Blackstone Digital Infrastructure Trust Inc.: Form 10-Q for the period ended Jun 30, 2026

References herein to “we,” “us,” “our,” “BXDC” and the “company” refer to Blackstone Digital Infrastructure Trust Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “identify” or other similar words or the negatives thereof. These may include our financial estimates and their underlying assumptions, statements about plans, objectives, intentions and expectations with respect to positioning, including the impact of macroeconomic trends and market forces, future operations, repurchases, acquisitions, future performance, and statements about identified but not yet disclosed acquisitions. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements, which are described under the section entitled “Risk Factors” in our prospectus dated May 13, 2026 (the “Prospectus”), filed with the SEC in connection with our initial public offering (the “IPO”) on May 15, 2026 pursuant to Rule 424(b) and as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov (http://www.sec.gov). These factors should be read in conjunction with the other cautionary statements that are included in this document (or our Prospectus and other filings with the SEC). Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Overview

We are a newly organized company focused on acquiring and owning mission-critical data center assets that power the modern digital economy. We target newly-constructed, income-generating, stabilized data center properties leased to investment-grade hyperscale tenants on long-term contracts. We intend to invest in essential digital infrastructure primarily in top data center markets that exhibit strong supply-demand dynamics. We expect to acquire assets with fixed, annual rent escalators and favorable tenant expense reimbursement structures, providing predictable yields and stable cash flows. Our strategy focuses on essential digital infrastructure assets that serve as the backbone for cloud computing, artificial intelligence, and the broader digital transformation driving economic growth. We believe the industry represents a substantial investment opportunity. As of June 30, 2026, we had not yet acquired any data center assets.

We are externally managed by BX REIT Advisors L.L.C. (our “Manager”) pursuant to the terms of the Management Agreement, dated May 15, 2026 (the “Management Agreement”). Our Manager is an affiliate of Blackstone Inc. (“Blackstone”), the world’s largest alternative asset manager with more than $1.3 trillion of assets under management as of June 30, 2026.

We commenced operations upon completion of our IPO on May 15, 2026. We intend to elect to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with the taxable year ending December 31, 2025. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on net taxable income that we distribute annually to our stockholders.

Completion of Initial Public Offering and Overallotment Option

On May 13, 2026, we priced our IPO of 87,500,000 shares of our common stock, par value $0.01 per share, at a public offering price of $20.00 per share, which included 86,741,695 shares sold to investors participating in the offering and 758,305 additional shares issued to IPO investors as bonus shares. Our shares of common stock commenced trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “BXDC” on May 14, 2026. Our IPO was completed on May 15, 2026, resulting in gross proceeds of $1.8 billion.

On May 20, 2026, we announced that the underwriters exercised in full their 30-day option to purchase additional shares of common stock at the public offering price of $20.00 per share. The issuance and sale of an additional 13,119,900 shares (including bonus shares issued in connection therewith) closed on May 20, 2026, bringing total gross proceeds of the IPO to over $2.0 billion. Following the exercise of the overallotment option, we had approximately 100.6 million shares of common stock outstanding.

The following table summarizes the gross proceeds from the IPO ($ in thousands, except share data):

Results of Operations

Revenues

Our activity from our initial formation on November 21, 2025 through the completion of our IPO on May 15, 2026 was limited to our preparation for the IPO. We commenced operations upon completion of the IPO on May 15, 2026. Accordingly, results for the three and six months ended June 30, 2026 reflect approximately 46 days of operations from the IPO closing date through June 30, 2026. There are no comparable prior-period results, as we were formed on November 21, 2025 and had not commenced operations or generated any revenues prior to the closing of the IPO.

As of June 30, 2026, we had not yet acquired any data center assets. The number and type of investments that we acquire will depend upon market conditions, the amount of net proceeds available and other circumstances existing at the time we are acquiring such assets.

We expect our revenues to be primarily derived from long-term leases of newly-constructed, income-generating, stabilized data center properties to investment-grade hyperscale tenants. Our strategy is focused on assets with fixed, annual rent escalators and favorable tenant expense reimbursement structures, providing predictable yields and stable cash flows. We intend to leverage Blackstone’s commitment and expertise in the data center sector, which includes an excellent track record in data center investments, deep sector expertise, and a global network of relationships with hyperscale tenants, developers, and lenders.

