Most important: New lease pricing and backlog conversion paceIn the print: Revenue, Core FFO/share, same-capital cash NOI growthOn the call: Hyperscaler demand pipeline, power availability constraintsRisk: Solid beat on revenue masks slowing new bookings and pricing plateau
House view
Street anchors on a low EPS bar ($0.46) and steady revenue growth. Our view: the print itself is secondary. What moves DLR is whether the $1.4B backlog converts faster than modeled and whether new lease pricing holds above $244/kW/month, confirming capacity tightening that justifies the premium multiple.
What is priced in
Consensus expects $1.60B revenue (+12% YoY) and $0.46 EPS, a low bar after Q4's miss ($0.24 vs $0.29 est). Steady leasing momentum and backlog drawdown are priced in. What is NOT priced in: acceleration in backlog commencements pulling revenue forward, or new lease pricing breaking above the $244/kW record, which would signal tightening beyond current models.
What decides the quarterRanked by thesis impact
Priority 1 · thesis-defining
New lease pricing and backlog conversion pace
DLR's pricing power is the clearest real-time signal of data center capacity tightening. The Q1 2025 record was $244/kW/month. If pricing holds or rises while the $1.4B backlog converts faster, it confirms demand outstrips supply and supports the premium valuation.
✓New lease rate at or above $244/kW/month AND backlog commencements ahead of the end-of-2026 schedule disclosed in Q3 2025.
✗New lease rate drops below $220/kW/month, or management signals backlog commencement delays tied to customer pushouts rather than power constraints.
Priority 2
Core FFO per share trajectory toward FY26 guide
FY26 guide is $7.90-$8.00 Core FFO/share vs FY25's $7.39. Q1 needs to show a credible ramp. REITs trade on FFO, not GAAP EPS. A weak Q1 run-rate forces back-half loading that the market will discount.
✓Core FFO/share at or above $1.90 for Q1, putting DLR on a clean annualized path to the $7.90 low end of guidance.
✗Core FFO/share below $1.80, requiring $6.10+ over the remaining three quarters and raising credibility questions on the full-year guide.
Priority 3
New bookings run-rate and development starts
FY25 bookings totaled $1.2B at 100% share. Q4 2025 was $400M. A sequential drop in Q1 bookings would suggest the hyperscaler capex cycle is peaking. Net new development starts (135 MW in Q4) show whether DLR is deploying capital into confirmed demand.
Sequential decline from Q4's $1.71B is expected. Focus on whether the YoY growth rate holds at 12%+ and whether interconnection revenue grows faster than colocation.
Core FFO per share
FY25 was $7.39 ($1.85/quarter avg); FY26 guide $7.90-$8.00
Needs to be at or above $1.90 to track the low end of FY26 guidance. Below $1.80 is a problem.
Same-Capital Cash NOI Growth
FY25 was 4.5% YoY
Acceleration above 5% confirms organic pricing power in the existing portfolio. Deceleration below 4% suggests mark-to-market tailwinds are fading.
If backlog shrinks while bookings stay strong, it means commencements are accelerating, which is bullish for near-term revenue. Backlog growth without commencements is a yellow flag.
Development Pipeline / Starts
How to read the outcomeQualitative (no specific %)
Mixed to flat. Solid execution on existing backlog but slowing new demand raises questions about sustainability. Stock likely fades after any initial pop.
Fades or down. Revenue beat driven by prior backlog, but pricing deterioration signals supply catching up to demand. Bears take control of the narrative.
Revenue miss + Core FFO below $1.80 + FY26 guide maintained without conviction
Sharp selloff. Echoes Q4 2025 EPS miss pattern. Market questions whether the AI demand thesis translates to DLR's financials at the pace the multiple implies.
93 signals · 21 high-qualityResearch read-through · not a trade recommendation
✓Q1 bookings above $300M and net new development starts above 100 MW, sustaining the FY25 pace.
✗Q1 bookings below $200M with net new starts below 75 MW, suggesting hyperscaler demand is plateauing or shifting to competitors.
769 MW under construction; 135 MW net new starts in Q4; 90 MW delivered in Q4
Net new starts above 100 MW and deliveries above 80 MW confirm the buildout is demand-led, not speculative.
On the call · where thesis moves
New lease pricing per kW/month
The single best real-time indicator of supply-demand balance. Holding above $244/kW confirms tightening. Any softness here matters more than a revenue beat.
Power availability and grid interconnection timelines
Power is the binding constraint on new deliveries. If management flags longer utility timelines, it confirms capacity tightening but also caps DLR's own growth rate.
Hyperscaler capex commentary and customer pipeline
DLR's top customers are hyperscalers. Any mention of deal pipeline size, new logos, or geographic expansion signals whether AI-driven demand is broadening or concentrating.
Private capital fund deployment and second fund plans
The $3.2B closed-end fund is DLR's new capital engine. Speed of deployment and any second fund discussion reveals management's confidence in multi-year demand visibility.
FY26 guidance reaffirmation or revision
Any narrowing or raising of the $7.90-$8.00 Core FFO guide after just one quarter would be a strong signal. Maintaining the range is neutral. Widening it lower is a red flag.