DigitalBridge (US:DBRG)2025-08-07 13:00Financial Data and Key Metrics Changes - The company reported fee revenue of $85 million for the second quarter, representing an 8% increase year-over-year [26] - Fee-related earnings (FRE) grew by 23% to $32 million compared to the same quarter last year [26] - Distributable earnings were negative $19 million due to a $40 million realized loss from an investment [27] - Fee earning equity under management increased to $39.7 billion, a 21% increase from the previous year [29] - The company maintained a strong balance sheet with approximately $1.6 billion in corporate assets [33] Business Line Data and Key Metrics Changes - The company raised $1.3 billion in new fee-earning commitments during the quarter, a 17% increase over the previous year [29] - The flagship DB3 strategy attracted $6.9 billion year-to-date, with a final close expected to exceed $7 billion [9] - The co-investment program saw fee rates increase by 30% year-to-date, averaging about 60 basis points compared to a historical average of 45 basis points [10] Market Data and Key Metrics Changes - The company is experiencing exceptional demand from limited partners (LPs) to invest in the digital economy, raising a total of $2.5 billion year-to-date [6] - The built and under-construction pipeline has grown to over 5.4 gigawatts, a 50% increase from the prior year [6] Company Strategy and Development Direction - The company focuses on three strategic pillars: fundraising, investing, and scaling [5] - New platforms, such as TACNOC and Yonder, have been established to address critical bottlenecks in the AI revolution [7][14] - The company aims to build predictable, recurring revenue for shareholders while addressing the growing demand for power and data center capacity [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding the $40 billion FEM target for 2025, driven by strong capital formation and investment strategies [11] - The demand for AI-related infrastructure is expected to continue growing, with significant capital deployment anticipated in the coming years [62] - The company is well-positioned to lead in the digital infrastructure space, with a focus on power solutions and data center capacity [39][62] Other Important Information - The company closed a multibillion-dollar acquisition of Yonder, enhancing its global hyperscale portfolio [15] - The company is committed to addressing the power crunch faced by customers, with a focus on developing power land and on-site dispatchable power solutions [44][46] Q&A Session Summary Question: Evidence of hyperscalers scaling up their focus on inference compute - Management indicated that they are in the early stages of inference workloads, with some customers starting to manifest these workloads in data centers [72][73] Question: How inference demand will drive financial results for Digital Bridge - Management noted that returns for inference workloads are expected to be higher than traditional training workloads, with significant interconnection capabilities being a key factor [79][80] Question: Strength in co-investment and future outlook - Management highlighted the importance of co-investment, noting that they have successfully attracted significant capital for large-scale projects, with expectations to exceed capital formation targets for the year [95][96]