Management Fees, Incentive Fees and Expenses

Pursuant to the Management Agreement, the Operating Partnership pays our Manager a Management Fee and an Incentive Fee, and we reimburse our Manager for certain documented costs and expenses. Our Manager has agreed to waive the Management Fee and Incentive Fee for the first six months following the completion of the IPO.

General and Administrative Expenses

General and administrative expenses of $1.4 million for the three and six months ended June 30, 2026 were composed primarily of organization costs, professional fees (including audit, legal and tax advisory), directors’ and officers’ insurance premiums, NYSE listing fees, and other costs associated with being a public company.

Interest Income

Interest income of $9.3 million for the three and six months ended June 30, 2026 was attributable to the investment of net IPO proceeds in cash and cash equivalents pending deployment into data center acquisitions.

Interest Expense

Interest expense of $0.8 million for the three and six months ended June 30, 2026 consisted of commitment fees and amortization of deferred financing costs on our Credit Facility (defined below).

Net Income Per Share

Basic and diluted net income per share for the three months ended June 30, 2026 was $0.14, based on a weighted-average of 50,157,102 shares of common stock outstanding during the period. Basic and diluted net income per share for the six months ended June 30, 2026 was $0.28, based on a weighted-average of 25,217,107 shares of common stock outstanding during the period.

Financial Condition, Liquidity and Capital Resources

We commenced principal operations upon completion of our IPO on May 15, 2026. Our activity from inception through the closing of the IPO was limited to our preparation for the IPO.

Revolving Credit Facility

On May 15, 2026, we entered into a $1.0 billion senior secured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent, and the lenders party thereto. The Credit Facility matures on May 15, 2030, includes borrowing capacity for letters of credit and, subject to customary conditions and additional lender commitments, may be increased to up to $4.0 billion of aggregate revolving commitments.

Interest on borrowings under the Credit Facility is based on SOFR or an alternate base rate, in each case plus a margin, and undrawn commitments bear a commitment fee of 0.35% per annum. The applicable margin is based on our leverage ratio and ranges from 2.00% to 2.50% per annum for SOFR borrowings and 1.00% to 1.50% per annum for alternate base rate borrowings.

Liquidity

Upon completion of our IPO (including the full exercise of the underwriters’ option to purchase additional shares), we received total gross proceeds of over $2.0 billion. After giving effect to underwriting discounts and commissions and estimated offering expenses payable by us, we had approximately $1.9 billion of net proceeds available to execute our business strategy.

We expect to generate liquidity primarily from (i) cash flows from our operations, (ii) borrowings under the Credit Facility and any other financing arrangements we may enter into in the future, and (iii) any future offerings of our equity or debt securities.

Our primary use of cash will be for (i) investment acquisitions and capital expenditures, (ii) the cost of operations (including fees payable to our Manager), (iii) debt service on any borrowings, and (iv) cash distributions to our stockholders to the extent declared by us.

Distributions

To satisfy the requirements for qualification as a REIT and generally not be subject to U.S. federal corporate income and excise tax, we intend to make quarterly distributions of all or substantially all of our REIT taxable income to holders of our common stock out of assets legally available for such purposes. However, until we invest a substantial portion of the net proceeds of our IPO in data center assets, we expect any quarterly distributions will be nominal. Our future distributions will be at the sole discretion of our board of directors.

Use of Offering Proceeds

As of June 30, 2026, we had invested approximately $1.9 billion of net IPO proceeds in cash and cash equivalents.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands):

Cash flows provided by operating activities were $3.7 million during the six months ended June 30, 2026, primarily as a result of interest income on cash and cash equivalents, partially offset by general and administrative expenses.

Cash flows provided by financing activities were $1.9 billion during the six months ended June 30, 2026, primarily as a result of proceeds from the IPO.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared in accordance with GAAP and include the accounts of us and our subsidiaries. The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of our condensed consolidated financial statements. Actual results could differ from those estimates.

Non-GAAP Financial Measures

Funds from Operations and Adjusted Funds from Operations

We had no real estate operations during the three and six months ended June 30, 2026. Accordingly, supplemental non-GAAP measures such as Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), FFO per adjusted share, and AFFO per adjusted share for these periods are not indicative of operating results we expect to generate in future periods once we have acquired income-generating data center properties. We have nevertheless presented FFO, AFFO, FFO per adjusted share, and AFFO per adjusted share below because we believe these measures may be useful to investors and may provide comparability in future periods.

