Digital Realty Trust, Inc. Q2 FY2025 earnings call

• Key takeaways: $177 million new bookings, including $90 million in 0-1 megawatt plus interconnection; core FFO at record $1.87 per share; oversubscribed LP equity commitments for U.S. Hyperscale Data Center Fund; additional development site acquisitions; robust balance sheet with over $7 billion liquidity.
• Andy Power discussed the full spectrum strategy, emphasizing growth in the 0-1 megawatt plus interconnection business, core FFO growth driven by execution in this segment, strong demand environment for data center capacity across geographies and product types, significant customer wins including global financial services, blockchain, healthcare, and entertainment companies, and progress on global sustainability goals with increased renewable energy use and reduced water usage intensity.

In the second quarter, Digital Realty posted $177 million of new bookings, with the 0-1 megawatt plus interconnection product set being a standout, accounting for $90 million of bookings. Core FFO surged to a record $1.87 per share, contributing to an increase in revenue, adjusted EBITDA, and core FFO per share guidance for full year 2025.

• Increased core FFO per share guidance for full year 2025 to $7.15 to $7.25 per share from the prior range.
• Raised revenue and adjusted EBITDA guidance ranges for 2025.
• Adjusted cash and GAAP re-leasing spread guidance ranges to 5% to 6% and 7% to 8% respectively.
• Backlog at $826 million provides strong visibility through the end of 2025 and beyond.

Q: What do you think is driving the inflection in growth in the 0-1 megawatt category? Are we seeing growth in that market overall? Or is it mostly DLR capturing market share? And if it's market share, can you break down -- maybe break it down for us two or three things that DLR has changed in its go-to-market strategy to capture more market share?

A: Andrew P. Power and Colin McLean discussed that it's been a growing market where DLR has executed and taken some share, with a focus on a global footprint, highly connected destinations, revamped go-to-market, and incremental changes to the program.

Q: I wondered if you could talk a little bit about more broadly interconnection bookings, which I think was a record. Anything you can comment on [what] drove that, including around pricing as well as how the second half bookings environment is shaping up?

A: Andrew P. Power and Chris Sharp discussed that interconnection bookings were driven by sustained 0-1 megawatt bookings, global pricing standardization, comprehensive interconnection suite including virtual services, and the overall bulk fiber and Pathways product.