Essential Properties Realty Trust, Inc. (NYSE:EPRT) is one of the 20 Best Stocks to Buy and Hold for a Lifetime, selected for its consistent revenue and dividend growth. Stifel Maintains Its Buy Rating on Essential Properties Realty Trust, Inc. (EPRT), Lowers PT to $35.00 Citing the company’s solid portfolio and financial standing, Stifel maintained its Buy rating on Essential Properties Realty Trust, Inc. (NYSE:EPRT) on September 17, 2025, but marginally lowered its price target to $35.00. With sales of ...

Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm a Navy veteran who enjoys dividend investing in quality blue-chip stocks, BDC's, and REITs. I am a buy-and-hold investor who prefers quality over quantity and plans to supplement his retirement income ...

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Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.46, representing a 7% increase compared to Q2 2024 [19] - Total AFFO for the quarter was $93 million, up 21% from the same period in 2024 [19] - General and administrative expenses increased to $10.7 million from $8.7 million year-over-year, primarily due to increased compensation expenses [20] - The company declared a cash dividend of $0.30, resulting in an AFFO payout ratio of 65% [20] - Income-producing gross assets reached $6.6 billion at quarter end [21] Business Line Data and Key Metrics Changes - The company invested $334 million in the second quarter at a weighted average cash yield of 7.9% [6][11] - The weighted average lease term for new investments was 19.5 years, with a weighted average annual rent escalation of 2.2% [11] - The portfolio ended the quarter with investments in 2,190 properties leased to over 400 tenants, with a weighted average lease term of 14 years [9] - Same store rent growth was reported at 1.4%, with occupancy at 99.6% [14] Market Data and Key Metrics Changes - The company closed $642 million of investments in the first half of the year and increased its full-year investment guidance range to $1 billion to $1.2 billion [8][9] - The weighted average unit level coverage ratio was 3.4 times, indicating strong profitability and cash flow generation by tenants [10] - The company sold 23 properties for $46.2 million in net proceeds during the quarter, with an average cash yield of 7.3% [17] Company Strategy and Development Direction - The company focuses on middle market sale leasebacks with growing operators in targeted industries, emphasizing the value of recurring business with its tenant base [6][8] - The management anticipates that competition may increase as capital markets normalize, leading to potential cap rate compression [8] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support external growth [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting favorable conditions for sourcing attractive investment opportunities [6] - The company is increasing its 2025 AFFO per share guidance to a range of $1.86 to $1.89, reflecting an 8% growth at the midpoint [23] - Management highlighted strong portfolio performance and healthy tenant credit trends, with no major concerns emerging in the credit landscape [71] Other Important Information - The company raised approximately $119 million of equity through its ATM program during the quarter [21] - The pro forma net debt to annualized adjusted EBITDA was 3.5 times at quarter end [23] Q&A Session Summary Question: What is preventing the company from leaning more into acquisitions despite a strong pipeline? - Management indicated they are leaning strongly into acquisitions but are conservative in guidance due to limited visibility on the pipeline [30] Question: Can you provide an update on occupancy and the quantum of assets in the vacancy bucket? - Management noted a slight increase in vacancy with nine properties out of 2,190, primarily in the restaurant space, and emphasized strong forward indicators of risk [31][32] Question: What are the expectations regarding competition and cap rates? - Management expects competition to increase as substantial capital has been raised for net lease investments, which may impact transaction markets [39][40] Question: Can you elaborate on the acquisition of the Whistle car wash portfolio? - Management explained that the acquisition was part of a strategy to manage industry concentration and that the portfolio had strong lease economics [58][61] Question: How does the company view the current credit environment? - Management expressed confidence in the stability of cash flows and tenant performance, with no major concerns emerging [71] Question: What is the company's strategy regarding future debt capital? - Management indicated a preference for the bond market as a long-term source of permanent debt capital, while remaining opportunistic in the current market [125][126]

