Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Q2 2024 Earnings Presentation
44 slides from Digitalbridge's earnings presentation, Aug 7, 2024
Slide 1: Earnings Presentation 2Q 2024
EARNINGS PRESENTATION 2Q 2024 August 7, 2024 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: DBRG Reports Second Quarter 2024 Results
DBRG REPORTS SECOND QUARTER 2024 RESULTS “ Boca Raton, August 7th, 2024 - DigitalBridge Group, Inc. (NYSE: DBRG) and subsidiaries (collectively, As the leading global asset manager “DigitalBridge,” or the “Company”) today announced financial results for the second quarter ended June 30, dedicated to
Slide 4: GAAP Financial Results
GAAP FINANCIAL RESULTS Net income attributable to common stockholders was $76.8 million in Q2 2024, and $0.44 per share (basic and diluted) (In thousands, except per share data, unaudited) 2Q23 2Q24 Revenues Fee revenue $ 65,742 $ 78,605 Carried interest allocation (reversal) 79,254 288,244 Principa
Slide 5: Agenda
AGENDA 1 SECTION BUSINESS UPDATE 2 SECTION FINANCIAL RESULTS 3 SECTION EXECUTING THE DIGITAL PLAYBOOK 5
Slide 6: Business Update
DIGITALBRIDGE BUSINESS “= UPDATE 1
Slide 7: Business Update
BUSINESS UPDATE Tangible progress across key 2024 priorities, particularly on capital formation across our multiple investment strategies focused on deploying capital into the AI Infrastructure ecosystem KEY CEO STRATEGIC UPDATES $$$ Management Fee Revenues AI-powered data center vertical is Positio
Slide 8: Capital Formation Driven by LP Demand for AI Data Centers
1 CAPITAL FORMATION DRIVEN BY LP DEMAND FOR AI DATA CENTERS In addition to raising FEEUM to support new platforms and investments, we continue to form significant credit and equity to fuel the continued growth of our portfolio companies, in total we’ve raised $14B in 1H of 2024. GROWTH CAPITAL FOR O
Slide 9: AI Powered Data Center Vertical - DBRG Global Footprint
2 AI POWERED DATA CENTER VERTICAL - DBRG GLOBAL FOOTPRINT DigitalBridge controls the largest private global data center portfolio1, diversified across 6 platforms, with exposure to the fastest-growing segments of the market. We believe DBRG is positioned to serve AI’s ‘cloud-trained, edge-delivered’
Slide 10: AI Infrastructure Investment Is Re-Accelerating to $250B+
AI INFRASTRUCTURE INVESTMENT IS RE- ACCELERATING TO $250B+ Leading hyperscalers, with the deepest insights into Gen AI breakthroughs, demand trajectories, and investment ROIs are re-accelerating their capital investments with a principal focus on AI Infrastructure. 2Q24 AI INFRASTRUCTURE HIGHLIGHTS
Slide 11: Data Center Ecosystem Has Evolved
2 DATA CENTER ECOSYSTEM HAS EVOLVED Single-platform businesses don’t address key customers’ workloads; A DIVERSE SET OF SOLUTIONS IS REQUIRED PUBLIC CLOUD PRIVATE CLOUD EDGE COMPUTE CONNECTED EDGE CAPACITY 100MW – 1GW+ 50MW – 800MW 1MW – 20MW 200KW – 800 KW AI TRAINING INFERENCE VANTAGE N.A. VANTAGE
Slide 12: AI Infrastructure Isn't Just Data Centers
2 AI INFRASTRUCTURE ISN’T JUST DATA CENTERS We believe owning the middle and last mile will become increasingly valuable as AI moves from ‘cloud- trained’ into the ‘edge-delivered’ inference phase and new GenAI apps and workloads proliferate AI INFRASTRUCTURE C L O U D - T R A I N E D ECOSYSTEM TOP
Slide 13: Capital Formation – Bridge to $7B Target
3 CAPITAL FORMATION – BRIDGE TO $7B TARGET Consistent with 2023 results ($3.4B YTD, $6.9B final), DBRG expects ~50% of fundraising to be concentrated in the last four months of 2024. DBRG has raised $3.4B YTD, including capital raised in July, representing ~49% of our YTD goal, with an identified pa
Slide 14: Capital Formation – AI-Powered Data Centers Catalyzing New Investment Solutions
CASE STUDY 3 CAPITAL FORMATION – AI-POWERED DATA CENTERS CATALYZING NEW INVESTMENT SOLUTIONS We are catalyzing the private wealth distribution channel with an investment solution that gives investors the diversification they want…direct, diversified exposure to high-quality data center platforms Cre
Slide 15: Capital Formation – Process Paves the Road for 2024 Goals
3 CAPITAL FORMATION – PROCESS PAVES THE ROAD FOR 2024 GOALS Our structured capital formation process draws from an investor pipeline of over 400 engaged LPs, including an additional 100+ prospects developed during 2024. CUMULATIVE COMMITMENTS TO LATEST DBP FLAGSHIP DBP STRATEGY UPDATE (Illustrative,
