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Digital Realty Reports Third Quarter 2024 Results

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Digital Realty (NYSE: DLR) reported Q3 2024 financial results with revenues of $1.4 billion, up 5% quarter-over-quarter and 2% year-over-year. Net income available to stockholders was $41 million ($0.09 per share), compared to $2.31 per share in Q3 2023. Core FFO per share increased to $1.67 from $1.62 year-over-year.

The company achieved record leasing with $521 million in new bookings and reported a backlog of $859 million in annualized GAAP base rent. Rental rates on renewal leases increased by 15.2% on a cash basis. Digital Realty raised its 2024 Core FFO guidance to $6.65-$6.75 per share.

Digital Realty (NYSE: DLR) ha riportato i risultati finanziari del terzo trimestre 2024 con ricavi pari a 1,4 miliardi di dollari, in aumento del 5% rispetto al trimestre precedente e del 2% rispetto all'anno scorso. Il reddito netto disponibile per gli azionisti è stato di 41 milioni di dollari ($0,09 per azione), rispetto ai $2,31 per azione nel terzo trimestre 2023. L'FFO core per azione è aumentato a $1,67 rispetto a $1,62 rispetto all'anno precedente.

L'azienda ha raggiunto un record di locazioni con 521 milioni di dollari in nuove prenotazioni e ha segnalato un backlog di 859 milioni di dollari in affitti base GAAP annualizzati. Le tariffe di affitto sui contratti di rinnovo sono aumentate del 15,2% su base cash. Digital Realty ha alzato le sue previsioni di FFO core per il 2024 a $6,65-$6,75 per azione.

Digital Realty (NYSE: DLR) reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 1.4 mil millones de dólares, un aumento del 5% trimestre a trimestre y del 2% en comparación con el año anterior. El ingreso neto disponible para los accionistas fue de 41 millones de dólares ($0.09 por acción), frente a $2.31 por acción en el tercer trimestre de 2023. El FFO principal por acción aumentó a $1.67 desde $1.62, año contra año.

La compañía logró arrendamientos récord con 521 millones de dólares en nuevas reservas y reportó un backlog de 859 millones de dólares en renta base GAAP anualizada. Las tarifas de alquiler en los contratos de renovación aumentaron un 15,2% en base a efectivo. Digital Realty elevó su guía de FFO principal para 2024 a $6.65-$6.75 por acción.

디지털 리얼티 (NYSE: DLR)는 2024년 3분기 재무 결과를 발표하며 수익이 14억 달러로, 전분기 대비 5% 증가하고 전년 대비 2% 증가했다고 보고했습니다. 주주에게 배당 가능한 순이익은 4,100만 달러($0.09 주당)로, 2023년 3분기의 $2.31 주당과 비교되었습니다. 핵심 FFO 주당 금액은 전년 동기 대비 $1.67로 증가했습니다.

회사는 5억 2,100만 달러의 신규 예약으로 기록적인 임대 실적을 달성했으며, 연간 GAAP 기준 임대료로 8억 5,900만 달러의 백로그를 보고했습니다. 갱신 임대의 임대료는 현금 기준으로 15.2% 증가했습니다. 디지털 리얼티는 2024년 핵심 FFO 가이던스를 $6.65-$6.75로 상향 조정했습니다.

Digital Realty (NYSE: DLR) a publié ses résultats financiers du troisième trimestre 2024, avec des revenus de 1,4 milliard de dollars, en hausse de 5 % par rapport au trimestre précédent et de 2 % par rapport à l'année précédente. Le bénéfice net disponible pour les actionnaires était de 41 millions de dollars ($0,09 par action), contre $2,31 par action au troisième trimestre 2023. Le FFO principal par action a augmenté à $1,67 contre $1,62 l'année précédente.

L'entreprise a atteint des niveaux record de baux avec 521 millions de dollars de nouvelles réservations et a signalé un arriéré de 859 millions de dollars de loyer de base GAAP annualisé. Les taux de location sur les renouvellements de baux ont augmenté de 15,2 % sur une base en espèces. Digital Realty a relevé ses prévisions de FFO principal pour 2024 à $6,65-$6,75 par action.

Digital Realty (NYSE: DLR) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht mit einem Umsatz von 1,4 Milliarden Dollar, was einem Anstieg von 5 % im Vergleich zum vorherigen Quartal und 2 % im Vergleich zum Vorjahr entspricht. Der Nettogewinn, der den Aktionären zur Verfügung steht, betrug 41 Millionen Dollar ($0,09 pro Aktie), verglichen mit $2,31 pro Aktie im 3. Quartal 2023. Der Core FFO pro Aktie stieg im Jahresvergleich auf $1,67 von $1,62.

Das Unternehmen erzielte Rekordvermietungen mit 521 Millionen Dollar an Neuanmeldungen und berichtete von einem Auftragsbestand von 859 Millionen Dollar an annualisiertem GAAP-Grundmietzins. Die Mietpreise bei Verlängerungen stiegen um 15,2 % auf Barbasis. Digital Realty hob seine Prognose für den Core FFO 2024 auf $6,65-$6,75 pro Aktie an.

Positive
  • Record quarterly bookings of $521M in annualized GAAP rental revenue
  • Core FFO per share increased to $1.67 from $1.62 year-over-year
  • Rental rates on renewal leases up 15.2% on cash basis
  • Raised 2024 Core FFO guidance to $6.65-$6.75 per share
  • Backlog increased to $859M, up 60% from previous record
Negative
  • Net income per share decreased to $0.09 from $2.31 in Q3 2023
  • Issued new shares through ATM program, potentially diluting existing shareholders

Insights

Digital Realty's Q3 2024 results demonstrate strong operational momentum with several positive indicators. The $521 million in new bookings represents a significant achievement, more than doubling their previous record. The $859 million backlog provides substantial revenue visibility and growth potential.

Key performance metrics show improvement:

  • Core FFO per share increased to $1.67 from $1.62 year-over-year
  • Rental rates on renewals grew 15.2% on cash basis
  • Adjusted EBITDA rose 11% year-over-year to $758 million

The raised 2024 Core FFO guidance to $6.65-$6.75 per share and strong leasing momentum indicate management's confidence in continued growth. The balance sheet remains solid with a 5.4x net debt-to-Adjusted EBITDA ratio, though careful monitoring of the $17.0 billion total debt is warranted.

The data center leasing environment shows remarkable strength, with Digital Realty capitalizing on robust demand. The 188.8 megawatts of new leasing demonstrates strong market fundamentals, particularly in the Americas region which secured 166.2 megawatts.

