Sila Realty Trust, Inc.(SILA) - 2025 Q2 - Quarterly Results

Sila Realty Trust Second Quarter 2025 Results Sila Realty Trust reported strong Q2 2025 results, driven by strategic acquisitions, share repurchases, and solid financial performance Overview and Highlights Sila Realty Trust reported $8.6 million net income for Q2 2025, acquiring properties, repurchasing shares, and declaring a $0.40 dividend Q2 2025 Key Financial Metrics | Metric | Value | Per Diluted Share | | :--- | :--- | :--- | | Net Income | $8.6 million | $0.15 | | Cash Net Operating Income (Cash NOI) | $41.9 million | N/A | | Adjusted Funds From Operations (AFFO) | $30.0 million | $0.54 | | Cash Distributions Paid | N/A | $0.40 | - Management emphasized a disciplined investment approach, focusing on acquiring net-lease healthcare properties and repurchasing shares at a perceived discount to intrinsic value[5] - The company achieved positive cash NOI growth compared to both the prior quarter and the same quarter last year, driven by strong leasing spreads on renewals[6] - Subsequent to the quarter end, on August 5, 2025, the board declared a quarterly cash dividend of $0.40 per share[7] - On August 4, 2025, the board authorized a new three-year share repurchase program for up to $75.0 million, with an annual limit of $25.0 million[7][18] Financial Performance Q2 2025 GAAP net income nearly doubled to $8.6 million, Cash NOI rose to $41.9 million, and AFFO remained stable at $0.54 per share Net Income Comparison (in millions, except per share data) | Period | Net Income | Per Diluted Share | | :--- | :--- | :--- | | Q2 2025 | $8.6 | $0.15 | | Q2 2024 | $4.6 | $0.08 | | YTD 2025 | $16.5 | $0.30 | | YTD 2024 | $19.6 | $0.34 | Cash NOI Comparison (in millions) | Period | Cash NOI | Key Drivers | | :--- | :--- | :--- | | Q2 2025 | $41.9 | Acquisitions, contractual rent increases | | Q2 2024 | $39.9 | - | | YTD 2025 | $83.1 | Decrease due to prior year termination fees and vacancy | | YTD 2024 | $86.8 | - | AFFO Comparison (in millions, except per share data) | Period | AFFO | Per Diluted Share | | :--- | :--- | :--- | | Q2 2025 | $30.0 | $0.54 | | Q2 2024 | $30.8 | $0.54 | | YTD 2025 | $59.4 | $1.07 | | YTD 2024 | $69.1 | $1.20 | Real Estate Portfolio Sila acquired one healthcare property for $24.1 million, expanding its portfolio to 136 properties with 99.2% occupancy - Acquired one inpatient rehabilitation facility in Dover, Delaware for $24.1 million, comprising 42,140 rentable square feet, 100% leased with an expiration in 2036[13] Portfolio Snapshot as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of Properties | 136 | | Rentable Square Feet | ~5.2 million | | Percentage Leased | 99.2% | | Weighted Avg. Remaining Lease Term | ~9.5 years | | Weighted Avg. Fixed Rent Escalation | 2.2% | - The percentage of square feet leased increased by 3.2 percentage points in Q2 2025, largely because the vacant Stoughton Healthcare Facility was taken out of service[15] Balance Sheet and Capital Markets Sila maintained strong liquidity of $568.8 million, with $581.0 million in debt, and authorized a new $75 million share repurchase program Liquidity and Debt Position as of June 30, 2025 | Metric | Value | | :--- | :--- | | Total Liquidity | ~$568.8 million | | Cash and Cash Equivalents | $24.8 million | | Credit Facility Availability | $544.0 million | | Total Principal Debt Outstanding | $581.0 million | | Weighted Average Interest Rate | 4.7% | | Net Debt to Enterprise Value | ~29.8% | - Of the $581.0 million in debt, $525.0 million was fixed through 10 interest rate swap agreements[17] - A new share repurchase program was authorized on August 4, 2025, allowing for up to $75.0 million in repurchases over three years, replacing the prior one-year program[18] Distributions The Q2 2025 dividend payout to AFFO ratio was 74.0%, with a quarterly cash dividend of $0.40 per share declared - The dividend payout to AFFO ratio for Q2 2025 was 74.0%[19] - A quarterly cash dividend of $0.40 per share was authorized on August 5, 2025, payable on September 4, 2025, to stockholders of record as of August 21, 2025[19] Consolidated Financial Statements Consolidated financial statements show total assets of $2.02 billion, with Q2 2025 total revenues of $48.7 million and net income of $8.6 million Condensed Consolidated Balance Sheets The balance sheet details assets, liabilities, and equity, with total assets reaching $2.02 billion as of June 30, 2025 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate, net | $1,728,062 | $1,707,620 | | Cash and cash equivalents | $24,832 | $39,844 | | Total assets | $2,019,316 | $2,007,074 | | Credit facility, net | $578,490 | $521,921 | | Total liabilities | $661,368 | $603,889 | | Total stockholders' equity | $1,357,948 | $1,403,185 | Condensed Consolidated Statements of Comprehensive Income The income statement reports Q2 2025 total revenues of $48.7 million and net income of $8.6 million, with diluted EPS of $0.15 Income Statement Summary - Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $48,732 | $43,554 | | Total operating expenses | $32,563 | $34,784 | | Net income | $8,598 | $4,628 | | Diluted EPS | $0.15 | $0.08 | Income Statement Summary - Six Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $96,988 | $94,193 | | Total operating expenses | $65,880 | $67,466 | | Net income | $16,496 | $19,608 | | Diluted EPS | $0.30 | $0.34 | Non-GAAP Financial Measures and Reconciliations This section reconciles non-GAAP measures like FFO, Core FFO, AFFO, and Same Store Cash NOI, providing definitions for investor understanding Reconciliation of Net Income to FFO, Core FFO and AFFO This reconciliation details the adjustments from net income to FFO, Core FFO, and AFFO for Q2 2025 and Q2 2024 FFO, Core FFO, and AFFO Reconciliation Summary - Q2 2025 (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $8,598 | $4,628 | | FFO | $30,014 | $25,268 | | Core FFO | $30,106 | $30,069 | | AFFO | $29,997 | $30,845 | Reconciliation of Net Income to Same Store Cash NOI This reconciliation details the adjustments from rental revenue to net operating income, Cash NOI, and Same Store Cash NOI Cash NOI Reconciliation Summary - Q2 2025 (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Rental revenue | $48,544 | $43,554 | | Net operating income | $42,553 | $37,705 | | Cash NOI | $41,889 | $39,878 | | Same store cash NOI | $40,383 | $39,802 | Definitions of Non-GAAP Measures This section provides clear definitions for key non-GAAP financial measures, including FFO, Core FFO, AFFO, and Cash NOI - FFO (Funds From Operations): Calculated per Nareit's definition, starting with net income and excluding gains/losses from property sales, impairment losses, and real estate depreciation[33] - Core FFO: Adjusts FFO to remove non-cash items and unusual or infrequent items like listing-related expenses and severance to show sustainable performance[34] - AFFO (Adjusted Funds From Operations): Further adjusts Core FFO for items like deferred rent and stock-based compensation, serving as a key metric for management to evaluate dividend policy[35] - Cash NOI (Cash Net Operating Income): Defined as NOI excluding non-cash GAAP adjustments like straight-line rent, used to evaluate the cash-based performance of the real estate portfolio[43]