Digital Realty Trust, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 23 July 2026: press release. Guidance figures: 15 raised, 3 lowered, 1 new, 7 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Development joint venture promote added to Core FFO: Net promote income of $188 million in Core FFO came from the successful development and leasing of three data centers in a development joint venture. Source
• Revenue rose 18% from prior quarter: Total revenues were $1.9 billion, up from the prior quarter and the same quarter last year. Fee income was $249 million against $35 million in the prior quarter. Source
• Small-deployment bookings passed $100 million: Bookings in the 0-1 MW plus interconnection category exceeded $100 million for the first time, according to management. Source
• Backlog reached a record level: Backlog of signed but not commenced leases was $1.9 billion at 100% share and $1.4 billion at Digital Realty’s share, up from $1.8 billion and $1.0 billion at March 31. Source
• Two hyperscale leases signed in July: In July the company signed two hyperscale leases worth $410 million at 100% share, of which $205 million is at Digital Realty’s share. Source
• Debt mostly unsecured at quarter end: Total debt was $18.6 billion at June 30, of which $17.0 billion was unsecured. Total debt was $18.0 billion at March 31. Source
• At-the-market equity sales continued: Net proceeds were about $1.2 billion from the ATM program since the first-quarter report. Year-to-date sales total about 13.5 million shares for $2.5 billion. Source
• Northern Virginia hyperscale stake acquired: Digital Realty bought a 64% stake in three fully leased Northern Virginia data centers with 288 MW, at a gross value of about $7.8 billion and an expected initial stabilized cap rate above 6.5%. Source

“Digital Realty delivered record Core FFO per share in the quarter, reflecting robust customer demand and strong execution across our core pillars of growth,”

President and Chief Executive Officer Andy Power

Guidance

What changed from last quarter

• Guidance raised: Full-year Core FFO per share guidance, excluding net promote, raised, with the constant-currency measure also raised. Source
• Guidance raised: Revenue, Adjusted EBITDA and G&A ranges raised; net non-cash rent adjustments moved to a more negative range. Source
• New guidance: Net promote now appears in the full-year per-share bridge at ($0.50); the prior quarter showed $0.00. Source
• Guidance lowered: Per-share amount for non-core expenses and revenue streams reduced from $0.40 to $0.25. Source
• Guidance raised: Expected dispositions and joint venture capital dollar volume range raised. Source
• Guidance raised: Long-term debt issuance pricing range raised and timing moved from mid-year to 2H-2026. Source
• New: Agreement announced to acquire Columbia Capital, a digital infrastructure investment firm. Source

Results and growth drivers

• Development joint venture promote added to Core FFO: Net promote income of $188 million in Core FFO came from the successful development and leasing of three data centers in a development joint venture. Source
• Revenue rose 18% from prior quarter: Total revenues were $1.9 billion, up from the prior quarter and the same quarter last year. Fee income was $249 million against $35 million in the prior quarter. Source
• Insurance settlement partly counted in Core FFO: A $94 million insurance settlement, net of tax, relates to a 2024 matter; about $27 million was recognized in Core FFO as business interruption recovery. Source
• Adjusted EBITDA rose to $978 million: Adjusted EBITDA was $978 million, up 6% from the prior quarter and 19% from a year earlier. Source

Segments and regions

• Northern Virginia occupancy near full: Northern Virginia occupancy was 98.6% at June 30. Americas was 95.7%, EMEA 82.1% and Asia Pacific 84.1% at the same date. Source
• Silicon Valley occupancy rose sharply: Silicon Valley occupancy on a 100% share basis rose to 92.4% from 78.8% at March 31. Source
• Currency lowered constant-currency NOI growth: Constant-currency cash NOI for the quarter was $686.6 million, with year-to-date constant-currency cash NOI up 4.9%, compared with reported growth shown in the sector figures. Source

“Together, these growth vectors are driving double-digit bottom line growth, and we are focused on extending this runway for years to come.”

