#USA #Dallas #Cloud Computing #Data Centers #Digital Realty

Digital Realty Reports Fourth Quarter 2024 Results

Digital Realty, a major player in the data center industry, has announced impressive fourth quarter results for 2024. As the largest global provider of cloud- and carrier-neutral data center solutions, their financial performance indicates a strong demand in the market. The company reported a net income available to common stockholders of $0.51 per share, a significant leap from $0.03 in the same quarter last year. This marks a robust year-over-year growth of over 160%.

Key Highlights

Among the notable achievements, Digital Realty reported Funds From Operations (FFO) of $545 million or $1.61 per share, an increase from $1.53 per share in Q4 2023. Additionally, the Core FFO per share also rose, reaching $1.73, compared to $1.63 from the previous year.

The company underscored its success with a 4.7% increase in rental rates on renewal leases on a cash basis. Furthermore, total bookings during the quarter were expected to generate $100 million in annualized GAAP rental revenue, driven by a record contribution from the 0-1 megawatt plus interconnection category. Digital Realty’s backlog of annualized GAAP base rent stood at $797 million at the end of the quarter.

Financial Overview

Digital Realty reported a revenue of $1.4 billion for the fourth quarter, reflecting a slight increase from the previous quarter and a 5% year-over-year growth. Their net income for the quarter totaled $186 million, with available income to common stockholders noted at $179 million.

Adjusted EBITDA for Q4 amounted to $751 million, demonstrating an increase compared to the same period last year, showcasing the company's effective expense management. These figures solidify Digital Realty's stronghold within the data center market.

Leasing Activity and Demand

During Q4 2024, Digital Realty signed new leases that are foreseen to contribute $100 million in annualized GAAP rental revenue, with a notable $62 million from the 0-1 megawatt segment and $15 million from interconnection services. Their effective growth was illustrated through the addition of 166 new customers, highlighting the success of their comprehensive data center strategy.

The firm also engaged in renewal leases, generating $250 million in annualized cash rental revenue. This included a significant cash basis rental rate increase of 4.7%. Digital Realty's acquisition strategy further positioned them for growth with several key land transactions, totaling $175 million across locations in Texas, North Carolina, and Spain. These acquisitions aim to augment their data center capacities substantially.

Outlook for 2025

Looking ahead, Digital Realty anticipates a promising outlook for 2025, projecting Core FFO per share between $7.05 and $7.15. The company plans to maintain rental rates for renewed leases between 4.0% and 6.0%, indicating sustained confidence in their operational strategies and market demand.

The financial results presented by Digital Realty not only affirm their market leader status but also demonstrate a significant rebound from the previous years, setting a strong foundation for continued growth and expansion in the data center sector. The strategic focus on enhancing interconnection services and expanding their global footprint remains paramount as they navigate future opportunities.