DIGITAL REALTY TRUST, INC. Q4 FY2024 earnings call

• 2024 was a breakout year for Digital Realty with over $1 billion of bookings, including several hyperscale transactions and nearly $250 million from the 0 - 1 megawatt plus interconnection category. • There was record lease renewal activity in 2024, approaching $1 billion with an average 9% roll - up in cash rents. • A record number of new logos (nearly 600) were added, and connectivity - rich solutions were expanded. • The total portfolio capacity was expanded by over 200 megawatts in 2024, and the development pipeline was scaled by over 75% to over $7 billion of projects underway, with 70% pre - leased. • New products and services were rolled out, such as high - density Colo 2.0, ServiceFabric expanded to 38 metros, and private AI Exchange. • The balance sheet was bolstered in the fourth quarter with over $2 billion of new debt and equity capital raised, over $500 million of net proceeds from asset sales and JV contributions, liquidity exceeding $6 billion, and leverage reduced to 4.8 times at year - end. • The fourth quarter saw a 6% growth in core FFO per share, foreshadowing expectations for 2025.

In the fourth quarter, Digital Realty signed $100 million of new leases. The 0 - 1 megawatt plus interconnection segment led the way with a record $76 million in bookings, which was a 16% sequential increase from the prior quarter. The greater than 1 - megawatt category signed $23 million. In 2024, the 0 - 1 megawatt product was a significant focus, and total leasing completed reached a record $1 billion. The 0 - 1 megawatt segment had strong and balanced growth in both the Americas and EMEA, achieving new records in the quarter. In the fourth quarter, the cash renewal spreads in the 0 - 1 megawatt segment were 4.9%, while the re - leasing spreads in the greater than 1 - megawatt segment were up by 3.7%.

• The core FFO per share for 2025 is expected to be in the range of $7.05 to $7.15 per share on a constant - currency basis. • Total revenue and adjusted EBITDA are anticipated to grow by more than 10% in 2025 on a normalized and constant - currency basis. • Same capital cash NOI is expected to grow by 3.5% to 4.5% on a constant - currency basis. • CapEx net of partner contributions is expected to rise to between $3 billion and $3.5 billion, and gross CapEx is expected to reach approximately $4.5 billion. • Development yields are expected to remain in double - digits. • $500 million to $1 billion of dispositions and JV capital is expected in 2025.

• Fluctuations in market demand for data center capacity could impact the business. • Changes in interest rates may affect borrowing costs and capital - raising efforts. • Supply chain issues might delay development timelines and increase costs. • Intense competition in the data center industry could influence market share and pricing.

Q: David Barden with Bank of America asked about Chris Sharp's perspective on how conversations with hyperscalers fit with the outlook for Digital Realty.

A: Andy Power stated that they heard consistency from customers regarding continued investment in AI infrastructure, and Chris Sharp expanded on how AI democratization is driving demand for their facilities.

Q: Richard Choe with JPMorgan asked about the cash renewal outlook.

A: Andy Power said that the 2025 guidance is 4% - 6% without considering packaged deals from outer - year expirations, and there are improving mark - to - market environments for outer years.

Q: Irvin Liu with Evercore ISI asked about bookings expectations.

A: Andy Power said to divide bookings into larger capacity blocks and others, with a record $1 billion of new signs in 2024, a development pipeline that is 70% pre - leased, and bookings set to roll out in 2025 and beyond.

Q: Jonathan Atkin with RBC asked about growth acceleration.

A: Andy Power turned to Matt Mercier, who mentioned mid - single - digit growth in 2025 and continued improvement beyond, with inventory and backlog supporting growth.

Q: Michael Rollins with Citi asked about the under 1 megawatt business and inorganic activity.

A: Andy Power handed to Colin McLean, who talked about the strategy of the 0 - 1 megawatt segment and the focus on organic development.

Q: Matt Niknam with Deutsche Bank asked about factors mitigating growth.

A: Matt Mercier said that FX headwinds, lower utility reimbursements, and dispositions/joint ventures are factors, with normalized growth expected.

Q: Ari Klein with BMO asked about inference demand.

A: Andy Power handed to Chris Sharp, who talked about how inference is driving demand for capacity blocks and private AI, and Digital Realty's AI - ready capabilities.

Q: David Guarino with Green Street asked about less than 1 - megawatt deals.

A: Andy Power said that the deals were broad - based across markets and business segments, with efforts to refill vacancies.

Q: Frank Louthan with Raymond James asked about less than 1 megawatt facilities and high - power density.

A: Andy Power said that the company is prioritizing enterprise capabilities, modularity, and flexibility, with more focus on dedicated spaces for growth.

Q: Jim Schneider with Goldman Sachs asked about the Stargate announcement and hyperscalers.

A: Andy Power said that the Stargate was about the conviction in customer investment, and demand has lulls but Digital Realty is well - positioned.

Q: Eric Luebchow with Wells Fargo asked about capital recycling.

A: Matt Mercier and Greg Wright talked about disposition and private capital efforts, with the fund progression going well.

Q: Erik Rasmussen with Stifel asked about factors derailing the thesis.

A: Andy Power said that near - term execution on the 0 - 1 megawatt interconnection, commercialization, and capital use is key.

Q: Vikram Malhotra with Mizuho asked about bookings velocity and pricing power.

A: Andy Power said that the 0 - 1 megawatt segment has an upward trajectory, the larger megawatt segment is lumpy, and pricing power in the 0 - 1 segment is firm.

Q: Simon Flannery with Morgan Stanley asked about the supply chain.

A: Andy Power said that power supply is tight, but the company is using relationships and scale to accelerate, and the supply chain on physical elements is tight.

Q: Nick Del Deo with MoffettNathanson asked about development yields in EMEA and APAC.

A: Andy Power said that AI globalization will have an impact, but similar supply issues exist in those regions.

Q: Michael Elias with TD Cowen asked about development yields and spot market pricing.

A: Andy Power said that Digital Realty can outshine competitors with its approach of picking spots and higher returns.