Technology
Digital Realty Reports Third Quarter 2024 Results
Published
2 years agoon
By
AUSTIN, Texas, Oct. 24, 2024 /PRNewswire/ — Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, announced today financial results for the third quarter of 2024. All per share results are presented on a fully diluted basis.
Highlights
Reported net income available to common stockholders of $0.09 per share in 3Q24, compared to $2.31 in 3Q23Reported FFO per share of $1.55 in 3Q24, compared to $1.55 in 3Q23Reported Core FFO per share of $1.67 in 3Q24, compared to $1.62 in 3Q23Reported rental rate increases on renewal leases of 15.2% on a cash basis in 3Q24Signed total bookings during 3Q24 that are expected to generate $521 million of annualized GAAP rental revenue, including a $50 million contribution from the 0–1 megawatt category and $16 million contribution from interconnectionReported backlog of $859 million of annualized GAAP base rent at the end of 3Q24Raised 2024 Core FFO per share outlook to $6.65 – $6.75
Financial Results
Digital Realty reported revenues of $1.4 billion in the third quarter of 2024, a 5% increase from the previous quarter and a 2% increase from the same quarter last year.
The company delivered net income of $40 million in the third quarter of 2024, and net income available to common stockholders of $41 million, or $0.09 per diluted share, compared to $0.20 per diluted share in the previous quarter and $2.31 per diluted share in the same quarter last year.
Digital Realty generated Adjusted EBITDA of $758 million in the third quarter of 2024, a 4% increase from the previous quarter and a 11% increase over the same quarter last year.
The company reported Funds From Operations (FFO) of $520 million in the third quarter of 2024, or $1.55 per share, compared to $1.57 per share in the previous quarter and $1.55 per share in the same quarter last year.
Excluding certain items that do not represent core expenses or revenue streams, Digital Realty delivered Core FFO per share of $1.67 in the third quarter of 2024, compared to $1.65 per share in the previous quarter and $1.62 per share in the same quarter last year. Digital Realty delivered Constant-Currency Core FFO per share of $1.66 for the third quarter of 2024 and $4.99 per share for the nine-month period ended September 30, 2024.
“In the third quarter, Digital Realty posted over $520 million of new leasing, more than double the record set in the first quarter. Record leasing across both the greater-than-a-megawatt and 0-1 MW plus interconnection segments drove the backlog up nearly 60% above our prior record,” said Digital Realty President & Chief Executive Officer Andy Power. “Our backlog now represents over 20% of annualized in-place data center revenue, enhancing our visibility and positioning Digital Realty for accelerating longer-term growth.”
Leasing Activity
In the third quarter, Digital Realty signed total bookings that are expected to generate $521 million of annualized GAAP rental revenue, including a $50 million contribution from the 0–1 megawatt category and a $16 million contribution from interconnection.
The weighted-average lag between new leases signed during the third quarter of 2024 and the contractual commencement date was 15 months. The backlog of signed-but-not-commenced leases at quarter-end increased to $859 million of annualized GAAP base rent at Digital Realty’s share.
In addition to new leases signed, Digital Realty also signed renewal leases representing $258 million of annualized cash rental revenue during the quarter. Rental rates on renewal leases signed during the third quarter of 2024 increased 15.2% on a cash basis and 27.5% on a GAAP basis.
1
New leases signed during the third quarter of 2024 are summarized by region and product as follows:
Annualized GAAP
Base Rent
Square Feet
GAAP Base Rent
GAAP Base Rent
Americas
(in thousands)
(in thousands)
per Square Foot
Megawatts
per Kilowatt
0-1 MW
$23,394
83
$282
7.5
$262
> 1 MW
425,641
1,102
386
158.8
223
Other (1)
4,684
66
71
—
—
Total
$453,719
1,251
$363
166.2
$225
EMEA (2)
0-1 MW
$20,406
66
$308
7.5
$228
> 1 MW
17,339
80
217
9.0
161
Other (1)
168
5
35
—
—
Total
$37,913
151
$252
16.5
$191
Asia Pacific (2)
0-1 MW
$6,563
20
$324
1.7
$315
> 1 MW
6,764
55
124
4.4
129
Other (1)
216
2
87
—
—
Total
$13,543
77
$175
6.1
$182
All Regions (2)
0-1 MW
$50,363
169
$297
16.6
$252
> 1 MW
449,744
1,236
364
172.1
218
Other (1)
5,068
73
69
—
—
Total
$505,174
1,479
$342
188.8
$221
Interconnection
$15,702
N/A
N/A
N/A
N/A
Grand Total
$520,876
1,479
$342
188.8
$221
Note: Totals may not foot due to rounding differences.
(1)
Other includes Powered Base Building® shell capacity as well as storage and office space within fully improved data center facilities.
(2)
Based on quarterly average exchange rates during the three months ended September 30, 2024.
Investment Activity
As previously disclosed, in July, Digital Realty closed on the acquisition of two data centers with a combined IT load of 15 megawatts in the Slough Trading Estate for $200 million, marking the Company’s entry into the west London, UK submarket.
During the quarter, Digital Realty acquired the land and shell of one of its existing data centers in Schiphol Rijk, Amsterdam for €43 million, or approximately $48 million. The site comprises approximately 15 megawatts of fully leased capacity and was previously operated pursuant to an operating lease.
Subsequent to quarter end, Digital Realty closed on the acquisition of a 6.7-acre parcel in Richardson, Texas, adjacent to Digital Realty’s existing campus, for approximately $15 million to support the development of more than 80 megawatts of incremental IT capacity.
2
Balance Sheet
Digital Realty had approximately $17.0 billion of total debt outstanding as of September 30, 2024, comprised of $16.2 billion of unsecured debt and approximately $0.8 billion of secured debt and other. At the end of the third quarter of 2024, net debt-to-Adjusted EBITDA was 5.4x, debt-plus-preferred-to-total enterprise value was 24.5% and fixed charge coverage was 4.1x.
Digital Realty completed the following financing transactions during the third quarter:
In July, the company repaid £250 million ($316 million) in aggregate principal amount of its 2.75% senior notes;In September, the company issued €850 million aggregate principal amount of 3.875% notes due 2033. Net proceeds were approximately €843 million ($933 million);In September, the company repaid €375 million ($415 million) on the Euro term loan;In late September, the company amended, extended, and upsized both its existing global revolving credit facility from $3.75 billion to $4.2 billion and its existing Japanese yen-denominated revolving credit facility from ¥33.3 billion (approximately $232 million) to ¥42.5 billion (approximately $297 million); andThe company also sold 5.2 million shares of common stock under its At-The-Market (ATM) equity issuance program at a weighted average price of $156.19 per share, for net proceeds of approximately $806 million.
Subsequent to quarter end, the company sold an additional 0.4 million shares of common stock under its ATM program at a weighted average price of $160.81 per share, for net proceeds of approximately $62 million.
3
2024 Outlook
Digital Realty raised its 2024 Core FFO per share and Constant-Currency Core FFO per share outlook to $6.65 – $6.75. The assumptions underlying the outlook are summarized in the following table.
As of
As of
As of
As of
Top-Line and Cost Structure
February 15, 2024
May 2, 2024
July 25, 2024
October 24, 2024
Total revenue
$5.550 – $5.650 billion
$5.550 – $5.650 billion
$5.550 – $5.650 billion
$5.550 – $5.600 billion
Net non-cash rent adjustments (1)
($35 – $40 million)
($35 – $40 million)
($35 – $40 million)
($25 – $30 million)
Adjusted EBITDA
$2.800 – $2.900 billion
$2.800 – $2.900 billion
$2.800 – $2.900 billion
$2.925 – $2.975 billion
G&A
$450 – $460 million
$450 – $460 million
$450 – $460 million
$455 – $460 million
Internal Growth
Rental rates on renewal leases
Cash basis
4.0% – 6.0%
5.0% – 7.0%
5.0% – 7.0%
8.0% – 10.0%
GAAP basis
6.0% – 8.0%
7.0% – 9.0%
7.0% – 9.0%
12.0% – 14.0%
Year-end portfolio occupancy
+100 – 200 bps
+100 – 200 bps
+100 – 200 bps
+150 – 200 bps
“Same-Capital” cash NOI growth (2)
2.0% – 3.0%
2.5% – 3.5%
2.5% – 3.5%
2.75% – 3.25%
Foreign Exchange Rates
U.S. Dollar / Pound Sterling
$1.25 – $1.30
$1.25 – $1.30
$1.25 – $1.30
$1.25 – $1.30
U.S. Dollar / Euro
$1.05 – $1.10
$1.05 – $1.10
$1.05 – $1.10
$1.05 – $1.10
External Growth
Dispositions / Joint Venture Capital
Dollar volume
$1,000 – $1,500 million
$1,000 – $1,500 million
$1,000 – $1,500 million
$1,000 – $1,500 million
Cap rate
6.0% – 8.0%
6.0% – 8.0%
6.0% – 8.0%
6.0% – 8.0%
Development
CapEx (Net of Partner Contributions) (3)
$2,000 – $2,500 million
$2,000 – $2,500 million
$2,000 – $2,500 million
$2,200 – $2,400 million
Average stabilized yields
10.0%+
10.0%+
10.0%+
10.0%+
Enhancements and other non-recurring CapEx (4)
$15 – $20 million
$15 – $20 million
$15 – $20 million
$25 – $30 million
Recurring CapEx + capitalized leasing costs (5)
$260 – $275 million
$260 – $275 million
$260 – $275 million
$260 – $275 million
Balance Sheet
Long-term debt issuance
Dollar amount
$0 – $1,000 million
$0 – $1,000 million
$0 – $1,000 million
$933 million
Pricing
5.0% – 5.5%
5.0% – 5.5%
5.0% – 5.5%
3.875 %
Timing
Mid-Year
Mid-Year
Mid-Year
Sep-24
Net income per diluted share
$1.80 – $1.95
$1.80 – $1.95
$1.40 – $1.55
$1.40 – $1.50
Real estate depreciation and (gain) / loss on sale
$4.40 – $4.40
$4.40 – $4.40
$4.75 – $4.75
$4.75 – $4.75
Funds From Operations / share (NAREIT-Defined)
$6.20 – $6.35
$6.20 – $6.35
$6.15 – $6.30
$6.15 – $6.25
Non-core expenses and revenue streams
$0.40 – $0.40
$0.40 – $0.40
$0.45 – $0.45
$0.50 – $0.50
Core Funds From Operations / share
$6.60 – $6.75
$6.60 – $6.75
$6.60 – $6.75
$6.65 – $6.75
Foreign currency translation adjustments
$0.00 – $0.00
$0.00 – $0.00
$0.00 – $0.00
$0.00 – $0.00
Constant-Currency Core Funds From Operations / share
$6.60 – $6.75
$6.60 – $6.75
$6.60 – $6.75
$6.65 – $6.75
(1)
Net non-cash rent adjustments represent the sum of straight-line rental revenue and straight-line rental expense, as well as the amortization of above- and below-market leases (i.e., ASC 805 adjustments).
