Digital Realty Trust Inc (NYSE:DLR) stock fell 6.57% (As on February 16, 12:00:18 AM UTC-4, Source: Google Finance) after the company reported lower than the expected results for the fourth quarter of FY 23. The company delivered net income of $20 million in the fourth quarter of 2023, and net income available to common stockholders of $18 million, or $0.08 per diluted share, compared to $2.33 per diluted share in the previous quarter and ($0.02) per diluted share in the same quarter last year. Digital Realty generated Adjusted EBITDA of $700 million in the fourth quarter of 2023, a 2% increase from the previous quarter and 9% increase over the same quarter last year. The company reported Funds From Operations (FFO) of $484 million in the fourth quarter of 2023, or $1.53 per share, compared to $1.55 per share in the previous quarter and $1.45 per share in the same quarter last year.

Moreover, in the fourth quarter, Digital Realty signed total bookings that are expected to generate $110 million of annualized GAAP rental revenue, including a $39 million contribution from the 0–1 megawatt category and a $13 million contribution from interconnection. The weighted-average lag between new leases signed during the fourth quarter of 2023 and the contractual commencement date was 16 months. In addition to new leases signed, Digital Realty also signed renewal leases representing $210 million of annualized rental revenue during the quarter. Rental rates on renewal leases signed during the fourth quarter of 2023 increased 8.2% on a cash basis and 10.6% on a GAAP basis.

DLR in the fourth quarter of FY 23 has reported the adjusted funds from operations (FFO) per share of $1.63, missing the analysts’ estimates for the adjusted FFO per share of $1.64, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 11 percent to $1.37 billion in the fourth quarter of FY 23, missing the analysts’ estimates for revenue by 2.02%.

Additionally, during the fourth quarter, Digital Realty signed definitive agreements with Brookfield Infrastructure Partners L.P., Cyxtera Technologies and Digital Core REIT to successfully resolve the relationship with Cyxtera. These agreements were completed in conjunction with Brookfield’s announced agreement to acquire Cyxtera, pursuant to its Plan of Reorganization under its Chapter 11 proceedings. Subsequent to year end, Digital Realty closed on the transactions and exercised its purchase option to acquire the data center outside of London, UK, which is expected to close at the end of the first quarter.