The 27.5% GAAP rental rate increase on renewals significantly exceeds industry averages, indicating strong pricing power and market positioning. Strategic expansion continues with targeted acquisitions in key markets like west London and Amsterdam, enhancing the company's global footprint and growth potential.

The weighted-average 15-month lag between signing and commencement suggests substantial pre-leasing activity, reducing development risk and providing clear visibility into future revenue streams.

AUSTIN, Texas, Oct. 24, 2024 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, announced today financial results for the third quarter of 2024. All per share results are presented on a fully diluted basis.

Highlights

  • Reported net income available to common stockholders of $0.09 per share in 3Q24, compared to $2.31 in 3Q23
  • Reported FFO per share of $1.55 in 3Q24, compared to $1.55 in 3Q23
  • Reported Core FFO per share of $1.67 in 3Q24, compared to $1.62 in 3Q23
  • Reported rental rate increases on renewal leases of 15.2% on a cash basis in 3Q24
  • Signed total bookings during 3Q24 that are expected to generate $521 million of annualized GAAP rental revenue, including a $50 million contribution from the 0–1 megawatt category and $16 million contribution from interconnection
  • Reported backlog of $859 million of annualized GAAP base rent at the end of 3Q24
  • Raised 2024 Core FFO per share outlook to $6.65 - $6.75

Financial Results

Digital Realty reported revenues of $1.4 billion in the third quarter of 2024, a 5% increase from the previous quarter and a 2% increase from the same quarter last year.

The company delivered net income of $40 million in the third quarter of 2024, and net income available to common stockholders of $41 million, or $0.09 per diluted share, compared to $0.20 per diluted share in the previous quarter and $2.31 per diluted share in the same quarter last year. 

Digital Realty generated Adjusted EBITDA of $758 million in the third quarter of 2024, a 4% increase from the previous quarter and a 11% increase over the same quarter last year.

The company reported Funds From Operations (FFO) of $520 million in the third quarter of 2024, or $1.55 per share, compared to $1.57 per share in the previous quarter and $1.55 per share in the same quarter last year. 

Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered Core FFO per share of $1.67 in the third quarter of 2024, compared to $1.65 per share in the previous quarter and $1.62 per share in the same quarter last year. Digital Realty delivered Constant-Currency Core FFO per share of $1.66 for the third quarter of 2024 and $4.99 per share for the nine-month period ended September 30, 2024.

"In the third quarter, Digital Realty posted over $520 million of new leasing, more than double the record set in the first quarter. Record leasing across both the greater-than-a-megawatt and 0-1 MW plus interconnection segments drove the backlog up nearly 60% above our prior record," said Digital Realty President & Chief Executive Officer Andy Power. "Our backlog now represents over 20% of annualized in-place data center revenue, enhancing our visibility and positioning Digital Realty for accelerating longer-term growth."

Leasing Activity

In the third quarter, Digital Realty signed total bookings that are expected to generate $521 million of annualized GAAP rental revenue, including a $50 million contribution from the 0–1 megawatt category and a $16 million contribution from interconnection.

The weighted-average lag between new leases signed during the third quarter of 2024 and the contractual commencement date was 15 months. The backlog of signed-but-not-commenced leases at quarter-end increased to $859 million of annualized GAAP base rent at Digital Realty's share.

In addition to new leases signed, Digital Realty also signed renewal leases representing $258 million of annualized cash rental revenue during the quarter. Rental rates on renewal leases signed during the third quarter of 2024 increased 15.2% on a cash basis and 27.5% on a GAAP basis. 

1

New leases signed during the third quarter of 2024 are summarized by region and product as follows:

















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



$23,394


83



$282


7.5



$262

 > 1 MW



425,641


1,102



386


158.8



223

 Other (1)



4,684


66



71




Total



$453,719


1,251



$363


166.2



$225















 EMEA (2)














 0-1 MW



$20,406


66



$308


7.5



$228

 > 1 MW



17,339


80



217


9.0



161

 Other (1)



168


5



35




Total



$37,913


151



$252


16.5



$191















 Asia Pacific (2)














 0-1 MW



$6,563


20



$324


1.7



$315

 > 1 MW



6,764


55



124


4.4



129

 Other (1)



216


2



87




Total



$13,543


77



$175


6.1



$182















 All Regions (2)














 0-1 MW



$50,363


169



$297


16.6



$252

 > 1 MW



449,744


1,236



364


172.1



218

 Other (1)



5,068


73



69




Total



$505,174


1,479



$342


188.8



$221















Interconnection



$15,702


N/A



N/A


N/A



N/A















Grand Total



$520,876


1,479



$342


188.8



$221


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 September 30, 2024.

Investment Activity

As previously disclosed, in July, Digital Realty closed on the acquisition of two data centers with a combined IT load of 15 megawatts in the Slough Trading Estate for $200 million, marking the Company's entry into the west London, UK submarket.

During the quarter, Digital Realty acquired the land and shell of one of its existing data centers in Schiphol Rijk, Amsterdam for €43 million, or approximately $48 million. The site comprises approximately 15 megawatts of fully leased capacity and was previously operated pursuant to an operating lease.

Subsequent to quarter end, Digital Realty closed on the acquisition of a 6.7-acre parcel in Richardson, Texas, adjacent to Digital Realty's existing campus, for approximately $15 million to support the development of more than 80 megawatts of incremental IT capacity.

2

Balance Sheet

Digital Realty had approximately $17.0 billion of total debt outstanding as of September 30, 2024, comprised of $16.2 billion of unsecured debt and approximately $0.8 billion of secured debt and other. At the end of the third quarter of 2024, net debt-to-Adjusted EBITDA was 5.4x, debt-plus-preferred-to-total enterprise value was 24.5% and fixed charge coverage was 4.1x.

Digital Realty completed the following financing transactions during the third quarter:

  • In July, the company repaid £250 million ($316 million) in aggregate principal amount of its 2.75% senior notes;
  • In September, the company issued €850 million aggregate principal amount of 3.875% notes due 2033. Net proceeds were approximately €843 million ($933 million);
  • In September, the company repaid €375 million ($415 million) on the Euro term loan;
  • In late September, the company amended, extended, and upsized both its existing global revolving credit facility from $3.75 billion to $4.2 billion and its existing Japanese yen-denominated revolving credit facility from ¥33.3 billion (approximately $232 million) to ¥42.5 billion (approximately $297 million); and
  • The company also sold 5.2 million shares of common stock under its At-The-Market (ATM) equity issuance program at a weighted average price of $156.19 per share, for net proceeds of approximately $806 million.

