilities | $1,880,782 | | Equity / (deficit) | $6,551,394 | | Total Liabilities and Equity | $13,295,902 | | Digital Realty's Pro Rata Share of Unconsolidated JV Debt | $1,697,287 | | Total revenues | $357,237 | | Operating expenses | ($157,877) | | Net Operating Income (NOI) | $199,360 | | Cash Net Operating Income (NOI) | $189,210 | | Digital Realty's Pro Rata Share of Unconsolidated JV Cash NOI | $70,205 | | Digital Realty's Pro Rata Share of Core FFO (5) | $41,804 | Additional Information & Non-GAAP Measures Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios Digital Realty's EBITDA for Q1 2025 was $658.4 million, and Adjusted EBITDA was $791.2 million, reflecting various non-core adjustments. Key financial ratios include an interest coverage ratio of 5.3x and a Net Debt-to-Adjusted EBITDA of 5.1x | Metric | 31-Mar-25 | 31-Dec-24 | 31-Mar-24 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Net Income / (Loss) Available to Common Stockholders | $99,793 | $179,388 | $271,327 | | Interest | $98,464 | $104,742 | $109,535 | | Depreciation & amortization | $443,009 | $455,355 | $431,102 | | EBITDA | $658,400 | $746,578 | $835,446 | | Unconsolidated JV real estate related depreciation & amortization | $55,861 | $49,463 | $47,877 | | Transaction and integration expenses | $39,902 | $11,797 | $31,839 | | (Gain) / loss on sale of investments | ($1,111) | ($144,885) | ($277,787) | | Adjusted EBITDA | $791,156 | $751,276 | $710,556 | | Interest coverage ratio (5) | 5.3x | 4.5x | 4.3x | | Fixed charge coverage ratio (7) | 4.9x | 4.2x | 4.1x | | Net Debt-to-Adjusted EBITDA (13) | 5.1x | 4.8x | 6.1x | Management Statements on Non-GAAP Measures This section provides comprehensive definitions and discussions of non-GAAP financial measures used by Digital Realty, including FFO, Core FFO, AFFO, EBITDA, Adjusted EBITDA, NOI, and Cash NOI. It clarifies their utility as supplemental performance indicators while acknowledging their limitations compared to GAAP measures - FFO is a non-GAAP measure that excludes real estate related depreciation and amortization and gains/losses from property dispositions, providing insight into occupancy rates, rental rates, and operating costs[130] - Core FFO further adjusts FFO by excluding certain non-core revenue and expense streams, such as transaction and integration expenses, and FX revaluation gains/losses, to reflect core business operating performance[131] - AFFO is presented to assess the company's ability to fund dividend and distribution requirements from operating activities, adjusting Core FFO for non-real estate depreciation, non-cash compensation, straight-line rents, and recurring capital expenditures[132] - EBITDA and Adjusted EBITDA are used to view performance without the impact of non-cash depreciation/amortization or the cost of debt, with Adjusted EBITDA including further adjustments for unconsolidated JV items and non-core adjustments[133] - NOI and Cash NOI measure property operating performance, with Cash NOI adjusting for straight-line rents and above/below-market rent amortization[136] Forward-Looking Statements This section serves as a disclaimer, highlighting that the document contains forward-looking statements based on current expectations and assumptions. It emphasizes that actual results may differ materially due to various risks and uncertainties, including economic conditions, competition, operational challenges, and regulatory changes, and disclaims any obligation to update these statements - The document contains forward-looking statements based on current expectations, forecasts, and assumptions, which involve risks and uncertainties that could cause actual outcomes and results to differ materially[143] - Key risks include reduced demand for data centers, decreased rental rates, increased competition, infrastructure suitability issues, development delays, global economic conditions, supply chain disruptions, inflation, customer dependence, geopolitical instability, and regulatory changes[145] - The company expressly disclaims any responsibility to update forward-looking statements, whether as a result of new information, future events, or otherwise[144]