Digital Realty Reports $0.48 Per Share in Third Quarter, Raises 2026 Earnings Outlook
Key Facts
Digital Realty said on October 29, 2026, that net income available to common stockholders was $185 million, or $0.48 per share, in the third quarter, compared with $0.15 per share in the same period a year earlier. The announcement came after the market close, and the company held an earnings call that day at 5:00 p.m. Eastern Time. Total revenue was $1.9 billion, up 21% year over year. The company also raised its fiscal 2026 core funds from operations per-share outlook, excluding net promotional income, to a range of $8.30–$8.35. The results combined growth in revenue and annual income with leasing indicators, while net income measures remain distinct from the operating earnings metric followed by real estate investment trusts.
Core funds from operations, excluding net promotional income, were $2.10 per share in the third quarter, versus $1.89 in the third quarter of 2025 and $2.13 in the second quarter of 2026. On a funds-from-operations basis, the company reported $1.97 per share, compared with $1.65 a year earlier and $2.73 in the previous quarter. Adjusted EBITDA was $978 million, up 13% year over year and at the same level as the previous quarter. These measures show differing comparison trends: core funds from operations per share and adjusted EBITDA rose year over year, while core funds from operations per share was below the previous quarter, as were funds from operations. Second-quarter revenue included $201 million in promotional income; excluding it, third-quarter revenue was 10% higher than the previous quarter.
Chief Executive Andy Power said the results reflected "the strength of global demand for connectivity-rich environments," citing record leasing and a growing backlog of contracts, as well as another quarter of double-digit earnings growth. Signed bookings during the quarter reached a record, with expected annualized base rent of $855 million on a full-project-share basis under accounting standards, and $627 million on Digital Realty's share. The company also signed renewal contracts representing $261 million in annualized cash rental revenue. Cash rents on renewal leases signed during the quarter rose 11.8%, while the increase was 17.0% on an accounting basis. These figures reflect leasing and renewal activity, with rental values differing according to the measurement basis and share used.
The backlog of signed leases that had not yet commenced reached a record at quarter-end, with annualized base rent of $2.5 billion on a full-project-share basis and $1.8 billion on the company's share. New leases do not immediately convert into current revenue: the weighted average period between signing new leases during the quarter and their contractual commencement date was 17 months. The backlog represents signed contracts awaiting commencement on their scheduled dates, while the commencement period shows the gap between signing and rent recognition. On expansion, Digital Realty acquired land for a total of $742 million during the third quarter. These figures provide a view of future rental commitments and the company's asset-related steps, without meaning that all rent in the backlog was already included in quarterly revenue.
The company's total debt was about $19.5 billion on September 30, 2026, while net debt to adjusted EBITDA was 5.2 times at quarter-end. After the period ended, the company closed initial investment commitments of $1.4 billion for its new permanent capital strategy, which focuses on stabilized hyperscale data centers in North America. In trading, the stock closed at $182.91 on October 29, up 1.75% during the session. The close came on the day of the earnings announcement, which was released after the market close, while the company's call to discuss the results was held at 5:00 p.m. Eastern Time. The revised annual outlook, investments and operating metrics provide context for what the market will track in the coming period, while execution of new contracts remains tied to their commencement dates.