Farmland Partners(FPI) - 2025 Q2 - Quarterly Results

Executive Summary Selected Highlights Farmland Partners Inc. reported a significant turnaround in Q2 2025, achieving net income and increased AFFO per share, driven by strategic asset sales and share repurchases, despite recording substantial impairments on California properties Q2 2025 Financial Highlights: | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :------- | :------- | :------- | | Net Income (Loss) | $7.8 million | $(2.1) million | NM % | | Net Income (Loss) per share | $0.15 | $(0.06) | NM % | | AFFO | $1.3 million | $0.5 million | 144.7 % | | AFFO per share | $0.03 | $0.01 | 200.0 % | - Completed dispositions of 32 properties for $71.6 million, recognizing an aggregate gain on sale of $24.2 million[3] - Repurchased 2,099,756 shares of common stock at a weighted average price of $11.19 per share during the quarter[3] - Recorded impairments on California properties totaling $16.8 million[3] - Subsequent to June 30, 2025, repurchased an additional 181,989 shares at $11.48 per share and made $23.0 million repayments against lines of credit[3] CEO Comments CEO Luca Fabbri emphasized the company's strong total returns to shareholders through consistent cash flow and significant gains from strategic farmland sales, with proceeds used for stock repurchases and debt reduction, while acknowledging impairments on California permanent crop properties due to evolving crop and water dynamics but reaffirming confidence in the business model and farmland as a stable asset class - Realized meaningful gains on over $80 million of farm sales in the first half of 2025, demonstrating asset appreciation and value creation[2] - Redeploying sale proceeds to repurchase undervalued stock and reduce high-cost debt to enhance long-term returns[2] - Recorded impairments on the California permanent crop portfolio due to a longer-term loss of value from crop and water dynamics[2] - Remains confident in the business model and the enduring strength of farmland as a low-volatility, total-return asset class[2] Financial and Operating Results Overview Summary Financial and Operating Data For the three and six months ended June 30, 2025, the company reported a significant improvement in net income and AFFO, despite a decrease in total operating revenues and Net Operating Income (NOI) compared to the same periods in 2024 Financial and Operating Results (Three Months Ended June 30, in thousands): | Metric | 2025 | 2024 | Change | | :----------------------------------- | :------- | :------- | :------- | | Net Income (Loss) | $7,792 | $(2,052) | NM % | | Net income (loss) available to common stockholders per share | $0.15 | $(0.06) | NM % | | AFFO | $1,297 | $530 | 144.7 % | | AFFO per weighted average common share | $0.03 | $0.01 | 200.0 % | | Adjusted EBITDAre | $4,469 | $6,521 | (31.5)% | | Total Operating Revenues | $9,960 | $11,445 | (13.0)% | | Net Operating Income (NOI) | $6,890 | $8,814 | (21.8)% | Financial and Operating Results (Six Months Ended June 30, in thousands): | Metric | 2025 | 2024 | Change | | :----------------------------------- | :------- | :------- | :------- | | Net Income (Loss) | $9,885 | $(644) | NM % | | Net income (loss) available to common stockholders per share | $0.18 | $(0.05) | NM % | | AFFO | $3,581 | $3,314 | 8.1 % | | AFFO per weighted average common share | $0.08 | $0.07 | 14.3 % | | Adjusted EBITDAre | $10,151 | $15,103 | (32.8)% | | Total Operating Revenues | $20,212 | $23,435 | (13.8)% | | Net Operating Income (NOI) | $14,998 | $18,465 | (18.8)% | - The six months ended June 30, 2025, includes approximately $1.0 million of income from a solar lease arrangement with a tenant[6] - The six months ended June 30, 2024, includes approximately $1.2 million of income from forfeited deposits due to the termination of a repurchase agreement[6] Operational and Strategic Updates Acquisition and Disposition Activity During the first half of 2025, the company primarily focused on strategic dispositions, selling a significant number of properties for substantial aggregate consideration and gains, while making a smaller number of acquisitions - Acquired five properties for a total consideration of $6.5 million during the six months ended June 30, 2025[10] - Completed 34 property dispositions for approximately $81.6 million in aggregate consideration, recognizing an aggregate gain on sale of $25.0 million during the six months ended June 30, 2025[10] Balance Sheet and Liquidity The company successfully reduced its total debt outstanding and maintained a strong liquidity position as of June 30, 2025, compared to year-end 2024, despite a decrease in overall liquidity - Total debt outstanding was approximately $193.4 million at June 30, 2025, down from $204.6 million at December 31, 2024[10] - Liquidity stood at $211.1 million at June 30, 2025, comprising $51.1 million in cash and $160.0 million in undrawn credit facilities, compared to $245.8 million at December 31, 2024[10] - As of July 18, 2025, the company had 44,913,381 