Subsequent to quarter end, the company sold an additional 0.4 million shares of common stock under its ATM program at a weighted average price of $160.81 per share, for net proceeds of approximately $62 million

3

2024 Outlook

Digital Realty raised its 2024 Core FFO per share and Constant-Currency Core FFO per share outlook to $6.65 - $6.75. The assumptions underlying the outlook are summarized in the following table. 













As of


As of


As of


As of


 Top-Line and Cost Structure


February 15, 2024


May 2, 2024


July 25, 2024


October 24, 2024


Total revenue


$5.550 - $5.650 billion


$5.550 - $5.650 billion


$5.550 - $5.650 billion


$5.550 - $5.600 billion


Net non-cash rent adjustments (1)


($35 - $40 million)


($35 - $40 million)


($35 - $40 million)


($25 - $30 million)


Adjusted EBITDA


$2.800 - $2.900 billion


$2.800 - $2.900 billion


$2.800 - $2.900 billion


$2.925 - $2.975 billion


G&A


$450 - $460 million


$450 - $460 million


$450 - $460 million


$455 - $460 million












 Internal Growth










Rental rates on renewal leases










Cash basis


4.0% - 6.0%


5.0% - 7.0%


5.0% - 7.0%


8.0% - 10.0%


GAAP basis


6.0% - 8.0%


7.0% - 9.0%


7.0% - 9.0%


12.0% - 14.0%


Year-end portfolio occupancy


+100 - 200 bps


+100 - 200 bps


+100 - 200 bps


+150 - 200 bps


"Same-Capital" cash NOI growth (2)


2.0% - 3.0%


2.5% - 3.5%


2.5% - 3.5%


2.75% - 3.25%












Foreign Exchange Rates










U.S. Dollar / Pound Sterling


$1.25 - $1.30


$1.25 - $1.30


$1.25 - $1.30


$1.25 - $1.30


U.S. Dollar / Euro


$1.05 - $1.10


$1.05 - $1.10


$1.05 - $1.10


$1.05 - $1.10












 External Growth










Dispositions / Joint Venture Capital










Dollar volume


$1,000 - $1,500 million


$1,000 - $1,500 million


$1,000 - $1,500 million


$1,000 - $1,500 million


Cap rate


6.0% - 8.0%


6.0% - 8.0%


6.0% - 8.0%


6.0% - 8.0%


Development










CapEx (Net of Partner Contributions) (3)


$2,000 - $2,500 million


$2,000 - $2,500 million


$2,000 - $2,500 million


$2,200 - $2,400 million


Average stabilized yields


10.0%+


10.0%+


10.0%+


10.0%+


Enhancements and other non-recurring CapEx (4)


$15 - $20 million


$15 - $20 million


$15 - $20 million


$25 - $30 million


Recurring CapEx + capitalized leasing costs (5)


$260 - $275 million


$260 - $275 million


$260 - $275 million


$260 - $275 million












 Balance Sheet










Long-term debt issuance










Dollar amount


$0 - $1,000 million


$0 - $1,000 million


$0 - $1,000 million


$933 million


Pricing


5.0% - 5.5%


5.0% - 5.5%


5.0% - 5.5%


3.875 %


Timing


Mid-Year


Mid-Year


Mid-Year


Sep-24












 Net income per diluted share


$1.80 - $1.95


$1.80 - $1.95


$1.40 - $1.55


$1.40 - $1.50


Real estate depreciation and (gain) / loss on sale


$4.40 - $4.40


$4.40 - $4.40


$4.75 - $4.75


$4.75 - $4.75


 Funds From Operations / share (NAREIT-Defined)


$6.20 - $6.35


$6.20 - $6.35


$6.15 - $6.30


$6.15 - $6.25


Non-core expenses and revenue streams


$0.40 - $0.40


$0.40 - $0.40


$0.45 - $0.45


$0.50 - $0.50


 Core Funds From Operations / share


$6.60 - $6.75


$6.60 - $6.75


$6.60 - $6.75


$6.65 - $6.75


Foreign currency translation adjustments


$0.00 - $0.00


$0.00 - $0.00


$0.00 - $0.00


$0.00 - $0.00


 Constant-Currency Core Funds From Operations / share


$6.60 - $6.75


$6.60 - $6.75


$6.60 - $6.75


$6.65 - $6.75




(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, 2022 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 2023-2024, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented.

(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.

4

Non-GAAP Financial Measures

This document contains non-GAAP financial measures, including FFO, Core FFO, Adjusted FFO, Net Operating Income (NOI), "Same-Capital" Cash NOI and Adjusted EBITDA. A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to Core FFO, a reconciliation from Core FFO to Adjusted FFO, reconciliation from NOI to Cash NOI, and definitions of FFO, Core FFO, Adjusted FFO, NOI and "Same-Capital" Cash NOI are included as an attachment to this document. A reconciliation from U.S. GAAP net income available to common stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA and definitions of net debt-to-Adjusted EBITDA, debt-plus-preferred-to-total enterprise value, cash NOI, and fixed charge coverage ratio are included as an attachment to this document.

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. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, external growth factors, such as dispositions, and balance sheet items such as debt issuances, that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Investor Conference Call

Prior to Digital Realty's investor conference call at 5:00 p.m. ET / 4:00 p.m. CT on October 24, 2024, a presentation will be posted to the Investors section of the company's website at https://investor.digitalrealty.com. The presentation is designed to accompany the discussion of the company's third quarter 2024 financial results and operating performance. The conference call will feature President & Chief Executive Officer Andy Power and Chief Financial Officer Matt Mercier.

To participate in the live call, investors are invited to dial +1 (888) 317-6003 (for domestic callers) or +1 (412) 317-6061 (for international callers) and reference the conference ID# 0345410 at least five minutes prior to start time. A live webcast of the call will be available via the Investors section of Digital Realty's website at https://investor.digitalrealty.com.

Telephone and webcast replays will be available after the call until November 24, 2024. The telephone replay can be accessed by dialing +1 (877) 344-7529 (for domestic callers) or +1 (412) 317-0088 (for international callers) and providing the conference ID# 4823548. The webcast replay can be accessed on Digital Realty's website.

About Digital Realty

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and X.

