Digital Realty: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 29, 2026, Digital Realty (NYSE:DLR) raised its full-year guidance for core funds from operations, a measure of recurring real estate operating performance, after delivering $855 million in record quarterly leasing bookings. Expanding enterprise demand for artificial intelligence infrastructure is driving multiyear revenue visibility across global markets. As data center capacity tightens, the company's pricing power is accelerating its organic growth. Three takeaways from management explain how this demand shapes the long-term outlook.

1. Smaller Connected Deployments Are Hitting Record Volumes

Enterprise demand for data center deployments under one megawatt, a measure of power capacity used to size facilities, expanded at a record pace. Customers are connecting cloud platforms and artificial intelligence workloads across localized markets, which increases high-margin recurring revenue.

Bookings within our 0-1 megawatt plus interconnection category exceeded $150 million at Digital Realty's share, increasing 80% year-over-year and 40% from the second quarter, marking our fourth consecutive quarterly record in this category.
-- Andrew Power, President and Chief Executive Officer

2. Record Contracted Backlog Secures Multiyear Revenue Growth

A record backlog, or contracted leases that haven't yet started generating rent, provides clear financial visibility into 2028. Turning these signed contracts into active rental revenue over coming quarters underpins projected double-digit earnings growth.

Combining strong leasing activity with minimal churn and steady commencements, our backlog reached a new record of $2.5 billion at quarter end or $1.8 billion at Digital Realty share.
-- Matt Mercier, Chief Financial Officer

3. Strategic Private Capital Enables Scale Without Stretching Leverage

Partnering with private institutional investors allows the business to fund massive hyperscale facilities without issuing dilutive shares or over-leveraging its balance sheet. This private capital strategy accelerates core funds from operations while preserving long-term balance sheet flexibility.

Today, our strategic private capital platform provides additional sources of capital, enhances our investment flexibility and financing options and enables us to pursue a broader set of opportunities, all while accelerating Digital Realty's core FFO growth and maintaining its balance sheet strength.
-- Andrew Power, President and Chief Executive Officer

Looking Ahead

Leasing activity across global data center hubs is hitting all-time highs, and executive leadership isn't hiding its satisfaction with how the platform is executing. The company's global reach across six continents, deep network interconnection, and specialized engineering expertise all position it to capture expanding artificial intelligence workloads. And on the operational side, management is focused on pricing discipline and supply chain management to sustain long-term earnings expansion.

The third quarter's record leasing activity demonstrates the power of this differentiated global platform and the value proposition it delivers to customers around the world.
-- Andrew Power, President and Chief Executive Officer

Looking ahead, the ability to secure regional power availability and expand institutional capital partnerships will determine how effectively the business scales into 2027.

Our momentum is strong, and I've never been more excited about the opportunity ahead.
-- Andrew Power, President and Chief Executive Officer

The Motley Fool recommends Digital Realty Trust. The Motley Fool has a disclosure policy.