Digital Realty Trust, Inc.

Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain certain non-GAAP financial information. Reconciliations to the most directly comparable GAAP measure are included in the supplemental package furnished to the SEC and available on our website. Before I turn the call over to Andy, let me offer a few key takeaways from our fourth quarter results. First, we posted $1.86 of core FFO per share in the fourth quarter and $7.39 for full year 2025, up 10% over 2024. Our initial guidance for 2026 implies nearly 8% bottom line per share growth at the midpoint, despite outperforming our original 2025 guidance by almost 500 basis points. Second, we concluded our second consecutive year with more than $1 billion of total bookings at 100% share, leaving us with a record backlog of nearly $1.4 billion at 100% share. We also posted another record quarter of 0 to 1 megawatt plus interconnection bookings, and a record year in 2025, as our team demonstrated its resolve to meet our goal to double digital. Lastly, we ended the year with over $3.2 billion of LP equity commitments to our oversubscribed inaugural close-end fund, marking our official entry into the private markets and evolving Digital Realty's funding strategy to support the growth of hyperscale data center capacity. With that, I'd like to turn the call over to our president and CEO, Andy Power.

Thanks, Jordan. And thanks to everyone for joining our call. 2025 was a pivotal year for the data center industry and for digital realty. Data centers moved firmly into the global spotlight. As AI adoption accelerated, cloud platforms continued to scale, and power became the industry's primary constraint. Against that backdrop, the digital realty team delivered exceptional execution. We closed the year with record financial performance exceeding the full-year guidance we laid out last February and finishing ahead of the targets we set for ourselves across revenue, EBITDA, and core FFO per share. Just as importantly, the strategy we articulated over the last several years focused on a global, full-spectrum, and connectivity-rich platform and operational excellence with disciplined capital allocation is clearly gaining momentum. Throughout 2025, demand remained robust across our full product range, and our leasing reflected that breadth. For the second consecutive year in our history, Digital Realty signed over a billion dollars of new leases with a $1.2 billion of bookings in 2025, representing a pace that is nearly 70% above the average bookings achieved over the preceding five-year period. Our zero to one megawatt plus interconnection product set continued to outperform and take share, posting nearly 340 million of bookings, easily a four-year record, and 35 plus percent above 2024 levels, as customers sought proximity, scale, and dense connectivity in the critical tier one markets that we serve. This segment benefited from the continued expansion of platform digital into 31 countries and 56 markets at year end, as well as the evolution of our product set. Our high-density co-location offering enables customers to deploy more compute in the same footprint while maintaining efficiency and reliability. Service fabric adoption also accelerated meaningfully during the year, now enabling access to over 300 cloud on-ramps and more than 700 interconnected data centers globally. further strengthening the network effects of platform digital. These dynamics helped drive a robust inflow of new logos with nearly 600 added for the second consecutive year. Graven and Megawatt bookings got off to a great start early in the year when we signed the largest lease in the company's history. Momentum continued through the fourth quarter with solid hyperscale activity across our footprint, particularly in the Americas. On a 100% share basis, hyperscale leasing exceeded 800 million in 2025, highlighting the underlying strength and durability of hyperscale demand. Also in 2025, we saw early but encouraging customer adoption of our private AI exchange platform, a growing set of AI-driven networking use cases that enable enterprises to connect to compute data and models privately and dynamically across clouds, campuses, and partners. By leveraging the scale of our interconnection portfolio, customers are beginning to move beyond static architectures to support low latency, secure, and cost efficient AI inference workflows that span multiple environments. With inference expected to scale in 2026, we see continued expansion of these private AI exchange use cases as a durable driver of interconnection demand. Building on this momentum, our data and AI strategy is centered on delivering AI-ready infrastructure in the tier one metros where performance, adjacency, and sovereignty matter most. Our roadmap positions us to meet accelerating inference demand with pre-installed liquid cooling capacity, higher density deployments, and a unified platform that provides the coverage, capacity, connectivity, and control enterprise require for long-term AI execution. Finally, we continue to expand our footprint in the APAC region. Last March, we expanded into Indonesia through a joint