Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Investor Presentation (March 2024)
33 slides from Digitalbridge's investor presentation, Mar 21, 2024
Slide 1: DigitalBridge Corporate Overview March 2024
1 DIGITALBRIDGE CORPORATE OVERVIEW M a r c h 2 0 24
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 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
3 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 certain of the financial metrics defined below, of which the calculations may differ from me
Slide 4: Table of Contents
4 TABLE OF CONTENTS A Platform Built to Capitalize on Opportunities Across Digital Infrastructure STRATEGY & PROFILE OVERVIEW SE CT IO N 1 FINANCIALS SE CT IO N 2 APPENDIX SE CT IO N 3 Simple, High-Growth Roadmap Digital Infrastructure Experts AI-Powered Secular Tailwinds INVESTMENT THESIS An Altern
Slide 5: DigitalBridge is a leading global alternative asset manager
5 DigitalBridge is a leading global alternative asset manager dedicated to investing in digital infrastructure. As an Infrastructure Partner to the Digital Economy, we manage capital on behalf of institutional investors across five key verticals: data centers, cell towers, fiber networks, small cell
Slide 6: A Leading Global Digital Infrastructure Asset Manager
6 $80B Assets Under Management1 30+ Digital Portfolio Companies2 100+ Digital Infrastructure Professionals3 25+ Years of Experience A LEADING GLOBAL DIGITAL INFRASTRUCTURE ASSET MANAGER (1) AUM as of December 31, 2023: AUM represents the total capital for which we provide investment management servi
Slide 7: Why Digital Infrastructure?
7 WHY DIGITAL INFRASTRUCTURE? Attractive sector characteristics position Digital Infrastructure as a growing asset class benefiting from secular tailwinds D i g i t a l I n f r a s t r u c t u r e DALL·E 3 Sora
Slide 8: Overview: Strategy & Profile
8 1 OVERVIEW STRATEGY & PROFILE
Slide 9: Our Platform: An Alternative Asset Manager Focused on Digital
9 Business Building / Growth PhaseMature, Stabilized, Yield-Focused DIGITAL INFRASTRUCTURE EQUITY ‘Value-Add’ Digital Infrastructure Equity Investing on a Global Basis CORE PLUS Long-Duration, Stabilized Assets VENTURES Software Powering Next-Gen Networks LIQUID Public Market Investing Built to Capi
Slide 10: DBRG Roadmap – Primed to Generate Long-Term Shareholder Value
10 DBRG ROADMAP – PRIMED TO GENERATE LONG-TERM SHAREHOLDER VALUE BY SCALING OUR LEADING DIGITAL INFRA PLATFORM 2 SCALING THE PLATFORM With our transformation complete, the Business Strategy is focused on building momentum within the DigitalBridge flywheel, scaling our platform to support the acceler
Slide 11: An Alternative Way to Invest in Digital Infrastructure
11 AN ALTERNATIVE WAY TO INVEST IN DIGITAL INFRASTRUCTURE Leading management team with operating DNA driving strong revenue and earnings growth EXPECTED FINANCIAL IMPACT: Powerful absolute and relative growth with revenue targeted to grow >25% and cash flow metrics expected to increase >90% in 2024
Slide 12: Growth Profile and Building Balanced Portfolios
12 2019 2020 2021 2022 2023 InfraBridge Co-invest$18.3B $12.8B $6.8B $32.8B IM F EE UM (A S RE PO RT ED ) FEE EARNING EQUITY UNDER MANAGEMENT GROWTH PROFILE Long-term contracted fee streams provide predictable revenue and earnings that we expect to grow over time Balanced, diversified portfolios bui
Slide 13: Investment Solutions Across the Digital Infra Ecosystem
13 INVESTMENT SOLUTIONS ACROSS THE DIGITAL INFRA ECOSYSTEM DBP I DBP Series Permanent Capital Vehicles formed during original ‘Digital Bridge holdco’ period. These are separately capitalized vehicles where DBRG exclusively earns management fees over some or all of the holding period. Co-Invest Credi
Slide 14: Overview: Investment Thesis
14 OVERVIEW INVESTMENT THESIS1
Slide 15: The DBRG Investment Case
15 THE DBRG INVESTMENT CASE The Demand – More, Better, Faster compute and connectivity is driving significant global digital infrastructure investment and DBRG is well positioned with exposure to powerful thematics including AI, Cloud, 5G, and IoT. The Supply – We believe DBRG’s investment managemen
Slide 16: The Demand: More, Better, Faster Connectivity & Compute
16 Data Centers Will Need Far More Power Source: AvidThink TE RA W AT T- HO UR S 20402038203620342032203020282026 0 500 1,000 1,500 8.15% CAGR 25% CAGR MORE COMPUTE AND PIPES REQUIRED Digital Infra Ensures Secure, Scalable, and Reliable Compute Power PRE-AI GROWTH: GLOBAL DIGITAL INFRA CAPEX INVESTM
Slide 17: How Does DigitalBridge Meet the Demand?
17 HOW DOES DIGITALBRIDGE MEET THE DEMAND? MOBILE CAPEX $1T worldwide (2021-2026) ARTIFICIAL INTELLIGENCE Experiencing its “iPhone moment” Resource-hungry AI workloads drive growing demand for digital infrastructure CLOUD ~$1.3T on global data center Capex INTERNET OF THINGS (IoT) >50 billion connec
Slide 18: The Supply: DigitalBridge is a Partner of Choice
18 THE SUPPLY: DIGITALBRIDGE IS A PARTNER OF CHOICE ALTERNATIVES CONTINUE TO EXHIBIT STEADY GROWTH… ...WE ARE GROWING FASTER AND TAKING SHARE Global Alternatives AUM Source: Preqin Institutional investors projected to continue to raise allocations to alternatives 11% CAGR Wallet Share Only 0.43% $7.
