Digital Realty Trust, Inc. is a global real estate investment trust (REIT) specializing in data center, colocation, and interconnection solutions. The company provides a global platform for customers to deploy and interconnect their digital infrastructure across a worldwide portfolio of data centers.
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Earnings call: Q1 2026 2026
Intel
Free
May 02, 2026Optimistic
● Full transcript on file
Andy Power (President & Chief Executive Officer), Matthew Vesey (Chief Financial Officer), Corey D. Zwart (Senior Vice President, Investor Relations)
Key metrics
Digital Realty reported Q1 2026 revenue in the mid-single-digit percentage growth range year over year, with core FFO per share up modestly versus Q1 2025 and occupancy broadly stable. Leasing signings were robust, highlighted by several large AI and hyperscale deals, and management cited record or near-record quarterly bookings for powered shell a
Forward guidance
Management reaffirmed full-year 2026 guidance for core FFO per share, projecting mid-single-digit growth driven by strong demand for AI and cloud-related deployments. They guided to continued elevated development spending, with a focus on large-scale campuses in key North American and European markets, while indicating that same-capital cash NOI gr
Notable Q&A
One notable Q&A exchange involved an analyst asking about the sustainability of hyperscale and AI-driven demand and any signs of pricing pressure; management responded that demand remained very strong across regions, with pricing rational and improving in certain constrained markets, and that they e
Surprise items
The most notable element of the call was the strength of large-scale AI and hyperscale leasing activity, which exceeded typical seasonal patterns and suggested an acceleration of demand rather than normalization. Management also highlighted stronger-than-expected pricing and limited concessions in s
Wall Street consensus — sourced weekly via public disclosures
Analyst coverage data sourced from public filings. Xavier analyst thesis summary available after weekly Perplexity scan completes.
Financial summary — Gemini analysis
Signal
Revenue
$6,112,692 thousand
10.0% YoY
Operating margin
10.8%
Net income
$1,267,865 thousand
Free cash flow
-$501,248 thousand
Dividend / share
$4.88000
Total debt
$18,556,770 thousand
Cash: $3,451,647 thousand
CapEx guidance
$3.25 billion to $3.75 billion
Earnings quality:HIGH
Recurring revenue:98%
Cash conversion:1.8x
Non-recurring items: Gain on disposition of properties, net: $995,586 thousand, Provision for impairment: $78,553 thousand, Transactions and integration expenses: $185,090 thousand, Gain (loss) on debt extinguishment and modifications: $9 thousand
DLR sits at $180, roughly 13% below its 52-week high and ~13% below the consensus analyst target of $219, after a ~5% drop triggered by the $3.5B Blackstone acquisition that issued $2.3B in new shares — creating a near-term overhang. The underlying business is genuinely strong (record FFO, 10%+ revenue growth, record leasing backlog, 100%-leased hyperscale acquisitions at a 6.5% cap rate accretive in 2027-28), but the P/E of 47.9x TTM and a Forward P/E of 63x on GAAP earnings are stretched for a REIT, and the immediate share dilution plus Blackstone's concurrent block resale at $185 suppresses near-term price recovery.
Strongest bull case
The Blackstone Northern Virginia assets are 100% leased to three investment-grade hyperscale tenants under 15-year leases with 3.6% annual rent escalators, management expects the deal to be leverage-neutral and Core FFO-per-share accretive by 2027-28, and the company's 2026 guidance calls for 10%+ revenue and EBITDA growth — providing a credible fundamental re-rating path ahead of July 23 earnings.
Strongest bear case
Blackstone received 12.3M shares as acquisition consideration and immediately completed a secondary offering at $185/share on July 1 — well above the current $180.41 price — confirming a real share overhang. With the stock trading below Blackstone's exit price and no catalyst until the Q2 2026 earnings release on July 23 (outside the 5-day window), near-term momentum is capped and dilution pressure remains fresh in the market's memory.
What the market may be missing
The market is penalizing DLR as if this is a dilutive deal, but the acquired assets carry a 6.5% stabilized cap rate versus DLR's own implied ~5% cap rate — meaning the acquisition is structurally accretive on an asset-yield basis. However, two of three assets don't stabilize until H1 2027 and the third until H1 2028, so accretion is real but deferred, and the near-term GAAP P/E distortion (reflecting depreciation and non-cash charges) obscures the Core FFO story that REIT investors actually price off.
President & Chief Executive Officer · Digital Realty Trust Inc.