(2)
The “Same-Capital” pool includes properties owned as of December 31, 2022 with less than 5% of total rentable square feet under development. It excludes properties that were undergoing, or were expected to undergo, development activities in 2023-2024, properties classified as held for sale, and properties sold or contributed to joint ventures for all periods presented.
(3)
Excludes land acquisitions and includes Digital Realty’s share of JV contributions. Figure is net of JV partner contributions.
(4)
Other non-recurring CapEx represents costs incurred to enhance the capacity or marketability of operating properties, such as network fiber initiatives and software development costs.
(5)
Recurring CapEx represents non-incremental improvements required to maintain current revenues, including second-generation tenant improvements and leasing commissions.
Note: The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. Please see Non-GAAP Financial Measures in this document for further discussion.
4
Non-GAAP Financial Measures
This document contains non-GAAP financial measures, including FFO, Core FFO, Adjusted FFO, Net Operating Income (NOI), “Same-Capital” Cash NOI and Adjusted EBITDA. A reconciliation from U.S. GAAP net income available to common stockholders to FFO, a reconciliation from FFO to Core FFO, a reconciliation from Core FFO to Adjusted FFO, reconciliation from NOI to Cash NOI, and definitions of FFO, Core FFO, Adjusted FFO, NOI and “Same-Capital” Cash NOI are included as an attachment to this document. A reconciliation from U.S. GAAP net income available to common stockholders to Adjusted EBITDA, a definition of Adjusted EBITDA and definitions of net debt-to-Adjusted EBITDA, debt-plus-preferred-to-total enterprise value, cash NOI, and fixed charge coverage ratio are included as an attachment to this document.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, external growth factors, such as dispositions, and balance sheet items such as debt issuances, that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Investor Conference Call
Prior to Digital Realty’s investor conference call at 5:00 p.m. ET / 4:00 p.m. CT on October 24, 2024, a presentation will be posted to the Investors section of the company’s website at https://investor.digitalrealty.com. The presentation is designed to accompany the discussion of the company’s third quarter 2024 financial results and operating performance. The conference call will feature President & Chief Executive Officer Andy Power and Chief Financial Officer Matt Mercier.
To participate in the live call, investors are invited to dial +1 (888) 317-6003 (for domestic callers) or +1 (412) 317-6061 (for international callers) and reference the conference ID# 0345410 at least five minutes prior to start time. A live webcast of the call will be available via the Investors section of Digital Realty’s website at https://investor.digitalrealty.com.
Telephone and webcast replays will be available after the call until November 24, 2024. The telephone replay can be accessed by dialing +1 (877) 344-7529 (for domestic callers) or +1 (412) 317-0088 (for international callers) and providing the conference ID# 4823548. The webcast replay can be accessed on Digital Realty’s website.
About Digital Realty
Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL®, the company’s global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and X.
Contact Information
Matt Mercier
Chief Financial Officer
Digital Realty
(415) 874-2803
Jordan Sadler / Jim Huseby
Investor Relations
Digital Realty
(415) 275-5344
5
Consolidated Quarterly Statements of Operations
Third Quarter 2024
Unaudited and in Thousands, Except Per Share Data
Three Months Ended
Nine Months Ended
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Rental revenues
$956,351
$912,994
$894,409
$885,694
$886,960
$2,763,753
$2,627,233
Tenant reimbursements – Utilities
305,097
274,505
276,357
316,634
335,477
855,959
983,041
Tenant reimbursements – Other
39,624
41,964
38,434
46,418
64,876
120,021
151,218
Interconnection & other
112,655
109,505
108,071
106,413
107,305
330,231
313,521
Fee income
12,907
15,656
13,010
14,330
7,819
41,572
30,596
Other
4,581
2,125
862
144
—
7,568
1,819
Total Operating Revenues
$1,431,214
$1,356,749
$1,331,143
$1,369,633
$1,402,437
$4,119,106
$4,107,428
Utilities
$356,063
$315,248
$324,571
$366,083
$384,455
$995,882
$1,105,753
Rental property operating
249,796
237,653
224,369
237,118
223,089
711,817
672,717
Property taxes
45,633
49,620
41,156
40,161
72,279
136,408
159,420
Insurance
4,869
4,755
2,694
3,794
4,289
12,318
13,029
Depreciation & amortization
459,997
425,343
431,102
420,475
420,613
1,316,442
1,274,379
General & administration
115,120
119,511
114,419
109,235
108,039
349,051
321,769
Severance, equity acceleration and legal expenses
2,481
884
791
7,565
2,682
4,156
10,489
Transaction and integration expenses
24,194
26,072
31,839
40,226
14,465
82,105
44,496
Provision for impairment
—
168,303
—
5,363
113,000
168,303
113,000
Other expenses
4,774
(529)
10,836
5,580
1,295
15,080
1,949
Total Operating Expenses
$1,262,928
$1,346,860
$1,181,776
$1,235,598
$1,344,206
$3,791,564
$3,717,001
Operating Income
$168,286
$9,889
$149,367
$134,035
$58,231
$327,542
$390,426
Equity in earnings / (loss) of unconsolidated joint ventures
(26,486)
(41,443)
(16,008)
(29,955)
(19,793)
(83,936)
164
Gain / (loss) on sale of investments
(556)
173,709
277,787
(103)
810,688
450,940
900,634
Interest and other income / (expense), net
37,756
62,261
9,709
50,269
24,812
109,726
18,162
Interest (expense)
(123,803)
(114,756)
(109,535)
(113,638)
(110,767)
(348,095)
(324,103)
Income tax benefit / (expense)
(12,427)
(14,992)
(22,413)
(20,724)
(17,228)
(49,832)
(54,855)
Loss on debt extinguishment and modifications
(2,636)
—
(1,070)
—
—
(3,706)
—
Net Income
$40,134
$74,668
$287,837
$19,884
$745,941
$402,639
$930,427
Net (income) / loss attributable to noncontrolling interests
11,059
5,552
(6,329)
8,419
(12,320)
10,282
(9,893)
Net Income Attributable to Digital Realty Trust, Inc.
$51,193
$80,220
$281,508
$28,304
$733,621
$412,921
$920,534
Preferred stock dividends
(10,181)
(10,181)
(10,181)
(10,181)
(10,181)
(30,544)
(30,544)
Net Income / (Loss) Available to Common Stockholders
$41,012
$70,039
$271,327
$18,122
$723,440
$382,377
$889,990
Weighted-average shares outstanding – basic
327,977
319,537
312,292
305,781
301,827
319,965
296,184
Weighted-average shares outstanding – diluted
336,249
327,946
320,798
314,995
311,341
328,641
306,735
Weighted-average fully diluted shares and units
342,374
334,186
326,975
321,173
317,539
334,830
312,867
Net income / (loss) per share – basic
$0.13
$0.22
$0.87
$0.06
$2.40
$1.20
$3.00
Net income / (loss) per share – diluted
$0.09
$0.20
$0.82
$0.03
$2.31
$1.10
$2.87
6
Funds From Operations and Core Funds From Operations
Third Quarter 2024
Unaudited and in Thousands, Except Per Share Data
Three Months Ended
Nine Months Ended
Reconciliation of Net Income to Funds From Operations (FFO)
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Net Income / (Loss) Available to Common Stockholders
$41,012
$70,039
$271,327
$18,122
$723,440
$382,378
$889,990
Adjustments:
Non-controlling interest in operating partnership
1,000
1,500
6,200
410
16,300
8,700
20,300
Real estate related depreciation & amortization (1)
449,086
414,920
420,591
410,167
410,836
1,284,597
1,247,072
Reconciling items related to non-controlling interests
(19,746)
(17,317)
(8,017)
(15,377)
(14,569)
(45,081)
(42,101)
Unconsolidated JV real estate related depreciation & amortization
48,474
47,117
47,877
64,833
43,215
143,468
112,320
(Gain) / loss on real estate transactions
556
(173,709)
(286,704)
103
(810,688)
(459,857)
(908,459)
Provision for impairment
—
168,303
—
5,363
113,000
168,303
113,000
Funds From Operations
$520,382
$510,852
$451,273
$483,621
$481,535
$1,482,507
$1,432,124
Weighted-average shares and units outstanding – basic
334,103
325,777
318,469
311,960
308,024
326,154
302,316
Weighted-average shares and units outstanding – diluted (2) (3)
342,374
334,186
326,975
321,173
317,539
334,830
312,867
Funds From Operations per share – basic
$1.56
$1.57
$1.42
$1.55
$1.56
$4.55
$4.74
Funds From Operations per share – diluted (2) (3)
$1.55
$1.57
$1.41
$1.53
$1.55
$4.52
$4.68
Three Months Ended
Nine Months Ended
Reconciliation of FFO to Core FFO
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Funds From Operations
$520,382
$510,852
$451,273
$483,621
$481,535
$1,482,507
$1,432,124
Other non-core revenue adjustments (4)
(4,583)
(33,818)
3,525
(146)
(27)
(34,876)
26,540
Transaction and integration expenses
24,194
26,072
31,839
40,226
14,465
82,105
44,496
Loss on debt extinguishment and modifications
2,636
—
1,070
—
—
3,706
—
Severance, equity acceleration and legal expenses (5)
2,481
884
791
7,565
2,682
4,156
10,489
(Gain) / Loss on FX and derivatives revaluation
1,513
32,222
33,602
(24,804)
451
67,337
(14,195)
Other non-core expense adjustments (6)
11,120
2,271
10,052
1,956
1,295
23,443
1,949
Core Funds From Operations
$557,744
$538,482
$532,153
$508,417
$500,402
$1,628,378
$1,501,403
Weighted-average shares and units outstanding – diluted (2) (3)
334,476
326,181
319,138
312,356
308,539
326,545
302,740
Core Funds From Operations per share – diluted (2)
$1.67
$1.65
$1.67
$1.63
$1.62
$4.99
$4.96
(1) Real Estate Related Depreciation & Amortization
Three Months Ended
Nine Months Ended
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Depreciation & amortization per income statement
$459,997
$425,343
$431,102
$420,475
$420,613
$1,316,442
$1,274,384
Non-real estate depreciation
(10,911)
(10,424)
(10,511)
(10,308)
(9,777)
(31,845)
(27,312)
Real Estate Related Depreciation & Amortization
$449,086
$414,920
$420,591
$410,167
$410,836
$1,284,597
$1,247,072
(2)
Certain of Teraco’s minority indirect shareholders have the right to put their shares in an upstream parent company of Teraco to Digital Realty in exchange for cash or the equivalent value of shares of Digital Realty common stock, or a combination thereof. US GAAP requires Digital Realty to assume the put right is settled in shares for purposes of calculating diluted EPS. This same approach was utilized to calculate FFO/share. The potential future dilutive impact associated with this put right will be excluded from Core FFO and AFFO until settlement occurs – causing diluted share count to be higher for FFO than for Core FFO and AFFO. When calculating diluted FFO, Teraco related minority interest is added back to the FFO numerator as the denominator assumes all shares have been put back to Digital Realty.
