Digital Realty Says AI Drove 44% Of Third-Quarter Bookings In Its Smallest Deployments
Fourth-quarter bookings in the 0-1 megawatt category already stand at 60% of the third-quarter number, management said.
AI accounted for 44% of Digital Realty's third-quarter bookings in its 0-1 megawatt business, a company executive told analysts on Thursday's earnings call. The segment, which management said set a record for a fourth straight quarter, has already booked 60% of that third-quarter total in the fourth quarter.
A record quarter in small deployments
Digital Realty, which owns data centers and rents space in them for colocation and interconnection (direct network links between customers, clouds and carriers), answered a question about its 0-1 megawatt business with the AI figure. The executive, introduced on the call in the Bank of America analyst slot, said the pipeline is as strong as it has been in the category, with AI becoming a more prevalent piece of the conversation.
CEO Andy Power said bookings in the 0-1 megawatt plus interconnection category exceeded $150 million at the company's share, up 80% from a year earlier and 40% from the second quarter. CFO Matt Mercier put the total at a record $165 million, or $151.8 million at the company's share. Interconnection bookings alone set a record of $23.9 million, or $22.2 million at its share.
The quarter's top signing in the category was an enterprise customer outside the U.S., Power said, followed by a traditional hyperscale deal. The next several were AI uses, including a 15-site backbone build-out for a major AI lab.
An AI lab across 15 European sites
Mercier said the AI lab's network deployment spans 15 Digital Realty sites in EMEA, where the sites act as interconnection hubs linking the customer to cloud providers, carriers and enterprises. AI inference deployments (the stage where trained models answer users) covered more than 15 separate markets in the quarter.
Power said Digital Realty is already live with liquid cooling for AI uses in more than 25 locations. Mercier named agentic AI and sovereign AI, where governments and regulated firms need capacity within their borders, as the two drivers gaining momentum.
Commencements to accelerate
Mercier said revenue from new leases should speed up over the next two quarters, helped by newly signed 0-1 megawatt leases and more than 250 megawatts of upcoming pre-lease deliveries. The company commenced $207 million of annualized rent in the third quarter, in line with the prior three quarters.
Total third-quarter bookings reached about $855 million, or $627 million at its share, and the backlog hit a record $2.5 billion. The company raised its 2026 core FFO per share guidance by 15 cents to $8.30 to $8.35. Its market value stood at $66.7 billion.
Mercier said the rise in commencements, set to build over the next two quarters, will keep driving revenue growth.
Sources
- Digital Realty Stock Ahead of Q3 Earnings: Smart Buy or Risky Move? — Yahoo Finance
- Digital Realty Trust FFO of $2.10 beats by $0.10, revenue of $1.9B beats by $140M (NYSE:DLR) | Seeking Alpha — seekingalpha.com
- Digital Realty Trust reports Q3 earnings above consensus; 2026 outlook raised (DLR:NYSE) | Seeking Alpha — seekingalpha.com
- Digital Realty Trust: Q3 Earnings Snapshot | 11alive.com — Associated Press
- Digital Realty Reports Third Quarter 2026 Results — globenewswire.com
