Digital Realty Trust Reports Mixed Q3 Results, Decline in Net Income Amid Increased Expenses and Strategic Developments

Digital Realty Trust, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing mixed performance in revenue and profitability compared to the previous fiscal period. Total operating revenues for the third quarter reached $1,431.2 million, a slight increase of 2.1% from $1,402.4 million in Q3 2023. For the nine months, revenues totaled $4,119.1 million, up marginally by 0.3% from $4,107.4 million in the same period last year.

However, net income experienced a significant decline, with Q3 2024 net income available to common stockholders at $41.0 million, down from $723.4 million in Q3 2023. For the nine months, net income available to common stockholders was $382.4 million, compared to $890.0 million in the prior year. This decline was attributed to a decrease in gains on property dispositions and increased operating expenses.

Operating expenses for Q3 2024 were $1,262.9 million, a decrease from $1,344.2 million in Q3 2023, while for the nine months, expenses rose to $3,791.6 million from $3,717.0 million. The company reported an operating income of $168.3 million for Q3 2024, a notable increase from $58.2 million in the same quarter last year, but a decrease in operating income for the nine months to $327.5 million from $390.4 million.

Digital Realty's strategic developments included several significant acquisitions and joint ventures. In January 2024, the company acquired a 16-acre site in Paris for $80 million, which included two completed data centers and two under construction. Additionally, in July 2024, it purchased two data centers in the Slough Trading Estate for $200 million. The company also formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses across Frankfurt, Paris, and Northern Virginia, generating approximately $231 million in net proceeds.

The company’s total assets as of September 30, 2024, were $45.3 billion, up from $44.1 billion at the end of 2023. Total liabilities decreased to $22.1 billion from $23.1 billion, while total stockholders’ equity increased to $21.2 billion from $19.1 billion. Digital Realty's cash and cash equivalents rose to $2.2 billion from $1.6 billion, reflecting improved liquidity.

Digital Realty also reported a provision for impairment on real estate investments of $168.3 million during the nine months ended September 30, 2024, primarily related to non-core properties in secondary U.S. markets. The company continues to focus on expanding its global footprint and enhancing its operational efficiencies while navigating market conditions and customer demand.