Three Months Ended
Nine Months Ended
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Teraco noncontrolling share of FFO
$9,828
$12,453
$9,768
$7,135
$11,537
$32,049
$32,251
Teraco related minority interest
$9,828
$12,453
$9,768
$7,135
$11,537
$32,049
$32,251
(3)
For all periods presented, we have excluded the effect of dilutive series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of FFO and the share count detail section that follows the reconciliation of Core FFO to AFFO for calculations of weighted average common stock and units outstanding. For definitions and discussion of FFO and Core FFO, see the Definitions section.
(4)
Includes deferred rent adjustments related to a customer bankruptcy, joint venture development fees included in gains, lease termination fees and gain on sale of equity investment included in other income.
(5)
Relates to severance and other charges related to the departure of company executives and integration-related severance.
(6)
Includes write-offs associated with bankrupt or terminated customers, non-recurring legal expenses and adjustments to reflect our proportionate share of transaction costs associated with noncontrolling interests.
7
Adjusted Funds From Operations (AFFO)
Third Quarter 2024
Unaudited and in Thousands, Except Per Share Data
Three Months Ended
Nine Months Ended
Reconciliation of Core FFO to AFFO
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Core FFO available to common stockholders and unitholders
$557,744
$538,482
$532,153
$508,417
$500,402
$1,628,378
$1,501,403
Adjustments:
Non-real estate depreciation
10,911
10,424
10,511
10,308
9,777
31,845
27,312
Amortization of deferred financing costs
4,853
5,072
5,576
5,744
5,776
15,501
15,832
Amortization of debt discount/premium
1,329
1,321
1,832
973
1,360
4,481
4,000
Non-cash stock-based compensation expense
15,026
14,464
12,592
9,226
14,062
42,083
41,012
Straight-line rental revenue
(17,581)
334
9,976
(21,992)
(14,080)
(7,271)
(46,424)
Straight-line rental expense
1,690
782
1,111
(4,999)
1,427
3,583
1,432
Above- and below-market rent amortization
(742)
(1,691)
(854)
(856)
(1,127)
(3,287)
(3,548)
Deferred tax (benefit) / expense
(9,366)
(9,982)
(3,437)
33,448
(8,539)
(22,786)
(16,995)
Leasing compensation & internal lease commissions
10,918
10,519
13,291
9,848
12,515
34,728
35,193
Recurring capital expenditures (1)
(67,308)
(60,483)
(47,676)
(142,808)
(90,251)
(175,467)
(184,214)
AFFO available to common stockholders and unitholders (2)
$507,474
$509,241
$535,073
$407,306
$431,322
$1,551,788
$1,375,001
Weighted-average shares and units outstanding – basic
334,103
325,777
318,469
311,960
308,024
326,154
302,316
Weighted-average shares and units outstanding – diluted (3)
334,476
326,181
319,138
312,356
308,539
326,545
302,740
AFFO per share – diluted (3)
$1.52
$1.56
$1.68
$1.30
$1.40
$4.75
$4.54
Dividends per share and common unit
$1.22
$1.22
$1.22
$1.22
$1.22
$3.66
$3.66
Diluted AFFO Payout Ratio
80.4 %
78.1 %
72.8 %
93.6 %
87.3 %
77.0 %
80.6 %
Three Months Ended
Nine Months Ended
Share Count Detail
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
30-Sep-24
30-Sep-23
Weighted Average Common Stock and Units Outstanding
334,103
325,777
318,469
311,960
308,024
326,154
302,316
Add: Effect of dilutive securities
373
404
669
396
515
391
424
Weighted Avg. Common Stock and Units Outstanding – diluted
334,476
326,181
319,138
312,356
308,539
326,545
302,740
(1)
Recurring capital expenditures represent non-incremental building improvements required to maintain current revenues, including second-generation tenant improvements and external leasing commissions. Recurring capital expenditures do not include acquisition costs contemplated when underwriting the purchase of a building, costs which are incurred to bring a building up to Digital Realty’s operating standards, or internal leasing commissions.
(2)
For a definition and discussion of AFFO, see the Definitions section. For a reconciliation of net income available to common stockholders to FFO and Core FFO, see above.
(3)
For all periods presented, we have excluded the effect of dilutive series J, series K and series L preferred stock, as applicable, that may be converted into common stock upon the occurrence of specified change in control transactions as described in the articles supplementary governing the series J, series K and series L preferred stock, as applicable, which we consider highly improbable. See above for calculations of FFO and for calculations of weighted average common stock and units outstanding.
8
Consolidated Balance Sheets
Third Quarter 2024
Unaudited and in Thousands, Except Per Share Data
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
Assets
Investments in real estate:
Real estate
$28,808,770
$27,470,635
$27,122,796
$27,306,369
$25,887,031
Construction in progress
5,175,054
4,676,012
4,496,840
4,635,215
5,020,464
Land held for future development
23,392
93,938
114,240
118,190
179,959
Investments in Real Estate
$34,007,216
$32,240,584
$31,733,877
$32,059,773
$31,087,453
Accumulated depreciation and amortization
(8,777,002)
(8,303,070)
(7,976,093)
(7,823,685)
(7,489,193)
Net Investments in Properties
$25,230,214
$23,937,514
$23,757,784
$24,236,089
$23,598,260
Investment in unconsolidated joint ventures
2,456,448
2,332,698
2,365,821
2,295,889
2,180,313
Net Investments in Real Estate
$27,686,662
$26,270,212
$26,123,605
$26,531,977
$25,778,573
Operating lease right-of-use assets, net
$1,228,507
$1,211,003
$1,233,410
$1,414,256
$1,274,410
Cash and cash equivalents
2,175,605
2,282,062
1,193,784
1,625,495
1,062,050
Accounts and other receivables, net (1)
1,274,460
1,222,403
1,217,276
1,278,110
1,325,725
Deferred rent, net
641,778
613,749
611,670
624,427
586,418
Goodwill
9,395,233
9,128,811
9,105,026
9,239,871
8,998,074
Customer relationship value, deferred leasing costs & other intangibles, net
2,367,467
2,315,143
2,359,380
2,500,237
2,506,198
Assets held for sale
—
—
287,064
478,503
—
Other assets
525,679
563,500
501,875
420,382
401,068
Total Assets
$45,295,392
$43,606,883
$42,633,089
$44,113,257
$41,932,515
Liabilities and Equity
Global unsecured revolving credit facilities, net
$1,786,921
$1,848,167
$1,901,126
$1,812,287
$1,698,780
Unsecured term loans, net
913,733
1,297,893
1,303,263
1,560,305
1,524,663
Unsecured senior notes, net of discount
13,528,061
12,507,551
13,190,202
13,422,342
13,072,102
Secured and other debt, net of discount
757,831
686,135
625,750
630,973
574,231
Operating lease liabilities
1,343,903
1,336,839
1,357,751
1,542,094
1,404,510
Accounts payable and other accrued liabilities
2,140,764
1,973,798
1,870,344
2,168,983
2,147,103
Deferred tax liabilities, net
1,223,771
1,132,090
1,121,224
1,151,096
1,088,724
Accrued dividends and distributions
—
—
—
387,988
—
Security deposits and prepaid rents
423,797
416,705
413,225
401,867
385,521
Obligations associated with assets held for sale
—
—
9,981
39,001
—
Total Liabilities
$22,118,781
$21,199,178
$21,792,866
$23,116,936
$21,895,634
Redeemable non-controlling interests
1,465,636
1,399,889
1,350,736
1,394,814
1,360,308
Equity
Preferred Stock: $0.01 par value per share, 110,000 shares authorized:
Series J Cumulative Redeemable Preferred Stock (2)
$193,540
$193,540
$193,540
$193,540
$193,540
Series K Cumulative Redeemable Preferred Stock (3)
203,264
203,264
203,264
203,264
203,264
Series L Cumulative Redeemable Preferred Stock (4)
334,886
334,886
334,886
334,886
334,886
Common Stock: $0.01 par value per share, 392,000 shares authorized (5)
3,285
3,231
3,097
3,088
3,002
Additional paid-in capital
27,229,143
26,388,393
24,508,683
24,396,797
23,239,088
Dividends in excess of earnings
(6,060,642)
(5,701,096)
(5,373,529)
(5,262,648)
(4,900,757)
Accumulated other comprehensive (loss), net
(657,364)
(884,715)
(850,091)
(751,393)
(882,996)
Total Stockholders’ Equity
$21,246,112
$20,537,503
$19,019,850
$19,117,535
$18,190,026
Noncontrolling Interests
Noncontrolling interest in operating partnership
$427,930
$434,253
$438,422
$438,081
$441,366
Noncontrolling interest in consolidated joint ventures
36,933
36,060
31,215
45,892
45,182
Total Noncontrolling Interests
$464,863
$470,313
$469,637
$483,972
$486,547
Total Equity
$21,710,975
$21,007,816
$19,489,487
$19,601,507
$18,676,573
Total Liabilities and Equity
$45,295,392
$43,606,883
$42,633,089
$44,113,257
$41,932,515
(1)
Net of allowance for doubtful accounts of $56,353 and $46,643 as of September 30, 2024 and September 30, 2023, respectively.
