Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (June 2024)
53 slides from Digital Realty Trust's investor presentation, June 2024
Slide 1: Global. Connected. Sustainable.
Global. Connected. Sustainable. INVESTOR PRESENTATION JUNE 2024 The meeting place for companies, technologies and data
Slide 2: Digital Realty Overview
r Digital Realty Overview L.
Slide 3: A Global Data Center and Connectivity Platform Supporting our Customers' Critical IT Architecture
A Global Data Center and Connectivity Platform Supporting our Customers’ Critical IT Architecture 5,000 221,000+ 50+ 300+ Customers (1) Cross connects (1) Metros (1) Data Centers (1) EQUITY & ENTERPRISE VALUE TOP PUBLICLY TRADED U.S. REIT $46 Bn $64 Bn 7th 2016 EQUITY MARKET ENTERPRISE LARGEST ADDED
Slide 4: Consistent Execution Against Strategic Priorities
Consistent Execution Against Strategic Priorities As of March 31, 2024 BOOKINGS 1 Strengthen our Customer Value Proposition 2 Innovate & Integrate for our Customers Building new applications 3 Diversifying and Bolstering Capital Sources Partnering with sources of Executing Meeting Place strate
Slide 5: Offering a Global Data Center Platform
Offering a Global Data Center Platform Capacity Blocks in World’s Major Metros to Meet Growing Customer Demand Global Capacity 237 MW delivered in 2023 ~2,500 MW total capacity in place >3,000 MW buildable IT capacity Geographically Diversified (1) 6% 10% North America EMEA 52% APAC 32% Latin Americ
Slide 6: Over 3 GW of Incremental Global Buildable IT Capacity
Over 3 GW of Incremental Global Buildable IT Capacity = >100MWs of Buildable IT Capacity = >50MWs of Buildable IT Capacity = <25MWs of Buildable IT Capacity AMERICAS EMEA APAC TOTAL Existing Capacity 1,500 MWs 750 MWs 300 MWs 2,550 MWs Buildable Capacity 2,200 MWs 1,200 MWs 400 MWs 3,250 MWs Total C
Slide 7: Assembling Strategic Pieces of the Global Puzzle
Assembling Strategic Pieces of the Global Puzzle 2015 2016 2017 2018 2020 2022 Metros 30 31 31 34 49 50 50+ Cross 60 70 74 78 164 211 221 Connects (in 000s) European Telx DuPont Fabros Ascenty Interxion Teraco Portfolio Acquisition A Leading North America U.S. Provider of Colocation, Eight Highly-Co
Slide 8: Globally Diversified Revenues
EXPOSURE BY REVENUE (1) Globally 51% 23% 6% 5% 4% 3% 2% 2% 1% 1% <1% Diversified USD EURO GBP SGD ZAR BRL JPY CHF CAD AUD OTHER Revenues 1% 6% <1% <1% 2% 23% • Nearly Half of DLR 51% <1% 2% Revenue is Non-US <1% <1% Dollar <1% 5% <1% • Over 90% of Currency 3% Exposure is from Major <1% 1% Developed
Slide 9: PlatformDIGITAL and ServiceFabric Designed for an Accelerating Digital Economy
PlatformDIGITAL® and ServiceFabric Designed for an Accelerating Digital Economy Harnessing Data Growth Through Connectivity 9
Slide 10: The PlatformDIGITAL Difference
The PlatformDIGITAL® Difference PlatformDIGITAL® is an open and flexible platform with a broad range of data center solutions that enables your business growth Our interconnection product suite simplifies cloud and ecosystem reach (including 3rd party data centers) Our portal capabilities enable dyn
Slide 11: Global Connectivity Hubs
Global Connectivity Hubs Network Density that Promotes Innovation and Collaboration Amsterdam Atlanta Chicago 28+ 221K+ Science Park 56 Marietta St. 350 E. Cermak METROS CROSS-CONNECTS Globally Where Our GLOBALLY Internet Gateways Are Located Frankfurt Johannesburg London Hanauer Landstraße JB1 Isan
Slide 12: ServiceFabric Connect: Private Connections Made Easy
ServiceFabric Connect: Private Connections Made Easy 1 Establish a Port Customers establish a port which supports multiple virtual private connections Metro 2 Connect Customers establish direct, private connections to multiple Cloud Service Providers, Network Providers, SaaS Providers and other part
Slide 13: ServiceFabric Connect
ServiceFabric Connect Available in 37 Metros North America EMEA APAC 15 Metros 15 Metros 7 Metros Regional • 10G / 100G native ServiceFabric • 10G native ServiceFabric ports • 10G / 100G native Launch ports • 100G backbone ServiceFabric ports Capabilities • 100G backbone • Available from 75 sites •
Slide 14: PlatformDIGITAL Enables AI
PlatformDIGITAL® Enables AI 14
Slide 15: AI Platform Readiness
AI Platform Readiness Industry Data As power-dense workloads grow, Digital Realty’s modular designs can accommodate advanced cooling solutions (1) Average Rack Density Increase and % of Racks above 30 kw Cooling Technology by Threshold of Rack Densities Enterprise & Enterprise & Colocation + AI / HP
Slide 16: Full Spectrum Strategy is Well Positioned for AI
