Digital Realty (NYSE: DLR), headquartered in Austin, Texas, announced financial results for the third quarter of 2024, reporting total revenue of $1.4 billion, a 5% increase from the previous quarter and a 2% rise compared to the same period last year. Net income came in at $40 million, equating to $0.09 per diluted share, down from $0.20 per share in Q2 2024 and significantly lower than $2.31 per share in Q3 2023. The company’s Adjusted EBITDA reached $758 million, a 4% quarter-over-quarter growth and an 11% improvement year-over-year.
Digital Realty’s leasing activity surged in the third quarter, signing new bookings expected to generate $521 million in annualized GAAP rental revenue. These bookings include a $50 million contribution from the 0–1 megawatt category and $16 million from interconnection services, emphasizing demand across different power segments. The weighted-average lag between lease signings and contractual start dates averaged 15 months, indicating a stable pipeline for future revenue. Digital Realty also reported a 15.2% increase in rental rates on renewal leases on a cash basis and 27.5% on a GAAP basis, reflecting a positive market environment for renewals.
In response to this strong leasing momentum, Digital Realty adjusted its 2024 Core FFO per share outlook, raising the range to $6.65 – $6.75. This reflects the company’s optimism about continued demand in its greater-than-a-megawatt and interconnection segments. To support future growth, Digital Realty expanded its presence in key markets, including the acquisition of a 6.7-acre parcel in Richardson, Texas, which will add over 80 megawatts of capacity to its data center portfolio. The company also closed acquisitions in London and Amsterdam, adding strategic capacity to its European portfolio.
• Q3 2024 revenue: $1.4 billion, up 5% from Q2, and 2% from Q3 2023.
• Net income: $40 million, translating to $0.09 per diluted share.
• Adjusted EBITDA: $758 million, up 4% quarter-over-quarter and 11% year-over-year.
• Funds From Operations (FFO): $520 million in Q3, or $1.55 per share.
• Core FFO per share: $1.67, compared to $1.62 in Q3 2023.
• Constant-Currency Core FFO: $1.66 per share in Q3 2024.
• Backlog of signed-but-not-commenced leases: $859 million in annualized GAAP base rent.
• New bookings: Expected to generate $521 million in annualized GAAP revenue.
• Rental rate increases on renewal leases: 15.2% cash basis, 27.5% GAAP basis.
• Average lag time for lease commencements: 15 months.
• Raised 2024 Core FFO per share outlook to $6.65 – $6.75.
• Strategic acquisitions: 6.7-acre parcel in Richardson, Texas, and two data centers in London.
• European expansion: Acquired data center site in Amsterdam for approximately $48 million.
• Total debt: Approximately $17 billion as of September 30, 2024, with a net debt-to-Adjusted EBITDA ratio of 5.4x.
“Our backlog now represents over 20% of annualized in-place data center revenue, enhancing our visibility and positioning Digital Realty for accelerating longer-term growth,” said Digital Realty President & CEO Andy Power.