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.46, representing a 7% increase compared to Q2 2024 [18] - Total AFFO for the quarter was $93 million, up 21% from the same period in 2024 [18] - General and administrative expenses increased to $10.7 million from $8.7 million year-over-year, primarily due to increased compensation expenses [19] - The company declared a cash dividend of $0.30, resulting in an AFFO payout ratio of 65% [19] - Income-producing gross assets reached $6.6 billion at quarter end [20] Business Line Data and Key Metrics Changes - The company invested $334 million in the second quarter at a weighted average cash yield of 7.9% [11] - The investment activity was broad-based across most top industries, with a weighted average initial lease term of 19.5 years and a weighted average annual rent escalation of 2.2% [11] - Same store rent growth was reported at 1.4% with an occupancy rate of 99.6% [14] Market Data and Key Metrics Changes - The company closed $642 million of investments in the first half of the year and increased its full-year investment guidance range to $1 billion to $1.2 billion [8] - The weighted average lease term remained at 14 years, with 4.9% of annual base rent expiring over the next five years [8] Company Strategy and Development Direction - The company focuses on middle market sale leasebacks with growing operators in targeted industries, emphasizing the importance of recurring business with its tenant base [6] - The company expects investment cap rates to trend lower in 2025 due to anticipated competition as capital markets normalize [7] - The company aims to maintain a well-capitalized balance sheet with low leverage and significant liquidity to support external growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, noting strong tenant credit trends and healthy same store rent performance [6] - The company remains optimistic about its investment pipeline and the overall performance of its portfolio [24] - Management indicated that while competition may increase, the company continues to have ample opportunities and a strong capital position [36] Other Important Information - The company sold 23 properties for $46.2 million in net proceeds during the quarter, highlighting the importance of owning liquid properties [16] - The company has a weighted average unit level coverage ratio of 3.4 times, indicating strong profitability and cash flow generation by its tenants [9] Q&A Session Summary Question: What is preventing the company from leaning more into acquisitions? - The company is leaning strongly into acquisitions but maintains conservative guidance due to limited visibility on the pipeline [26][28] Question: Can you provide an update on occupancy and the quantum of assets in the vacancy bucket? - The company has nine properties out of 2,190 that are vacant, with an average property value of $3 million [29][30] Question: What are the expectations for competition impacting cap rates? - The company expects competition to eventually impact the transaction market, but currently has a strong opportunity set [36][37] Question: Can you elaborate on the acquisition of the Whistle car washes portfolio? - The company managed its car wash exposure while acquiring well-established sites with strong lease coverage [54][56] Question: How does the company view the credit side of its portfolio? - The company sees stability in cash flows and no major concerns emerging from its operators [64] Question: What are the characteristics the company looks for in convenience store investments? - The company seeks well-positioned convenience stores with strong inside store sales and stable corporate credit [102][103]

Investor Presentation and Supplemental Information 146, 204, 238 Second Quarter 2025 Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements can be identified by the use of words such as "expect," "plan," "will," "estimate," "project," "intend," "believe," "guidance," and other similar expressions that do not relate to historical matters. These forward-looki ...

