How strong were Digital Realty's 1Q26 results compared with last year?

Results were strong. Core FFO per diluted share rose 15% to $2.04 from $1.77, FFO per share rose to $1.99 from $1.67, and total revenue grew 16% to $1.635B. Reported GAAP diluted EPS was $0.46, compared with $0.27 a year earlier. Part of the reported growth reflects favorable currency movements, which management highlighted with a constant-currency Core FFO of $1.96.

Why did the company raise its 2026 guidance, and what does the new outlook imply?

Management raised its 2026 Core FFO per share outlook to $8.00-$8.10 from $7.90-$8.00, citing improving core growth, stronger leasing, and higher renewal spreads. Total revenue guidance rose to $6.65-$6.75B and Adjusted EBITDA guidance to $3.65-$3.75B. The constant-currency Core FFO outlook is $7.95-$8.05, reflecting an assumed currency headwind of about $0.05 per share for the year, so the reported guidance includes some FX benefit. Management also raised its expected 2026 development CapEx to $3.5-$4.0B.

How much contracted future revenue does the leasing backlog represent?

The backlog of signed but not yet commenced leases reached a record $1.8B of annualized GAAP base rent at 100% share, or $1.0B at Digital Realty's share, at quarter-end. The weighted-average lag between signing and commencement was 19 months. Management expects about $375M of backlog NOI to commence in 2026 and more in 2027 and beyond, which provides multi-year visibility on revenue growth.

Is the balance sheet and funding position healthy enough to support the aggressive development pipeline?

Digital Realty had about $18.0B of total debt at March 31, 2026, with 95% unsecured and a weighted-average maturity of 4.7 years. Net debt to Adjusted EBITDA was 4.7x, improved from 5.1x a year earlier, and fixed charge coverage was 4.9x. The company held roughly $2.4B of cash and had about $3.6B of available revolver capacity. Its ATM program raised about $1.3B in equity since year-end 2025, and it plans $1.5-$2.0B of new long-term debt in mid-2026 at 4.0%-4.5%. Development spending is large, with about $5.4B of construction in progress, so funding and execution remain key risks to monitor.

What risks should investors weigh, given the strong headline numbers?

Several risks stand out. Reported growth benefited from favorable FX, and constant-currency same-capital NOI growth was only 2.5% versus the 7.9% reported figure. Net income also included some one-time items. Leasing is concentrated, with the top 20 customers representing about 52% of annualized rent and the largest customer about 11%. Development is capital-intensive, with a large construction pipeline and an average stabilized yield target of 10%+ that depends on leasing execution. Occupancy in some markets such as London, Silicon Valley, and Hong Kong remains below 80%. Finally, Q4 2025 AFFO was lower due to higher recurring CapEx, so cash flow coverage can be uneven from quarter to quarter.

DLR 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 23, 2026. Cited figures are marked; the original filing is the authoritative source.

Digital Realty (DLR) reported first-quarter 2026 results on April 23, 2026 that show strong operating momentum and a raised Core FFO outlook.

Core FFO per diluted share was $2.04^a, up 15% year over year from $1.77, and FFO per share was $1.99 versus $1.67. Total operating revenues were $1.635 billion, up 16% year over year, and Adjusted EBITDA rose 16% to $920 million. Same-capital cash NOI grew 7.9% as reported, though constant-currency growth was 2.5%, a gap driven by FX that management is flagging.

Net income available to common stockholders was $169 million^b, or $0.46 per diluted share. Leasing was a highlight. Bookings were $707 million of annualized GAAP base rent at 100% share ($423 million at DLR's share), including a record $98 million from the 0-1 MW plus interconnection category and what management described as the largest hyperscale lease in company history.

The total backlog reached a record $1.8 billion^c at 100% share ($1.0 billion at DLR's share). Renewal cash rent spreads were +5.0%, and the company raised its full-year renewal spread guidance to 6.5%-8.5%. Balance sheet metrics improved, with net debt to Adjusted EBITDA at 4.7x and debt-plus-preferred to enterprise value at 22.7%.

The company also sold 7.3 million shares under its ATM program at an average of $179.30^d, for net proceeds of about $1.3 billion. The 2026 outlook was raised. Core FFO per share guidance moved to $8.00-$8.10 (constant currency $7.95-$8.05, versus the prior $7.90-$8.00), and Adjusted EBITDA guidance moved up to $3.65-$3.75 billion.