CEO since 2022
Total compensation
$21,071,498 ▲ 29.6% YoY
Prior year: $16,254,113
Pay vs performance
Aligned
Board assessment
Say-on-pay approval
87%
Shareholder vote
Board independence
9/10 (90%)
Diversity: 40% (3 women)
Base salary$978,846
Bonus / incentive$3,700,000
Stock awards$14,174,684
CEO letter to shareholders
Signal
No shareholder letter on file for DLR
Some companies file their annual report without a separate CEO letter.
When available, Xavier extracts strategic themes, tone analysis, and
forward-looking statements to help you read between the lines.
Executive compensation
Signal
Name
Title
Total compensation
Andrew P. Power
President & Chief Executive Officer
$21,071,498
Matthew Mercier
Chief Financial Officer
$5,939,288
Jeannie Lee
Executive Vice President, General Counsel and Secretary
Unsecured. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation.
323345171XS3233451718
Credit
Term Loan Agreement, dated as of January 9, 2023 (as amended by First Amendment, dated as of Septemb
Matures 2025-03-31 · Filed 2024-11-01
Floating · SOFR | Term SOFR | Daily Simple SOFR | Federal Funds | Prime
unsecured
Credit€375,000,000
FIRST AMENDMENT TO TERM LOAN AGREEMENT
Matures 2025-08-11 · Filed 2024-11-01
Floating · EURIBO Rate
unsecured
Credit$4,200,000,000
THIRD AMENDED AND RESTATED GLOBAL SENIOR CREDIT AGREEMENT
Matures 2029-01-24 · Filed 2024-11-01
Floating · SOFR | CORRA | SONIA | SARON | EURIBO Rate | TIBOR | HIBOR | JIBOR | Base CD Rate | Fed Funds | Canadian Prime Rate
unsecured
Credit
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Matures 2029-01-24 · Filed 2024-11-01
Floating · TIBOR
The facility is implied to be senior unsecured. However, a security interest is granted to the Administrative Agent in the L/C Cash Collateral Account and its contents for the ratable benefit of the Secured Parties, to secure obligations related to Letters of Credit.
25 additional agreements on file
Financial covenants
Maximum Total Outstanding Debt to Total Assets Ratio
≤ 60%
Total Outstanding Debt / Total Assets
€800,000,000 4.250% Guaranteed Notes due 2037
Maximum Secured Debt to Total Assets Ratio
≤ 40%
Secured Debt / Total Assets
€800,000,000 4.250% Guaranteed Notes due 2037
Minimum Total Unencumbered Assets to Unsecured Debt Ratio
≥ 150%
Total Unencumbered Assets / Unsecured Debt
€800,000,000 4.250% Guaranteed Notes due 2037
Minimum Consolidated EBITDA to Interest Expense Ratio
≥ 1.50:1.00
Consolidated EBITDA / Interest Expense
€800,000,000 4.250% Guaranteed Notes due 2037
Minimum Consolidated EBITDA to Interest Expense Ratio
≥ 1.50x
Consolidated EBITDA / Interest Expense
€600,000,000 3.750% Guaranteed Notes due 2033
Maximum Total Leverage Ratio
not greater than 60.0% (or 65.0% for up to four consecutive fiscal quarters following an acquisition)
Leverage Ratio
Term Loan Agreement, dated as of January 9, 2023 (
Minimum Fixed Charge Coverage Ratio
not less than 1.50:1.00
Fixed Charge Coverage Ratio
Term Loan Agreement, dated as of January 9, 2023 (
Maximum Secured Debt Leverage Ratio
not greater than 40.0% (or 45.0% for up to four consecutive fiscal quarters following an acquisition)
Secured Debt Leverage Ratio
Term Loan Agreement, dated as of January 9, 2023 (
54 additional covenants on file
Cross-default risk
22 agreements contain cross-default provisions — a covenant breach on one facility may trigger default on others.
Xavier risk radar
Pro
Covenant headroom
Low leverage — no covenants required
Earnings quality
High quality (cash conversion 1.8x)
Risk trend
Risk increasing — Our business depends upon the demand for data centers.
Mgmt narrative
Management tone: Cautiously optimistic
Analyst drift
Consensus Buy — targets stable
Insider sentiment
Pattern detection — 90 days needed
Signal history
Signal
Date
Direction
Conf.
Agree.
Thesis
Price
Type
Jul 12, 2026
NEUTRAL
6.3/10
75%
DLR sits at $180, roughly 13% below its 52-week high and ~13% below the consensus analyst target of ...
$180.41
Sched.
