DLR US S&P 500Russell 1000 Earnings call
Digital Realty (DLR) · Q1 2026 results and valuation
Share price: $181.13 · 2026-11-11
Digital Realty provides data center, colocation, and interconnection solutions for customers across various industries. The company operates a global network of facilities to support digital infrastructure, data processing, and storage. It serves a diverse range of clients, including enterprises, service providers, and content providers, across multiple continents. Source: 10-K annual report (2026-02-13)
Results Q1 2026 vs Q4 2025 · previous quarter · published 23 Apr 2026 and 5 Feb 2026
Net income up 73.7% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
+73.7%
Net income vs Q4 2025
Outlook given
Net income 179.3M vs 103.2M
Revenue ±0%
Against the same quarter last year (Q1 2025) it is +63.0%, so it is not just seasonal.
Why Against the same quarter last year, net income rose primarily due to growth in the 0 to 1 megawatt plus interconnection business, lease commencements, healthy re-leasing spreads, a favorable FX environment, and increased fee income from the private capital platform.
2 · How management spoke
Typical
More upbeat than 62% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Digital Realty signed 10-plus megawatt leases in Dallas, Sao Paulo, and Tokyo to accommodate the accelerating pace of large AI workloads moving into scaled production environments.
Valuation
Is Digital Realty undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 9.2% growth a year (3-year revenue growth), the model's fair value is $78.21 a share — the stock trades 132% above it. Today's price assumes 20.4% growth a year.
Current price
$181.13
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+20.4% for 10 yrs
Fair value / share
$78.21
Buy below
$58.66
Price vs fair value
Overvalued 132%
Price vs buy-below price
Overvalued >200%
Management expects
Growth +9% · from the Q1 2026 report: “DLR raised its 2026 Core FFO per share guidance range to imply 9% growth at the midpoint due to strong execution, backlog visibility, and confidence in the…”
A guidance figure for growth, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
DLR raised its 2026 core FFO per share guidance by $0.10 to a range of $8 to $8.10 due to better-than-expected execution across its data center portfolio.
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Figure
Debt to adjusted EBITDA reached a multiyear low of 4.7x at quarter end because adjusted EBITDA growth and a lower AFFO payout ratio of 64% increased retained capital.
Source quote
“The first quarter was highlighted by a multiyear low in our leverage as debt to adjusted EBITDA dipped to 4.7x at quarter end, supported by meaningful adjusted EBITDA growth and a further ramp-up in retained capital as our AFFO payout ratio fell to 64%.”
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Guidance
DLR raised its 2026 Core FFO per share guidance range to imply 9% growth at the midpoint due to strong execution, backlog visibility, and confidence in the operating outlook.
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Figure
Record 21% of 0-1 megawatt bookings were AI-oriented requirements in Q1 2026.
Source quote
“Notably, a record 21% of 0-1 megawatt bookings were AI-oriented requirements.”
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Figure
DLR signed 10-plus megawatt leases in Dallas, Sao Paulo, and Tokyo to accommodate the accelerating pace of large AI workloads moving into scaled production environments.
Source quote
“We signed 10-plus megawatt leases in each of Dallas, Sao Paulo and Tokyo during the quarter, highlighting the accelerating pace at which large AI workloads are moving into scaled production environments and the continued global appetite for compute.”
4 more
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Figure
The development pipeline scaled by more than 60% to $16.5 billion at 100% share because of significant development starts in the first quarter.
Source quote
“Given the significant development starts in the first quarter, our development pipeline scaled by more than 60% to $16.5 billion at 100% share at strong double-digit unlevered returns.”
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Figure
Digital Realty signed leases representing $707 million of annualized rent at 100% share, or $423 million at its share, during the first quarter.
Source quote
“During the first quarter, we signed leases representing $707 million of annualized rent at 100% share, or $423 million at Digital Realty's share.”
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Figure
Digital Realty achieved these strong results while maintaining significant dry powder to expand and invest in its now 6 gigawatt development pipeline and simultaneously reducing its leverage to a multiyear low of 4.7x at quarter…
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Figure
The backlog reached a record $1 billion at quarter end because $423 million in new bookings exceeded $204 million in commencements during the quarter.
