Store Operations - As of September 30, 2025, the company owned or had ownership interests in 2,427 operating stores, an increase from 2,401 stores as of September 30, 2024, representing a growth of approximately 1.1%[128] - The company managed a total of 2,222 stores for unconsolidated joint ventures and third parties as of September 30, 2025, compared to 1,921 stores as of September 30, 2024, indicating a growth in management operations[131] - The total number of tenants leasing storage units at the company's operating stores was approximately 2,460,000 as of September 30, 2025[124] - The company operates in competitive markets, with seasonal fluctuations in occupancy levels, generally higher in summer months due to increased moving activity[122] - The self-storage business experiences seasonal fluctuations, with the highest occupancy typically at the end of July and the lowest in late February and early March[162] Financial Performance - Total revenues for the three months ended September 30, 2025, were $858,460,000, a 4.1% increase from $824,804,000 in the same period of 2024[129] - Tenant reinsurance revenues rose by 7.5% to $90,341,000 for the three months ended September 30, 2025, driven by an increase in the number of stores operated[130] - Same-store rental revenues for the three months ended September 30, 2025, decreased by 0.2% to $673,982 compared to $675,351 in 2024[150] - Same-store net operating income for the nine months ended September 30, 2025, decreased by 2.3% to $1,418,799 from $1,451,818 in 2024[151] - Total cash flows from operating activities for the nine months ended September 30, 2025, increased to $1,482,396 compared to $1,479,151 in 2024[152] Expenses - Total expenses for the three months ended September 30, 2025, were $474,212, an increase of $12,871 or 2.8% compared to $461,341 in 2024[132] - Property operations expenses increased by $26,451 or 12.7% for the three months ended September 30, 2025, primarily due to acquisitions completed in 2024 and 2025[133] - General and administrative expenses rose by $3,729 or 9.4% for the three months ended September 30, 2025, attributed to the company's increased size from acquisitions[135] - Depreciation and amortization expenses decreased by $17,580 or 9.0% for the three months ended September 30, 2025, due to the full expensing of customer intangibles from a merger[136] Debt and Interest - The total face value of debt as of September 30, 2025, was $13,162,058 with a weighted average interest rate of 4.4%[155] - Interest expense increased by $6,795 or 4.8% for the three months ended September 30, 2025, primarily due to higher outstanding debt, totaling approximately $13,162,058[138] - Interest income rose by $8,641 or 24.7% for the three months ended September 30, 2025, driven by an increase in bridge loans outstanding, which totaled $1,544,719[140] - A 100 basis point increase or decrease in SOFR would result in an annual change in interest expense of approximately $21.4 million, impacting future earnings and cash flows[167] Tax and Regulatory - The company recorded an income tax expense increase of $1,105 or 10.2% for the three months ended September 30, 2025, due to higher book income[144] - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, permanently extending the 20% deduction for "qualified REIT dividends" for individuals and non-corporate taxpayers[164] - The OBBBA increased the percentage limit under the REIT asset test for taxable REIT subsidiaries from 20% to 25% of the REIT's total assets, effective for taxable years beginning after December 31, 2025[164] - The company is evaluating the provisions of the OBBBA but does not expect it to have a material impact on its financial position or results of operations[164] Cash and Liquidity - As of September 30, 2025, the company had $111,931 in cash and cash equivalents available[154] - The company expects to generate positive cash flow from operations in 2025, primarily from rents paid by tenants[153] - The company established a commercial paper program with a maximum outstanding amount of $1,000,000, with $540,000 in issuances as of September 30, 2025[157] - The company entered into an equity distribution agreement allowing for the issuance of up to $800,000 in common stock, with no shares sold as of September 30, 2025[160] Market and Risk Factors - The company does not currently have any relationships with unconsolidated entities or financial partnerships that could expose it to financing, liquidity, market, or credit risk[161] - Market risk is influenced by adverse changes in market prices and interest rates, affecting future income and cash flows[165] - Interest rate risk is sensitive to various factors, including governmental monetary and tax policies, and economic conditions[166] - The analyses of interest rate risk do not consider the effects of changes in overall economic activity, assuming no changes in the company's financial structure[168]

Core Insights - Extra Space Storage (EXR) is recognized as one of the leading self-storage REITs globally, with a focus on expansion through acquisitions [1] - The stock has experienced a decline of approximately 15% over the past year [1] Company Overview - Extra Space Storage has been actively expanding its portfolio through multiple acquisitions in recent years [1] - The company is part of the broader REIT sector, which includes various types of real estate investments [1] Market Performance - The stock performance indicates a downward trend, with a notable decrease of around 15% in the last year [1]

Extra Space Storage (NYSE:EXR) Q3 2025 Earnings Call October 30, 2025 01:00 PM ET Company ParticipantsOmotayo Okusanya - Managing Director, Head of US REITs ResearchJeff Norman - CFOEric Wolfe - Managing PartnerJared Conley - VP Investor RelationsJoseph Margolis - CEONicholas Yulico - Managing Director, US REITs ResearchJeffrey Spector - Managing Director, Head of US REITsRavi Vaidya - Equity Research - REITsCaitlin Burrows - VP REITs Equity ResearchRonald Kamdem - Managing Director, Head of US REITs and CR ...