Contact Information

Matt Mercier
Chief Financial Officer
Digital Realty
(415) 874-2803

Jordan Sadler / Jim Huseby 
Investor Relations  
Digital Realty 
(415) 275-5344

 

5

 

Consolidated Quarterly Statements of Operations


Third Quarter 2024

Unaudited and in Thousands, Except Per Share Data




























Three Months Ended



Nine Months Ended




30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23

Rental revenues



$956,351



$912,994



$894,409



$885,694



$886,960




$2,763,753



$2,627,233

Tenant reimbursements - Utilities



305,097



274,505



276,357



316,634



335,477




855,959



983,041

Tenant reimbursements - Other



39,624



41,964



38,434



46,418



64,876




120,021



151,218

Interconnection & other



112,655



109,505



108,071



106,413



107,305




330,231



313,521

Fee income



12,907



15,656



13,010



14,330



7,819




41,572



30,596

Other



4,581



2,125



862



144






7,568



1,819

Total Operating Revenues



$1,431,214



$1,356,749



$1,331,143



$1,369,633



$1,402,437




$4,119,106



$4,107,428
























Utilities



$356,063



$315,248



$324,571



$366,083



$384,455




$995,882



$1,105,753

Rental property operating



249,796



237,653



224,369



237,118



223,089




711,817



672,717

Property taxes



45,633



49,620



41,156



40,161



72,279




136,408



159,420

Insurance



4,869



4,755



2,694



3,794



4,289




12,318



13,029

Depreciation & amortization



459,997



425,343



431,102



420,475



420,613




1,316,442



1,274,379

General & administration



115,120



119,511



114,419



109,235



108,039




349,051



321,769

Severance, equity acceleration and legal expenses



2,481



884



791



7,565



2,682




4,156



10,489

Transaction and integration expenses



24,194



26,072



31,839



40,226



14,465




82,105



44,496

Provision for impairment





168,303





5,363



113,000




168,303



113,000

Other expenses



4,774



(529)



10,836



5,580



1,295




15,080



1,949

Total Operating Expenses



$1,262,928



$1,346,860



$1,181,776



$1,235,598



$1,344,206




$3,791,564



$3,717,001
























Operating Income



$168,286



$9,889



$149,367



$134,035



$58,231




$327,542



$390,426
























Equity in earnings / (loss) of unconsolidated joint ventures



(26,486)



(41,443)



(16,008)



(29,955)



(19,793)




(83,936)



164

Gain / (loss) on sale of investments



(556)



173,709



277,787



(103)



810,688




450,940



900,634

Interest and other income / (expense), net



37,756



62,261



9,709



50,269



24,812




109,726



18,162

Interest (expense)



(123,803)



(114,756)



(109,535)



(113,638)



(110,767)




(348,095)



(324,103)

Income tax benefit / (expense)



(12,427)



(14,992)



(22,413)



(20,724)



(17,228)




(49,832)



(54,855)

Loss on debt extinguishment and modifications



(2,636)





(1,070)








(3,706)



Net Income



$40,134



$74,668



$287,837



$19,884



$745,941




$402,639



$930,427
























Net (income) / loss attributable to noncontrolling interests



11,059



5,552



(6,329)



8,419



(12,320)




10,282



(9,893)

Net Income Attributable to Digital Realty Trust, Inc.



$51,193



$80,220



$281,508



$28,304



$733,621




$412,921



$920,534
























Preferred stock dividends



(10,181)



(10,181)



(10,181)



(10,181)



(10,181)




(30,544)



(30,544)

Net Income / (Loss) Available to Common Stockholders



$41,012



$70,039



$271,327



$18,122



$723,440




$382,377



$889,990
























Weighted-average shares outstanding - basic



327,977



319,537



312,292



305,781



301,827




319,965



296,184

Weighted-average shares outstanding - diluted



336,249



327,946



320,798



314,995



311,341




328,641



306,735

Weighted-average fully diluted shares and units



342,374



334,186



326,975



321,173



317,539




334,830



312,867
























Net income / (loss) per share - basic



$0.13



$0.22



$0.87



$0.06



$2.40




$1.20



$3.00

Net income / (loss) per share - diluted



$0.09



$0.20



$0.82



$0.03



$2.31




$1.10



$2.87


























 

6

 

Funds From Operations and Core Funds From Operations


Third Quarter 2024

Unaudited and in Thousands, Except Per Share Data



























Three Months Ended



Nine Months Ended

Reconciliation of Net Income to Funds From Operations (FFO)



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23
























Net Income / (Loss)  Available to Common Stockholders



$41,012



$70,039



$271,327



$18,122



$723,440




$382,378



$889,990

Adjustments:























Non-controlling interest in operating partnership



1,000



1,500



6,200



410



16,300




8,700



20,300

Real estate related depreciation & amortization (1)



449,086



414,920



420,591



410,167



410,836




1,284,597



1,247,072

Reconciling items related to non-controlling interests



(19,746)



(17,317)



(8,017)



(15,377)



(14,569)




(45,081)



(42,101)

Unconsolidated JV real estate related depreciation & amortization



48,474



47,117



47,877



64,833



43,215




143,468



112,320

(Gain) / loss on real estate transactions



556



(173,709)



(286,704)



103



(810,688)




(459,857)



(908,459)

Provision for impairment





168,303





5,363



113,000




168,303



113,000

Funds From Operations



$520,382



$510,852



$451,273



$483,621



$481,535




$1,482,507



$1,432,124
























Weighted-average shares and units outstanding - basic



334,103



325,777



318,469



311,960



308,024




326,154



302,316

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



342,374



334,186



326,975



321,173



317,539




334,830



312,867
























Funds From Operations per share - basic



$1.56



$1.57



$1.42



$1.55



$1.56




$4.55



$4.74
























Funds From Operations per share - diluted (2) (3)



$1.55



$1.57



$1.41



$1.53



$1.55




$4.52



$4.68


























Three Months Ended



Nine Months Ended

Reconciliation of FFO to Core FFO



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23
























Funds From Operations



$520,382



$510,852



$451,273



$483,621



$481,535




$1,482,507



$1,432,124

Other non-core revenue adjustments (4)



(4,583)



(33,818)



3,525



(146)



(27)




(34,876)



26,540

Transaction and integration expenses



24,194



26,072



31,839



40,226



14,465




82,105



44,496

Loss on debt extinguishment and modifications



2,636





1,070








3,706



Severance, equity acceleration and legal expenses (5)



2,481



884



791



7,565



2,682




4,156



10,489

(Gain) / Loss on FX and derivatives revaluation



1,513



32,222



33,602



(24,804)



451




67,337



(14,195)

Other non-core expense adjustments (6)



11,120



2,271



10,052



1,956



1,295




23,443



1,949

Core Funds From Operations



$557,744



$538,482



$532,153



$508,417



$500,402




$1,628,378



$1,501,403
























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



334,476



326,181



319,138



312,356



308,539




326,545



302,740
























Core Funds From Operations per share - diluted (2)



$1.67



$1.65



$1.67



$1.63



$1.62




$4.99



$4.96
























(1)          Real Estate Related Depreciation & Amortization


Three Months Ended



Nine Months Ended




30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23
























Depreciation & amortization per income statement



$459,997



$425,343



$431,102



$420,475



$420,613




$1,316,442



$1,274,384

Non-real estate depreciation



(10,911)



(10,424)



(10,511)



(10,308)



(9,777)




(31,845)



(27,312)

Real Estate Related Depreciation & Amortization



$449,086



$414,920



$420,591



$410,167



$410,836




$1,284,597



$1,247,072




























(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



Nine Months Ended




30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23

Teraco noncontrolling share of FFO                                                            



$9,828



$12,453



$9,768



$7,135



$11,537




$32,049



$32,251

Teraco related minority interest



$9,828



$12,453



$9,768



$7,135



$11,537




$32,049



$32,251



(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 expenses and adjustments to reflect our proportionate share of transaction costs associated with noncontrolling interests.

