NETSTREIT (NTST) came out with quarterly funds from operations (FFO) of $0.33 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to FFO of $0.32 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of +3.13%. A quarter ago, it was expected that this company would post FFO of $0.31 per share when it actually produced FFO of $0.32, delivering a surprise of +3.23%.Over the last four quarters, the company has sur ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and notes, showing a shift from net loss to net income and improved cash flow from operations for the six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | Percentage Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------------------ | | Total assets | $2,311,714 | $2,259,346 | $52,368 | 2.32% | | Real estate held for investment, net | $1,871,583 | $1,834,361 | $37,222 | 2.03% | | Term loans, net | $795,976 | $622,608 | $173,368 | 27.85% | | Revolving credit facility | $127,000 | $239,000 | $(112,000) | -46.86% | | Total liabilities | $988,169 | $921,214 | $66,955 | 7.27% | | Total equity | $1,323,545 | $1,338,132 | $(14,587) | -1.09% | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $48,286 | $39,567 | $94,196 | $77,240 | | Total operating expenses | $35,960 | $31,677 | $70,518 | $62,819 | | Interest expense, net | $(12,638) | $(7,604) | $(24,098) | $(13,784) | | Gain on sales of real estate, net | $3,533 | $8 | $5,608 | $1,006 | | Net income (loss) | $3,289 | $(2,306) | $4,989 | $(1,254) | | Basic EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | | Diluted EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | [Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Condensed Consolidated Statements of Changes in Equity (in thousands) | Equity Component | Balance at Dec 31, 2024 | Issuance of common stock (6M 2025) | Dividends & distributions (6M 2025) | Other comprehensive loss (6M 2025) | Net income (6M 2025) | Balance at Jun 30, 2025 | | :------------------------------ | :---------------------- | :--------------------------------- | :---------------------------------- | :--------------------------------- | :------------------- | :---------------------- | | Common stock, par value | $816 | $19 | — | — | — | $835 | | Additional paid-in capital | $1,507,995 | $30,000 | — | — | — | $1,538,592 | | Distributions in excess of retained earnings | $(188,046) | — | $(34,316) | — | $4,963 | $(217,589) | | Accumulated other comprehensive (loss) income | $10,206 | — | — | $(15,508) | — | $(5,222) | | Total stockholders' equity | $1,330,971 | $28,352 | $(34,316) | $(15,508) | $4,963 | $1,316,616 | | Noncontrolling interests | $7,161 | — | $(178) | $(54) | $26 | $6,929 | | Total equity | $1,338,132 | $28,352 | $(34,494) | $(15,562) | $4,989 | $1,323,545 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed 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 | $52,727 | $37,018 | | Net cash used in investing activities | $(96,705) | $(203,923) | | Net cash provided by financing activities | $49,398 | $150,702 | | Net change in cash, cash equivalents, and restricted cash | $5,420 | $(16,203) | | Cash, cash equivalents, and restricted cash at end of the period | $19,740 | $13,726 | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Organization and Description of Business](index=13&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Description%20of%20Business) NETSTREIT Corp. operates as an internally managed UPREIT, focusing on acquiring, owning, and managing a diversified portfolio of single-tenant commercial retail properties under long-term net leases - The Company operates as an internally managed UPREIT, acquiring, owning, and managing a diversified portfolio of single-tenant commercial retail properties with long-term net leases[28](index=28&type=chunk) - As of June 30, 2025, the Company owned or had investments in **707 properties** located in **45 states**[28](index=28&type=chunk) - The Company elected to be treated as a Real Estate Investment Trust (REIT) for U.S. federal income tax purposes starting December 31, 2019[27](index=27&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=13&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's accounting policies, including estimates, impairment, cash management, and fair value, along with recent accounting pronouncements ASU 2023-09 and ASU 2024-03 Total Provision for Impairment (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total provision for impairment | $4,422 | $3,836 | $8,038 | $7,498 | - Restricted cash increased to **$16.7 million** as of June 30, 2025, from **$7.9 million** as of December 31, 2024, primarily due to cash proceeds from asset sales held by qualified intermediaries for tax-free exchanges[34](index=34&type=chunk) - For the three and six months ended June 30, 2025, no single tenant or borrower accounted for more than **10% of total revenues**, indicating diversified credit risk. In contrast, for the same periods in 2024, Dollar General accounted for **11.3% and 11.5% of total revenues**, respectively[42](index=42&type=chunk) - The Company is evaluating the potential impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation) on future financial disclosures, with effective dates in 2024 and 2026/2027 respectively[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 3 – Leases](index=17&type=section&id=Note%203%20%E2%80%93%20Leases) The company's property leases are primarily long-term triple-net operating leases with a weighted average remaining lease term of 9.8 years as of June 30, 2025. Rental revenue, including fixed and variable components, increased significantly for both the three and six months ended June 30, 2025, compared to the prior year - As of June 30, 2025, the Company's weighted average remaining lease term was **9.8 years**, indicating stable long-term revenue streams[49](index=49&type=chunk) Lease Income (in thousands) | Lease Income | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fixed lease income | $41,175 | $33,788 | $80,267 | $65,653 | | Variable lease income | $3,977 | $2,978 | $7,405 | $6,207 | | Total rental revenue | $45,158 | $36,864 | $87,748 | $72,053 | Future Minimum Base Rental Receipts (in thousands) | Period | Future Minimum Base Rental Receipts | | :---------- | :----------------------------------------------- | | Remainder of 2025 | $77,794 | | 2026 | $155,486 | | 2027 | $153,246 | | 2028 | $148,106 | | 2029 | $139,114 | | Thereafter | $948,131 | | **Total** | **$1,621,877** | [Note 4 – Real Estate Investments](index=19&type=section&id=Note%204%20%E2%80%93%20Real%20Estate%20Investments) The company's gross real estate investment portfolio grew to approximately $2.4 billion across 707 properties, driven by acquisitions, property developments, and mortgage loans, alongside strategic dispositions - As of June 30, 2025, the Company's gross real estate investment portfolio, including properties under development and mortgage loans receivable, totaled approximately **$2.4 billion**, comprising **707 properties**[53](index=53&type=chunk)[54](index=54&type=chunk) Real Estate Investment Activity (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Number of properties acquired | 23 | 18 | 41 | 46 | | Purchase price of acquired properties | $96,528 | $95,611 | $173,996 | $190,764 | | Number of properties sold | 20 | 6 | 36 | 18 | | Sales price, net of disposal costs | $55,613 | $12,064 | $94,176 | $32,542 | | Gain on sales of real estate, net | $3,533 | $8 | $5,608 | $1,006 | - During the six months ended June 30, 2025, the Company invested **$2.2 million** in property developments, completed two projects, and reclassified **$6.5 million** from property under development to land, buildings, and improvements[57](index=57&type=chunk) Mortgage Loans Receivable (in thousands) | Mortgage Loans Receivable | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total mortgage loans receivable, net | $152,779 | $139,409 | [Note 5 – Intangible Assets and Liabilities](index=23&type=section&id=Note%205%20%E2%80%93%20Intangible%20Assets%20and%20Liabilities) The company's net intangible assets decreased to $154.7 million as of June 30, 2025, from $164.4 million at year-end 2024, primarily due to amortization. Net intangible liabilities also saw a slight decrease. The weighted average amortization periods for these assets and liabilities range from 8.5 to 11.0 years Intangible Assets and Liabilities Net Carrying Amount (in thousands) | Intangible | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :------------------------ | :-------------------------------- | :------------------------------------ | | Total intangible assets | $154,701 | $164,392 | | Below-market leases (liabilities) | $18,294 | $20,177 | Intangible Weighted Average Amortization Periods (in years) | Intangible Category | Years Remaining (June 30, 2025) | Years Remaining (December 31, 2024) | | :------------------ | :------------------------------ | :---------------------------------- | | In-place leases | 8.5 | 8.6 | | Above-market leases | 11.0 | 11.4 | | Below-market leases | 9.7 | 10.1 | | Lease incentives | 9.4 | 10.1 | Amortization of In-Place Leases (in thousands) | Amortization | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization of in-place leases | $5,661 | $5,196 | $11,217 | $10,071 | [Note 6 – Debt](index=25&type=section&id=Note%206%20%E2%80%93%20Debt) Total net debt increased to $926.6 million due to new term loans and credit agreement amendments in January 2025, leading to significantly higher interest expense compared to the prior year Debt Component (in thousands) | Debt Component | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | 2028 Term Loan | $200,000 | $200,000 | | 2029 Term Loan | $250,000 | $250,000 | | 2030 Term Loan A | $175,000 | $175,000 | | 2030 Term Loan B | $175,000 | — | | Revolver | $127,000 | $239,000 | | Mortgage Note | $8,124 | $8,205 | | Total debt | $935,124 | $872,205 | | Total debt, net | $926,551 | $868,261 | - In January 2025, the Company amended its credit agreements, introducing a new **$175.0 million 2030 Term Loan B** and upsizing the Revolver to **$500.0 million**. The 2030 Term Loan A maturity was also extended. These changes provide revised pricing based on investment grade ratings and leverage targets[64](index=64&type=chunk)[70](index=70&type=chunk)[79](index=79&type=chunk) Interest Expense (in thousands) | Interest Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revolving credit facilities | $2,104 | $1,636 | $3,566 | $2,759 | | Term loans | $8,993 | $6,491 | $17,551 | $12,200 | | Total interest expense, net | $12,638 | $7,604 | $24,098 | $13,784 | - The Company was in compliance with all debt covenants as of June 30, 2025, and expects to remain so for the twelve-month period ending December 31, 2025[88](index=88&type=chunk) [Note 7 – Derivative Financial Instruments](index=32&type=section&id=Note%207%20%E2%80%93%20Derivative%20Financial%20Instruments) The company uses interest rate derivative