Full Spectrum Strategy is Well Positioned for AI Digital Realty is unique in its ability to provide solutions for both Training and Inference phases of AI Training Inference Initial stage for AI workloads Driver of the long-term digital economy Deep connectivity required to deliver real-time Larger
Slide 17: Private Interconnections Enable Enterprise AI Applications
Private Interconnections Enable Enterprise AI Applications Private AI Exchange Powered by ServiceFabric helps enterprises alleviate data gravity barriers FUTURE-PROOFED ORCHESTRATION HD Colo accelerates 150 kW/rack ServiceFabric enables intelligent AI workflow deployments in 34 markets across the gl
Slide 18: Disciplined Financial Strategy
Disciplined Financial Strategy Committed to an Investment Grade Balance Sheet Supported by Multiple Funding Sources 18
Slide 19: Proven Track Record of Sustainable Growth
Proven Track Record of Sustainable Growth Disciplined Financial Management 2018 1Q24 Better/ Worse Change Properties / Data Centers (1) 214 309 44% Total Enterprise Value (2) $35 billion $64 billion 83% SIZE & DIVERSIFICATION RMZ Rank 5th 7th (3) Down Two IG-equivalent AAA-rated Fortune 50 Top
Slide 20: Committed to Conservative Capital Structure
Committed to Conservative Capital Structure Growing Enterprise Value While Maintaining Target Credit Metrics CREDIT METRICS CAPITAL STRUCTURE Net Debt (1) / LQA Adjusted EBITDA (2) Fixed Charge Coverage (2)(3) 7.1x 6.8x 27% 6.2x 5.8x 5.4x Debt 4.4x 4.5x 4.2x 4.1x 4.0x Debt Preferred Equity 1Q23 2Q23
Slide 21: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Modest Near-Term Maturities, Well-Laddered Debt Schedule DEBT MATURITY SCHEDULE AS OF MARCH 31, 2024 (1)(2) DEBT PROFILE (U.S. $ in billions) Unsecured 4.4 YEARS $2.2 2.7 % 97% Secured Weighted Avg. Weighted Avg. Unsecured Maturity (1)(2) $3.3 Coupon (
Slide 22: Recent Financial Results
Recent Financial Results Note: Certain data in this section was originally posted to the Company’s website on May 2, 2024 and has not been updated to reflect changes occurring after that date. 22
Slide 23: AI Spurs Demand for Large Capacity Blocks
HISTORICAL BOOKINGS AI Spurs Demand ANNUALIZED GAAP BASE RENT $ in millions for Large Capacity Blocks $240 Strong and Steady $180 Leasing for 0-1MW + IX $120 • Record Quarter of $252M Bookings $60 • Record High >1 MW $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 average leasing rate 1Q24 BOOK
Slide 24: Increasing Demand Driving Rental Rate Growth
Increasing Demand Driving Rental Rate Growth Pricing Improvement Resulting in Higher Development Yields RENTAL RATES ON >1 MW BOOKINGS AMERICAS DEVELOPMENT YIELDS GAAP Base Rent Per Kilowatt Rising Rental Rates 12.3% $169 Driving Higher Stabilized ESTIMATED Development Yields YIELDS $141 $144 $145 $
Slide 25: Connected Data Communities
Connected Data Communities Strong 0-1MW + IX Revenue 1Q24 Results 128 new logos $53M total 1Q bookings from 0-1 MW + Interconnection #3 Highest 0-1MW + IX Bookings in History 25
Slide 26: Strong Pricing Environment
Strong Pricing 1Q24 RENEWAL SPREADS Environment Record Renewal Spreads 0-1 MW > 1 MW OTHER (1) TOTAL RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 3.8% 18.5% 84.7% 11.8% • Record Cash Renewal CASH CASH CASH CASH Spreads in > 1MW 4.3% 21.6% 88.1% 13.0% Segment GAAP GAAP
Slide 27: Lease Expirations Provide Re-Pricing Opportunities
Lease Expirations % of Lease Expirations by Annualized Base Rent (1) Provide Re-Pricing Opportunities 30% >1 MW 0-1 MW Other 5.0% – 7.0% • Shorter term 0-1 MW 25% Updated 2024 leases provide near Guidance (2) for cash rental rate on renewals term opportunities to 20% drive price increases 15% • Even
Slide 28: Record Backlog
BACKLOG ROLL-FORWARD (1) COMMENCEMENT TIMING (3) Record Backlog $ in millions $ in millions Bodes Well for $239M $144M Future Growth $131M $541M $46M $541M $235M $218M $40M $446M (2) • Record Backlog $193M of $541 Million $495M $495M $392M $277M • Record $156 Million of $263M Commencements, Includin
Slide 29: High-Quality, Diversified Customer Base
High-Quality, TOP 20 CUSTOMERS Diversified Customer Base Customer Rank Locations % of Customer Rank Locations % of ARR (1) ARR (1) • Top customers have a 1. Fortune 50 Software Company 71 11.6% 11. 48 1.6% presence in 42 different 2. Social Content Platform 25 5.7% 12. Fortune 500 12 1.5% SaaS Provi
Slide 30: 2024 Quarterly Cadence
2024 Quarterly 2024E CORE FFO PER SHARE Cadence • NOI Growth Impacted by Deleveraging Activities in the Second Half of 2023 and First Half of 2024 1Q24 NOI Growth Capital 2Q24 3Q24 4Q24 Recycling Note: Based on management estimates; actual performance may differ materially. Core FFO and NOI are non-
Slide 31: 2024 Financial Guidance Update
