Digital Realty Trust, Inc. Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights

  • Record leasing of $252 million, more than 40% above the prior record (Q3 2022’s $176 million). Drivers included strong AI-linked demand and improved pricing.
  • Backlog reached an all-time high of $541 million, up from $430 million last quarter, with over half set to commence in 2024.
  • Re-leasing spreads hit a record 11.8% (vs. prior quarter low-double digits). Adjusted spreads excluding one-offs would have been 3.4%.
  • Same-capital cash NOI grew 4.7% year-over-year, marking the fifth consecutive quarter of positive growth.
  • Raised over $1 billion through asset sales and joint ventures year-to-date, moving leverage down to 6.1x reported and 5.8x pro forma (vs. 6.2x year‑end 2023).

Operational & Financial Performance

  • Core FFO per share: $1.67, up sequentially due to leasing strength and operating performance.
  • Revenue growth normalized at 7% year-over-year after adjusting for disposed/JV assets.
  • Adjusted EBITDA grew 9% year-over-year.
  • Development spending declined sequentially by ~$300 million due to JV contributions and timing.
  • Weighted average debt maturity: 4+ years; weighted average interest rate: 2.9%.
  • $3B+ in liquidity, $1.2B in cash on hand.

Market & Demand Commentary

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Operator: Good afternoon, and welcome to the Digital Realty First Quarter 2024 Earnings Call. Please note that 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. Jordan, please go ahead. Jordan Sadler: Thank you, operator, and welcome, everyone, to Digital Realty's First Quarter 2024 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 differ materially. For a further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain non-GAAP financial information. Reconciliations to net income 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 first quarter. First, our customer value proposition continues to resonate as reflected by an AI-driven acceleration in leasing activity that drove our overal

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