DigitalBridge (DBRG) - 2025 Q2 - Quarterly Results

Introduction and Disclaimers This section provides cautionary statements regarding forward-looking information, outlining potential risks and disclaiming future updates Cautionary Statement Regarding Forward-Looking Statements This statement warns that forward-looking information is subject to risks and uncertainties, potentially causing actual results to differ materially - The presentation includes forward-looking statements subject to known and unknown risks, uncertainties, and contingencies, which may cause actual results to differ significantly[4][5] - Factors influencing differences include market/political difficulties, inflation, interest rates, capital raising ability, investment performance, reliance on digital infrastructure, foreign market exposure, strategic expansion, climate change, data security, and regulatory changes[5] - Investors are cautioned not to unduly rely on forward-looking statements, which are current only as of the presentation date, with no obligation for updates[7] Second Quarter 2025 Results Overview This section summarizes DigitalBridge's Q2 2025 financial performance, including GAAP net income, Distributable Earnings, and strategic growth drivers Key Financial Highlights and Dividends DigitalBridge reported $17 million GAAP net income and an $18.6 million Distributable Earnings loss in Q2 2025, alongside dividend declarations and AI-driven growth 2Q 2025 Key Financial Results | Metric | Value | Per Share | | :----- | :---- | :-------- | | GAAP Net Income Attributable to Common Stockholders | $17 million | $0.10 | | Distributable Earnings | ($18.6 million) | ($0.10) | - A cash dividend of $0.01 per common share was declared, payable October 15, 2025, along with preferred stock dividends[11] - CEO Marc Ganzi highlighted a solid quarter with double-digit fee-related earnings growth, driven by AI tailwinds and landmark investments like Yondr and Takanock[14] GAAP Financial Results Details GAAP net income decreased to $17.0 million in 2Q25, with total revenues declining significantly due to a carried interest allocation reversal GAAP Financial Results (2Q25 vs. 2Q24) | Metric (in thousands) | 2Q24 | 2Q25 | | :-------------------- | :--- | :--- | | Revenues: | | | | Fee revenue | $78,605 | $85,262 | | Carried interest allocation | $288,244 | ($115,074) | | Principal investment income | $15,982 | $20,437 | | Other income | $7,505 | $6,168 | | Total revenues | $390,336 | ($3,207) | | Net income (loss) attributable to common stockholders | $76,763 | $16,962 | | Net income (loss) attributable to common stockholders per common share-basic | $0.44 | $0.10 | - Total revenues significantly decreased from $390.3 million in 2Q24 to a loss of $3.2 million in 2Q25, primarily due to a negative carried interest allocation of ($115.1 million)[16] Business Update This section details DigitalBridge's Q2 2025 business highlights, including financial growth, capital formation, strategic investments, and AI-driven market trends Second Quarter 2025 Business Highlights DigitalBridge achieved 8% YoY Fee Revenue growth to $85 million and 23% YoY FRE growth to $32 million in 2Q25, with strategic investments in data centers and power infrastructure - Fee Revenues grew +8% YoY to $85 million in 2Q25, supported by new Fee-Earning Equity Under Management (FEEUM) activation from the DBP Flagship series[26] - Fee-Related Earnings (FRE) grew +23% YoY to $32 million in 2Q25, demonstrating continued margin improvement as revenues outpaced expenses[26] - Closed the multi-billion Yondr data center acquisition (400MW+ in place, potential for 1GW+) and launched the Takanock powered-land strategy for Digital Energy[26] Capital Formation Metrics Mid-year fundraising is on track with $2.5 billion in new capital formation YTD and FEEUM reaching $39.7 billion, expecting further growth from DBP Series and new strategies - New capital formation reached $2.5 billion YTD 2025, including $1.3 billion in 2Q25, aligning with full-year objectives[22][28] - Fee-Earning