Digital Realty Trust Inc (0I9F.L) Q1 2025 Earnings Report

Digital Realty Trust delivered a resilient first quarter of 2025, with revenue of $1.4076 billion and gross profit of $802.3 million, reflecting a 5.8% year-over-year revenue growth and an 8.7% rise in gross profit. Operating income rose to $195.8 million, up 31.1% YoY and 35.6% QoQ, underpinned by a favorable EBITDA of $665.0 million and an EBITDAR margin of 47.2%. Despite this operating strength, net income declined meaningfully to $110.0 million (down 60.9% YoY and 42.0% QoQ), contributing to EPS of $0.30 (basic) and $0.27 (diluted) for the period. The disparity between robust operating metrics and net income is driven by higher non-operating costs and expenses captured in the quarter, complemented by substantial depreciation and amortization and a notable level of other expenses.

Free cash flow (FCF) remained constructive at $399.1 million, with cash flow from operations also at $399.1 million. The company ended the quarter with $2.329 billion in cash and cash equivalents and reported net debt of approximately $15.98 billion, against total debt of about $18.30 billion and total assets of roughly $45.08 billion. The balance sheet remains solid with a current ratio of 1.29 and a debt-to-capitalization ratio of about 0.462, indicating balanced liquidity in a capital-intensive model. The payout ratio stands at 7.72% with a dividend yield near 1.76%, consistent with a high-quality, inflation-protected cash flow profile typical of data center REITs, though equity valuation remains premium relative to broader benchmarks.

Looking ahead, management provided no explicit forward guidance in the data provided, highlighting ongoing macro and operational uncertainties in the near term. The growth trajectory hinges on continued capacity additions to PlatformDIGITALR and PDx interconnection offerings, scale benefits in existing metros, and the ability to monetize new interconnection and tier-1 customer relationships while navigating interest-rate and refinancing dynamics. Investors should monitor per-share capital allocation, cadence of new development deliveries, rent escalations, occupancy levels, and the pace of capex funded by FCF as key drivers of long-term value.