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Reflecting investors’ positive sentiments, shares of the company closed around 1.7% higher at the end of the last day’s trading session. 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 $1.58 billion in the third quarter, surpassing the Zacks Consensus Estimate of $1.52 billion. Moreover, operating revenues increased 10.2% year over year. DLR also reported "Same-Capital" cash net operating income (NOI) growth of 8%.
Per Digital Realty’s president & CEO, Andy Power, "Robust enterprise demand continues to drive our 0-1 megawatt plus interconnection offering, with companies expanding on PlatformDIGITAL. With five gigawatts of buildable IT capacity worldwide, we are well-positioned to meet our customers' evolving needs.”
DLR’s Third Quarter in Detail
In the reported quarter, DLR’s signed total bookings were estimated to generate $201 million of annualized GAAP rental revenues at its share, including a $65 million contribution from the 0-1 megawatt category and a $20 million contribution from interconnection. The weighted average lag between the new leases signed in the third quarter and the contractual commencement date was eight months.
Digital Realty signed renewal leases, marking $192 million of annualized cash rental revenues during the July-September quarter. Rental rates on renewal leases signed during the quarter rose 8% on a cash basis and 11.5% on a GAAP basis.
Adjusted EBITDA of $867.8 million in the quarter marked a 14.4% increase year over year.
DLR’s Portfolio Activity
During July-September, Digital Realty acquired a property comprising around five acres of land in the Los Angeles metro area for $49 million, expected to support 32 megawatts of IT capacity.
In addition, DLR bought out two land parcels near its Franklin Park campus for $18 million. Together with the previously acquired land parcels, this acquisition is expected to support more than 40 megawatts of incremental IT capacity in the Chicago metro area.
During the quarter, DLR disposed of non-core data centers in the Atlanta, Boston and Miami metro areas for gross proceeds amounting to $90 million.
Post the quarter end, DLR disposed of a non-core data center in the Dallas metro area for a gross proceeds value of $33 million.
DLR’s Balance Sheet Position
Digital Realty exited the third quarter of 2025 with cash and cash equivalents of $3.30 billion, down from $3.55 billion recorded as of June 30, 2025.
As of Sept. 30, 2025, this data center REIT had $18.2 billion of total debt outstanding, of which $17.4 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 4.9X, while the fixed charge coverage was 4.6X.
Its debt maturity schedule is well-laddered with modest near-term maturities, with a weighted average term to initial maturity of 4.4 years and a 2.75% weighted average coupon as of Sept. 30, 2025.
From the beginning of the third quarter through Oct. 23, DLR has cumulatively sold 2.9 million shares of common stock under its At-The-Market equity issuance program for net proceeds of around $501 million.
DLR’s 2025 Guidance Revised
Digital Realty raised its 2025 core FFO per share guidance range to $7.32-$7.38 from the earlier guided range of $7.15-$7.25. The Zacks Consensus Estimate of $7.21 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 $7.25 and $7.30, up from the earlier guided range of $7.10-$7.20.
DLR projects total revenues in the band of $6.025-$6.075 billion. The consensus mark is pegged at $5.97 billion, below the guided range. Adjusted EBITDA is expected in the range of $3.300-$3.350 billion.
DLR projects rental rates on renewal leases to be within 5.75-6.25% on a cash basis and 7.75-8.25% on a GAAP basis.
We now look forward to the earnings releases of other REITs like Welltower (WELL - Free Report) and American Tower (AMT - Free Report) , slated to report on Oct. 27 and Oct. 28, respectively.
The Zacks Consensus Estimate for Welltower’s third-quarter 2025 FFO per share is pegged at $1.30, implying a 17.12% year-over-year increase. WELL currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for American Tower’s third-quarter 2025 FFO per share is pegged at $2.62, calling for a marginal year-over-year decrease. AMT currently carries a Zacks Rank #2.
