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Digital Realty beat Q2 estimates as revenues rose 28.9% and core FFO per share increased 13.9% year over year.
DLR posted record signed lease backlog and strong bookings, with renewal rental rates rising sharply.
DLR raised 2026 core FFO and revenue guidance after expanding capacity through acquisitions and land buys.
Digital Realty Trust, Inc. (DLR - Free Report) reported second-quarter 2026 core FFO per share, excluding net promote, of $2.13, up 13.9% from a year ago. The figure surpassed the Zacks Consensus Estimate of $1.98 by 7.6%.
Total operating revenues rose 28.9% year over year to $1.92 billion and beat the consensus mark of $1.66 billion. Strong bookings, a record backlog and sharp renewal rent increases supported the quarter. The company raised its 2026 core FFO guidance.
As a result, the stock was trading almost 3% higher during the pre-market session today.
DLR's Bookings Reflect Broad-Based Demand
Digital Realty signed bookings expected to generate $307 million of annualized GAAP base rent at 100% share. At DLR's share, bookings totaled $208.5 million, with the 0-1-megawatt category contributing $87.8 million and interconnection adding $20.5 million.
Digital Realty Builds Record Revenue Visibility
The backlog of signed but not yet commenced leases reached a record $1.9 billion of annualized GAAP base rent at 100% share. Digital Realty's share was $1.4 billion.
The weighted-average lag between new lease signing and contractual commencement was nine months. In July, the company also signed two hyperscale leases representing $410 million of annualized GAAP base rent at 100% share, or $205 million at DLR's share.
DLR Benefits From Strong Renewal Pricing
Digital Realty signed renewal leases representing $262 million of annualized cash rental revenues. Rental rates increased 25.4% on a cash basis and 32% on a GAAP basis, reflecting a favorable pricing environment. Portfolio occupancy ended the quarter at 90.2%, up from 89.7% a year earlier.
DLR Expands Capacity Through Investments
Digital Realty acquired Kansas City-area land for about $475 million to support up to 2 gigawatts of utility power. It also purchased a 64% stake in three fully leased Northern Virginia data centers containing 288 megawatts of IT capacity at a gross value of about $7.8 billion.
Other investments included two Malaysian data centers and adjacent land for about $134 million, Marseille land for $53.1 million and Atlanta-area land for $20 million. The global portfolio ended June with roughly 3.1 gigawatts of in-place IT capacity and 8.5 gigawatts of buildable capacity.
Digital Realty Maintains Financial Flexibility
Total debt stood at roughly $18.6 billion at quarter-end. Net debt to Adjusted EBITDA remained at 4.7 times, while fixed-charge coverage improved to 5.2 times from 4.7 times a year ago.
From the prior earnings release through June 30, DLR sold about 6.2 million shares through its at-the-market program for net proceeds of approximately $1.2 billion. Year-to-date proceeds totaled about $2.5 billion from 13.5 million shares.
DLR Raises 2026 Outlook
Digital Realty raised its 2026 core FFO per share outlook, excluding net promote, to $8.15-$8.20 from $8.00-$8.10. The revised range stands above the current Zacks Consensus Estimate of $8.04.
The company also lifted its revenue outlook, excluding promote income, to $6.85-$6.95 billion from $6.65-$6.75 billion. Adjusted EBITDA is now projected at $3.75-$3.85 billion, while development capital expenditures, net of partner contributions, are expected at $4.25-$4.75 billion.
We now look forward to the earnings releases of other REITs like Regency Centers (REG - Free Report) and Ventas (VTR - Free Report) , both slated to report on July 29.
The Zacks Consensus Estimate for Regency Centers’ second-quarter 2026 FFO per share is pegged at $1.20, implying a 3.45% year-over-year increase. REG currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Ventas’ second-quarter 2026 FFO per share is pegged at 96 cents, calling for a 10.3% year-over-year jump. VTR 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.
View the Zacks #1 Rank List
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DLR Q2 FFO Beats on Leasing Strength & Renewal Rent, '26 View Raised
Key Takeaways
Digital Realty Trust, Inc. (DLR - Free Report) reported second-quarter 2026 core FFO per share, excluding net promote, of $2.13, up 13.9% from a year ago. The figure surpassed the Zacks Consensus Estimate of $1.98 by 7.6%.
Total operating revenues rose 28.9% year over year to $1.92 billion and beat the consensus mark of $1.66 billion. Strong bookings, a record backlog and sharp renewal rent increases supported the quarter. The company raised its 2026 core FFO guidance.
As a result, the stock was trading almost 3% higher during the pre-market session today.
DLR's Bookings Reflect Broad-Based Demand
Digital Realty signed bookings expected to generate $307 million of annualized GAAP base rent at 100% share. At DLR's share, bookings totaled $208.5 million, with the 0-1-megawatt category contributing $87.8 million and interconnection adding $20.5 million.
Digital Realty Builds Record Revenue Visibility
The backlog of signed but not yet commenced leases reached a record $1.9 billion of annualized GAAP base rent at 100% share. Digital Realty's share was $1.4 billion.
The weighted-average lag between new lease signing and contractual commencement was nine months. In July, the company also signed two hyperscale leases representing $410 million of annualized GAAP base rent at 100% share, or $205 million at DLR's share.
DLR Benefits From Strong Renewal Pricing
Digital Realty signed renewal leases representing $262 million of annualized cash rental revenues. Rental rates increased 25.4% on a cash basis and 32% on a GAAP basis, reflecting a favorable pricing environment. Portfolio occupancy ended the quarter at 90.2%, up from 89.7% a year earlier.
DLR Expands Capacity Through Investments
Digital Realty acquired Kansas City-area land for about $475 million to support up to 2 gigawatts of utility power. It also purchased a 64% stake in three fully leased Northern Virginia data centers containing 288 megawatts of IT capacity at a gross value of about $7.8 billion.
Other investments included two Malaysian data centers and adjacent land for about $134 million, Marseille land for $53.1 million and Atlanta-area land for $20 million. The global portfolio ended June with roughly 3.1 gigawatts of in-place IT capacity and 8.5 gigawatts of buildable capacity.
Digital Realty Maintains Financial Flexibility
Total debt stood at roughly $18.6 billion at quarter-end. Net debt to Adjusted EBITDA remained at 4.7 times, while fixed-charge coverage improved to 5.2 times from 4.7 times a year ago.
From the prior earnings release through June 30, DLR sold about 6.2 million shares through its at-the-market program for net proceeds of approximately $1.2 billion. Year-to-date proceeds totaled about $2.5 billion from 13.5 million shares.
DLR Raises 2026 Outlook
Digital Realty raised its 2026 core FFO per share outlook, excluding net promote, to $8.15-$8.20 from $8.00-$8.10. The revised range stands above the current Zacks Consensus Estimate of $8.04.
The company also lifted its revenue outlook, excluding promote income, to $6.85-$6.95 billion from $6.65-$6.75 billion. Adjusted EBITDA is now projected at $3.75-$3.85 billion, while development capital expenditures, net of partner contributions, are expected at $4.25-$4.75 billion.
Currently, DLR carries a Zacks Rank #3 (Hold). 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 Regency Centers (REG - Free Report) and Ventas (VTR - Free Report) , both slated to report on July 29.
The Zacks Consensus Estimate for Regency Centers’ second-quarter 2026 FFO per share is pegged at $1.20, implying a 3.45% year-over-year increase. REG currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Ventas’ second-quarter 2026 FFO per share is pegged at 96 cents, calling for a 10.3% year-over-year jump. VTR 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.