Digital Realty Reports First Quarter 2025 Results

Annualized GAAP

Base Rent

Square Feet

GAAP Base Rent

GAAP Base Rent

 Americas

(in thousands)

(in thousands)

per Square Foot

Megawatts

per Kilowatt

 0-1 MW

$23,219

97

$240

6.4

$304

 > 1 MW

163,390

448

365

53.0

257

 Other ⁽¹⁾

1,307

21

63

—

—

Total

$187,916

565

$332

59.4

$262

 EMEA ⁽²⁾

 0-1 MW

$24,906

75

$333

7.7

$268

 > 1 MW

3,626

27

136

1.6

189

 Other ⁽¹⁾

97

3

31

—

—

Total

$28,630

105

$274

9.3

$255

 Asia Pacific ⁽²⁾

 0-1 MW

$5,997

15

$405

1.4

$357

 > 1 MW

5,113

68

76

7.2

59

 Other ⁽¹⁾

—

—

—

—

—

Total

$11,110

82

$135

8.6

$108

 All Regions ⁽²⁾

 0-1 MW

$54,122

186

$290

15.5

$291

 > 1 MW

172,129

542

318

61.8

232

 Other ⁽¹⁾

1,404

24

59

—

—

Total

$227,655

752

$303

77.3

$244

Interconnection

$14,649

N/A

N/A

N/A

N/A

Grand Total

$242,305

752

$303

77.3

$244

Note:  Totals may not foot due to rounding differences.

(1)

Other includes Powered Base Building® shell capacity as well as storage and office space within fully improved data center facilities.

(2)

Based on quarterly average exchange rates during the three months ended March 31, 2025.

As of

As of

 Top-Line and Cost Structure

February 13, 2025

April 24, 2025

Total revenue

$5.800 - $5.900 billion

$5.825 - $5.925 billion

Net non-cash rent adjustments ⁽¹⁾

($45 - $50 million)

($50 - $55 million)

Adjusted EBITDA

$3.100 - $3.200 billion

$3.125 - $3.225 billion

G&A

$500 - $510 million

$505 - $515 million

 Internal Growth

Rental rates on renewal leases

Cash basis

4.0% - 6.0%

4.0% - 6.0%

GAAP basis

6.0% - 8.0%

6.0% - 8.0%

Year-end portfolio occupancy

+100 - 200 bps

+100 - 200 bps

"Same-Capital" cash NOI growth ⁽²⁾

3.5% - 4.5%

3.5% - 4.5%

Foreign Exchange Rates

U.S. Dollar / Pound Sterling

$1.20 - $1.25

$1.25 - $1.35

U.S. Dollar / Euro

$1.00 - $1.05

$1.05 - $1.15

 External Growth

Dispositions / Joint Venture Capital

Dollar volume

$500 - $1,000 million

$500 - $1,000 million

Cap rate

0.0% - 10.0%

0.0% - 10.0%

Development

CapEx (Net of Partner Contributions) ⁽³⁾

$3,000 - $3,500 million

$3,000 - $3,500 million

Average stabilized yields

10.0%+

10.0%+

Enhancements and other non-recurring CapEx ⁽⁴⁾

$30 - $35 million

$30 - $35 million

Recurring CapEx + capitalized leasing costs ⁽⁵⁾

$320 - $335 million

$320 - $335 million

 Balance Sheet

Long-term debt issuance

Dollar amount

$900 - $1,500 million

$900 - $1,500 million

Pricing

5.0% - 5.5%

4.0% - 5.5%

Timing

Mid-Year

Mid-Year

 Net income per diluted share

$2.10 - $2.20

$2.15 - $2.25

Real estate depreciation and (gain) / loss on sale

$4.50 - $4.50

$4.50 - $4.50

 Funds From Operations / share (NAREIT-Defined)

$6.60 - $6.70

$6.65 - $6.75

Non-core expenses and revenue streams

$0.40 - $0.40

$0.40 - $0.40

 Core Funds From Operations / share

$7.00 - $7.10

$7.05 - $7.15

Foreign currency translation adjustments

$0.05 - $0.05

$0.00 - $0.00

 Constant-Currency Core Funds From Operations / share

$7.05 - $7.15

$7.05 - $7.15

(1)

Net non-cash rent adjustments represent the sum of straight-line rental revenue and straight-line rental expense, as well as the amortization of above- and below-market leases (i.e., ASC 805 adjustments).

(2)

The "Same-Capital" pool includes properties owned as of December 31, 2023 with less than 5% of total rentable square feet under development. It excludes properties that were undergoing, or were expected to undergo, development activities in 2024-2025, properties classified as held for sale and contribution, and properties sold or contributed to joint ventures for all periods presented. The 2025 "Same-Capital" cash NOI growth outlook is presented on a constant currency basis.

(3)

Excludes land acquisitions and includes Digital Realty's share of JV contributions. Figure is net of JV partner contributions.

(4)

Other non-recurring CapEx represents costs incurred to enhance the capacity or marketability of operating properties, such as network fiber initiatives and software development costs.