Slide 16: Capital Formation – DBRG Bridge to Financial Targets
3 CAPITAL FORMATION – DBRG BRIDGE TO FINANCIAL TARGETS DBRG remains on track to achieve its financial targets for 2024 building off the base of 2Q FRE, with higher fee income in 2H driven by a higher capital base and contribution from catch-up fees, which structurally increase later in the year. Ill
Slide 17: Financial Update
‘eat! ull DIGITALBRIDGE FINANCIAL UPDATE
Slide 18: Second Quarter 2024 Highlights & KPIs
SECOND QUARTER 2024 HIGHLIGHTS & KPIs DBRG key metrics for the quarter ended June 30, 2024: Financial § Fee Revenue of $78.7 million, up 18% year-over-year, driven by higher FEEUM. Highlights § Fee Related Earnings of $26.0 million, up 20% year-over-year. § Distributable Earnings of $19.6 million, i
Slide 19: FEEUM Growth Driven by Organic Fundraising
FEEUM GROWTH DRIVEN BY ORGANIC FUNDRAISING Fee-Earning Equity Under Management (FEEUM) increased $3.6B, or 12% YoY, to $32.7B as of June 30, 2024, driven by organic capital formation at the DBP Series, Co-Invest, and Credit strategies. During the second quarter, DBRG closed new capital commitments f
Slide 20: Non-GAAP Financial Results
NON-GAAP FINANCIAL RESULTS § Fee Related Earnings of $26.0 million, with FRE margin at 33% in Q2 2024 § Distributable Earnings of $19.6 million in Q2 2024 ($ in millions) 2Q23 2Q24 % Change YOY 2Q23 LTM 2Q24 LTM % Change YOY Fee Revenue $66.6 $78.7 +18 % $214.0 $291.9 +36 % Cash Compensation ($31.9)
Slide 21: Carried Interest & Principal Investment Income
CARRIED INTEREST & PRINCIPAL INVESTMENT INCOME § Net carried interest of $75.1 million in Q2 2024 § Net principal investment income of $13.7 million in Q2 2024 Carried Interest ($ in millions) 2Q23 2Q24 % Change YOY 2Q23 LTM 2Q24 LTM % Change YOY Unrealized Carried Interest Allocation (Reversal) $79
Slide 22: DBRG Financial Profile & FEEUM Progression
DBRG FINANCIAL PROFILE & FEEUM PROGRESSION Fee revenue and FRE growth continue migration higher, driven by new FEEUM growth on back of new capital formation and FEEUM activation. $315M LTM Fee Revenue and FRE Profile(1) $280M $292M $267M LTM Fee Revenue $238M $214M $193M LTM FRE $176M $82M $86M $90M
Slide 23: Balance Sheet Profile
BALANCE SHEET PROFILE Key Corporate Assets Key Corporate Liabilities Blended 6/30/2024 Avg. Cost GP Affiliated Investments(1) Corporate Debt GP Affiliated Investment in DBP Series $322 Securitized Notes $300 3.9% GP Affiliated Investments - Other & Warehoused Investments (Credit, Core, InfraBridge,
Slide 24: Executing the Digital Playbook
3 EXECUTING THE DIGITAL PLAYBOOK 24
Slide 25: Vantage Typifies Our Long-Term Value Creation Playbook
CASE STUDY AI-POWERED DATA CENTER VERTICAL: VANTAGE TYPIFIES OUR LONG-TERM VALUE CREATION PLAYBOOK Over the past 8 years, DBRG has helped scale Vantage from 3 campuses in North America with <100MW to 1.5GW+ of capacity across 30+ campuses worldwide Montreal, Canada North America Quebec City, Canada
Slide 26: Vantage Transaction: Supporting a $30B AI-Powered Growth Opportunity
CASE STUDY VANTAGE TRANSACTION: SUPPORTING A $30B AI-POWERED GROWTH OPPORTUNITY Transaction positions Vantage to develop an additional 3GW of leased capacity to meet hyperscale demand for AI and cloud compute 4.5GW 3.0GW1 2 3x DigitalBridge led a $9.2 By 2030 equity investment in partnership with Si
Slide 27: Vantage Transaction in Context: DBRG Long-Term Value Creation
CASE STUDY VANTAGE TRANSACTION IN CONTEXT: DBRG LONG-TERM VALUE CREATION In addition to supporting the next leg of Vantage’s growth with fresh capital, the transaction has a number of strategic value-creation benefits for the DBRG shareholder….those with a long-term view DBRG SHAREHOLDER PERSPECTIVE
Slide 28: DBRG 2024: Key Priorities
DBRG 2024: KEY PRIORITIES FIRST HALF DELIVERED SECOND HALF PRIORITIES 1. Management Fee Revenue and Fee-Related Earnings 1. Continue to deliver peer-leading management fee (FRE) both up over 20% YoY, with expanding margins revenue growth and operating margin expansion 2. Formed over $14B in capital
Slide 29: Q&A Session
‘eat! ull DIGITALBRIDGE Q&A SESSION
Slide 30: Supplemental Financial Data
