PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements For H1 2025, Sila Realty Trust reported $97.0 million in revenues, net income decreased to $16.5 million, total assets reached $2.02 billion, and operating cash flow declined Condensed Consolidated Balance Sheet Highlights (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 Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $48,732 | $43,554 | $96,988 | $94,193 | | Total operating expenses | $32,563 | $34,784 | $65,880 | $67,466 | | Net income | $8,598 | $4,628 | $16,496 | $19,608 | | Basic EPS | $0.16 | $0.08 | $0.30 | $0.34 | | Diluted EPS | $0.15 | $0.08 | $0.30 | $0.34 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $56,054 | $68,212 | | Net cash used in investing activities | ($68,101) | ($135,355) | | Net cash used in financing activities | ($2,965) | ($47,905) | | Net change in cash | ($15,012) | ($115,048) | - During the six months ended June 30, 2025, the Company purchased two real estate properties for a total cash consideration of $59.5 million3536 - The Company recorded impairment losses on real estate of $6.8 million for the six months ended June 30, 2025, primarily related to the Stoughton Healthcare Facility following a lease rejection in bankruptcy by Steward Health Care System394041 - On August 5, 2025, the Board authorized a quarterly cash dividend of $0.40 per share; subsequent to the quarter end, the company also acquired two healthcare properties for $16.15 million and authorized a new three-year, $75 million share repurchase program105106107 Management's Discussion and Analysis of Financial Condition and Results of Operations H1 2025 rental revenue increased by 2.8%, but net income declined due to higher expenses, while liquidity remains strong with 90% of debt effectively fixed Results of Operations Q2 2025 vs Q2 2024 Revenue Breakdown (in thousands) | Revenue Category | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Same store rental revenue | $42,817 | $41,207 | $1,610 | 3.9% | | Non-same store rental revenue | $1,847 | ($1,396) | $3,243 | 232.3% | | Total rental revenue | $48,544 | $43,554 | $4,990 | 11.5% | | Total revenues | $48,732 | $43,554 | $5,178 | 11.9% | - For Q2 2025, total operating expenses decreased by 6.4% to $32.6 million, primarily due to the absence of $2.9 million in listing-related expenses incurred in Q2 2024 and lower depreciation and amortization, partially offset by a $2.8 million increase in impairment losses130132 H1 2025 vs H1 2024 Revenue Breakdown (in thousands) | Revenue Category | H1 2025 | H1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Same store rental revenue | $81,071 | $78,160 | $2,911 | 3.7% | | Non-same store rental revenue | $7,690 | $8,447 | ($757) | (9.0)% | | Total rental revenue | $96,800 | $94,193 | $2,607 | 2.8% | | Total revenues | $96,988 | $94,193 | $2,795 | 3.0% | - For H1 2025, total operating expenses decreased by 2.4% to $65.9 million, driven by lower general & administrative costs (down $2.7 million) and the absence of listing-related expenses ($3.0 million in 2024), but largely offset by a significant increase in impairment losses to $6.8 million from $0.4 million in the prior year137139 - Interest expense for H1 2025 increased by 44.5% to $15.2 million from $10.5 million in H1 2024, primarily due to a higher weighted average interest rate on the credit facility, driven by higher average borrowings and new interest rate swaps140145 Liquidity and Capital Resources - The company's primary sources of funds are operating cash flows and its credit facility; as of June 30, 2025, 90% of the company's outstanding debt was effectively fixed through hedging strategies, limiting exposure to interest rate fluctuations141 - As of June 30, 2025, the company had $24.8 million in cash and cash equivalents; material cash requirements over the next twelve months are estimated at $39.5 million, including $27.4 million for interest payments, $9.3 million for unfunded loan commitments, and $2.8 million for lease obligations149 - The company's Unsecured Credit Facility has total commitments of $1.125 billion; as of June 30, 2025, the outstanding principal balance was $581 million, leaving $544 million available for drawing156157 Non-GAAP Financial Measures Reconciliation of Net Income to FFO, Core FFO and AFFO (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $8,598 | $4,628 | $16,496 | $19,608 | | FFO | $30,014 | $25,268 | $59,180 | $59,047 | | Core FFO | $30,106 | $30,069 | $59,713 | $66,229 | | AFFO | $29,997 | $30,845 | $59,445 | $69,130 | - The company uses FFO, Core FFO, and AFFO as supplemental performance measures; Core FFO adjusts for items like listing-related expenses and severance, while AFFO further adjusts for non-cash rent adjustments and stock-based compensation and is a metric used to evaluate the dividend policy170171 - The decrease in Core FFO and AFFO for the six months ended June 30, 2025, compared to the same period in 2024, is partly because the 2024 period included $4.1 million of lease termination fee income174 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk on variable-rate debt, which is actively managed through interest rate swaps - As of June 30, 2025, the company had 10 interest rate swap agreements with an aggregate notional amount of $525 million, fixing the interest rate on the majority of its debt178 - The company is exposed to interest rate risk on $56 million of its total $581 million debt outstanding; a hypothetical 50 basis point (0.50%) increase in market interest rates would result in an approximate $280,000 increase in annual interest expense181 Controls and Procedures As of June 30, 2025, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025184 - There were no changes in internal controls over financial reporting during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls185 PART II. OTHER INFORMATION Legal Proceedings The company is not aware of any material pending legal proceedings affecting it or its properties - As of the filing date, the company is not a party to any material pending legal proceedings187 Risk Factors No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2024188 Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the company repurchased 305,362 shares at an average of $24.09 per share, with $17.7 million remaining available under the program Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 484 | $24.92 | | June 2025 | 304,878 | $24.09 | | Total | 305,362 | $24.09 | - As of June 30, 2025, the company had up to the lesser of 1,195,122 shares or $17,656,000 available for repurchase under its Share Repurchase Program; a new, larger three-year program was authorized on August 4, 2025194 Other Information No officers or directors adopted or terminated any Rule 10b5-1 trading plans or other trading arrangements during Q2 2025 - No officers or directors adopted or terminated any Rule 10b5-1 trading plans during the second quarter of 2025194195
Sila Realty Trust, Inc.(SILA) - 2025 Q2 - Quarterly Report