Equinix, Digital Realty raise 2026 guidance, payout ratios diverge
Equinix (EQIX) and Digital Realty (DLR) raised full-year 2026 guidance in separate earnings releases. Equinix lifted 2026 AFFO per diluted share midpoint to $42.99 and annualized its $5.16 quarterly dividend to $20.64, implying a 48.0% payout. Digital Realty raised 2026 ex-net-promote core FFO midpoint to $8.175 with a $1.22 quarterly dividend, implying 59.7%.
How this was made
The 30-second read
Why it matters
The key trading takeaway is that the same dividend can look covered by very different percentages depending on whether guidance is measured on AFFO including certain items or on core FFO excluding net promote income, and whether one-time fees are quantified.
Market read
Guidance increases and dividend payout ratio methodology differences are likely to drive relative valuation and dividend-coverage expectations for 2026 among data center REITs.
What to watch
Traders may overreact to the headline payout ratios without adjusting for the disclosed one-time components (xScale fees, net promote income, and insurance settlement) and without verifying how much of the guidance lift is recurring versus non-recurring.
Background
Equinix and Digital Realty both issued earnings releases about six days apart, each raising 2026 guidance and declaring dividends, but using different payout ratio denominators and treatment of one-time items.
Ticker impact
Equinix raised its 2026 AFFO per diluted share guidance midpoint to $42.99 and reiterated 2026 capex of $5.0B to $6.0B.
Moderate positive bias near-term as traders reprice 2026 AFFO and dividend coverage, with some skepticism due to one-time fee treatment.
The update is a fresh guidance change with explicit midpoint and capex range, but the release does not quantify the dollar contribution of xScale fees to the guidance adjustment.
Digital Realty raised 2026 core FFO per share (ex net promote income) guidance midpoint to 8.175, implying a 59.7% annualized dividend payout ratio.
Mild to moderate positive bias as the market focuses on the ex-promote metric consistent with the company’s stated full-year payout framing.
The article provides the new guidance midpoint and explains the payout ratio methodology, including how net promote income and an insurance settlement affect quarterly Core FFO.
Market effects
Data center REITs’ dividend coverage can diverge materially depending on AFFO vs ex-promote core FFO definitions, increasing scrutiny of payout ratio methodology.
None explicitly stated.
None explicitly stated.
Counterpoint
The payout ratio comparison may be less informative than it appears because Equinix’s guidance adjustment does not isolate one-time xScale fees, while Digital Realty’s ex-promote framing can exclude economically relevant items.
Key entities
- companyEquinix
Raised 2026 AFFO per diluted share guidance midpoint to $42.99 and annualized dividend to $20.64.
- companyDigital Realty Trust
Raised 2026 core FFO per share (ex net promote income) guidance midpoint to 8.175 and annualized dividend to $4.88.