(2)
Series J Cumulative Redeemable Preferred Stock, 5.250%, $200,000 liquidation preference ($25.00 per share), 8,000 shares issued and outstanding as of September 30, 2024 and September 30, 2023.
(3)
Series K Cumulative Redeemable Preferred Stock, 5.850%, $210,000 liquidation preference ($25.00 per share), 8,400 shares issued and outstanding as of September 30, 2024 and September 30, 2023.
(4)
Series L Cumulative Redeemable Preferred Stock, 5.200%, $345,000 liquidation preference ($25.00 per share), 13,800 shares issued and outstanding as of September 30, 2024 and September 30, 2023.
(5)
Common Stock: 331,347 and 302,846 shares issued and outstanding as of September 30, 2024 and September 30, 2023, respectively.
9
Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization and Financial Ratios
Third Quarter 2024
Unaudited and Dollars in Thousands
Three Months Ended
Reconciliation of Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) (1)
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
Net Income / (Loss) Available to Common Stockholders
$41,012
$70,039
$271,327
$18,122
$723,440
Interest
123,803
114,756
109,535
113,638
110,767
Loss on debt extinguishment and modifications
2,636
—
1,070
—
—
Income tax expense (benefit)
12,427
14,992
22,413
20,724
17,228
Depreciation & amortization
459,997
425,343
431,102
420,475
420,613
EBITDA
$639,875
$625,130
$835,446
$572,958
$1,272,048
Unconsolidated JV real estate related depreciation & amortization
48,474
47,117
47,877
64,833
43,214
Unconsolidated JV interest expense and tax expense
34,951
27,704
34,271
42,140
27,000
Severance, equity acceleration and legal expenses
2,481
884
791
7,565
2,682
Transaction and integration expenses
24,194
26,072
31,839
40,226
14,465
(Gain) / loss on sale of investments
556
(173,709)
(277,787)
103
(810,688)
Provision for impairment
—
168,303
—
5,363
113,000
Other non-core adjustments, net (2)
8,642
743
21,608
(35,439)
1,719
Non-controlling interests
(11,059)
(5,552)
6,329
(8,419)
12,320
Preferred stock dividends
10,181
10,181
10,181
10,181
10,181
Adjusted EBITDA
$758,296
$726,874
$710,556
$699,509
$685,943
(1)
For definitions and discussion of EBITDA and Adjusted EBITDA, see the Definitions section.
(2)
Includes foreign exchange net unrealized gains/losses attributable to remeasurement, deferred rent adjustments related to a customer bankruptcy, write offs associated with bankrupt or terminated customers, non-recurring legal expenses, gain on sale of land option and lease termination fees.
Three Months Ended
Financial Ratios
30-Sep-24
30-Jun-24
31-Mar-24
31-Dec-23
30-Sep-23
Total GAAP interest expense
$123,803
$114,756
$109,535
$113,638
$110,767
Capitalized interest
28,312
27,592
28,522
33,032
29,130
Change in accrued interest and other non-cash amounts
43,720
(55,605)
55,421
(66,013)
44,183
Cash Interest Expense (3)
$195,835
$86,743
$193,479
$80,657
$184,081
Preferred stock dividends
10,181
10,181
10,181
10,181
10,181
Total Fixed Charges (4)
$162,296
$152,529
$148,239
$156,851
$150,079
Coverage
Interest coverage ratio (5)
4.3x
4.3x
4.3x
4.2x
4.2x
Cash interest coverage ratio (6)
3.4x
6.4x
6.3x
3.2x
7.0x
Fixed charge coverage ratio (7)
4.1x
4.1x
4.0x
4.0x
4.0x
Cash fixed charge coverage ratio (8)
3.3x
5.9x
3.1x
5.9x
3.3x
Leverage
Debt to total enterprise value (9)(10)
23.5 %
24.2 %
24.2 %
26.7 %
28.6 %
Debt-plus-preferred-stock-to-total-enterprise-value (10)(11)
24.5 %
25.3 %
25.3 %
27.9 %
29.8 %
Pre-tax income to interest expense (12)
1.3x
1.7x
3.5x
1.2x
7.6x
Net Debt-to-Adjusted EBITDA (13)
5.4x
5.3x
5.7x
6.0x
6.4x
(3)
Cash interest expense is interest expense less amortization of debt discount and deferred financing fees and includes interest that we capitalized. We consider cash interest expense to be a useful measure of interest as it excludes non-cash-based interest expense.
(4)
Fixed charges consist of GAAP interest expense, capitalized interest, and preferred stock dividends.
(5)
Adjusted EBITDA divided by GAAP interest expense plus capitalized interest (including our pro rata share of unconsolidated joint venture interest expense).
(6)
Adjusted EBITDA divided by cash interest expense (including our pro rata share of unconsolidated joint venture interest expense).
(7)
Adjusted EBITDA divided by fixed charges (including our pro rata share of unconsolidated joint venture fixed charges).
(8)
Adjusted EBITDA divided by the sum of cash interest expense and preferred stock dividends (including our pro rata share of unconsolidated joint venture cash fixed charges).
(9)
Total debt divided by market value of common equity plus debt plus preferred stock.
(10)
Total enterprise value defined as market value of common equity plus debt plus preferred stock.
(11)
Same as (9), except numerator includes preferred stock.
(12)
Calculated as net income plus interest expense divided by GAAP interest expense.
(13)
Calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty’s pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty’s pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty’s pro rata share of unconsolidated joint venture EBITDA), multiplied by four.
10
Definitions
Funds From Operations (FFO):
We calculate funds from operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts (Nareit) in the Nareit Funds From Operations White Paper – 2018 Restatement. FFO is a non-GAAP financial measure and represents net income (loss) (computed in accordance with GAAP), excluding gain (loss) from the disposition of real estate assets, provision for impairment, real estate related depreciation and amortization (excluding amortization of deferred financing costs), our share of unconsolidated JV real estate related depreciation & amortization, net income attributable to non-controlling interests in operating partnership and, depreciation related to non-controlling interests. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions and after adjustments for unconsolidated partnerships and joint ventures, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the Nareit definition and, accordingly, our FFO may not be comparable to other REITs’ FFO. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
Core Funds from Operations (Core FFO):
We present core funds from operations, or Core FFO, as a supplemental operating measure because, in excluding certain items that do not reflect core revenue or expense streams, it provides a performance measure that, when compared year over year, captures trends in our core business operating performance. We calculate Core FFO by adding to or subtracting from FFO (i) other non-core revenue adjustments, (ii) transaction and integration expenses, (iii) loss on debt extinguishment and modifications, (iv) gain on / issuance costs associated with redeemed preferred stock, (v) severance, equity acceleration and legal expenses, (vi) gain/loss on FX revaluation, and (vii) other non-core expense adjustments. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of Core FFO as a measure of our performance is limited. Other REITs may calculate Core FFO differently than we do and accordingly, our Core FFO may not be comparable to other REITs’ Core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
Adjusted Funds from Operations (AFFO):
We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs, including on a per share and unit basis. We calculate AFFO by adding to or subtracting from Core FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs, (iii) amortization of debt discount/premium, (iv) non-cash stock-based compensation expense, (v) straight-line rental revenue, (vi) straight-line rental expense, (vii) above- and below-market rent amortization, (viii) deferred tax expense / (benefit), (ix) leasing compensation and internal lease commissions, and (x) recurring capital expenditures. Other REITs may calculate AFFO differently than we do and, accordingly, our AFFO may not be comparable to other REITs’ AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
EBITDA and Adjusted EBITDA:
We believe that earnings before interest, loss on debt extinguishment and modifications, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact of non-cash depreciation and amortization or the cost of debt and, with respect to Adjusted EBITDA, (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (viii) non-controlling interests, (ix) preferred stock dividends, and (x) issuance costs associated with redeemed preferred stock. Adjusted EBITDA is EBITDA excluding (i) unconsolidated joint venture real estate related depreciation & amortization, (ii) unconsolidated joint venture interest expense and tax, (iii) severance, equity acceleration and legal expenses, (iv) transaction and integration expenses, (v) gain (loss) on sale / deconsolidation, (vi) provision for impairment, (vii) other non-core adjustments, net, (viii) non-controlling interests, (ix) preferred stock dividends, and (x) gain on / issuance costs associated with redeemed preferred stock. In addition, we believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs. Because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, exclude capitalized costs, such as leasing commissions, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Other REITs may calculate EBITDA and Adjusted EBITDA differently than we do and, accordingly, our EBITDA and Adjusted EBITDA may not be comparable to other REITs’ EBITDA and Adjusted EBITDA. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income computed in accordance with GAAP as a measure of our financial performance.
11
Net Operating Income (NOI) and Cash NOI:
Net operating income, or NOI, represents rental revenue, tenant reimbursement revenue and interconnection revenue less utilities expense, rental property operating expenses, property taxes and insurance expenses (as reflected in the statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company’s rental portfolio. Cash NOI is NOI less straight-line rents and above- and below-market rent amortization. Cash NOI is commonly used by stockholders, company management and industry analysts as a measure of property operating performance on a cash basis. Same-Capital Cash NOI represents buildings owned as of December 31, 2022 of the prior year with less than 5% of total rentable square feet under development and excludes buildings that were undergoing, or were expected to undergo, development activities in 2023-2024, buildings classified as held for sale, and buildings sold or contributed to joint ventures for all periods presented (prior period numbers adjusted to reflect current same-capital pool). However, because NOI and cash NOI exclude depreciation and amortization and capture neither the changes in the value of our data centers that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our data centers, all of which have real economic effect and could materially impact our results from operations, the utility of NOI and cash NOI as measures of our performance is limited. Other REITs may calculate NOI and cash NOI differently than we do and, accordingly, our NOI and cash NOI may not be comparable to other REITs’ NOI and cash NOI. NOI and cash NOI should be considered only as supplements to net income computed in accordance with GAAP as measures of our performance.
