Digital Realty Raises 2026 Profit Outlook After Record $855 Million Of New Rent Signed At 100% Share
The data center landlord lifted its core profit forecast to $8.30-$8.35 a share and closed $1.4 billion of equity commitments after quarter end.
Digital Realty, which owns data centers and rents space in them to cloud, technology and enterprise customers, raised its 2026 profit forecast after signing a record $855 million of new annualized rent at 100% share in the third quarter, the company said Thursday. At its own share, bookings were a record $627 million.
Forecast raised again, to $8.30-$8.35
The company now expects 2026 core funds from operations per share, excluding net promote, of $8.30 to $8.35, up from $8.15 to $8.20 in July. Core funds from operations is a profit measure for real estate companies that adds back depreciation. Its February range was $7.90 to $8.00.
It also lifted revenue guidance, excluding promote income, to $7.050-$7.125 billion from $6.850-$6.950 billion in July. Adjusted EBITDA is guided to $3.800-$3.850 billion, from $3.750-$3.850 billion.
Third-quarter revenue was $1.9 billion, 21% above a year earlier. Net income available to common stockholders was $0.48 per diluted share, against $0.15 a year earlier.
Backlog and renewal pricing
The backlog of signed leases that have not yet started reached a record $2.5 billion of annualized base rent at 100% share, or a record $1.8 billion at the company's share. New leases signed in the quarter carried a weighted-average lag of 17 months before they begin.
Renewal leases rose 11.8% on a cash basis and 17.0% on a GAAP basis. CEO Andy Power said the quarter brought "record leasing, an expanding backlog, and another quarter of double-digit earnings growth."
Paying for the build-out
Net development capital spending is guided to $4.25-$4.75 billion, up from $3.25-$3.75 billion in February. After quarter end, the company closed $1.4 billion of initial cornerstone equity commitments to a new perpetual capital strategy focused on stabilized hyperscale data centers in North America.
Year to date it has sold about 15.9 million shares through its at-the-market program for net proceeds of about $2.9 billion. In October it also issued €1 billion of 5.125% euro notes due 2036 and Swiss franc bonds worth about CHF508 million in net proceeds.
It also bought an additional 16% stake in Teraco after quarter end for about $688 million, mostly in 3.4 million new shares, lifting its ownership from 61% to about 77%.
Management hosts its investor call at 5:00 p.m. ET Thursday, and the company next appears at the Nareit REITworld conference in Atlanta on November 17-18.
Sources
- 8-K Filing — DIGITAL REALTY TRUST, INC. (DLR) — SEC EDGAR
- Exhibit dlr-ex99d1.htm — DIGITAL REALTY TRUST, INC. 8-K exhibit — SEC EDGAR
- Exhibit dlr-ex99d2.htm — DIGITAL REALTY TRUST, INC. 8-K exhibit — SEC EDGAR
