Core Insights - Digital Realty Trust has raised its annual forecasts for core funds from operations and revenue, anticipating increased demand for data center services driven by the growth in artificial intelligence [1] Company Summary - The company expects a significant boost in demand for its data center services due to the ongoing boom in artificial intelligence [1]

Core Insights - The most valuable real estate in the 21st century is not traditional properties but rather windowless warehouses and data centers [2][15] - Companies like Prologis dominate the logistics and warehouse sector, serving as landlords for e-commerce giants [5][3] - Data centers, operated by firms like Equinix and Digital Realty Trust, are critical infrastructure for the digital economy [6][8] Warehouse Sector - Prologis and similar companies are essential for the e-commerce age, owning fulfillment centers that facilitate online shopping [4][5] - These warehouses are strategically located near major ports and population centers, focusing on package traffic rather than foot traffic [5][4] Data Center Sector - Data centers are described as the "brain" of the new economy, housing servers that support digital services [6][8] - Their locations prioritize proximity to fiber optic cables and reliable electricity, redefining what constitutes a prime location [9][14] Telecommunications Infrastructure - Companies like American Tower own cell towers that are vital for mobile communication, serving major telecom providers [10] - This sector highlights the importance of owning essential infrastructure rather than traditional real estate [11] Shift in Real Estate Dynamics - Traditional real estate players, particularly in office buildings, are losing dominance due to the rise of remote work and e-commerce [12][13] - The definition of "prime location" has evolved to include access to internet exchange points and shipping routes [14][15]

Core Viewpoint - Digital Realty reported strong financial results for the second quarter of 2025, showcasing significant revenue growth and improved profitability metrics compared to previous quarters and the same quarter last year [2][10]. Financial Results - Revenues reached $1.49 billion, marking a 6% increase from the previous quarter and a 10% increase year-over-year [2]. - Net income was reported at $1.05 billion, with net income available to common stockholders at $1.02 billion, translating to $2.94 per share, up from $0.27 per share in the previous quarter and $0.20 per share in the same quarter last year [2][10]. - Adjusted EBITDA was $823 million, reflecting a 4% increase from the previous quarter and a 13% increase year-over-year [3]. - Funds From Operations (FFO) totaled $600 million, or $1.75 per share, compared to $1.67 per share in the previous quarter and $1.57 per share in the same quarter last year [3][10]. Leasing Activity - The company signed total bookings expected to generate $135 million of annualized GAAP rental revenue, with significant contributions from the 0–1 megawatt category and interconnection [5]. - Renewal leases represented $177 million of annualized cash rental revenue, with rental rates increasing by 7.3% on a cash basis and 9.9% on a GAAP basis [7][10]. - The backlog of signed-but-not-commenced leases at the end of the quarter was $826 million of annualized GAAP base rent [6][10]. Investment Activity - Digital Realty acquired land parcels in three metropolitan areas, including approximately 100 acres in Atlanta for $120 million and 167 acres in Dallas for $11 million, expected to support significant IT capacity [11]. - The U.S. Hyperscale Data Center Fund received over $3 billion in equity commitments, exceeding its initial target, and Digital Realty contributed interests in five operating data centers and two development sites to the Fund [12]. Balance Sheet - As of June 30, 2025, total debt outstanding was approximately $18.5 billion, with a net debt-to-Adjusted EBITDA ratio of 5.1x [14]. - The company issued €850 million of 3.875% notes due 2034, with net proceeds of approximately $975 million, and repaid €650 million in senior notes [15]. 2025 Outlook - Digital Realty raised its 2025 Core FFO per share outlook to $7.15 - $7.25 and Constant-Currency Core FFO per share outlook to $7.10 - $7.20 [16][10].

Group 1 - Digital Realty, the largest global provider of cloud- and carrier-neutral data center solutions, will release its financial results for Q2 2025 on July 24, 2025, after market close [1] - A conference call to discuss the financial results will take place at 5:00 p.m. ET / 4:00 p.m. CT on the same day [1] - Investors can participate in the call by dialing specific numbers for domestic and international callers and referencing the conference ID [2] Group 2 - Telephone and webcast replays of the conference call will be available starting one hour after the call until August 24, 2025 [3] - Digital Realty offers a comprehensive range of data center, colocation, and interconnection solutions, with a global footprint of over 300 facilities across more than 50 metropolitan areas in 25+ countries [4] - The company's PlatformDIGITAL® provides customers with secure data meeting places and a proven methodology for managing Data Gravity challenges [4]