Core Viewpoint - Essential Properties (EPRT) reported quarterly funds from operations (FFO) of $0.46 per share, which missed the Zacks Consensus Estimate of $0.47 per share, representing an FFO surprise of -2.13% [1] Financial Performance - The company posted revenues of $137.06 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 2.92%, compared to $109.27 million in the same quarter last year [2] - Over the last four quarters, the company has not surpassed consensus FFO estimates, but it has topped consensus revenue estimates three times [2] Stock Performance - Essential Properties shares have declined approximately 1.3% since the beginning of the year, while the S&P 500 has gained 7.3% [3] - The current consensus FFO estimate for the upcoming quarter is $0.48 on revenues of $138.26 million, and for the current fiscal year, it is $1.91 on revenues of $543.84 million [7] Industry Outlook - The REIT and Equity Trust - Retail industry is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for June 30, 2025, reflect significant growth in assets, revenues, and net income, primarily driven by portfolio expansion [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$6,289,589** | **$5,798,682** | | Net Investments | $6,051,213 | $5,552,606 | | Cash and cash equivalents | $20,777 | $40,713 | | **Total Liabilities** | **$2,451,603** | **$2,226,555** | | Unsecured term loans, net | $1,723,074 | $1,721,114 | | Revolving credit facility | $200,000 | $0 | | **Total Equity** | **$3,837,986** | **$3,572,127** | - Total assets grew by **8.5%** to **$6.29 billion** as of June 30, 2025, from **$5.80 billion** at the end of 2024, primarily due to an increase in net real estate investments Total liabilities increased by **10.1%** to **$2.45 billion**, largely driven by a **$200 million** draw on the revolving credit facility[8](index=8&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$137,062** | **$109,268** | **$266,416** | **$212,770** | | Rental Revenue | $129,108 | $104,369 | $250,900 | $202,880 | | **Net Income Attributable to Stockholders** | **$63,212** | **$51,517** | **$119,320** | **$98,491** | | Diluted Net Income Per Share | $0.32 | $0.29 | $0.61 | $0.57 | - Total revenues for Q2 2025 increased **25.4%** YoY to **$137.1 million**, and for the first six months of 2025, revenues grew **25.2%** YoY to **$266.4 million** This growth was primarily driven by an increase in rental revenue from portfolio expansion[12](index=12&type=chunk) - Net income attributable to stockholders for Q2 2025 rose **22.7%** YoY to **$63.2 million** For the six-month period, it increased **21.1%** YoY to **$119.3 million**[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$176,939** | **$147,888** | | **Net cash used in investing activities** | **($570,976)** | **($560,906)** | | Investment in real estate | ($548,275) | ($408,823) | | **Net cash provided by financing activities** | **$370,128** | **$388,547** | | Proceeds from issuance of common stock, net | $298,809 | $244,735 | | Borrowings under revolving credit facility | $355,000 | $255,000 | | Repayments under revolving credit facility | ($155,000) | ($10,000) | | Dividends paid | ($114,263) | ($97,418) | | **Net decrease in cash** | **($23,909)** | **($24,471)** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company operates in one reportable segment, focusing on single-tenant properties net leased on a long-term basis to middle-market companies in service-oriented or experience-based businesses[30](index=30&type=chunk)[36](index=36&type=chunk) Investment Activity (in thousands) | Investment Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Number of properties acquired | 121 | 141 | | Total investments (including acquisition costs) | $605,000 | $506,857 | Debt Summary (in thousands) | Debt Summary | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured term loans | $1,730,000 | $1,730,000 | | Senior unsecured notes | $400,000 | $400,000 | | Revolving Credit Facility | $200,000 | $0 | | **Total principal outstanding** | **$2,330,000** | **$2,130,000** | - In March 2025, the company completed a follow-on offering of **9,430,000 shares** via forward sale agreements, with expected net proceeds of **$285.2 million** As of June 30, 2025, no shares under these agreements have been settled[167](index=167&type=chunk) - As of June 30, 2025, the company had future commitments to fund **$149.1 million** for development, construction, and