Financial Data and Key Metrics Changes - The company reported core FFO of $2.08 per share, meeting internal expectations [4] - Same-store occupancy at quarter-end was 93.7%, with an average of 94.1% during the quarter, reflecting a 30 basis point improvement year over year [4] - Same-store revenue declined 0.2% year over year, slightly below internal forecasts [9] - The company raised its full-year core FFO guidance to a range of $8.12 to $8.20 per share based on year-to-date performance [11] Business Line Data and Key Metrics Changes - New customer rate growth exceeded 3% year over year net of discounts, with approximately 6% growth excluding discounts [5] - The bridge loan program originated $123 million during the quarter, with $71 million in mortgage loans sold [6] - The third-party management platform expanded by 95 stores during the quarter, bringing the total managed portfolio to 1,811 stores [7] Market Data and Key Metrics Changes - The self-storage sector demonstrated resilience, with the company maintaining high occupancy levels and positive rate momentum [13] - The company noted that moving customers accounted for about 58% in the third quarter, up from mid-50% in previous quarters, indicating seasonal trends [32] Company Strategy and Development Direction - The company is focused on long-term revenue optimization through strategic discounts and pricing strategies [5][17] - The acquisition of a 24-property portfolio for $244 million is expected to enhance future revenue growth, with stabilized yields projected to increase from 4.5% in year one to mid-7% by year three [5][31] - The company aims to capitalize on market conditions through a diversified growth strategy, including direct ownership, joint ventures, and management services [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational execution and improving storage fundamentals, despite expecting same-store revenue to remain relatively flat for 2025 [8][13] - The company anticipates that the positive trend in new customer rates will eventually translate into revenue acceleration [9] - Management highlighted the importance of maintaining a strong balance sheet and financial flexibility to pursue strategic opportunities [10] Other Important Information - The company has a conservative capital structure, with 95% of interest rates fixed, and recently recast its credit facility to add $1 billion in capacity [10] - Same-store expense growth guidance was raised to 4.5% to 5% due to increased marketing investments aimed at long-term revenue growth [13] Q&A Session Summary Question: How long does new customer rate growth take to benefit same-store revenue growth? - Management indicated that timing depends on churn and other factors, but they are encouraged by the accelerating trend in new customer rates [16] Question: Has the use of discounts and promotions continued into October? - Management confirmed that they have been using discounts strategically and will continue to evaluate their effectiveness based on results [17] Question: Can you discuss the short-term headwind related to discounting? - Management noted that the headwind was primarily felt in the quarter and is viewed as a temporary measure to optimize long-term revenue [23] Question: What are the reasons for storage use and any recent changes? - Management reported no significant changes in reasons for storage use, with moving customers slightly increasing in the third quarter [32] Question: How does the company view marketing spend efficiency? - Management stated that they have not seen a decline in the ROI of marketing spend and view it as an investment for long-term revenue growth [37] Question: What is the outlook for the bridge loan program in a lower-rate environment? - Management indicated that a lower-rate environment could impact the bridge loan program positively by loosening the acquisition market [83] Question: Can you provide details on the disposition of Life Storage assets? - Management confirmed that they are actively looking to dispose of certain Life Storage assets to improve their portfolio [77] Question: What is the current staffing situation for properties? - Management reported approximately 1.4 full-time employees per store, emphasizing the importance of having store managers present for customer interactions [100]