Source quote
“At Digital Realty's share, the backlog reached a new record of $1 billion at quarter end as $423 million of new bookings exceeded the strong $204 million of commencements in the quarter.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q1 2026. Ring: Q4 2025.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Same capital cash NOI growth continued to be strong in the first quarter, increasing by 7.9% year-over-year, as strong data center rental revenue growth was balanced by elevated operating expense...”
“While the successful execution of our 0-1 megawatt plus interconnection segment is helping to accelerate near-term growth our scaling backlog is improving our visibility over the long term, helping to...”
“We're coming out an exceptional start to the year, record 0 to 1, one of the highest second highest signings in greater than a megawatt, really putting us in place...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-03-31)
| Metric | Q1 2026period end 2026-03-31 | Q4 2025period end 2025-12-31 | Change | Q1 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 1.64B | 1.63B | ±0% | 1.41B | +16.2% |
| Operating income | 267.8M | 112.6M | +137.8% | 196.9M | +36.0% |
| Net income | 179.3M | 103.2M | +73.7% | 110.0M | +63.0% |
| EPS | 0.46 | 0.23 | +100.0% | 0.27 | +70.4% |
| P/E today 46.2 | 47.8 | 43.2 | +4.6 | 135.2 | −87.4 |
Topics
Most discussed now
- New Demand for digital infrastructure remains robust, execution across PlatformDIGITAL remains crisp and Digital Realty's strategy continued to…
- New Dedicated community members on all fronts and active in those communities
- Digital Realty delivered the second highest bookings quarter ever for Digital Realty, underscoring the diversity and durability of demand…
- I can tell you to the left of that development cycle, whether it's shells or land, things Digital Realty is working on,...
Faded since Q4 2025
- Fading You're seeing that in the commitments to accelerating their build-outs for this infrastructure, from their earnings calls, and Digital…
- Fading Just as importantly, the strategy Digital Realty articulated over the last several years focused on a global full-spectrum…
- Fading Digital Realty's zero to one megawatt plus interconnection product set continued to outperform and take share, posting nearly $340 million…
- Fading The rest is basically us looking to continue to build out Digital Realty's space and improve its portfolio for what has...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Material agreement; New financial obligation · SEC 8-K
Digital Realty Trust, Inc. filed a Form 8-K on October 9, 2026, regarding a material agreement and a new financial obligation.
- Regulation FD disclosure; Other events · SEC 8-K
Digital Euro Finco, LLC priced an offering of €1 billion aggregate principal amount of 5.125% Guaranteed Notes due 2036 at a price of 99.289% of the principal amount.
- Material agreement; New financial obligation; Regulation FD disclosure · SEC 8-K
Digital Realty closed an offering of CHF 510 million in Swiss bonds due 2029, 2032, and 2036 to finance or refinance projects and for general corporate purposes.
- Other events · SEC 8-K
- Other events · SEC 8-K
Digital Realty Trust, Inc. is registering the resale of common stock in connection with its acquisition of Columbia Capital.
- Results of operations; Regulation FD disclosure · SEC 8-K
The filing provides a financial supplement for the second quarter of 2026, reporting that the company operates 310 data centers with 3.1 gigawatts of IT capacity.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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2026
outlook for 0-1 megawatt signings
Source quote
“0-1 megawatt signings boosted our 2026 outlook, while the greater than a megawatt leasing increased our total backlog to a total of $1.8 billion or $1 billion at Digital Realty's share, providing strong visibility for our growth into 2027 and 2028.”
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2026
Core FFO per share guidance
Source quote
“Given strong execution across our product offering, visibility from our backlog and confidence in our operating outlook, we are raising our 2026 Core FFO per share guidance range, implying 9% growth at the midpoint.”
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less than 18 months
time to source, position and lease hyperscale IT capacity for development
Source quote
“In the first quarter, we demonstrated the ability and expertise necessary to source, position and then lease hyperscale IT capacity for development in less than 18 months.”
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this year
leases scheduled to commence
Source quote
“Looking ahead, we have $544 million of leases scheduled to commence somewhat ratably throughout this year with $247 million of leases to commence in 2027 and another $242 million commencing in 2028 and beyond.”
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through 2026 and beyond
hedging of electricity for smaller colocation deployments
Source quote
“For the remaining 10%, primarily consisting of smaller colocation deployments, a large majority of our electricity is hedged forward through 2026 and beyond, while most of our contracts provide the ability to adjust pricing, giving us flexibility to respond to changing market conditions.”