venture that owns a robust connectivity hub in Jakarta. In January, we announced our continued Southeast Asian expansion with the acquisition of one of Malaysia's most highly connected data centers. Together, these investments further strengthen our presence in fast-growing APAC markets and extend the reach of platform digital into regions where digital demand is accelerating. We continue to believe that not all data centers are created equal. Different types of data centers can be thought of as different tools for different jobs. Our portfolio is largely focused in locations that matter most to our customers and their stakeholders. Interconnection hubs in or near where clouds and data converge create network effects, making the platform more valuable for every participant. The value generated by these network effects, together with our ability to support hyperscale requirements and higher power density workloads, underscores the advantage of Digital Realty's Connected Campus approach. The key to these network effects is interconnection. Digital has continued to enhance the value that we provide through both physical and virtual products available at our data centers. Customers can use this connectivity to connect to others within the same data center via CrossConnect or another data center across the globe via Service Fabric and everything in between. Customers can connect with their business partners in our data centers and expand their connectivity when they add sites or deepen their integration with cloud, data, and AI ecosystems. The importance of this connectivity grows as enterprise AI and use of inference accelerates. Inference thrives where data and networks meet, and our position in major population and GDP centers, together with our robust and diverse connectivity, makes us particularly well positioned to host and scale inference workloads as enterprises continue to operationalize AI. The introduction of ChatGPT a few years ago and the ensuing race between Gemini, Claude, Grok, and others marked the beginning of a new chapter in the digital age, one defined by the convergence of AI, cloud, data, and interconnection at a global scale. Cloud platforms continue to grow at remarkable rates, even at their extraordinary scale, underscoring the depth and durability of this demand. Looking ahead, cloud and AI demand are expected to continue to compound, with AI-specific services growing even faster as generative and inference workloads become embedded directly into business processes. We're positioned for the next phase of infrastructure enablement, where enterprise AI demands infrastructure that behaves like the cloud, reliable, secure, and always on. As cloud and AI demand scale, a combination of power availability and ability to execute have become the defining constraints across global digital infrastructure, shaping the timelines for how new data center capacity comes online. In most of our core markets, new supply will continue to arrive gradually as both generation and transmission upgrades continue. Hyperscalers are increasingly making leasing decisions based on who can secure and deliver power capacity on a predictable schedule. As a result, customers are prioritizing operators with verified visibility into the future supply of power and a track record of on-time or even accelerated delivery. Digital Realty continues to leverage its global footprint, 20 plus year track record, and five gigawatt power bank to position incremental capacity for development in some of the world's most power-constrained markets. Before I move on, let me highlight a few recent wins that demonstrate how customers across the globe are using the connectivity in our data centers to deploy critical workloads to create value for their enterprise. A technology services company and new logo is leveraging platform digital in four US locations to create a distributed AI inference-ready ecosystem to support advanced artificial intelligence workloads for a growing enterprise demand. A leading technology and communications company is expanding its footprint to two additional European markets on platform digital to enable network optimized platforms leveraging the interconnected digital infrastructure to reach customers faster and at scale. A global industrial technology and engineering company based in Germany and a new logo for Platform Digital is enabling advanced data analytics and AI initiatives, leveraging the high-performance digital ecosystems available in a Dallas data center. A leading European AI company and a new logo for Digital Realty is deploying an edge-infrared node on Platform Digital, leveraging the network and emerging AI ecosystem available on our Paris campus. And a leading multinational manufacturing company is expanding its footprint on platform digital to enable advanced data and AI workloads, leveraging high density and interconnected digital infrastructure available on our sole campus. These wins demonstrate the continued momentum of our enterprise offering and the value of deploying critical workloads within our connected global communities. And with that, I'll now turn the call over to our CFO, Matt Merceder.

