Group 1 - Broadstone Net Lease (BNL) is a REIT that focuses on net leases in the industrial and retail single-tenant commercial real estate markets [1] - The company has a diversified portfolio of tenants across the United States [1] Group 2 - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology [1] - The analyst has researched over 1000 companies and has transitioned to a value investing-focused YouTube channel [1] - The analyst expresses a preference for covering metals and mining stocks, while also being comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Group 1 - The article does not provide any specific information or insights regarding a company or industry [1]

Financial Data and Key Metrics Changes - The company reported a 5.7% increase in quarterly Adjusted Funds From Operations (AFFO) per share compared to Q3 2024, reaching $0.37 per share [35] - Full-year 2025 AFFO per share guidance was raised to a range of $1.49 to $1.50, representing a growth of 4.2% to 4.9% for the year [6][37] - Year-to-date investments totaled $552.6 million, including $353.4 million in new property acquisitions and $150.2 million in build-to-suit developments [7] Business Line Data and Key Metrics Changes - The weighted average initial cash cap rate for new property acquisitions was reported at 7.1%, with a weighted average straight-line yield of 8.2% [7][31] - The build-to-suit program has started seven developments in 2025 with a budgeted deployment of $256.7 million, expected to deliver approximately $28 million of additional Annual Base Rent (ABR) [10][26] - The company achieved a 99.5% lease rate at the end of the quarter, with 100% of base rents collected [32] Market Data and Key Metrics Changes - The Eastern Pennsylvania industrial market is experiencing robust demand, with over 100 active tenants seeking more than 30 million square feet of space [29] - E-commerce continues to drive demand for logistics and distribution assets, particularly in major logistics hubs [12] Company Strategy and Development Direction - The company is focused on a differentiated build-to-suit strategy, which is expected to provide long-term, high-quality, de-risked growth [10][27] - The management emphasized maintaining rigorous discipline around the cost of capital and opportunistic dispositions to enhance portfolio quality [22] - The company plans to balance proactive equity capital market activities with prudent capital recycling to enhance shareholder value [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of their assets and the ability to navigate challenges, citing successful handling of tenant credit events [34] - The company is optimistic about the industrial sector's growth driven by reshoring trends and increased demand for logistics facilities [12][96] - Management noted that while competition for build-to-suit projects has increased, strong relationships with developers provide a competitive edge [45] Other Important Information - The company successfully returned to the investment-grade bond market with a $350 million offering, which was nearly seven times oversubscribed [14][36] - The Board of Directors approved a $0.29 dividend per share, which remains well covered [37] Q&A Session Summary Question: On build-to-suit projects, is capital recycling a preferred outcome? - Management indicated that while they prefer to hold onto build-to-suit projects long-term, they are open to selling if it supports business growth [41][43] Question: Are there more competitive pressures for build-to-suit projects? - Management acknowledged increased competition but emphasized their strong developer relationships that provide ample opportunities [45] Question: What is the outlook for lease expirations and potential backfills? - Management reported a low percentage of ABR at risk and expressed confidence in their ability to manage lease expirations effectively [56] Question: What is the strategy for regular way dispositions? - Management stated that regular way dispositions will focus on portfolio pruning and opportunistic sales, with a goal of reinvesting proceeds into the investment pipeline [58] Question: Any specific tenants on the watch list for potential bad debt? - Management indicated no specific names of concern but noted ongoing monitoring of certain sectors [91]