contracts, specifically cash flow hedges, to manage variable interest rate exposure on its term loans, with $875.0 million notional amount in swaps as of June 30, 2025 - The Company uses interest rate derivative contracts (cash flow hedges) to manage exposure to changes in interest rates on its variable rate debt, with **21 outstanding instruments** and a notional amount of **$875.0 million** as of June 30, 2025[89](index=89&type=chunk)[97](index=97&type=chunk) - Key term loans are hedged to fixed rates: **2029 Term Loan at 4.99%**, **2028 Term Loan at 3.88%**, **2030 Term Loan B at 5.12%**, and **2030 Term Loan A at 3.65%**[68](index=68&type=chunk)[77](index=77&type=chunk)[81](index=81&type=chunk) Derivative Fair Value (in thousands) | Derivative Fair Value | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Derivative Assets (Interest rate swaps) | $6,831 | $16,426 | | Derivative Liabilities (Interest rate swaps) | $7,331 | — | [Note 8 – Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets](index=35&type=section&id=Note%208%20%E2%80%93%20Supplemental%20Detail%20for%20Certain%20Components%20of%20the%20Condensed%20Consolidated%20Balance%20Sheets) This note provides a breakdown of 'Other assets, net' and 'Accounts payable, accrued expenses, and other liabilities' on the condensed consolidated balance sheets. Notable changes include an increase in deferred rent receivable and deferred financing costs within assets, and a new fair value of interest rate swaps liability Other Assets, Net (in thousands) | Other Assets, Net | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Accounts receivable, net | $8,861 | $9,809 | | Deferred rent receivable | $14,312 | $11,790 | | Fair value of interest rate swaps | $6,831 | $16,426 | | Deferred financing costs, net | $4,259 | $1,200 | | Total Other assets, net | $55,116 | $58,227 | Accounts Payable, Accrued Expenses, and Other Liabilities (in thousands) | Accounts Payable, Accrued Expenses, and Other Liabilities | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------------------------- | :------------ | :---------------- | | Accrued expenses | $8,022 | $4,961 | | Fair value of interest rate swaps | $7,331 | — | | Total Accounts payable, accrued expenses, and other liabilities | $37,249 | $29,664 | [Note 9 – Shareholders' Equity](index=36&type=section&id=Note%209%20%E2%80%93%20Shareholders%27%20Equity) The company utilizes ATM Programs for equity sales, with significant unsettled forward sale agreements, and declared increased dividends totaling $34.3 million for the six months ended June 30, 2025 - The Company has utilized ATM Programs (2021, 2023, 2024) for equity sales, with the **2024 ATM Program currently active** and **$271.3 million** of remaining gross proceeds available for future issuances[105](index=105&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk) - As of June 30, 2025, there were **1,743,100 shares unsettled** under 2023 ATM forward sale agreements, **1,237,547 shares unsettled** under 2024 ATM forward sale agreements, and **8,840,000 shares unsettled** under the January 2024 follow-on offering forward sale agreements[106](index=106&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) Dividend Information (in thousands, except per share data) | Dividend Information | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :----------------------------- | :----------------------------- | | Dividend Per Share | $0.420 | $0.410 | | Total Amount | $34,316 | $30,073 | - Noncontrolling interests, primarily OP Units convertible into common stock, represented **0.5% of OP Units** as of June 30, 2025[117](index=117&type=chunk) [Note 10 – Stock-Based Compensation](index=38&type=section&id=Note%2010%20%E2%80%93%20Stock-Based%20Compensation) The company recognized $2.9 million in stock-based compensation expense for the six months ended June 30, 2025, primarily from unvested service-based and performance-based RSUs - Total stock-based compensation costs recognized in general and administrative expense were **$1.5 million** for the three months ended June 30, 2025, and **$2.9 million** for the six months ended June 30, 2025[119](index=119&type=chunk) RSU Activity (Shares) | RSU Activity | Service-Based RSUs (June 30, 2025) | Performance-Based RSUs (June 30, 2025) | | :-------------------- | :--------------------------------- | :------------------------------------- | | Unvested grants outstanding as of Dec 31, 2024 | 326,987 | 290,442 | | Granted during the period | 279,345 | 170,213 | | Forfeited during the period | (1,546) | (68,525) | | Vested during the period | (149,434) | — | | Unvested grants outstanding as of Jun 30, 2025 | 455,352 | 392,130 | - As of June 30, 2025, remaining unamortized stock-based compensation expense totaled **$5.4 million** for service-based RSUs and **$3.9 million** for market-based RSUs, expected to be recognized over a weighted average period of **2.1 years**[122](index=122&type=chunk)[125](index=125&type=chunk) [Note 11 – Earnings Per Share](index=41&type=section&id=Note%2011%20%E2%80%93%20Earnings%20Per%20Share) Basic and diluted earnings per share calculations are provided, showing an improvement from a net loss in 2024 to net income in 2025. The diluted EPS calculation considers the potential dilutive effect of OP Units and unvested RSUs, which were antidilutive in the prior year's net loss periods EPS Metric (per share data) | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | | Diluted EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | - As of June 30, 2025, there were **424,956 OP Units** outstanding, which are convertible into common stock and represent potentially dilutive securities[127](index=127&type=chunk)[131](index=131&type=chunk) [Note 12 – Commitments and Contingencies](index=43&type=section&id=Note%2012%20%E2%80%93%20Commitments%20and%20Contingencies) The company has no material litigation and significant commitments for tenant improvements, property developments, and mortgage loan extensions, expected to be funded within 18 months - The Company is not currently subject to any material lawsuits, claims, or regulatory matters, nor is it aware of any environmental conditions likely to have a material adverse effect on its financial statements[132](index=132&type=chunk)[134](index=134&type=chunk) Commitment Category (in millions) | Commitment Category | Amount | Expected Funding Timeline | | :------------------ | :------------------- | :------------------------ | | Tenant improvement allowances | $4.1 | Within the next 18 months | | Property developments | $6.6 | Within the next 12 months | | Mortgage loans receivable | $14.0 | Within the next 18 months | [Note 13 – Subsequent Events](index=43&type=section&id=Note%2013%20%E2%80%93%20Subsequent%20Events) Subsequent events after June 30, 2025, include the declaration of a Q3 2025 cash dividend of $0.215 per share, entering into additional forward sale agreements for 107,400 shares under the 2024 ATM Program, and a net repayment of $4.5 million on the Revolver in July 2025 - On July 21, 2025, the Board of Directors declared a cash dividend of **$0.215 per share** for the third quarter of 2025[139](index=139&type=chunk) - In July 2025, the Company entered into forward sale agreements for an aggregate **107,400 shares** of common stock under the 2024 ATM Program at a weighted average price of **$16.94 per share**[140](index=140&type=chunk) - In July 2025, the Company repaid **$4.5 million**, net of borrowings, on the Revolver[141](index=141&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, highlighting asset and revenue growth, the impact of debt and equity programs, and a shift from net loss to net income, with strong liquidity [Special Note Regarding Forward-Looking Statements](index=44&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section serves as a cautionary statement, indicating that the report contains forward-looking statements subject to known and unknown risks and uncertainties. It advises readers that actual results may differ materially from projections and disclaims any obligation to update these statements, except as required by law - The report contains forward-looking statements regarding business strategies, investments, financing, leasing activities, and market trends, which are subject to known and unknown risks and uncertainties[142](index=142&type=chunk) - The Company disclaims any obligation to update or revise forward-looking statements, except as required by law, acknowledging that actual results may differ from expectations[143](index=143&type=chunk) [Business Overview](index=44&type=section&id=Business%20Overview) NETSTREIT Corp. is an internally managed REIT with a diversified portfolio of 707 single-tenant retail properties, boasting 99.9% occupancy and a 9.8-year weighted average remaining lease term - The Company is an internally managed REIT owning and managing **707 diversified single-tenant commercial retail properties** across **45 states**, with a focus on necessity goods and essential services[144](index=144&type=chunk) Business Overview Metrics (as of June 30, 2025) | Metric | Value | | :---------------------- | :-------------------------- | | Number of properties | 707 | | Number of states | 45 | | Number of tenants | 106 | | Retail sectors | 27 | | Annualized Base Rent (ABR) | $172.9 million | | Occupancy | 99.9% | | Weighted Average Remaining Lease Term (WALT) | 9.8 years | | ABR from investment grade credit rated tenants | 52% | | ABR from investment grade profile tenants | 17% | [January 2025 Debt Transactions](index=45&type=section&id=January%202025%20Debt%20Transactions) In January 2025, the company amended credit agreements, establishing a new $175.0 million 2030 Term Loan B, upsizing the Revolver, and extending the 2030 Term Loan A maturity, with improved pricing - On January 15, 2025, the Company amended its credit agreements, introducing a new **$175.0 million 2030 Term Loan B** and upsizing the Revolver to **$500.0 million**[145](index=145&type=chunk) - The maturity date of the existing **$175.0 million 2030 Term Loan A** was extended from January 2027 to January 2029, with an option to extend to January 2030[145](index=145&type=chunk) - The 2030 Term Loan B was fully funded and hedged at an all-in fixed interest rate of **5.12%** through January 2030, with revised pricing available upon achieving investment-grade ratings and leverage targets[145](index=145&type=chunk) [2024 ATM Program](index=45&type=section&id=2024%20ATM%20Program) The company established a $300.0 million ATM equity program in August 2024, with significant forward sale agreements entered into during 2025, generating $28.352 million in net proceeds - The Company established a **$300.0 million 2024 ATM Program** on August 12, 2024, for selling common stock in registered transactions[146](index=146&type=chunk) - During 2025, forward sale agreements for **2,190,299 shares** were entered into at a weighted average price of **$16.40 per share**, with **1,085,000 shares** remaining unsettled as of June 30, 2025[147](index=147&type=chunk) 2024 ATM Program Metrics (in thousands, except share and per share data) | Metric | Three and Six Months Ended June 30, 2025 | | :----------------------------------------------------- | :--------------------------------------- | | Shares of common stock issued | 1,757,815 | | Weighted average price per share | $16.32 | | Gross proceeds | $28,694 | | Sales commissions and offering costs | $342 | | Net proceeds | $28,352 | [Results of Operations](index=45&type=section&id=Results%20of%20Operations) The company achieved significant asset and revenue growth in the first half of 2025 through acquisitions, developments, and mortgage loans, shifting from a net loss to net income despite increased expenses [Overall](index=45&type=section&id=Overall) The company expanded its investment assets in the first half of 2025 through acquisitions, developments, and mortgage loans, financed by new debt, equity, and operating cash flows - The Company grew its assets for investment in the first half of 2025 through acquisitions, property developments, and mortgage loans, with an underwritten weighted-average capitalization rate of approximately **7.7%**[150](index=150&type=chunk) - Growth was financed by the 2030 Term Loan B, settlement of forward sale agreements (**$17.9 million**), issuance of common stock under the 2024 ATM Program (**$10.5 million**), Revolver borrowings, restricted cash from tax-free exchanges, and cash flows from operations[150](index=150&type=chunk) [Acquisitions](index=46&type=section&id=Acquisitions) The company acquired 23 properties for $96.5 million in Q2 2025 and 41 properties for $174.0 million in H1 2025, with long weighted average lease terms Property Acquisition Summary | Acquisition Period | Number of Properties Acquired | Total Purchase Price (in millions) | Weighted Average Lease Term (WALT) | | :----------------- | :---------------------------- | :--------------------------------- | :--------------------------------- | | Three Months Ended June 30, 2025 | 23 | $96.5 | 15.9 years | | Six Months Ended June 30, 2025 | 41 | $174.0 | 12.9 years | [Development](index=46&type=section&id=Development) As of June 30, 2025, two property developments were under construction, with $2.2 million invested and two projects completed in the first half of 2025 - As of June 30, 2025, the Company had **two property developments** under construction, with expected completion and rent commencement throughout 2025[153](index=153&type=chunk) Property Development Activity (in millions) | Development Activity | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------- | :------------------------------- | :----------------------------- | | Investment in property developments | $1.4 | $2.2 | | Number of developments completed | 1 | 2 | | Amounts reclassified to in-service assets | $2.74 | $6.5 | [Dispositions](index=46&type=section&id=Dispositions) The company disposed of 20 properties for $55.6 million (net sales price) in Q2 2025 and 36 properties for $94.2 million in H1 2025, generating net gains Property Disposition Summary (in millions) | Disposition Period | Number of Properties Sold | Sales Price, Net of Disposal Costs | Gain on Sales of Real Estate, Net | | :----------------- | :------------------------ | :----------------------------------------------- | :---------------------------------------------- | | Three Months Ended June 30, 2025 | 20 | $55.6 | $3.5 | | Six Months Ended June 30, 2025 | 36 | $94.2 | $5.6 | [Investment in Mortgage Loans Receivable](index=46&type=section&id=Investment%20in%20Mortgage%20Loans%20Receivable) The company invested an additional $25.7 million in fully collateralized mortgage loans receivable, collecting $12.1 million in principal, with rates from 7.00% to 10.25% - During the six months ended June 30, 2025, the Company invested an additional **$25.7 million** in fully collateralized mortgage loans receivable[155](index=155&type=chunk) - Principal collections on mortgage loans receivable totaled **$12.1 million** for the six months ended June 30, 2025[155](index=155&type=chunk) - The mortgage loans receivable have stated interest rates ranging from **7.00% to 10.25%** and are primarily collateralized by real estate leased by investment-grade credit rated tenants[155](index=155&type=chunk) [Economic and Financial Environment](index=46&type=section&id=Economic%20and%20Financial%20Environment) Fluctuating inflation, interest rates, and global volatility have increased acquisition costs and reduced financing, potentially impacting tenant performance and property transactions - Fluctuating inflation and interest rates have increased acquisition costs and decreased financing availability, impacting the Company's ability to acquire properties on attractive terms[156](index=156&type=chunk) - Macroeconomic pressures, including recession fears and potential tariffs, may adversely affect tenants, potentially leading to lower rent, defaults, or delays in long-term leases[156](index=156&type=chunk) - The Company continuously monitors commercial real estate and credit markets to adjust its business strategy in response to changing economic and financial conditions[156](index=156&type=chunk) [Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024](index=48&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Three%20Months%20Ended%20June%2030,%202024) For Q2 2025, the company reported a net income of $3.3 million, a significant improvement from a net loss in the prior year, driven by increased revenues and real estate sales gains Financial Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :-------------------- | | Total revenues | $48,286 | $39,567 | $8,719 | | Total operating expenses | $35,960 | $31,677 | $4,283 | | Interest expense, net | $(12,638) | $(7,604) | $(5,034) | | Gain on sales of real estate, net | $3,533 | $8 | $3,525 | | Other income (expense), net | $81 | $(2,588) | $2,669 | | Net income (loss) | $3,289 | $(2,306) | $5,595 | - The increase in total revenues was attributed to growth in operating leases and properties securing mortgage loans, including additional cash rental receipts of **$6.7 million**[158](index=158&type=chunk) - Operating expenses increased by **$4.3 million**, primarily due to higher depreciation and amortization (**$3.0 million**), provisions for impairment (**$0.6 million**), and property-specific reimbursable expenses[159](index=159&type=chunk)[165](index=165&type=chunk) [Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024](index=51&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202024) For H1 2025, the company achieved a net income of $5.0 million, a significant improvement from a net loss, driven by increased revenues and real estate sales gains, despite higher interest expense Financial Performance (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total revenues | $94,196 | $77,240 | $16,956 | | Total operating expenses | $70,518 | $62,819 | $7,699 | | Interest expense, net | $(24,098) | $(13,784) | $(10,314) | | Gain on sales of real estate, net | $5,608 | $1,006 | $4,602 | | Other expense, net | $(124) | $(2,868) | $2,744 | | Net income (loss) | $4,989 | $(1,254) | $6,243 | - The **$17.0 million increase** in total revenues was primarily due to **$13.5 million** in additional cash rental receipts and **$1.1 million** in interest income on mortgage loans receivable, driven by portfolio growth[166](index=166&type=chunk) - Operating expenses increased by **$7.7 million**, mainly due to higher depreciation and amortization (**$6.3 million**) and provisions for impairment (**$0.5 million**), partially offset by a **$1.4 million decrease** in employee severance[167](index=167&type=chunk)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) Capital requirements for acquisitions, developments, and operations are funded by cash from operations, equity sales, and borrowing facilities, with management confident in adequate resources for the next 12 months - Primary capital requirements include funding property acquisitions, developments, mortgage loans, working capital, operating expenses, and capital expenditures[174](index=174&type=chunk) - Capital resources consist of cash from operations, sales of equity securities (including unsettled forward equity of **$201.6 million**), and available borrowing facilities[174](index=174&type=chunk)[209](index=209&type=chunk) Debt Outstanding (in millions, as of June 30, 2025) | Debt Outstanding | | :------------------------------------------------ | :------------------------------------------------ | | 2028 Term Loan | $200.0 | | 2029 Term Loan | $250.0 | | 2030 Term Loan A | $175.0 | | 2030 Term Loan B | $175.0 | | Revolver | $127.0 | - The Company believes its available resources will be adequate to support ongoing operations and fund debt service, capital expenditures, and working capital for at least the next **12 months**[177](index=177&type=chunk) [Contractual Obligations and Commitments](index=55&type=section&id=Contractual%20Obligations%20and%20Commitments) Total contractual obligations amounted to $1.08 billion, primarily debt payments, with significant commitments for property developments, mortgage loan extensions, and tenant improvements Contractual Obligations (in thousands, as of June 30, 2025) | Contractual Obligation | Total | | :------------------------------------ | :-------------------------- | | 2028 Term Loan – Principal | $200,000 | | 2029 Term Loan – Principal | $250,000 | | 2030 Term Loan A – Principal | $175,000 | | 2030 Term Loan B – Principal | $175,000 | | Revolver – Borrowings | $127,000 | | Mortgage Note – Principal | $8,124 | | Property development under contract | $6,599 | | Additional principal under mortgage loans | $13,951 | | Tenant improvement allowances | $4,089 | | Corporate office lease obligations | $4,955 | | **Total** | **$1,080,125** | - The Company had commitments to fund property developments (**$6.6 million**) and extend funds under mortgage loans receivable (**$14.0 million**) as of June 30, 2025, expected to be funded over the next **18 months**[183](index=183&type=chunk) [Debt](index=57&type=section&id=Debt) This section refers to detailed discussions of the company's debt structure and interest rate hedges provided in Note 6 (Debt) and Note 7 (Derivative Financial Instruments) of the condensed consolidated financial statements - Detailed information regarding the Company's debt and interest rate hedges is provided in Note 6 – Debt and Note 7 – Derivative Financial Instruments[184](index=184&type=chunk) [Historical Cash Flow Information](index=57&type=section&id=Historical%20Cash%20Flow%20Information) Net cash from operating activities increased by $15.7 million, investing activities decreased by $107.2 million, and financing activities decreased by $101.3 million for the six months ended June 30, 2025 Cash Flow Activity (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net