President and Chief Executive Officer Andy Power

Products and customers

• Small-deployment bookings passed $100 million: Bookings in the 0-1 MW plus interconnection category exceeded $100 million for the first time, according to management. Source
• Largest customers hold large share of rent: The largest customer, a Fortune 50 software company, accounts for 10.8% of annualized recurring revenue. The top 20 customers total 53.1%. Source
• Large share of rent expires in 2027: Annualized rent expiring in 2026 is $571 million (11.9%) and in 2027 is $875 million (18.2%) across the data center total. Source

Costs, margins and pricing

• Utility expense rose with volume: Utilities expense was $396 million, up from $372 million in the prior quarter. Tenant reimbursements for utilities were $353 million. Source
• Transaction costs rose to $39 million: Transaction and integration expenses were $39 million, up from $16 million in the prior quarter. Source
• General and administrative costs held steady: General and administration expense was $153 million, close to the $152 million of the prior quarter. Source

Demand and the order book

• Backlog reached a record level: Backlog of signed but not commenced leases was $1.9 billion at 100% share and $1.4 billion at Digital Realty’s share, up from $1.8 billion and $1.0 billion at March 31. Source
• Commencement lag shortened to nine months: The weighted-average lag between signing and commencement for leases signed in the quarter was nine months, compared with nineteen months in the first quarter. Source
• Two hyperscale leases signed in July: In July the company signed two hyperscale leases worth $410 million at 100% share, of which $205 million is at Digital Realty’s share. Source
• Renewal volume in the quarter: Renewal leases signed in the quarter represented $262 million of annualized cash rental revenue. Source

Capital, cash and returns

• Debt mostly unsecured at quarter end: Total debt was $18.6 billion at June 30, of which $17.0 billion was unsecured. Total debt was $18.0 billion at March 31. Source
• At-the-market equity sales continued: Net proceeds were about $1.2 billion from the ATM program since the first-quarter report. Year-to-date sales total about 13.5 million shares for $2.5 billion. Source
• Shares and units rose with partner equity: Shares and units outstanding rose to 376.7 million at June 30 from 355.2 million at March 31, including shares issued to partners in the Northern Virginia transaction. Source
• Liquidity under revolving credit facilities: Cash was $1.86 billion at June 30. Of the revolving credit facilities’ maximum capacity, $3.64 billion remained available. Source

Strategy and investment

• Northern Virginia hyperscale stake acquired: Digital Realty bought a 64% stake in three fully leased Northern Virginia data centers with 288 MW, at a gross value of about $7.8 billion and an expected initial stabilized cap rate above 6.5%. Source
• Kansas City powered land for hyperscale: Powered land in the Kansas City metro cost about $475 million and supports hyperscale development of up to two gigawatts of utility power. Source
• Atlanta campus expected above one gigawatt: Atlanta land purchases, together with a parcel bought in the first quarter, form a campus expected to support over one gigawatt of IT capacity. Source
• Buildable pipeline grew to 8.5 gigawatts: Management reports about 3.1 GW of IT capacity and about 8.5 GW buildable under development or held for future development, up from 6.3 GW at March 31. Source

Coming up, as management said on 23 July 2026

• Columbia Capital acquisition pending: Management announced a deal to acquire Columbia Capital. The documents give no closing date. Source
• Northern Virginia stabilization timing: Management expects the newly developed Northern Virginia assets to be fully stabilized in the first half of 2027 and the first half of 2028. Source
• Investor conferences in August and September: Management listed investor conferences on dated events from August 4 through September 29, 2026. Source

Figures management reported

Risks management discussed

• Financial: Certain Teraco minority shareholders can put shares to the company; the resulting dilution is excluded from Core FFO and AFFO until settlement. Source
• Operational: Acquisition cash cap rates may differ from expectations; the company cites rent collection, tenant bankruptcy, property tax reassessment and unplanned expense risks. Source
• External: Currency movements affect reported results; the company presents Core FFO and cash NOI at constant 2025 exchange rates alongside reported figures. Source

Earlier plans management reported on

• Met: The non-core Atlanta metro asset sale that was previously disclosed closed during the quarter. Source
• Met: Acquisitions the company had previously announced were completed during the quarter, including Malaysia, Kansas City and Northern Virginia transactions. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.