Digital Realty Reports Third Quarter 2026 Results

Digital Realty posts strong Q3 growth, record leasing, and raises 2026 FFO guidance.

What the company is saying

Digital Realty emphasizes robust third-quarter financial performance, highlighting net income available to common stockholders of $0.48 per share, up from $0.15 in 3Q25, and FFO per share of $1.97, up from $1.65. Core FFO per share reached $2.10, compared to $1.89 a year ago. The company frames its narrative around record leasing activity, with total bookings expected to generate $855 million in annualized GAAP base rent at 100% share, and a record backlog of $2.5 billion. President and CEO Andy Power attributes these results to strong global demand and Digital Realty's execution capabilities. The announcement also stresses raised 2026 Core FFO per share guidance to $8.30–$8.35 and constant-currency Core FFO to $8.25–$8.30. Significant land acquisitions and a new joint venture in Türkiye are presented as strategic moves to support future growth.

What the data suggests

The disclosed figures show clear financial momentum: net income available to common stockholders rose to $0.48 per share, FFO per share increased to $1.97, and Core FFO per share climbed to $2.10, all up from the prior year. Total revenues for 3Q26 were $1.9 billion, a 10% sequential increase (excluding $201 million of promote income in 2Q26) and 21% above 3Q25. Adjusted EBITDA reached $978 million, up 13% year-over-year. Leasing activity was strong, with $855 million in total bookings at 100% share and $627 million at Digital Realty’s share, including $130 million from the 0–1 MW category and $22 million from interconnection. The backlog of signed-but-not-commenced leases hit $2.5 billion at 100% share. Rental rates on renewal leases increased 11.8% on a cash basis and 17.0% on a GAAP basis. The company acquired $742 million of land in the quarter and entered a $33 million joint venture in Türkiye. Debt stood at $19.5 billion, with net debt-to-Adjusted EBITDA at 5.2x. The data supports the company’s claims of operational and financial growth, though 'record' superlatives are not directly benchmarked against prior records in the release.

Analysis

The announcement is highly detailed and provides comprehensive, period-over-period financial and operational metrics, including net income, FFO, Core FFO, revenues, and EBITDA, all of which show clear improvement over prior periods. The majority of key claims are realised and supported by hard numbers, with only a minority being forward-looking (e.g., backlog conversion, future FFO guidance). While there is significant capital outlay disclosed (land acquisitions, joint ventures, development CapEx), these are paired with immediate and near-term financial results and raised guidance, not just distant projections. The language is proportionate to the evidence, with no exaggerated or unsupported claims; even the 'record' superlatives are directionally supported by disclosed figures, though not always with explicit historical context. The weighted-average lag of 17 months between lease signing and commencement is disclosed, providing transparency on timing. Overall, the narrative closely matches the disclosed reality, with no material inflation or hype.

Risk flags

• ●Execution risk exists in converting the $2.5 billion backlog of signed-but-not-commenced leases into active revenue, given the 17-month average lag between signing and commencement. Delays or cancellations could impact future revenue realization.
• ●The company’s capital intensity is high, with $742 million in land acquisitions this quarter and 2026 development CapEx guidance of $4.25–$4.75 billion. This requires continued access to capital markets and successful project execution to avoid overextension.
• ●Leverage remains significant, with $19.5 billion in total debt and a net debt-to-Adjusted EBITDA ratio of 5.2x. Rising interest rates or tightening credit conditions could pressure cash flow and refinancing options.
• ●The raised 2026 FFO guidance is forward-looking and depends on continued strong leasing, timely project delivery, and stable macroeconomic conditions. Any slowdown in demand or operational setbacks could cause the company to miss these targets.
• ●The 'record' leasing and backlog claims are not benchmarked against prior records in the release, limiting the ability to independently verify the scale of improvement and increasing reliance on management’s framing.

Bottom line

Digital Realty delivered strong third-quarter results, with net income, FFO, and Core FFO per share all rising year-over-year and sequentially. Record leasing activity and a $2.5 billion backlog position the company for continued growth, while raised 2026 FFO guidance signals management’s confidence in future earnings. The company is deploying significant capital into land acquisitions and new ventures, particularly in North America and Europe, which should support long-term expansion but heightens execution and financial risk. Leverage is elevated, and the conversion of backlog to revenue will be a key metric to watch over the next 12–24 months. While the operational and financial trajectory is positive, investors should focus on the pace of backlog realization, project delivery, and debt management as the main drivers of future performance. The most important takeaway is that Digital Realty is scaling rapidly, but sustained execution and prudent capital management will be critical to delivering on its ambitious outlook.