renovation costs at its properties[189](index=189&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong performance to a disciplined investment strategy, portfolio expansion, and prudent capital management [Overview and Portfolio Characteristics](index=42&type=section&id=Overview%20and%20Portfolio%20Characteristics) - The company focuses on single-tenant properties net leased to middle-market companies in service-oriented or experience-based businesses, which are considered less susceptible to e-commerce pressures[217](index=217&type=chunk) Portfolio Characteristics | Portfolio Metric | As of June 30, 2025 | | :--- | :--- | | Number of Properties | 2,190 | | Annualized Base Rent | $507.8 million | | Occupancy | 99.6% | | Weighted Average Lease Term | 14.3 years | | Weighted Average Rent Coverage | 3.4x | | Average Investment per Property | $3.0 million | [Business and Growth Strategies](index=44&type=section&id=Business%20and%20Growth%20Strategies) - The company's growth strategy is centered on originating sale-leaseback transactions with middle-market companies, leveraging its management team's extensive relationships During the first six months of 2025, **92%** of new real estate investments were from sale-leasebacks[236](index=236&type=chunk) - A key strategic focus is maintaining a diversified portfolio, with a long-term goal that no single tenant exceeds **5%** of annualized base rent and no single property exceeds **1%**[234](index=234&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity needs include funding investment activities, servicing debt, and paying dividends The company expects to meet short-term needs with cash on hand, operating cash flow, borrowings under its **$1.0 billion** Revolving Credit Facility, and proceeds from its ATM program[248](index=248&type=chunk)[251](index=251&type=chunk) - The company targets a net debt level of less than **six times** its annualized adjusted EBITDAre As of June 30, 2025, all long-term debt was either fixed-rate or effectively fixed through hedging strategies[241](index=241&type=chunk)[255](index=255&type=chunk) - As of June 30, 2025, the company had a remaining commitment of approximately **$149.1 million** for tenant construction financing and reimbursements, expected to be funded by June 30, 2026[249](index=249&type=chunk) [Results of Operations](index=59&type=section&id=Results%20of%20Operations) - For Q2 2025 vs Q2 2024, rental revenue increased by **$24.7 million (23.7%)** primarily due to the growth in the real estate portfolio Net income attributable to stockholders grew by **$11.7 million (22.7%)**[301](index=301&type=chunk)[302](index=302&type=chunk) - For the six months ended June 30, 2025 vs 2024, rental revenue increased by **$48.0 million (23.7%)**, and net income attributable to stockholders grew by **$20.8 million (21.1%)**, driven by acquisitions made in 2024 and early 2025[315](index=315&type=chunk)[316](index=316&type=chunk) - Interest expense increased by **$15.8 million (48.0%)** for the first six months of 2025 compared to the same period in 2024, due to a higher outstanding debt balance and increased interest rates[315](index=315&type=chunk)[325](index=325&type=chunk) [Non-GAAP Financial Measures](index=62&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP Financial Measures (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | FFO | $100,455 | $84,241 | $192,585 | $162,089 | | Core FFO | $100,455 | $84,241 | $192,585 | $162,089 | | AFFO | $93,021 | $77,117 | $178,722 | $148,234 | Debt Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt | $2,319,755 | $2,117,517 | | Net Debt | $2,308,931 | $2,085,022 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate risk is managed through hedging, with the Revolving Credit Facility being the primary variable-rate exposure - The company's variable-rate term loans (2027, 2028, 2029, 2030 Term Loans) are hedged with interest rate swaps, effectively fixing the interest rates[349](index=349&type=chunk) - The main exposure to interest rate fluctuations is from the Revolving Credit Facility A sensitivity analysis indicates that a **100 basis point** increase in rates would result in a **$2.0 million** increase in annual interest expense based on the balance at June 30, 2025[350](index=350&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[356](index=356&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[357](index=357&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, not