[Financial and Operating Results](index=1&type=section&id=Financial%20and%20Operating%20Results) [First Quarter 2025 Highlights](index=1&type=section&id=FIRST%20QUARTER%202025%20HIGHLIGHTS) NETSTREIT reported Q1 2025 net income of $0.02 per diluted share (100% increase) and AFFO of $0.32 per diluted share (3.2% increase) - The company's strategic focus is on active and accretive capital recycling to enhance portfolio diversity and reduce top tenant concentrations[2](index=2&type=chunk) Q1 2025 Financial Results per Diluted Share | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income per Diluted Share | $0.02 | $0.01 | 100.0% | | Funds from Operations per Diluted Share | $0.29 | $0.28 | 3.6% | | Core Funds from Operations per Diluted Share | $0.30 | $0.30 | — % | | Adjusted Funds from Operations per Diluted Share | $0.32 | $0.31 | 3.2% | [Investment Activity](index=2&type=section&id=INVESTMENT%20ACTIVITY) Q1 2025 saw $90.7 million in gross investments and $45.7 million in net investment activity, plus four ongoing development projects Investment and Disposition Activity (Q1 2025) | Activity | Number of Properties | Amount (in thousands) | Cash Yield | Weighted Avg. Lease Term (years) | | :--- | :--- | :--- | :--- | :--- | | **Investments** | 25 | $90,680 | 7.7% | 9.2 | | **Dispositions** | 16 | $40,293 | 7.3% | 10.0 | | **Loan Repayments** | 1 | $4,699 | 8.7% | N/A | | **Net Investment Activity** | | **$45,688** | | | - New investments in Q1 2025 were comprised of **38.6% ABR** from Investment Grade tenants and **27.3%** from Investment Grade Profile tenants[5](index=5&type=chunk) Development Projects as of March 31, 2025 | Metric | Value (in thousands) | | :--- | :--- | | Number of Developments | 4 | | Amount Funded During the Quarter | $757 | | Amount Funded to Date | $6,750 | | Estimated Funding Remaining | $4,846 | | **Total Estimated Development Cost** | **$11,596** | [Portfolio Update](index=3&type=section&id=PORTFOLIO%20UPDATE) NETSTREIT's Q1 2025 portfolio included 695 investments across 45 states, 99.9% occupancy, and $168.7 million ABR Portfolio Summary as of March 31, 2025 | Metric | Value | | :--- | :--- | | Number of Investments | 695 | | ABR (in thousands) | $168,702 | | States | 45 | | Tenants | 101 | | Occupancy | 99.9% | | Weighted Average Lease Term (years) | 9.7 | | Investment Grade % | 54.7% | | Investment Grade Profile % | 16.0% | [Capital Markets and Balance Sheet](index=3&type=section&id=CAPITAL%20MARKETS%20AND%20BALANCE%20SHEET) As of March 31, 2025, the company reported a Net Debt to Annualized Adjusted EBITDAre ratio of 6.0x (4.7x adjusted) and $584.0 million in total liquidity Leverage and Liquidity as of March 31, 2025 | Metric | Value | | :--- | :--- | | Net Debt / Annualized Adjusted EBITDAre | 6.0x | | Adjusted Net Debt / Annualized Adjusted EBITDAre | 4.7x | | **Total Liquidity (in thousands)** | **$584,036** | | - Unused Unsecured Revolver Capacity | $385,350 | | - Cash, Cash Equivalents and Restricted Cash | $14,205 | | - Net Value of Unsettled Forward Equity | $184,481 | - The company has **10,735,647** unsettled forward equity shares with a net value of **$184.5 million** as of the end of the quarter[11](index=11&type=chunk) [Dividend](index=4&type=section&id=DIVIDEND) The Board declared a Q2 2025 cash dividend of $0.21 per share, an annualized $0.84, up $0.02 year-over-year - A quarterly cash dividend of **$0.21 per share** was declared for Q2 2025[12](index=12&type=chunk) - The annualized dividend of **$0.84 per share** marks a **$0.02 per share** increase over the prior year[12](index=12&type=chunk) [2025 Guidance](index=4&type=section&id=2025%20GUIDANCE) The company increased its full-year 2025 AFFO per share guidance to $1.28-$1.30, maintaining net investment activity guidance - 2025 AFFO per share guidance was increased to a new range of **$1.28 to $1.30**[13](index=13&type=chunk) - Net investment activity guidance for 2025 is maintained at **$75.0 million to $125.0 million**[13](index=13&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=7&type=section&id=NETSTREIT%20CORP.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets reached $2.29 billion, liabilities $971.8 million, and equity $1.31 billion Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $2,285,278 | $2,259,346 | | Total liabilities | $971,753 | $921,214 | | Total equity | $1,313,525 | $1,338,132 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=NETSTREIT%20CORP.