cash provided by operating activities | $52,727 | $37,018 | $15,709 | | Net cash used in investing activities | $(96,705) | $(203,923) | $107,218 | | Net cash provided by financing activities | $49,398 | $150,702 | $(101,304) | - The increase in operating cash flow was largely attributed to the growth of the real estate investment portfolio, with a **$13.5 million increase** in rental receipts[184](index=184&type=chunk) - The decrease in cash used in investing activities was primarily due to a **$53.2 million increase** in proceeds from real estate sales and a **$26.5 million decrease** in real estate development and improvements[185](index=185&type=chunk) [Income Taxes](index=58&type=section&id=Income%20Taxes) The company maintains its REIT status, which generally exempts it from U.S. federal and state corporate income tax, provided it meets specific requirements, including distributing taxable income to stockholders. It also operates a Taxable REIT Subsidiary (TRS) that is subject to income taxes - The Company elected and qualifies as a REIT for U.S. federal income tax purposes, generally exempting it from corporate income tax if it meets distribution and other REIT requirements[188](index=188&type=chunk) - The Company maintains a Taxable REIT Subsidiary (TRS) which may be subject to U.S. federal, state, and local income taxes on its taxable income[189](index=189&type=chunk) [Recent Accounting Pronouncements](index=58&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 – Summary of Significant Accounting Policies for a discussion of recent accounting pronouncements and their potential impact on the company's condensed consolidated financial statements - A discussion of recent accounting pronouncements and their possible effects on the condensed consolidated financial statements is included in Note 2 – Summary of Significant Accounting Policies[190](index=190&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies and estimates, which require significant management judgment, remain unchanged from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024. These estimates are continuously evaluated, though actual results may differ from assumptions - The Company's critical accounting policies and estimates, which involve significant management judgment, have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[190](index=190&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP%20Financial%20Measures) The company uses various non-GAAP financial measures, including FFO, EBITDA, and Net Debt, to provide supplemental information for evaluating operating performance and comparing REITs [FFO, Core FFO, and AFFO](index=59&type=section&id=FFO,%20Core%20FFO,%20and%20AFFO) FFO, Core FFO, and AFFO are non-GAAP measures for operating performance and distributions, showing significant improvements for the six months ended June 30, 2025 - FFO, Core FFO, and AFFO are non-GAAP financial measures used to evaluate operating performance and funds available for distributions, excluding certain non-cash items and non-recurring events[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) FFO, Core FFO, and AFFO (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | FFO | $25,611 | $19,987 | $49,702 | $41,164 | | Core FFO | $25,614 | $23,389 | $50,184 | $45,837 | | AFFO | $27,460 | $23,817 | $53,707 | $46,677 | [EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre](index=60&type=section&id=EBITDA,%20EBITDAre,%20Adjusted%20EBITDAre,%20and%20Annualized%20Adjusted%20EBITDAre) These non-GAAP measures provide supplemental operating performance information, with EBITDAre increasing to $73.8 million for H1 2025 and Adjusted Net Debt to Annualized Adjusted EBITDAre at 4.6x - EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre are non-GAAP measures used to provide supplemental information on operating performance, excluding non-cash items and other costs[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) EBITDA and EBITDAre (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EBITDA | $37,467 | $23,740 | $71,419 | $48,473 | | EBITDAre | $38,356 | $27,568 | $73,849 | $54,965 | Adjusted EBITDAre and Related Metrics (in thousands, except ratio) | Metric | Three Months Ended June 30, 2025 | | :-------------------- | :------------------------------- | | Adjusted EBITDAre | $38,825 | | Annualized Adjusted EBITDAre | $155,300 | | Adjusted Net Debt / Annualized Adjusted EBITDAre | 4.6x | [Net Debt and Adjusted Net Debt](index=64&type=section&id=Net%20Debt%20and%20Adjusted%20Net%20Debt) Net Debt and Adjusted Net Debt are non-GAAP measures, with Net Debt at $915.4 million and Adjusted Net Debt at $713.8 million as of June 30, 2025 - Net Debt is calculated as the principal amount of total debt outstanding, excluding deferred financing costs, net discounts, and debt issuance costs, less cash, cash equivalents, and restricted cash[207](index=207&type=chunk) - Adjusted Net Debt further adjusts Net Debt by subtracting the net value of unsettled forward equity, providing an estimate of the net contractual amount of borrowed capital to be repaid[208](index=208&type=chunk) Net Debt and Adjusted Net Debt (in thousands) | Debt Metric | As of June 30, 2025 | | :------------------------- | :------------------ | | Principal amount of total debt | $935,124 | | Less: Cash, equivalents, and restricted cash | $(19,740) | | Net Debt | $915,384 | | Less: Net of unsettled forward equity value | $(201,621) | | Adjusted Net Debt | $713,763 | [Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate](index=64&type=section&id=Property-Level%20NOI,%20Property-Level%20Cash%20NOI,%20and%20Property-Level%20Cash%20NOI%20-%20Estimated%20Run%20Rate) These non-GAAP measures assess property-level operating results on an unlevered basis, with Property-Level NOI at $40.4 million for the three months ended June 30, 2025 - Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are non-GAAP measures used to assess operating results at the property level on an unlevered basis[210](index=210&type=chunk) Property-Level NOI Metrics (in thousands) | Property-Level Metric | Three Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | | Property-Level NOI | $40,445 | | Property-Level Cash NOI | $39,256 | | Property-Level Cash NOI - Estimated Run Rate | $39,415 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on floating-rate debt, with term loans hedged but the Revolver exposed to a potential $1.2 million impact from a 1% rate change - The Company's principal market risk is related to interest rate fluctuations on its floating-rate debt, which includes **$200.0 million** under the 2028 Term Loan, **$250.0 million** under the 2029 Term Loan, **$175.0 million** under the 2030 Term Loan A, **$175.0 million** under the 2030 Term Loan B, and **$127.0 million** of borrowings under the Revolver as of June 30, 2025[213](index=213&type=chunk) - Interest rate derivative contracts are used to hedge the market risk associated with the term loans, converting variable rates to fixed rates[214](index=214&type=chunk) - Based on a sensitivity analysis, a **1% adverse change** in the Revolver's interest rate as of June 30, 2025, would result in an estimated market risk exposure of approximately **$1.2 million**[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's principal executive and financial officers concluded that its disclosure controls and procedures were effective as of June 30, 2025. Furthermore, no material changes in internal control over financial reporting were identified during the reporting period - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[216](index=216&type=chunk) - No material changes to the Company's internal control over financial reporting were identified during the period covered by the report[217](index=217&type=chunk) [PART II – OTHER INFORMATION](index=67&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material lawsuits, claims, or other legal proceedings that could significantly impact its business, financial condition, or results of operations - The Company is not currently subject to any material lawsuits, claims, or other legal proceedings[218](index=218&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the 'Risk Factors' section in the company's Annual Report on Form 10-K for a comprehensive discussion of significant factors that may adversely affect the company. No material changes to these risk factors have occurred since the Annual Report - For a discussion of significant factors that may adversely affect the Company, refer to the 'Risk Factors' section in the Annual Report on Form 10-K for the year ended December 31, 2024[219](index=219&type=chunk) - There have been no material changes to the risk factors disclosed in the Annual Report[219](index=219&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds during the period[220](index=220&type=chunk) [Item 3. Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[220](index=220&type=chunk) [Item 4. Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[221](index=221&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company for the reporting period - This item is not applicable[222](index=222&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, incentive plans, certifications, and XBRL-related documents - The section lists various exhibits filed, including organizational documents (Articles of Amendment and Restatement, Amended and Restated Bylaws), the 2019 Omnibus Incentive Compensation Plan, certifications (Sarbanes-Oxley Act Sections 302 and 906), and XBRL documents[224](index=224&type=chunk) [Signatures](index=69&type=section&id=Signatures) This section contains the signatures of the company's authorized officers, including the President, Chief Executive Officer, Secretary and Director (Principal Executive Officer), Chief Financial Officer and Treasurer (Principal Financial Officer), and Senior Vice President and Chief Accounting Officer (Principal Accounting Officer), certifying the report - The report is signed by the President, Chief Executive Officer, Secretary and Director (Mark Manheimer), Chief Financial Officer and Treasurer (Daniel Donlan), and Senior Vice President and Chief Accounting Officer (Sofia Chernylo) on July 23, 2025[227](index=227&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) NETSTREIT reported strong Q2 2025 performance with increased AFFO, significant gross investments, and a raised quarterly dividend, leading to an upward revision of 2025 guidance [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) NETSTREIT reported Q2 2025 net income of $0.04 and Adjusted Funds from Operations (AFFO) of $0.33 per diluted share, completed $117.1 million in gross investments, and raised $46.1 million in common equity, leading to increased 2025 guidance and a dividend raise - Net Income per Diluted Share for Q2 2025: **$0.04**[1](index=1&type=chunk) - Adjusted Funds from Operations (AFFO) per Diluted Share for Q2 2025: **$0.33**[1](index=1&type=chunk) - Completed **$117.1 million** of gross investment activity at a **7.8%** blended cash yield[1](index=1&type=chunk) - Raised **$46.1 million** of common equity via the At-The-Market (ATM) program[1](index=1&type=chunk) - Increased 2025 AFFO Per Share Guidance to **$1.29 to $1.31**[1](index=1&type=chunk) - Increased 2025 Net Investment Guidance to **$125.0 million to $175.0 million**[1](index=1&type=chunk) - Increased Quarterly Dividend by **2.4%** to **$0.215** Per Share[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mark Manheimer highlighted strong execution in net investments, completing $117.1 million in investments and $60.4 million in dispositions, while leveraging improved cost of capital to strengthen the balance sheet and increase 2025 guidance - Strong execution on net investment front, completing **$117.1 million** of investments at a **7.8%** cash yield and **$60.4 million** of dispositions at a **6.5%** cash yield[3](index=3&type=chunk) - Strengthened the balance sheet by raising **$46.1 million** of equity via the ATM program, leveraging an improved cost of capital[3](index=3&type=chunk) - Increased 2025 guidance for both net investment activity and AFFO per share, driven by a strong performing portfolio and a decision to re-emphasize external growth[3](index=3&type=chunk) [Financial Highlights](index=1&type=section&id=SECOND%20QUARTER%202025%20HIGHLIGHTS) NETSTREIT demonstrated significant financial improvement in Q2 2025, with positive net income and growth in FFO and AFFO per diluted share compared to the prior year [Key Financial Metrics (Q2 2025 vs Q2 2024)](index=1&type=section&id=Key%20Financial%20Metrics) For Q2 2025, Net Income per diluted share improved significantly from a loss of $(0.03) to a gain of $0.04, FFO per diluted share increased by 14.8% to $0.31, and AFFO per diluted share grew by 3.1% to $0.33 Three Months Ended June 30, 2025 vs 2024 | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Net Income (Loss) per Diluted Share | $0.04 | $(0.03) | NA | | Funds from Operations per Diluted Share | $0.31 | $0.27 | 14.8 % | | Core Funds from Operations per Diluted Share | $0.31 | $0.31 | — % | | Adjusted Funds from Operations per Diluted Share | $0.33 | $0.32 | 3.1 % | Six Months Ended June 30, 2025 vs 2024 | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Net Income (Loss) per Diluted Share | $0.06 | $(0.02) | NA | | Funds from Operations per Diluted Share | $0.60 | $0.55 | 9.1 % | | Core Funds from Operations per Diluted Share | $0.61 | $0.62 | NA | | Adjusted Funds from Operations per Diluted Share | $0.65 | $0.63 | 3.2 % | [Operational Performance](index=3&type=section&id=Operational%20Performance) NETSTREIT executed substantial investment and disposition activities in Q2 2025, maintaining a highly occupied portfolio with a strong tenant base and ongoing development projects [Investment and Disposition Activity](index=3&type=section&id=INVESTMENT%20ACTIVITY) In Q2 2025, NETSTREIT completed 32 investments totaling $117.1 million at a 7.8% cash yield, with dispositions of 20 properties for $60.4 million, resulting in $49.4 million in net investment activity for the quarter Investment, Disposition, and Loan Repayment Activities (Three Months Ended June 30, 2025) | Activity | Number of Investments | Amount ($ thousands) | Cash Yield % | | :----------------------- | :-------------------- | :------------------- | :----------- | | Investments | 32 | 117,063 | 7.8 % | | Less Dispositions | 20 | 60,391 | 6.5 % | | Less Loan Repayments | 2 | 7,318 | 9.3 % | | Net Investment Activity | | 49,354 | | Investment, Disposition, and Loan Repayment Activities (Six Months Ended June 30, 2025) | Activity | Number of Investments | Amount ($ thousands) | Cash Yield % | | :----------------------- | :-------------------- | :------------------- | :----------- | | Investments | 57 | 207,743 | 7.7 % | | Less Dispositions | 36 | 100,684 | 6.8 % | | Less Loan Repayments | 3 | 12,016 | 9.1 % | | Net Investment Activity | | 95,043 | | - For Q2 2025 investments, **18.0%** of ABR was derived from Investment Grade Tenants and **7.7%** from Investment Grade Profile Tenants, with a weighted average lease term of **15.7 years**[6](index=6&type=chunk) [Development Projects](index=3&type=section&id=Development%20Projects) As of June 30, 2025, NETSTREIT had 2 ongoing development projects, with $1.4 million funded during Q2 2025, bringing the total funded to date to $1.7 million against an estimated total cost of $6.3 million Development Projects as of June 30, 2025 (dollars in thousands) | Metric | Amount ($ thousands) | | :---------------------------------- | :------- | | Number of Developments | 2 | | Amount Funded During the Quarter | $1,408 | | Amount Funded to Date | $1,726 | | Estimated Funding Remaining on Developments | $4,599 | | Total Estimated Development Cost | $6,325 | [Portfolio Statistics](index=4&type=section&id=PORTFOLIO%20UPDATE) As of June 30, 2025, NETSTREIT's portfolio comprised 705 investments across 45 states, totaling 12.8 million square feet, maintaining a 99.9% occupancy rate and a weighted average lease term of 9.8 years Real Estate Portfolio as of June 30, 2025 (weighted by ABR, dollars in thousands) | Metric | Value | | :-------------------------------- | :------------ | | Number of Investments | 705 | | ABR | $172,889 thousand | | States | 45 | | Square Feet | 12,787,231 | | Tenants | 106 | | Industries | 27 | | Occupancy | 99.9 % | | Weighted Average Lease Term (years) | 9.8 | | Investment Grade % | 52.2 % | | Investment Grade Profile % | 16.5 % | [Capital Markets and Balance Sheet](index=4&type=section&id=CAPITAL%20MARKETS%20AND%20BALANCE%20SHEET) NETSTREIT maintained a healthy balance sheet with manageable leverage and robust liquidity, actively utilizing equity programs to support its capital structure [Leverage and Liquidity](index=4&type=section&id=Leverage%20and%20Liquidity) As of June 30, 2025, NETSTREIT's Net Debt to Annualized Adjusted EBITDAre was 5.9x and Adjusted Net Debt to Annualized Adjusted EBITDAre was 4.6x, with total liquidity standing at $594.2 million Leverage as of June 30, 2025 | Metric | Value | | :--------------------------------- | :---- | | Net Debt / Annualized Adjusted EBITDAre | 5.9x | | Adjusted Net Debt / Annualized Adjusted EBITDAre | 4.6x | Liquidity as of June 30, 2025 (dollars in thousands) | Metric | Amount ($ thousands) | | :-------------------------------- | :------- | | Unused Unsecured Revolver Capacity | $372,850 | | Cash, Cash Equivalents and Restricted Cash | $19,740 | | Net Value of Unsettled Forward Equity | $201,621 | | Total Liquidity | $594,211 | [Equity Programs](index=4&type=section&id=Equity%20Programs) During Q2 2025, NETSTREIT sold 2.8 million shares under its ATM program and settled 1.1 million forward equity shares, with 11.8 million shares unsettled as of quarter-end, representing a net value of $201.6 million ATM Program Activity (as of June 30, 2025) | Metric | Value | | :-------------------------------- | :------------ | | Shares Sold During Quarter | 2,842,815 shares | | Weighted Average Price Per Share (Gross) | $16.36 | | ATM Capacity Remaining | $250,866 thousand | Forward Equity Settlement Activity (as of June 30, 2025) | Metric | Value | | :-------------------------------- | :------------ | | Shares Settled During Quarter | 1,105,299 shares | | Weighted Average Price Per Share (Gross) | $16.37 | | Net Value of Settled Forward Equity | $17,927 thousand | - As of June 30, 2025, **11,820,647 shares** remained unsettled under forward equity contracts, with a net value of **$201,621 thousand** at a weighted average gross price of **$17.80** per share[12](index=12&type=chunk) - Subsequent to quarter-end, **107,400 shares** were sold on a forward basis under the ATM Program at a weighted average gross price of **$16.94**[14](index=14&type=chunk) [Shareholder Returns and Outlook](index=5&type=section&id=Shareholder%20Returns%20and%20Outlook) NETSTREIT declared an increased quarterly dividend and raised its 2025 AFFO per share and net investment guidance, reflecting confidence in future performance [Dividend Declaration](index=5&type=section&id=DIVIDEND) NETSTREIT's Board of Directors declared a quarterly cash dividend of $0.215 per share for Q3 2025, payable on September 15, 2025, representing an annualized increase of $0.02 per share (2.4%) - Quarterly cash dividend declared for Q3 2025: **$0.215** per share[15](index=15&type=chunk) - Annualized dividend of **$0.86** per share, representing an increase of **$0.02** per share (**2.4%**) over the prior year annualized dividend[15](index=15&type=chunk) - Dividend payable on September 15, 2025, to shareholders of record on September 2, 2025[15](index=15&type=chunk) [2025 Guidance Update](index=5&type=section&id=2025%20GUIDANCE) NETSTREIT increased its 2025 AFFO per share guidance range to $1.29-$1.31 and its net investment activity guidance to $125.0-$175.0 million, with cash G&A now expected to be $15.0-$15.5 million Updated 2025 Guidance | Metric | Previous Guidance | New Guidance | Change | | :-------------------------------- | :---------------- | :--------------- | :----- | | AFFO per share | $1.28 to $1.30 | $1.29 to $1.31 | Increased | | Net investment activity | $75.0 million to $125.0 million | $125.0 million to $175.0 million | Increased | | Cash G&A | | $15.0 million to $15.5 million | New range | - The guidance is based on assumptions subject to change and outside the Company's control, with no assurance of achieving these results[17](index=17&type=chunk) - AFFO is a non-GAAP financial measure, and a reconciliation to GAAP is not provided for forward-looking measures due to practical difficulties in projecting event-driven items[18](index=18&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) NETSTREIT Corp. is a Dallas-based REIT specializing in high-quality, e-commerce resistant net lease retail properties, committed to consistent cash flows and investor communication [About NETSTREIT Corp.](index=5&type=section&id=About%20NETSTREIT%20Corp.) NETSTREIT Corp. is an internally managed REIT based in Dallas, Texas, specializing in acquiring single-tenant net lease retail properties nationwide, focusing on e-commerce resistant tenants with strong balance sheets - NETSTREIT Corp. is an internally managed real estate investment trust (REIT) based in Dallas, Texas[23](index=23&type=chunk) - Specializes in acquiring single-tenant net lease retail properties nationwide[23](index=23&type=chunk) - Portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets[23](index=23&type=chunk) - Strategy aims to create the highest quality net lease retail portfolio to generate consistent cash flows and dividends for its investors[23](index=23&type=chunk) [Investor Communications](index=5&type=section&id=EARNINGS%20CONFERENCE%20CALL) NETSTREIT will host an earnings conference call on July 24, 2025, at 11:00 AM ET to discuss Q2 2025 performance, with a webcast and supplemental package