 

 7

 

Adjusted Funds From Operations (AFFO)


Third Quarter 2024

Unaudited and in Thousands, Except Per Share Data



























Three Months Ended



Nine Months Ended

 Reconciliation of Core FFO to AFFO



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23
























 Core FFO available to common stockholders and unitholders



$557,744



$538,482



$532,153



$508,417



$500,402




$1,628,378



$1,501,403

Adjustments:























Non-real estate depreciation



10,911



10,424



10,511



10,308



9,777




31,845



27,312

Amortization of deferred financing costs



4,853



5,072



5,576



5,744



5,776




15,501



15,832

Amortization of debt discount/premium



1,329



1,321



1,832



973



1,360




4,481



4,000

Non-cash stock-based compensation expense



15,026



14,464



12,592



9,226



14,062




42,083



41,012

Straight-line rental revenue



(17,581)



334



9,976



(21,992)



(14,080)




(7,271)



(46,424)

Straight-line rental expense



1,690



782



1,111



(4,999)



1,427




3,583



1,432

Above- and below-market rent amortization



(742)



(1,691)



(854)



(856)



(1,127)




(3,287)



(3,548)

Deferred tax (benefit) / expense



(9,366)



(9,982)



(3,437)



33,448



(8,539)




(22,786)



(16,995)

Leasing compensation & internal lease commissions



10,918



10,519



13,291



9,848



12,515




34,728



35,193

Recurring capital expenditures (1)



(67,308)



(60,483)



(47,676)



(142,808)



(90,251)




(175,467)



(184,214)
























AFFO available to common stockholders and unitholders (2)



$507,474



$509,241



$535,073



$407,306



$431,322




$1,551,788



$1,375,001
























Weighted-average shares and units outstanding - basic



334,103



325,777



318,469



311,960



308,024




326,154



302,316

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



334,476



326,181



319,138



312,356



308,539




326,545



302,740
























AFFO per share - diluted (3)



$1.52



$1.56



$1.68



$1.30



$1.40




$4.75



$4.54
























 Dividends per share and common unit



$1.22



$1.22



$1.22



$1.22



$1.22




$3.66



$3.66
























Diluted AFFO Payout Ratio



80.4 %



78.1 %



72.8 %



93.6 %



87.3 %




77.0 %



80.6 %


























Three Months Ended



Nine Months Ended

Share Count Detail



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23




30-Sep-24



30-Sep-23
























Weighted Average Common Stock and Units Outstanding



334,103



325,777



318,469



311,960



308,024




326,154



302,316

Add: Effect of dilutive securities



373



404



669



396



515




391



424

Weighted Avg. Common Stock and Units Outstanding - diluted



334,476



326,181



319,138



312,356



308,539




326,545



302,740




























(1)

Recurring capital expenditures represent non-incremental building improvements required to maintain current revenues, including second-generation tenant improvements and external leasing commissions. Recurring capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building, costs which are incurred to bring a building up to Digital Realty's operating standards, or internal leasing commissions.

(2)

For a definition and discussion of AFFO, see the Definitions section. For a reconciliation of net income available to common stockholders to FFO and Core FFO, see above.

(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 for calculations of weighted average common stock and units outstanding.

 

 8

 

Consolidated Balance Sheets


Third Quarter 2024

Unaudited and in Thousands, Except Per Share Data




















30-Sep-24


30-Jun-24


31-Mar-24


31-Dec-23


30-Sep-23

Assets
















Investments in real estate:















Real estate


$28,808,770



$27,470,635



$27,122,796



$27,306,369



$25,887,031

Construction in progress


5,175,054



4,676,012



4,496,840



4,635,215



5,020,464

Land held for future development


23,392



93,938



114,240



118,190



179,959

Investments in Real Estate


$34,007,216



$32,240,584



$31,733,877



$32,059,773



$31,087,453

Accumulated depreciation and amortization


(8,777,002)



(8,303,070)



(7,976,093)



(7,823,685)



(7,489,193)

Net Investments in Properties


$25,230,214



$23,937,514



$23,757,784



$24,236,089



$23,598,260

Investment in unconsolidated joint ventures


2,456,448



2,332,698



2,365,821



2,295,889



2,180,313

Net Investments in Real Estate


$27,686,662



$26,270,212



$26,123,605



$26,531,977



$25,778,573

















Operating lease right-of-use assets, net


$1,228,507



$1,211,003



$1,233,410



$1,414,256



$1,274,410

Cash and cash equivalents


2,175,605



2,282,062



1,193,784



1,625,495



1,062,050

Accounts and other receivables, net (1)


1,274,460



1,222,403



1,217,276



1,278,110



1,325,725

Deferred rent, net


641,778



613,749



611,670



624,427



586,418

Goodwill


9,395,233



9,128,811



9,105,026



9,239,871



8,998,074

Customer relationship value, deferred leasing costs & other intangibles, net


2,367,467



2,315,143



2,359,380



2,500,237



2,506,198

Assets held for sale







287,064



478,503



Other assets


525,679



563,500



501,875



420,382



401,068

Total Assets


$45,295,392



$43,606,883



$42,633,089



$44,113,257



$41,932,515
















Liabilities and Equity















Global unsecured revolving credit facilities, net


$1,786,921



$1,848,167



$1,901,126



$1,812,287



$1,698,780

Unsecured term loans, net


913,733



1,297,893



1,303,263



1,560,305



1,524,663

Unsecured senior notes, net of discount


13,528,061



12,507,551



13,190,202



13,422,342



13,072,102

Secured and other debt, net of discount


757,831



686,135



625,750



630,973



574,231

Operating lease liabilities


1,343,903



1,336,839



1,357,751



1,542,094



1,404,510

Accounts payable and other accrued liabilities


2,140,764



1,973,798



1,870,344



2,168,983



2,147,103

Deferred tax liabilities, net


1,223,771



1,132,090



1,121,224



1,151,096



1,088,724

Accrued dividends and distributions








387,988



Security deposits and prepaid rents


423,797



416,705



413,225



401,867



385,521

Obligations associated with assets held for sale







9,981



39,001



Total Liabilities


$22,118,781



$21,199,178



$21,792,866



$23,116,936



$21,895,634
















Redeemable non-controlling interests


1,465,636



1,399,889



1,350,736



1,394,814



1,360,308
















Equity















Preferred Stock:  $0.01 par value per share, 110,000 shares authorized:















