Digital Realty Trust, Inc.

Digital Realty reported second-quarter 2026 core FFO of $2.65 per share, including a $0.52 benefit from net promote income. Excluding promote income, core FFO was a record $2.13 per share, up 14% year over year. Same capital cash NOI grew 8.9% year over year, or 7.2% on a constant-currency basis, and leverage was 4.7x at quarter end. The company also booked a record $108 million in 0-1 MW plus interconnection signings, signed over $261 million of renewals with cash re-leasing spreads above 25%, and ended the quarter with a record $1.9 billion backlog at 100% share. For 2026, management raised core FFO per share guidance excluding net promote income to $8.15 to $8.20, from $0.15 at the low end and $0.10 at the high end, and kept cash renewal spreads guidance at 9% to 11%; same capital cash NOI guidance was raised to 4.25% to 5.25% constant currency, and CapEx guidance was increased to $4.25 billion to $4.75 billion.

Andy Power framed the quarter as evidence that Digital Realty’s “full spectrum” strategy is working across colo/connectivity, hyperscale, and strategic private capital. He emphasized record demand in 0-1 MW plus interconnection, healthy hyperscale activity, and new market expansion such as Kansas City, which he described as a proactive move to secure power ahead of demand. His tone was highly confident and expansive, repeatedly saying the business is “firing on all cylinders” and that the company has the strongest development and leasing pipelines in its history.

Matt Mercier highlighted double-digit growth across major operating and financial metrics, driven by strong leasing, commencements, re-leasing spreads, modest churn, and fee income. He cited $208 million of annualized rent commencements in the quarter, $635 million scheduled to commence in 2H26, $480 million in 2027, and $312 million in 2028 and beyond; he also noted $1.1 billion of development CapEx in the quarter and $2.0 billion year to date. On the balance sheet, leverage stayed at 4.7x with about $6 billion of liquidity, and he said current backlog, development pipeline, and recent strategic transactions support extending double-digit core FFO growth into 2027 and beyond.

Analysts pressed for detail on how Digital Realty can sustain double-digit FFO growth for multiple years, how the Blackstone, Teraco, and Columbia Capital deals affect accretion, and how higher CapEx will be funded; management said growth is coming from renewals, hyperscale leasing, backlog conversion, and private capital fee income. Questions also focused on the development pipeline timing, fee income scaling, customer credit quality in AI/hyperscale, Kansas City’s role as a new market, and whether renewals could keep improving; management pointed to a 1.4 GW pipeline that is 63% pre-leased, about $10 billion to $12 billion of deployable private capital, and continued focus on traditional investment-grade hyperscale customers while acknowledging AI-related smaller deployments are growing. Interconnection and AI inference were discussed as early but increasingly important drivers, with management saying bidirectional, connectivity-heavy workloads fit Digital Realty’s platform well.