What the quarter reported
Digital Realty released second-quarter results on July 23, 2026. Core funds from operations, the measure REITs use to strip depreciation out of earnings, came in at $2.65 per share against $1.87 in the same quarter of 2025. Excluding net promote income — the performance fees a manager collects from joint-venture partners, which are lumpy by nature — the figure was $2.13, about 14 percent higher year over year.
Revenue was roughly $1.9 billion, up 18 percent from the first quarter and 29 percent from a year earlier. Net income per share moved the other way, at $1.21 against $2.94, a reminder that GAAP earnings for a landlord of this kind are dominated by asset sales and depreciation rather than by operations.
Total bookings for the quarter were $307 million of annualised GAAP base rent at 100 percent share, or $208 million at the company's own share. Of that, $108 million came from the smallest category the company reports — deals under one megawatt plus interconnection — which is the colocation end of the business rather than the hyperscale end.
The backlog is the number that matters
The company put its total backlog of signed-but-not-commenced leases at $1.9 billion of annualised base rent at 100 percent share, and $1.4 billion at its own share. Both are records for the company.
A backlog in this business is contracted revenue waiting on physical delivery. A signed hyperscale lease does not begin paying until the capacity is energised, which can be a year or more after signature in constrained power markets. So the backlog is simultaneously a measure of demand already won and a measure of construction and interconnection work not yet finished.
Two leases signed in July 2026, after the quarter closed, added $410 million of annualised base rent at 100 percent share between them. That single pair of transactions exceeded the entire second quarter's bookings, which is the clearest available illustration of how concentrated hyperscale demand has become in a small number of very large contracts.
Pricing power shows up in renewals
Cash rental rates on renewals rose 25.4 percent during the quarter. Renewal spreads are the cleanest read on landlord pricing power because they compare the same tenant in the same space: there is no mix effect from new markets or new building specifications.
A renewal spread of that size indicates that existing leases, many struck before the current demand cycle, were materially below what the same capacity now commands. It also indicates that tenants are not relocating in response, which is consistent with the practical difficulty of moving deployed compute.
Scale, guidance and the caveats
As of June 30, 2026 the portfolio comprised 310 data centres with roughly 3.1 gigawatts of IT capacity in service and about 12 gigawatts including future development. The company raised its full-year core FFO guidance excluding net promote income to a range of $8.15 to $8.20 per share, and said its acquisition of Columbia Capital, an investment manager with roughly $9 billion of assets under management, was expected to close in the second half of 2026.
Analysis: core FFO is a company-defined measure with no standardised definition across the sector, and the exclusion of net promote income — added precisely because that line swung the headline figure by half a dollar this quarter — illustrates why. Read the backlog and the renewal spread, which are contractual facts, ahead of the earnings measure, which is a presentation choice.
The constraint on converting that backlog to revenue is not demand. It is power, transmission interconnection queues and equipment lead times, none of which a quarterly release quantifies.