Financial Performance - Broadstone Net Lease reported quarterly funds from operations (FFO) of $0.37 per share, matching the Zacks Consensus Estimate and showing an increase from $0.35 per share a year ago [1] - The company achieved revenues of $114.17 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.35% and up from $108.4 million year-over-year [2] - The current consensus FFO estimate for the upcoming quarter is $0.37 on revenues of $115.34 million, and for the current fiscal year, it is $1.48 on revenues of $450.84 million [7] Market Performance - Broadstone Net Lease shares have increased approximately 16.8% since the beginning of the year, compared to a 17.2% gain in the S&P 500 [3] - The company has surpassed consensus revenue estimates three times over the last four quarters, while it has only exceeded consensus FFO estimates once in the same period [2][1] Future Outlook - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call and the outlook for future FFO expectations [3][4] - The estimate revisions trend for Broadstone Net Lease was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Residential industry, to which Broadstone Net Lease belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Portfolio Overview - As of September 30, 2025, the portfolio includes 759 properties, with 752 located in 44 U.S. states and 7 in 4 Canadian provinces[112] - The portfolio was approximately 99.5% leased with an annualized base rent (ABR) weighted average remaining lease term of approximately 9.5 years[117] - The company has a diversified portfolio with no single geographic concentration exceeding 9.2% of ABR[117] - The total number of properties in the portfolio is 759, with a diverse range of tenants across various industries[125] - The company has a total of 759 properties with an Annual Base Rent (ABR) of $412,944,000, covering 40,653,000 square feet[130] Financial Performance - Net income for the three months ended September 30, 2025, was $27,065, representing an increase of $7,235, or 36.5%, compared to $19,830 for the previous quarter[154] - Lease revenues, net for the three months ended September 30, 2025, increased by $1,181, or 1.0%, to $114,167, compared to $112,986 for the previous quarter[146] - For the nine months ended September 30, 2025, lease revenues, net increased by $16,174, or 5.1%, to $335,844 compared to $319,670 for the same period in 2024[157] - Net income for the nine months ended September 30, 2025, was $64.4 million, a decrease of 54.5% compared to $141.4 million in 2024, primarily due to a $60.7 million decrease in gains on real estate sales[168] Investment Activity - For the three months ended September 30, 2025, total investments amounted to $203.9 million, with an initial cash capitalization rate of 7.1%[118] - The investment activity for the nine months ended September 30, 2025, included acquisitions totaling $253.2 million, with a straight-line yield of 8.2%[118] - The company closed on $145.0 million of acquisitions and revenue-generating capital expenditures at a weighted average cash capitalization rate of 7.1% during the three months ended September 30, 2025[146] Debt and Financing - As of September 30, 2025, total debt outstanding was $2.4 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.7x[170] - Total unsecured debt as of September 30, 2025, was $2.28 billion, including $1.2 billion in senior unsecured notes[180] - The company completed a public offering of $350.0 million in senior unsecured notes with a 5.00% interest rate, maturing in 2032, to repay borrowings and fund investments[182] - A new unsecured term loan of $400.0 million was established, maturing in March 2028, with an additional $100.0 million drawn to repay part of the revolving credit facility[184] Operational Metrics - Approximately 97.5% of leases have contractual rent escalations, with an ABR weighted average increase of 2.0%[117] - Approximately 96.6% of tenants provide financial reporting, with 82.0% required to provide specified financial information periodically[117] - The company has 207 industrial properties, totaling 252,887 thousand square feet, which represents 81.4% of the total square footage[125] - The largest tenant industry is Restaurants, accounting for 13.3% of the total ABR and 2.9% of the total square feet[130] Impairment and Expenses - The company recognized an impairment charge of $6,999 for the three months ended September 30, 2025, down from $11,939 in the previous quarter, reflecting a $4.9 million decrease[149] - The impairment charge for the nine months ended September 30, 2025, was $35.1 million, primarily due to changes in the long-term hold strategy, including a $14.6 million charge on two healthcare properties[160] - General and administrative expenses increased by $1.7 million, mainly due to higher stock-based compensation expenses[162] Cash Flow and Liquidity - As of September 30, 2025, cash and cash equivalents totaled $83.3 million, up from $11.2 million a year earlier, with net cash provided by operating activities at $214.9 million[196] - The company reported a net cash used in investing activities of $(390.6) million, primarily due to increased build-to-suit development investments[197] - Financing activities generated net cash of $243.0 million, reflecting increased proceeds from unsecured term loans and senior unsecured notes[198] Market and Economic Conditions - The company anticipates that challenging macroeconomic conditions will continue to limit acquisition volumes and earnings growth compared to historical periods[116] - The company is exposed to foreign currency exchange rate risk due to investments in Canada, with a 10% change in the exchange rate between the Canadian dollar and USD potentially resulting in a $7.2 million unrealized foreign currency gain or loss[219]

