DIGITAL REALTY TRUST, INC. Q3 FY2026 earnings call

• Record-Leasing Momentum: Achieved record total bookings of $855 million ($627M DLR share), driven by strong demand across geographies and customer types. The 'Zero to one megawatt' category saw its fourth consecutive quarterly record, up 40% sequentially, while hyperscale bookings also set a new record.

The transcript does not provide a breakdown of financial performance by specific product segments (e.g., Co-location vs. Hyperscale) in terms of absolute revenue or percentage contribution to total revenue. It reports consolidated results: Core FFO per share was $2.10 (11% YoY growth), Cash NOI from the same capital portfolio increased ~6% YoY, and Total Leasing Bookings were $855 million ($627 million at DLR share). Leasing activity is detailed by size category rather than product segment: 'Zero to one megawatt plus interconnection' bookings reached $165 million total ($151.8 million at DLR share), and 'Greater than a megawatt' hyperscale bookings reached $689 million total ($474 million at DLR share).

• Core FFO Per Share: Raised by 15 cents (nearly 2%) to a range of $8.30–$8.35 for full-year 2026. The midpoint represents ~13% growth over 2025.

• Community & Regulatory Pushback: Acknowledges concerns regarding energy consumption, water usage, grid capacity, noise, and utility bills. Management emphasizes transparency and community engagement to mitigate opposition.

Q: Analyst asks about land bank strategy and sellers in new markets like Indianapolis and Charlotte. / A: CEO Andy Power states they focus on markets with robust, diverse demand (cloud, AI, enterprise). CIO Greg Wright adds that Indianapolis is strategically located near 80% of the US population, has low power costs (~9¢/kWh), and is capturing hyperscalers displaced from Ohio/Michigan/Illinois due to moratoria and legislation. Former military sites in Kansas City and Atlanta are being revitalized through partnerships with local developers.

Q: Analyst asks about the medium-to-long-term opportunity for edge inference and its impact on interconnection. / A: CEO Andy Power highlights Digital Realty's unique position due to global scale (65 markets), connectivity-rich environments (record 22M cross-connects), and AI-ready infrastructure (liquid cooling operational in 25+ locations). He notes that AI inference drives distributed demand, benefiting their platform, with 44% of Q3 zero-to-one megawatt bookings associated with AI use cases.

Q: Analyst asks if market rent growth is outpacing development cost inflation and how the company mitigates cost pressures. / A: CEO Andy Power notes that despite rising development costs (pipeline value doubled to $22B), they are achieving net yields >11.5% and pre-leasing rates >63%, indicating pricing power outpaces inflation. They manage supply chain risks via vendor-managed inventory and consistent vendor relationships. CFO Matt Mercier adds that access to diverse capital sources (recently raised $1.7B debt at ~4% coupon and $1.4B private equity) helps mitigate financing cost volatility.

Q: Analyst asks about the stabilized hyperscale acquisition strategy and buy box for returns. / A: CIO Greg Wright explains the evolution from their closed-end fund (development-focused, high-risk/high-return) to a new perpetual capital strategy focused on stabilized, core-plus assets. This matches long-duration institutional capital with long-lived data center assets, leveraging Digital Realty’s 20+ year track record to generate stable returns through cornerstone equity commitments.

Q: Analyst asks about the outlook for the zero-to-one megawatt business and pricing trends compared to peers. / A: Chief Revenue Officer Colin McLean reports strong momentum with four consecutive quarters of record bookings. Growth is driven by digital transformation, hybrid cloud resilience, data sovereignty, and increasingly distributed AI architectures. The pipeline remains strong, with Q4 already showing 60% of the prior quarter’s booking volume, indicating sustained double-digit growth.