Additional Definitions
Net debt-to-Adjusted EBITDA ratio is calculated as total debt at balance sheet carrying value, plus capital lease obligations, plus Digital Realty’s pro rata share of unconsolidated joint venture debt, less cash and cash equivalents (including Digital Realty’s pro rata share of unconsolidated joint venture cash) divided by the product of Adjusted EBITDA (including Digital Realty’s pro rata share of unconsolidated joint venture EBITDA), multiplied by four.
Debt-plus-preferred-to-total enterprise value is total debt plus preferred stock divided by total debt plus the liquidation value of preferred stock and the market value of outstanding Digital Realty Trust, Inc. common stock and Digital Realty Trust, L.P. units, assuming the redemption of Digital Realty Trust, L.P. units for shares of Digital Realty Trust, Inc. common stock.
Fixed charge coverage ratio is Adjusted EBITDA divided by the sum of GAAP interest expense, capitalized interest and preferred stock dividends. For the quarter ended September 30, 2024, GAAP interest expense was $124 million, capitalized interest was $28 million and preferred stock dividends was $10 million.
Reconciliation of Net Operating Income (NOI)
Three Months Ended
Nine Months Ended
(in thousands)
30-Sep-24
30-Jun-24
30-Sep-23
30-Sep-24
30-Sep-23
Operating income
$168,286
$9,889
$58,231
$327,542
$390,426
Fee income
(12,907)
(15,656)
(7,819)
(41,572)
(30,596)
Other income
(4,581)
(2,125)
—
(7,568)
(1,819)
Depreciation and amortization
459,997
425,343
420,613
1,316,442
1,274,379
General and administrative
115,120
119,511
108,039
349,051
321,769
Severance, equity acceleration and legal expenses
2,481
884
2,682
4,156
10,489
Transaction expenses
24,194
26,072
14,465
82,105
44,496
Provision for impairment
—
168,303
113,000
168,303
113,000
Other expenses
4,774
(529)
1,295
15,080
1,949
Net Operating Income
$757,365
$731,692
$710,505
$2,213,540
$2,124,094
Cash Net Operating Income (Cash NOI)
Net Operating Income
$757,365
$731,692
$710,505
$2,213,540
$2,124,094
Straight-line rental revenue
(18,423)
(2,873)
(14,185)
(23,818)
(17,999)
Straight-line rental expense
1,683
959
1,632
4,011
1,844
Above- and below-market rent amortization
(742)
(1,691)
(1,127)
(3,287)
(3,548)
Cash Net Operating Income
$739,883
$728,088
$696,826
$2,190,446
$2,104,391
Constant Currency CFFO Reconciliation
Three Months Ended
Nine Months Ended
(in thousands, except per share data)
30-Sep-24
30-Sep-23
30-Sep-24
30-Sep-23
Core FFO (1)
$557,744
$500,402
$1,628,378
$1,501,403
Core FFO impact of holding ’23 Exchange Rates Constant (2)
(3,281)
—
1,792
—
Constant Currency Core FFO
$554,463
$500,402
$1,630,170
$1,501,403
Weighted-average shares and units outstanding – diluted
334,476
308,539
326,545
302,740
Constant Currency CFFO Per Share
$1.66
$1.62
$4.99
$4.96
1)
As reconciled to net income above.
2)
Adjustment calculated by holding currency translation rates for 2024 constant with average currency translation rates that were applicable to the same periods in 2023.
12
This document contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Such forward-looking statements include statements relating to: our economic outlook, our expected investment and expansion activity, anticipated continued demand for our products and service, our liquidity, our joint ventures, supply and demand for data center and colocation space, our acquisition and disposition activity, pricing and net effective leasing economics, market dynamics and data center fundamentals, our strategic priorities, our product offerings, available inventory, rent from leases that have been signed but have not yet commenced and other contracted rent to be received in future periods, rental rates on future leases, lag between signing and commencement, cap rates and yields, investment activity, the company’s FFO, Core FFO, constant currency Core FFO, adjusted FFO, and net income, 2024 outlook and underlying assumptions, information related to trends, our strategy and plans, leasing expectations, weighted average lease terms, the exercise of lease extensions, lease expirations, debt maturities, annualized rent at expiration of leases, the effect new leases and increases in rental rates will have on our rental revenue, our credit ratings, construction and development activity and plans, projected construction costs, estimated yields on investment, expected occupancy, expected square footage and IT load capacity upon completion of development projects, backlog NOI, NAV components, and other forward-looking financial data. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:
reduced demand for data centers or decreases in information technology spending;decreased rental rates, increased operating costs or increased vacancy rates;increased competition or available supply of data center space;the suitability of our data centers and data center infrastructure, delays or disruptions in connectivity or availability of power, or failures or breaches of our physical and information security infrastructure or services;breaches of our obligations or restrictions under our contracts with our customers;our inability to successfully develop and lease new properties and development space, and delays or unexpected costs in development of properties;the impact of current global and local economic, credit and market conditions;global supply chain or procurement disruptions, or increased supply chain costs;the impact from periods of heightened inflation on our costs, such as operating and general and administrative expenses, interest expense and real estate acquisition and construction costs;the impact on our customers’ and our suppliers’ operations during an epidemic, pandemic, or other global events;our dependence upon significant customers, bankruptcy or insolvency of a major customer or a significant number of smaller customers, or defaults on or non-renewal of leases by customers;changes in political conditions, geopolitical turmoil, political instability, civil disturbances, restrictive governmental actions or nationalization in the countries in which we operate;our inability to retain data center space that we lease or sublease from third parties;information security and data privacy breaches;difficulties managing an international business and acquiring or operating properties in foreign jurisdictions and unfamiliar metropolitan areas;our failure to realize the intended benefits from, or disruptions to our plans and operations or unknown or contingent liabilities related to, our recent and future acquisitions;our failure to successfully integrate and operate acquired or developed properties or businesses;difficulties in identifying properties to acquire and completing acquisitions;risks related to joint venture investments, including as a result of our lack of control of such investments;risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements;our failure to obtain necessary debt and equity financing, and our dependence on external sources of capital;financial market fluctuations and changes in foreign currency exchange rates;adverse economic or real estate developments in our industry or the industry sectors that we sell to, including risks relating to decreasing real estate valuations and impairment charges and goodwill and other intangible asset impairment charges;our inability to manage our growth effectively;losses in excess of our insurance coverage;our inability to attract and retain talent;environmental liabilities, risks related to natural disasters and our inability to achieve our sustainability goals;the expected operating performance of anticipated near-term acquisitions and descriptions relating to these expectations;our inability to comply with rules and regulations applicable to our company;Digital Realty Trust, Inc.’s failure to maintain its status as a REIT for federal income tax purposes;Digital Realty Trust, L.P.’s failure to qualify as a partnership for federal income tax purposes;restrictions on our ability to engage in certain business activities;changes in local, state, federal and international laws, and regulations, including related to taxation, real estate, and zoning laws, and increases in real property tax rates; andthe impact of any financial, accounting, legal or regulatory issues or litigation that may affect us.
The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. Several additional material risks are discussed in our annual report on Form 10‑K for the year ended December 31, 2023, and other filings with the U.S. Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Digital Realty, Digital Realty Trust, the Digital Realty logo, Interxion, Turn-Key Flex, Powered Base Building, ServiceFabric, AnyScale Colo, Pervasive Data Center Architecture, PlatformDIGITAL, PDx, Data Gravity Index and Data Gravity Index DGx are registered trademarks and service marks of Digital Realty Trust, Inc. in the United States and/or other countries. All other names, trademarks and service marks are the property of their respective owners.
13
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SOURCE Digital Realty Trust
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Technology
10x Genomics Reports First Quarter 2026 Financial Results
Published
6 hours agoon
May 7, 2026By
PLEASANTON, Calif., May 7, 2026 /PRNewswire/ — 10x Genomics, Inc. (Nasdaq: TXG), a leader in single cell and spatial biology, today reported financial results for the first quarter ended March 31, 2026.
Recent Updates
Revenue was $150.8 million for the first quarter of 2026, representing a 3% decrease over the corresponding period of 2025. Excluding $16.8 million related to one-time license and royalty revenue in the first quarter of 2025, revenue increased 9% over the corresponding period of 2025.Launched Atera, a new platform to redefine how biology is measured and understood. Atera was engineered to deliver spatial whole-transcriptome analysis with single-cell sensitivity at unprecedented scale. The Company expects to start shipping Atera in the second half of 2026.Announced a partnership with Bioptimus, a global AI biotech company, to launch STELA, a multinational spatial data generation initiative to create foundational datasets connecting underlying biology with disease outcomes. The initiative is starting this effort on our Xenium platform and plans to expand to Atera over time.Ended the first quarter of 2026 with cash and cash equivalents and marketable securities of $539.8 million, representing a $112.9 million increase from March 31, 2025.
“We had a solid start to the year, with double-digit growth in Single Cell consumables reaction volumes and double-digit growth in Spatial consumables revenue,” said Serge Saxonov, Co-founder and CEO of 10x Genomics. “The biggest highlight is our recent launch of Atera, which represents the most significant product introduction in our history. We are extremely encouraged by the extraordinary early customer response.”
First Quarter 2026 Financial Results
Revenue was $150.8 million for the first quarter of 2026, a 3% decrease from the corresponding period of 2025. Excluding $16.8 million related to a patent litigation settlement recognized in the first quarter of 2025, revenue increased 9% over the corresponding period of 2025.
Gross margin was 70% for the first quarter of 2026, as compared to 68% for the corresponding prior year period. The increase in gross margin was primarily due to lower warranty costs and lower inventory write-downs, partially offset by a decrease in license and royalty revenue reflecting a non-recurring royalty benefit recognized in the first quarter of 2025.
Operating expenses were $123.2 million for the first quarter of 2026, a 15% decrease from $144.8 million for the corresponding prior year period. The decrease was primarily driven by lower outside legal expenses and personnel expenses, partially offset by a non-recurring gain on settlement of $9.2 million recognized in the first quarter of 2025.
Operating loss was $17.0 million for the first quarter of 2026, as compared to operating loss of $39.3 million for the corresponding prior year period.
Net loss was $13.5 million for the first quarter of 2026, as compared to a net loss of $34.4 million for the corresponding prior year period.
Cash and cash equivalents and marketable securities were $539.8 million as of March 31, 2026.
