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Digital Realty Trust Inc DLR

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Good Q2 for Digital Realty Includes Signs Its Transformation to a Connectivity Platform is Working

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Digital Realty beat FactSet consensus revenue and EBITDA estimates in the second quarter and delivered another period of strong bookings across all geographies. Most encouraging to us is that the strength in Digital’s business is centered on smaller deployments and connectivity, the types of services it historically didn’t provide but has entered via acquisitions in the last several years. We believe the ability to connect enterprises (smaller deployments) to hyperscalers like cloud providers is what makes data centers differentiated and that the ability to do it on a global scale is attractive for customers. Digital’s portfolio seems to be in the sweet spot to provide these abilities, and we think it can close the gap with Equinix as the premier global data center provider for connectivity.

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Company Profile

Business Description

Digital Realty owns and operates nearly 300 data centers worldwide. It has more than 35 million rentable square feet across five continents. Digital's offerings range from retail co-location, where an enterprise may rent a single cabinet and rely on Digital to provide all the accommodations, to "cold shells," where hyperscale cloud service providers can simply rent much, or all, of a barren, power-connected building. In recent years, Digital Realty has de-emphasized cold shells and now primarily provides higher-level service to tenants, which outsource their related IT needs to Digital. Digital Realty has also moved more into the co-location business, increasingly serving enterprises and facilitating network connections. Digital Realty operates as a real estate investment trust.

Contact
Four Embarcadero Center, Suite 3200
San Francisco, CA, 94111
T +1 415 738-6500
Sector Real Estate
Industry REIT - Office
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 2,878

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