(5)

Recurring CapEx represents non-incremental improvements required to maintain current revenues, including second-generation tenant improvements and leasing commissions.

Note: The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items, and the information is not available without unreasonable effort. Please see Non-GAAP Financial Measures in this document for further discussion.

Consolidated Quarterly Statements of Operations

Unaudited and in Thousands, Except Per Share Data

First Quarter 2025

Three Months Ended

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Rental revenues

$960,526

$958,892

$956,351

$912,994

$894,409

Tenant reimbursements - Utilities

271,189

302,664

305,097

274,505

276,357

Tenant reimbursements - Other

42,177

38,591

39,624

41,964

38,434

Interconnection & other

112,969

112,360

112,655

109,505

108,071

Fee income

20,643

23,316

12,907

15,656

13,010

Other

133

40

4,581

2,125

862

Total Operating Revenues

$1,407,637

$1,435,862

$1,431,214

$1,356,749

$1,331,143

Utilities

$313,385

$337,534

$356,063

$315,248

$324,571

Rental property operating

238,600

273,104

249,796

237,653

224,369

Property taxes

48,856

46,044

45,633

49,620

41,156

Insurance

4,483

6,007

4,869

4,755

2,694

Depreciation & amortization

443,009

455,355

459,997

425,343

431,102

General & administration

121,112

124,470

115,120

119,511

114,419

Severance, equity acceleration and legal expenses

2,428

2,346

2,481

884

791

Transaction and integration expenses

39,902

11,797

24,194

26,072

31,839

Provision for impairment

—

22,881

—

168,303

—

Other expenses

112

12,002

4,774

(529)

10,836

Total Operating Expenses

$1,211,887

$1,291,540

$1,262,928

$1,346,860

$1,181,776

Operating Income

$195,750

$144,322

$168,286

$9,889

$149,367

Equity in earnings / (loss) of unconsolidated joint ventures

(7,640)

(36,201)

(26,486)

(41,443)

(16,008)

Gain / (loss) on sale of investments

1,111

144,885

(556)

173,709

277,787

Interest and other income / (expense), net

32,773

44,517

37,756

62,261

9,709

Interest (expense)

(98,464)

(104,742)

(123,803)

(114,756)

(109,535)

Income tax benefit / (expense)

(17,135)

(4,928)

(12,427)

(14,992)

(22,413)

Loss on debt extinguishment and modifications

—

(2,165)

(2,636)

—

(1,070)

Net Income

$106,395

$185,688

$40,134

$74,668

$287,837

Net (income) / loss attributable to noncontrolling interests

3,579

3,881

11,059

5,552

(6,329)

Net Income Attributable to Digital Realty Trust, Inc.

$109,974

$189,569

$51,193

$80,220

$281,508

Preferred stock dividends

(10,181)

(10,181)

(10,181)

(10,181)

(10,181)

Net Income / (Loss) Available to Common Stockholders

$99,793

$179,388

$41,012

$70,039

$271,327

Weighted-average shares outstanding - basic

336,683

333,376

327,977

319,537

312,292

Weighted-average shares outstanding - diluted

344,721

340,690

336,249

327,946

320,798

Weighted-average fully diluted shares and units

350,632

346,756

342,374

334,186

326,975

Net income / (loss) per share - basic

$0.30

$0.54

$0.13

$0.22

$0.87

Net income / (loss) per share - diluted

$0.27

$0.51

$0.09

$0.20

$0.82

Funds From Operations and Core Funds From Operations

Unaudited and in Thousands, Except Per Share Data

First Quarter 2025

Three Months Ended

Reconciliation of Net Income to Funds From Operations (FFO)

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Net Income / (Loss) Available to Common Stockholders

$99,793

$179,388

$41,012

$70,039

$271,327

Adjustments:

Non-controlling interest in operating partnership

3,000

4,000

1,000

1,500

6,200

Real estate related depreciation & amortization ⁽¹⁾

432,652

445,462

449,086

414,920

420,591

Reconciling items related to non-controlling interests

(19,480)

(19,531)

(19,746)

(17,317)

(8,017)

Unconsolidated JV real estate related depreciation & amortization

55,861

49,463

48,474

47,117

47,877

(Gain) / loss on real estate transactions

(1,111)

(137,047)

556

(173,709)

(286,704)

Provision for impairment

—

22,881

—

168,303

—

Funds From Operations

$570,715

$544,616

$520,382

$510,852

$451,273

Weighted-average shares and units outstanding - basic

342,594

339,442

334,103

325,777

318,469

Weighted-average shares and units outstanding - diluted ^{(2) (3)}

350,632

346,756

342,374

334,186

326,975

Funds From Operations per share - basic

$1.67

$1.60

$1.56

$1.57

$1.42

Funds From Operations per share - diluted ^{(2) (3)}

$1.67

$1.61

$1.55

$1.57

$1.41

Three Months Ended

Reconciliation of FFO to Core FFO

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Funds From Operations

$570,715

$544,616

$520,382

$510,852

$451,273

Other non-core revenue adjustments ⁽⁴⁾

(1,925)

4,537

(4,583)

(33,818)