We believe FFO is a meaningful non-GAAP supplemental measure of our operating results. Our condensed consolidated financial statements are presented using historical cost accounting which, among other things, requires depreciation of real estate investments. As a result, our operating results imply that the value of our real estate investments have decreased over time. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and, as such, depreciation under historical cost accounting may be less informative as a measure of our performance. FFO is an operating measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) that is broadly used in the REIT industry. FFO, as defined by NAREIT, is calculated as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of depreciable real property, impairment write-downs on depreciable real property, and real estate-related depreciation and amortization.

We also believe that AFFO is a meaningful non-GAAP supplemental measure of our operating results. AFFO further adjusts FFO to reflect the performance of our portfolio by adjusting for items we believe are not directly attributable to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of organization costs and amortization of stock awards. AFFO is not defined by NAREIT and our calculation of AFFO may not be comparable to disclosures made by other REITs.

We also believe that FFO and AFFO per adjusted share is a meaningful non-GAAP supplemental measure of our operating results. AFFO and FFO per adjusted share is calculated by dividing FFO and AFFO by the weighted-average shares outstanding from May 15, 2026 (the date we closed our IPO) through the end of the period. We utilize AFFO and FFO per adjusted share in assessing per share performance subsequent to our IPO.

FFO, AFFO, FFO per adjusted share, and AFFO per adjusted share should not be considered more relevant or accurate than GAAP net income and GAAP net income per share in evaluating our operating performance. In addition, FFO, AFFO, FFO per adjusted share, and AFFO per adjusted share should not be considered as alternatives to net income and net income per share as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO, AFFO, FFO per adjusted share, and AFFO per adjusted share are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. In addition, our methodology for calculating AFFO, FFO per adjusted share, and AFFO per adjusted share may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported AFFO, FFO per adjusted share, and AFFO per adjusted share may not be comparable to AFFO, FFO per adjusted share, and AFFO per adjusted share reported by other companies.

The following tables present a reconciliation of Net income to FFO and AFFO and Net income per share to FFO and AFFO per adjusted share ($ in thousands, except share and per share data):

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The primary components of our market risk are related to interest rates, tenant creditworthiness, real estate market values, and capital markets generally.

Interest Rate Risks

Interest rate risk is particularly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. Our primary exposure to interest rate risk relates to the use of variable-rate debt, including borrowings under the Credit Facility, to finance real estate acquisitions, development projects, or operations. A rise in interest rates may increase our borrowing costs and reduce the fair value of our real estate investments by applying higher market capitalization rates. Conversely, a decline in interest rates may lower our cost of capital and enhance asset values.

As of June 30, 2026, we had no outstanding borrowings under the Credit Facility.

Credit Risk

We may be exposed to credit risk through tenant lease obligations tied to data center assets that we may acquire. We intend to manage this risk by targeting assets leased to investment-grade-rated, hyperscale tenants, such as leading cloud computing and technology companies, through long-term leases with fixed, annual rent escalators. By limiting our scope to target well-capitalized, investment-grade hyperscale tenants, we are relatively more insulated from short-term shifts in demand or market sentiment, which we believe will enable us to provide stable, attractive risk-adjusted returns over the long term.

Market Value Risks

We may be exposed to market value risk with respect to the fair value of our investments due to changes in market conditions, including interest rates and property cash flows. We intend to manage our exposure to market value risk by maintaining a diversified portfolio of strategically located data center assets in supply-constrained, high-demand markets. However, the fair value of our investments may still fluctuate. Therefore, the amount we will realize upon any future sale is unknown.

The values of data center assets may be adversely affected by a number of factors, including: national, regional and local economic conditions; market-specific supply and demand dynamics; changes or continued weakness in specific technology or connectivity sectors; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes or tax and legal considerations.

Capital Market Risks

We are exposed to risks related to the equity capital markets and our related ability to raise capital through the issuance of our common stock or other equity instruments. We are also exposed to risks related to the debt capital markets and our related ability to finance our business through borrowings under credit facilities or other debt instruments. To comply with the REIT requirements, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and terms of capital we raise.

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) required by paragraph (b) of Rule 13a-15 or Rule 15d-15 as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2026, our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to us that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.

There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures to disclose material information otherwise required to be set forth in our periodic reports.