available on the company's investor relations website - An earnings conference call will be held on Thursday, July 24, 2025, at **11:00 AM ET** to review Q2 2025 performance and discuss recent events[19](index=19&type=chunk) - The webcast will be accessible on the 'Investor Relations' section of the Company's website at www.NETSTREIT.com[20](index=20&type=chunk) - A supplemental package will be available prior to the conference call in the Investor Relations section of www.investors.netstreit.com[22](index=22&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) NETSTREIT's Q2 2025 financial statements show increased total assets and revenues, a shift from net loss to net income, and changes in liabilities and equity [Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets increased to $2.31 billion from $2.26 billion, with real estate held for investment rising to $1.87 billion, while total liabilities grew to $988.2 million and total equity slightly decreased to $1.32 billion Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (thousands) | December 31, 2024 (thousands) | | :------------------------------------ | :-------------- | :---------------- | | **Assets:** | | | | Real estate held for investment, net | $1,871,583 | $1,834,361 | | Assets held for sale | $57,795 | $48,637 | | Mortgage loans receivable, net | $152,779 | $139,409 | | Cash, cash equivalents, and restricted cash | $19,740 | $14,320 | | Total assets | $2,311,714 | $2,259,346 | | **Liabilities:** | | | | Term loans, net | $795,976 | $622,608 | | Revolving credit facility | $127,000 | $239,000 | | Total liabilities | $988,169 | $921,214 | | **Equity:** | | | | Total stockholders' equity | $1,316,616 | $1,330,971 | | Total equity | $1,323,545 | $1,338,132 | [Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, total revenues increased to $48.3 million from $39.6 million, resulting in net income attributable to common stockholders of $3.3 million, a significant improvement from a net loss of $(2.3) million in the prior year Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental revenue (including reimbursable) | $45,158 | $36,864 | $87,748 | $72,053 | | Total revenues | $48,286 | $39,567 | $94,196 | $77,240 | | Total operating expenses | $35,960 | $31,677 | $70,518 | $62,819 | | Net income (loss) attributable to common stockholders | $3,272 | $(2,291) | $4,963 | $(1,246) | | Basic EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | | Diluted EPS | $0.04 | $(0.03) | $0.06 | $(0.02) | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES%20AND%20RECONCILIATIONS) This section provides detailed reconciliations and definitions for key non-GAAP financial metrics like FFO, AFFO, EBITDAre, and NOI, crucial for assessing operational performance [FFO, Core FFO, and AFFO](index=9&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20FFO%2C%20CORE%20FFO%20AND%20ADJUSTED%20FFO) For Q2 2025, FFO increased to $25.6 million (diluted FFO per share $0.31) and AFFO increased to $27.5 million (diluted AFFO per share $0.33), with detailed reconciliations provided from net income to these non-GAAP measures FFO, Core FFO, and AFFO Reconciliation (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 (thousands) | Three Months Ended June 30, 2024 (thousands) | Six Months Ended June 30, 2025 (thousands) | Six Months Ended June 30, 2024 (thousands) | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $3,289 | $(2,306) | $4,989 | $(1,254) | | FFO | $25,611 | $19,987 | $49,702 | $41,164 | | Core FFO | $25,614 | $23,389 | $50,184 | $45,837 | | AFFO | $27,460 | $23,817 | $53,707 | $46,677 | | FFO per common share, diluted | $0.31 | $0.27 | $0.60 | $0.55 | | Core FFO per common share, diluted | $0.31 | $0.31 | $0.61 | $0.62 | | AFFO per common share, diluted | $0.33 | $0.32 | $0.65 | $0.63 | [EBITDA, EBITDAre, and Adjusted EBITDAre](index=10&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20EBITDA%2C%20EBITDAre%2C%20ADJUSTED%20EBITDAre%2C%20AND%20ANNUALIZED%20ADJUSTED%20EBITDAre) For Q2 2025, EBITDA was $37.5 million, EBITDAre was $38.4 million, and Adjusted EBITDAre was $38.8 million, with Annualized Adjusted EBITDAre at $155.3 million, providing supplemental information on operating performance EBITDA, EBITDAre, Adjusted EBITDAre (Three Months Ended June 30, 2025, in thousands) | Metric | Amount (thousands) | | :-------------------------------------------------- | :------- | | Net income | $3,289 | | EBITDA | $37,467 | | EBITDAre | $38,356 | | Adjusted EBITDAre | $38,825 | | Annualized Adjusted EBITDAre | $155,300 | [Property-Level NOI and Cash NOI](index=11&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20NOI%2C%20PROPERTY-LEVEL%20CASH%20NOI%2C%20AND%20PROPERTY-LEVEL%20CASH%20NOI%20-%20ESTIMATED%20RUN%20RATE) For Q2 2025, Property-Level NOI was $40.4 million and Property-Level Cash NOI was $39.3 million, with an estimated run rate of $39.4 million, used to assess property-level operating results on an unlevered basis Property-Level NOI, Property-Level Cash NOI (Three Months Ended June 30, 2025, in thousands) | Metric | 2025 (thousands) | 2024 (thousands) | | :-------------------------------------- | :------- | :------- | | Net income (loss) | $3,289 | $(2,306) | | Property-Level NOI | $40,445 | $32,866 | | Property-Level Cash NOI | $39,256 | $32,230 | | Property-Level Cash NOI - Estimated Run Rate | $39,415 | | [Non-GAAP Definitions](index=13&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES_Definitions) This section provides detailed definitions for various non-GAAP financial measures used by NETSTREIT, including FFO, Core FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, Net Debt, Adjusted Net Debt, Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate - FFO, Core FFO, and AFFO are non-GAAP measures used to evaluate operating performance and funds available for distributions, excluding historical cost depreciation and certain non-recurring items[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre are industry-common measures providing supplemental information on operating performance, exclusive of certain non-cash items and other costs[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Net Debt and Adjusted Net Debt are calculated to estimate the net contractual amount of borrowed capital to be repaid, adjusting for cash and unsettled forward equity[53](index=53&type=chunk)[54](index=54&type=chunk) - Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate assess property-level operating results on an unlevered basis[55](index=55&type=chunk) - All non-GAAP measures are supplemental and should not be considered alternatives to GAAP net income or cash flows[45](index=45&type=chunk)[50](index=50&type=chunk)[56](index=56&type=chunk) [Other Definitions](index=15&type=section&id=OTHER%20DEFINITIONS) This section clarifies key operational terms such as ABR, Cash Yield, Investment Grade, and Occupancy, essential for understanding NETSTREIT's portfolio and performance metrics [Operational Definitions](index=15&type=section&id=Operational%20Definitions) This section defines key operational terms used in the report, such as Annualized Base Rent (ABR), Cash Yield, Investments, Investment Grade, Investment Grade Profile, Occupancy, and Weighted Average Lease Term - **ABR:** Annualized base rent for all leases that commenced and annualized cash interest for all executed mortgage loans as of June 30, 2025[57](index=57&type=chunk) - **Cash Yield:** The annualized base rent contractually due from acquired properties and completed developments, and interest income from mortgage loans receivable, divided by the gross investment amount, gross proceeds in the case of dispositions, or loan repayment amount[57](index=57&type=chunk) - **Investments:** Lease agreements in place at owned properties, properties that have leases associated with mortgage loans receivable, developments where rent commenced, interest earning developments, or in the case of master lease arrangements each property under the master lease is counted as a separate lease[58](index=58&type=chunk) - **Investment Grade:** Investments, or investments that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody's) or NAIC2 (National Association or Insurance Commissioners) or higher[59](index=59&type=chunk) - **Investment Grade Profile:** Investments with investment grade credit metrics (more than **$1.0 billion** in annual sales and a debt to adjusted EBITDA ratio of less than **2.0x**), but do not carry a published rating from S&P, Fitch, Moody's, or NAIC[59](index=59&type=chunk) - **Occupancy:** Expressed as a percentage, and is the number of leased investments divided by the total number of investments owned, excluding properties under development[60](index=60&type=chunk) - **Weighted Average Lease Term:** Weighted by the annualized base rent, excluding lease extension options and investments associated with mortgage loans receivable[60](index=60&type=chunk) [Disclaimers](index=6&type=section&id=Disclaimers) This section outlines the forward-looking nature of statements within the report, highlighting inherent risks and uncertainties that could cause actual results to differ materially [Forward-Looking Statements](index=6&type=section&id=FORWARD%20LOOKING%20STATEMENTS) The press release contains forward-looking statements regarding business strategies, investment activities, and 2025 guidance, which involve known and unknown risks and uncertainties, and the company disclaims any obligation to update these statements - The press release contains forward-looking statements concerning business and growth strategies, investment, financing and leasing activities, and 2025 guidance[26](index=26&type=chunk) - Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different[26](index=26&type=chunk) - Risks are heightened by ongoing and numerous adverse effects arising from macroeconomic conditions, including inflation, interest rates, and instability in the banking system[26](index=26&type=chunk) - The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement, except to the extent otherwise required by law[26](index=26&type=chunk)

Core Insights - The article emphasizes the importance of dividend investing as a pathway to financial freedom, highlighting its accessibility and potential for steady income [1]. Group 1: Investment Philosophy - The author combines financial expertise with value investing principles, focusing on dividend investing as a foundational strategy for wealth building [1]. - The article aims to demystify dividend investing, making it more approachable for individuals seeking long-term financial growth [1]. Group 2: Professional Background - The author has extensive experience in M&A and business valuation, having evaluated numerous businesses and participated in both sell-side and buy-side transactions [1]. - The sectors of focus include technology, real estate, software, finance, and consumer staples, which are also reflected in the author's personal investment portfolio [1].

