Digital Realty Trust, Inc. Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Digital Realty (DLR) Q3 2026 Earnings Summary

Overview: Strong execution across global platform drove record leasing, backlog growth, and 11% YoY core FFO per share growth. AI demand broadening beyond training into inference, enterprise, and connectivity. Raised full-year guidance; maintained investment-grade balance sheet with pro forma leverage at 4.9x.

Financial Performance (vs. Prior Periods)

  • Core FFO per share: $2.10 (+11% YoY); full-year 2026 guidance raised to $8.30–$8.35 (nearly 13% growth vs. 2025, up ~2% from prior guidance).
  • Same-capital cash NOI: +6% YoY in Q3; YTD constant currency ~5% (guidance raised to 5.25%–5.75% constant currency).
  • Stabilized occupancy: 93.4% (+90 bps sequentially).
  • Churn: Record low 0.7%.
  • Cash re-leasing spreads: ~12% (third-highest on record; YTD >14%; guidance raised to 10%–12%).
  • Recurring revenue: +16% YTD reported (+14% constant currency), double-digit growth in all regions.

Leasing Activity & Backlog

  • Total bookings: $855M ($627M at share) — record, +20% vs. prior record.
  • >1 MW hyperscale bookings: $689M ($474M at share) — record, driven by strong pricing and broad geographic demand (e.g., Northern Virginia, APAC record +600%).
  • 0-1 MW + interconnection bookings: $165M ($151.8M at share) — record, +40% QoQ, +80% YoY; fourth consecutive record; strong across all regions.
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Operator: Good afternoon, and welcome to Digital Realty Third Quarter 2026 Earnings Call. Please note, this event is being recorded. [Operator Instructions] I would now like to turn the call over to Jordan Sadler, Digital Realty's Senior Vice President of Public and Private Investor Relations. Please go ahead. Jordan Sadler: Thank you, operator, and welcome, everyone, to Digital Realty's Third Quarter 2026 Earnings Conference Call. Joining me on today's call are President and CEO, Andy Power; and CFO, Matt Mercier. Chief Investment Officer, Greg Wright; Chief Technology Officer, Chris Sharp; and Chief Revenue Officer, Colin McLean, are also on the call and will be available for Q&A. Management will be making forward-looking statements, including guidance and underlying assumptions on today's call. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to materially differ. For a further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain certain non-GAAP financial information. Reconciliations to the most directly comparable GAAP measures are included in the supplemental package furnished to the SEC and available on our website. Before I turn the call over to Andy, let me offer a few key takeaways from our third quarter results. First, exceptionally strong execution across our global platform drove upside to revenues, adjusted EBITDA and core FFO
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