expecting a material adverse financial impact - Management believes that no current legal proceedings, individually or in aggregate, will have a material adverse effect on the company's business or financial condition[360](index=360&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the current period - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, have occurred[361](index=361&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=69&type=section&id=Other%20Items) This section reports no unregistered equity sales, no senior security defaults, and no other material information - The report indicates no unregistered sales of equity securities (Item 2), no defaults upon senior securities (Item 3), and no other material information to disclose (Item 5) for the quarter ended June 30, 2025[362](index=362&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk)

```markdown [Financial & Operating Highlights](index=1&type=section&id=Financial%20%26%20Operating%20Highlights) [Second Quarter 2025 Financial and Operating Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operating%20Highlights) In the second quarter of 2025, Essential Properties demonstrated strong growth, with Net Income per Share rising 10% to $0.32 and AFFO per Share increasing 7% to $0.46 compared to Q2 2024 Second Quarter 2025 Key Financial and Operating Metrics | Metric | Value | Change vs Q2 2024 | | :--- | :--- | :--- | | **Investments** | $334.0 million | - | | Weighted Avg Cash Cap Rate | 7.9% | - | | **Dispositions (Net Proceeds)** | $46.2 million | - | | Weighted Avg Cash Cap Rate | 7.3% | - | | **Net Income per Share** | $0.32 | +10% | | **AFFO per Share** | $0.46 | +7% | | **Equity Raised (ATM Program)** | $118.9 million | - | | **Pro Forma Net Debt / Ann. Adj. EBITDAre** | 3.5x | - | [Year to Date 2025 Financial and Operating Highlights](index=1&type=section&id=Year%20to%20Date%202025%20Financial%20and%20Operating%20Highlights) For the first six months of 2025, the company invested $641.7 million at a 7.9% weighted average cash cap rate, contributing to a 7% year-over-year increase in AFFO per share to $0.91 Year to Date 2025 Key Financial and Operating Metrics | Metric | Value | Change vs YTD 2024 | | :--- | :--- | :--- | | **Investments** | $641.7 million | - | | Weighted Avg Cash Cap Rate | 7.9% | - | | **Dispositions (Net Proceeds)** | $70.5 million | - | | Weighted Avg Cash Cap Rate | 7.2% | - | | **Net Income per Share** | $0.61 | +7% | | **AFFO per Share** | $0.91 | +7% | - Key capital activities in the first half of 2025 included upsizing the revolving credit facility to **$1.0 billion** and raising a total of **$431.8 million** in gross equity through a follow-on offering and the ATM program[3](index=3&type=chunk) - A significant portion of these shares (**16.5 million**) remain unsettled on a forward basis, representing estimated net proceeds of **$507.4 million**[3](index=3&type=chunk) [Activity Subsequent to Second Quarter 2025](index=1&type=section&id=Activity%20Subsequent%20to%20Second%20Quarter%202025) Subsequent to the end of the second quarter, the company continued its portfolio management activities, investing an additional $8.0 million and realizing $1.8 million in gross proceeds from dispositions Subsequent Activity Metrics | Activity | Amount | | :--- | :--- | | Investments | $8.0 million | | Dispositions (Gross Proceeds) | $1.8 million | [Management Commentary and Portfolio Overview](index=2&type=section&id=Management%20Commentary%20and%20Portfolio%20Overview) [CEO Comments](index=2&type=section&id=CEO%20Comments) The CEO expressed a positive outlook, highlighting the company's strong performance in the first half of the year, characterized by resilient portfolio trends, robust investment execution, and proactive capital management - CEO Pete Mavoides noted that the year has been positive relative to expectations due to:[5](index=5&type=chunk) - Resilient portfolio trends[5](index=5&type=chunk) - Strong execution on investments[5](index=5&type=chunk) - Proactive capital markets activity[5](index=5&type=chunk) - A substantial investment pipeline despite a fluid macroeconomic backdrop[5](index=5&type=chunk) [Portfolio Highlights](index=2&type=section&id=Portfolio%20Highlights) As of June 30, 2025, the company's portfolio comprised 2,190 properties with a high occupancy rate of 99.6%, a long