Key financial results
- Core FFO: Core FFO per share grew 11% year-over-year to $2.10 per share for the third quarter, driven by strong commencements, mark-to-market opportunities, and growing fee income.
We reported core FFO of $2.10 per share for the third quarter, an 11% increase year-over-year.
- Revenue: Recurring revenue increased nearly 16% year-to-date or more than 14% on a constant currency basis, with double-digit reported growth across all 3 regions.
recurring revenue increased nearly 16% year-to-date or more than 14% on a constant currency basis
- NOI: Same capital cash NOI increased approximately 6% year-over-year in the third quarter, bringing year-to-date constant currency growth to approximately 5%.
Cash NOI increased approximately 6% year-over-year in the third quarter
- Occupancy: Stabilized occupancy increased nearly 90 basis points sequentially to 93.4% and churn reached a record low of just 0.7%.
Stabilized occupancy increased nearly 90 basis points sequentially to 93.4%
Business segment results
- Total bookings: Total leasing for the quarter reached a record $855 million, or $627 million at Digital Realty's share.
total leasing for the quarter was a blowout at $855 million, or $627 million at our share
- Colocation: Bookings within the 0 to 1 megawatt plus interconnection category exceeded $150 million at Digital Realty's share, increasing 80% year-over-year and 40% from the second quarter.
Bookings within our 0 to 1 megawatt plus interconnection category exceeded $150 million at Digital Realty share
- Interconnection: Interconnection bookings totaled a record $23.9 million or $22.2 million at Digital Realty's share.
Interconnection bookings totaled a record $23.9 million or $22.2 million at DLR share
- Hyperscale: Total hyperscale bookings in the greater than a megawatt category reached $689 million or $474 million at Digital Realty's share.
Total hyperscale bookings of $689 million or $474 million at Digital Realty share set another quarterly record.
- Renewals: Renewal activity included $261 million signed at a blended average 11.8% cash re-leasing spread.
We signed another $261 million of renewals at a blended average 11.8% cash re-leasing spread
Capital allocation
- CapEx: Digital Realty invested $1.5 billion in development CapEx during the third quarter, bringing year-to-date capital spending to $3.3 billion net of partner share.
we invested $1.5 billion in development CapEx bringing year-to-date capital spending to $3.3 billion
- Land acquisitions: The company invested over $700 million across 7 different land and site locations in the U.S. and Europe, including a 1 gigawatt development in greater Indianapolis.
vesting over $700 million across 7 different locations in the U.S. and Europe.
- Financing: Digital Realty raised approximately $3.5 billion across the capital stack recently, including $450 million of common equity under the ATM and $1.7 billion of total debt proceeds.
raising approximately $3.5 billion further scaling the quantum of capital available
Industry trends and dynamics
- AI demand: The adoption of artificial intelligence is driving unprecedented demand for capacity while increasing the value of highly connected environments.
The adoption of artificial intelligence is driving unprecedented demand for capacity
- Grid capacity: Data center power consumption and energy grid capacity remain key focus areas, and Digital Realty signed the ratepayer protection pledge.
We have also signed the ratepayer protection pledge, reflecting our commitment that the cost of infrastructure required to serve new data center demand should not be borne by residential customers
- Water usage: Approximately 75% of Digital Realty's data centers utilize highly efficient closed-loop cooling systems or do not use water for cooling.
Approximately 75% of our data centers utilize highly efficient, closed-loop cooling systems or do not use water for cooling.
Competitive landscape
- Market position: Management stated that most newer entrants to the hyperscale data center field lack the scale, balance sheet strength, or funding sources necessary to pursue opportunities at required scales.
most lack the scale, balance sheet strength or funding sources necessary to pursue opportunities at the scale required by hyperscale customers today.
- Footprint: Digital Realty's global platform spans 65 metros across 58 operational markets, supporting more than 6,000 customers.
Macroeconomic environment
- Capital markets: Management noted that interest rates and broader capital market dynamics are dynamic, but the company successfully accessed capital at attractive rates.
- Macroeconomics: Management did not discuss broader macroeconomic inflation indicators outside of construction and supply chain dynamics.
Growth opportunities and strategies
- Development pipeline: The total development pipeline expanded to 1.5 gigawatts under construction at a total expected cost of $22 billion with a 63% pre-leased rate and an 11.6% average expected stabilized yield.
our development pipeline expanded to 1.5 gigawatts under construction at a total expected cost of $22 billion
- Backlog: The company backlog reached a new record of $2.5 billion at quarter end or $1.8 billion at Digital Realty's share.
our backlog reached a new record of $2.5 billion at quarter end or $1.8 billion at Digital Realty share.
Financial guidance and outlook
- Core FFO guidance: Management raised 2026 core FFO per share guidance by $0.15 to a new range of $8.30 to $8.35 per share.
raising our 2026 or FFO per share guidance, excluding net promote income by $0.15 or nearly 2% to a new range of $8.30 to $8.35 per share.
- Renewal spreads: Cash renewal spreads guidance was raised to 10% to 12%.
expect cash renewal spreads of 10% to 12%
- NOI guidance: Same capital cash NOI growth guidance was set at 5.25% to 5.75% on a constant currency basis.
Same capital cash NOI growth of 5.25%, 5.75% on a constant currency basis
- Capital recycling: Capital recycling guidance was raised by $500 million to a range of $1.5 billion to $2 billion.
raising our capital recycling guidance by another $500 million to a range of $1.5 billion to $2 billion
Strategic private capital
- Perpetual capital: Digital Realty closed over $1.4 billion of initial cornerstone equity commitments for a new perpetual capital strategy focused on stabilized hyperscale data centers in North America.
closing over $1.4 billion of initial cornerstone equity commitments to our new perpetual capital strategy
- Columbia Capital: The company completed the acquisition of Columbia Capital during the third quarter to enhance its investment capabilities.
closed on the acquisition of Columbia Capital, a 30-plus year digital infrastructure-focused investment platform.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Core FFO per share | $2.10 | 11% increase year-over-year |
| Total bookings | $855 million | Not stated |
| Backlog | $2.5 billion | Not stated |
| Same capital cash NOI | 6% | increase year-over-year |
| Stabilized occupancy | 93.4% | increased nearly 90 basis points sequentially |
How management sounded
Positive (+45 on our -100 to +100 scale). Management expressed high confidence due to record leasing, an expanding backlog, and raised full-year guidance. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Execution of upcoming pre-leased deliveries and backlog conversion.
- Scaling of the new perpetual private capital strategy and further capital raising.
- Development pipeline progress and power availability in constrained markets.
Earlier calls
- Q2 2026 (Jul 23, 2026), tone Balanced: Digital Realty reported second quarter core FFO of $2.13 per share, excluding net promote income, and raised its 2026 guidance.
