Digital Realty beats Q2 estimates with $2.13 FFO per share as AI demand surges

Key Takeaways:

Digital Realty posted Q2 FFO of $2.13 per share, beating the $1.98 consensus.
Revenue reached $1.92 billion, topping estimates of $1.66 billion.
The data center REIT raised its full-year core FFO guidance to $8.10-$8.15.

Digital Realty Trust reported second-quarter funds from operations of $2.13 per share, beating the Zacks Consensus Estimate of $1.98 and rising from $1.87 a year earlier.

Revenue came in at $1.92 billion, exceeding the $1.66 billion analyst forecast, the Austin, Texas-based real estate investment trust said Thursday. Net income reached $443.1 million, or $1.21 per share.

The data center REIT posted core FFO of $767.9 million, or $2.13 per share, compared with $1.98 expected by seven analysts surveyed by Zacks Investment Research. Funds from operations, a closely watched metric for REITs, adds back depreciation and amortization to net income.

Digital Realty raised its full-year constant-currency core FFO per share guidance to $8.10 to $8.15, excluding net promote, up from its prior outlook. The company also reported renewal lease rental rate increases of 25.4 percent on a cash basis and 32 percent on a GAAP basis, while new interconnection bookings surpassed $100 million during the quarter.

Shares gained 2 percent in after-hours trading following the release, reflecting investor confidence in the data center sector's growth trajectory. The results underscore strong demand for digital infrastructure as enterprises expand AI and cloud computing capacity.

The guidance raise signals management expects demand to accelerate through the second half of the year. Investors will watch the Q3 earnings call for updates on leasing momentum and development pipeline expansion.

This article is for informational purposes only and does not constitute investment advice.