Q1 2026 Digital Realty Trust Inc Earnings Call Transcript
Key Points
- Digital Realty Trust Inc (DLR) delivered the second-highest bookings quarter ever, highlighting strong demand across its platform.
- The company signed the largest megawatt lease in its history, boosting its total backlog to $1.8 billion, providing strong growth visibility into 2027 and 2028.
- Development pipeline increased by over 50% sequentially to 1.2 gigawatts under construction, with 61% pre-leased at an 11.4% average expected yield.
- Exceeded earnings expectations with core FFO of $2.04 per share, reflecting strong double-digit year-over-year growth.
- Raised 2026 core FFO per share guidance range, implying 9% growth at the midpoint, due to strong execution and visibility from backlog.
- Power availability, labor, and supply chain risks are meaningful constraints on the industry, creating a gap between demand and deployable capacity.
- The commencement lag for new leases signed was about 19 months, driven by large lease signings and potential utility power delivery delays.
- Operating expenses were higher than expected, impacting organic growth, largely due to low operating expense comp in the prior year.
- There is increased NIMBYism and local pushback in some markets, potentially complicating future developments.
- Inflation in build costs and design changes, such as more liquid cooling infrastructure, have increased the cost per megawatt in the Americas development pipeline.
Good afternoon, and welcome to the Digital Realty first quarter 2026 earnings call. Please note this event is being recorded.(Operator Instructions)
I will now turn the call over to Jordan Sadler, Digital Realtyâs Senior Vice President of Public and Private Investor Relations. Jordan, please go ahead.
Thank you, operator, and welcome everyone to Digital Realty Trustâs First Quarter 2026 Earnings Conference Call. Joining me on todayâs call are President and CEO Andy Power and Chief Financial Officer Matt Mercier.
Chief Investment Officer Greg Wright, Chief Technology Officer Chris Sharp, and Chief Revenue Officer Colin McLean are also on the call and will be available for Q&A.
Management will be making forward-looking statements, including guidance and underlying assumptions, on todayâs call. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ
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