shares of common stock outstanding on a fully diluted basis[10] Dividend Declarations The Board of Directors declared a quarterly cash dividend of $0.06 per share for common stock and Class A Common OP units, maintaining the previous dividend rate - A quarterly cash dividend of $0.06 per share of common stock and Class A Common OP unit was declared on July 22, 2025[8] - The dividends are payable on October 15, 2025, to stockholders and common unit holders of record as of October 1, 2025[8] 2025 Earnings Guidance The company's 2025 AFFO per share earnings guidance remains consistent with the prior quarter's outlook - The Company's 2025 AFFO per share earnings guidance remains unchanged compared to the prior quarter[9] Consolidated Financial Statements Consolidated Balance Sheets As of June 30, 2025, the consolidated balance sheet reflects a decrease in total assets, primarily driven by a reduction in net real estate and cash, alongside a corresponding decrease in total liabilities and equity compared to December 31, 2024 Consolidated Balance Sheets (in thousands): | ASSETS | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total real estate, net | $648,571 | $717,843 | | Cash and cash equivalents | $51,073 | $78,441 | | Loans and financing receivables, net | $64,066 | $55,305 | | TOTAL ASSETS | $776,671 | $868,560 | | LIABILITIES | | | | Mortgage notes and bonds payable, net | $192,747 | $203,683 | | Dividends payable | $2,763 | $57,253 | | Total liabilities | $202,671 | $272,003 | | Total equity | $473,515 | $494,587 | | TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY | $776,671 | $868,560 | Consolidated Statements of Operations For the three months ended June 30, 2025, the company reported a net income of $7.792 million, a significant improvement from a net loss in the prior year, primarily due to a substantial gain on asset dispositions, despite a decrease in total operating revenues and a large impairment charge Consolidated Statements of Operations (Three Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :-------------------------------------------------- | :------- | :------- | | Total operating revenues | $9,960 | $11,445 | | Total operating expenses | $24,093 | $8,205 | | (Gain) loss on disposition of assets, net | $(24,228) | $10 | | Impairment of assets | $16,821 | — | | Interest expense | $2,437 | $5,249 | | NET INCOME (LOSS) | $7,792 | $(2,052) | | Net income (loss) available to common stockholders of Farmland Partners Inc. | $6,836 | $(2,769) | | Basic net income (loss) available to common stockholders per share | $0.15 | $(0.06) | | Dividends declared per common share | $0.06 | $0.06 | Consolidated Statements of Operations (Six Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :-------------------------------------------------- | :------- | :------- | | Total operating revenues | $20,212 | $23,435 | | Total operating expenses | $30,492 | $15,048 | | (Gain) loss on disposition of assets, net | $(24,991) | $96 | | Impairment of assets | $16,821 | — | | Interest expense | $5,075 | $10,285 | | NET INCOME (LOSS) | $9,885 | $(644) | | Net income (loss) available to common stockholders of Farmland Partners Inc. | $8,108 | $(2,163) | | Basic net income (loss) available to common stockholders per share | $0.18 | $(0.05) | | Dividends declared per common share | $0.12 | $0.12 | Non-GAAP Financial Measures Reconciliation of Non-GAAP Measures The company provides detailed reconciliations for FFO, AFFO, EBITDAre, Adjusted EBITDAre, and NOI, illustrating significant improvements in FFO and AFFO for both the three and six months ended June 30, 2025, compared to the prior year, despite a decrease in Adjusted EBITDAre FFO and AFFO Reconciliation (Three Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Net income (loss) | $7,792 | $(2,052) | | (Gain) loss on disposition of assets, net | $(24,228) | $10 | | Depreciation, depletion and amortization | $1,130 | $1,430 | | Impairment of assets | $16,821 | — | | FFO | $1,515 | $(612) | | AFFO | $1,297 | $530 | | AFFO per diluted weighted average share | $0.03 | $0.01 | FFO and AFFO Reconciliation (Six Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Net income (loss) | $9,885 | $(644) | | (Gain) loss on disposition of assets, net | $(24,991) | $96 | | Depreciation, depletion and amortization | $2,303 | $2,911 | | Impairment of assets | $16,821 | — | | FFO | $4,018 | $2,363 | | AFFO | $3,581 | $3,314 | | AFFO per diluted weighted average share | $0.08 | $0.07 | EBITDAre and Adjusted EBITDAre Reconciliation (Three Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Net income (loss) | $7,792 | $(2,052) | | Interest expense | $2,437 | $5,249 | | Depreciation, depletion and amortization | $1,130 | $1,430 | | Impairment of assets | $16,821 | — | | (Gain) loss on disposition of assets, net | $(24,228) | $10 | | EBITDAre | $3,944 | $4,636 | | Adjusted EBITDAre | $4,469 | $6,521 | EBITDAre and Adjusted EBITDAre Reconciliation (Six Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Net income (loss) | $9,885 | $(644) | | Interest