Q4 results provide the first full-year data set to test that question.
The Numbers That Support S&P’s View
Core FFO per share reached $1.86 in Q4, a 7.5% increase over Q4 2024, bringing the full-year figure to $7.39, a 10.1% increase over the prior year. Revenue grew 13.9% year over year to approximately $1.63 billion, driven by continued demand across both hyperscale and enterprise segments.
Fee income reached approximately $45.7 million in Q4, bringing the full-year total to approximately $137.2 million, more than double the $64.9 million generated in 2024. This acceleration followed the oversubscription of Digital Realty’s inaugural closed-end fund, which attracted approximately $3.225 billion in LP equity commitments by year-end.
The company’s balance sheet remained within institutional parameters. Net debt-to-Adjusted EBITDA held at 4.9x, consistent with the prior quarter. In November, Digital Realty issued approximately €1.4 billion ($1.6 billion) of dual-tranche green Eurobonds, and in December, it repaid early approximately €1.075 billion of senior notes originally due in 2026.
These are the metrics S&P’s framework appears to be crediting: diversification of capital sources, scaling fee income, and leverage discipline during a period of elevated development spending.
The Numbers That Support Fitch And Moody’s Caution
GAAP net income per share fell to $0.24 in Q4, down from $0.51 in Q4 2024. The quarter included a $78.5 million impairment provision, the first material impairment in several quarters. Transaction and integration expenses reached $36.1 million in the quarter, contributing to elevated operating costs.
The AFFO payout ratio reached approximately 91% in Q4, ...
