DigitalBridge Group, Inc. 10-K Analysis & Summary – 2/21/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

DigitalBridge Group, Inc.

10-K

Annual report

Filing date:

02/21/2025

TLDR:

DigitalBridge Group, Inc. reported a decrease in total revenues despite an increase in fee revenue. The company is focused on expanding its FEEUM and streamlining its capital structure.

ELI5:

DigitalBridge, a company that invests in digital infrastructure like data centers, made more money from fees but less overall due to how their investments performed. They’re trying to manage more investments and simplify their finances.

Accession #:

0001679688-25-000017

Published on

March 16, 2025

Analyst Summary

Fee Revenue increased by 25% to $329.7 million, driven by growth in FEEUM.
Total Revenue decreased by 26% to $607.0 million, primarily due to lower carried interest allocation and principal investment income.
Net Income Attributable to Common Stockholders decreased significantly to $11.9 million from $127.6 million in the prior year.
FEEUM increased by 8% to $35.5 billion.
Operating Profit Margin decreased by 44.68% to 18.15%.
Net Profit Margin increased by 340.18% to 24.21%.
Return on Assets (ROA) increased by 228.35% to 4.18%.
Return on Equity (ROE) decreased by 64.81% to 3.60%.
Basic EPS decreased by 91.03% to $0.07.
Debt-to-Equity Ratio decreased by 28.57% to 0.15.
Debt-to-Assets Ratio decreased by 20% to 0.08.
Interest Coverage Ratio decreased by 39.09% to 6.70.
Asset Turnover decreased by 26.09% to 0.17.
Price-to-Earnings Ratio (P/E) increased by 1014.24% to 173.71.
Price-to-Book Ratio (P/B) decreased by 2.27% to 1.29.
Price-to-Sales Ratio (P/S) increased by 42.47% to 4.16.
Enterprise Value to EBITDA (EV/EBITDA) is 12.96.
Revenue Growth decreased by -26.10%.
Net Income Growth increased by 225.50%.
EPS Growth decreased by -91.03%.
AUM increased from $80.1 billion in 2023 to $95.6 billion in 2024.
FEEUM increased from $32.8 billion to $35.5 billion.
FRE attributable to the Operating Company increased from $81.8 million to $107.1 million.
Distributable Earnings increased from $48.6 million to $52.5 million.

Opportunities and Risks

Key risks include market volatility, competition, and regulatory changes.
The company’s strategic focus on digital infrastructure and efforts to reduce leverage are positive.

Potential Implications

Company Performance

Variability of earnings and the impact of market conditions on investment performance.
Growth in AUM and FEEUM indicates growth in the company’s investment management business.
Low debt-to-equity and debt-to-assets ratios indicate a conservative capital structure.

Stock Price

High P/E ratio suggests the stock may be overvalued.
P/B ratio of 1.29 suggests the market values the company slightly above its book value.
P/S ratio of 4.16 is relatively high, indicating investors are paying a premium for each dollar of DigitalBridge’s revenue.

DigitalBridge Group, Inc. (DBRG) SEC Filing Report – Form 10-K (FY 2024)

Executive Summary

This report analyzes DigitalBridge Group, Inc.’s (DBRG) Form 10-K filing for the fiscal year ended December 31, 2024. DBRG, a leading global investment manager in digital infrastructure, reported a decrease in total revenues primarily due to variability in unrealized carried interest and principal investment income, despite an increase in fee revenue. The company continues to focus on expanding its FEEUM and streamlining its capital structure. Key risks include market volatility, competition, and regulatory changes. Overall, the company’s strategic focus on digital infrastructure and efforts to reduce leverage are positive, but investors should be aware of the inherent risks in the investment management business and the variability of earnings. A hold rating is suggested, pending further evidence of consistent profitability and successful capital deployment.

Company Overview

DigitalBridge Group, Inc. (DBRG) is a global investment manager specializing in digital infrastructure, including data centers, cell towers, fiber networks, and edge infrastructure. The company manages capital on behalf of a diverse investor base, including public and private pensions, sovereign wealth funds, and insurance companies. As of December 31, 2024, DBRG had $35.5 billion of fee-earning equity under management (FEEUM). The company operates as a taxable C Corporation.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management highlights the company’s capital raise of $9.0 billion in 2024 and the reduction of leverage through the exchange/redemption of senior notes. The MD&A emphasizes the company’s focus on digital infrastructure and its ability to adapt to changing market conditions. However, the narrative also acknowledges the variability of earnings and the impact of market conditions on investment performance.

Financial Statement Analysis

Key Ratios and Trends

Fee Revenue: Increased by 25% to $329.7 million, driven by growth in FEEUM.
Total Revenue: Decreased by 26% to $607.0 million, primarily due to lower carried interest allocation and principal investment income.
Net Income Attributable to Common Stockholders: Decreased significantly to $11.9 million from $127.6 million in the prior year.
FEEUM: Increased by 8% to $35.5 billion.

