Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Q2 2023 Earnings Presentation
36 slides from Digital Realty Trust's earnings presentation, Jul 27, 2023
Slide 1: 2Q23 Financial Results
2Q23 FINANCIAL RESULTS July 27, 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+ 216,000 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: Data Gravity Driving Data Center Demand
Data Gravity Driving Data Center Demand PlatformDIGITAL® Poised to Capitalize(1) DGx™ 2.0 2025E AMERs EMEA APAC 117M* 55M* 69M* Non-Cloud Storage Devices Storage Devices Storage Devices Public Cloud * Incremental # of Storage Devices required to address data gravity across G10000 enterprises in top
Slide 4: Connected Data Communities: Record Interconnection Revenue
Connected Data Communities Record Interconnection Revenue 133 new logos $49 million total 2Q bookings from 0-1 MW + Interconnection 43% of total 2Q bookings from 0-1 MW + Interconnection ~35% Auto Manufacturer Asset Manager of new signed leases contained inflation-linked increases 2Q23 Financial Res
Slide 5: Northern Virginia Update
Northern Virginia Update (1) DLR’s in-place IT capacity in the 518 MW world’s largest data center market(2) 96 MW By the end of 2025 in Ashburn, including 24 MW of capacity in the Buildable Capacity current NoVA development pipeline In place monthly rent in the $103/kW stabilized portfolio Note: As
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 with SEC standard 2023 Enhanced Board diversity to 44% female Top 100 ranking on JUST Capital + ethnically diverse
Slide 8: 2Q23 Financial Results
2Q23 Financial Results 2Q23 Financial Results 8
Slide 9: Digital Transformation Driving Steady Demand
HISTORICAL BOOKINGS ANNUALIZED GAAP BASE RENT Digital $ in millions Transformation $150 Driving Steady Demand Global Full-Product $100 Spectrum Provides Broadest Solutions $50 • Continued Strengthening in the 0-1 MW Bookings $0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • Average Rental
Slide 10: Firm Fundamentals: Robust Demand, Constrained Supply
Firm Fundamentals Robust Demand, Constrained Supply Northern Virginia Frankfurt Singapore (1) (1) Price / kW / Month $190 Price / kW / Month Price / kW / Month (1) $630 $165 $105 $140 39% $350 Growth (2) 23% 45% Growth (2) Growth (2) $95 $320 2021 $70 $140 $95 $175 Pricing 2021 2023 2021 2023 2021 2
Slide 11: Strong Backlog
Strong Backlog BACKLOG ROLL-FORWARD (1) COMMENCEMENT TIMING (2) Healthy 2Q $ in millions $ in millions $114M $110M Commencements $110M $100M $434M $437M $95M $437M $70M $192M • Robust Backlog of $437 Million $374M $378M $176M $378M • $150 Million to $150M Commence in the Remainder of 2023 $132M 1Q23
Slide 12: Improving Pricing Environment
Improving Pricing 2Q23 RE-LEASING SPREADS Environment Robust Re-Leasing 0-1 MW > 1 MW OTHER (1) TOTAL Spreads RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 4.8% 8.7% 54.7% 6.9% • Strong Renewal CASH CASH CASH CASH Spreads for 2nd 6.5% 29.9% 66.0% 14.6% Consecutive Quart
Slide 13: Highest Same-Capital Cash NOI Growth in Recent Years
Highest Same-Capital Cash NOI(1) Growth in Recent Years Raising 2023 Same-Capital Cash NOI Guidance 9% Actual: 5.6% 6% Actual: 3.4% 3% 0% -3% -6% -9% FY17 FY18 FY19 FY20 FY21 FY22 1Q23 2Q23 1. Same–Capital Net Operating Income is a non-GAAP financial measure. For a reconciliation of Stabilized Cash
Slide 14: Revenue Exposure by Currency
EXPOSURE BY REVENUE (1) 50% 24% 7% 6% 3% 3% 2% 2% 1% <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 HRK Revenue Exposure by Currency <1% 7% < 1% < 1% Currency Headwinds 24% 2% < 1% Abating 50% <1% 2% <1% <1% < 1% 6% • Local Operations Funded
Slide 15: 2Q Events Impact Second-Half Earnings
2Q Events Impact Second-Half Earnings Revenue and EBITDA Guidance Affirmed, Deleveraging Weighs 2023E CORE FFO PER SHARE 1Q23 2Q23 NOI Growth Customer Deleveraging 3Q23E 4Q23E Bankruptcy + NoVA Re-Lease 2Q23 Financial Results 15
Slide 16: Significant De-Levering