3,525

Transaction and integration expenses

39,902

11,797

24,194

26,072

31,839

Loss on debt extinguishment and modifications

—

2,165

2,636

—

1,070

Severance, equity acceleration and legal expenses ⁽⁵⁾

2,428

2,346

2,481

884

791

(Gain) / Loss on FX and derivatives revaluation

(2,064)

7,127

1,513

32,222

33,602

Other non-core expense adjustments ⁽⁶⁾

(702)

14,229

11,120

2,271

10,052

Core Funds From Operations

$608,354

$586,816

$557,744

$538,482

$532,153

Weighted-average shares and units outstanding - diluted ^{(2) (3)}

343,050

339,982

334,476

326,181

319,138

Core Funds From Operations per share - diluted ⁽²⁾

$1.77

$1.73

$1.67

$1.65

$1.67

(1)    Real Estate Related Depreciation & Amortization

Three Months Ended

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Depreciation & amortization per income statement

$443,009

$455,355

$459,997

$425,343

$431,102

Non-real estate depreciation

(10,356)

(9,894)

(10,911)

(10,424)

(10,511)

Real Estate Related Depreciation & Amortization

$432,652

$445,462

$449,086

$414,920

$420,591

(2)

Certain of Teraco's minority indirect shareholders have the right to put their shares in an upstream parent company of Teraco to Digital Realty in exchange for cash or the equivalent value of shares of Digital Realty common stock, or a combination thereof. US GAAP requires Digital Realty to assume the put right is settled in shares for purposes of calculating diluted EPS. This same approach was utilized to calculate FFO/share. The potential future dilutive impact associated with this put right will be excluded from Core FFO and AFFO until settlement occurs – causing diluted share count to be higher for FFO than for Core FFO and AFFO. When calculating diluted FFO, Teraco related minority interest is added back to the FFO numerator as the denominator assumes all shares have been put back to Digital Realty.

Three Months Ended

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Teraco noncontrolling share of FFO

$13,286

$14,905

$9,828

$12,453

$9,768

Teraco related minority interest

$13,286

$14,905

$9,828

$12,453

$9,768

(3)

For all periods presented, we have excluded the effect of dilutive series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of FFO and the share count detail section that follows the reconciliation of Core FFO to AFFO for calculations of weighted average common stock and units outstanding. For definitions and discussion of FFO and Core FFO, see the Definitions section.

(4)

Includes deferred rent adjustments related to a customer bankruptcy, joint venture development fees included in gains, lease termination fees and gain on sale of equity investment included in other income.

(5)

Relates to severance and other charges related to the departure of company executives and integration-related severance.

(6)

Includes write-offs associated with bankrupt or terminated customers, non-recurring legal and insurance expenses and adjustments to reflect our proportionate share of transaction costs associated with noncontrolling interests.

Adjusted Funds From Operations (AFFO)

Unaudited and in Thousands, Except Per Share Data

First Quarter 2025

Three Months Ended

 Reconciliation of Core FFO to AFFO

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

 Core FFO available to common stockholders and unitholders

$608,354

$586,816

$557,744

$538,482

$532,153

Adjustments:

Non-real estate depreciation

10,356

9,894

10,911

10,424

10,511

Amortization of deferred financing costs

6,548

5,697

4,853

5,072

5,576

Amortization of debt discount/premium

1,125

1,324

1,329

1,321

1,832

Non-cash stock-based compensation expense

16,700

13,386

15,026

14,464

12,592

Straight-line rental revenue

(9,692)

(18,242)

(17,581)

334

9,976

Straight-line rental expense

(160)

(136)

1,690

782

1,111

Above- and below-market rent amortization

(706)

(269)

(742)

(1,691)

(854)

Deferred tax (benefit) / expense

(517)

(15,048)

(9,366)

(9,982)

(3,437)

Leasing compensation & internal lease commissions

13,405

10,505

10,918

10,519

13,291

Recurring capital expenditures ⁽¹⁾

(35,305)

(130,245)

(67,308)

(60,483)

(47,676)

AFFO available to common stockholders and unitholders ⁽²⁾

$610,108

$463,682

$507,474

$509,241

$535,073

Weighted-average shares and units outstanding - basic

342,594

339,442

334,103

325,777

318,469

Weighted-average shares and units outstanding - diluted ⁽³⁾

343,050

339,982

334,476

326,181

319,138

AFFO per share - diluted ⁽³⁾

$1.78

$1.36

$1.52

$1.56

$1.68

 Dividends per share and common unit

$1.22

$1.22

$1.22

$1.22

$1.22

Diluted AFFO Payout Ratio

68.6 %

89.5 %

80.4 %

78.1 %

72.8 %

Three Months Ended

Share Count Detail

31-Mar-25

31-Dec-24

30-Sep-24

30-Jun-24

31-Mar-24

Weighted Average Common Stock and Units Outstanding

342,594

339,442

334,103

325,777

318,469

Add: Effect of dilutive securities

456

540

373

404

669

Weighted Avg. Common Stock and Units Outstanding - diluted

343,050

339,982

334,476

326,181