10-QPeriod: Q3 FY2021

DIGITAL REALTY TRUST, INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) reported solid financial performance for the nine months ended September 30, 2021, demonstrating revenue growth and effective expense management. Total operating revenues increased by 16.7% year-over-year, driven by robust growth in rental and other services, largely influenced by the Interxion Combination and expansion into new markets. The company maintained a strong focus on operational efficiency, with property level expenses increasing at a slower rate than revenue, indicating effective cost control. Key financial highlights include a significant increase in net income available to common stockholders and a corresponding rise in Funds From Operations (FFO). DLR continues to strategically manage its capital structure, with a focus on maintaining a conservative leverage ratio and well-laddered debt maturities. The company also actively manages its liquidity through its revolving credit facilities and ATM equity program, ensuring sufficient resources for ongoing operations, development activities, and potential acquisitions. Investors can take confidence in the company's continued strategic execution and financial resilience in a dynamic market.

Financial Highlights

32 data points
Beta

Revenue

$1.13B

Net Income

$134.28M

11.8% Net Margin

EPS (Diluted)

$0.44

Total Assets

$35.85B

Cash & Equivalents

$116.00M

Free Cash Flow

$399.80M

Financial Statements
Beta
Revenue$1.13B
Operating Expenses$948.77M
Operating Income$184.37M
Interest Expense$71.42M
Net Income$134.28M
EPS (Basic)$0.44
EPS (Diluted)$0.44
Shares Outstanding (Basic)283.11M
Shares Outstanding (Diluted)283.80M

Key Highlights

  • 1Total operating revenues increased by 16.7% to $3.32 billion for the nine months ended September 30, 2021, compared to $2.84 billion in the prior year period.
  • 2Net income available to common stockholders rose significantly to $623.9 million for the nine months ended September 30, 2021, a substantial increase from $219.2 million in the prior year period.
  • 3Funds From Operations (FFO) available to common stockholders and unitholders increased by 44.9% to $1.39 billion for the nine months ended September 30, 2021.
  • 4The company maintained an 83.8% occupancy rate for its consolidated portfolio as of September 30, 2021, showcasing strong asset utilization.
  • 5Digital Realty reported $1.5 billion in open commitments for construction contracts, indicating ongoing investment in property development and expansion.
  • 6As of September 30, 2021, approximately $577.6 million remained available under the company's at-the-market (ATM) equity offering program, providing flexibility for future capital needs.
  • 7Debt to total enterprise value stood at approximately 25% as of September 30, 2021, demonstrating a controlled leverage position.

Frequently Asked Questions

Digital Realty's total operating revenues increased by 16.7% to $3.32 billion for the nine months ended September 30, 2021, up from $2.84 billion in the same period of 2020. This growth was primarily driven by higher rental and other services revenue, influenced by the Interxion Combination and expansion into new markets.

As of September 30, 2021, Digital Realty had $116.0 million in cash and cash equivalents. The company manages its liquidity through operating cash flow, a $2.35 billion global revolving credit facility (with approximately $1.5 billion available), and an at-the-market (ATM) equity program with $577.6 million remaining capacity. This provides ample resources for operations, development, and potential acquisitions.

Digital Realty maintains a conservative capital structure. As of September 30, 2021, the company had approximately $14.2 billion in outstanding consolidated long-term debt. The debt-to-total enterprise value ratio was approximately 25%, and the weighted average term to initial maturity for its debt was approximately 6.0 years. The company also adheres to financial covenants related to leverage and coverage ratios.

The company has significant ongoing investment in its portfolio. As of September 30, 2021, Digital Realty had open commitments of approximately $1.5 billion related to construction contracts, indicating active development and expansion projects. The company expects to incur approximately $0.5 billion to $0.8 billion in capital expenditures for its development programs during the fourth quarter of 2021.