Slide 19: The Digital Infrastructure Specialists
19 THE DIGITAL INFRASTRUCTURE SPECIALISTS The DigitalBridge team has a 25+ year track record of successfully building businesses in the digital infrastructure sector. Our specialization creates durable competitive advantages that seek to generate alpha for our portfolio companies and investors OPERA
Slide 20: Today DBRG is Building the AI Revolution
20 TODAY DBRG IS BUILDING THE AI REVOLUTION $15 billion budgeted portfolio-level capex in 2024, DBRG leads in global mission- critical investment. Note: Capex figures are estimates and may be higher or lower than budgeted expectations. There can be no assurance that budgeted portfolio-level capex wi
Slide 21: An Attractive Business Model
21 AN ATTRACTIVE BUSINESS MODEL Digital Asset Rankings Highly Scalable 3 Compare the economics of buying $1 Billion of digital infrastructure in the traditional vs. investment management model (50% Equity ($500M) at 20x EBITDA or 5% Cap Rate) ILLUSTRATIVE TRADITIONAL MODEL VS. ILLUSTRATIVE INVESTMEN
Slide 22: Financials
22 2 FINANCIALS
Slide 23: Scaling DigitalBridge: Focus on Operating Leverage
23 $173M $264M $360M $54M $104M $165M ($14M) $49M SCALING DIGITALBRIDGE: FOCUS ON OPERATING LEVERAGE Simple, profitable, fast- growing asset manager levered to secular growth in digital infrastructure markets. Expanding margins generate earnings to fuel our corporate capital allocation priorities No
Slide 24: DigitalBridge 2023 Highlights & Key Metrics
24 $53.6M $103.6M 2022 2023 $172.7M $264.1M 2022 2023 Distributable Earnings DIGITALBRIDGE 2023 HIGHLIGHTS & KEY METRICS Fee Revenue Adjusted EBITDA FEEUM AUM Run-Rate Fee Revenue(1) 53% 93% 47% 52% 24% -$14.0M $48.6M 2022 2023 $22.2B $32.8B 2022 2023 $52.8B $80.1B 2022 2023 $250M $311M 2022 2023 (1
Slide 25: DigitalBridge Consolidated Results (Non-GAAP)
25 TOTAL COMPANY 4Q22 4Q23 % Change YOY FY 2022 FY 2023 % Change YOY Fee Revenue $44.3 74.0 +67% $172.7 $264.1 +53% Carried Interest (realized and unrealized) 176.9 169.7 (4%) 378.3 363.1 (4%) Principal Investment Income 22.3 93.5 +319% 56.7 145.4 +156% Interest & Other Income 27.5 13.1 (53%) 87.0 4
Slide 26: Investment Management Growth
26 $311M Run Rate Fee Revenue INVESTMENT MANAGEMENT GROWTH Run-Rate Fee Revenue is calculated by multiplying committed FEEUM as of the referenced date by the average annual fee rate % to provide an indication of future expected revenue. See definition of Run Rate Fee Revenue at end of this presentat
Slide 27: Financial Guidance
27 Millions of $, except as noted. Actual results 2023A Results 2024E Range Ending FEEUM $33B $36-$38B Fee Revenue $264M $335-360M +32% midpoint Adjusted EBITDA / FRE (1) $104M / N.A. N.A. / $150-165M FINANCIAL GUIDANCE - ALIGNED WITH OUR ALT MGMT PEERS Assumptions / Notes on Guidance Ending FEEUM
Slide 28: DigitalBridge Corporate Capital Allocation Priorities
28 DIGITALBRIDGE CORPORATE CAPITAL ALLOCATION PRIORITIES As DBRG executes on a near/medium term focus on strategic M&A and capital structure optimization, we expect additional free cash flow will become available to invest and compound capital alongside LPs in our fund vehicles (1) Excludes initial
Slide 29: Balance Sheet Profile
29 BALANCE SHEET PROFILE Key Corporate Assets Equity Investments (At Share) GP Affiliated Investment in DBP Series $317 GP Affiliated Investments - Other & Warehoused Investments (Credit, Core, Infrabridge, Liquid, Ventures) 342 GP Affiliated Investment in DataBank and Vantage SDC 669 Equity Investm
Slide 30: Appendix
sent atl DIGITALBRIDGE APPENDIX 3
Slide 31: Non-GAAP Reconciliations
31 NON-GAAP RECONCILIATIONS ($ in thousands) 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 Net income (loss) attributable to common stockholders $ 100,607 $ 261,828 $ (22,411) $ (212,473) $ (19,356) $ (63,273) $ (37,321) $ (262,316) Net income (loss) attributable to noncontrolling common interests in Oper
Slide 32: Non-GAAP Reconciliations
32 NON-GAAP RECONCILIATIONS ($ in thousands) 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 IM net income ( loss) $72,975 $100,014 $35,177 $ (2,804) $81,167 $46,065 $67,995 $ (9,143) Adjustments: Interest expense (income) 2,027 2,128 2,268 2,411 2,200 2,906 2,771 2,500 Investment expense, net of reimbursem
Slide 33: DigitalBridge
DIGITALBRIDGE
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