Digital Realty Trust reported Q2 2025 results with a solid topline expansion and healthy operating margin, underscored by a meaningful uplift in annualized revenue driven by hyperscale demand and interconnection activity. Revenue reached $1.493B, up 10.1% year over year and 6.1% quarter over quarter, while gross margin remained robust at 55.7% and operating margin stood at 14.18%. The GAAP net income of $1.032B was significantly influenced by a large positive contribution from other income, totaling $848.1M, which implies that the core operating profitability was more modest than the GAAP net income might suggest. EBITDA was $1.630B, signaling strong cash-generating capability from ongoing data center operations.
Cash generation remained a strength, with $641.2M of net cash provided by operating activities and free cash flow of $641.2M. The company ended the period with $3.56B in cash and cash equivalents and a net debt position of approximately $16.2B, supported by a comfortable current ratio of 1.49 and a debt-to-capitalization level around 46%. Equity stood at roughly $22.9B against total assets of $48.7B, reflecting conservative liquidity management in a high-capital-intensity business. The dividend payout policy implies a 42% payout ratio with a dividend yield around 0.74%, consistent with a mature, income-focused REIT profile.
Looking ahead, Digital Realty did not publish explicit forward guidance in the provided data. However, the secular demand for hyperscale data centers, interconnection services, and PlatformDIGITAL capabilities positions the company to benefit from continued growth in cloud and enterprise workloads and strategic interconnection in key metros. Key risks include interest-rate sensitivity, competition and new supply across markets, and the need to fund ongoing capex while maintaining leverage and liquidity targets.