2026 Financial Guidance
10x Genomics is maintaining its full year 2026 revenue guidance of $600 million to $625 million. Excluding the non-recurring license and royalty revenue related to patent litigation settlements in 2025, this represents 0% to 4% growth over full year 2025.
Webcast and Conference Call Information
10x Genomics will host a conference call to discuss the first quarter 2026 financial results, business developments and outlook after market close on Thursday, May 7, 2026 at 1:30 PM Pacific Time / 4:30 PM Eastern Time. A webcast of the conference call can be accessed at http://investors.10xgenomics.com. The webcast will be archived and available for replay at least 45 days after the event.
About 10x Genomics
10x Genomics is a life science technology company building products to accelerate the mastery of biology and advance human health. Our integrated research solutions include instruments, consumables and software for single cell and spatial biology, which help academic and translational researchers and biopharmaceutical companies understand biological systems at a resolution and scale that matches the complexity of biology. Our products are behind breakthroughs in oncology, immunology, neuroscience and more, fueling powerful discoveries that are transforming the world’s understanding of health and disease. To learn more, visit 10xgenomics.com or connect with us on LinkedIn, X, Facebook, Bluesky or YouTube.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. All statements included in this press release, other than statements of historical facts, may be forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “expect,” “plan,” “outlook,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “see,” “estimate,” “predict,” “potential,” “would,” “likely,” “seek” or “continue” or the negatives of these terms or variations of them or similar terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include statements regarding 10x Genomics, Inc.’s products, services, business strategy, collaborations and opportunities and 10x Genomics, Inc.’s financial performance and results of operations, including expectations regarding revenue and guidance. These statements are based on management’s current expectations, forecasts, beliefs, estimates, assumptions and information currently available to management. Actual outcomes and results could differ materially from these statements due to a number of factors and such statements should not be relied upon as representing 10x Genomics, Inc.’s views as of any date subsequent to the date of this press release. 10x Genomics, Inc. disclaims any obligation to update any forward-looking statements provided to reflect any change in 10x Genomics’ expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law. The material risks and uncertainties that could affect 10x Genomics, Inc.’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s most recently-filed 10-K for the fiscal year ended December 31, 2025 filed on February 12, 2026 and the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2026 to be filed with the U.S. Securities and Exchange Commission (“SEC”), and elsewhere in the documents 10x Genomics, Inc. files with the SEC from time to time.
Disclosure Information
10x Genomics uses filings with the Securities and Exchange Commission, its website (www.10xgenomics.com), press releases, public conference calls, public webcasts and its social media accounts as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Contacts
Investors: investors@10xgenomics.com
Media: media@10xgenomics.com
10x Genomics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
March 31,
2026
2025
Products and services revenue
$ 149,896
$ 137,823
License and royalty revenue
947
17,060
Revenue (1)
150,843
154,883
Cost of products and services revenue (2)
44,665
49,438
Gross profit
106,178
105,445
Operating expenses:
Research and development (2)
56,847
64,245
Selling, general and administrative (2)
66,377
89,728
Gain on settlement
—
(9,200)
Total operating expenses
123,224
144,773
Loss from operations
(17,046)
(39,328)
Other income (expense):
Interest income
5,014
3,686
Other income (expense), net
(815)
2,136
Total other income
4,199
5,822
Loss before provision for income taxes
(12,847)
(33,506)
Provision for income taxes
623
852
Net loss
$ (13,470)
$ (34,358)
Net loss per share, basic and diluted
$ (0.10)
$ (0.28)
Weighted-average shares used to compute net loss per share, basic and diluted
128,291,153
122,606,091
__________________________
(1)
The following table represents total revenue by source for the periods indicated (in thousands). Spatial includes the Company’s Visium and Xenium products:
Three Months Ended
March 31,
2026
2025
Instruments
Single Cell
$ 5,223
$ 5,913
Spatial
6,039
8,902
Total instruments revenue
11,262
14,815
Consumables
Single Cell
88,894
84,109
Spatial
40,907
31,247
Total consumables revenue
129,801
115,356
Services
8,833
7,652
Products and services revenue
149,896
137,823
License and royalty revenue
947
17,060
Total revenue
$ 150,843
$ 154,883
(1)
The following table presents revenue by geography based on the location of the customer for the periods indicated (in thousands):
Three Months Ended
March 31,
2026
2025
Americas
United States*
$ 76,693
$ 86,818
Americas (excluding United States)
3,406
3,752
Total Americas
80,099
90,570
Europe, Middle East and Africa
36,852
31,895
Asia-Pacific
China
15,837
16,883
Asia-Pacific (excluding China)
18,055
15,535
Total Asia-Pacific
33,892
32,418
Total revenue
$ 150,843
$ 154,883
*
Includes license and royalty revenue.
(2)
Includes stock-based compensation expense as follows:
Three Months Ended
March 31,
(in thousands)
2026
2025
Cost of revenue
$ 1,918
$ 2,481
Research and development
10,695
14,106
Selling, general and administrative
10,029
14,489
Total stock-based compensation expense
$ 22,642
$ 31,076
10x Genomics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March 31,
2026
December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$ 490,285
$ 473,966
Marketable securities
49,563
49,443
Accounts receivable, net
39,031
47,013
Other receivables
17,106
35,480
Inventory
53,487
56,341
Prepaid expenses and other current assets
20,261
22,208
Total current assets
669,733
684,451
Property and equipment, net
220,591
226,711
Operating lease right-of-use assets
58,390
60,450
Goodwill
4,511
4,511
Intangible assets, net
59,910
62,329
Other noncurrent assets
2,624
2,913
Total assets
$ 1,015,759
$ 1,041,365
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$ 17,425
$ 12,733
Accrued compensation and related benefits
21,506
42,500
Accrued expenses and other current liabilities
33,680
39,971
Deferred revenue
24,342
23,902
Operating lease liabilities
11,330
10,985
Contingent consideration, current
5,315
23,363
Total current liabilities
113,598
153,454
Contingent consideration, noncurrent
1,222
1,237
Operating lease liabilities, noncurrent
70,059
73,376
Deferred revenue, noncurrent
10,138
10,501
Other noncurrent liabilities
6,418
6,471
Total liabilities
201,435
245,039
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
2
2
Additional paid-in capital
2,338,269
2,306,690
Accumulated deficit
(1,524,061)
(1,510,591)
Accumulated other comprehensive income
114
225
Total stockholders’ equity
814,324
796,326
Total liabilities and stockholders’ equity
$ 1,015,759
$ 1,041,365
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SOURCE 10x Genomics, Inc.
NEW YORK, May 7, 2026 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) announced today that its board of directors has declared a quarterly cash dividend on the Company’s common stock of $0.30 per share payable on June 30, 2026, to shareholders of record at the close of business on June 5, 2026.
About OUTFRONT Media Inc.
OUTFRONT is one of the largest and most trusted out-of-home media companies in the U.S., helping brands connect with audiences in the moments and environments that matter most. As OUTFRONT evolves, it’s defining a new era of in-real-life (IRL) marketing, turning public spaces into platforms for creativity, connection, and cultural relevance. With a nationwide footprint across billboards, digital displays, transit systems, and other out-of-home formats, OUTFRONT turns creative into powerful real-world experiences. Its in-house agency, OUTFRONT STUDIOS, and award-winning innovation team, XLabs, deliver standout storytelling, supported by advanced technology and data tools that can drive measurable impact.
Contacts:
Investors
Media
Stephan Bisson
Courtney Richards
Investor Relations
Events & Communications
(212) 297-6573
(646) 876-9404
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SOURCE OUTFRONT Media Inc.
Technology
OUTFRONT Media Reports First Quarter 2026 Results
Published
6 hours agoon
May 7, 2026By
Revenues of $429.6 million
Operating income of $55.9 million
Net income attributable to OUTFRONT Media Inc. of $19.1 million
Adjusted OIBDA of $100.4 million
AFFO attributable to OUTFRONT Media Inc. of $61.0 million
Quarterly dividend of $0.30 per share, payable June 30, 2026
NEW YORK, May 7, 2026 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) today reported results for the quarter ended March 31, 2026.
“Our first quarter results demonstrate our continued strong performance, with revenue, OIBDA, and AFFO all exceeding our guidance,” said Nick Brien, Chief Executive Officer of OUTFRONT Media. “Importantly, this exceptional performance was driven by strong results across our entire business, with billboard and transit both contributing to this success.”
Three Months Ended
March 31,
$ in Millions, except per share amounts
2026
2025
Revenues
$429.6
$390.7
Operating income
55.9
13.9
Adjusted OIBDA
100.4
64.2
Net income (loss) before allocation to redeemable and non-redeemable
noncontrolling interests
19.3
(20.7)
Net income (loss)1
19.1
(20.6)
Net income (loss) per share1,2,3
$0.11
($0.14)
Funds From Operations (FFO)1
63.5
26.5
Adjusted FFO (AFFO)1
61.0
27.1
Shares outstanding3
177.1
166.4
Notes: See exhibits for reconciliations of non-GAAP financial measures; 1) References to “Net income (loss)”, “FFO” and “AFFO” mean “Net income (loss) attributable to OUTFRONT Media Inc.”, “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively; 2) References to “per share” mean per common share for diluted earnings per weighted average share; 3) Diluted weighted average shares outstanding.
First Quarter 2026 Results
Consolidated Results
Reported revenues of $429.6 million increased $38.9 million, or 10.0%, for the first quarter of 2026 as compared to the same prior-year period.
Total operating expenses of $227.5 million increased $6.2 million, or 2.8%, compared to the same prior-year period, due primarily to higher variable billboard property lease expenses, higher transit franchise costs, including higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”) due to inflation, higher production expenses, and higher maintenance and utilities costs, partially offset by the impact of lost billboards in the period.
Selling, General and Administrative expenses (“SG&A”) of $107.3 million decreased $7.4 million, or 6.5%, compared to the same prior-year period, due primarily to lower compensation-related expenses, including severance and salaries, and lower credit card usage by customers, partially offset by higher professional fees, including software and technology expenses, a higher allowance for bad debt and higher client entertainment expenses.
Adjusted OIBDA of $100.4 million increased $36.2 million, or 56.4%, compared to the same prior-year period.
Segment Results
Billboard
Reported billboard segment revenues of $332.9 million increased $22.2 million, or 7.1%, compared to the same prior-year period, due primarily to higher proceeds from condemnations and an increase in average revenue per display (yield), including the impact of programmatic platforms on digital billboard revenues, partially offset by lost billboards in the period.
