Digital Realty’s leasing activity hit multiple records in Q2, reflecting growing demand across hyperscale, colocation, and interconnection segments. The company signed $177 million in bookings at 100% share, with $135 million attributable to Digital Realty, including $90 million from the 0–1MW plus interconnection category—accounting for 66% of total bookings. Interconnection alone contributed $17.3 million, while the >1MW segment added $45 million. Notably, this performance marked the highest quarterly bookings ever from the retail colocation and interconnection tiers. Global leasing was broadly distributed, with strong performance in the Americas, EMEA, and Asia-Pacific.
To meet surging AI and cloud hyperscale workloads, Digital Realty advanced its U.S. Hyperscale Data Center Fund beyond $3 billion in LP equity commitments—well above initial targets. In Q2, the company contributed five operating data centers and two development sites to the Fund, generating over $900 million in gross proceeds. With this platform, Digital Realty anticipates unlocking more than $10 billion in total hyperscale data center investments. Additionally, the company expanded its land holdings in Atlanta (100 acres for 200MW), Dallas (167 acres for 480MW), and Chicago (assemblage to support Franklin Park campus expansion), positioning itself for over 680MW in future development.
The company delivered 96MW of new capacity in Q2 and has 734MW under construction globally. Its buildable IT capacity now totals nearly 5,000MW across 300+ data centers in 50+ metros. Digital Realty also reported record commencements of $228 million in annualized base rent and ended the quarter with an $826 million backlog of signed-but-not-yet-commenced leases. Renewal activity also remained strong, with 7.3% cash rent increases and 9.9% on a GAAP basis. Looking forward, 29% of the backlog is expected to commence in the second half of 2025, providing solid revenue visibility.
Digital Realty delivered a robust second-quarter performance for fiscal 2025, reporting $1.49 billion in revenue—up 10% year-over-year and 6% sequentially. Net income surged to $1.05 billion, or $2.94 per share, driven largely by a $931 million gain on real estate transactions. Funds from Operations (FFO) reached $600 million, or $1.75 per share, while Core FFO increased to $1.87 per share, up from $1.65 a year earlier. Adjusted EBITDA came in at $823 million, a 13% annual increase. The company also raised its full-year Core FFO outlook to $7.15–$7.25 per share and its constant-currency Core FFO to $7.10–$7.20.
Digital Realty maintained a conservative balance sheet with $18.5 billion in total debt and a net debt-to-adjusted EBITDA ratio of 5.1x. Fixed charge coverage stood at 4.7x, and the company maintained 94% of its debt as fixed-rate. In June, Digital Realty issued €850 million in 3.875% notes due 2034 and subsequently repaid €650 million in prior debt. It also raised $719 million via an at-the-market equity program at an average price of $173.19 per share. The company now estimates 2025 revenue between $5.925 and $6.025 billion, with adjusted EBITDA projected between $3.2 and $3.3 billion.
• Revenue: $1.49B in Q2 2025, up 10% YoY
• Net Income: $1.05B ($2.94/share), vs. $0.20/share YoY
• Core FFO: $1.87/share; Constant-currency Core FFO: $1.84/share
• Adjusted EBITDA: $823M, up 13% YoY
• Bookings: $177M (100% share); $135M (DLR share); $90M from 0–1MW + interconnection
• Commencements: $228M, a record
• Backlog: $826M of annualized base rent, with 29% expected to commence in 2H25
• Rental Rate Increases: +7.3% cash, +9.9% GAAP on renewals
• Hyperscale Fund: >$3B in LP equity commitments; >$900M in proceeds realized in Q2
• New land acquisitions to support over 680MW of future IT capacity
• Global Buildable Capacity: ~5,000MW, with 734MW under construction
• Green Metrics: 75% renewable energy usage globally; $7.2B green bonds issued
• FY25 Revenue Outlook: $5.925B–$6.025B
• FY25 Core FFO Outlook: $7.15–$7.25/share
“Our inaugural U.S. Hyperscale Data Center Fund is oversubscribed, providing us the capital necessary to serve our customers’ growing requirements and to extend Digital Realty’s runway for growth,” said Andy Power, CEO of Digital Realty.
🌐 Why it Matters: Hyperscale and AI infrastructure build-outs are fueling demand for both multi-megawatt deployments and dense interconnection. Digital Realty’s capital-light strategy—leveraging fund contributions and land banking—positions it to meet this demand at global scale. Record growth in smaller-footprint deals also signals a healthy market for hybrid enterprise workloads and edge aggregation nodes.
🌐 We’re tracking the latest developments in data center infrastructure. Follow our ongoing coverage at: https://convergedigest.com/category/data-center/
