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Digital Realty Reports Impressive First Quarter Results for 2025

Digital Realty, a leading provider of cloud and carrier-neutral data center solutions, has announced its financial results for the first quarter of 2025. This report highlights a mixture of shifts in net income alongside commendable growth in key areas such as revenue and Core Funds From Operations (Core FFO).

Key Highlights

In Q1 2025, Digital Realty reported a net income available to common stockholders of $0.27 per share, a decline from $0.82 in Q1 2024. However, the company showed remarkable resilience with a Funds From Operations (FFO) per share at $1.67, up from $1.41 from the previous year. Additionally, the Core FFO surged to $1.77 per share, compared to $1.67 last year. The growth in Core FFO indicates a robust operational performance, reinforcing the company's standing in the industry.

The significant aspect of this quarter's results was the reported revenue reaching $1.4 billion, a modest 2% decrease from the previous quarter but marking an increase of 6% year-over-year. This indicates a consistent demand for Digital Realty's data center services despite market fluctuations.

Strong Leasing Activity

During the first quarter, Digital Realty signed deals projected to generate $242 million in annualized GAAP rental revenue. This included contributions from the 0 to 1-megawatt section, bolstering the company’s future revenue outlook. Impressively, rental rates on renewal leases experienced an uplift of 5.6% on a cash basis, facilitating sustained growth and increased cash flow.

Digital Realty's backlog of signed leases reached a record high of $919 million, further showcasing the firm’s anticipated revenue streams in the coming quarters. In addition, the CEO Andy Power noted strong demand across product segments as a driver behind this remarkable performance, stating that their leasing activities kept pace with the record levels seen in 2024.

Investment Activity and Future Outlook

In alignment with its growth strategy, Digital Realty has been actively acquiring properties and expanding its footprint. During Q1, the company acquired three land parcels in Charlotte, North Carolina, aiming to support up to 400 megawatts of IT capacity. Moreover, the launch of the U.S. Hyperscale Data Center Fund successfully raised over $1.7 billion, targeting a total equity commitment of $2.5 billion. This fund is expected to facilitate further investments in operating data centers and development sites across key U.S. markets.

In an effort to expand its global reach, Digital Realty entered the Indonesian market by acquiring a 50% stake in a joint venture, which underscores the company's strategic emphasis on entering emerging markets.

Moving forward, Digital Realty has raised its 2025 Core FFO per share forecast to the range of $7.05 - $7.15, which demonstrates the firm's confidence in its operational capabilities and market positions. The anticipated total revenue is adjusted to $5.825 - $5.925 billion, reflecting a proactive approach to market dynamics and business growth.

Conclusion

Overall, Digital Realty's Q1 2025 results reflect a balanced mix of challenges and substantial opportunities. Despite a dip in net income, the growth in FFO demonstrates operational resilience and potential. The strategic acquisitions and focus on expanding data center capacity position Digital Realty well for sustained revenue growth. Moving forward, stakeholders and investors will be keen to see how these strategies play out in the broader context of the rapidly evolving data center landscape.