weighted average lease term of 14.3 years, and a healthy rent coverage ratio of 3.4x Portfolio Key Metrics | Metric | Value (as of June 30, 2025) | | :--- | :--- | | Number of properties | 2,190 | | Weighted average lease term (WALT) | 14.3 years | | Weighted average rent coverage ratio | 3.4x | | Top 10 tenant concentration (% of cash ABR) | 17.6% | | Weighted average occupancy | 99.6% | | Service-oriented or experience-based (% of cash ABR) | 93.0% | [Portfolio Activity](index=2&type=section&id=Portfolio%20Activity) [Investments](index=2&type=section&id=Investments) The company invested $334.0 million in Q2 and $641.7 million year-to-date, maintaining a consistent weighted average cash cap rate of 7.9%, with a high percentage of sale-leaseback transactions and reliance on existing relationships Investment Metrics | Investment Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Investment volume | $334.0 million | $641.7 million | | Number of properties | 77 | 125 | | Wtd. avg. cash / GAAP cap rate | 7.9% / 9.7% | 7.9% / 9.6% | | Wtd. avg. lease escalation | 2.2% | 2.2% | | % Sale-leaseback transactions | 93% | 92% | | % Existing relationship | 88% | 87% | | WALT | 19.5 years | 18.5 years | [Dispositions](index=3&type=section&id=Dispositions) In Q2 2025, the company generated $46.2 million in net proceeds from the sale of 23 properties, achieving a net gain of $2.1 million, with year-to-date dispositions totaling $70.5 million from 34 properties Disposition Metrics | Disposition Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Net proceeds | $46.2 million | $70.5 million | | Number of properties sold | 23 | 34 | | Net gain / (loss) | $2.1 million | $7.1 million | | Wtd. avg. cash cap rate | 7.3% | 7.2% | [Loan Repayments](index=3&type=section&id=Loan%20Repayments) The company received $3.4 million in loan principal repayments during Q2 2025 and $5.8 million year-to-date, with the repaid loans having a weighted average interest rate of 9.1% for the quarter Loan Repayment Metrics | Loan Repayment Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Proceeds—Principal | $3.4 million | $5.8 million | | Number of properties | 2 | 5 | | Weighted average interest rate | 9.1% | 8.4% | [Capital Structure and Liquidity](index=3&type=section&id=Capital%20Structure%20and%20Liquidity) [Leverage and Liquidity](index=3&type=section&id=Leverage%20and%20Liquidity) As of June 30, 2025, the company maintained a strong liquidity position of $1.3 billion, with leverage at 4.5x Net Debt to Annualized Adjusted EBITDAre, improving to 3.5x on a pro forma basis Leverage and Liquidity Metrics | Metric (as of June 30, 2025) | As Reported | Pro Forma | | :--- | :--- | :--- | | Net debt to Annualized Adjusted EBITDAre | 4.5x | 3.5x | | Cash and cash equivalents | $21.1 million | $328.5 million | | Unused revolving credit facility | $800.0 million | $1.0 billion | | Forward equity sales - unsettled | $507.4 million | — | | **Total available liquidity** | **$1.3 billion** | **$1.3 billion** | [Equity Activity](index=4&type=section&id=Equity%20Activity) During Q2 2025, the company sold **3,664,521 shares** through its ATM program at a net price of $32.00 per share, raising **$117.3 million** - In Q2 2025, the company sold **3,664,521 shares** via its ATM program, raising net proceeds of **$117.3 million**[13](index=13&type=chunk) - As of quarter-end, **16,512,921 forward shares** remained unsettled, representing **$507.4 million** in estimated net proceeds[13](index=13&type=chunk) [Outlook and Shareholder Information](index=4&type=section&id=Outlook%20and%20Shareholder%20Information) [2025 Guidance](index=4&type=section&id=2025%20Guidance) Reflecting its strong performance and positive outlook, the company has increased its full-year 2025 guidance, with the new AFFO per share range at $1.86 to $1.89 and investment volume target raised to $1.0 billion to $1.2 billion 2025 Guidance Metrics | 2025 Guidance Metric | Updated Range | | :--- | :--- | | AFFO per share | $1.86 to $1.89 | | Investment volume | $1.0 billion to $1.2 billion | | Cash G&A expense | $28 million to $31 million | [Dividend Information](index=4&type=section&id=Dividend%20Information) The company's board of directors declared a second quarter 2025 cash dividend of $0.30 per share, corresponding to an annualized dividend of $1.20 per share - A cash dividend of **$0.30 per share** was declared for Q2 2025[16](index=16&type=chunk) - This