Digital Realty Reports Strong Q4 2023 Results, Expects Continued Growth in 2024
Digital Realty, a leading provider of data center solutions, has announced strong fourth-quarter results for 2023, driven by high demand across its data center platform and a surge in AI workload requirements. The company has also revealed its plans for 2024, which include new development joint ventures and capital recycling efforts.
Revenue growth for Digital Realty in 2023 was impressive, and the company expects this trend to continue in 2024 with a projected growth of 2%. Adjusted EBITDA is also set to grow by 4%, showing the company's strong performance in the market. The core FFO per share range for 2024 is expected to be between $6.60 and $6.75.
Digital Realty is focusing on capital recycling and non-core asset sales to raise $1.25 billion, allowing the company to invest in strategic opportunities and further strengthen its position in the industry. The company anticipates improved occupancy rates and positive cash re-leasing spreads throughout the year.
While inflation may affect leases rolling within the year and higher property tax expenses are anticipated in 2024, Digital Realty remains optimistic about its future prospects. The company is confident in its robust pipeline of customers and expects favorable mark-to-market rent opportunities, especially in the greater than 1 megawatt category, to support its growth.
Digital Realty also sees significant growth opportunities in the AI and hyperscale markets, with an increasing demand for these technologies. As businesses continue to rely on AI and hyperscale solutions, Digital Realty is well-positioned to capitalize on this trend and cater to the growing market needs.
With its strong performance in 2023 and solid plans for 2024, Digital Realty is poised for continued success in the data center industry. The company's focus on meeting customer demands and its strategic investments will undoubtedly contribute to its growth and position as a leader in the market.
Analyst comment
Positive news: Digital Realty reported strong fourth-quarter results and announced new development joint ventures. They expect revenue growth, adjusted EBITDA growth, and positive cash re-leasing spreads. Despite inflation and higher property tax expenses, a robust pipeline of customers and favorable rent opportunities are expected to support growth in the AI and hyperscale markets. Analysts anticipate a positive market response and potential growth in Digital Realty’s market position.
