DLR Q2'26 Conference Call Notes

Three things from Digital Realty Trust's call, starting with: The fee income transformation is the real story: promotes and Columbia Capital create an asset manager disguised as a REIT

Three things that matter from Digital Realty Trust (DLR) in its Q2’26 call:

1. The fee income transformation is the real story: promotes and Columbia Capital create an asset manager disguised as a REIT: $200M promote income this quarter plus $9B AUM from Columbia acquisition transforms DLR into a Blackstone-lite model; management buried the lede that fee income could reach $200M+ quarterly run rate by 2027.

2. Record renewal spreads of 25% (66.7% on hyperscale!) signal pricing power nobody’s modeling correctly: Singapore repricing drove monster spreads, but management’s language suggests this happens ‘periodically’ in constrained markets; the embedded mark-to-market opportunity across the portfolio is massive.

3. They stopped disclosing interconnection revenue as a percentage of total while claiming record interconnection growth: ServiceFabric adoption ‘demonstrably increased’ with ‘2x customer usage’ but no actual revenue numbers; classic metric disappearance when monetization disappoints.

Disclosure Quality: B | Financial Quality: C

Track DLR’s promise history and grade trend: callsheetdaily.com/tickers/dlr

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Delta Sheet

• ▼ Core FFO per share (ex-promote): $2.04 (15% YoY) → $2.13 (14% YoY) (100 bps deceleration YoY)

• ▼ Total bookings: $707M at 100% share → $108M (0-1MW only disclosed) (Stopped reporting total bookings)

• ▲ Renewal spreads (cash): 5% blended → 25%+ blended (+2000 bps explosion)

• ▲ Greater than 1MW renewal spreads: 7.4% → 66.7% (+5930 bps surge)

• ▲ Backlog at DLR share: $1.0B → $1.4B (+40% sequential)

• - Development pipeline: 1.2GW at $16.5B → 1.4GW at $20B (+17% MW, +21% cost)

• ▲ Leverage (Debt/EBITDA): 4.7x → 4.7x (4.6x adjusted) (Flat despite $6B investment)

• ▲ Fee income (normalized): Not disclosed → ~$45M quarterly (New recurring revenue stream)

• ▲ Promote income: $0 → $188M net ($0.52/share) (First promote realized)

• ▲ Same-capital cash NOI (constant FX): 2.5% → 7.2% (+470 bps acceleration)

• ▲ 0-1MW + interconnection bookings: $98M record → $108M new record (+10% sequential growth)

• - AI % of 0-1MW bookings: 21% → ~20% (Stable at elevated levels)

• - Development CapEx (net): $910M → $1.1B (+21% sequential surge)

• ▲ Pre-leasing %: 61% → 63% (+200 bps despite pipeline growth)