Equity Under Management (FEEUM) reached $39.7 billion as of June 30, 2025, progressing towards the $40 billion target[28] - The co-invest fee rate is 30% higher than average, indicating strong LP interest in AI infrastructure[27][28] Investment Activities DigitalBridge invests in new platforms like Takanock and expands existing portfolio companies, closing the Yondr acquisition and securing significant financings for Switch and Vantage - New platform Takanock focuses on data center power infrastructure, serving hyperscale data centers[31] - The Yondr acquisition adds 420 MW of current leased capacity for hyperscale data centers, with 5.2 GW capital raised since 2024 for growth[31] - Significant debt financings were raised across North America, Europe, and APAC for Switch and Vantage data center platforms to accelerate growth and reduce borrowing costs[26][31] Market Trends and AI Demand Markets recovered in 2Q25 due to abating macro concerns and surging AI demand, with hyperscale CapEx forecasts increasing 50% to $380 billion for 2025 - The 2025 Hyperscaler CapEx forecast increased by 50% from $250 billion to $380 billion, driven by accelerating AI demand[34][35] - Google's monthly AI token volume doubled in 90 days to 980 trillion by July 2025, a 50x increase YoY, signaling an inflection in compute demand[37][38] - Global data center electricity consumption is forecasted to double from 416 TWh in 2024 to 946 TWh by 2030, necessitating massive energy investment[40] - The U.S. hyperscale data center leasing pipeline is at a historical high of ~4.9 GW[40] Financial Results This section details DigitalBridge's Q2 2025 financial performance, including Fee Revenue, Fee Related Earnings, Distributable Earnings, and FEEUM growth Second Quarter 2025 Financial Highlights DigitalBridge reported $85.4 million Fee Revenue (+8% YoY) and $32.0 million FRE (+23% YoY) in 2Q25, with a $18.6 million DE loss due to a realized fund loss 2Q 2025 Financial Highlights | Metric | Value | YoY Change | | :-------------------------------- | :---------- | :--------- | | Fee Revenue | $85.4 million | +8% | | Fee Related Earnings (FRE) | $32.0 million | +23% | | Distributable Earnings (DE) | ($18.6 million) loss | n/a | | Fee Earning Equity Under Management (FEEUM) | $39.7 billion | +21% | | New Capital Formation (2Q25) | $1.3 billion | n/a | | Available Corporate Cash (June 30, 2025) | $158 million | n/a | - A Distributable Earnings loss of $18.6 million in 2Q25 was primarily due to a $40 million realized loss from an InfraBridge fund investment, with no 2Q25 cash flow impact[42] - A common stock dividend of $0.01 per share was declared, with $48.2 million funded for GP commitments and $32.7 million for new initiative seed investments[42] Fee-Earning Equity Under Management (FEEUM) Growth FEEUM grew by $7.0 billion (+21% YoY) to $39.7 billion as of June 30, 2025, driven by organic capital formation from Co-Invest and DBP series FEEUM Growth (in Billions) | Metric | 2Q24 | 1Q25 | 2Q25 | YoY Growth | | :----- | :--- | :--- | :--- | :--------- | | FEEUM | $32.7 | $37.3 | $39.7 | +21% | | New Capital Formation | $0.1 | $1.2 | $1.3 | +241% | - Growth was driven by organic capital formation from Co-Invest ($14.8 billion in 2Q25) and the DBP Series (collectively $17.3 billion in 2Q25)[44][101] Non-GAAP Financial Results Non-GAAP Fee Revenue increased 8% YoY to $85.4 million, FRE grew 23% YoY to $32.0 million with a 37% margin, while DE was a ($18.6 million) loss due to realized investment losses Non-GAAP Financial Results (2Q25 vs. 2Q24) | Metric (in millions) | 2Q24 | 2Q25 | % Change YoY | | :------------------- | :--- | :--- | :----------- | | Fee Revenue | $78.7 | $85.4 | +8% | | Cash Compensation | ($35.6) | ($36.5) | +2% | | Administrative and Other Expenses | ($17.1) | ($16.9) | (1)% | | Fee Related Earnings (FRE) | $26.0 | $32.0 | +23% | | Realized Principal Investment Income (Loss) | $7.6 | ($34.0) | n/a | | Distributable Earnings (DE) | $19.6 | ($18.6) | n/a | | FRE Margin | 33% | 37% | +4 ppts | | FRE Per Basic Share | $0.14 | $0.17 | n/a | | After-tax DE Per Basic Share | $0.11 | ($0.10) | n/a | - The FRE Margin improved from 33% in 2Q24 to 37% in 2Q25, indicating enhanced operational efficiency[45] - Realized Principal Investment Income shifted from a $7.6 million gain in 2Q24 to a $34.0 million loss in 2Q25, significantly impacting DE[45] Carried Interest & Principal Investment Income DigitalBridge reported a net carried interest reversal of $11.6 million in 2Q25, while net principal investment income increased to $21.5 million, driven by unrealized gains despite realized losses Carried Interest (in millions) | Metric | 2Q24 | 2Q25 | % Change YoY | | :----- | :--- | :--- | :----------- | | Unrealized Carried Interest Allocation (Reversal) | $288.1 | ($115.1) | n/a | | Realized Carried Interest Allocation | $0.1 | $0.0 | n/a | | Carried Interest - Revenue (GAAP) | $288.2 | ($115.1) | n/a | | Carried Interest Allocation (Reversal), Net | $75.1 | ($11.6) | n/a | Principal Investment Income (in millions) | Metric | 2Q24 | 2Q25 | % Change YoY | | :----- | :--- | :--- | :----------- | | Unrealized Principal Investment Income | $7.8 | $54.2 | +594% | | Realized Principal Investment Income (Loss) | $8.2 | ($33.8) | n/a | | Principal Investment Income (GAAP) | $16.0 | $20.4 | +28% | | Principal Investment Income, Net | $13.7 | $21.5 | +57% | - A net carried interest reversal of $11.6 million occurred in 2Q25, a significant shift from a $75.1 million net allocation in 2Q24, primarily due to unrealized reversals[48][52] Financial Profile & FEEUM Progression LTM Fee Revenue and FRE increased to $354 million and $129 million, respectively, driven by FEEUM growth from $37.3 billion to $39.7 billion in 2Q25 with $3.4 billion in inflows LTM Fee Revenue and FRE Profile (in millions) | Metric | 2Q24 LTM | 1Q25 LTM | 2Q25 LTM | | :----- | :------- | :------- | :------- | | LTM Fee Revenue | $292 | $347 | $354 | | LTM FRE | $90 | $122 | $129 | | FRE Margin | 31% | 35% | 36% | FEEUM Roll-forward (in Billions) | Metric | 1Q25 | 2Q25 | | :----- | :--- | :--- | | Beginning Period Balance | $37.3 | $37.3 | | Inflows | $2.0 | $3.4 | | Outflows/Realizations | ($0.3) | ($0.9) | | Market Activity | $0.1 | $0.0 | | End of Period Balance | $37.3 | $39.7 | - FEEUM inflows of $3.4 billion in 2Q25 indicate strong capital formation, contributing to overall growth[54] Balance Sheet Profile Key Corporate Assets increased 7% YoY to $1,584 million, driven by GP Affiliated Investments, while Key Corporate Liabilities remained flat at $1,122 million with $158 million available cash Key Corporate Assets (as of 6/30/2025, in millions) | Asset Category | Amount | | :------------- | :----- | | DBP Series | $402 | | DataBank and Vantage SDC | $635 | | Other Funds & Investments | $389 | | Total GP Affiliated Investments | $1,426 | | Available Corporate Cash | $158 | | Total Key Corporate Assets | $1,584 | Key Corporate Liabilities (as of 6/30/2025, in millions) | Liability Category | Amount | Blended Avg. Cost (Per Annum) | | :----------------- | :----- | :---------------------------- | | Corporate Debt | $300 | 3.9% | | Preferred Stock | $822 | 7.1% | | Total Key Corporate Liabilities | $1,122 | n/a | - Available corporate cash stood at $158 million as of June 30, 2025, with full availability of a $100 million revolver[42][57][58] Executing the Digital Playbook This section outlines DigitalBridge's strategic initiatives and investments, demonstrating the execution of its long-term 'digital playbook' for digital infrastructure opportunities New Initiatives Aligned with Long-Term Playbook New initiatives and investments align with the 'digital playbook,' focusing on establishing, transforming, and scaling platforms through customer-driven investment frameworks and domain expertise - The 'digital playbook' comprises three phases: Establish Platforms, Transform and Scale, and Follow the Logos, leveraging capital, operating expertise, and customer-driven investment[63] - New initiatives and investments in 2025 leverage deep domain expertise to execute the