Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 23, 2026 · Beat 4 of last 6 quarters
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Digital Realty's record backlog, strong renewal spreads, and expanding development pipeline (1.4GW under construction, 63% pre-leased) underscore sustained demand for AI and cloud infrastructure. The company's aggressive land/power acquisitions (Kansas City, Atlanta, Marseille) and private capital expansion signal continued buildout of hyperscale capacity, which will drive demand for power, cooling, and networking equipment. The Blackstone transaction and Columbia Capital acquisition further consolidate capital and expertise in the AI infrastructure ecosystem.
Digital Realty delivered record Q2 results with core FFO ex-promote of $2.13 per share, up 14% YoY, and raised full-year guidance. Bookings were strong: record $108M in 0-1MW+ interconnection signings and record renewal spreads of 25%+ (66.7% on >1MW renewals). Total backlog reached a record $1.9B, and post-quarter-end hyperscale leases added $410M annualized rent. The company closed the Blackstone acquisition of three Northern Virginia data centers (288MW), announced entry into Kansas City with up to 2GW power runway, and agreed to acquire Columbia Capital to scale its private capital platform. Development pipeline grew to 1.4GW under construction, 63% pre-leased.
Management raised 2026 core FFO per share guidance (ex-promote) to a range that implies ~10% constant currency growth at the midpoint, and raised cash renewal spread guidance. They expect double-digit core FFO per share growth to extend into 2027 and 2028, supported by a record backlog, strong commencements ($635M scheduled for 2H26), and accretive strategic transactions (Blackstone Northern Virginia assets, Columbia Capital). Development pipeline expanded to 1.4GW under construction with 63% pre-leased, and they entered Kansas City with 600MW of power ramping in early 2028. Management emphasized continued strength in colo/connectivity and hyperscale demand, with a tone of high confidence in the growth runway.
“Our business is firing on all cylinders, and this quarter showcases the strength and scalability of our platform.”
on Overall performance
“We are raising our 2026 core FFO per share guidance, excluding net promote income by $0.15 at the low end and $0.10 at the high end to a new range of $8.15 to $8.20 per share, reflecting the continued strong execution across our data center portfolio and our high visibility for the remainder of the year.”
on Guidance
“These renewals highlight the continued imbalance between supply and demand for premium data center capacity and underscore the attractive repricing opportunities that are periodically presented to us in our most highly constrained markets.”
on Renewal spreads
Could you walk through the accretion math for the Blackstone, Teraco, and Columbia Capital deals and how you balance that with higher CapEx to hit double-digit FFO growth?
Matt Mercier explained that growth is driven by multiple levers: renewal execution, hyperscale leasing building backlog, record 0-1MW demand, and private capital generating fee income. These combined give confidence in extending double-digit core FFO growth into 2027 and beyond.
How should we think about the evolution of your asset mix between colo, hyperscale, and off-balance sheet vehicles over the next 3-5 years?
Andy Power said colo/connectivity is increasingly on balance sheet with record signings and new markets. Hyperscale is being supported via private capital vehicles like the $3.25B U.S. fund, with a playbook of recycling capital to fund growth.
Can you help us appreciate the timing for the development pipeline and how fee income should scale?
Andy Power noted the $20B development pipeline is 63% pre-leased with 1.4GW under construction, and near-term deliveries are in active dialogue. Matt Mercier said fee income (excluding promote) was ~$45M in Q2 and should grow as $10-12B of private capital deploys over 1-2 years.