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Digital Realty's Q3 core FFO per share rose 11.1% to $2.10, beating estimates by 6.6%.
Record bookings reached $626.6 million at DLR's share, while its lease backlog climbed to $1.85 billion.
DLR raised 2026 core FFO guidance to $8.30-$8.35 per share and revenue guidance to $7.05-$7.125 billion.
Digital Realty Trust, Inc. (DLR - Free Report) reported third-quarter 2026 core FFO per share, excluding net promote, of $2.10, up 11.1% year over year. The figure surpassed the Zacks Consensus Estimate by 6.6%.
Total operating revenues increased 20.6% year over year to $1.90 billion, topping the consensus mark by 9.3%. Higher rental revenues and fee income contributed to growth, while record bookings and a rising lease backlog strengthened the company's longer-term revenue visibility.
DLR's Bookings Set a New Quarterly Record
Digital Realty signed leases expected to generate $855.3 million of annualized GAAP base rent at 100% share. Its proportionate share of bookings reached $626.6 million, with contracts larger than 1 megawatt accounting for $474.2 million. Hyperscale demand drove the largest category of new signings.
Small-capacity deals and interconnection together contributed $151.8 million, or 24% of bookings at DLR's share. The company added 155 new customer logos during the quarter. The weighted-average period from signing to commencement was 17 months.
Digital Realty's Backlog Extends Growth Visibility
The signed but not yet commenced backlog rose to a record $2.5 billion in annualized GAAP base rent at 100% share. At Digital Realty's share, it totaled $1.85 billion. This represents roughly 40% of the company's in-place data center rental revenues.
Of the share-weighted backlog, $371 million is scheduled to commence in 2026, followed by $831 million in 2027 and $643 million in 2028 and beyond. The scheduled ramp-up provides multiyear visibility for additional rental revenues.
DLR's Renewal Pricing and Occupancy Improve
During the quarter, renewal leases represented $261 million of annualized cash rent. Rental rates rose 11.8% on a cash basis and 17% under GAAP. Renewals for spaces larger than 1 megawatt recorded 26.3% cash spreads, while smaller spaces recorded 4.7%.
Portfolio occupancy reached 91.1% as of Sept. 30, up from 90.4% a year earlier and 90.2% in June. Same-capital occupancy climbed to 93.4%, versus 91.9% a year ago. Same-capital cash net operating income increased 5.9% from the prior-year quarter.
Digital Realty's Revenue Mix Supports Profitability
Rental revenues increased 17.1% year over year to $1.22 billion. Utility reimbursements rose 27.4% to $423.9 million, while fee income more than doubled to $75.3 million. Growth across these revenue streams supported the top line.
Operating expenses advanced 11.8% to $1.61 billion, including $477.5 million in utility costs and $170.6 million in general and administrative expenses.
DLR Adds Capacity and Pursues New Investments
DLR spent $741.9 million acquiring land in the third quarter. Key purchases included sites near Indianapolis for more than 1 gigawatt of IT capacity, around Chicago for 360 megawatts and in Charlotte for up to 600 megawatts. The company also expanded in Atlanta and European markets.
The data center portfolio contained 311 facilities and 3.16 gigawatts of in-place IT capacity at quarter-end. Buildable IT capacity stood at roughly 9.8 gigawatts, including 1.46 gigawatts under construction. About 63% of the capacity currently under construction was leased.
Digital Realty's Capital Plan Supports Development
Total debt stood at $19.5 billion at quarter-end. Net debt to adjusted EBITDA was 5.2 times compared with 4.7 times in June, while fixed-charge coverage declined to 4.8 times from 5.2 times. DLR raised approximately $450 million through its at-the-market equity program during the quarter.
Following September, the company obtained $1.4 billion in cornerstone equity commitments for a perpetual capital strategy aimed at stabilized North American hyperscale data centers. It also issued euro and Swiss franc bonds that generated approximately $1.7 billion in net proceeds.
DLR Lifts Core FFO and Revenue Guidance
Digital Realty lifted its 2026 core FFO per share outlook, excluding net promote, to $8.30-$8.35 from $8.15-$8.20. The revised range encompasses the current Zacks Consensus Estimate of $8.33.
Revenue guidance, excluding promote income, rose to $7.05-$7.125 billion from $6.85-$6.95 billion compared with the consensus estimate of $7.11 billion. Adjusted EBITDA is projected at $3.80-$3.85 billion. The company also raised its same-capital cash NOI growth outlook to 5.25%-5.75% and cash rent spreads on renewals to 10%-12%.
Crown Castle Inc. (CCI - Free Report) reported third-quarter 2026 adjusted FFO per share of $1.24, up 10.7% year over year. The metric surpassed the Zacks Consensus Estimate of $1.20 by 3.3%. Results benefited from lower interest expenses.
Public Storage (PSA - Free Report) reported third-quarter 2026 core FFO per share of $4.34, beating the Zacks Consensus Estimate of $4.27. Results gained from improving same-store operating trends, growth in non-same-store properties and strong ancillary operations.
