Digital Realty Raises Guidance Twice as Backlog Hits Record $1.9 Billion
Digital Realty Trust posted second-quarter revenue of $1,924.0 million, up 29% from a year earlier, as record bookings backlog and accelerating rent spreads pushed the data-center landlord to raise full-year guidance for the second straight quarter.
Digital Realty Trust (DLR), the data-center landlord, reported second-quarter revenue of $1,924.0 million, up 18% sequentially from $1,635.2 million in the first quarter and up 29% from $1,493.2 million a year earlier. Core funds from operations, excluding net promote income, rose to $2.13 a share from $2.04 in the first quarter and $1.87 a year ago.
The quarter's defining signal was demand outpacing even the company's own recent guidance. Digital Realty signed a record backlog of $1.9 billion of annualized GAAP base rent at 100% share, or $1.4 billion at the company's share, by the end of the second quarter, a record for the first time. Bookings in the 0-to-1 megawatt-plus interconnection category exceeded $100 million for the first time, contributing $108 million, a milestone management specifically called out.
Renewal rental rate spreads accelerated to 25.4% on a cash basis and 32.0% on a GAAP basis in the second quarter, well above the range implied by prior guidance of 6.5% to 8.5% cash spreads. Portfolio occupancy edged up to 90.2% from 90.1% in the first quarter, while same-capital occupancy climbed to 92.5% from 91.6% in both of the prior two quarters. Occupied capacity grew to 2,799 megawatts from 2,725 megawatts in the first quarter and 2,602 megawatts in the third quarter of last year, as total IT load capacity expanded to 3,102 megawatts.
Adjusted EBITDA grew to $977.6 million, up 6% sequentially and 19% year-over-year, while net debt to adjusted EBITDA held at 4.7 times, unchanged from the first quarter but down from 4.9 times in the fourth quarter of last year and 5.1 times a year earlier. FFO per diluted share jumped to $2.73 from $1.99 in the first quarter, aided by $188 million of net promote income tied to development joint-venture leasing. Net income available to common stockholders came to $1.21 a diluted share, up from $0.46 in the first quarter but below the $2.94 posted a year earlier, when results had benefited from a large prior-year gain.
Digital Realty raised its 2026 core FFO guidance, excluding net promote income, to $8.15 to $8.20 a share, up from $8.00 to $8.10 guided in April and $7.90 to $8.00 guided in February — the second consecutive increase. Full-year revenue guidance, excluding promote income, moved up to $6.850 billion to $6.950 billion from $6.650 billion to $6.750 billion previously. Renewal rate guidance rose sharply as well, to 9.0% to 11.0% on a cash basis and 12.0% to 14.0% on a GAAP basis, from 6.5% to 8.5% and 9.5% to 11.5%, respectively.
The company also lifted its 2026 development capital-expenditure guidance to $4.25 billion to $4.75 billion from $3.5 billion to $4.0 billion, reflecting increased hyperscale development activity. That spending build-out followed the June 30 close of the roughly $1.2 billion cash buyout of Blackstone's stake in a Northern Virginia joint venture, which helped push total debt to $18.6 billion from $18.0 billion in the first quarter. Buildable capacity expanded further with a Kansas City land acquisition capable of supporting up to 2 gigawatts and the addition of a 288-megawatt, 64%-owned Northern Virginia asset.
Digital Realty funded part of the expansion with equity, raising about $1.2 billion in net proceeds through its at-the-market program since the first-quarter report, at a weighted average price of $191.63 a share, bringing year-to-date ATM proceeds to $2.5 billion. Shares and units outstanding rose to 376,675 thousand at quarter-end from 355,217 thousand at the end of the first quarter, reflecting both the 12.3 million shares issued for the Northern Virginia acquisition and ongoing ATM issuance.
The quarter also included a new $94 million insurance settlement, net of tax, tied to a 2024 matter, with about $27 million counted in core FFO as a business-interruption recovery. Data center count held steady at 310, unchanged from the fourth quarter of last year, even as the company's land and capacity pipeline expanded materially.