Digital Core REIT (DCRU) Q2 2025 earnings summary

Executive summary

• 1H25 distribution was 1.80 US cents per unit, unchanged from 2H24, with stable earnings and high occupancy across a portfolio of 11 data centres in the US, Canada, Germany, and Japan, totaling $1.7 billion AUM and 98% occupancy as of 30 June 2025.

• Gross revenue rose 84.2% year-over-year to $88.9 million, driven by acquisitions and higher rental income, with net property income up 52.2% to $46.3 million.

• Completed acquisition of a 20% interest in Digital Osaka 3 for $86.7 million, financed by a JPY10 billion bond issuance, and repurchased 1.8 million units, supporting DPU accretion.

• Established a $750 million medium-term note programme, enhancing access to public debt capital markets.

• Assets under management reached $1.7 billion, spanning the US, Canada, Germany, and Japan.

Financial highlights

• 1H25 revenue rose 84.2% year-over-year to $88.9 million; net property income up 52.2% to $46.3 million.

• Distributable income to unitholders increased 3.5% to $23.4 million; DPU held steady at 1.80 US cents.

• Net profit attributable to unitholders fell 35.2% year-over-year to $12.1 million, mainly due to higher finance and trust expenses.

• Net asset value per unit was $0.80 as of 30 June 2025, up from $0.79 at end-2024.

• Aggregate leverage stood at 38.3%, with an all-in average interest rate of 3.6%.

Outlook and guidance

• AI and digital transformation are expected to drive continued growth in digital spending and data centre demand globally.

• Sponsor pipeline supports a path to a $15+ billion portfolio, with over 300 data centres globally and a focus on stabilized, income-producing assets.

• Manager aims to maximize organic growth via leasing and maintain financial flexibility for accretive investments.

• Global economic growth is expected to slow to 2.3% in 2025, but sector fundamentals remain positive.

• Pro forma DPU growth potential highlighted by recent acquisitions, lease-ups, and credit facility recast, offset by lease roll at Linton Hall.