Group 1 - Albert Anthony is a Croatian-American media personality and analyst for financial media platforms Investing.com and Seeking Alpha, focusing on dividend stocks and general market commentary [1] - Since 2023, Albert Anthony has gained over 1,000 followers and has covered more than 200 companies across multiple sectors [1] - He has experience as an analyst in the IT sector and was part of the IT team at a top 10 financial firm in the US [1] Group 2 - Albert Anthony holds a B.A. from Drew University and has completed coursework through the Corporate Finance Institute and Coursera [1] - In 2025, he plans to launch a new book on Amazon discussing his methodology as an analyst and how he rates stocks [1] - The Albert Anthony brand is owned by Albert Anthony & Co., a sole proprietorship registered in Austin, Texas [1]

Financial Data and Key Metrics Changes - The company reported net income of $1.7 million or $0.02 per diluted share for the first quarter of 2025 [12] - Core FFO for the quarter was $24.6 million or $0.30 per diluted share, and AFFO was $26.2 million or $0.32 per diluted share, representing a 3.2% increase over the previous year [12] - Total recurring G&A increased by 5% year over year to $5.1 million, but represented 11% of total revenues compared to 13% in the prior year [12] Business Line Data and Key Metrics Changes - The company completed $90.7 million of gross investments at a blended cash yield of 7.7% during the quarter [4] - The weighted average lease term for these investments was 9.2 years, with 66% of ABR from investment grade and investment grade profile tenants [5] - The top five tenant concentration declined by 70 basis points to 28.2% of ABR, with the top tenant Dollar General reduced by 50 basis points to 8.1% of ABR [6] Market Data and Key Metrics Changes - The company ended the quarter with investments in 695 properties leased to 101 tenants across 26 industries in 45 states [5] - 71% of total ABR is leased to investment grade or investment grade profile tenants, with a weighted average lease term remaining of 9.7 years [6] Company Strategy and Development Direction - The company aims to reduce tenant concentrations and diversify its portfolio while maintaining a low leverage balance sheet [4] - The management is prepared to accelerate investment activity if there is a sustained improvement in the cost of equity [5] - The focus remains on necessity, discount, and service-oriented industries, which account for 88% of ABR, to weather economic downturns [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving diversification goals and noted strong demand for properties despite economic uncertainties [8] - The company has maintained zero credit losses during COVID and continues to perform well despite negative headlines in the industry [9] - Management remains cautious about growth, emphasizing that they will not sacrifice the balance sheet for growth [11] Other Important Information - The company declared a quarterly cash dividend of $0.21 per share, payable on June 16, with an AFFO payout ratio of 66% for the first quarter [16] - Adjusted net debt was reported at $724 million, with a weighted average interest rate of 4.57% [14] Q&A Session Summary Question: Update on appetite for pharmacy and dollar stores - Management expects to reduce exposures to Dollar General and Walgreens below 5% by year-end, with strong interest from institutional buyers [18][19] Question: Expectations for ratings upgrade - Preliminary discussions for a ratings upgrade are planned for the latter half of the year, with potential savings of at least 30 basis points on debt [21][24] Question: Clarification on net investment activity - Management indicated that they would not increase acquisitions unless there is a change in equity price, maintaining a capital recycling strategy [27][28] Question: Update on Big Lots asset in Maryland - There is significant interest from retailers, and management is negotiating attractive LOIs while waiting for market dynamics to play out [34][35] Question: Impact of Walgreens take-private on risk profile - Management believes the take-private will not change the risk profile of Walgreens assets, as the focus will be on retail operations [37] Question: Expectations for portfolio changes and cap rates - Dispositions are expected to occur at mid to high 6% cap rates, while acquisitions will likely remain above 7.5% [45][46] Question: New store opening appetite - Tenants are still in growth mode, but uncertainty due to tariffs is causing some hesitation in decision-making [72][75] Question: Impact of tariffs on tenants - Tariffs have created confusion but are not expected to significantly impact tenant credit quality [103] Question: New tenant relationships in acquisitions - The company added three new tenants in the quarter, indicating ongoing diversification efforts [107]

Financial Data and Key Metrics Changes - The company reported net income of $1.7 million or $0.02 per diluted share for Q1 2025, with core FFO of $24.6 million or $0.30 per diluted share, and AFFO of $26.2 million or $0.32 per diluted share, representing a 3.2% increase year-over-year [15] - Total recurring G&A expenses increased by 5% year-over-year to $5.1 million, but represented 11% of total revenues compared to 13% in the prior year [15] - Adjusted net debt was $724 million with a weighted average interest rate of 4.57% and a weighted average debt maturity of 4.1 years [16][17] Business Line Data and Key Metrics Changes - The company completed $90.7 million of gross investments at a blended cash yield of 7.7%, with a weighted average lease term of 9.2 years [7][8] - The top five tenant concentration declined by 70 basis points to 28.2% of ABR, with Dollar General's share reducing by 50 basis points to 8.1% [9] - 71% of total ABR is leased to investment grade or investment grade profile tenants, with just 1.3% of ABR expiring through 2026 [9] Market Data and Key Metrics Changes - The company ended the quarter with investments in 695 properties leased to 101 tenants across 26 industries in 45 states [8] - The company is seeing strong demand for properties, particularly in necessity, discount, and service-oriented industries, which drive 88% of ABR [10] Company Strategy and Development Direction - The company aims to reduce tenant concentrations and diversify its portfolio, with a goal to have all tenants below 5% by December 31 [21] - The company is focused on maintaining a low leverage balance sheet and is prepared to accelerate investment activity if cost of equity improves [7][13] - The company continues to avoid specialized real estate and sectors more susceptible to distress during economic downturns [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving diversification goals and noted that the portfolio is resilient enough to weather economic challenges [10][12] - The company has maintained zero credit losses during COVID and continues to perform well despite negative headlines in the retail sector [11] - Management is optimistic about the operations of Family Dollar and Walgreens under new leadership, expecting them to operate with low leverage [12] Other Important Information - The Board declared a quarterly cash dividend of $0.21 per share, payable on June 16, with an AFFO payout ratio of 66% for Q1 [18] - The company is increasing the low end of its AFFO per share guidance to a range of $1.28 to $1.30, assuming net investment activity of $75 million to $125 million [17] Q&A Session Summary Question: Update on appetite for pharmacy and dollar stores - Management expects to reduce exposures to Dollar General, CVS, and Walgreens below target levels by year-end, with strong interest from institutional buyers [21] Question: Expectations for ratings upgrade - Preliminary discussions for a ratings upgrade are planned for the latter half of the year, with potential savings of at least 30 basis points on debt [23][26] Question: Clarification on net investment activity - Management indicated that they would not increase acquisitions unless equity prices improve, but they are actively engaged in capital recycling [29][30] Question: Update on Big Lots asset in Maryland - There is significant interest from retailers, and management is negotiating attractive LOIs while waiting for market dynamics to play out [37] Question: Impact of Walgreens take-private on risk profile - Management believes the focus on retail operations will be beneficial and does not expect significant risk to their assets [40] Question: Expectations for portfolio changes and cap rates - Dispositions are expected to occur at mid to high 6% cap rates, while acquisitions may continue at yields above 7.5% [48] Question: New store opening appetite and tariffs - Tenants are still in growth mode, but uncertainty from tariffs may slow decision-making [80][111] Question: Changes in credit underwriting criteria - No significant changes in underwriting criteria, but the focus remains on cash flow generation and location quality [100][102]

Portfolio Highlights - The company's portfolio boasts high credit quality, with 71% investment grade (IG) and investment grade profile (IGP) tenants[9] - The portfolio maintains a high occupancy rate of 99.9%[9,12] - The weighted average lease term (WALT) is 9.7 years[9,12] - 88% of tenants are in necessity, discount, and service-oriented sectors[9] - Rent collection is at 100%[9] Investment and Financial Performance - $90.7 million of gross investments were completed in 1Q'25[9] - The weighted average cash yield since 3Q'20 is 7.0%[9] - The year-to-date cash yield is 7.7%[9] - Adjusted Net Debt / Annualized Adjusted EBITDAre is 4.7x[9,46] - Total liquidity stands at $584 million[9,46] Portfolio Composition - Investment grade tenants account for 54.7% of the portfolio by ABR[12,28] - Dollar Stores represent 18.2% of the top industries in the portfolio[19] - Grocery stores account for 15.1% of the top industries in the portfolio[19]

Company Performance - NETSTREIT (NTST) reported quarterly funds from operations (FFO) of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing an increase from $0.31 per share a year ago, representing an FFO surprise of 3.23% [1] - The company achieved revenues of $45.91 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.43%, compared to revenues of $37.67 million in the same quarter last year [2] - Over the last four quarters, NETSTREIT has exceeded consensus FFO estimates three times and topped consensus revenue estimates four times [2] Stock Performance - NETSTREIT shares have increased approximately 10.4% since the beginning of the year, contrasting with the S&P 500's decline of -6.1% [3] - The current consensus FFO estimate for the upcoming quarter is $0.31 on revenues of $45.91 million, while for the current fiscal year, it is $1.27 on revenues of $179.97 million [7] Industry Outlook - The REIT and Equity Trust - Other industry, to which NETSTREIT belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of NETSTREIT's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the first quarter of 2025 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) For the first quarter ended March 31, 2025, NETSTREIT Corp. reported total revenues of $45.9 million, a 21.9% increase year-over-year, and a net income of $1.7 million, up from $1.1 million in the prior year's quarter. Total assets grew to $2.29 billion from $2.26 billion at year-end 2024, primarily driven by property acquisitions and development. The company's financial activities included issuing new term loans, increasing borrowings on its revolving credit facility, and managing its portfolio through acquisitions and dispositions [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets increased