Digital Realty Trust(US:DLR)2025-10-31 20:29Financial Performance - Total operating revenues for the nine months ended September 30, 2025, increased by approximately $358.9 million, or 8.7%, compared to the same period in 2024, reaching $4,478,021[219]. - Stabilized rental and other services revenue increased by approximately $160.7 million, or 5.3%, for the nine months ended September 30, 2025, primarily due to increases in new leasing and renewals across all regions[220]. - Non-stabilized rental and other services revenue increased by approximately $149.7 million, or 14.1%, for the nine months ended September 30, 2025, driven by the completion of the global development pipeline[221]. - Funds from Operations (FFO) available to common stockholders for the nine months ended September 30, 2025, was $1,741.111 million, compared to $1,482.508 million for the same period in 2024, reflecting a year-over-year increase of 17.4%[296]. - Basic FFO per share for the nine months ended September 30, 2025, was $5.05, up from $4.55 in 2024, representing an increase of 11%[296]. Occupancy and Portfolio - As of September 30, 2025, the consolidated portfolio occupancy rate was 83.1%, with 31,694 thousand square feet of net rentable space[201]. - The occupancy rate for the managed unconsolidated portfolio was 93.5% as of September 30, 2025[201]. - The company reported an occupancy rate of 85.5% for its North America data center properties as of September 30, 2025[201]. - The total portfolio, including managed and non-managed unconsolidated portfolios, consisted of 311 buildings with 42,706 thousand square feet of space as of September 30, 2025[201]. - As of September 30, 2025, the average remaining lease term was approximately five years, reflecting the long-term nature of the company's operations[204]. Capital Expenditures and Investments - The company expects to incur approximately $1.2 billion to $1.7 billion in capital expenditures for the remainder of 2025, influenced by demand and leasing results[263]. - Total capital expenditures for the nine months ended September 30, 2025, were $1,983.7 million, compared to $1,929.7 million for the same period in 2024[268]. - The company had open commitments related to construction contracts of approximately $2.3 billion as of September 30, 2025[262]. - The company completed a joint venture in March 2025 with Bersama Digital Infrastructure Asia, acquiring a 50% interest for approximately $94.7 million, supporting up to 32 megawatts of IT load[199]. - The company launched its first U.S. Hyperscale Data Center Fund, raising over $3 billion in equity commitments[276]. Debt and Financing - The company’s outstanding debt as of September 30, 2025, totaled $18,370 million, with 90.8% being fixed rate[279]. - The ratio of debt to total enterprise value was approximately 23.0% as of September 30, 2025[279]. - The Global Revolving Credit Facility allows borrowings up to $4.5 billion, with an additional potential increase of $1.8 billion, maturing on January 24, 2029[258]. - Interest expense decreased by $10.2 million and $26.7 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[239]. - The company experienced a decrease in cash provided by short-term borrowings by $516.209 million for the nine months ended September 30, 2025, compared to 2024[290]. Operating Expenses - Total property level operating expenses for the nine months ended September 30, 2025, increased by approximately $120.7 million, or 6.5%, compared to the same period in 2024, totaling $1,977,102[222]. - Total stabilized utilities expenses increased by approximately $7.8 million for the nine months ended September 30, 2025, primarily due to higher power pricing at certain properties[223]. - Total non-stabilized utilities expenses increased by approximately $14.4 million and $24.7 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[224]. - Total stabilized rental property operating and maintenance expenses (excluding utilities) increased by approximately $24.3 million and $46.5 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[226]. - Total other operating expenses increased by $121.996 million (20.1%) in the three months ended September 30, 2025, and $19.913 million (1.0%) in the nine months ended September 30, 2025, compared to the same periods in 2024[231]. Gains and Dispositions - The company recognized a gain on disposition of approximately $873 million from the contribution of operating data centers and development projects to a fund in May 2025[202]. - Gain on disposition of properties increased by $20.3 million and $501.8 million in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024[235]. - The company recognized a gain on the contribution of operating data centers to the Fund of approximately $873 million[276]. Cash Flow and Liquidity - As of September 30, 2025, the company had $3,299.7 million in cash and cash equivalents, excluding $6.3 million of restricted cash[258]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $1,693.2 million, an increase of $201.2 million from 2024[284]. - Cash provided by operating activities in 2025 increased by $201.2 million compared to 2024[285]. - Net cash used in investing activities increased by $77.231 million, primarily due to a decrease in cash provided by proceeds from the sale of real estate by $86.639 million[286]. - Cash provided by proceeds from secured/unsecured debt increased by $848.824 million, driven by new issuances of Guaranteed Notes[290]. Market and Economic Factors - The company anticipates that inflationary increases may be partially offset by contractual rent increases and expense escalations in its leases[294]. - Company is exposed to interest rate changes, with a potential increase in annual interest expense of $5 million following a 10% increase in interest rates[303]. - A 10% decrease in interest rates could lead to a decrease in fair value of fixed-rate debt by $173 million[303]. - Company mitigates foreign currency exchange risk by financing investments in local currencies and using cross-currency interest rate swaps[305]. - Changes in foreign currency relations to the U.S. dollar may impact revenues, operating margins, and stockholders' equity[305].