Slide 1: Earnings Presentation 1Q 2023
EARNINGS PRESENTATION 1Q 2023 May 3, 2023 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws, including statements relating to (i) our strategy, outlook and growth prospects, (ii) our operational and financial targets and (iii)
Slide 3: Important Note Regarding Non-GAAP Financial Measures
IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES This presentation includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including the financial metrics defined below, of which the calculations may differ from methodologies u
Slide 4: DigitalBridge First Quarter 2023 GAAP Results (Unaudited)
DIGITALBRIDGE FIRST QUARTER 2023 GAAP RESULTS (UNAUDITED) DigitalBridge GAAP Net Income (loss) attributable to common stockholders was ($212) million for the quarter ended March 31, 2023, a net loss of $1.34 per diluted share. Quarter Ended March 31, 2023 Revenues Fee income $ 59,126 Carried interes
Slide 5: Agenda
AGENDA 1 SECTION BUSINESS UPDATE 2 SECTION FINANCIAL RESULTS 3 SECTION EXECUTING THE DIGITAL PLAYBOOK 5
Slide 6: Business Update
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Slide 7: Progress on Our 2023 Priorities: The Things That Matter
PROGRESS ON OUR 2023 PRIORITIES: THE 3 THINGS THAT MATTER DigitalBridge made tangible progress across its key 2023 priorities, including new fee-paying capital formation off to a solid start, substantive corporate debt reduction, and legacy asset dispositions. DBRG is ‘on-track’ to deliver in 2023.
Slide 8: Assets & Fee Earning Equity Under Management
ASSETS & FEE EARNING EQUITY UNDER MANAGEMENT Fee-Earning Equity Under Management (FEEUM) increased $8.9B, or 47% YoY, driven equally by a combination of organic capital formation in co-invest, core and credit strategies and contribution from the InfraBridge acquisition FEEUM AUM(1) ($ in Billions) (
Slide 9: New Capital Formation
NEW CAPITAL FORMATION DigitalBridge raised $0.7B in new fee-earning equity during 1Q23, up 50% YoY, driven principally by new co-invest. This puts DBRG on pace to hit its 2023 fundraising goals. Co-invest capital supports the ongoing expansion of DBRG platform companies, representing a structural gr
Slide 10: Corporate Simplification
CORPORATE SIMPLIFICATION YTD we achieved two key simplification objectives with the sale of 100% of our non-core legacy BRSP stake and the repayment of our 2023 convertible notes, further optimizing our capital structure. BRIGHTSPIRE (“BRSP”) SHARE SALE CONVERTIBLE NOTE REPAYMENT DECONSOLIDATION Net
Slide 11: Financial Results
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Slide 12: First Quarter 2023 Highlights & KPIs
FIRST QUARTER 2023 HIGHLIGHTS & KPIs DBRG shareholder pro-rata metrics for the quarter ended March 31, 2023; Fee Revenue in the investment management segment was $59.2 million, up 36% year-over-year. Financial Fee Related Earnings (“FRE”) in the investment management segment were $34.5 million,
Slide 13: Consolidated Results (Non-GAAP)
CONSOLIDATED RESULTS (NON-GAAP) 1Q23 revenues increased over the prior year driven principally by increases in Fee Income from higher FEEUM and contribution from continued growth in Operating Segment revenues. TOTAL COMPANY 1Q22 1Q23 % Cha nge YOY 1Q22 LTM 1Q23 LTM % Cha nge YOY Fee Income $42.8 $59
Slide 14: Investment Management Segment Results (Non-GAAP)
INVESTMENT MANAGEMENT SEGMENT RESULTS (NON-GAAP) During 1Q23, Fee Income increased 36% as additional FEEUM from new strategies and InfraBridge contributed to revenue growth. FRE and segment-level DE also showed strong YoY growth and margin expansion. INVESTMENT MANAGEMENT ("IM") 1Q22 1Q23 % Cha nge
Slide 15: Operating Segment Results (Non-GAAP)
OPERATING SEGMENT RESULTS (NON-GAAP) Operating Segment revenues and earnings declined YoY due to lower DBRG ownership of businesses in this segment. Notably, the successful DataBank recap lowered DBRG ownership of the company from 22% to 11%. Excluding the impact of the ownership reduction, consolid
Slide 16: Consistent Investment Management Growth
CONSISTENT INVESTMENT MANAGEMENT GROWTH Investment management segment has continued to grow consistently with ‘lower left to upper right trajectory’. Run-Rate Fee Revenue, which assumes full deployment of committed capital, continued to increase with contributions from new capital formed during the
Slide 17: Liquidity and Leverage
LIQUIDITY AND LEVERAGE YTD DBRG has executed key strategic capital allocation initiatives including, closing of the InfraBridge acquisition in February and finalizing the convertible note repayment in April. The note repayment further reduced company-wide leverage and DBRG remains on track to achiev
Slide 18: Corporate Simplification - Enhanced Financial Reporting
CORPORATE SIMPLIFICATION - ENHANCED FINANCIAL REPORTING As we finalize our transformation to an alternative asset manager, we continue to make improvements to our financial reporting and disclosures to more closely align our reporting with our peers and facilitate investor analysis. Income Statement
Slide 19: Executing the Digital Playbook
3 EXECUTING THE DIGITAL PLAYBOOK 19
Slide 20: Digital Infrastructure Markets: Tale of Two Cities
DIGITAL INFRASTRUCTURE MARKETS: TALE OF TWO CITIES Equity and credit markets highlight a ‘tale of two cities’ in digital infrastructure with higher quality ‘in-favor’ companies performing in-line with broader markets, while ‘out-of-favor’ names exhibit material underperformance. Equity Markets Credi
Slide 21: In the Face of Market Volatility: What Is the Playbook?
