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Results reflect steady leasing momentum with better rental rates amid rising demand. The company raised its 2025 core FFO guidance range.
The company registered operating revenues of $1.49 billion in the second quarter, surpassing the Zacks Consensus Estimate of $1.44 billion. Moreover, on a year-over-year basis, operating revenues increased 10.1%. DLR also reported "Same-Capital" cash net operating income (NOI) growth of 4.4%.
Per Digital Realty’s president & CEO, Andy Power, "Record bookings in our 0–1 megawatt plus interconnection product set underscore the strength of our full spectrum strategy and the breadth of thegrowing demand for digital infrastructure.”
On July 24, DLR announced that it has partnered with Oracle Solution Centers to support organizations in achieving faster innovations. This collaboration will bring together Digital Realty’s data center cloud-adjacent, colocation, multicloud and interconnection services to global customers, along with a portfolio of jointly developed deployment-ready frameworks on Oracle's solution centers for seamless adoption.
DLR’s Second Quarter in Detail
In the reported quarter, DLR’s signed total bookings were estimated to generate $135 million of annualized GAAP rental revenues at its share, including a $73 million contribution from the 0-1 megawatt category and a $17 million contribution from interconnection. The weighted average lag between the new leases signed in the second quarter and the contractual commencement date was four months.
Digital Realty signed renewal leases, marking $177 million of annualized cash rental revenues during the April-June quarter. Rental rates on renewal leases signed during the quarter rose 7.3% on a cash basis and 9.9% on a GAAP basis.
Adjusted EBITDA of $823.3 million in the quarter marked a 13.3% increase year over year.
DLR’s Portfolio Activity
During the April-June period, Digital Realty acquired land parcels in three metros. The first one, acquired for $120 million, is a 100-acre parcel in the Atlanta metro area, expected to support more than 200 megawatts of IT capacity.
The second land parcel, acquired for $11 million,is a 167-acre parcel in the Dallas metro area, expected to support around 480megawatts of IT capacity.
Lastly, several land parcels were acquired for around $6 million as part of an assemblage in the Chicago metro area to support the continued expansion of its Franklin Park campus.
During the reported quarter, Digital Realty received additional equity commitments for its U.S Hyperscale Data Center Fund from several global Limited Partners. As of July 24, 2025, the total commitment stands at more than $3 billion.
Post the quarter end, DLR disposed of a five-megawatt non-core data center in the Atlanta metro area for a gross proceeds value of $65 million.
DLR’s Balance Sheet Position
Digital Realty exited the second quarter of 2025 with cash and cash equivalents of $3.55 billion, up from $2.32 billion recorded as of March 31, 2025.
As of March 31, 2025, this data center REIT had $18.5 billion of total debt outstanding, of which $17.7 billion was unsecured debt and $0.8 billion was secured debt and other. As of the same date, its net debt-to-adjusted EBITDA was 5.1X, while the fixed charge coverage was 4.7X.
Its debt maturity schedule is well-laddered with modest near-term maturities, with a weighted average term to initial maturity of 4.5 years and a 2.7% weighted average coupon as of June 30, 2025.
From the beginning of the second quarter through July 24, DLR has cumulatively sold 4.15 million shares of common stock under its At-The-Market equity issuance program for net proceeds of around $719 million.
DLR’s 2025 Guidance Revised
Digital Realty raised its 2025 core FFO per share guidance range to $7.15-$7.25 from the earlier guided range of $7.05-$7.15. The Zacks Consensus Estimate of $7.04 lies below the guided range. The REIT also raised its guidance for 2025 constant currency core FFO per share. The company now expects it to be between $7.10 and $7.20, up from the earlier guided range of $7.05-$7.15.
DLR projects total revenues in the band of $5.925-$6.025 billion. The consensus mark is pegged at $5.88 billion, below the guided range. Adjusted EBITDA is expected in the range of $3.200-$3.300 billion.
DLR projects rental rates on renewal leases to be within 5-6% on a cash basis and 7-8% on a GAAP basis.
We now look forward to the earnings releases of other REITs like Welltower (WELL - Free Report) and Highwoods Properties (HIW - Free Report) , slated to report on July 28 and July 29, respectively.
The Zacks Consensus Estimate for Welltower’s second-quarter 2025 FFO per share is pegged at $1.22, implying a 16.19% year-over-year increase. WELL currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Highwoods’ second-quarter 2025 FFO per share is pegged at 85 cents, calling for a 13.27% year-over-year decrease. HIW currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Digital Realty's Q2 Core FFO & Revenues Top Estimates, '25 View Raised
Key Takeaways
Digital Realty Trust (DLR - Free Report) reported second-quarter 2025 core funds from operations (FFO) per share of $1.87, beating the Zacks Consensus Estimate of $1.74. FFO also increased 13.3% year over year.