Visual Aids

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DigitalBridge Group, Inc. Financial Analysis (2024)

1. Financial Ratio and Metric Analysis:

Profitability:

Gross Profit Margin:
- Ratio/Metric: Not applicable. DigitalBridge does not have a cost of goods sold.
Operating Profit Margin:
- Ratio/Metric: Operating Income / Total Revenues = (Total Revenues – Total Expenses) / Total Revenues = ($607,028 – $496,865) / $607,028 = 18.15%
- Trend: 2023 Operating Profit Margin = ($821,383 – $551,873) / $821,383 = 32.81%. Percentage Change = (18.15% – 32.81%) / 32.81% = -44.68%
- Industry: Compared to asset management industry peers, an operating margin of 18.15% is below average. Many asset managers have operating margins in the 30-40% range.
Net Profit Margin:
- Ratio/Metric: Net Income / Total Revenues = $147,006 / $607,028 = 24.21%
- Trend: 2023 Net Profit Margin = $45,165 / $821,383 = 5.50%. Percentage Change = (24.21% – 5.50%) / 5.50% = 340.18%
- Industry: A net profit margin of 24.21% is relatively strong compared to the broader market, but within the asset management industry, it is fairly average.
Return on Assets (ROA):
- Ratio/Metric: Net Income / Total Assets = $147,006 / $3,513,318 = 4.18%
- Trend: 2023 ROA = $45,165 / $3,562,550 = 1.27%. Percentage Change = (4.18% – 1.27%) / 1.27% = 228.35%
- Industry: An ROA of 4.18% is below average for financial institutions.
Return on Equity (ROE):
- Ratio/Metric: Net Income Attributable to DigitalBridge Group, Inc. / Total Stockholders’ Equity = $70,522 / $1,958,582 = 3.60%
- Trend: 2023 ROE = $185,280 / $1,811,055 = 10.23%. Percentage Change = (3.60% – 10.23%) / 10.23% = -64.81%
- Industry: An ROE of 3.60% is low compared to the average ROE for financial services companies.
Earnings Per Share (EPS) – Basic and Diluted:
- Ratio/Metric:
  - Basic EPS: Net Income Attributable to Common Stockholders / Weighted Average Shares Outstanding (Basic) = $11,881 / 168,437 = $0.07
  - Diluted EPS: Net Income Attributable to Common Stockholders / Weighted Average Shares Outstanding (Diluted) = $11,881 / 168,818 = $0.07
- Trend:
  - Basic EPS: 2023 Basic EPS = $127,551 / 159,868 = $0.78. Percentage Change = ($0.07 – $0.78) / $0.78 = -91.03%
  - Diluted EPS: 2023 Diluted EPS = $127,551 / 169,720 = $0.77. Percentage Change = ($0.07 – $0.77) / $0.77 = -90.91%
- Industry: EPS is significantly below industry averages.

Liquidity:

Current Ratio:
- Ratio/Metric: Current Assets / Current Liabilities. The filing does not provide sufficient information to calculate current assets and current liabilities.
Quick Ratio (Acid-Test Ratio):
- Ratio/Metric: (Current Assets – Inventory) / Current Liabilities. The filing does not provide sufficient information to calculate current assets, inventory, and current liabilities.
Cash Ratio:
- Ratio/Metric: Cash and Cash Equivalents / Current Liabilities. The filing does not provide sufficient information to calculate current liabilities.

Solvency/Leverage:

Debt-to-Equity Ratio:
- Ratio/Metric: Total Debt / Total Stockholders’ Equity = $296,362 / $1,958,582 = 0.15
- Trend: 2023 Debt-to-Equity Ratio = $371,783 / $1,811,055 = 0.21. Percentage Change = (0.15 – 0.21) / 0.21 = -28.57%
- Industry: A debt-to-equity ratio of 0.15 is relatively low, indicating a conservative capital structure.
Debt-to-Assets Ratio:
- Ratio/Metric: Total Debt / Total Assets = $296,362 / $3,513,318 = 0.08
- Trend: 2023 Debt-to-Assets Ratio = $371,783 / $3,562,550 = 0.10. Percentage Change = (0.08 – 0.10) / 0.10 = -20%
- Industry: A debt-to-assets ratio of 0.08 is low, suggesting the company finances its assets primarily through equity.
Interest Coverage Ratio (Times Interest Earned):
- Ratio/Metric: Operating Income / Interest Expense = (Total Revenues – Total Expenses) / Interest Expense = ($607,028 – $496,865) / $16,438 = 6.70
- Trend: 2023 Interest Coverage Ratio = ($821,383 – $551,873) / $24,540 = 11.0. Percentage Change = (6.70 – 11.0) / 11.0 = -39.09%
- Industry: An interest coverage ratio of 6.70 indicates the company can comfortably cover its interest expenses.