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 total revenues grew to $45.9 million, with net income attributable to common stockholders increasing to $1.7 million ($0.02 per diluted share) Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $45,910 | $37,673 | | Total operating expenses | $34,558 | $31,141 | | Net income attributable to common stockholders | $1,691 | $1,045 | | Diluted EPS | $0.02 | $0.01 | [Reconciliation of Net Income to FFO, Core FFO and AFFO](index=9&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20FFO,%20CORE%20FFO%20AND%20ADJUSTED%20FFO) Q1 2025 Net Income of $1.7 million reconciled to FFO of $24.1 million, Core FFO of $24.6 million, and AFFO of $26.2 million FFO and AFFO Reconciliation Summary (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $1,700 | $1,052 | | FFO | $24,091 | $21,179 | | Core FFO | $24,570 | $22,450 | | AFFO | $26,248 | $22,863 | Per Diluted Share Reconciliation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | FFO per common share, diluted | $0.29 | $0.28 | | Core FFO per common share, diluted | $0.30 | $0.30 | | AFFO per common share, diluted | $0.32 | $0.31 | [Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre](index=10&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20EBITDA,%20EBITDAre%20AND%20ADJUSTED%20EBITDAre) Q1 2025 Net Income reconciled to Adjusted EBITDAre of $38.1 million, resulting in a 6.0x Net Debt to Annualized Adjusted EBITDAre ratio EBITDAre Reconciliation and Leverage (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $1,700 | $1,052 | | EBITDAre | $35,493 | $27,399 | | Adjusted EBITDAre | $38,125 | $31,805 | | **Annualized Adjusted EBITDAre** | **$152,500** | N/A | | **Net Debt / Annualized Adjusted EBITDAre** | **6.0x** | N/A | | **Adjusted Net Debt / Annualized Adjusted EBITDAre** | **4.7x** | N/A | [Reconciliation of Net Income to NOI and Cash NOI](index=11&type=section&id=RECONCILIATION%20OF%20NET%20INCOME%20TO%20NOI%20AND%20CASH%20NOI) Q1 2025 Net Income reconciled to Property-Level NOI of $38.2 million and Property-Level Cash NOI of $37.2 million, with total cash NOI run rate at $41.5 million NOI Reconciliation Summary (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $1,700 | $1,052 | | Property-Level NOI | $38,245 | $31,126 | | Property-Level Cash NOI | $37,221 | $30,489 | | **Total Cash NOI - Estimated Run Rate** | **$41,458** | N/A | [Non-GAAP Financial Measures and Other Definitions](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Definitions) [Non-GAAP Financial Measures](index=13&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section defines key non-GAAP financial measures like FFO, AFFO, EBITDAre, and NOI, used to supplement GAAP operating performance - **FFO (Funds from Operations):** Defined as GAAP net income, excluding gains/losses from property sales, plus depreciation, amortization, and impairment charges on real property[37](index=37&type=chunk) - **AFFO (Adjusted Funds from Operations):** Defined as Core FFO adjusted for non-cash revenues and expenses like straight-line rent, amortization of lease intangibles, and non-cash compensation[39](index=39&type=chunk) - **EBITDAre:** Defined as EBITDA excluding gains/losses from sales of depreciable property and impairment charges[43](index=43&type=chunk) - **Property-Level Cash NOI:** Defined as Property-Level NOI adjusted for non-cash revenue components like straight-line rent and amortization of lease-intangibles[51](index=51&type=chunk) [Other Definitions](index=15&type=section&id=OTHER%20DEFINITIONS) This section defines key operational and portfolio metrics, including ABR, Cash Yield, and Investment Grade tenant classifications - **ABR (Annualized Base Rent):** The annualized base rent for all commenced leases and annualized cash interest for all executed mortgage loans as of March 31, 2025[53](index=53&type=chunk) - **Investment Grade:** Tenants with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody's), or NAIC2 or higher[55](index=55&type=chunk) - **Investment Grade Profile:** Unrated tenants with investment-grade credit metrics (over **$1.0 billion** in annual sales and debt-to-EBITDA ratio below **2.0x**)[55](index=55&type=chunk) - **Occupancy:** The number of leased investments divided by the total number of investments owned, excluding properties under development[57](index=57&type=chunk)

