Digital Realty's Q4 Core FFO Tops Estimates, Revenues Grow Y/Y

Core Insights - Digital Realty Trust (DLR) reported a fourth-quarter 2024 constant currency core funds from operations (FFO) per share of $1.73, exceeding the Zacks Consensus Estimate of $1.69, with a year-over-year increase of 6.1% [1][4] - The company experienced steady leasing momentum with improved rental rates, although higher operating expenses impacted performance [2][6] Financial Performance - Operating revenues for the fourth quarter were $1.44 billion, slightly below the Zacks Consensus Estimate of $1.46 billion, but up 4.8% year-over-year [3] - For the full year 2024, constant currency core FFO per share was $6.72, a 2% increase from the previous year, surpassing the consensus estimate of $6.71 [4] - Adjusted EBITDA for the quarter was $751.3 million, reflecting a 7.4% year-over-year increase [7] Leasing and Revenue Growth - Total signed bookings in the fourth quarter are projected to generate $100 million in annualized GAAP rental revenues, with significant contributions from various categories [5] - Renewal leases signed during the quarter accounted for $250 million in annualized cash rental revenues, with rental rates increasing by 4.7% on a cash basis and 9.1% on a GAAP basis [6] Operating Expenses - Total operating expenses rose 4.5% year-over-year to $1.29 billion, driven by increased costs related to property operations, taxes, insurance, and general administration [6] Portfolio Activity - During the fourth quarter, DLR acquired several land parcels totaling approximately $201 million and disposed of three facilities for a total of $100 million [8][9] - The company also sold a 15.1% interest in a data center in Frankfurt for $74 million [9] Balance Sheet and Capital Management - DLR ended 2024 with cash and cash equivalents of $3.87 billion, up from $2.18 billion at the end of Q3 2024 [10] - Total debt outstanding was $16.7 billion, with a net debt-to-adjusted EBITDA ratio of 4.8X and a fixed charge coverage of 4.2X [11] 2025 Guidance - For 2025, DLR expects constant currency core FFO per share to be in the range of $7.05-$7.15, with total revenues projected between $5.80-$5.90 billion [13] - The company anticipates rental rates on renewal leases to increase by 4-6% on a cash basis and 6-8% on a GAAP basis [14]