Financial Data and Key Metrics Changes - Core FFO for Q3 2025 was $2.08 per share, meeting internal expectations [4] - Same-store occupancy at quarter-end was 93.7%, with an average of 94.1% during the quarter, a 30 basis point improvement year over year [4] - Same-store revenue declined 0.2% year over year, slightly below internal forecasts [10] - Same-store new customer rate growth was approximately 6% excluding discounts, while net growth was over 3% year over year [5][10] - Full-year core FFO guidance raised to a range of $8.12 to $8.20 per share based on year-to-date performance [12] Business Line Data and Key Metrics Changes - The third-party management platform expanded by 95 stores during the quarter, with a total managed portfolio of 1,811 stores [7] - The bridge loan program originated $123 million during the quarter, with $71 million in mortgage loans sold [6] Market Data and Key Metrics Changes - The self-storage sector continues to show resilience, with a geographically diversified portfolio of over 4,200 stores across 43 states [13] - Same-store expenses were above internal estimates, driven by repairs and maintenance and marketing expenses [11] Company Strategy and Development Direction - The company is focusing on long-term revenue optimization through strategic discounts, despite short-term headwinds [5] - Increased acquisition guidance to $900 million, driven by a $244 million purchase of a 24-property portfolio [6] - The company maintains a conservative capital structure with 95% of interest rates fixed [11] Management's Comments on Operating Environment and Future Outlook - Management expects same-store revenue to remain relatively flat for 2025, but is optimistic about outside growth in other revenue streams [9] - The company is encouraged by the sustained positive rate trend and believes it is well-positioned for accelerating revenue growth [10][13] - Management is positive about the future, citing improving rent rate trends and decreasing supply [98] Other Important Information - The company has been actively testing discounting strategies to maximize long-term revenue, particularly in states with emergencies [18][63] - The bridge loan program is expected to benefit from a lower-rate environment, providing a countercyclical growth opportunity [70] Q&A Session Summary Question: How long does new customer rate growth take to impact same-store revenue growth? - Management indicated that the timing depends on churn and other factors, but they are encouraged by the accelerating trend in new customer rates [16][17] Question: Has the discounting strategy continued into October? - Management confirmed that they have been using discounts strategically and are testing their effectiveness [18][19] Question: What specific regions were affected by the discounting strategy? - The discounting efforts were focused on states with emergencies, such as Los Angeles [23] Question: What is the outlook for the bridge loan program in a lower-rate environment? - Management expects the lower-rate environment to positively impact the bridge loan program, as it may loosen the acquisition market [70][71] Question: How does the company view its marketing spend efficiency? - Management stated that they have not seen a decline in the ROI of their marketing spend and view it as an investment [32][33] Question: What is the expected impact of the recent acquisition on yields? - The acquisition is expected to have a leverage yield of about 4.5% in year one, increasing to mid-7% by year three [27] Question: How does the company plan to manage expenses moving forward? - Management emphasized the importance of investing in properties and personnel to maximize long-term revenue while being efficient [35][36]

Key Takeaways Extra Space Storage posted Q3 core FFO of $2.08 per share, topping the consensus estimate of $2.06.Quarterly revenues rose 4.1% year over year to $858.5 million but missed analyst expectations.Higher same-store and interest expenses pressured margins despite improved occupancy at 93.7%.Extra Space Storage Inc. (EXR) reported third-quarter 2025 core funds from operations (FFO) per share of $2.08, surpassing the Zacks Consensus Estimate of $2.06. The figure increased 0.48% from the prior-year qu ...

Core Insights - Extra Space Storage (EXR) reported revenue of $858.46 million for Q3 2025, a year-over-year increase of 4.1% [1] - The earnings per share (EPS) for the same period was $2.08, compared to $0.91 a year ago, with an EPS surprise of +0.97% [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $864.8 million, resulting in a surprise of -0.73% [1] Financial Performance Metrics - Same-store square foot occupancy was reported at 93.7%, below the average estimate of 94.4% [4] - Property rental revenues reached $735.58 million, exceeding the estimated $732.32 million, reflecting a year-over-year increase of +3.5% [4] - Tenant reinsurance revenues were $90.34 million, surpassing the average estimate of $87.99 million, with a year-over-year change of +7.5% [4] - Management fees and other income totaled $32.54 million, above the estimated $31.59 million, marking an +8.9% change year-over-year [4] - Same-store rental revenues were reported at $673.98 million, significantly higher than the estimated $475.94 million, representing a +58.9% year-over-year increase [4] - Net income per common share (diluted) was $0.78, below the average estimate of $1.18 [4] - Equity in earnings and dividend income from unconsolidated real estate entities was $15.67 million, slightly below the estimated $16.45 million [4] Stock Performance - Over the past month, shares of Extra Space Storage have returned +4.2%, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Extra Space Storage (EXR) came out with quarterly funds from operations (FFO) of $2.08 per share, beating the Zacks Consensus Estimate of $2.06 per share. This compares to FFO of $2.07 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of +0.97%. A quarter ago, it was expected that this self-storage facility real estate investment trust would post FFO of $2.06 per share when it actually produced FFO of $2.05, delivering a surprise of -0. ...

