On the back of strong global demand for data center solutions, Digital Realty reported revenues of $1.2 billion in Q3 of 2022, a 5% jump when compared to the previous quarter (Q2).
This was also a 5% increase when compared to the same quarter last year (2021). Net income in the third quarter of 2022 came in at $239 million, and net income available to common stockholders was $227 million, or $0.75 per diluted share, compared to $0.19 per diluted share in the previous quarter and $0.44 per diluted share in the same quarter last year.
Digital Realty generated third quarter of 2022 adjusted EBITDA of $620 million, a 1% increase from the previous quarter and a 2% increase over the same quarter last year. The company reported third quarter of 2022 funds from operations of $462 million, or $1.55 per share, compared to $1.55 per share in the previous quarter and $1.54 per share in the same quarter last year.
Strong Quarter
In the third quarter, Digital Realty signed total bookings expected to generate $176 million of annualized GAAP rental revenue, including a $13 million contribution from interconnection, but excluding any contribution from Teraco. Digital Realty Chief Executive Officer Bill Stein said:
“Digital Realty again delivered record quarterly bookings in the third quarter, our third record in the past four quarters, reflecting the strong global demand for data center solutions. With a rapidly changing global environment, we are making the necessary adjustments in order to maximize the significant market opportunity that lies ahead.”
The weighted-average lag between new leases signed during the third quarter of 2022 and the contractual commencement date was seventeen months. In addition to new leases signed, Digital Realty also signed renewal leases representing $156 million of annualized GAAP rental revenue during the quarter, excluding any contribution from Teraco.
Rental rates on renewal leases signed during the third quarter of 2022 rolled down 0.5% on a cash basis and up 2.3% on a GAAP basis, the company said.
Investment Drive
During the third quarter, Digital Realty completed its previously announced acquisition of a majority interest in Teraco, a leading carrier-neutral data center and interconnection services provider in South Africa, for approximately $1.7 billion.
Digital Realty acquired three assets for data center development during the third quarter. Digital Realty acquired a 38-acre parcel, which can support approximately 80 megawatts of IT load, in Paris for $10 million.
Digital Realty also acquired an income producing mixed-used building on a nine-acre parcel, which can support up to 10 megawatts of IT load in Stockholm $39 million. Further, Digital Realty acquired a one-acre parcel, which can support up to 6.5 megawatts of IT load in Crete, Greece for $2 million.
During the third quarter, Digital Realty disposed of a non-core, mixed-use data center property in Dallas for $207 million.
