Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q3 2023 Earnings Presentation
32 slides from Digital Realty Trust's earnings presentation, Oct 26, 2023
Slide 1: 3Q23 Financial Results
3Q23 FINANCIAL RESULTS October 26, 2023 Global. Connected. Sustainable. The meeting place for companies, technologies and data
Slide 2: A Global Platform Supporting Our Customers' Data Center Requirements
A Global Platform Supporting Our Customers’ Data Center Requirements 5,000+ 218,000 50+ 300+ Customers Cross connects Metros Data Centers Coverage Capacity Deploy where you need Host what you need, how you need Connectivity Control Connect how you need Implement and operate to whom you need the way
Slide 3: Executing on Strategic Vision
Executing on Strategic Vision Refining Strategy to Fuel Future Growth 1 Strengthen our Customer 2 Integrate and Innovate for 3 Diversifying and Bolstering Value Proposition our Customers Capital Sources Added new on-ramps and Aligned organization into three Reduced leverage and increased expanded ou
Slide 4: Connected Data Communities: Record Interconnection Revenue
Connected Data Communities Record Interconnection Revenue 117 new logos $54 million total 3Q bookings from 0-1 MW + Interconnection 35% of total 3Q bookings from 0-1 MW + Interconnection Auto Manufacturer 3Q23 Financial Results 4
Slide 5: Northern Virginia Update
Northern Virginia Update 422 MW (1) DLR’s in-place IT capacity in the world’s largest data center market(2) ~100 MW New development capacity to be brought to market prior to 2026 In Loudoun County 192 MW Capacity in a nearby development site outside the power-constrained area Note: As of September 3
Slide 6: Leading Data Center Partner for Sustainability
Leading Data Center Partner for Sustainability Science-Based Target Commitment to Reduce Global Emissions by 68% by 2030 Renewable energy Green buildings Energy efficiency Green Bonds More green building certified IT More energy star certifications Leading data center purchaser Leading the data cent
Slide 7: Serving a Social Purpose
Serving a Social Purpose Delivering Growth for All Stakeholders Social Governance Newsweek’s America’s Most Aligned ownership requirements to Responsible Companies of 2023 amend bylaws consistent with SEC 2023 standard Top 100 ranking on JUST Capital Enhanced Board diversity to 44% female America’s
Slide 8: 3Q23 Financial Results
3Q23 Financial Results 3Q23 Financial Results 8
Slide 9: Strong Demand Across Region and Products
HISTORICAL BOOKINGS Strong Demand ANNUALIZED GAAP BASE RENT $ in millions Across Region and Products $150.0 AI adds incremental layer of demand $100.0 • Record 0-1MW + $50.0 Interconnection signings • Highest >1 MW average $0.0 leasing rate since 2016 2013 2014 2015 2016 2017 2018 2019 2020 2021 202
Slide 10: Record Backlog
BACKLOG ROLL-FORWARD (1) COMMENCEMENT TIMING (2) Record Backlog $ in millions $ in millions Healthy 3Q Commencements $140M $98M $85M $127M $482M $120M $482M $437M • Record Backlog $87M $286M of $482 Million $422M $422M $378M • $76 Million to $267M Commence in the Remainder of 2023 $76M $68M 2Q23 Bac
Slide 11: Improving Pricing Environment
Improving Pricing 3Q23 RENEWAL SPREADS Environment Robust Renewal Spreads 0-1 MW > 1 MW OTHER (1) TOTAL RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 4.4% 5.6% 71.6% 7.4% • Highest Cash Renewal CASH CASH CASH CASH Spreads since 2015 5.6% 10.3% 85.5% 9.5% GAAP GAAP GAAP
Slide 12: Highest Same-Capital Cash NOI Growth in 10+ Years
Highest Same-Capital Cash NOI(1) Growth in 10+ Years Raising 2023 Same-Capital Cash NOI Guidance 12% 9.4% 9% 5.6% 6% 3.4% 3% 0% -3% -6% -9% FY17 FY18 FY19 FY20 FY21 FY22 1Q23 2Q23 3Q23 1. Same–Capital Net Operating Income (NOI) is a non-GAAP financial measure. For a reconciliation of Same-Capital Ca
Slide 13: Revenue Exposure by Currency
EXPOSURE BY REVENUE (1) 50% 24% 7% 6% 4% 3% 2% 2% 1% 1% <1% <1% <1% <1% <1% <1% <1% USD EURO GBP SGD ZAR BRL JPY CHF AUD CAD DKK SEK HKD KES KRW NGN MZN Revenue Exposure by Currency 1% 7% < 1% < 1% FX Slight Tailwind in 3Q 24% 2% <1% 50% 2% <1% <1% < 1% 6% • Local Operations Funded 3% < 1% in Local
