Digital Realty Trust (DLR) Q2 2024 earnings summary

Executive summary

• Achieved $164 million in new leasing for Q2 2024, supporting record first-half performance and long-term growth, with strong demand across both >1 MW and 0-1 MW segments and interconnection services.

• Revenues for Q2 2024 were $1.36–$1.4 billion, with net income available to common stockholders of $70 million, reflecting lower utility reimbursements and higher operating expenses.

• Balance sheet strengthened via over $10 billion in private capital raised, equity issuance, and asset sales, reducing leverage to 5.3x and enhancing financial flexibility.

• Expanded global footprint with strategic acquisitions in London and Amsterdam, and continued innovation with HD Colo 2.0 and new cloud on-ramps.

• Advanced sustainability initiatives, including 1.4 GW contracted renewable energy, $6.4 billion in green bonds fully allocated, and 152 data centers matched with 100% renewable energy.

Financial highlights

• Core FFO for Q2 2024 was $1.65 per share; FFO per share was $1.57, with Adjusted EBITDA at $727 million, up 4% year-over-year.

• Rental plus interconnection revenues and adjusted EBITDA grew 13% and 14% year-over-year pro forma for capital recycling in Q2.

• Leasing bookings in the 0-1 MW + Interconnection segment exceeded $50 million for the fourth consecutive quarter.

• Delivered 71–72 MW of new capacity and commenced $176 million of new leases in Q2; backlog of signed, not-yet-commenced leases remains robust at $527 million.

• Cash renewal spreads at 4.0% and GAAP renewal spreads at 7.5%, driven by strong pricing in the 0-1 MW segment.

Outlook and guidance

• 2024 Core FFO per share guidance reaffirmed at $6.60–$6.75, with expectations for accelerating growth in the second half as backlog commences.

• Total revenue guidance for 2024 is $5.55–$5.65 billion; adjusted EBITDA guidance is $2.8–$2.9 billion.

• CapEx intensity expected to increase to support pre-leased development pipeline; management targets mid-single-digit FFO per share growth in 2025 and beyond.

• Rental rates on renewal leases expected to rise 4–6% on a cash basis and 6–8% on a GAAP basis.