Series J Cumulative Redeemable Preferred Stock (2)


$193,540



$193,540



$193,540



$193,540



$193,540

Series K Cumulative Redeemable Preferred Stock (3)


203,264



203,264



203,264



203,264



203,264

Series L Cumulative Redeemable Preferred Stock (4)


334,886



334,886



334,886



334,886



334,886

Common Stock: $0.01 par value per share, 392,000 shares authorized (5)


3,285



3,231



3,097



3,088



3,002

Additional paid-in capital


27,229,143



26,388,393



24,508,683



24,396,797



23,239,088

Dividends in excess of earnings


(6,060,642)



(5,701,096)



(5,373,529)



(5,262,648)



(4,900,757)

Accumulated other comprehensive (loss), net


(657,364)



(884,715)



(850,091)



(751,393)



(882,996)

Total Stockholders' Equity


$21,246,112



$20,537,503



$19,019,850



$19,117,535



$18,190,026
















Noncontrolling Interests















Noncontrolling interest in operating partnership


$427,930



$434,253



$438,422



$438,081



$441,366

Noncontrolling interest in consolidated joint ventures


36,933



36,060



31,215



45,892



45,182
















Total Noncontrolling Interests


$464,863



$470,313



$469,637



$483,972



$486,547
















Total Equity


$21,710,975



$21,007,816



$19,489,487



$19,601,507



$18,676,573
















Total Liabilities and Equity


$45,295,392



$43,606,883



$42,633,089



$44,113,257



$41,932,515





















(1)

Net of allowance for doubtful accounts of $56,353 and $46,643 as of September 30, 2024 and September 30, 2023, respectively.

(2)

Series J Cumulative Redeemable Preferred Stock, 5.250%, $200,000 liquidation preference ($25.00 per share), 8,000 shares issued and outstanding as of September 30, 2024 and September 30, 2023.

(3)

Series K Cumulative Redeemable Preferred Stock, 5.850%, $210,000 liquidation preference ($25.00 per share), 8,400 shares issued and outstanding as of September 30, 2024 and September 30, 2023.

(4)

Series L Cumulative Redeemable Preferred Stock, 5.200%, $345,000 liquidation preference ($25.00 per share), 13,800 shares issued and outstanding as of September 30, 2024 and September 30, 2023.

(5)

Common Stock: 331,347 and 302,846 shares issued and outstanding as of September 30, 2024 and September 30, 2023, respectively.

 

 9

 

Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios


Third Quarter 2024

Unaudited and Dollars in Thousands




















Three Months Ended

Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) (1)



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23

















Net Income / (Loss) Available to Common Stockholders



$41,012



$70,039



$271,327



$18,122



$723,440

Interest



123,803



114,756



109,535



113,638



110,767

Loss on debt extinguishment and modifications



2,636





1,070





Income tax expense (benefit)



12,427



14,992



22,413



20,724



17,228

Depreciation & amortization



459,997



425,343



431,102



420,475



420,613

EBITDA



$639,875



$625,130



$835,446



$572,958



$1,272,048

Unconsolidated JV real estate related depreciation & amortization



48,474



47,117



47,877



64,833



43,214

Unconsolidated JV interest expense and tax expense



34,951



27,704



34,271



42,140



27,000

Severance, equity acceleration and legal expenses



2,481



884



791



7,565



2,682

Transaction and integration expenses



24,194



26,072



31,839



40,226



14,465

(Gain) / loss on sale of investments



556



(173,709)



(277,787)



103



(810,688)

Provision for impairment





168,303





5,363



113,000

Other non-core adjustments, net (2)



8,642



743



21,608



(35,439)



1,719

Non-controlling interests



(11,059)



(5,552)



6,329



(8,419)



12,320

Preferred stock dividends



10,181



10,181



10,181



10,181



10,181

Adjusted EBITDA



$758,296



$726,874



$710,556



$699,509



$685,943





















(1)

For definitions and discussion of EBITDA and Adjusted EBITDA, see the Definitions section.

(2)

Includes foreign exchange net unrealized gains/losses attributable to remeasurement, deferred rent adjustments related to a customer bankruptcy, write offs associated with bankrupt or terminated customers, non-recurring legal expenses, gain on sale of land option and lease termination fees.

 



















Three Months Ended

Financial Ratios



30-Sep-24



30-Jun-24



31-Mar-24



31-Dec-23



30-Sep-23

















Total GAAP interest expense



$123,803



$114,756



$109,535



$113,638



$110,767

Capitalized interest



28,312



27,592



28,522



33,032



29,130

Change in accrued interest and other non-cash amounts



43,720



(55,605)



55,421



(66,013)



44,183

Cash Interest Expense (3)



$195,835



$86,743



$193,479



$80,657



$184,081

















Preferred stock dividends



10,181



10,181



10,181



10,181



10,181

Total Fixed Charges (4)



$162,296



$152,529



$148,239



$156,851



$150,079

































Coverage
















Interest coverage ratio (5)



 4.3x



 4.3x



 4.3x



 4.2x



 4.2x

Cash interest coverage ratio (6)



 3.4x



 6.4x



 6.3x



 3.2x



 7.0x

Fixed charge coverage ratio (7)



 4.1x



 4.1x



 4.0x



 4.0x



 4.0x

Cash fixed charge coverage ratio (8)



 3.3x



 5.9x



 3.1x



 5.9x



 3.3x

















Leverage
















Debt to total enterprise value (9)(10)



23.5 %



24.2 %



24.2 %



26.7 %



28.6 %

Debt-plus-preferred-stock-to-total-enterprise-value (10)(11)



24.5 %



25.3 %



25.3 %



27.9 %



29.8 %

Pre-tax income to interest expense (12)



 1.3x



 1.7x



 3.5x



 1.2x



 7.6x

Net Debt-to-Adjusted EBITDA (13)



 5.4x



 5.3x



 5.7x



 6.0x



 6.4x



(3)

Cash interest expense is interest expense less amortization of debt discount and deferred financing fees and includes interest that we capitalized. We consider cash interest expense to be a useful measure of interest as it excludes non-cash-based interest expense.

