DigitalBridge Group (DBRG) Q4 2023 earnings summary

Executive summary

• Completed the multi-year transition to an alternative asset manager focused on digital infrastructure; deconsolidated the Operating segment in 4Q23 and moved former operating assets to Investments.

• 4Q23 total revenue was $350.3M, GAAP net income attributable to common stockholders was $100.6M, or $0.61 per share, and distributable earnings (DE) were $17.9M, or $0.10 per share.

• Investment management fee revenue and fee-related earnings (IM FRE) reached quarterly records since leadership changed, supported by fundraising, FEEUM activation, and the InfraBridge acquisition.

Financial highlights

• 4Q23 consolidated revenue rose 29% YoY to $350.3M; fee revenue increased 67% to $74.0M, principal investment income rose to $93.5M from $22.3M, and carried interest was $169.7M, down 4%.

• 4Q23 Adjusted EBITDA was $32.0M versus $17.0M; DE was $17.9M versus a loss of $22.3M. FY23 Adjusted EBITDA was $103.6M and DE was $48.6M, versus $53.6M and a $14.0M loss in FY22.

• FY23 consolidated revenue increased 18% YoY to $821.4M; fee revenue rose 53% to $264.1M, while principal investment income increased 156% to $145.4M and carried interest declined 4% to $363.1M.

• 4Q23 GAAP net income attributable to common stockholders was $100.6M versus a $19.4M loss in 4Q22; continuing-operations EPS was $0.67 basic and $0.63 diluted, versus losses of $0.16 and $0.16.

Outlook and guidance

• 2024E ending FEEUM is $36B–$38B; fee revenue is $335M–$360M and company-wide FRE/Adjusted EBITDA is $150M–$165M, including $40M of catch-up fees in each earnings metric.

• Guidance assumes $7B of new capital formation, offset by expected DBP I/II realizations; fee growth assumes new FEEUM activation without M&A. Guidance excludes incentive fees, carried interest, and principal investment income.

• 2024 plans target $15B in portfolio capex, including $11B for data centers, and $7B of new fee-bearing capital; $0.8B of the capital target had been raised YTD as of the presentation.

• The 2024 plan prioritizes fundraising, launching investment platforms, portfolio-company performance, corporate operating leverage, complementary M&A, and capital-structure optimization; longer-cycle growth and profitability guidance was to be outlined at Investor Day in May 2024.