DigitalBridge Group (NYSE: DBRG) showed positive results for 3Q23 as it continues raising funds for infrastructure investments. The company completed the DataBank deconsolidation and removed it from its balance sheet, and made gains towards its $8 billion fundraise goal for 2023. Moreover, its 26 portfolio companies that span towers, fiber, data centers and edge infrastructure across global markets all showed monthly recurring revenue growth along with improving order backlogs, particularly in data centers.
Consolidated revenues for the quarter were $477 million, up 11 percent year-over-year led by fee income growth of 58 percent, driven by higher Fee-Earning Equity Under Management. Adjusted EBITDA of $34 million grew 15 percent YoY, with increased earnings from its Investment Management segment offset by reduced ownership in DataBank, one of its two Operating segment assets.
Portfolio company monthly recurring revenues continued to grow across all verticals in the DBRG ecosystem, led by data centers that were up 20 percent YoY and complemented by mid-to-high single digit growth across towers, fiber and small cells. Data center demand for AI workloads continues to be high with elevated leasing expected into 2024. Pricing remains firm as enterprises increasingly recognize data center capacity inventory is tightening.
Fee-Earning Equity Under Management grew by 46 percent YoY to $29.9 billion, powered by organic capital formation and contribution from the InfraBridge acquisition. Assets Under Management grew to $74.6 billion, up 48 percent YoY and is on track to reach the company’s goal of $100 billion AUM by 2025.
Marc Ganzi, DigitalBridge CEO, has set three strategic priorities for the balance of 2023 and into 2024:
- Continue to raise funds for investments. Through 3Q23, the company raised $5.4 billion towards its $8.0 billion goal for 2023 which it expects to meet.
- Simplify the company structure. Having deconsolidated DataBank to where it now owns just 9.8 percent of the company and removed it from the balance sheet, DBRG plans to accomplish a similar move with Vantage Stabilized Data Centers which it expects to complete by year-end 2023.
- Enhance portfolio company performance. DigitalBridge is experiencing solid growth across its diverse group of infrastructure operators. The company believes its portfolio is well-positioned in the early stages of AI-led demand that will require more infrastructure builds and associated capital.
Ganzi comments, “We delivered a solid third quarter, anchored by strong year-over-year revenue growth in our investment management platform and contributions from the DataBank recapitalization. DataBank not only generated great returns and capital back to shareholders, its deconsolidation from our financial statements de-levered the balance sheet and advanced our simplification initiatives.”
By John Celentano, Inside Towers Business Editor
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