2024 Financial Guidance Update Improving Core Growth As of Feb. 15, 2024 As of May 2, 2024 Better/Worse Total Revenue $5,550 – $5,650 $5,550 – $5,650 (1) Adjusted EBITDA $2,800 – $2,900 $2,800 - $2,900 Rental Rates on Renewals Leases 4.0% – 6.0% 5.0 – 7.0% (Cash) Year-End Portfolio Occupancy +100 –
Slide 32: Spotlight on Sustainability: Building for a Better Tomorrow
Spotlight on Sustainability: Building for a Better Tomorrow Helping Enterprises Cut Costs and Meet Their Sustainability Goals 32
Slide 33: 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 Leading data center purchaser of More green building certified IT capacity More energy star certifications than any
Slide 34: Serving a Social Purpose
Serving a Social Purpose Delivering Growth for All Stakeholders Social Governance Newsweek’s America’s Most Susan Swanezy added to the Board of Responsible Companies of 2023 Directors 2024 Enhanced Board diversity to 44% female Top 100 ranking on JUST Capital or ethnically diverse America’s Most JUS
Slide 35: Appendix
Presenter Name 15/09/22 Appendix
Slide 36: 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 37: 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 38: Reconciliation of Non-GAAP Items
Reconciliation of Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) Non-GAAP Items (in thousands, except per share and unit data) (unaudited) To Their Closest GAAP Three Months Ended March 31, 2024 March 31, 2023
Slide 39: 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 Twelve Months Ended December
Slide 40: 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) Equivalent (in thousands, except per share and unit data) (unaudited) Three Months Ended March 31, 2024 March 31, 2023
Slide 41: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries To Their Closest GAAP Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA Equivalent (in thousands) (unaudited) Three
Slide 42: Reconciliation of Non-GAAP Items
Net Debt/LQA Adjusted EBITDA Reconciliation of QE 06/30/24 Total debt at balance sheet carrying value $ 16,339,746 Add: DLR share of unconsolidated joint venture debt 1,415,647 Non-GAAP Items Add: Capital lease obligations, net Less: Unrestricted cash 358,386 (2,573,739) To Their Closest GAAP Net De
Slide 43: Reconciliation of Non-GAAP Items
Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income Reconciliation of (in thousands) (unaudited) Non-GAAP Items Three Months Ended March 31, 2024 March 31, 2023 To Their Closest GAAP Rental revenues Tenant reimbursements - Utilities $ 710,342 $ 228,34
Slide 44: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 44
Slide 45: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA Total debt at balance sheet carrying value $ QE 03/31/23 17,875,511 Non-GAAP Items Add: DLR share of unconsolidated joint venture debt Add: Capital lease obligations, net 1,123,360 335,910 To Their Closest GAAP Less: Unrestricted cash (361,380) Net Debt
Slide 46: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 03/31/23 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge Reconciliation of Market value of common equity(i) $ 29,272,861 facility fees) Liquidation value of preferred equity(ii) 755,000 Total GAAP interest e
Slide 47: 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 (including
Slide 48: 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 49: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 12/31/23 Reconciliation of Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge (i) Market value of common equity $ 42,804,053 facility fees) Liquidation value of preferred equity(ii) 755,000 Total GAAP interest
Slide 50: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Net Debt/LQA Adjusted EBITDA PF 12/31/23 Equivalent Net Debt as of December 31, 2023 Pro forma proceeds from asset sales, completion of JVs and issuance of shares through the ATM $ 17,377,488 program in January 2024 (1,246,000) Pro Forma Net Deb
Slide 51: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 03/31/24 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility (i) Reconciliation of Market value of common equity $ 45,950,001 fees) Liquidation value of preferred equity(ii) 755,000 Total GAAP interest
Slide 52: Thank you
r Thank you FN DIGITAL Lv REALTY.
Slide 53: Connectivity Without Limits
Connectivity Without Limits WORK IN PROGRESS Our diverse connectivity products unlock new opportunities for growth and innovation Fiber Connections Direct connections to partner • A broadband connection that allows companies creates data to travel though them as beams of light ecosystem value in ret
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