to $2.29 billion by March 31, 2025, primarily due to real estate investments, while total liabilities also rose to $971.8 million Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Real estate held for investment, net | $1,827,171 | $1,834,361 | | Assets held for sale | $79,838 | $48,637 | | Cash, cash equivalents, and restricted cash | $14,205 | $14,320 | | **Total assets** | **$2,285,278** | **$2,259,346** | | **Liabilities and Equity** | | | | Term loans, net | $795,534 | $622,608 | | Revolving credit facility | $114,500 | $239,000 | | **Total liabilities** | **$971,753** | **$921,214** | | **Total equity** | **$1,313,525** | **$1,338,132** | | **Total liabilities and equity** | **$2,285,278** | **$2,259,346** | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) Total revenues increased to $45.9 million in Q1 2025, leading to a net income of $1.7 million, despite higher operating and interest expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenues** | **$45,910** | **$37,673** | | Rental revenue | $42,590 | $35,189 | | **Total operating expenses** | **$34,558** | **$31,141** | | Depreciation and amortization | $20,923 | $17,541 | | Interest expense, net | ($11,460) | ($6,180) | | **Net income** | **$1,700** | **$1,052** | | Net income attributable to common stockholders | $1,691 | $1,045 | | **Basic EPS** | **$0.02** | **$0.01** | | **Diluted EPS** | **$0.02** | **$0.01** | [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased to $1.314 billion by March 31, 2025, mainly due to dividend payments and other comprehensive losses, partially offset by net income - Total equity decreased from **$1.338 billion** at the end of 2024 to **$1.314 billion** as of March 31, 2025. The decrease was primarily due to dividends and distributions of **$17.2 million** and an other comprehensive loss of **$9.9 million**, partially offset by net income of **$1.7 million**[14](index=14&type=chunk) - The company declared and paid dividends of **$17.2 million** on common stock and OP Units during the three months ended March 31, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly increased to $22.1 million, while investing activities saw reduced cash usage and financing activities provided less cash compared to the prior year Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$22,091** | **$11,651** | | **Net cash used in investing activities** | **($48,308)** | **($97,202)** | | Acquisitions of real estate | ($77,468) | ($95,153) | | Proceeds from sale of real estate | $38,563 | $20,466 | | **Net cash provided by financing activities** | **$26,102** | **$77,956** | | Proceeds from term loans | $218,675 | $100,000 | | Repayments under revolving credit facilities | ($214,000) | ($87,000) | | **Net change in cash** | **($115)** | **($7,595)** | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's real estate portfolio, property transactions, debt structure, hedging activities, equity programs, and subsequent events - The company is an internally managed REIT focused on single-tenant retail commercial properties under long-term net leases. As of March 31, 2025, it owned or had investments in **695 properties** in **45 states**[23](index=23&type=chunk) - During Q1 2025, the company acquired **18 properties** for **$77.5 million** and sold **16 properties** for **$38.6 million**, recognizing a net gain of **$2.1 million**[50](index=50&type=chunk)[56](index=56&type=chunk) - As of March 31, 2025, total debt outstanding was **$922.7 million**, consisting of various term loans, a revolving credit facility, and a mortgage note. The company amended several credit agreements in January 2025 to extend maturities and upsize its revolver[63](index=63&type=chunk)[69](index=69&type=chunk)[78](index=78&type=chunk) - The company uses interest rate swaps to hedge its variable-rate debt. As of March 31, 2025, it had **18 outstanding interest rate swaps** with a notional value of **$800 million**, designated as cash flow hedges[89](index=89&type=chunk)[96](index=96&type=chunk) - The company has active at-the-market (ATM) equity programs. As of March 31, 2025, **$300.0 million** remained available under the 2024 ATM Program. There were also significant unsettled shares under forward sale agreements from ATM programs and a January 2024 follow-on offering[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Subsequent to the quarter end, on April 25, 2025, the Board of Directors declared a Q2 2025 cash dividend of **$0.21 per share**[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 21.9% year-over-year revenue growth to the expansion of its property portfolio through acquisitions. Operating expenses increased primarily due to higher depreciation and property-related costs associated with the larger portfolio. Interest expense rose significantly due to new debt issuances and higher average borrowings. The company maintains a strong liquidity position with access to a $500 million revolving credit facility, unsettled forward equity proceeds, and an active ATM program to fund future growth and obligations - As of March 31, 2025, the company's portfolio consisted of **695 properties** with **99.9% occupancy** and a weighted average remaining lease term of **9.7 years**. Annualized base rent (ABR) was **$168.7 million**, with approximately **71%** from tenants rated investment grade or having an investment grade profile[134](index=134&type=chunk) - In January 2025, the company executed significant debt transactions, including amending credit agreements to extend maturities, upsizing its revolver to **$500 million**, and adding a new **$175.0 million** 2030 Term Loan B[135](index=135&type=chunk) - The company's primary capital resources include cash from operations, sales of equity securities (including ATM programs), and its credit facilities. Management believes current liquidity is sufficient for at least the next 12 months[149](index=149&type=chunk)[153](index=153&type=chunk) [Results of Operations Comparison](index=43&type=section&id=Results%20of%20Operations%20Comparison) Total revenues increased by 21.9% due to portfolio growth, while operating expenses and interest expense also rose significantly Comparison of Operating Results (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$45,910** | **$37,673** | **$8,237** | **21.9%** | | **Total operating expenses** | **$34,558** | **$31,141** | **$3,417** | **11.0%** | | Depreciation and amortization | $20,923 | $17,541 | $3,382 | 19.3% | | **Interest expense, net** | **($11,460)** | **($6,180)** | **($5,280)** | **85.4%** | | **Net income** | **$1,700** | **$1,052** | **$648** | **61.6%** | - The increase in revenue was driven by a larger portfolio of operating leases and mortgage loans. The rise in operating expenses was mainly due to higher depreciation and property expenses from portfolio growth. Interest expense increased by **$5.3 million** due to new term loans and higher average borrowings on the revolver[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through term loans, a revolving credit facility, and unsettled forward equity contracts, supporting its operational and investment needs - As of March 31, 2025, the company had **$800 million** in term loans and **$114.5 million** outstanding on its **$500 million** revolver. It also had significant liquidity from unsettled forward equity contracts totaling **$184.5 million**[149](index=149&type=chunk)[183](index=183&type=chunk) - Cash from operating activities increased to **$22.1 million** in Q1 2025 from **$11.7 million** in Q1 2024, driven by higher rental receipts from a larger portfolio[159](index=159&type=chunk) - Cash used in investing activities decreased to **$48.3 million** from **$97.2 million** year-over-year, due to lower acquisition spending and higher proceeds from property sales[160](index=160&type=chunk) - Cash provided by financing activities decreased to **$26.1 million** from **$78.0 million**, mainly due to higher net repayments on the revolver, partially offset by proceeds from new term loans[161](index=161&type=chunk) [Non-GAAP Financial Measures](index=51&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles net income to key non-GAAP metrics such as FFO, Core FFO, AFFO, EBITDAre, and Adjusted EBITDAre, providing additional insights into operational performance Reconciliation of Net Income to FFO and AFFO (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $1,700 | $1,052 | | Depreciation and amortization of real estate | 20,850 | 17,462 | | Provisions for impairment | 3,616 | 3,662 | | Gain on sales of real estate, net | (2,075) | (997) | | **FFO** | **$24,091** | **$21,179** | | **Core FFO** | **$24,570** | **$22,450** | | **AFFO** | **$26,248** | **$22,863** | Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands) | | Three Months Ended March 31, 2025 | | :--- | :--- | | Net income | $1,700 | | Interest expense, net | 11,460 | | Depreciation and amortization | 20,853 | | **EBITDA** | **$33,952** | | **EBITDAre** | **$35,493** | | **Adjusted EBITDAre** | **$38,125** | | **Annualized Adjusted EBITDAre** | **$152,500** | - The company's Adjusted Net Debt to Annualized Adjusted EBITDAre ratio was **4.7x** as of March 31, 2025[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuation on its variable-rate debt, which includes four term loans and a revolving credit facility totaling $914.5 million as of March 31, 2025. To mitigate this risk, the company has entered into interest rate derivative contracts to effectively fix the rates on its term loans. The remaining exposure is on the revolving credit facility, where a 1% adverse change in interest rates would result in an estimated market risk exposure of approximately $1.0 million - The company is exposed to interest rate risk from its floating-rate debt, which includes the 2028, 2029, 2030A, and 2030B Term Loans, and the Revolver[187](index=187&type=chunk) - Interest rate derivative contracts are used to hedge the market risk on all term loans, converting the variable rates to fixed rates for the duration of the hedges[188](index=188&type=chunk) - The primary unhedged interest rate exposure is on the Revolver. A sensitivity analysis indicates that a **1% adverse change** in interest rates would have an approximate **$1.0 million** impact based on borrowings during 2025[189](index=189&type=chunk) [Controls and Procedures](index=59&type=section&id=Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[191](index=191&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[192](index=192&type=chunk) [PART II – OTHER INFORMATION](index=60&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, defaults, mine safety disclosures, other information, and exhibits [Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material lawsuits, claims, or other legal proceedings - The company is not currently a party to any material legal proceedings[193](index=193&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[194](index=194&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no company stock repurchases during the period - There were no unregistered sales of equity securities or company stock repurchases[195](index=195&type=chunk) [Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable - Not applicable[195](index=195&type=chunk) [Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - Not applicable[196](index=196&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This item is not applicable - Not applicable[197](index=197&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) The report includes standard exhibits, such as CEO and CFO certifications pursuant to the Sarbanes-Oxley Act (Sections 302 and 906) and XBRL data files - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL interactive data files[199](index=199&type=chunk)