Digital Realty Trust ((DLR)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call of Digital Realty Trust, Inc. conveyed a predominantly positive sentiment, underscoring several significant achievements. The company reported record leasing figures, growth in core funds from operations (FFO) per share, and the establishment of a major US hyperscale fund. Despite challenges posed by market volatility and potential tariff impacts, Digital Realty Trust has shown robust growth and strategic expansion, supported by a strong pipeline and advancements in sustainability.
Record Leasing and Strong Backlog
Digital Realty Trust, Inc. achieved impressive leasing results in the first quarter of 2025, with $242 million in new leases, maintaining the record pace set in 2024. The backlog of booked not billed leases reached an unprecedented $919 million, indicating strong future revenue streams.
Growth in Core FFO Per Share
The company reported a 6.1% year-over-year increase in core FFO per share, driven by solid same-capital operating results and new commencements over the past year. This growth reflects the company’s effective operational strategies and financial health.
Successful Formation of US Hyperscale Fund
Digital Realty Trust announced the creation of its first US hyperscale data center fund, aiming for $2.5 billion in equity commitments. This initiative supports approximately $10 billion in hyperscale data center investments, aligning with growing customer demands and optimizing the company’s balance sheet.
Expansion and New Market Entries
The company expanded its global presence by entering the Indonesian market and launching the Heracleion One data center in Crete. Additionally, three new Azure on-ramps were added in Atlanta, Brussels, and Vienna, enhancing connectivity and service offerings.
Sustainability Achievements
Digital Realty Trust reached 100% renewable energy coverage for its operations in Singapore and inaugurated a 16 MW data center in Frankfurt powered entirely by renewable sources, showcasing its commitment to sustainability.
Market Volatility and Uncertainty
Despite significant market volatility and uncertainty, Digital Realty Trust’s pipeline remains robust. The company continues to navigate these challenges effectively, maintaining its growth trajectory.
Potential Tariff Impact on Development Costs
The company anticipates a modest impact of less than 5% on development costs due to tariffs. However, proactive measures have been implemented to mitigate these potential cost increases.
Forward-Looking Guidance
Digital Realty Trust provided an optimistic outlook for the remainder of 2025 and into 2026. The firm highlighted its strong leasing activity and record backlog, offering solid visibility into future performance. The formation of the US hyperscale fund is expected to meet growing customer needs and enhance the balance sheet. The company also raised its core FFO guidance range for 2025, reflecting updated foreign exchange assumptions.
In conclusion, Digital Realty Trust’s earnings call highlighted a positive sentiment, with record leasing, growth in core FFO per share, and strategic expansions underscoring the company’s robust performance. Despite challenges from market volatility and tariffs, the company’s forward-looking guidance remains optimistic, promising continued growth and sustainability advancements.