Jul 12, 2026
NEUTRAL
6.7/10
75%
DLR screens as expensive for a 5-day tactical call: its trailing P/E near 48x and forward P/E near 6...
$180.41
Sched.
Jun 07, 2026
NEUTRAL
6.7/10
75%
DLR's long-term AI/cloud data center demand story is genuine — record Q1 2026 leasing bookings of $7...
$186.79
Sched.
May 31, 2026
NEUTRAL
6.2/10
100%
DLR's operational fundamentals are genuinely strong — record leasing, 10% Core FFO/share growth, a $...
$190.00
Sched.
May 24, 2026
NEUTRAL
6.5/10
100%
DLR screens expensive for a REIT at roughly 51x trailing earnings and 62x forward earnings, while re...
$192.03
Sched.
May 17, 2026
NEUTRAL
6.1/10
100%
DLR delivered exceptional Q1 2026 operational results — record leasing, a 200MW AI hyperscale deal, ...
$188.51
Sched.
May 10, 2026
NEUTRAL
6.5/10
100%
DLR has strong structural AI/data-center demand and a supportive macro tape, but the stock already r...
$195.31
Sched.
May 03, 2026
NEUTRAL
5.7/10
100%
DLR is trading close to its 52-week high and at a stretched earnings multiple for a REIT, while reve...
$200.70
Sched.
Apr 24, 2026
BULLISH
7.0/10
50%
DLR just posted its second-highest bookings quarter in company history, beat Core FFO estimates mean...
$200.00
Event
Apr 13, 2026
BULLISH
7.1/10
75%
DLR is trading within 1% of its 52-week high, supported by record Core FFO growth, a $9B development...
$188.87
Sched.
Showing last 10 signals
DLRDigital Realty Trust Inc.
Signal
FY2026 annual report (10-K filed 2026-02-13)
INCOME STATEMENT
?Revenue
$6,112,692 thousand10.0% YoY
Total revenue from rents, property management fees, and real estate operations. Up 10.0% from last year. Management has guided capital spending of $3.25 billion to $3.75 billion.
?Operating income
$658,492 thousand
What remains after subtracting all operating costs — salaries, materials, rent, R&D — from revenue. This is the profit from actually running the business, before interest and taxes. Operating margin is 10.8%, meaning 11 cents of every dollar of revenue becomes operating profit.
?Net income
$1,267,865 thousand
The bottom line — what the company actually earned after all expenses, interest, and taxes. This is the number that gets divided by shares outstanding to calculate earnings per share (EPS), which directly affects the stock price. Net margin is 11.0%. Note: results include non-recurring items (gain on disposition of properties, net: $995,586 thousand, provision for impairment: $78,553 thousand) that may not repeat.
?Free cash flow
-$501,248 thousand
Operating cash flow minus capital expenditure. This is the money available for dividends, share buybacks, debt repayment, or acquisitions. Free cash flow is what many professional investors consider the truest measure of financial health.
?EPS (diluted)
$0.46
Earnings per share — net income divided by total shares outstanding (including stock options and convertible bonds that could become shares). This is the single number most investors watch because it directly connects company profits to your ownership stake.
?Dividend per share
$4.88000
Cash paid to shareholders each year for every share they own. REITs are required by law to distribute 90% of taxable income as dividends, making yields typically higher than other sectors.
BALANCE SHEET
?Total assets
$48.9B
Everything the company owns — cash, factories, equipment, patents, inventory, investments. Includes owned properties, land, development projects, and lease agreements.
?Cash & equivalents
$3,451,647 thousand
Money available right now — bank accounts, money market funds, short-term government bonds. This is the company's financial cushion. More cash means more flexibility to invest, acquire, or survive a downturn without borrowing.
?Total debt
$18,556,770 thousand
All money the company owes — bonds, bank loans, credit facilities. Compare this to cash to understand the net debt position. The company holds $3,451,647 thousand in cash against this debt.
?Shares outstanding
343,615,444 shares
Total number of shares that exist — owned by all investors, insiders, and institutions combined. When the company reports EPS, this is the denominator. Share buybacks reduce this number, which increases EPS even without earnings growth.
CASH FLOW
?Operating cash flow
$532M
Actual cash generated from running the business — not accounting profits, real money coming in the door. This is more trustworthy than net income because it's harder to manipulate. A company can report profits but still run out of cash.
?Interest expense
$116M
The cost of borrowing money — interest payments on bonds, loans, and credit facilities. Higher interest expense means more of the company's earnings go to lenders instead of shareholders.