Operating expenses increased $3.5 million, or 2.4%, due primarily to higher variable billboard property lease costs, higher maintenance and utilities, higher site-related costs, and higher compensation-related expenses, partially offset by the impact of lost billboards in the period.
SG&A expenses increased $1.3 million, or 1.9%, due primarily to higher professional fees, including software and technology expenses, and a higher allowance for bad debt, partially offset by lower credit card usage by customers and lower compensation-related expenses.
Adjusted OIBDA of $116.4 million increased $17.4 million, or 17.6%, compared to the same prior-year period.
Transit
Reported transit segment revenues of $95.0 million increased $17.3 million, or 22.3%, compared to the same prior-year period, due primarily to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts.
Operating expenses increased $3.0 million, or 4.0%, due primarily to higher guaranteed minimum annual payments to the MTA due to inflation, higher display production costs, and higher posting and rotation costs.
SG&A expenses increased $1.5 million, or 8.7%, due primarily to higher compensation-related expenses, including severance and commissions, higher professional fees, including higher software and technology expenses, partially offset by lower credit card usage by customers.
Adjusted OIBDA loss decreased $12.8 million, or 90.1%, compared to the same prior-year period.
Other
Reported revenues decreased $0.6 million, or 26.1%, operating expenses decreased $0.3 million, or 16.7%, and Adjusted OIBDA decreased $0.3 million, or 60.0%, compared to the same prior-year period, due primarily to a decrease in third-party digital equipment sales.
Corporate
Corporate expenses, excluding stock-based compensation, decreased $6.3 million, or 29.9%, compared to the same prior-year period to $14.8 million, due primarily to lower compensation-related expenses, including severance, and lower professional fees, including fees related to a management consulting project.
Interest Expense
Net interest expense in the first quarter of 2026 was $36.0 million, including amortization of deferred financing costs of $1.4 million, as compared to $36.0 million, including amortization of deferred financing costs of $1.5 million, in the same prior-year period. The weighted average cost of debt was 5.3% as of March 31, 2026 and 5.4% as of March 31, 2025.
Income Taxes
The provision for income taxes decreased $0.1 million, or 20.0%, in the first quarter of 2026 compared to the same prior-year period. Cash paid for income taxes in the three months ended March 31, 2026 was $0.4 million.
Net Income Attributable to OUTFRONT Media Inc.
Net income attributable to OUTFRONT Media Inc. was $19.1 million in the first quarter of 2026 compared to a Net loss attributable to OUTFRONT Media Inc. of $20.6 million in the same prior-year period. Diluted weighted average shares outstanding were 177.1 million for the first quarter of 2026 compared to 166.4 million for the same prior-year period. Net income per common share for diluted earnings per weighted average share was $0.11 in the first quarter of 2026 compared to a Net loss per common share for diluted earnings per weighted average share of $0.14 in the same prior-year period.
FFO
FFO attributable to OUTFRONT Media Inc. was $63.5 million in the first quarter of 2026, an increase of $37.0 million, or 139.6%, from the same prior-year period, driven primarily by higher Adjusted OIBDA.
AFFO
Starting at the end of 2025, we modified our calculation of AFFO to include amortization of direct lease acquisition costs instead of cash paid for direct lease acquisition costs, as management believes that this calculation of AFFO is a more appropriate measure of performance period-over-period and consistent with how we calculate FFO. Accordingly, relevant prior periods have been recast to conform to this presentation.
AFFO attributable to OUTFRONT Media Inc. was $61.0 million in the first quarter of 2026, an increase of $33.9 million, or 125.1%, from the same prior-year period, due primarily to higher Adjusted OIBDA and a higher non-cash effect of straight-line rent, partially offset by lower equity earnings.
Cash Flow & Capital Expenditures
Net cash flow provided by operating activities of $75.3 million for the three months ended March 31, 2026, increased $41.7 million, or 124.1%, compared to $33.6 million in the same prior-year period, due primarily to higher net income, as adjusted for non-cash items, the timing of accounts receivables and a decrease in accounts payable and accrued expenses, partially offset by a decrease in deferred revenues. Total capital expenditures increased $6.9 million, or 40.1%, to $24.1 million for the three months ended March 31, 2026, compared to the same prior-year period, due primarily to increased growth in digital displays, increased maintenance spending for billboard display upgrades and increased spending for safety-related projects.
Dividends
In the three months ended March 31, 2026, we paid cash dividends of $53.4 million on our common stock and vested restricted share units granted to employees. We announced on May 7, 2026, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on June 30, 2026, to stockholders of record at the close of business on June 5, 2026.
Balance Sheet and Liquidity
As of March 31, 2026, our liquidity position included unrestricted cash of $67.2 million and $494.9 million of availability under our $500.0 million revolving credit facility, net of $5.1 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility, and $150.0 million of additional availability under our accounts receivable securitization facility. During the three months ended March 31, 2026, no shares of our common stock were sold under our at-the-market equity offering program, of which $232.5 million remains available. Total indebtedness as of March 31, 2026 was $2.6 billion, excluding $14.8 million of deferred financing costs, and includes a $500.0 million term loan, $450.0 million of senior secured notes and $1.7 billion of senior unsecured notes.
Conference Call
We will host a conference call to discuss the results on May 7, 2026, at 4:30 p.m. Eastern Time. The conference call numbers are 833-461-5787 (U.S. callers) and 585-542-9983 (International callers) and the passcode for both is 404991578. Live and replay versions of the conference call will be webcast in the Investor Relations section of our website, www.outfront.com.
Supplemental Materials
In addition to this press release, we have provided a supplemental investor presentation which can be viewed on our website, www.outfront.com.
About OUTFRONT Media Inc.
OUTFRONT is one of the largest and most trusted out-of-home media companies in the U.S., helping brands connect with audiences in the moments and environments that matter most. As OUTFRONT evolves, it’s defining a new era of in-real-life (IRL) marketing, turning public spaces into platforms for creativity, connection, and cultural relevance. With a nationwide footprint across billboards, digital displays, transit systems, and other out-of-home formats, OUTFRONT turns creative into powerful real-world experiences. Its in-house agency, OUTFRONT STUDIOS, and award-winning innovation team, XLabs, deliver standout storytelling, supported by advanced technology and data tools that can drive measurable impact.
Contacts:
Investors
Media
Stephan Bisson
Courtney Richards
Investor Relations
Events & Communications
(212) 297-6573
(646) 876-9404
stephan.bisson@outfront.com
courtney.richards@outfront.com
Non-GAAP Financial Measures
In addition to the results prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) provided throughout this document, this document and the accompanying tables include non-GAAP financial measures as described below. We calculate and define “Adjusted OIBDA” as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions and stock-based compensation. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues. Adjusted OIBDA and Adjusted OIBDA margin are among the primary measures we use for managing our business, evaluating our operating performance and planning and forecasting future periods, as each is an important indicator of our operational strength and business performance. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates. When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively. We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and redeemable and non-redeemable noncontrolling interests, as well as the related income tax effect of adjustments, as applicable. We calculate AFFO as FFO adjusted to include amortization of direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes certain non-cash items, including non-real estate depreciation and amortization, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our redeemable and non-redeemable noncontrolling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other real estate investment trusts (“REITs”). Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs. Since Adjusted OIBDA, Adjusted OIBDA margin, FFO and AFFO are not measures calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income (loss) and net income (loss) attributable to OUTFRONT Media Inc., the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.
Please see Exhibits 4-5 of this release for a reconciliation of the above non-GAAP financial measures to the most directly comparable GAAP financial measures.
Cautionary Statement Regarding Forward-Looking Statements
We have made statements in this document that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “would,” “may,” “might,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “projects,” “predicts,” “estimates,” “forecast” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: declines in advertising and general economic conditions; competition; government regulation; our ability to operate our digital display platform; losses and costs resulting from recalls and product liability, warranty and intellectual property claims; our ability to obtain and renew key municipal contracts on favorable terms; taxes, fees and registration requirements; decreased government compensation for the removal of lawful billboards; content-based restrictions on outdoor advertising; seasonal variations; acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations; dependence on our management team and other key employees; experiencing a cybersecurity incident; changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies; asset impairment charges for our long-lived assets and goodwill; environmental, health and safety laws and regulations; expectations relating to environmental, social and governance considerations; our substantial indebtedness; restrictions in the agreements governing our indebtedness; incurrence of additional debt; interest rate risk exposure from our variable-rate indebtedness; our ability to generate cash to service our indebtedness; cash available for distributions; hedging transactions; the ability of our board of directors to cause us to issue additional shares of stock without common stockholder approval; certain provisions of Maryland law may limit the ability of a third party to acquire control of us; our rights and the rights of our stockholders to take action against our directors and officers are limited; our failure to remain qualified to be taxed as a REIT; REIT distribution requirements; availability of external sources of capital; we may face other tax liabilities even if we remain qualified to be taxed as a REIT; complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive investments or business opportunities; our ability to contribute certain contracts to a taxable REIT subsidiary (“TRS”); our planned use of TRSs may cause us to fail to remain qualified to be taxed as a REIT; REIT ownership limits; complying with REIT requirements may limit our ability to hedge effectively; the ability of our board of directors to revoke our REIT election at any time without stockholder approval; the Internal Revenue Service may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax; establishing operating partnerships as part of our REIT structure; and other factors described in our filings with the Securities and Exchange Commission (the “SEC”), including but not limited to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. All forward-looking statements in this document apply as of the date of this document or as of the date they were made and, except as required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
EXHIBITS
Exhibit 1: CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
(in millions, except per share amounts)
2026
2025
Revenues
$ 429.6
$ 390.7
Expenses:
Operating
227.5
221.3
Selling, general and administrative
107.3
114.7
Net loss on dispositions
1.0
0.1
Depreciation
20.7
23.6
Amortization
17.2
17.1
Total expenses
373.7
376.8
Operating income
55.9
13.9
Interest expense, net
(36.0)
(36.0)
Income (loss) before provision for income taxes and equity in earnings of investee
companies
19.9
(22.1)
Provision for income taxes
(0.4)
(0.5)
Equity in earnings of investee companies, net of tax
(0.2)
1.9
Net income (loss) before allocation to redeemable and non-redeemable noncontrolling
interests
19.3
(20.7)
Net income (loss) attributable to redeemable and non-redeemable noncontrolling interests
0.2
(0.1)
Net income (loss) attributable to OUTFRONT Media Inc.