Financial Performance - Achieved net income attributable to common stockholders of $0.78 per diluted share, a decrease of 14.3% compared to the same period last year[5] - Net income attributable to common stockholders for Q3 2025 was $166.00 million, down 14.2% from $193.21 million in Q3 2024[40] - Basic earnings per share for Q3 2025 was $0.78, down from $0.91 in Q3 2024[40] - Estimated net income for the year ending December 31, 2025, ranges from $1,037,636,000 to $1,064,636,000[43] Funds from Operations (FFO) - Funds from operations (FFO) attributable to common stockholders was $2.01 per diluted share, with Core FFO at $2.08 per diluted share, reflecting a 0.5% increase year-over-year[5] - Core FFO for 2025 is estimated to range from $8.12 to $8.20 per share, compared to the prior estimate of $8.05 to $8.25[26] - Funds from operations (FFO) per share for the year ending December 31, 2025 is estimated to be between $7.84 and $7.92[42] Revenue and Operating Income - Same-store revenue decreased by 0.2% and same-store net operating income (NOI) decreased by 2.5% compared to the prior year[5] - Same-store net operating income for Q3 2025 was $477,245, a decrease of 2.5% compared to $489,387 in Q3 2024[1] - Total same-store revenues for the nine months ended September 30, 2025, were $1,999,361, reflecting a slight increase of 0.0% from $1,998,764 in the same period of 2024[1] - Total same-store net operating income is estimated between $1,887,000,000 and $1,904,000,000[43] - Same-store rental revenues are projected to be between $2,659,000,000 and $2,672,000,000[43] Expenses - Total same-store operating expenses for the nine months ended September 30, 2025, were $580,562, an increase of 6.1% from $546,946 in the same period of 2024[1] - Same-store operating expenses are expected to be between $768,000,000 and $772,000,000[43] - Interest expense is projected at approximately $583,000,000 to $585,000,000[43] - General and administrative expenses are estimated to be between $184,000,000 and $185,000,000[43] Acquisitions and Investments - Acquired one operating store for $12.8 million and partnered in acquiring another for approximately $14.2 million, with the company's investment being $1.4 million[5] - Acquired 14 operating stores for a total cost of $178.7 million and completed several strategic property acquisitions[7] - The company plans to maintain acquisitions at $900 million for 2025, consistent with the previous estimate[26] Debt and Financing - The percentage of fixed-rate debt to total debt was 83.8% as of September 30, 2025, with a combined weighted average interest rate of 4.4%[24] - The company completed a public bond offering in August 2025, issuing $800.0 million in unsecured senior notes due 2033[21] - The company increased its revolving line of credit capacity to $3.0 billion, up from $2.0 billion, and extended the maturity to August 2029[22] - Unsecured senior notes increased to $9.42 billion in Q3 2025, up from $7.76 billion in Q4 2024[39] Market and Operational Metrics - Ending same-store occupancy was reported at 93.7% as of September 30, 2025, slightly up from 93.6% a year earlier[5] - Added 95 stores (62 stores net) to the third-party management platform, bringing the total managed stores to 2,222[5] - The company managed a total of 2,222 stores as of September 30, 2025, including 1,811 stores for third-party owners[19] - The company operates 4,238 self-storage stores across 43 states and Washington, D.C., comprising approximately 2.9 million units and 326.9 million square feet of rentable space[36] Dividends - Paid a quarterly dividend of $1.62 per share[5] - The company paid a third quarter common stock dividend of $1.62 per share on September 30, 2025[25] - Cash dividends paid per common share remained stable at $1.62 for both Q3 2025 and Q3 2024[40] Guidance and Projections - Same-store revenue growth is projected between (0.25)% and 0.25%, an improvement from the previous range of (0.50)% to 1.00%[26] - Same-store expense growth is expected to be between 4.50% and 5.00%, consistent with the prior estimate of 4.00% to 5.00%[26] - Same-store NOI growth is forecasted to range from (2.25)% to (1.25)%, compared to the previous estimate of (2.75)% to 0.00%[26] - Net tenant reinsurance income is projected at $281 million to $283 million, up from $277 million to $280 million in the prior estimate[26] - Management fees and other income are expected to be between $127 million and $128 million, slightly higher than the previous range of $125.5 million to $126.5 million[26] - Interest income is estimated to be between $162 million and $163 million, compared to the prior estimate of $159.5 million to $161 million[26] - Bridge loans outstanding are expected to remain at $1.45 billion, unchanged from the prior estimate[26]

Accessibility StatementSkip Navigation FFO Per Share: SALT LAKE CITY, Oct. 29, 2025 /PRNewswire/ -- Extra Space Storage Inc. (NYSE: EXR) (the "Company"), a leading owner and operator of self-storage facilities in the United States and a constituent of the S&P 500 index, announced operating results for the three and nine months ended September 30, 2025. Highlights for the three months ended September 30, 2025: Highlights for the nine months ended September 30, 2025: Joe Margolis, CEO of the Company, stated: ...