Significant De-Levering Capital Recycling and Net Debt to Adjusted EBITDA (1) Fixed Charge Coverage Ratio (2) ATM Issuance Bolster 6.8x Liquidity 6.3x (0.5x) 4.6x • Pro Forma Liquidity of 4.2x 0.4x ~$4 Billion 17% 6% Floating Floating Rate Debt Rate Debt (3) • 6.3x Pro Forma Leverage After JVs and F
Slide 17: Stabilized Hyperscale Joint Venture Summary
Stabilized Hyperscale Joint Venture Summary Raised $2B+ of Proceeds Harvesting Value from Stabilized Hyperscale Assets to Redeploy into Premium Growth Opportunities (1) Chicago Hyperscale JV NoVA Hyperscale JV Total Hyperscale JVs Adds ~$2 Billion of 90% 2 97% 3 Liquidity Stabilized Stabilized Occup
Slide 18: 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 June 30, 2023 (1)(2) (U.S. $ in billions) $1.8 Unsecured 97% Secured 4.9 YEARS 2.7 % Unsecured Weighted Avg. $3.0 Weighted Avg. Maturity (1)(2) Coupon
Slide 19: Over $2 Billion in Capital Recycling Transactions Completed
Over $2 Billion in Capital Recycling Transactions Completed Dispositions Guidance Raised We have Substantially Bolstered and Diversified our Sources of Capital, Improving our Balance Sheet Non-Core Dispositions Hyperscale JVs Total JVs & Dispositions 30% 133% Updated Guidance: Guidance: $500M Guidan
Slide 20: 2023 Financial Guidance Update
2023 Financial Guidance Update Improving Core Growth As of April 27, 2023 As of July 27, 2023 Better/Worse Total Revenue $5,500 - $5,600 $5,500 - $5,600 Adjusted EBITDA $2,675 - $2,725 $2,675 - $2,725 Rental Renewal Rates (Cash Basis) Greater than 3% Greater than 4% Year-End Portfolio Occupancy 85 -
Slide 21: Q&A
Q&A Global. Connected. Sustainable. 2Q23 Financial Results 21
Slide 22: Successful 2Q23 Initiatives
Successful 2Q23 Initiatives 1. Strengthening Customer Value Proposition Strong Leasing Led by 0-1 MW and Interconnection 2. Operating Results Inflect Upward Fastest Same-Capital NOI Growth since 2014 with Strong New Logo Growth and Robust Re-Leasing Spreads 3. Diversifying and Bolstering Capital Sou
Slide 23: Appendix
Appendix 2Q23 Financial Results 23
Slide 24: 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 25: 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 26: Reconciliation of Non-GAAP Items
Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) Reconciliation of (unaudited) Three Months Ended June 30, 2023 June 30, 2022 Non-GAAP Items Net income available to
Slide 27: 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 28: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries To Their Closest GAAP 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 29: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to To Their Closest GAAP Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) Equivalent (unaudited) Three
Slide 30: 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 June 30, 2023 June 30, 2022 Equivalent Rental revenues $ 664,744 $ 622,572 Tenant reimbursements -
Slide 31: Reconciliation of Non-GAAP Items
Reconciliation of Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income (in thousands) Non-GAAP Items (unaudited) Three Months Ended To Their Closest GAAP March 31, 2023 March 31, 2022 Equivalent Rental revenues $ 684,585 $ 639,728 Tenant reimbursements
Slide 32: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 06/30/23 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility (i) Market value of common equity $ 34,812,727 fees) Liquidation value of preferred equity (ii) 755,000 Total GAAP interest expense (includin
Slide 33: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Three Months Ended June 30, 2023 June 30, 2022 Three Months Ended March 31, 2023 March 31, 2022 Equivalent Operating income $154,860 $170,371 $177,335 $141,236 Fee income (14,908) (5,072) (7,868) (5,757) Other income (932) (2,713) (887) (15) Dep
Slide 34: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Twelve Months Ended Twelve Months Ended Twelve Months Ended To Their Closest GAAP 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 35: 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 36: Thank you
r Thank you FN DIGITAL Lv REALTY.