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NETSTREIT Corp. (NYSE:NTST) Q4 2024 Earnings Conference Call February 25, 2025 11:00 AM ET Company Participants Amy An - Director of Investor Relations Mark Manheimer - President and Chief Executive Officer Daniel Donlan - Chief Financial Officer Conference Call Participants Elmer Chang - Scotiabank Michael Goldsmith - UBS Group AG Ravi Vaidya - Mizuho Securities Co., Ltd. Michael Gorman - BTIG, LLC Linda Tsai - Jefferies Group LLC Dan Guglielmo - Capital One Securities, Inc. Jay Kornreich - Wedbush Securit ...

Investor Presentation February 2025 1 Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements concerning our business and growth strategies, investment, financing and leasing activities, including estimated development costs, and trends in our business, including trends in the market f ...

Core Insights - NETSTREIT (NTST) reported $44.1 million in revenue for Q4 2024, a year-over-year increase of 19.6% [1] - The company's EPS for the same period was $0.32, compared to $0.03 a year ago, indicating significant growth [1] - Revenue exceeded the Zacks Consensus Estimate of $43.32 million by 1.81%, and EPS also surpassed the consensus estimate of $0.31 by 3.23% [1] Revenue Breakdown - Interest income on loans receivable was reported at $3.10 million, slightly below the two-analyst average estimate of $3.28 million, reflecting a year-over-year increase of 38.3% [4] - Rental revenue, including reimbursable, was $40.60 million, exceeding the two-analyst average estimate of $39.53 million, with a year-over-year change of 17.3% [4] Stock Performance - NETSTREIT shares have returned -0.5% over the past month, matching the Zacks S&P 500 composite's -0.5% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

NETSTREIT (NTST) came out with quarterly funds from operations (FFO) of $0.32 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to FFO of $0.31 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 3.23%. A quarter ago, it was expected that this company would post FFO of $0.32 per share when it actually produced FFO of $0.32, delivering no surprise.Over the last four quarters, the company has surpassed con ...

Portfolio Overview - As of December 31, 2024, the company owned or had investments in 687 properties, generating an annualized base rent (ABR) of $165.1 million, with a portfolio occupancy rate of 99.9%[16] - Approximately 56% of the ABR is derived from investment grade credit rated tenants, and an additional 15% from tenants with an investment grade profile[16] - The average purchase price of properties in the portfolio was $3.6 million, with an ABR per property of approximately $251,000[24] - The weighted average remaining lease term (WALT) for the portfolio is 9.8 years, providing a stable source of recurring cash flow[16] - The company's weighted average lease term (WALT) was 9.8 years as of December 31, 2024, contributing to stable cash flows[33] - The portfolio includes substantial geographic concentrations, with 12.3% in Texas, 10.1% in Illinois, and 7.4% in New York, making the company susceptible to adverse developments in these markets[67] Financial Performance and Strategy - The company aims to maximize stockholder value by generating attractive risk-adjusted returns through a diversified portfolio of commercially desirable properties[22] - In 2024, the company disposed of 56 properties for a total sales price of $110.9 million, enhancing portfolio performance through diversification and improved tenant credit quality[31] - The company targets properties with a purchase price between $1 million and $10 million, focusing on e-commerce resistant and recession-resilient industries[24][25] - The company plans to leverage developer relationships for build-to-suit opportunities, which are expected to provide higher yields than traditional acquisitions[29] - The company aims for a target dividend payout ratio that allows for free cash flow reinvestment, supporting strong dividend growth without relying solely on common stock issuances[33] Debt and Capital Structure - As of December 31, 2024, the company had $239.0 million in borrowings outstanding under its $400.0 million Revolver, with a target net debt to EBITDAre leverage ratio of 4.5x to 5.5x[32] - The company is committed to maintaining a capital structure that allows for targeted acquisitions while servicing debt requirements[32] - The company amended its PNC Credit Agreement to include a new $175.0 million 2030 Term Loan B and an upsized $500.0 million Revolver, with the 2030 Term Loan B fully funded at a fixed interest rate of 5.12% through January 2030[92] - As of December 31, 2024, the company had outstanding borrowings of $200.0 million under a 2028 Term Loan, $175.0 million under a 2027 Term Loan, $250.0 million under a 2029 Term Loan, and $239.0 million under a $400.0 million Revolver[92] - The company's debt agreements contain covenants that may limit its operational flexibility and ability to make distributions to common stockholders[95] Tenant and Market Risks - The company focuses on tenants in necessity goods and essential services, which are considered e-commerce resistant and resilient through economic cycles[34] - The company faces risks related to tenant defaults, particularly as it primarily invests in single-tenant properties, where the financial failure of a tenant could lead to significant revenue loss[62] - Current macro-economic conditions, including fluctuating inflation and interest rates, have increased costs associated with property acquisitions and reduced financing availability[57] - The assessment that certain businesses are e-commerce resistant may prove incorrect, as competition from online vendors could impact tenant performance[64] - Tenant bankruptcies could lead to lease terminations and significant income losses, with potential statutory limitations on claims for unpaid rent[72] Compliance and Regulatory Risks - The company operates as a REIT and must distribute at least 90% of its taxable income to stockholders to maintain its tax status[35] - If the company fails to qualify as a REIT, it would face serious tax consequences, including being subject to U.S. federal income tax at the corporate rate, which would reduce funds available for distribution[97] - The company must ensure that less than 50% of its stock is owned by non-qualifying U.S. persons to maintain its status as a domestically-controlled REIT[123] - New legislation or regulatory changes could impact the company's ability to qualify as a REIT, potentially with retroactive effects[119] Operational and Management Risks - The company employs 22 full-time employees, primarily in roles essential to origination, underwriting, and portfolio management[51] - Key management personnel are crucial for business performance, and their loss could adversely affect investment opportunities and relationships[77] - The company may face significant remediation costs if environmental contamination is discovered on its properties, which could adversely affect its financial condition[127] - The company is subject to various environmental laws that may impose fines or liabilities for non-compliance, potentially impacting its operations[128] Cybersecurity and Fraud Risks - The company experienced a loss of $2.8 million due to a fraudulent scheme involving business email compromise, despite insurance recoveries totaling $3.3 million[145] - The company has strengthened its internal controls and processes related to fund transfers and vendor information updates following the fraudulent incident[145] - Cybersecurity risks from third-party vendors could lead to operational disruptions and financial losses[80] Market Conditions and Stock Performance - The market price of the company's common stock may be highly volatile, influenced by various macroeconomic and market conditions[139] - The company relies on distributions from its operating partnership to meet obligations and pay dividends, making it structurally subordinated to its operating partnership's liabilities[136] - The company may issue units of its operating partnership to third parties, which could dilute existing ownership and voting rights of stockholders[138]