$ 19.1
$ (20.6)
Net income (loss) per common share:
Basic
$ 0.11
$ (0.14)
Diluted
$ 0.11
$ (0.14)
Weighted average shares outstanding:
Basic
175.5
166.4
Diluted
177.1
166.4
Exhibit 2: CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited) See Notes on Page 14
As of
(in millions)
March 31,
2026
December 31,
2025
Assets:
Current assets:
Cash and cash equivalents
$ 67.2
$ 99.9
Receivables, less allowance ($25.0 in 2026 and $23.2 in 2025)
294.3
365.7
Prepaid lease and franchise costs
2.6
5.1
Prepaid MTA equipment deployment costs
0.2
—
Other prepaid expenses
25.6
21.9
Other current assets
11.6
11.1
Total current assets
401.5
503.7
Property and equipment, net
644.3
643.8
Goodwill
2,006.4
2,006.4
Intangible assets
603.6
612.0
Operating lease assets
1,553.8
1,521.5
Other assets
28.5
24.2
Total assets
$ 5,238.1
$ 5,311.6
Liabilities:
Current liabilities:
Accounts payable
$ 33.3
$ 50.2
Accrued compensation
42.4
72.3
Accrued interest
23.4
35.1
Accrued lease and franchise costs
62.7
72.2
Other accrued expenses
63.2
55.5
Deferred revenues
60.1
57.7
Short-term operating lease liabilities
179.5
172.9
Other current liabilities
27.6
29.4
Total current liabilities
492.2
545.3
Long-term debt, net
2,584.5
2,583.4
Asset retirement obligation
34.1
34.0
Operating lease liabilities
1,398.9
1,374.7
Other liabilities
39.2
40.3
Total liabilities
4,548.9
4,577.7
Commitments and contingencies
Redeemable noncontrolling interests
25.8
22.0
Stockholders’ equity:
Common stock (2026 – 450.0 shares authorized, and 176.1 shares issued and
outstanding; 2025 – 450.0 shares authorized, and 175.2 issued and outstanding)
1.8
1.8
Additional paid-in capital
2,604.6
2,619.3
Distribution in excess of earnings
(1,944.6)
(1,910.8)
Accumulated other comprehensive loss
0.1
0.1
Total stockholders’ equity
661.9
710.4
Noncontrolling interests
1.5
1.5
Total liabilities and equity
$ 5,238.1
$ 5,311.6
Exhibit 3: CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
(in millions)
2026
2025
Operating activities:
Net income (loss) attributable to OUTFRONT Media Inc.
$ 19.1
$ (20.6)
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Net income (loss) attributable to redeemable and non-redeemable noncontrolling interests
0.2
(0.1)
Depreciation and amortization
37.9
40.7
Stock-based compensation
5.6
9.5
Provision for doubtful accounts
2.2
1.5
Accretion expense
0.7
0.7
Net loss on dispositions
1.0
0.1
Equity in earnings of investee companies, net of tax
0.2
(1.9)
Distributions from investee companies
0.3
0.3
Amortization of deferred financing costs and debt discount and premium
1.4
1.5
Change in assets and liabilities, net of investing and financing activities:
Decrease in receivables
69.2
45.3
Increase in prepaid MTA equipment deployment costs
(0.2)
—
(Increase) decrease in prepaid expenses and other current assets
(3.5)
0.8
Decrease in accounts payable and accrued expenses
(57.1)
(67.8)
Increase in operating lease assets and liabilities
0.5
2.1
Increase in deferred revenues
2.4
16.7
Increase (decrease) in income taxes
—
0.5
Other, net
(4.6)
4.3
Net cash flow provided by operating activities
75.3
33.6
Investing activities:
Capital expenditures
(24.1)
(17.2)
Acquisitions
(8.1)
(5.7)
MTA franchise rights
(1.8)
(4.0)
Net proceeds from dispositions
—
0.7
Investment in investee companies
(4.0)
—
Return of investments in investee companies
—
1.5
Net cash flow used for investing activities
(38.0)
(24.7)
Financing activities:
Proceeds from borrowings under short-term debt facilities
—
50.0
Repayments of borrowings under short-term debt facilities
—
(10.0)
Taxes withheld for stock-based compensation
(16.6)
(12.3)
Dividends
(53.4)
(53.0)
Net cash flow used for financing activities
(70.0)
(25.3)
Exhibit 3: CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
(in millions)
2026
2025
Net decrease in cash and cash equivalents
(32.7)
(16.4)
Cash and cash equivalents at beginning of period
99.9
46.9
Cash and cash equivalents at end of period
$ 67.2
$ 30.5
Supplemental disclosure of cash flow information:
Cash paid for income taxes
$ 0.4
$ —
Cash paid for interest
47.1
46.2
Non-cash investing and financing activities:
Accrued purchases of property and equipment
3.3
13.4
Accrued MTA franchise rights
1.9
1.6
Taxes withheld for stock-based compensation
2.8
2.6
Exhibit 4: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited) See Notes on Page 14
Three Months Ended March 31, 2026
(in millions, except percentages)
Billboard
Transit
Other
Corporate
Consolidated
Revenues
$ 332.9
$ 95.0
$ 1.7
$ —
$ 429.6
Operating income (loss)
$ 82.5
$ (6.4)
$ 0.2
$ (20.4)
$ 55.9
Net loss on dispositions
0.9
0.1
—
—
1.0
Depreciation
18.1
2.6
—
—
20.7
Amortization
14.9
2.3
—
—
17.2
Stock-based compensation
—
—
—
5.6
5.6
Adjusted OIBDA
$ 116.4
$ (1.4)
$ 0.2
$ (14.8)
$ 100.4
Adjusted OIBDA margin
35.0 %
(1.5) %
11.8 %
*
23.4 %
Three Months Ended March 31, 2025
(in millions, except percentages)
Billboard
Transit
Other
Corporate
Consolidated
Revenues
$ 310.7
$ 77.7
$ 2.3
$ —
$ 390.7
Operating income (loss)
$ 61.0
$ (17.0)
$ 0.5
$ (30.6)
$ 13.9
Net (gain) loss on dispositions
0.7
(0.6)
—
—
0.1
Depreciation
21.6
2.0
—
—
23.6
Amortization
15.7
1.4
—
—
17.1
Stock-based compensation
—
—
—
9.5
9.5
Adjusted OIBDA
$ 99.0
$ (14.2)
$ 0.5
$ (21.1)
$ 64.2
Adjusted OIBDA margin
31.9 %
(18.3) %
21.7 %
*
16.4 %
Exhibit 5: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
(in millions)
2026
2025
Net income (loss) attributable to OUTFRONT Media Inc.
$ 19.1
$ (20.6)
Depreciation of billboard advertising structures
16.2
18.8
Amortization of real estate-related intangible assets
14.3
15.1
Amortization of direct lease acquisition costs
13.0
13.2
Net loss on disposition of real estate assets
1.0
0.1
Adjustment related to redeemable and non-redeemable noncontrolling interests
(0.1)
(0.1)
FFO attributable to OUTFRONT Media Inc.
$ 63.5
$ 26.5
Non-cash portion of income taxes
—
0.5
Cash paid for direct lease acquisition costs
(13.0)
(13.2)
Maintenance capital expenditures
(7.0)
(6.3)
Other depreciation
4.5
4.8
Other amortization
2.9
2.0
Stock-based compensation
5.6
9.5
Non-cash effect of straight-line rent
2.4
1.1
Accretion expense
0.7
0.7
Amortization of deferred financing costs
1.4
1.5
AFFO attributable to OUTFRONT Media Inc.(a)
$ 61.0
$ 27.1
Exhibit 6: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
(in millions)
2026
2025
Adjusted OIBDA
$ 100.4
$ 64.2
Interest expense, net, less amortization of deferred financing costs
(34.6)
(34.5)
Cash paid for income taxes
(0.4)
—
Maintenance capital expenditures
(7.0)
(6.3)
Equity in earnings of investee companies, net of tax
(0.2)
1.9
Non-cash effect of straight-line rent
2.4
1.1
Accretion expense
0.7
0.7
Adjustment related to redeemable and non-redeemable noncontrolling interests
(0.3)
—
AFFO attributable to OUTFRONT Media Inc.(a)
$ 61.0
$ 27.1
Exhibit 7: OPERATING EXPENSES
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
%
(in millions, except percentages)
2026
2025
Change
Operating expenses:
Billboard property lease
$ 111.3
$ 109.2
1.9 %
Transit franchise
59.7
58.0
2.9
Posting, maintenance and other
56.5
54.1
4.4
Total operating expenses
$ 227.5
$ 221.3
2.8
Exhibit 8: EXPENSES BY SEGMENT
(Unaudited) See Notes on Page 14
Three Months Ended
March 31,
%
(in millions, except percentages)
2026
2025
Change
Billboard:
Billboard property lease
$ 111.3
$ 109.2
1.9 %
Billboard posting, maintenance and other
37.1
35.7
3.9
Billboard operating expenses
$ 148.4
$ 144.9
2.4
Billboard SG&A expenses
$ 68.1
$ 66.8
1.9
Transit:
Transit franchise
$ 59.7
$ 58.0
2.9
Transit posting, maintenance and other
17.9
16.6
7.8
Transit operating expenses
$ 77.6
$ 74.6
4.0
Transit SG&A expenses
$ 18.8
$ 17.3
8.7
NOTES TO EXHIBITS
PRIOR PERIOD PRESENTATION CONFORMS TO CURRENT REPORTING CLASSIFICATIONS.
(a)
Starting at the end of 2025, we modified our calculation of AFFO to include amortization of direct lease acquisition costs instead of the cash paid for direct lease acquisition costs, as management believes that this calculation of AFFO is a more appropriate measure of performance period-over-period and consistent with how we calculate FFO. Accordingly, relevant prior periods have been recast to conform to this presentation.
* Calculation not meaningful.
View original content to download multimedia:https://www.prnewswire.com/news-releases/outfront-media-reports-first-quarter-2026-results-302766116.html
SOURCE OUTFRONT Media Inc.
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