Results reflect steady leasing momentum with better rental rates amid rising demand. The company raised its 2025 core FFO guidance range.
The company registered operating revenues of $1.49 billion in the second quarter, surpassing the Zacks Consensus Estimate of $1.44 billion. Moreover, on a year-over-year basis, operating revenues increased 10.1%. DLR also reported "Same-Capital" cash net operating income (NOI) growth of 4.4%.
Per Digital Realty’s president & CEO, Andy Power, "Record bookings in our 0–1 megawatt plus interconnection product set underscore the strength of our full spectrum strategy and the breadth of thegrowing demand for digital infrastructure.”
On July 24, DLR announced that it has partnered with Oracle Solution Centers to support organizations in achieving faster innovations. This collaboration will bring together Digital Realty’s data center cloud-adjacent, colocation, multicloud and interconnection services to global customers, along with a portfolio of jointly developed deployment-ready frameworks on Oracle's solution centers for seamless adoption.
DLR’s Second Quarter in Detail
In the reported quarter, DLR’s signed total bookings were estimated to generate $135 million of annualized GAAP rental revenues at its share, including a $73 million contribution from the 0-1 megawatt category and a $17 million contribution from interconnection. The weighted average lag between the new leases signed in the second quarter and the contractual commencement date was four months.
Digital Realty signed renewal leases, marking $177 million of annualized cash rental revenues during the April-June quarter. Rental rates on renewal leases signed during the quarter rose 7.3% on a cash basis and 9.9% on a GAAP basis.
Adjusted EBITDA of $823.3 million in the quarter marked a 13.3% increase year over year.
DLR’s Portfolio Activity
During the April-June period, Digital Realty acquired land parcels in three metros. The first one, acquired for $120 million, is a 100-acre parcel in the Atlanta metro area, expected to support more than 200 megawatts of IT capacity.
The second land parcel, acquired for $11 million,is a 167-acre parcel in the Dallas metro area, expected to support around 480megawatts of IT capacity.
Lastly, several land parcels were acquired for around $6 million as part of an assemblage in the Chicago metro area to support the continued expansion of its Franklin Park campus.
During the reported quarter, Digital Realty received additional equity commitments for its U.S Hyperscale Data Center Fund from several global Limited Partners. As of July 24, 2025, the total commitment stands at more than $3 billion.
Post the quarter end, DLR disposed of a five-megawatt non-core data center in the Atlanta metro area for a gross proceeds value of $65 million.
DLR’s Balance Sheet Position
Digital Realty exited the second quarter of 2025 with cash and cash equivalents of $3.55 billion, up from $2.32 billion recorded as of March 31, 2025.
As of March 31, 2025, this data center REIT had $18.5 billion of total debt outstanding, of which $17.7 billion was unsecured debt and $0.8 billion was secured debt and other. As of the same date, its net debt-to-adjusted EBITDA was 5.1X, while the fixed charge coverage was 4.7X.
Its debt maturity schedule is well-laddered with modest near-term maturities, with a weighted average term to initial maturity of 4.5 years and a 2.7% weighted average coupon as of June 30, 2025.
From the beginning of the second quarter through July 24, DLR has cumulatively sold 4.15 million shares of common stock under its At-The-Market equity issuance program for net proceeds of around $719 million.
DLR’s 2025 Guidance Revised
Digital Realty raised its 2025 core FFO per share guidance range to $7.15-$7.25 from the earlier guided range of $7.05-$7.15. The Zacks Consensus Estimate of $7.04 lies below the guided range. The REIT also raised its guidance for 2025 constant currency core FFO per share. The company now expects it to be between $7.10 and $7.20, up from the earlier guided range of $7.05-$7.15.
DLR projects total revenues in the band of $5.925-$6.025 billion. The consensus mark is pegged at $5.88 billion, below the guided range. Adjusted EBITDA is expected in the range of $3.200-$3.300 billion.
DLR projects rental rates on renewal leases to be within 5-6% on a cash basis and 7-8% on a GAAP basis.
DLR’s Zacks Rank
Currently, DLR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Digital Realty Trust, Inc. Price, Consensus and EPS Surprise
Digital Realty Trust, Inc. price-consensus-eps-surprise-chart | Digital Realty Trust, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like Welltower (WELL - Free Report) and Highwoods Properties (HIW - Free Report) , slated to report on July 28 and July 29, respectively.
The Zacks Consensus Estimate for Welltower’s second-quarter 2025 FFO per share is pegged at $1.22, implying a 16.19% year-over-year increase. WELL currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Highwoods’ second-quarter 2025 FFO per share is pegged at 85 cents, calling for a 13.27% year-over-year decrease. HIW currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.