Thank you, Andy. As Andy noted, 2025 was a transformative year for digital realty. Over the last 12 months, we posted record financial results and saw a meaningful acceleration in top and bottom line growth. In the fourth quarter, digital realty again posted strong double digit growth in revenue and adjusted EBITDA, reflecting the momentum in our zero to one megawatt plus interconnection business, commencements from our substantial backlog, strong releasing spread, modest churn, and continued strong growth in fee income. We achieved these strong results while keeping our leverage below five turns and maintaining significant liquidity to invest in data center projects across our five gigawatt runway of buildable IT capacity. Core FFO per share grew by 8% year over year while leasing posted a top five quarter in DLR history. with the 0 to 1 megawatt plus interconnection category setting a new quarterly leasing record. During the fourth quarter, we signed leases representing $400 million of annualized rent at 100% share or $175 million at digital realty share. Demand for data center capacity continues to be robust, both for larger capacity blocks to support growth in cloud and AI and smaller but also scaling co-location capacity which often supports enterprise digital transformation workloads. Data center supply remains tight, especially within our footprint. New leasing activity was particularly strong in the Americas, representing 65% of DLR's share of bookings in the quarter. Our 0 to 1 megawatt plus interconnection product set continued its strong momentum, posting a new leasing record of 96 million. 7% higher than the previous record set in 2Q25. Over the course of 2025, we've averaged 85 million of quarterly leasing in this category, a reflection of our growing value proposition and the consistency of our team's efforts. Leasing was driven by regional records in North America and EMEA, led by strength in the smaller zero to 500 kilowatt deal tranche. The 0 to 1 Megawatt plus interconnection product continues to be a significant focus for digital realty, and we are encouraged by the growing strength and momentum of our execution. Interconnection bookings approached last quarter's record at 18.9 million. Strength in the quarter was driven by record bookings in EMEA and momentum within our service fabric product. Interconnection bookings stepped up noticeably in the second half of 2025, resulting in a 22% increase year over year. We signed 78 million within the greater than a megawatt category at our share, with continued strength in the Americas. Pricing in this product segment remains strong, averaging over $180 per kilowatt in the quarter. Manassas, Virginia was the top contributor to the greater than a megawatt signings this quarter, while hyperscalers also signed leases in Tokyo, Osaka, and Paris. Availability across our nearly 800 megawatts in-place portfolio in Northern Virginia remains very limited. With strong demand queuing for the 300 megawatts of capacity we are readying for delivery in the 2027 to 2029 timeframe. Our total backlog reached a record at year end of nearly 1.4 billion. reflecting the robust data center fundamentals we are experiencing and our ability to capitalize on this demand. Many remain understandably focused on the pro rata share view of leasing that we have historically provided to enhance transparency and modeling, but we feel it is important to understand the complete picture. The total backlog is a better representation of the aggregate demand being captured across platform digital, and in turn, an important driver of the overall economics enjoyed by DLR shareholders. While the evolution of our funding strategy has impacted some items on our income statement, bottom line economics remain paramount. This evolution has enabled us to more than double our fee income in 2025, while expanding our operational reach to better serve our customers. At Digital Realty Share, the backlog was $817 million at quarter end, as 209 million of commencement exceeded the 175 million of new bookings in the quarter. Looking ahead to 2026, we have 634 million of leases scheduled to commence somewhat readily throughout this year, and then another 152 million of leases to commence in 2027 and beyond. Our backlog provides us with strong visibility and predictability. During the fourth quarter, we signed 269 million of renewal leases at a blended 6.1% increase on a cash basis. As usual, renewals were heavily weighted towards our shorter zero to one megawatt leases, with 175 million of co-location renewals at a 4.3% uplift. Greater than a megawatt renewals totaled 88 million at a robust 8.1% cash releasing spread, driven by deals in Northern Virginia, Chicago, and Dublin. For the full year 2025, Cash releasing spreads were 6.7%, surpassing the high end of our guidance range. As for earnings, we reported core FFO of $1.86 per share for the fourth quarter, up 8% year-over-year, reflecting strong core growth and continued growth in fee income, offset by seasonally higher expenses. For the full year, we reported core FFO per share of $7.39, just above the high end of our guidance range, and 10% higher than 2024. Same capital cash NOI growth continued to be strong in the fourth quarter, increasing by 8.6% year over year, driven by 8.2% growth in data center revenue. On a constant currency basis, same capital cash NOI rose 4.5% in the quarter. For the year, same capital cash