IN THE FACE OF MARKET VOLALITILTY: WHAT IS THE PLAYBOOK? 1 2 3 We are Forming Capital Invest in Our Continue to Drive to Fuel the Next Phase Customers and Our Best Outcomes for of Growth Best Ideas Stakeholders FUNDRAISING IN SHARP DISCIPLINED DEPLOYMENT PORTFOLIO COMPANY FOCUS OF CAPITAL PERFORMANC
Slide 22: Capital Formation: Remains Our Highest Priority
1 CAPITAL FORMATION: REMAINS OUR HIGHEST PRIORITY DigitalBridge is in the early innings of tapping into significant pools of capital on a global basis. We have expanded our team and our global footprint to access capital attracted to the resilient profile of digital infrastructure. Expanding Capital
Slide 23: Benefiting from Industry and Company-Specific Tailwinds
1 BENEFITING FROM INDUSTRY AND COMPANY-SPECIFIC TAILWINDS Allocations to digital infrastructure are growing and DigitalBridge is early in its lifecycle ANTICIPATED ASSETS UNDER MANAGEMENT $2TR >20% $1.9TR CAGR in 4 YEARS SECULAR INDUSTRY TAILWINDS Allocations to Infra/Real Assets continue to grow
Slide 24: Capital Formation: Portfolio by the Numbers in 2023
1 CAPITAL FORMATION: PORTFOLIO BY THE NUMBERS IN 2023 High-quality ‘in favor’ platforms continue to attract capital as recent transactions demonstrate. We invested here in anticipation of a more discerning market. EQUITY Fresh Co-Invest CREDIT $2.3B $0.7B Deutsche Telekom Towers GD Towers Portfoli
Slide 25: Disciplined Capital Deployment: Hunting Value & Quality
2 DISCIPLINED CAPITAL DEPLOYMENT: HUNTING VALUE & QUALITY Market conditions have created opportunities to invest in ‘value’ in selected sub-verticals that we opted not to invest in during the peak cycle, as they did not present the appropriate risk/return profile when ‘everything traded together’ AR
Slide 26: Disciplined Capital Deployment: Greenfield Matters
Waiting for data to add / remove logos BUY vs 2 DISCIPLINED CAPITAL DEPLOYMENT: GREENFIELD MATTERS BUILD $7.6B in Capex being deployed this year in success-based capex to our top global customers across five continents and four industry verticals. NORTH AMERICA LATAM EUROPE ASIA $3.2B $2.7B 2023 202
Slide 27: Portfolio Performance: New Leasing
3 PORTFOLIO PERFORMANCE…NEW LEASING WE BENEFIT FROM We continue to experience positive performance across our global portfolio CONSERVATIVE through a combination of strong organic and investment-led growth PORTFOLIO DEBT METRICS DATA CENTER TOWER FIBER SMALL PORTFOLIO PORTFOLIO PORTFOLIO CELLS/EDGE
Slide 28: 2023 CEO Priorities: Things That Matter
2023 CEO PRIORITIES: 3 THINGS THAT MATTER CEO 2023 Checklist ON TRACK Secular Tailwinds Around FUNDRAISE Connectivity – Big Growing TAM • $8B IN NEW CAPITAL The Leading Management Team SIMPLIFY 25+ years Investing and • DECONSOLIDATE OPERATING Operating Digital Assets • ADVANCE CAPITAL STRUCTURE OPT
Slide 29: Q&A Session
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Slide 30: Appendix
5 APPENDIX 30
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ in thousands) 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 Net income (loss) attributable to common stockholders ($212,473) ($19,356) ($63,273) ($37,321) ($262,316) ($20,686) $41,036 ($141,260) Net income (loss) attributable to noncontrolling common interests in Operating Comp
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ in thousands) 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 IM net income (loss) ($2,804) $81,167 $46,065 $67,995 ($9,143) $28,194 $39,272 $15,786 Adjustments: Interest expense (income) 2,411 2,200 2,906 2,771 2,500 2,499 2,250 – Investment expense, net of reimbursement 51 156
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