Activity/Efficiency:

Inventory Turnover: Not applicable. DigitalBridge is not a retail or manufacturing company.
Days Sales Outstanding (DSO):
- Ratio/Metric: (Accounts Receivable / Total Revenue) * 365. The filing does not provide sufficient information to calculate accounts receivable.
Days Payable Outstanding (DPO):
- Ratio/Metric: (Accounts Payable / Total Revenue) * 365. The filing does not provide sufficient information to calculate accounts payable.
Asset Turnover:
- Ratio/Metric: Total Revenue / Total Assets = $607,028 / $3,513,318 = 0.17
- Trend: 2023 Asset Turnover = $821,383 / $3,562,550 = 0.23. Percentage Change = (0.17 – 0.23) / 0.23 = -26.09%
- Industry: An asset turnover ratio of 0.17 is low, suggesting the company is not generating significant revenue from its asset base.

Valuation:

Price-to-Earnings Ratio (P/E):
- Ratio/Metric: Stock Price / EPS (Basic) = $12.16 / $0.07 = 173.71
- Trend: 2023 P/E Ratio = $12.16 / $0.78 = 15.59. Percentage Change = (173.71 – 15.59) / 15.59 = 1014.24%
- Industry: A P/E ratio of 173.71 is very high, indicating the stock is expensive relative to its earnings.
Price-to-Book Ratio (P/B):
- Ratio/Metric: Market Cap / Total Stockholders’ Equity = (Shares Outstanding * Stock Price) / Total Stockholders’ Equity = (174,202 + 32,876 + 150) * 1000 * $12.16 / $1,958,582,000 = $2,526,984,448 / $1,958,582,000 = 1.29
- Trend: 2023 P/B Ratio = (163,209 + 32,876 + 166) * 1000 * $12.16 / $1,811,055,000 = $2,394,187,776 / $1,811,055,000 = 1.32. Percentage Change = (1.29 – 1.32) / 1.32 = -2.27%
- Industry: A P/B ratio of 1.29 suggests the market values the company slightly above its book value.
Price-to-Sales Ratio (P/S):
- Ratio/Metric: Market Cap / Total Revenue = $2,526,984,448 / $607,028,000 = 4.16
- Trend: 2023 P/S Ratio = $2,394,187,776 / $821,383,000 = 2.92. Percentage Change = (4.16 – 2.92) / 2.92 = 42.47%
- Industry: A P/S ratio of 4.16 is relatively high, indicating investors are paying a premium for each dollar of DigitalBridge’s revenue.
Enterprise Value to EBITDA (EV/EBITDA):
- Ratio/Metric: (Market Cap + Total Debt – Cash) / (Net Income + Interest Expense + Taxes + Depreciation & Amortization) = ($2,526,984,448 + $296,362,000 – $306,298,000) / ($147,006,000 + $16,438,000 + (-$2,944,000) + $33,706,000) = $2,517,048,448 / $194,206,000 = 12.96
- Industry: An EV/EBITDA of 12.96 suggests the company is reasonably valued compared to its earnings before interest, taxes, depreciation, and amortization.

Growth Rates

Revenue Growth:
- Ratio/Metric: (Current Year Revenue – Previous Year Revenue) / Previous Year Revenue = ($607,028 – $821,383) / $821,383 = -26.10%
Net Income Growth:
- Ratio/Metric: (Current Year Net Income – Previous Year Net Income) / Previous Year Net Income = ($147,006 – $45,165) / $45,165 = 225.50%
EPS Growth:
- Ratio/Metric: (Current Year EPS – Previous Year EPS) / Previous Year EPS = ($0.07 – $0.78) / $0.78 = -91.03%

Other Relevant Metrics:

Assets Under Management (AUM):
- Analysis: AUM increased from $80.1 billion in 2023 to $95.6 billion in 2024, indicating growth in the company’s investment management business.
Fee Earning Equity Under Management (FEEUM):
- Analysis: FEEUM increased from $32.8 billion to $35.5 billion, driven by inflows of $7.4 billion, partially offset by outflows of $4.6 billion and market activity.
Fee-Related Earnings (FRE):
- Analysis: FRE attributable to the Operating Company increased from $81.8 million to $107.1 million, driven by higher fee revenue.
Distributable Earnings:
- Analysis: Distributable Earnings increased from $48.6 million to $52.5 million.

2. Commentary:

DigitalBridge Group’s financial performance in 2024 presents a mixed picture. While AUM and FEEUM experienced growth, revenue declined significantly, impacting operating profit margin and asset turnover. Net income and ROA improved substantially, but ROE and EPS decreased. The company maintains a conservative capital structure with low debt-to-equity and debt-to-assets ratios, but the high P/E ratio suggests the stock may be overvalued.