Investors should note that reported results benefited from currency tailwinds and that management plans roughly $3.5-$4.0 billion of development CapEx, with more debt issuance expected mid-year. The 1Q26 AFFO payout ratio of 63.6% is well covered, but Q4 2025 AFFO was weaker because of higher recurring CapEx.

02—Key points

Key Highlights

Core FFO per diluted share of $2.04 in 1Q26, up 15% year over year from $1.77. Constant-currency Core FFO was $1.96. The 2026 Core FFO outlook was raised to $8.00-$8.10 from $7.90-$8.00.
Record leasing: $707M of bookings at 100% share ($423M at DLR share), including a record $98M from 0-1 MW plus interconnection and a 42% year-over-year increase in that category. Management cited the largest hyperscale lease in company history.
Record backlog of $1.8B at 100% share ($1.0B at DLR share), about 23% of in-place annualized rent, giving multi-year revenue visibility.
Total revenue of $1.635B, up 16% year over year. Adjusted EBITDA of $920M, up 16%. Same-capital cash NOI grew 7.9% as reported, but only 2.5% on a constant-currency basis.
Renewal rental rates rose 5.0% on a cash basis and 6.3% on a GAAP basis. The full-year cash renewal spread guidance was raised to 6.5%-8.5%.
Balance sheet remains solid: net debt to Adjusted EBITDA of 4.7x, fixed charge coverage of 4.9x, and about $2.4B of cash. Approximately $1.3B was raised through ATM equity sales since year-end 2025, and $1.5-$2.0B of long-term debt is planned for mid-2026.
Strategic expansion continued with acquisitions in Bulgaria (Telepoint), Italy, and Malaysia, plus over 1 GW of land added in Atlanta and Portland. Development CapEx guidance rose to $3.5-$4.0B, and the company has about 6 GW of future development capacity.

03—Questions

Frequently Asked Questions

How strong were Digital Realty's 1Q26 results compared with last year?
Results were strong. Core FFO per diluted share rose 15% to $2.04 from $1.77, FFO per share rose to $1.99 from $1.67, and total revenue grew 16% to $1.635B. Reported GAAP diluted EPS was $0.46, compared with $0.27 a year earlier. Part of the reported growth reflects favorable currency movements, which management highlighted with a constant-currency Core FFO of $1.96.
Why did the company raise its 2026 guidance, and what does the new outlook imply?
Management raised its 2026 Core FFO per share outlook to $8.00-$8.10 from $7.90-$8.00, citing improving core growth, stronger leasing, and higher renewal spreads. Total revenue guidance rose to $6.65-$6.75B and Adjusted EBITDA guidance to $3.65-$3.75B. The constant-currency Core FFO outlook is $7.95-$8.05, reflecting an assumed currency headwind of about $0.05 per share for the year, so the reported guidance includes some FX benefit. Management also raised its expected 2026 development CapEx to $3.5-$4.0B.
How much contracted future revenue does the leasing backlog represent?
The backlog of signed but not yet commenced leases reached a record $1.8B of annualized GAAP base rent at 100% share, or $1.0B at Digital Realty's share, at quarter-end. The weighted-average lag between signing and commencement was 19 months. Management expects about $375M of backlog NOI to commence in 2026 and more in 2027 and beyond, which provides multi-year visibility on revenue growth.
Is the balance sheet and funding position healthy enough to support the aggressive development pipeline?
Digital Realty had about $18.0B of total debt at March 31, 2026, with 95% unsecured and a weighted-average maturity of 4.7 years. Net debt to Adjusted EBITDA was 4.7x, improved from 5.1x a year earlier, and fixed charge coverage was 4.9x. The company held roughly $2.4B of cash and had about $3.6B of available revolver capacity. Its ATM program raised about $1.3B in equity since year-end 2025, and it plans $1.5-$2.0B of new long-term debt in mid-2026 at 4.0%-4.5%. Development spending is large, with about $5.4B of construction in progress, so funding and execution remain key risks to monitor.
What risks should investors weigh, given the strong headline numbers?
Several risks stand out. Reported growth benefited from favorable FX, and constant-currency same-capital NOI growth was only 2.5% versus the 7.9% reported figure. Net income also included some one-time items. Leasing is concentrated, with the top 20 customers representing about 52% of annualized rent and the largest customer about 11%. Development is capital-intensive, with a large construction pipeline and an average stabilized yield target of 10%+ that depends on leasing execution. Occupancy in some markets such as London, Silicon Valley, and Hong Kong remains below 80%. Finally, Q4 2025 AFFO was lower due to higher recurring CapEx, so cash flow coverage can be uneven from quarter to quarter.

04—Continue

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