Executive Summary
Executive Summary: Digital Realty Trust reported Q3 2025 revenue of USD 1.577 billion, up 10.2% year over year and 5.63% quarter over quarter, reflecting ongoing demand for hyperscale data center capacity. Despite top-line growth, gross profit declined sharply to USD 369.98 million (gross margin 23.46%), driven by elevated depreciation, other expenses and a less favorable margin mix, resulting in a 14.26% operating margin and a net income of USD 67.8 million (net margin 4.3%). EBITDA stood at USD 721.98 million with EBITDA margin of approximately 45.8%. Diluted EPS was USD 0.15 and standalone EPS USD 0.17, underscoring continued earnings pressure from significant non-cash and financing costs.
Balance sheet and cash flow metrics point to a high-leverage, capital-intensive model. The reported debt/ capitalization metrics show total debt to capitalization around 45.9%, and a debt ratio near 1.87, with a negative signal on traditional cash conversion metrics in the near term. Interest coverage, while typically positive, is reported as negative in the dataset (likely a sign convention issue); EBIT of USD 225.0 million versus interest expense of USD 60.1 million suggests roughly 3.7x interest coverage on a clean basis. Cash per share is USD 1.414, and the dividend yield stands at roughly 0.7%, with a payout ratio around 6.1%, indicating a modest distribution relative to earnings but a need to fund ongoing capex and leverage.
Outlook: Management Guidance for QQ3 2025 is not explicitly disclosed in the provided data. Given secular demand for data center capacity, Digital Realty remains positioned to benefit from hyperscale and enterprise migration to colocation platforms, subject to financing costs, capex cadence, and tenant retention. Investors should monitor occupancy/visibility of rent escalations, financing costs, and the cadence of new asset deployment as key drivers of margin stabilization and FFO/adjusted earnings trajectory in 2025 and beyond.
Key Performance Indicators
QoQ: -55.51% | YoY:-52.25%
QoQ: -93.43% | YoY:32.46%
QoQ: -94.39% | YoY:30.77%
Key Insights
Revenue: USD 1,577,234,000; YoY growth 10.20%; QoQ growth 5.63%
Gross Profit: USD 369,982,000; Gross Margin 23.46%; YoY margin change -52.25%; QoQ change -55.51%
EBITDA: USD 721,982,000; EBITDA Margin ~45.78%
Operating Income: USD 224,980,000; Operating Margin 14.26%
Net Income: USD 67,812,000; Net Margin 4.30%
EPS (Basic): USD 0.17; EPS (Diluted): USD 0.15;
Weighted Avg Shares (Out): 341.37 million; Weighted Avg Diluted: 349.23 million
Interest Expense: USD 60.13 million; Depreciation &a...
Financial Highlights
Revenue: USD 1,577,234,000; YoY growth 10.20%; QoQ growth 5.63%
Gross Profit: USD 369,982,000; Gross Margin 23.46%; YoY margin change -52.25%; QoQ change -55.51%
EBITDA: USD 721,982,000; EBITDA Margin ~45.78%
Operating Income: USD 224,980,000; Operating Margin 14.26%
Net Income: USD 67,812,000; Net Margin 4.30%
EPS (Basic): USD 0.17; EPS (Diluted): USD 0.15;
Weighted Avg Shares (Out): 341.37 million; Weighted Avg Diluted: 349.23 million
Interest Expense: USD 60.13 million; Depreciation & Amortization: USD 497.00 million
Current Ratio: 0.157; Quick Ratio: 0.157; Cash per Share: USD 1.414
Dividend Yield: 0.707%; Dividend Payout Ratio: 6.14%; P/B: 2.56; P/S: 37.42; P/E: 217.57; EV/EBITDA: 108.10
Debt to Capitalization (Total): 0.459; Long-Term Debt to Capitalization: 0.442; Debt Ratio: 1.868; Interest Coverage: approximately 3.7x (calculated from EBIT/Interest)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.58B |
10.20% |
5.63% |
| Gross Profit |
369.98M |
-52.25% |
-55.51% |
| Operating Income |
224.98M |
33.69% |
6.27% |
| Net Income |
67.81M |
32.46% |
-93.43% |
| EPS |
0.17 |
30.77% |
-94.39% |
Key Financial Ratios
operatingProfitMargin
14.3%
priceEarningsRatio
217.57
Management Commentary
No earnings-call transcript data provided in the dataset. As a result, there are no management quotes or themed highlights to extract. The analysis below relies on reported financials and observable market context.
Forward Guidance
Guidance and explicit forward targets were not provided in the supplied data. Given the data center secular growth trend and Digital Realty’s scale, potential scenarios include: (1) Moderate revenue growth driven by new leases and rent escalations with stabilizing gross margins as depreciation and operating costs normalize; (2) Margin recovery contingent on disciplined capex, cost control, and favorable mix of high-margin hyperscale tenants; (3) Leverage deleveraging or neutral leverage depending on capital deployment pace and access to attractive financing. Investors should monitor: occupancy visibility, capex cadence (new openings and PDx-related investments), tenant diversification, FX/interest-rate environment, and the company’s ability to convert EBITDA into sustainable free cash flow to support the dividend and deleverage over time.