digital playbook, focusing on greenfield and strategic M&A[62][63] Takanock: Digital Power Opportunity DigitalBridge partnered with ArcLight to launch Takanock, committing up to $500 million for data center power infrastructure, with a 5.3GW+ generation capacity footprint in three states - DigitalBridge partnered with ArcLight to launch Takanock, committing up to $500 million for data center power infrastructure solutions[65][67] - Takanock's model focuses on developing shovel-ready powered land and onsite power generation to accelerate hyperscale data center deployment in power-constrained markets[67] - Takanock boasts a 5.3GW+ generation capacity footprint in three states, offering faster time to power, fully entitled sites, and elimination of diesel generators[70][73][74] Yondr: Data Center Platform Investment DigitalBridge strategically invested in Yondr, a hyperscale data center developer with ~1 GW landbank and 1GW+ development capacity, implementing a 'Transform & Scale' playbook including divestment and new leadership - Strategic investment in Yondr, a global hyperscale data center developer/operator, aims to accelerate growth and meet unprecedented AI demand[76] - Yondr possesses a ~1 GW landbank and 1GW+ of development capacity, strengthening DigitalBridge's global hyperscale portfolio[76] - The 'Transform and Scale' playbook for Yondr includes divesting EverYondr (India) to focus on Tier 1 markets and appointing new senior leadership like Aaron Wangenheim (CEO) and Sandip Mahajan (CFO)[78][79][80] Switch: Capital Expansion for Growth Switch expanded its borrowing base and revolving credit facilities to $10 billion, raising $11 billion since 2024 to fund AI growth, reduce costs, and retire bank debt - Switch expanded its borrowing base and revolving credit facilities to $10 billion as of July 15, 2025[81][83] - Raised $11 billion (including debt) since 2024 to fund AI growth, reduce capital costs, and retire 100% of bank debt from its 2022 take-private transaction[82][84] - Improvements include broadening of instruments, issuer-friendly amendments, and the first-ever ABS rated under S&P's new data center ABS methodology[84] AI Factories: Building at Unprecedented Scale DigitalBridge is building AI factories at an unprecedented scale, leveraging its 8 global platforms with 5.4 GW of data center capacity and 20.9 GW total secured power, supported by $43 billion in CapEx for 2025-2026 - DigitalBridge's 8 global platforms have 5.4 GW of built and under-construction data center capacity[88] - Total secured power across the data center portfolio is 20.9 GW, forming a significant 'power bank'[88] - Portfolio CapEx of $43 billion is planned for 2025-2026 to support this unprecedented scale of AI infrastructure build-out[88] Translating Scale into Shareholder Value DigitalBridge expects its data center capacity build-out to generate significant shareholder value through carried interest, potentially translating to over $1.50 of value per share per GW at scale - Capacity built and under construction (5.4 GW) is expected to generate significant embedded value for shareholders[90][91] Illustrative Value Creation per MW | Metric | Value | | :----- | :---- | | Capex per MW | $10,000,000 | | Original Equity Invested | $5,000,000 | | Net Equity Value per MW (Year 3) | $10,372,000 | | Equity Profit per MW | $5,372,000 | | DBRG Shareholder Value per MW | $290,088 | | DBRG $ Value/Share/GW | $1.55 | - At Gigawatt scale, this translates to $290 million in potential DBRG shareholder carry, representing potentially over $1.50 of value per share per GW[129][130] Key Priorities for 2025 DigitalBridge delivered strong first-half results with Management Fee Revenue up 10%+ YoY and FRE up 25%+ YoY, prioritizing 2025 financial metrics, FEEUM growth, new strategies, and M&A for the second half - First half delivered Management Fee Revenue up 10%+ YoY and Fee-Related Earnings (FRE) up 25%+ YoY[96] - Second half priorities include delivering 2025 financial metrics (FRE up 10-20% YoY, expanding margins) and successfully