Slide 14: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Modest Near-Term Maturities, Well-Laddered Debt Schedule DEBT PROFILE DEBT MATURITY SCHEDULE AS OF SEPTEMBER 30, 2023 (1)(2) (U.S. $ in billions) $3.5 Unsecured $3.2 97% Secured 4.6 YEARS 2.9 % Unsecured Weighted Avg. € Weighted Avg. Maturity (1)(2) $2
Slide 15: $2.5 Billion in Capital Recycling Transactions Completed
$2.5 Billion in Capital Recycling Transactions Completed Strong Demand from Private Capital Substantially Bolstered and Diversified our Sources of Capital, Improving our Balance Sheet Non-Core Dispositions Hyperscale JVs Total JVs & Dispositions 70% 140% Updated Guidance: Guidance: $500M Guidance: $
Slide 16: 2023 Financial Guidance Update
2023 Financial Guidance Update As of April 27, 2023 As of July 27, 2023 As of October 26, 2023 Total Revenue $5,500 - $5,600 $5,500 - $5,600 $5,475 - $5,525 Adjusted EBITDA $2,675 - $2,725 $2,675 - $2,725 $2,685 - $2,715 Rental Renewal Rates (Cash Basis) Greater than 3% Greater than 4% Greater than
Slide 17: Q&A
Q&A Global. Connected. Sustainable. 3Q23 Financial Results 17
Slide 18: Successful 3Q23 Initiatives
Successful 3Q23 Initiatives 1. Strengthening Customer Value Proposition Strong Leasing Led by 0-1 MW Plus Interconnection 2. Core Operating Results Inflect Upward Accelerated Same-Capital NOI Growth with Robust Re-Leasing Spreads 3. Diversifying and Bolstering Capital Sources Raised ~$3.5 Billion(1)
Slide 19: Appendix
Appendix 3Q23 Financial Results 19
Slide 20: Management Statements on Non-GAAP Measures
Appendix Management Statements on Non-GAAP Measures The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures
Slide 21: Forward-Looking Statements
Appendix Forward-Looking Statements This information in this presentation contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes an
Slide 22: Reconciliation of Non-GAAP Items
Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Non-GAAP Items Three Months Ended September 30, 2023 September 30, 2022 To Their Close
Slide 23: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) To Their Closest GAAP (in thousands, except per share and unit data) (unaudited) Equivalent Three Months Ended September 30, 2023 September
Slide 24: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) To Their Closest GAAP (in thousands, except per share and unit data) (unaudited) Equivalent Three Months Ended June 30, 2023 June 30, 2022 F
Slide 25: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in thousands, except per share and unit data) Equivalent (unaudited) Three Months Ended March 31, 2023 March 31, 2022
Slide 26: Reconciliation of Non-GAAP Items
Reconciliation of Digital Realty Trust, Inc. and Subsidiaries Non-GAAP Items Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) To Their Closest GAAP (unaudited) Equivalent Three
Slide 27: Reconciliation of Non-GAAP Items
Reconciliation of Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income Non-GAAP Items (in thousands) (unaudited) To Their Closest GAAP Three Months Ended Equivalent September 30, 2023 September 30, 2022 Rental revenues $ 648,940 $ 584,452 Tenant reimbu
Slide 28: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 09/30/23 Reconciliation of Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility (i) Market value of common equity $ 37,434,562 fees) Liquidation value of preferred equity(ii) 755,000 Total GAAP interest
Slide 29: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Three Months Ended Three Months Ended Three Months Ended September 30, 2023 September 30, 2022 June 30, 2023 June 30, 2022 March 31, 2023 March 31, 2022 Operating income $58,231 $157,381 $154,860 $170,371 $177,335 $141,236 Fee income
Slide 30: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Twelve Months Ended Twelve Months Ended Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2020 December 31, 2019 Equivalent Operating income $589,969 $694,010 $694,010 $557,530 $557,530 $594
Slide 31: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Twelve Months Ended December 31, 2019 December 31, 2018 Twelve Months Ended December 31, 2018 December 31, 2017 Twelve Months Ended December 31, 2017 December 31, 2016 Equivalent Operating income $594,216 $549,787 $549,787 $451,295 $451,295 $497
Slide 32: Thank you
r Thank you FN DIGITAL Lv REALTY.