Digital Realty Trust (DLR) reported fourth‑quarter 2025 results that surpassed revenue expectations and delivered a strong Core FFO performance, while GAAP earnings fell short of consensus. Total revenue rose 4 % to $1.63 billion, driven by a 14 % year‑over‑year increase in the company’s high‑margin “zero‑to‑one megawatt plus interconnection” segment, which captured record leasing activity from hyperscale cloud providers.
The company’s $1.63 billion in revenue beat the consensus estimate of $1.58 billion by $50 million, a 3.2 % lift that reflects sustained demand for data‑center capacity amid the AI boom. New bookings for the quarter totaled $400 million in annualized rent, and the backlog of signed‑but‑not‑commenced leases reached nearly $1.4 billion on a 100 % share basis—significantly higher than the $817 million figure previously reported.
GAAP earnings per share were $0.24, missing the consensus estimate of $1.83 by $1.59, largely because the company’s operating income was offset by a $1.6 billion one‑time charge related to a restructuring of its European portfolio. In contrast, Core FFO per share reached $1.86, beating the $0.91 estimate by $0.95 and underscoring the strength of DLR’s recurring lease income. The Core FFO beat was driven by higher occupancy rates and a favorable mix of long‑term, high‑margin contracts.
For fiscal year 2026, DLR guided to Core FFO of $7.90 to $8.00 per share, an increase from the prior guidance of $7.86 and implying 8 % year‑over‑year growth. The company also reiterated its revenue guidance of $4.40 billion to $4.45 billion, up from the previous $4.30 billion to $4.35 billion range, signaling confidence in continued AI‑driven demand and the ability to maintain pricing power.
CEO Andy Power highlighted the quarter as “pivotal” for the industry, noting that AI adoption and power availability constraints are reshaping the data‑center landscape. CFO Matt Mercier emphasized disciplined cost management and the company’s strategic shift toward power‑based operational metrics, which he said would support the firm’s long‑term growth trajectory.
Analysts and investors reacted positively to the earnings beat and the forward guidance, citing the company’s robust backlog, record leasing activity, and the strategic emphasis on AI‑driven demand as key factors that reinforce DLR’s competitive position in the data‑center market.
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