?Interest coverage
6.6x
EBITDA divided by interest expense — how many times over the company can pay its interest bill from earnings. At 6.6x, coverage is healthy. Lenders typically want to see at least 3-4x.
?Depreciation & amortization
$500M
A non-cash expense that spreads the cost of commercial buildings, tenant improvements, and property infrastructure over their useful life. This reduces reported income but no cash actually leaves the company — that's why it gets added back to calculate EBITDA and operating cash flow.
EARNINGS QUALITY
?Accrual quality
HIGH
Measures how well reported earnings match actual cash generation. HIGH means earnings are backed by real cash. LOW means the company may be using accounting techniques to inflate reported numbers. Professional investors check this before trusting EPS.
?Recurring revenue
98%
98% of revenue comes from repeat sources — ongoing contracts, subscriptions, or regular customer purchasing patterns rather than one-time sales. Higher recurring revenue means more predictable future earnings.
?Cash conversion
1.8x
Operating cash flow divided by net income. Above 1.0x means the company generates more cash than it reports in profits — a sign of high-quality earnings. At 1.8x, the company is generating significantly more cash than reported profits — very healthy.
?Non-recurring items
4 identified
One-time items that affect the bottom line but won't repeat: gain on disposition of properties, net: $995,586 thousand, provision for impairment: $78,553 thousand, transactions and integration expenses: $185,090 thousand, gain (loss) on debt extinguishment and modifications: $9 thousand. When evaluating the company's true earning power, investors strip these out to see what the business earns on a normal basis.
?Management tone
Cautious Optimistic
How management sounds in their SEC filings — are they confident, cautious, or defensive? This is analyzed from the actual language used in the 10-K annual report. A shift in tone from prior years can signal changing conditions before the numbers reflect it.
?Top risk factor
Increasing
Our business depends upon the demand for data centers. Risk trend: increasing. This is the single biggest threat to the company's future earnings as identified in their SEC filing.
Click any row to expand the plain-English explanation. Source: SEC EDGAR XBRL filings.
Capital intelligence
Signal
Weighted Average Cost of Capital · Return on Invested Capital · Economic Value Added
ROIC
1.46%
WACC
7.92%
🔴 VALUE DESTROYER — EVA Spread: -6.47%
?WACC
7.92%
Weighted Average Cost of Capital — the minimum return Digital Realty Trust Inc. must earn on its investments to satisfy both debt holders and shareholders. Computed from a 77.83% equity / 22.17% debt capital structure. If the company earns less than 7.92% on its invested capital, it is destroying shareholder value.
?Cost of equity
10.04%
The return shareholders demand for holding DLR stock instead of a risk-free Treasury bond. Computed using the Capital Asset Pricing Model: Risk-Free Rate (4.25%) + Beta (1.05) × Equity Risk Premium (5.50%). A beta of 1.05 means DLR is more volatile than the overall market.
?Cost of debt (after-tax)
0.50%
What Digital Realty Trust Inc. effectively pays on its borrowed money after the tax deduction on interest. Interest is tax-deductible, so the true cost is lower than the stated rate. Effective tax rate used: 21.00%.
?Capital structure
E: 77.83% / D: 22.17%
How Digital Realty Trust Inc. finances its operations — the split between equity (stock market value: $65.1B) and debt (total borrowings: $18.6B). More debt means more leverage — higher potential returns but higher risk.
?ROIC
1.46%
Return on Invested Capital — how efficiently Digital Realty Trust Inc. turns its total invested capital into after-tax operating profit. NOPAT ($576M) ÷ Invested Capital ($39.5B). This is below WACC, meaning the company is not earning enough to cover its cost of capital.
?EVA
-$2.6B
Economic Value Added — the dollar amount of value Digital Realty Trust Inc. created (or destroyed) above its cost of capital. NOPAT ($576M) minus the capital charge (Invested Capital × WACC = $3.1B). Negative EVA means the company would create more value by returning capital to shareholders.
?NOPAT
$576M
Net Operating Profit After Tax — operating income adjusted for taxes, ignoring how the company is financed. Operating Income ($729M) × (1 - Tax Rate 21.00%). This isolates the company's core business profitability from its financing decisions.
Xavier consensus signals are intelligence outputs, not investment advice. All signals are generated by a multi-model AI system and reflect public information at time of generation. Past signal accuracy does not guarantee future performance. Wall Street analyst consensus sourced from public disclosures, summarized weekly. Financial data sourced from SEC EDGAR and yfinance. Insider transactions sourced from SEC EDGAR Form 4 filings. Updated Jul 12, 2026.