(4)

Fixed charges consist of GAAP interest expense, capitalized interest, and preferred stock dividends.

(5)

Adjusted EBITDA divided by GAAP interest expense plus capitalized interest (including our pro rata share of unconsolidated joint venture interest expense).

(6)

Adjusted EBITDA divided by cash interest expense (including our pro rata share of unconsolidated joint venture interest expense).

(7)

Adjusted EBITDA divided by fixed charges (including our pro rata share of unconsolidated joint venture fixed charges).

(8)

Adjusted EBITDA divided by the sum of cash interest expense and preferred stock dividends (including our pro rata share of unconsolidated joint venture cash fixed charges).

(9)

Total debt divided by market value of common equity plus debt plus preferred stock.

(10)

Total enterprise value defined as market value of common equity plus debt plus preferred stock.

(11)

Same as (9), except numerator includes preferred stock.

(12)

Calculated as net income plus interest expense divided by GAAP interest expense.

(13)

Calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty's pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

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Definitions

Funds From Operations (FFO):
We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts (Nareit) in the Nareit Funds From Operations White Paper - 2018 Restatement. FFO is a non-GAAP financial measure and represents net income (loss) (computed in accordance with GAAP), excluding gain (loss) from the disposition of real estate assets, provision for impairment, real estate related depreciation and amortization (excluding amortization of deferred financing costs), our share of unconsolidated JV real estate related depreciation & amortization, net income attributable to non-controlling interests in operating partnership and, depreciation related to non-controlling interests. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions and after adjustments for unconsolidated partnerships and joint ventures, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the Nareit definition and, accordingly, our FFO may not be comparable to other REITs' FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Core Funds from Operations (Core FFO):
We present core funds from operations, or Core FFO, as a supplemental operating measure because, in excluding certain items that do not reflect core revenue or expense streams, it provides a performance measure that, when compared year over year, captures trends in our core business operating performance. We calculate Core FFO by adding to or subtracting from FFO (i) other non-core revenue adjustments, (ii) transaction and integration expenses, (iii) loss on debt extinguishment and modifications, (iv) gain on / issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration and legal expenses, (vi) gain/loss on FX revaluation, and (vii) other non-core expense adjustments. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of Core FFO as a measure of our performance is limited. Other REITs may calculate Core FFO differently than we do and accordingly, our Core FFO may not be comparable to other REITs' Core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Adjusted Funds from Operations (AFFO):
We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs, including on a per share and unit basis. We calculate AFFO by adding to or subtracting from Core FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs, (iii) amortization of debt discount/premium, (iv) non-cash stock-based compensation expense, (v) straight-line rental revenue, (vi) straight-line rental expense, (vii) above- and below-market rent amortization, (viii) deferred tax expense / (benefit), (ix) leasing compensation and internal lease commissions, and (x) recurring capital expenditures. Other REITs may calculate AFFO differently than we do and, accordingly, our AFFO may not be comparable to other REITs' AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

EBITDA and Adjusted EBITDA:
We believe that earnings before interest, loss on debt extinguishment and modifications, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact of non-cash depreciation and amortization or the cost of debt and, with respect to Adjusted EBITDA, (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (viii) non-controlling interests, (ix) preferred stock dividends, and (x) issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (viii) non-controlling interests, (ix) preferred stock dividends, and (x) gain on / issuance costs associated with redeemed preferred stock. In addition, we believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs. Because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, exclude capitalized costs, such as leasing commissions, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Other REITs may calculate EBITDA and Adjusted EBITDA differently than we do and, accordingly, our EBITDA and Adjusted EBITDA may not be comparable to other REITs' EBITDA and Adjusted EBITDA. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income computed in accordance with GAAP as a measure of our financial performance.

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Net Operating Income (NOI) and Cash NOI:
Net operating income, or NOI, represents rental revenue, tenant reimbursement revenue and interconnection revenue less utilities expense, rental property operating expenses, property taxes and insurance expenses (as reflected in the statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company's rental portfolio. Cash NOI is NOI less straight-line rents and above- and below-market rent amortization. Cash NOI is commonly used by stockholders, company management and industry analysts as a measure of property operating performance on a cash basis. Same-Capital Cash NOI represents buildings owned as of December 31, 2022 of the prior year with less than 5% of total rentable square feet under development and excludes buildings that were undergoing, or were expected to undergo, development activities in 2023-2024, buildings classified as held for sale, and buildings sold or contributed to joint ventures for all periods presented (prior period numbers adjusted to reflect current same-capital pool). However, because NOI and cash NOI exclude depreciation and amortization and capture neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our results from operations, the utility of NOI and cash NOI as measures of our performance is limited. Other REITs may calculate NOI and cash NOI differently than we do and, accordingly, our NOI and cash NOI may not be comparable to other REITs' NOI and cash NOI. NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance.

Additional Definitions

Net debt-to-Adjusted EBITDA ratio is calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty's pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty's pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty's pro rata share of unconsolidated joint venture EBITDA), multiplied by four.

Debt-plus-preferred-to-total enterprise value is total debt plus preferred stock divided by total debt plus the liquidation value of preferred stock and the market value of outstanding Digital Realty Trust, Inc. common stock and Digital Realty Trust, L.P. units, assuming the redemption of Digital Realty Trust, L.P. units for shares of Digital Realty Trust, Inc. common stock.

Fixed charge coverage ratio is Adjusted EBITDA divided by the sum of GAAP interest expense, capitalized interest and preferred stock dividends. For the quarter ended September 30, 2024, GAAP interest expense was $124 million, capitalized interest was $28 million and preferred stock dividends was $10 million.


