NOI also grew by 4.5%, consistent with our most recent guidance increase. Before going any further, I want to inform you of some upcoming disclosure enhancements that we expect to make beginning next quarter to better align our reporting with how we manage the business. While we have long provided both power and square footage metrics in our disclosures, we will be transitioning the focus toward power-based metrics. Key elements of our reporting, including leasing and development activity, are already based on power, and we will now bring occupancy in line by highlighting it on an IT load basis. Based on square feet, same capital and total portfolio occupancy ended the year at 83.7 and 84.7% respectively. However, on an IT load basis, same capital and total portfolio occupancy was approximately 91% and 89%, both improving over 50 basis points year over year. We believe that this update will better reflect the dynamics of our current business while providing a clearer and more consistent view of utilization across our platform. We also expect to make some modest updates to our quarterly supplemental, pruning unnecessary data points. The objective is to retain our industry-leading transparency, better align reporting with how the business is managed, and improve the overall digestibility of the supplemental. Moving on to our investment activity, we spent $930 million on development CapEx in the quarter, net of our partner share, bringing full year spend to $3 billion. Recurring CapEx increased to $169 million in the seasonally high fourth quarter. During the quarter, we delivered about 90 megawatts of new capacity, 75% of which was pre-lease, while we started about 135 megawatts of new data center projects increasing our total development to 769 megawatts under construction. At quarter end, our gross data center development pipeline underway stood at just over 10 billion, at an 11.9% expected stabilized yield. For the full year, we delivered approximately 289 megawatts of new capacity, reflecting strong execution across our development pipeline in support of customer demand, even as labor and supply chains got tighter. During the fourth quarter, we sold a non-core facility in Dallas for 33 million and acquired land near Portland, Tel Aviv, and Lisbon for future development. Turning to the balance sheet, we were active again in the capital markets during the fourth quarter, raising 1.4 billion euros in a dual tranche green euro bond offering. The first tranche was for 600 million euros at 3.75% due 2033, and the second tranche was for 800 million euros at 4.25% due 2037. We used a portion of the net proceeds to redeem 1.075 billion of euro bonds, carrying a 2.5% coupon that was scheduled to mature in January. The 160 basis points spread between the new and redeemed issues will cause a modest interest expense headwind starting in the first quarter of 2026. Our only remaining debt maturity for 2026 is a modest $275 million Swiss franc note that matures late this year. Looking further out, our maturities remain well-laddered through 2037. Leverage remained at 4.9 times, well below our long-term target of 5.5 times, while balance sheet liquidity remained robust at nearly $7 billion. We maintain approximately 15 billion of dry powder to support hyperscale data center development and investment through our private capital initiatives. As a quick update surrounding the fund, by year end, we had closed 3.225 billion of LP equity into our inaugural closed-end fund, and we anticipate the final 25 million closing prior to our next call. In late December, we contributed another 40% stake in the five stabilized seed assets into the fund, increasing the fund stake to 80% and resulting in an additional $427 million of net proceeds to digital. We are excited to move on to the next stage of our private capital strategy as we work to further support the perpetual capitalization of hyperscale data centers alongside digital realty's public shareholders. Our balance sheet is positioned to fuel growth opportunities for our customers around the globe, consistent with our long-term financing strategies. Let me conclude with our guidance. We are establishing a core FFO guidance range for the full year of 2026 of $7.90 to $8 per share. The midpoint represents 8% year-over-year growth, reflecting underlying strength in our business, balanced by a continued ramp in new investment spending that is geared toward extending our runway for growth. On a normalized and constant currency basis, we anticipate total revenue and adjusted EBITDA growth of more than 10% in 2026. Same capital cash online growth is expected to grow 4% to 5% on a constant currency basis. We also expect cash renewal spreads of between 6% to 8%, with upside partly mitigated by the high mix of zero to one megawatt leases expiring, together with a portion of fixed rate renewals in our greater than a megawatt portfolio. Power-based occupancy should improve by another 50 to 100 basis points from the approximate 89% at year end 2025. CapEx net of partner contributions are expected to rise to between 3.25 and 3.75 billion, with development yields expected to remain in the double digits. And we will also continue to recycle capital, with $500 million to $1 billion of dispositions in JV capital expected this year. This concludes our prepared remarks, and now we will be pleased to take your questions. Operator, would you please begin the Q&A session?