Digital Realty owns and operates 310 data centers across six continents. A data center is a large, secure building packed with computer servers that companies use to store and process their information. Digital Realty does not build software or sell gadgets. It rents space, power, and connectivity inside these buildings, mostly through long-term leases that last five years or more on average. Customers pay a fixed fee every month, much like rent, in exchange for reliable access to Digital Realty's infrastructure. The biggest customers include familiar names like IBM, Meta Platforms, JPMorgan Chase, and AT&T. No single customer accounts for more than 11.7% of total recurring revenue, which spreads the risk across a wide base. The diagram below traces where the money goes.

Five years of financial data tell a clear story of growth, but also rising costs and growing debt. Revenue climbed from $4.4 billion in 2021 to $6.1 billion in 2025, a gain of nearly 39% over four years. The jump from 2024 to 2025 alone was $557 million, or 10%, driven by new leases coming online in Northern Virginia, Johannesburg, and Portland. That is a meaningful acceleration.

Cash from operations tells a similarly positive story, rising from $1.7 billion in 2021 to $2.4 billion in 2025. That cash is what the business generates after paying its day-to-day bills, and more of it means more flexibility to build new facilities or pay dividends. The jump from $1.6 billion in 2023 to $2.3 billion in 2024 was especially notable, reflecting better lease economics as newly developed sites filled up with paying customers.

The debt picture deserves attention. Net debt was essentially flat in 2021 and 2022 at around $100 million. By 2023 it had risen to $1.6 billion, and by 2024 it reached $3.9 billion before easing slightly to $3.5 billion in 2025. Building data centers is expensive. Digital Realty spent heavily on construction and issued several large rounds of bonds in euros during 2025, totaling billions of dollars. The company has a stated goal of keeping its debt-to-earnings ratio around 5.5 times. That is a manageable level for a property-owning business, but it leaves little room for error if revenue growth slows.

Because Digital Realty must distribute most of its earnings, it cannot simply save cash to fund expansion. Instead, it raises money by selling bonds, issuing new shares, and forming joint ventures with partners like Blackstone and Mitsubishi. In 2025, the company raised roughly $1.1 billion by selling 6.4 million new shares at an average price of $173.09 each. It also contributed data centers into a new fund called Digital DC Partners NA Fund, receiving about $937 million in proceeds. These moves reduce how much Digital Realty owns outright, but bring in cash to fund the next wave of construction.

The portfolio itself sits at 84.7% leased as of December 31, 2025, across 310 data centers totaling 43.2 million rentable square feet. About 9.7 million square feet is still under active development, and 64% of that construction activity is already pre-leased before it even opens. Renewal rates on existing leases are rising too. Leases larger than one megawatt renewed at rates 27% above the expiring price. That is a sign of genuine pricing power in the current market.

Now for the risks. Customer concentration is the most immediate concern. The 20 largest customers account for about 51% of total revenue. The top three alone represent 26%. If any one of those large customers hits financial trouble, cancels a lease, or moves to a competitor, the revenue loss would be significant and hard to replace quickly. Twenty of Digital Realty's 310 buildings are occupied by a single customer each, which makes those specific buildings entirely dependent on one relationship.

Power supply is the second major risk. Digital Realty depends entirely on third-party utility companies for electricity. It cannot control prices or guarantee supply. Some of its long-term renewable energy contracts run for 5 to 20 years at fixed prices, which protects against some volatility but could become a disadvantage if market power prices fall below what Digital Realty locked in. The company also disclosed that it is under investigation by the United States Securities and Exchange Commission for its cybersecurity disclosures, adding regulatory uncertainty on top of operational risk. A 2024 fire at a Singapore data center disrupted services for several large technology companies and illustrated how physical accidents can quickly become reputational problems.

Geography adds another layer. Northern Virginia generates 21.4% of total annualized rent. Chicago contributes 7.1%. Frankfurt adds 6.1%. These are vital markets, but concentration in a handful of cities means that a local economic shock, a zoning change, or a power grid problem in one area could have an outsized effect on the whole business. The rapid spread of artificial intelligence is also creating pressure to upgrade older facilities, because AI workloads require far more electricity and more advanced cooling than traditional server work. Retrofitting older buildings is expensive, and not all of those costs can be passed on to customers.