Reconciliation of Net Operating Income (NOI)


Three Months Ended



Nine Months Ended

(in thousands)


30-Sep-24


30-Jun-24


30-Sep-23



30-Sep-24


30-Sep-23


















Operating income



$168,286



$9,889



$58,231




$327,542



$390,426


















 Fee income



(12,907)



(15,656)



(7,819)




(41,572)



(30,596)

 Other income



(4,581)



(2,125)






(7,568)



(1,819)

 Depreciation and amortization



459,997



425,343



420,613




1,316,442



1,274,379

 General and administrative



115,120



119,511



108,039




349,051



321,769

 Severance, equity acceleration and legal expenses



2,481



884



2,682




4,156



10,489

 Transaction expenses



24,194



26,072



14,465




82,105



44,496

 Provision for impairment





168,303



113,000




168,303



113,000

 Other expenses



4,774



(529)



1,295




15,080



1,949


















Net Operating Income



$757,365



$731,692



$710,505




$2,213,540



$2,124,094



































 Cash Net Operating Income (Cash NOI)


































Net Operating Income



$757,365



$731,692



$710,505




$2,213,540



$2,124,094


















 Straight-line rental revenue



(18,423)



(2,873)



(14,185)




(23,818)



(17,999)

 Straight-line rental expense



1,683



959



1,632




4,011



1,844

 Above- and below-market rent amortization



(742)



(1,691)



(1,127)




(3,287)



(3,548)


















Cash Net Operating Income



$739,883



$728,088



$696,826




$2,190,446



$2,104,391




















































Constant Currency CFFO Reconciliation


Three Months Ended



Nine Months Ended

(in thousands, except per share data)


30-Sep-24




30-Sep-23



30-Sep-24


30-Sep-23


















Core FFO (1)



$557,744






$500,402




$1,628,378



$1,501,403

 Core FFO impact of holding '23 Exchange Rates Constant (2)



(3,281)









1,792




















Constant Currency Core FFO



$554,463






$500,402




$1,630,170



$1,501,403

 Weighted-average shares and units outstanding - diluted



334,476






308,539




326,545



302,740

Constant Currency CFFO Per Share



$1.66






$1.62




$4.99



$4.96



1)

As reconciled to net income above.

2)

Adjustment calculated by holding currency translation rates for 2024 constant with average currency translation rates that were applicable to the same periods in 2023.

12

This document contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Such forward-looking statements include statements relating to: our economic outlook, our expected investment and expansion activity, anticipated continued demand for our products and service, our liquidity, our joint ventures, supply and demand for data center and colocation space, our acquisition and disposition activity, pricing and net effective leasing economics, market dynamics and data center fundamentals, our strategic priorities, our product offerings, available inventory, rent from leases that have been signed but have not yet commenced and other contracted rent to be received in future periods, rental rates on future leases, lag between signing and commencement, cap rates and yields, investment activity, the company's FFO, Core FFO, constant currency Core FFO, adjusted FFO, and net income, 2024 outlook and underlying assumptions, information related to trends, our strategy and plans, leasing expectations, weighted average lease terms, the exercise of lease extensions, lease expirations, debt maturities, annualized rent at expiration of leases, the effect new leases and increases in rental rates will have on our rental revenue, our credit ratings, construction and development activity and plans, projected construction costs, estimated yields on investment, expected occupancy, expected square footage and IT load capacity upon completion of development projects, backlog NOI, NAV components, and other forward-looking financial data. Such statements are based on management's beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

  • reduced demand for data centers or decreases in information technology spending;
  • decreased rental rates, increased operating costs or increased vacancy rates;
  • increased competition or available supply of data center space;
  • the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services;
  • breaches of our obligations or restrictions under our contracts with our customers;
  • our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties;
  • the impact of current global and local economic, credit and market conditions;
  • global supply chain or procurement disruptions, or increased supply chain costs;
  • the impact from periods of heightened inflation on our costs, such as operating and general and administrative expenses, interest expense and real estate acquisition and construction costs;
  • the impact on our customers' and our suppliers' operations during an epidemic, pandemic, or other global events;
  • our dependence upon significant customers, bankruptcy or insolvency of a major customer or a significant number of smaller customers, or defaults on or non-renewal of leases by customers;
  • changes in political conditions, geopolitical turmoil, political instability, civil disturbances, restrictive governmental actions or nationalization in the countries in which we operate;
  • our inability to retain data center space that we lease or sublease from third parties;
  • information security and data privacy breaches;
  • difficulties managing an international business and acquiring or operating properties in foreign jurisdictions and unfamiliar metropolitan areas;
  • our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent and future acquisitions;
  • our failure to successfully integrate and operate acquired or developed properties or businesses;
  • difficulties in identifying properties to acquire and completing acquisitions;
  • risks related to joint venture investments, including as a result of our lack of control of such investments;
  • risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements;
  • our failure to obtain necessary debt and equity financing, and our dependence on external sources of capital;
  • financial market fluctuations and changes in foreign currency exchange rates;
  • adverse economic or real estate developments in our industry or the industry sectors that we sell to, including risks relating to decreasing real estate valuations and impairment charges and goodwill and other intangible asset impairment charges;
  • our inability to manage our growth effectively;
  • losses in excess of our insurance coverage;
  • our inability to attract and retain talent;
  • environmental liabilities, risks related to natural disasters and our inability to achieve our sustainability goals;
  • the expected operating performance of anticipated near-term acquisitions and descriptions relating to these expectations;
  • our inability to comply with rules and regulations applicable to our company;
  • Digital Realty Trust, Inc.'s failure to maintain its status as a REIT for federal income tax purposes;
  • Digital Realty Trust, L.P.'s failure to qualify as a partnership for federal income tax purposes;
  • restrictions on our ability to engage in certain business activities;
  • changes in local, state, federal and international laws, and regulations, including related to taxation, real estate, and zoning laws, and increases in real property tax rates; and
  • the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us.

The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. Several additional material risks are discussed in our annual report on Form 10‑K for the year ended December 31, 2023, and other filings with the U.S. Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Digital Realty, Digital Realty Trust, the Digital Realty logo, Interxion, Turn-Key Flex, Powered Base Building, ServiceFabric, AnyScale Colo, Pervasive Data Center Architecture, PlatformDIGITAL, PDx, Data Gravity Index and Data Gravity Index DGx are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other names, trademarks and service marks are the property of their respective owners.

13

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SOURCE Digital Realty Trust

FAQ

What was Digital Realty's (DLR) revenue growth in Q3 2024?

Digital Realty reported Q3 2024 revenues of $1.4 billion, representing a 5% increase from the previous quarter and a 2% increase year-over-year.

How much did Digital Realty (DLR) earn per share in Q3 2024?

Digital Realty reported net income of $0.09 per diluted share in Q3 2024, compared to $2.31 per diluted share in Q3 2023.

What was Digital Realty's (DLR) leasing activity in Q3 2024?

Digital Realty signed total bookings expected to generate $521 million in annualized GAAP rental revenue, including $50 million from 0-1 megawatt category and $16 million from interconnection.

What is Digital Realty's (DLR) updated FFO guidance for 2024?

Digital Realty raised its 2024 Core FFO per share outlook to $6.65-$6.75.

Digital Realty Trust, Inc.

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REIT - Specialty
Real Estate Investment Trusts
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