Financial Performance - Net income for Q3 2025 was $27,065 thousand, a 36.5% increase from $19,830 thousand in Q2 2025[16] - Net income attributable to Broadstone Net Lease, Inc. for the three months ended September 30, 2025, was $26,466,000, compared to $35,608,000 for the same period in 2024, indicating a decrease of 25.7%[18] - Basic net earnings per common share for the three months ended September 30, 2025, were $0.14, compared to $0.19 in the same period last year, a decline of 26.3%[18] - For the three months ended September 30, 2025, the company reported a net income of $27,065,000, an increase from $19,830,000 in the previous quarter[20] - EBITDA for the three months ended September 30, 2025, was $95,749,000, compared to $83,716,000 in the prior quarter, reflecting a growth of 14.4%[35] - Adjusted EBITDAre for the same period was $100,252,000, up from $98,242,000 in the previous quarter, indicating a 2.0% increase[37] Assets and Liabilities - Total assets reached $5,519,271 thousand in Q3 2025, compared to $5,326,679 thousand in Q2 2025, reflecting an increase of 3.62%[16] - Total liabilities increased to $2,506,762 thousand in Q3 2025 from $2,290,858 thousand in Q2 2025, an increase of 9.45%[16] - Total liabilities as of September 30, 2025, were $2,506,762,000, an increase from $2,124,927,000 a year prior, marking a rise of 17.9%[17] - The company’s total debt as of September 30, 2025, was $2,353,029,000, which constitutes 40.0% of total capitalization[25] - The company’s net debt stands at $2,269,708,000, an increase from $1,941,756,000 in the previous year[38] - The gross debt has risen to $2,353,028,000 compared to $1,952,974,000 as of September 30, 2024, indicating a significant increase in leverage[38] Cash Flow and Operations - Net cash provided by operating activities was $64,190 thousand in Q3 2025, down from $79,280 thousand in Q2 2025, a decrease of 18.99%[16] - Funds From Operations (FFO) for Q3 2025 was $70,969 thousand, slightly down from $73,695 thousand in Q2 2025, a decrease of 3.7%[16] - Core FFO per share, diluted, decreased to $0.35 in Q3 2025 from $0.39 in Q2 2025, a decline of 10.26%[16] - Total operating expenses for the three months ended September 30, 2025, were $63,417,000, down from $77,369,000 in the same quarter of 2024, a decrease of 18.0%[18] - Adjusted Funds From Operations (AFFO) stood at $74,314,000, slightly up from $74,308,000 in the prior quarter, showing a marginal increase[20] Investments and Acquisitions - Investment in rental property increased to $5,147,649 thousand in Q3 2025, up from $5,058,791 thousand in Q2 2025, representing a growth of 1.75%[16] - The company completed 7 acquisitions year-to-date in 2025, totaling an acquisition price of $253,188,000 for 10 properties[47] - Total investments for the year-to-date 2025 amount to $433,025,000, with a weighted average lease term of 12.3 years[47] - The initial cash capitalization rate for acquisitions in Q3 2025 is 7.1%, consistent with the previous quarters, indicating stable investment returns[47] Property and Lease Information - Total lease revenues for the three months ended September 30, 2025, reached $114,167,000, an increase from $112,986,000 in the previous quarter, representing a growth of approximately 1.0%[22] - Total annualized base rent increased to $412.9 million as of September 30, 2025, up from $395.5 million in 2024, representing a growth of 4.5%[61] - Occupancy rate based on square footage reached 99.5% as of September 30, 2025, compared to 99.0% in 2024[61] - Rent collection rate improved to 100.0% in the latest quarter, up from 99.1% in the same period last year[61] - The company has 204 tenants across 759 properties in 44 U.S. states and 4 Canadian provinces[61] Debt and Financial Ratios - The weighted average interest rate on all outstanding borrowings was 4.09% as of September 30, 2025[33] - The net debt to annualized EBITDAre ratio is 5.7x, up from 5.3x in the previous quarter, reflecting a decline in financial leverage efficiency[38] - The company maintains a leverage ratio of 0.34, well below the required maximum of 0.60 to 1.00, demonstrating strong compliance with financial covenants[40] - The fixed charge coverage ratio is 3.23, significantly above the required minimum of 1.50 to 1.00, showcasing strong cash flow generation[40] Development and Future Projects - As of September 30, 2025, the total projected rentable square feet for in-process developments is 2,252, with a total project investment of $370,868,000[49] - The company expects to update project timelines quarterly based on actual construction progress and costs[53] - The estimated cash capitalization rate for the total in-process developments is 7.5%, with a straight-line yield of 8.9%[49] - The estimated total project investment for development properties will be updated quarterly, reflecting any significant changes in expected costs[100]

