DigitalBridge Group, Inc. (DBRG) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. DigitalBridge Group, Inc. is a global investment manager focused on digital infrastructure, including data centers, cell towers, and fiber networks. As of March 31, 2026, the Company managed $40.8 billion in Fee Earning Equity Under Management (FEEUM). The Company operates as a taxable C Corporation with 97% ownership of its Operating Company (OP).
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $72.2 million | $45.4 million |
| Net Income (Loss) | $2.0 million | $(14.9) million |
| Net Income Attributable to Common Stockholders | $5.3 million | $(0.9) million |
| Diluted EPS (Common) | $0.03 | $(0.01) |
| Cash and Cash Equivalents | $411.3 million | $349.9 million |
| Total Debt (Principal) | $300.0 million | $300.0 million |
| Operating Cash Flow | $(40.0) million | $50.3 million |
Fee Revenue: $87.3 million (down 3% YoY due to absence of catch-up fees, partially offset by higher recurring fees).
Carried Interest: Unrealized reversal of $(44.7) million (improved from $(55.5) million reversal in Q1 2025).
Principal Investment Income: $24.6 million (up from $5.3 million), driven by unrealized gains.
Material Changes vs. Prior Period
- Profitability Turnaround: The Company returned to profitability for common stockholders ($5.3M) compared to a loss of $0.9M in Q1 2025, driven by a significant reduction in unrealized carried interest reversals and higher principal investment income.
- Transaction Costs: Transaction-related costs increased to $14.2 million from $4.4 million, primarily due to costs associated with the proposed acquisition by SoftBank.
- Operating Cash Flow: Shifted from a $50.3 million inflow in Q1 2025 to a $40.0 million outflow in Q1 2026. The 2025 inflow included $34.0 million from a DataBank secondary sale and $10.6 million in insurance recoveries, neither of which were present in 2026.
- Discontinued Operations: Recorded a loss of $5.5 million, including a $7.7 million accrual for a litigation contingent loss (Hernandez v. Colony Capital), partially offset by insurance recoveries.
Guidance, Outlook, and Risks
Proposed Acquisition: On December 29, 2025, DBRG entered into a merger agreement to be acquired by indirect subsidiaries of SoftBank Group Corp. for $16.00 per share in cash. Common stockholder approval was received on April 23, 2026. The transaction is subject to regulatory approvals and other closing conditions, with an expected closing in the second half of 2026. Upon consummation, DBRG will become a wholly-owned subsidiary of SoftBank.
Liquidity: The Company reported $250 million in available corporate cash and has a $100 million Variable Funding Notes (VFN) facility fully available. The Company is in the process of refinancing its corporate debt, which has an anticipated repayment date of September 2026.
Key Risks:
- Merger Uncertainty: Risks related to the timing, consummation, and potential termination of the SoftBank merger, including potential termination fees ($96 million for DBRG, $154 million for SoftBank).
- Legal Proceedings: A jury verdict in Hernandez v. Colony Capital resulted in $10.2 million in compensatory damages and $100 million in punitive damages. The Company's share of punitive damages is estimated at $92 million. The Company intends to appeal and believes compensatory damages are covered by insurance, but the outcome remains uncertain.
- Carried Interest Volatility: Revenue is heavily influenced by unrealized carried interest, which is subject to reversals based on fair value changes of underlying investments.
Investor Verification Checklist
- Merger Status: Verify the status of regulatory approvals and the likelihood of the SoftBank merger closing in H2 2026.
- Litigation Exposure: Monitor the appeal process for the Hernandez verdict and the Company's ability to recover damages via insurance.
- Debt Refinancing: Confirm the terms and timing of the refinancing for the $300 million securitized facility maturing in September 2026.
- Fee Revenue Trends: Assess the sustainability of fee revenue growth absent of "catch-up" fees and the impact of FEEUM fluctuations.
- Carried Interest Clawback: Review the $32.6 million potential clawback obligation and the portion attributable to the Company ($3.7 million) versus employees.