Digital Realty Revenue Reaches $1.9 Billion, Beating Third-Quarter Expectations
Key Facts
Digital Realty reported revenue of $1.9 billion in the third quarter of 2026, exceeding analysts’ estimate of $1.75 billion, according to the company’s results and estimates cited by Investing.com. Revenue increased 21% from the same period last year, reflecting broader activity supporting data center operations. Chief Executive Andy Power said the company delivered "record leasing, a growing contract backlog and another quarter of double-digit earnings growth." The company announced the results on Oct. 29 and scheduled a call to discuss them for 5:00 p.m. Eastern Time that day. Revenue in the previous quarter was $1.92 billion, but a direct comparison obscures the effect of $201 million in promotional income that quarter.
Excluding promotional income recorded in the second quarter, third-quarter revenue increased 10% from the previous quarter, the company said. Net income available to common shareholders was $185 million, or $0.48 per share, compared with $0.15 per share in the third quarter of 2025. Core funds from operations, a measure used by real estate companies, came to $2.10 per share excluding net promotional income, up from $1.89 a year earlier. It was below the $2.13 per share recorded in the second quarter. The figures show annual growth in the measure, with a slight decline from the previous quarter.
In its leasing business, the company reported record new bookings expected to generate annualized rental revenue of $855 million at 100% share and $627 million at Digital Realty’s share. Cash rents on renewal leases signed during the quarter were 11.8% above prior contract levels, while the increase on a GAAP basis reached 17.0%. Annualized base rent on signed leases not yet commenced was also $2.5 billion at 100% share and $1.8 billion at the company’s share. This backlog represents contracted business that has not yet converted into current revenue. The weighted average gap between signing new leases and their commencement was 17 months, delaying the start of rent revenue recognition for some of the bookings.
The company attributed its performance to demand for data center space, with Power saying the global need for richly connected environments continues to support activity. To expand its capacity to meet demand, Digital Realty spent $742 million on land during the quarter. The sites include land near the Indianapolis area to support more than one gigawatt of IT capacity and another site near Charlotte for development of up to 600 megawatts of capacity. After the quarter ended, the company closed initial investment commitments of $1.4 billion for its new perpetual capital strategy. The strategy targets stabilized hyperscale data centers in North America.
Digital Realty raised its 2026 forecast for core funds from operations, excluding net promotional income, to a range of $8.30–$8.35 per share, and to $8.25–$8.30 on a constant-currency basis. It also raised its annual revenue forecast, excluding promotional income, to $7.050–$7.125 billion, from the $6.850–$6.950 billion range announced on July 23. The forecast revision follows strong quarterly results and record bookings, while the average lease commencement timing indicates that some of the bookings’ impact will come later. Meanwhile, the company had total debt of about $19.5 billion on Sept. 30, and net debt to adjusted EBITDA stood at 5.2 times. The company’s shares, traded under the ticker DLR, closed at $179.77 on Oct. 28.