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 Q3 Core FFO & Revenues Top Estimates, '25 View Raised
Key Takeaways
Digital Realty Trust (DLR - Free Report) reported third-quarter 2025 core funds from operations (FFO) per share of $1.89, beating the Zacks Consensus Estimate of $1.78. FFO also increased 13.2% year over year.
Reflecting investors’ positive sentiments, shares of the company closed around 1.7% higher at the end of the last day’s trading session. 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 $1.58 billion in the third quarter, surpassing the Zacks Consensus Estimate of $1.52 billion. Moreover, operating revenues increased 10.2% year over year. DLR also reported "Same-Capital" cash net operating income (NOI) growth of 8%.
Per Digital Realty’s president & CEO, Andy Power, "Robust enterprise demand continues to drive our 0-1 megawatt plus interconnection offering, with companies expanding on PlatformDIGITAL. With five gigawatts of buildable IT capacity worldwide, we are well-positioned to meet our customers' evolving needs.”
DLR’s Third Quarter in Detail
In the reported quarter, DLR’s signed total bookings were estimated to generate $201 million of annualized GAAP rental revenues at its share, including a $65 million contribution from the 0-1 megawatt category and a $20 million contribution from interconnection. The weighted average lag between the new leases signed in the third quarter and the contractual commencement date was eight months.
Digital Realty signed renewal leases, marking $192 million of annualized cash rental revenues during the July-September quarter. Rental rates on renewal leases signed during the quarter rose 8% on a cash basis and 11.5% on a GAAP basis.
Adjusted EBITDA of $867.8 million in the quarter marked a 14.4% increase year over year.
DLR’s Portfolio Activity
During July-September, Digital Realty acquired a property comprising around five acres of land in the Los Angeles metro area for $49 million, expected to support 32 megawatts of IT capacity.
In addition, DLR bought out two land parcels near its Franklin Park campus for $18 million. Together with the previously acquired land parcels, this acquisition is expected to support more than 40 megawatts of incremental IT capacity in the Chicago metro area.
During the quarter, DLR disposed of non-core data centers in the Atlanta, Boston and Miami metro areas for gross proceeds amounting to $90 million.
Post the quarter end, DLR disposed of a non-core data center in the Dallas metro area for a gross proceeds value of $33 million.
DLR’s Balance Sheet Position
Digital Realty exited the third quarter of 2025 with cash and cash equivalents of $3.30 billion, down from $3.55 billion recorded as of June 30, 2025.
As of Sept. 30, 2025, this data center REIT had $18.2 billion of total debt outstanding, of which $17.4 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 4.9X, while the fixed charge coverage was 4.6X.
Its debt maturity schedule is well-laddered with modest near-term maturities, with a weighted average term to initial maturity of 4.4 years and a 2.75% weighted average coupon as of Sept. 30, 2025.
From the beginning of the third quarter through Oct. 23, DLR has cumulatively sold 2.9 million shares of common stock under its At-The-Market equity issuance program for net proceeds of around $501 million.
DLR’s 2025 Guidance Revised
Digital Realty raised its 2025 core FFO per share guidance range to $7.32-$7.38 from the earlier guided range of $7.15-$7.25. The Zacks Consensus Estimate of $7.21 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 $7.25 and $7.30, up from the earlier guided range of $7.10-$7.20.
DLR projects total revenues in the band of $6.025-$6.075 billion. The consensus mark is pegged at $5.97 billion, below the guided range. Adjusted EBITDA is expected in the range of $3.300-$3.350 billion.
DLR projects rental rates on renewal leases to be within 5.75-6.25% on a cash basis and 7.75-8.25% 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 American Tower (AMT - Free Report) , slated to report on Oct. 27 and Oct. 28, respectively.
The Zacks Consensus Estimate for Welltower’s third-quarter 2025 FFO per share is pegged at $1.30, implying a 17.12% year-over-year increase. WELL currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for American Tower’s third-quarter 2025 FFO per share is pegged at $2.62, calling for a marginal year-over-year decrease. AMT currently carries a Zacks Rank #2.
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.