[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)

[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)

Group 1 - The market is experiencing significant volatility, likened to historical events such as the end of the gold standard in 1971, as noted by Bill Gross [1] - Pearl Gray is an investment fund and market research firm that focuses on systematic analysis, particularly in bonds, investment funds, and REITs, with a primary emphasis on financials and real estate sectors [1] - The mission of Pearl Gray is to identify actionable total return ideas that integrate rigorous academic theories, practical experience, and common sense [1] Group 2 - The content provided by Pearl Gray and similar platforms is intended for discussion purposes and does not constitute financial advice, encouraging consultation with a registered financial advisor before making investment decisions [2] - Seeking Alpha emphasizes that past performance does not guarantee future results and that the views expressed may not represent the platform as a whole [3]

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].

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]