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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DLR Q3 FFO & Revenues Beat Estimates on Rental Growth, '26 View Raised
Key Takeaways
Digital Realty Trust, Inc. (DLR - Free Report) reported third-quarter 2026 core FFO per share, excluding net promote, of $2.10, up 11.1% year over year. The figure surpassed the Zacks Consensus Estimate by 6.6%.
Total operating revenues increased 20.6% year over year to $1.90 billion, topping the consensus mark by 9.3%. Higher rental revenues and fee income contributed to growth, while record bookings and a rising lease backlog strengthened the company's longer-term revenue visibility.
DLR's Bookings Set a New Quarterly Record
Digital Realty signed leases expected to generate $855.3 million of annualized GAAP base rent at 100% share. Its proportionate share of bookings reached $626.6 million, with contracts larger than 1 megawatt accounting for $474.2 million. Hyperscale demand drove the largest category of new signings.
Small-capacity deals and interconnection together contributed $151.8 million, or 24% of bookings at DLR's share. The company added 155 new customer logos during the quarter. The weighted-average period from signing to commencement was 17 months.
Digital Realty's Backlog Extends Growth Visibility
The signed but not yet commenced backlog rose to a record $2.5 billion in annualized GAAP base rent at 100% share. At Digital Realty's share, it totaled $1.85 billion. This represents roughly 40% of the company's in-place data center rental revenues.
Of the share-weighted backlog, $371 million is scheduled to commence in 2026, followed by $831 million in 2027 and $643 million in 2028 and beyond. The scheduled ramp-up provides multiyear visibility for additional rental revenues.
DLR's Renewal Pricing and Occupancy Improve
During the quarter, renewal leases represented $261 million of annualized cash rent. Rental rates rose 11.8% on a cash basis and 17% under GAAP. Renewals for spaces larger than 1 megawatt recorded 26.3% cash spreads, while smaller spaces recorded 4.7%.
Portfolio occupancy reached 91.1% as of Sept. 30, up from 90.4% a year earlier and 90.2% in June. Same-capital occupancy climbed to 93.4%, versus 91.9% a year ago. Same-capital cash net operating income increased 5.9% from the prior-year quarter.
Digital Realty's Revenue Mix Supports Profitability
Rental revenues increased 17.1% year over year to $1.22 billion. Utility reimbursements rose 27.4% to $423.9 million, while fee income more than doubled to $75.3 million. Growth across these revenue streams supported the top line.
Operating expenses advanced 11.8% to $1.61 billion, including $477.5 million in utility costs and $170.6 million in general and administrative expenses.
DLR Adds Capacity and Pursues New Investments
DLR spent $741.9 million acquiring land in the third quarter. Key purchases included sites near Indianapolis for more than 1 gigawatt of IT capacity, around Chicago for 360 megawatts and in Charlotte for up to 600 megawatts. The company also expanded in Atlanta and European markets.
The data center portfolio contained 311 facilities and 3.16 gigawatts of in-place IT capacity at quarter-end. Buildable IT capacity stood at roughly 9.8 gigawatts, including 1.46 gigawatts under construction. About 63% of the capacity currently under construction was leased.
Digital Realty's Capital Plan Supports Development
Total debt stood at $19.5 billion at quarter-end. Net debt to adjusted EBITDA was 5.2 times compared with 4.7 times in June, while fixed-charge coverage declined to 4.8 times from 5.2 times. DLR raised approximately $450 million through its at-the-market equity program during the quarter.
Following September, the company obtained $1.4 billion in cornerstone equity commitments for a perpetual capital strategy aimed at stabilized North American hyperscale data centers. It also issued euro and Swiss franc bonds that generated approximately $1.7 billion in net proceeds.
DLR Lifts Core FFO and Revenue Guidance
Digital Realty lifted its 2026 core FFO per share outlook, excluding net promote, to $8.30-$8.35 from $8.15-$8.20. The revised range encompasses the current Zacks Consensus Estimate of $8.33.
Revenue guidance, excluding promote income, rose to $7.05-$7.125 billion from $6.85-$6.95 billion compared with the consensus estimate of $7.11 billion. Adjusted EBITDA is projected at $3.80-$3.85 billion. The company also raised its same-capital cash NOI growth outlook to 5.25%-5.75% and cash rent spreads on renewals to 10%-12%.
Currently, DLR carries a Zacks Rank #4 (Sell).
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
Performance of Other REITs
Crown Castle Inc. (CCI - Free Report) reported third-quarter 2026 adjusted FFO per share of $1.24, up 10.7% year over year. The metric surpassed the Zacks Consensus Estimate of $1.20 by 3.3%. Results benefited from lower interest expenses.
Public Storage (PSA - Free Report) reported third-quarter 2026 core FFO per share of $4.34, beating the Zacks Consensus Estimate of $4.27. Results gained from improving same-store operating trends, growth in non-same-store properties and strong ancillary operations.
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.