NetSTREIT(NTST) - 2025 Q1 - Quarterly Results

Financial and Operating Results First Quarter 2025 Highlights 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] 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 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] 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 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 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] 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] - The annualized dividend of $0.84 per share marks a $0.02 per share increase over the prior year[12] 2025 Guidance 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] - Net investment activity guidance for 2025 is maintained at $75.0 million to $125.0 million[13] Financial Statements Condensed Consolidated Balance Sheets 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 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 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 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 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 Non-GAAP Financial Measures 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] - 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] - EBITDAre: Defined as EBITDA excluding gains/losses from sales of depreciable property and impairment charges[43] - 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] Other Definitions 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] - Investment Grade: Tenants with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody's), or NAIC2 or higher[55] - 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] - Occupancy: The number of leased investments divided by the total number of investments owned, excluding properties under development[57]