Financial Performance - NETSTREIT reported a net loss of $(0.07) per diluted share for Q4 2024, a decrease of 333.3% compared to a profit of $0.03 in Q4 2023[3] - For the full year 2024, Funds from Operations (FFO) per diluted share increased by 1.7% to $1.20 compared to $1.18 in 2023[3] - Net loss attributable to common stockholders for 2024 was $11.937 million, compared to a net income of $6.837 million in 2023[32] - For the three months ended December 31, 2024, the company reported a net loss of $5,424 million compared to a net income of $1,962 million in the same period of 2023[41] Revenue and Growth - Total revenues for the year ended December 31, 2024, increased to $162.784 million, up 23.3% from $131.905 million in 2023[32] - Rental revenue, including reimbursable, rose to $150.823 million in 2024, compared to $123.967 million in 2023, reflecting a growth of 21.6%[32] - Adjusted Funds from Operations (AFFO) for Q4 2024 was $0.32 per diluted share, up 3.2% from $0.31 in Q4 2023[3] - Funds from Operations (FFO) for 2024 was $92.653 million, compared to $76.177 million in 2023, indicating a growth of 21.6%[35] - Adjusted Funds from Operations (AFFO) per common share, diluted, was $1.26 for 2024, compared to $1.22 in 2023, reflecting an increase of 3.3%[35] Investment Activity - The company achieved record gross investment activity of $195.1 million at a 7.4% blended cash yield in Q4 2024[1] - The company recorded record dispositions of $59.3 million in Q4 2024, contributing to a net investment activity of $122.1 million for the quarter[5] - The company closed $275.0 million in additional financing commitments in January 2025, including a new $175.0 million senior unsecured term loan[12] Portfolio and Assets - The real estate portfolio as of December 31, 2024, consisted of 687 investments with an Annualized Base Rent (ABR) of $165.1 million and an occupancy rate of 99.9%[8] - The weighted average lease term for the portfolio was 9.8 years, with 55.8% of ABR derived from investment-grade tenants[8] - Total assets as of December 31, 2024, reached $2.259 billion, an increase from $1.946 billion in 2023, representing a growth of 16.1%[30] - Total liabilities increased to $921.214 million in 2024, up from $672.804 million in 2023, marking a rise of 36.8%[30] Cash Flow and Expenses - A quarterly cash dividend of $0.21 per share was declared for Q1 2025, representing an increase of $0.02 per share over the prior year[16] - General and administrative expenses decreased to $4,456 million from $4,876 million year-over-year[41] - Property-Level NOI increased to $36,241 million from $29,635 million, representing a growth of approximately 22%[41] - Property-Level Cash NOI for the quarter was $35,026 million, up from $29,086 million, indicating a year-over-year increase of about 20%[41] - Total Cash NOI - Estimated Run Rate reached $40,039 million[41] Debt and Financial Ratios - The company reported a net debt of $857.885 million as of December 31, 2024[38] - The leverage ratio, calculated as Net Debt to Annualized Adjusted EBITDAre, was 5.8x[38] - Interest expense increased to $8,576 million from $5,646 million, reflecting a rise of approximately 52%[41] - Provisions for impairment rose significantly to $12,633 million from $2,709 million, marking an increase of over 366%[41] Future Outlook - NETSTREIT has initiated 2025 AFFO per share guidance in the range of $1.27 to $1.30[17] - The company anticipates continued growth in rental revenue and overall performance despite macroeconomic uncertainties[27]

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