Digital Realty Lifts Profit Outlook on Record Leasing
The data-center operator raised its full-year Core FFO guidance to $8.00-$8.10 a share after bookings surged 77%.
Digital Realty Trust (DLR) reported second-quarter results that pushed its profit outlook higher after leasing activity reached a record. The data-center landlord said Core funds from operations rose 9.7% to $2.04 a share, accelerating from 7.5% growth in the prior quarter.
The quarter stood out for a sharp rebound in demand. Digital Realty signed bookings expected to generate $707 million of annualized base rent, up 77% from the fourth quarter and well above the $423 million recorded in the first quarter. That surge lifted the backlog of signed-but-not-commenced leases to $1.8 billion, more than doubling from the end of 2025.
Revenue climbed 16% to $1.6 billion, matching the prior quarter’s pace, while adjusted EBITDA rose 16% year-over-year to $920 million and 7% sequentially. Occupancy ticked up to 90.1%, in line with the company’s guidance for 50-100 basis points of improvement in 2026.
The leasing momentum was broad. Same-capital occupancy held at 91.6%, while rental rate increases on renewals came in at 5.0% on a cash basis, within the raised 6.5%-8.5% guidance range for the year. The weighted average remaining lease term extended to 4.3 years, signaling longer customer commitments.
Digital Realty raised its 2026 Core FFO per-share outlook to $8.00-$8.10, up from the initial $7.90-$8.00 introduced in the fourth quarter. The company also announced a $7.8 billion acquisition of Blackstone’s 64% stake in three Northern Virginia data centers, a deal expected to be accretive to earnings in 2027 and 2028.
Leverage continued to improve, with net debt-to-adjusted EBITDA falling to 4.7x from 4.9x at year-end. The company’s strategic private capital platform expanded earlier in the year with the acquisition of Columbia Capital, adding $9 billion in fund commitments.