expense | $5,075 | $10,285 | | Depreciation, depletion and amortization | $2,303 | $2,911 | | Impairment of assets | $16,821 | — | | (Gain) loss on disposition of assets, net | $(24,991) | $96 | | EBITDAre | $9,102 | $12,666 | | Adjusted EBITDAre | $10,151 | $15,103 | NOI Reconciliation (Three Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------- | :------- | :------- | | Total operating revenues | $9,960 | $11,445 | | Property operating expenses | $1,606 | $1,870 | | Cost of goods sold | $1,464 | $761 | | NOI | $6,890 | $8,814 | NOI Reconciliation (Six Months Ended June 30, in thousands): | Metric | 2025 | 2024 | | :----------------------- | :------- | :------- | | Total operating revenues | $20,212 | $23,435 | | Property operating expenses | $3,086 | $3,668 | | Cost of goods sold | $2,128 | $1,302 | | NOI | $14,998 | $18,465 | Definitions of Non-GAAP Measures The company provides comprehensive definitions and rationale for its non-GAAP financial measures, including FFO, AFFO, EBITDAre, Adjusted EBITDAre, and NOI, emphasizing their role as supplemental performance indicators for investors while clarifying their limitations compared to GAAP measures - Non-GAAP measures (FFO, NOI, AFFO, EBITDAre, Adjusted EBITDAre) are considered useful supplemental measures of performance but should not be viewed as alternatives to net income or loss[22] - FFO is calculated in accordance with Nareit standards, excluding gains/losses from sales of depreciable operating property, real estate related depreciation/amortization, and impairment write-downs of depreciated property[23] - AFFO adjusts FFO to exclude income and expenses not reflective of sustainable operating performance, such as real estate related acquisition and due diligence costs, stock-based compensation, preferred unit distributions, and severance expense[24][25] - EBITDAre is calculated per Nareit standards, excluding interest expense, income tax, depreciation and amortization, and gains or losses on disposition of depreciated property[27] - Adjusted EBITDAre further adjusts EBITDAre for items like stock-based compensation, real estate related acquisition and due diligence costs, and severance expense to better understand operating performance[28] - Net Operating Income (NOI) is calculated as total operating revenues less property operating expenses and cost of goods sold, reflecting revenues and expenses directly associated with owning and leasing farmland real estate[30] Company Information and Disclosures Conference Call Information Farmland Partners Inc. scheduled a conference call for July 24, 2025, to discuss its financial results and provide a company update, with options for live phone access or webcast, and subsequent replay availability - A conference call is scheduled for July 24, 2025, at 11:00 a.m. (U.S. Eastern Time) to discuss financial results and provide a company update[11] - The call can be accessed live via phone (1-800-715-9871, conference ID 4868033) or a live listen-only webcast through the Investor Relations section of the company's website[11] - A replay of the conference call will be available until August 3, 2025, via phone (1-800-770-2030, playback ID 4868033) and on the Investor Relations website[12] About Farmland Partners Inc. Farmland Partners Inc. is an internally managed real estate investment trust (REIT) focused on owning and acquiring high-quality North American farmland, making loans to farmers, and managing a portfolio of approximately 125,500 acres across 15 states as of June 30, 2025 - Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to third-party farmers[13] - As of June 30, 2025, the company owned and/or managed approximately 125,500 acres of farmland in 15 states[13] - The company also owns land and buildings for four agriculture equipment dealerships in Ohio, leased to Ag Pro under the John Deere brand[13] - The company elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014[13] Forward-Looking Statements This press release contains forward-looking statements that are subject to various risks and uncertainties, including global conflicts, economic conditions, and environmental factors, which could cause actual results to differ materially from expectations, and the company does not undertake any obligation to update these statements - The press release includes "forward-looking statements" regarding outlook, acquisitions, dispositions, financing, crop yields, prices, and rental rates[14] - Actual results could differ materially due to factors such as ongoing global conflicts (Ukraine, Middle East), changes in trade policies, high inflation, elevated interest rates, economic recession, extreme weather events, and public health crises[14] - Other risks include capital market volatility, changes in business strategy, financing availability, industry changes, adverse developments in crop yields/prices, competition, litigation outcomes, and share repurchase timing/price[14] - The company does not undertake any obligation to update or revise any forward-looking information[14]