DLR-PK — Digital Realty Trust, Inc.

Summary of Digital Realty (DLR-PK) Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Core FFO: Reported at $2.65 per share, with a record $2.13 per share excluding net promote income, reflecting a 14% year-over-year growth.
• Revenue Growth: Strong performance across major metrics, with same capital cash NOI growth of 8.9% year-over-year.
• Backlog: Reached a record $1.9 billion at 100% share, or $1.4 billion at Digital Realty's share, representing approximately 30% of in-place data center revenue.
• Renewal Spreads: Exceptional at over 25%, with significant contributions from both the 0-1 megawatt and greater than 1 megawatt segments.

2. Strategic Updates and Business Highlights

• Record Bookings: Achieved $108 million in bookings for the 0-1 megawatt plus interconnection business, marking a third consecutive quarterly record.
• Hyperscale Leasing: Signed two additional leases post-quarter end, contributing an annualized $410 million in GAAP base rent.
• Acquisitions: Completed the acquisition of Blackstone's interest in three hyperscale data centers and announced plans to acquire Columbia Capital, enhancing private capital capabilities.
• Sustainability Initiatives: Achieved 93% renewable energy coverage globally and expanded the renewable energy portfolio to approximately 1.7 gigawatts.

3. Forward Guidance and Outlook

• Core FFO Guidance: Raised for 2026 to a range of $8.15 to $8.20 per share, implying double-digit growth over 2025.
• CapEx Expectations: Anticipated to increase to between $4.25 billion and $4.75 billion, driven by strong leasing activity.
• Renewal Spreads: Expected to remain robust, with guidance of 9% to 11% cash renewal spreads for the remainder of the year.

4. Bad News, Challenges, or Points of Concern

• Seasonal Expenses: Anticipated increases in net utility and repair and maintenance expenses may moderate core FFO growth in the upcoming quarters.
• Market Conditions: While demand is strong, the competitive landscape and potential regulatory challenges in key markets like New York State and Loudoun County may pose risks.
• Leverage Levels: Although leverage remains low at 4.7x, ongoing investments and acquisitions could impact financial flexibility if not managed carefully.

5. Notable Q&A Insights

• Customer Credit: Management confirmed a focus on traditional investment-grade customers for larger leases, with ongoing support for smaller, diverse deployments in AI and private cloud.
• Development Pipeline: Approximately $20 billion in projects under development, with 63% pre-leased, indicating strong future revenue potential.
• Market Expansion: Kansas City identified as a new growth hub, with expectations to become a significant data center market due to its central location and connectivity.
• Fee Income Growth: Management anticipates continued growth in fee income from private capital initiatives, which are expected to enhance long-term revenue streams.

Overall, Digital Realty demonstrated strong operational performance and strategic growth initiatives in Q2 2026, positioning itself for continued success despite potential market challenges.