Executive Summary: Digital Realty Trust reported Q3 2025 revenue of USD 1.577 billion, up 10.2% year over year and 5.63% quarter over quarter, reflecting ongoing demand for hyperscale data center capacity. Despite top-line growth, gross profit declined sharply to USD 369.98 million (gross margin 23.46%), driven by elevated depreciation, other expenses and a less favorable margin mix, resulting in a 14.26% operating margin and a net income of USD 67.8 million (net margin 4.3%). EBITDA stood at USD 721.98 million with EBITDA margin of approximately 45.8%. Diluted EPS was USD 0.15 and standalone EPS USD 0.17, underscoring continued earnings pressure from significant non-cash and financing costs.
Balance sheet and cash flow metrics point to a high-leverage, capital-intensive model. The reported debt/ capitalization metrics show total debt to capitalization around 45.9%, and a debt ratio near 1.87, with a negative signal on traditional cash conversion metrics in the near term. Interest coverage, while typically positive, is reported as negative in the dataset (likely a sign convention issue); EBIT of USD 225.0 million versus interest expense of USD 60.1 million suggests roughly 3.7x interest coverage on a clean basis. Cash per share is USD 1.414, and the dividend yield stands at roughly 0.7%, with a payout ratio around 6.1%, indicating a modest distribution relative to earnings but a need to fund ongoing capex and leverage.
Outlook: Management Guidance for QQ3 2025 is not explicitly disclosed in the provided data. Given secular demand for data center capacity, Digital Realty remains positioned to benefit from hyperscale and enterprise migration to colocation platforms, subject to financing costs, capex cadence, and tenant retention. Investors should monitor occupancy/visibility of rent escalations, financing costs, and the cadence of new asset deployment as key drivers of margin stabilization and FFO/adjusted earnings trajectory in 2025 and beyond.