forming capital to take FEEUM over $40 billion[96] - Launch new investment strategies including digital energy, stabilized data centers, and private wealth, while evaluating strategic, accretive M&A opportunities[96] Q&A Session This section presents the question and answer session following the financial results presentation Supplemental Financial Data This section provides additional detailed financial metrics, reconciliations, and performance data to supplement the main financial results Summary Financial Metrics This section summarizes GAAP and Non-GAAP financial metrics, highlighting fluctuating net income, consistent dividends, and growth in FRE and FEEUM despite negative DE in 2Q25 Summary Financial Metrics (2Q25 vs. 2Q24) | Metric (in thousands, except per share) | 2Q24 | 2Q25 | | :-------------------------------------- | :--- | :--- | | GAAP Fee revenue | $78,605 | $85,262 | | Net income (loss) attributable to common stockholders | $76,763 | $16,962 | | Net income (loss) attributable to common stockholders per basic share | $0.44 | $0.10 | | Common dividend per share | $0.01 | $0.01 | | Fee Related Earnings ("FRE") Fee Revenue | $78,688 | $85,371 | | Fee Related Earnings | $25,968 | $31,975 | | FRE per basic share | $0.14 | $0.17 | | Distributable Earnings ("DE") | $19,629 | ($18,618) | | DE per basic share | $0.11 | ($0.10) | | Fee Earning Equity Under Management ("FEEUM") (in billions) | $32.7 | $39.7 | | Total assets | $3,502,420 | $3,408,581 | | Total debt principal | $300,000 | $300,000 | | Available corporate cash | $127,260 | $158,260 | - FEEUM has shown consistent growth, increasing from $32.7 billion in 2Q24 to $39.7 billion in 2Q25[99] - Distributable Earnings per basic share turned negative in 2Q25 at ($0.10) compared to $0.11 in 2Q24[99] FEEUM, Fee Related Earnings & Distributable Earnings Details This section details FEEUM by strategy and components of FRE and DE, showing FEEUM growth across DBP series and Co-Investment Vehicles, with FRE increasing to $32.0 million but DE turning negative due to realized investment losses FEEUM by Strategy (in millions, as of 6/30/25) | Strategy | FEEUM | Blended Fee Rate | | :-------------------------------- | :------ | :--------------- | | DigitalBridge Partners I (DBP I) | $3,569 | 1.10% | | DigitalBridge Partners II (DBP II) | $7,295 | 1.18% | | DigitalBridge Partners III (DBP III) | $6,402 | 1.18% | | Co-Investment Vehicles | $14,842 | 0.43% | | InfraBridge | $3,701 | 1.12% | | Core, Credit and Liquid Strategies | $2,758 | 0.73% | | Separately Capitalized Portfolio Companies | $1,172 | 0.81% | | Total FEEUM | $39,739 | 0.84% | FRE and DE Components (in thousands, 2Q25) | Metric | Amount | | :-------------------------------------------------------------------------------- | :----- | | Fee revenue | $85,371 | | Cash compensation | ($36,459) | | Administrative and other expenses | ($16,937) | | Fee Related Earnings (FRE) | $31,975 | | Realized principal investment income | ($33,957) | | Interest expense and preferred dividends | ($18,093) | | Distributable Earnings (DE) | ($18,618) | - Realized principal investment income was a significant negative contributor to DE in 2Q25, at ($33.9 million)[101] Fund Performance This section presents key fund performance metrics, showing strong Net IRRs for DBP I (9.0%) and DBP II (8.0%), while InfraBridge GIF II shows negative Net IRR Key Fund Performance Metrics (as of June 30, 2025) | Fund | Inception Date | Total Commitments (millions) | Invested Capital (millions) | Total Investment Value (millions) | Net MOIC | Net IRR | | :----- | :------------- | :--------------------------- | :-------------------------- | :-------------------------------- | :------- | :------ | | DBP I | Mar-2018 | $4,059 | $4,825 | $7,540 | 1.4x | 9.0% | | DBP II | Nov-2020 | $8,286 | $8,057 | $10,928 | 1.2x | 8.0% | | SAF | Nov-2022 | $1,110 | $994 | $1,130 | 1.1x | 4.7% | | GIF I | Mar-2015 | $1,411 | $1,504 | $2,438 | 1.4x | 6.6% | | GIF II | Jun-2018 | $3,382 | $3,160 | $2,611 | 0.7x | <0% | | Credit I | Dec-2022 | $697 | $635 | $699 | 1.1x | 6.5% | - DBP I and DBP II (Value-Add funds) demonstrate strong performance with Net MOIC of 1.4x and 1.2x, and Net IRRs of 9.0% and 8.0% respectively[105] - InfraBridge GIF II shows underperformance with a Net MOIC of 0.7x and a negative Net IRR[105] Capitalization As of June 30, 2025, DigitalBridge's capitalization includes $300 million in Securitized Notes at 3.933% and $821.9 million in total preferred stock across Series H, I, and J Capitalization (as of June 30, 2025, in thousands) | Instrument | Amount Outstanding | Interest Rate (Per Annum) | | :------------------------------------------ | :----------------- | :------------------------ | | Securitized Notes - Class A-2 Term Notes | $300,000 | 3.933% | | Revolver - Class A-1 Variable Funding Notes (Maximum Available) | $100,000 | Adjusted 1M Term SOFR + 3.00% | | Series H 7.125% Cumulative Redeemable Perpetual Preferred Stock | $209,870 | 7.125% | | Series I 7.15% Cumulative Redeemable Perpetual Preferred Stock | $321,668 | 7.15% | | Series J 7.125% Cumulative Redeemable Perpetual Preferred Stock | $290,361 | 7.125% | | Total Preferred Stock | $821,899 | n/a | - Revolver availability was reduced from $300 million to $100 million in 2Q25, reflecting cost savings and strong liquidity[42][111] GP Affiliated Investments Total GP Affiliated Investments (Consolidated) increased to $1,667.9 million in 2Q25, with the Operating Company's share rising to $1,426.4 million, driven by DBP Series and DataBank/Vantage SDC GP Affiliated Investments (in thousands) | Category | 2Q24 Consolidated | 2Q25 Consolidated | 2Q24 Operating Company Share | 2Q25 Operating Company Share | | :---------------------------------------------------- | :---------------- | :---------------- | :--------------------------- | :--------------------------- | | DBP Series | $452,604 | $533,397 | $321,917 | $401,722 | | DataBank and Vantage SDC | $674,900 | $640,000 | $670,463 | $635,335 | | Other Funds & Investments | $399,066 | $494,546 | $356,055 | $389,337 | | Total GP Affiliated Investments | $1,526,570 | $1,667,943 | $1,348,435 | $1,426,394 | - DBP Series investments saw a notable increase in both consolidated and operating company shares from 2Q24 to 2Q25[113] Balance Sheet As of June 30, 2025, total assets decreased to $3,408.6 million, primarily due to lower investments, while total liabilities also decreased, and stockholders' equity increased to $2,018.5 million Balance Sheet (in thousands) | Metric | Dec 31, 2024 | June 30, 2025 | | :------------------------------------------ | :----------- | :------------ | | Cash and cash equivalents | $302,154 | $340,698 | | Investments | $2,492,268 | $2,389,801 | | Total assets | $3,513,318 | $3,408,581 | | Debt | $296,362 | $297,992 | | Other liabilities | $725,766 | $659,761 | | Total liabilities | $1,022,128 | $957,753 | | Stockholders' equity | $1,958,582 | $2,018,531 | - Investments decreased by approximately $102.5 million from December 31, 2024, to June 30, 2025[115] - Stockholders' equity increased by $59.9 million, indicating an improvement in the company's net worth[115] Distributable Earnings & Fee Related Earnings Reconciliation This section reconciles GAAP net income to Distributable Earnings (DE) and Fee Related Earnings (FRE). In 2Q25, DE was ($18.6 million) and FRE was $32.0 million, with key adjustments including unrealized principal investment income/loss and unrealized carried interest DE & FRE Reconciliation (in thousands, 2Q25) | Metric | Amount | | :-------------------------------------------------------------------------------- | :----- | | Net income (loss) attributable to common stockholders | $16,962 | | Net income (loss) attributable to Operating Company | $18,044 | | Adjustments (e.g., unrealized principal investment income, unrealized carried interest, equity-based compensation, depreciation) | ($36,662) | | Distributable Earnings (After Tax) | ($18,618) | | Realized principal investment income | $33,957 | | Interest expense and preferred dividends | $18,093 | | Income tax (benefit) expense | $753 | | Fee Related Earnings | $31,975 | - Unrealized principal investment income (loss) was ($55.4 million) in 2Q25, a major adjustment from GAAP net income to DE[118] - Unrealized carried interest, net of associated expense, was $11.6 million in 2Q25, also impacting the DE calculation[118] Reconciliations This section provides detailed reconciliations for FRE Fee Revenue, Cash Compensation, Administrative Expenses, DE Realized Principal Investment Income, Carried Interest, and weighted average shares/OP units FRE Fee Revenue Reconciliation (in thousands, 2Q25) | Metric | Amount | | :-------------------------------------------------------------------------------- | :----- | | GAAP Fee Revenue | $85,262 | | Consolidated Funds | $109 | | Incentive Fees | $0 | | FRE Fee Revenue | $85,371 | DE Realized Principal Investment Income Reconciliation (in thousands, 2Q25) | Metric | Amount | | :-------------------------------------------------------------------------------- | :----- | | GAAP Principal Investment Income | $20,437 | | Unrealized Principal Investment (Income) Loss | ($54,256) | | Noncontrolling Interests in Realized Principal Investment Income | ($138) | | DE Realized Principal Investment Income | ($33,957) | FEEUM and DE Weighted Average Basic Shares and OP Units (in thousands, 2Q25) | Metric | Amount | | :-------------------------------------------------------------------------------- | :----- | | GAAP Weighted Average Basic Shares Outstanding | 173,059 | | Weighted Average OP Units | 11,269 | | Weighted Average Unvested Restricted Stock | 4,169 | | Total Weighted Average Basic Shares and OP Units | 188,497 | Appendix This section provides supplementary information, including an illustration of shareholder value creation from data center capacity and definitions of non-GAAP financial measures Understanding the Value of a MW to DBRG Shareholder This section illustrates how data center capacity build-out translates into shareholder value, showing that $5 million equity per MW can yield $5.4 million equity profit, potentially over $1.50 per share per GW - Simple analysis suggests substantial value creation for DBRG shareholders via carried interest from data center capacity[129] Illustrative Value Creation per MW | Metric | Value | | :----- | :---- | | Capex per MW | $10,000,000 | | Original Equity Invested | $5,000,000 | | Net Equity Value per MW (Year 3) | $10,372,000 | | Equity Profit per MW | $5,372,000 | | DBRG Shareholder Value per MW | $290,088 | | DBRG $ Value/Share/GW | $1.55 | - At Gigawatt scale, this translates to $290 million in potential DBRG shareholder carry, representing potentially over $1.50 of value per share per GW[129][130] Important Note Regarding Non-GAAP Financial Measures This section defines and explains non-GAAP financial measures like Fee Related Earnings (FRE) and Distributable Earnings (DE), used to evaluate financial performance and trends in investment management - FRE and DE are non-GAAP measures supplementing GAAP results, offering insight into underlying financial performance and investment management trends[132][133] - FRE assesses recurring fee revenue, net of compensation and administrative expenses, excluding non-recurring items such as distributed carried interest and placement fees[136][138] - DE represents net realized earnings, excluding unrealized gains/losses, non-cash expenses, and non-core items, to reflect ongoing operating performance and assess amounts available for distribution[141][143][145] Definitions This section defines key terms used in the presentation, including AUM, FEEUM, FRE Margin, GP Affiliated Investments, Operating Company (OP), and OP share - AUM represents the total capital for which services are provided, encompassing third-party capital and general partner capital[146] - FEEUM represents equity under management that earns management fees and/or incentive fees or carried interest, typically based on NAV or GAV[147] - FRE Margin % is calculated as FRE divided by FRE fee revenue, indicating operational efficiency[148]