represents an annualized dividend of **$1.20 per share**[16](index=16&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, total revenues grew 25.4% year-over-year to $137.1 million, driving a 22.6% increase in net income attributable to stockholders to $63.2 million Consolidated Statements of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $137,062 | $109,268 | +25.4% | | Income from operations | $87,813 | $66,797 | +31.5% | | Net income attributable to stockholders | $63,212 | $51,517 | +22.7% | Consolidated Statements of Operations (in thousands) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $266,416 | $212,770 | +25.2% | | Income from operations | $167,431 | $129,179 | +29.6% | | Net income attributable to stockholders | $119,320 | $98,491 | +21.1% | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's total assets grew to $6.29 billion from $5.80 billion at year-end 2024, primarily due to an increase in net real estate investments Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Net investments | $6,051,213 | $5,552,606 | | Total assets | $6,289,589 | $5,798,682 | | **Liabilities & Equity** | | | | Total liabilities | $2,451,603 | $2,226,555 | | Total stockholders' equity | $3,829,888 | $3,563,678 | | Total liabilities and equity | $6,289,589 | $5,798,682 | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Reconciliation of Net Income to FFO, Core FFO, and AFFO](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20FFO%2C%20Core%20FFO%2C%20and%20AFFO) The company reported strong growth in its key non-GAAP metrics for Q2 2025, with FFO and Core FFO per diluted share increasing to $0.50 and AFFO per diluted share growing to $0.46 year-over-year FFO, Core FFO, and AFFO Per Diluted Share | Per Diluted Share | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income | $0.32 | $0.29 | +10.3% | | FFO | $0.50 | $0.47 | +6.4% | | Core FFO | $0.50 | $0.47 | +6.4% | | AFFO | $0.46 | $0.43 | +7.0% | FFO, Core FFO, and AFFO Per Diluted Share | Per Diluted Share | YTD 2025 | YTD 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income | $0.61 | $0.57 | +7.0% | | FFO | $0.98 | $0.93 | +5.4% | | Core FFO | $0.98 | $0.93 | +5.4% | | AFFO | $0.91 | $0.85 | +7.1% | [Reconciliation of Net Income to EBITDAre and NOI](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDAre%20and%20NOI) The reconciliation of net income to non-GAAP measures shows an Annualized Adjusted EBITDAre of $512.3 million and an Annualized Adjusted Cash NOI of $506.2 million for Q2 2025, providing a run-rate estimate of earnings power Annualized Run-Rate Metrics (in thousands) | Annualized Run-Rate Metrics (Q2 2025) | Value | | :--- | :--- | | Annualized Adjusted EBITDAre | $512,324 | | Annualized Adjusted NOI | $556,328 | | Annualized Adjusted Cash NOI | $506,184 | [Debt and Enterprise Value Calculation](index=10&type=section&id=Debt%20and%20Enterprise%20Value%20Calculation) As of June 30, 2025, the company had total gross debt of $2.33 billion, with pro forma net debt decreasing to $1.80 billion after accounting for unsettled forward equity sales, resulting in a pro forma Net Debt to Annualized Adjusted EBITDAre ratio of 3.5x Debt and Enterprise Value Metrics | Metric (as of June 30, 2025) | As Reported | Pro Forma | | :--- | :--- | :--- | | Net Debt | $2.31 billion | $1.80 billion | | Total Enterprise Value (TEV) | $8.65 billion | $8.67 billion | | Net Debt / TEV | 26.7% | 20.8% | | Net Debt / Annualized Adj. EBITDAre | 4.5x | 3.5x | [Definitions of Non-GAAP Financial Measures](index=12&type=section&id=Definitions%20of%20Non-GAAP%20Financial%20Measures) [Non-GAAP Definitions](index=12&type=section&id=Non-GAAP%20Definitions) This section provides definitions for key non-GAAP financial measures used throughout the report, including FFO, Core FFO, AFFO, EBITDAre, Net Debt, NOI, and Cash NOI, explaining their utility for comparing REIT operating performance - The company computes FFO in accordance with NAREIT's definition, which excludes real estate depreciation and gains/losses on property sales from net income[42](index=42&type=chunk) - AFFO is derived from Core FFO by further adjusting for non-cash items like straight-line rent and non-cash compensation to better reflect operating performance[44](index=44&type=chunk) - EBITDAre is calculated per NAREIT standards, excluding gains/losses on property sales and impairment losses from EBITDA[46](index=46&type=chunk) ```