Postal Realty Trust(PSTL) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview Key Financial and Operational Highlights Postal Realty Trust reported strong Q2 2025 results, including a 29% revenue increase, $3.6 million net income, and $0.33 AFFO per diluted share, while expanding its portfolio and raising full-year guidance Q2 2025 Financial Highlights | Metric | Value | Per Diluted Share | | :--- | :--- | :--- | | Net Income (attributable to common shareholders) | $3.6 million | $0.12 | | Funds from Operations (FFO) | $10.8 million | $0.35 | | Adjusted Funds from Operations (AFFO) | $10.4 million | $0.33 | - Revenue grew by 29% from Q2 2024 to Q2 2025[5] - Acquired 68 USPS properties for approximately $35.9 million at a weighted average capitalization rate of 7.8%[1][5] - The company increased its 2025 AFFO guidance by $0.04 to a new range of $1.24 - $1.26 per diluted share[1] Management Commentary CEO Andrew Spodek attributed strong quarterly results to successful 10-year leases, strategic acquisitions, and a robust balance sheet, emphasizing the strong USPS relationship and disciplined growth strategy - Management credits the strong performance to successful execution of 10-year leases with annual rent escalations, strategic property acquisitions, and maintaining a robust balance sheet[3] - The CEO emphasized that the company's relationship with its primary tenant, the U.S. Postal Service, remains stronger than ever[3] - The company's strategy focuses on disciplined growth through prudent platform scaling to deliver consistent internal and external growth[3] Operational and Financial Details Property Portfolio & Acquisitions As of June 30, 2025, the company's portfolio was 99.8% occupied with 1,806 properties and 6.8 million square feet, having acquired 68 properties for $35.9 million in Q2 at a 7.8% cap rate Portfolio Overview as of June 30, 2025 | Metric | Value | | :--- | :--- | | Occupancy | 99.8% | | Number of Properties | 1,806 | | Net Leasable Square Feet | ~6.8 million | | Weighted Average Rental Rate | $11.11 / sq. ft. | | - Last-mile & Flex Rate | $13.24 / sq. ft. | | - Industrial Rate | $4.14 / sq. ft. | Q2 2025 Acquisitions | Metric | Value | | :--- | :--- | | Properties Acquired | 68 | | Total Cost | ~$35.9 million | | Net Leasable Square Feet Added | ~240,000 | | Weighted Average Rental Rate | $13.20 / sq. ft. | Leasing Activities The company successfully managed 2025 lease expirations, securing 161 new USPS leases by July 18, 2025, which generated a $0.2 million lump sum catch-up rent payment in Q2 - As of July 18, 2025, the company received 161 fully executed new leases from the USPS for leases that expired in 2025[7] - A total lump sum catch-up payment of approximately $0.2 million was received from the USPS for leases executed in Q2 2025[7] Balance Sheet & Capital Markets As of June 30, 2025, the company maintained a solid financial position with $328 million in net debt at 4.51% weighted average interest, 86% fixed, and raised capital via ATM program for acquisitions Balance Sheet Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Cash and Property-Related Reserves | ~$2.0 million | | Net Debt | ~$328 million | | Weighted Average Interest Rate | 4.51% | | Fixed Rate Debt Percentage | 86% | | Undrawn Revolving Credit Facility | $104 million | - During Q2 and through July 18, 2025, the company issued 867,083 shares of common stock via its ATM program at an average price of $14.79 per share[9] - The company also issued 391,929 common units in its operating partnership as part of consideration for property acquisitions[9] Dividend On July 21, 2025, the company declared a quarterly dividend of $0.2425 per share, equating to an annualized $0.97 per share, payable on August 29, 2025 Quarterly Dividend Information | Metric | Value | | :--- | :--- | | Quarterly Dividend per Share | $0.2425 | | Annualized Dividend per Share | $0.97 | | Record Date | July 31, 2025 | | Payment Date | August 29, 2025 | Outlook and Subsequent Events Full Year 2025 Guidance The company raised its full-year 2025 