Announcement summary

(NYSE:DLR) Digital Realty reported financial results for the third quarter of 2026, including net income available to common stockholders of $0.48 per share, up from $0.15 in 3Q25. Funds From Operations (FFO) per share was $1.97 in 3Q26, compared to $1.65 in 3Q25, and Core FFO per share was $2.10, up from $1.89 in 3Q25. The company signed record total bookings in 3Q26, expected to generate $855 million of annualized GAAP base rent at 100% share, and $627 million at Digital Realty’s share, including $152 million within the 0-1 megawatt plus interconnection category. Rental rate increases on renewal leases were 11.8% on a cash basis in 3Q26. The total backlog reached a record $2.5 billion of annualized GAAP base rent at 100% share, and $1.8 billion at Digital Realty’s share. Total revenues for 3Q26 were $1.9 billion, 10% higher than the previous quarter (excluding $201 million of promote income in 2Q26) and 21% above the same quarter last year. Net income for 3Q26 was $194 million, with net income available to common stockholders of $185 million. Adjusted EBITDA was $978 million, a 13% increase over the same quarter last year. FFO was $742 million, or $1.97 per share, compared to $2.73 per share in the previous quarter. Core FFO per share (excluding net promote) for the nine months ended September 30, 2026, was $6.27, and Constant-Currency Core FFO per share was $6.18. Leasing activity included $130 million from the 0-1 MW category and $22 million from interconnection. The weighted-average lag between new leases signed and commencement was 17 months. Renewal leases signed in 3Q26 represented $261 million of annualized cash rental revenue, with rental rates increasing 11.8% on a cash basis and 17.0% on a GAAP basis. By region, new leases at Digital Realty’s share included $242,947,000 in the Americas, $78,062,000 in EMEA, and $283,386,000 in Asia Pacific. Interconnection contributed $22,209,000. Grand total bookings at DLR share were $626,604,000 and $855,275,000 at 100% share. During 3Q26, Digital Realty acquired $742 million of land in the U.S. and Europe, including sites near Indianapolis, Atlanta, Chicago, Charlotte, Frankfurt (Germany), and Crete (Greece). The company entered a joint venture with Rönesans Infrastructure to develop data centers in Türkiye for $33 million, with the first investment in Ankara expected to support more than 22 megawatts of IT capacity. Subsequent to quarter end, Digital Realty acquired land near Brussels, Belgium for approximately €15 million ($17 million), the freehold interest in land in Dugny, France for approximately €80 million ($90 million), and an additional 16% stake in Teraco for approximately $688 million, increasing its ownership from 61% to approximately 77%. The company closed $1.4 billion of initial cornerstone equity commitments to its new perpetual capital strategy focused on stabilized hyperscale data centers in North America. As of September 30, 2026, Digital Realty had $19.5 billion of total debt outstanding, including $17.9 billion of unsecured debt and $1.6 billion of secured and other debt. Net debt-to-Adjusted EBITDA was 5.2x, debt-plus-preferred-to-total enterprise value was 23.2%, and fixed charge coverage was 4.8x. During the quarter, the company sold 2.4 million shares under its ATM program at a weighted average price of $191.84 per share for net proceeds of $450 million, and year-to-date sold 15.9 million shares at $185.98 per share for $2.9 billion. In October, the company issued €1 billion of 5.125% euro notes due 2036 for net proceeds of €1 billion ($1.1 billion), and CHF508 million ($611 million) of Swiss bonds due 2029, 2032, and 2036. Digital Realty raised its 2026 Core FFO per share (excluding net promote) outlook to $8.30 - $8.35 and its 2026 Constant-Currency Core FFO per share (excluding net promote) outlook to $8.25 - $8.30. The company’s 2026 outlook includes total revenue (excluding promote income) of $7.050 - $7.125 billion, Adjusted EBITDA of $3.800 - $3.850 billion, G&A of $640 - $650 million, and development CapEx (net of partner contributions) of $4,250 - $4,750 million.

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