Data center services provider Digital Realty reported an unexpected drop in second-quarter revenue and a decline in core funds from operations (FFO) on Thursday, causing its shares to fall by 2.7% in extended trading.
High interest rates have led customers to spend cautiously on the company’s services, and it faces significant competition from rivals such as Equinix.
Based in Austin, Texas, Digital Realty offers data center and co-location solutions to support enterprise customers in their digitization efforts amid the AI boom.
Digital Realty’s second-quarter revenue saw a slight decline from the previous year, reaching about $1.36 billion, falling short of analysts’ average estimate of $1.38 billion.
Its core FFO, a crucial measure of cash flow, dropped to $1.65 per share, compared to $1.68 per share a year earlier.
The real estate investment trust has maintained its annual revenue forecast of between $5.55 billion and $5.65 billion, with analysts’ average expectation at $5.59 billion. The company also kept its annual core FFO forecast of between $6.60 and $6.75 per share.
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