5 SUPPLEMENTAL FINANCIAL DATA 30
Slide 31: Summary Financial Metrics
SUMMARY FINANCIAL METRICS 2024 2023 2022 ($ and shares in thousands, except per share data and as noted) (Unaudited) 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 GAAP Results Fee revenue $ 78,605 $ 72,955 $ 74,009 $ 65,240 $ 65,742 $ 59,126 $ 44,255 $ 41,263 Net income (loss) attributable to common stock
Slide 32: FEEUM, Fee Related Earnings & Distributable Earnings
FEEUM, FEE RELATED EARNINGS & DISTRIBUTABLE EARNINGS 2024 2023 2022 ($ in millions) 6/30/24 Fee Rate 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 DigitalBridge Partners I (DBP I) 1.10% $ 3,677 $ 3,687 $ 3,571 $ 3,345 $ 3,311 $ 3,180 $ 3,165 $ 2,802 DigitalBridge Partners II (DBP II) 1.18% 6,269 6,219 6,6
Slide 33: Fund Performance
FUND PERFORMANCE Certain performance metrics for our key investment funds from inception through June 30, 2024 are presented in the table below. Excluded are funds with less than one year of performance history as of June 30, 2024, funds and separately managed accounts in the liquid strategy, co-inv
Slide 34: Capitalization
CAPITALIZATION ($ and shares in thousands, as of June 30, 2024) Securitized Notes - Class A-2 Term Notes Amount Outstanding $ 300,000 Interest Rate (per annum) 3.933 % Anticipated Repayment Date September 25, 2026 Kroll Rating BBB Revolver - Class A-1 Variable Funding Notes Maximum Available $ 300,0
Slide 35: GP Affiliated Investments
GP AFFILIATED INVESTMENTS ($ in thousands) 2024 2023 2022 Consolidated 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 GP Affiliated Investments DBP Series $ 452,604 $ 446,954 $ 446,423 $ 442,991 $ 427,188 $ 395,534 $ 392,322 $ 305,621 DataBank and Vantage SDC(1) 674,900 940,854 931,004 434,666 204 206 208
Slide 36: Balance Sheet
BALANCE SHEET December 31, June 30, 2024 ($ in thousands, unaudited) 2023 (Unaudited) Assets Cash and cash equivalents $ 345,335 $ 261,173 Restricted cash 4,915 4,743 Investments 2,476,093 2,517,653 Goodwill 465,991 465,602 Intangible assets 103,750 87,711 Other assets 78,953 70,212 Due from affilia
Slide 37: Distributable Earnings & Fee Related Earnings
DISTRIBUTABLE EARNINGS & FEE RELATED EARNINGS 2024 2023 2022 ($ in thousands) 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 Net income (loss) attributable to common stockholders $ 76,763 $ (44,288) $ 100,607 $ 261,828 $ (22,411) $ (212,473) $ (19,356) $ (63,273) Net income (loss) attributable to noncontro
Slide 38: Reconciliations
RECONCILIATIONS 2024 2023 2022 ($ in thousands) 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 Fee Revenue GAAP Fee Revenue $ 78,605 $ 72,955 $ 74,009 $ 65,240 $ 65,742 $ 59,126 $ 44,255 $ 41,263 Consolidated Funds(1) 84 471 385 818 856 972 1,017 776 Incentive Fees(2) (1) (635) — — — — — — FRE Fee Revenue
Slide 39: Reconciliations
RECONCILIATIONS 2024 2023 2022 (shares in thousands) 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 FRE and DE Share Count GAAP Weighted Average Basic Shares Outstanding 170,358 161,043 160,664 160,564 158,089 158,446 158,837 162,398 Weighted Average OP Units 12,291 12,338 12,376 12,376 12,543 12,629 12,62
Slide 40: Appendix
6 APPENDIX 40
Slide 41: Important Note Regarding Non-GAAP Financial Measures
IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES This presentation contains the following non-GAAP financial measures attributable to the Operating Company: Fee Related Earnings (“FRE”) and Distributable Earnings (“DE”). FRE and DE are common metrics utilized in the investment management sector.
Slide 42: Important Note Regarding Non-GAAP Financial Measures (Continued)
IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES (CONTINUED) Distributable Earnings (“DE”): DE generally represents the net realized earnings of the Company and is an indicative measure used by the Company to assess ongoing operating performance and in making decisions related to distributions a
Slide 43: Definitions
DEFINITIONS Assets Under Management (“AUM”) AUM represents the total capital for which we provide investment management services and our general partner capital. AUM is generally composed of third-party capital managed by the Company and its affiliates, including capital that is not yet fee earning,
Slide 44: DigitalBridge
DIGITALBRIDGE