Digital Realty Trust, Inc. Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview
  • Digital Realty delivered an unprecedented quarter with $521 million in new leasing at the company’s share — more than double the prior record from Q1 2024 and exceeding all leasing done in 2023.
  • Backlog surged more than 60% sequentially to $859 million, representing 20% of annualized data center revenue; more than 85% set to commence by the end of 2026.
  • Record performance across every leasing category:
    • Greater than 1 MW: $450 million
    • 0–1 MW: $50 million
    • Interconnection: $16 million
  • Development pipeline expanded nearly 50% sequentially to 644 MW under construction, 74% preleased, with a 12% expected yield.
  • Core FFO per share reached $1.67, driven by revenue growth and a ~200 bps EBITDA margin improvement.
  • Full-year 2024 Core FFO guidance raised to $6.65–$6.75.
Key Performance Drivers
  • Hyperscale demand was the primary driver, with major deals in Manassas, Ashburn, and Chicago. Greater than 1 MW bookings grew 75% vs. Q1 2024’s previous record.
  • AI-driven bookings accounted for ~50% of total activity — similar to Q1 levels — highlighting consistently growing AI demand.

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Operator: Good afternoon, and welcome to the Digital Realty Third Quarter 2024 Earnings Conference Call. Please note, this event is being recorded. During today’s presentation, all parties will be in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [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 third 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; and 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 third quarte

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