Core Insights - Broadstone Net Lease has scheduled its third quarter 2025 earnings release and conference call [1] Group 1 - The earnings release will provide insights into the company's financial performance for the third quarter of 2025 [1] - A conference call will follow the earnings release, allowing for further discussion and analysis of the results [1]

Core Viewpoint - Broadstone Net Lease has successfully closed a $350 million senior notes offering, indicating strong market demand and confidence in the company's financial stability [1] Group 1 - The offering consists of senior notes that are expected to enhance the company's capital structure and provide additional liquidity for future investments [1] - The proceeds from the offering will be utilized for general corporate purposes, which may include funding acquisitions and other growth initiatives [1] - This move reflects the company's strategy to optimize its financing options and support its ongoing growth trajectory in the net lease sector [1]

Group 1 - Broadstone Net Lease has announced the pricing of $350 million in senior notes due in 2032 [1] - The issuance of these senior notes is part of the company's strategy to enhance its capital structure [1] - The proceeds from the notes will be used for general corporate purposes, which may include funding acquisitions and other investments [1]

Core Insights - An active investing strategy focuses on identifying breakout stocks within a specific price range, with guidelines to sell if prices fall below the lower band and hold for gains if they exceed the upper band [1] - Selected breakout stocks for today include Sally Beauty Holdings, Inc. (SBH), Broadstone Net Lease, Inc. (BNL), and Opus Genetics, Inc. (IRD) [1] Breakout Stock Selection - Breakout stocks are identified by calculating support and resistance levels, where support is the lower bound and resistance is the upper bound of stock movements [2] - Demand is lowest at the support level, indicating traders are willing to sell, while at the resistance level, traders are inclined to buy [3] Genuine Breakout Criteria - A genuine breakout occurs when the previous resistance level becomes the new support level, validated by long-term price trends [5] - Correct identification of breakout stocks can lead to significant returns, even if initial prices seem unattractive [5] Screening Criteria - Stocks must show a percentage price change over four weeks between 10% and 20% [6] - Current price must be at least 90% of the 52-week high [6] - Stocks must have a Zacks Rank of 1 (Strong Buy) or 2 (Buy) to ensure historical outperformance [6] Selected Stocks Overview - **Sally Beauty Holdings, Inc. (SBH)**: Expected earnings growth of 8.9% for the year, currently holds a Zacks Rank 1 [9] - **Broadstone Net Lease, Inc. (BNL)**: Anticipated earnings growth of 3.5% for the current year, currently holds a Zacks Rank 2 [10] - **Opus Genetics, Inc. (IRD)**: Projected earnings growth of 74.4% for the year, currently holds a Zacks Rank 2 [11]