AFFO per diluted share guidance to $1.24-$1.26 and expects acquisition volume to meet or exceed $90 million Updated Full Year 2025 Guidance | Metric | Prior Guidance | Current Guidance | | :--- | :--- | :--- | | AFFO per Diluted Share | $1.20 - $1.22 | $1.24 - $1.26 | | Acquisition Volume | $80.0M - $90.0M | Meet or exceed $90M | | Cash G&A Expense | $10.5M - $11.0M | $10.5M - $11.5M | Subsequent Events Subsequent to Q2, the company acquired 23 additional properties for $8.4 million and has another 24 properties valued at $7.3 million under definitive contracts - Subsequent to quarter end, the company acquired 23 properties for approximately $8.4 million[11] - The company has an additional 24 properties under definitive contracts, totaling approximately $7.3 million[11] Financial Statements and Reconciliations Consolidated Statements of Operations For Q2 2025, total revenues increased to $23.4 million from $18.1 million year-over-year, with net income attributable to common stockholders rising significantly to $3.6 million, or $0.12 per diluted share Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $23,351 | $18,050 | | Total Operating Expenses | $14,642 | $13,941 | | Income from Operations | $8,709 | $4,109 | | Net Income | $4,672 | $1,032 | | Net Income Attributable to Common Stockholders | $3,614 | $817 | | Net Income per Share (Diluted) | $0.12 | $0.02 | Consolidated Balance Sheets As of June 30, 2025, total assets grew to $689.8 million from $646.8 million at year-end 2024, driven by real estate, while total liabilities increased to $365.3 million from $329.3 million due to higher borrowings Balance Sheet Comparison (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Real Estate Properties, net | $637,326 | $590,031 | | Total Assets | $689,822 | $646,818 | | Total Liabilities | $365,268 | $329,320 | | Total Equity | $324,554 | $317,498 | Reconciliation of Net Income to FFO and AFFO For Q2 2025, the company reconciled GAAP net income of $4.7 million to FFO of $10.8 million and AFFO of $10.4 million, with key adjustments for depreciation, non-cash compensation, and rent adjustments Q2 2025 Reconciliation (in thousands) | Metric | Value | | :--- | :--- | | Net Income | $4,672 | | Depreciation and amortization of real estate assets | $5,887 | | FFO | $10,752 | | Adjustments (Recurring capex, financing fees, rent adjustments, etc.) | ($364) | | AFFO | $10,388 | | FFO per share/unit | $0.35 | | AFFO per share/unit | $0.33 | Supplemental Information Non-GAAP Financial Measures This section defines non-GAAP financial measures like FFO, AFFO, and net debt, explaining their calculation in accordance with NAREIT guidelines and their utility for understanding company performance - The company calculates FFO in accordance with the National Association of Real Estate Investment Trusts (NAREIT) definition[17] - AFFO is calculated by starting with FFO and adjusting for items such as recurring capital expenditures, acquisition-related expenses, straight-line rent, and non-cash compensation[18][19] - Net debt is defined as total debt less cash and property-related reserves[20] Forward-Looking Statements This section contains forward-looking statements subject to risks and uncertainties, including USPS lease renewals and market conditions, with further details available in SEC filings - The report includes forward-looking statements that are subject to inherent uncertainties, risks, and changes in circumstances[22][23] - Key risk factors include USPS lease terminations or non-renewals, changes in demand for postal services, and the financial health of the USPS[23] Company Profile and Contact Postal Realty Trust, Inc. is an internally managed REIT specializing in owning and managing over 2,150 properties primarily leased to the USPS, with contact information provided for investor and media relations - Postal Realty Trust, Inc. is an internally managed REIT owning and managing over 2,150 properties leased mainly to the USPS[24] - Contact information for investor and media relations is provided via email and phone[25]