Extra Space Storage Q2 Core FFO Lags Estimates, Revenues Beat

Core Insights - Extra Space Storage Inc. (EXR) reported second-quarter 2025 core funds from operations (FFO) per share of $2.05, missing the Zacks Consensus Estimate of $2.06, and reflecting a 0.5% decrease from the prior-year quarter [1][10] - Quarterly revenues reached $841.6 million, surpassing the Zacks Consensus Estimate of $835.8 million, marking a 3.8% year-over-year increase [2] - The company experienced high same-store expenses and interest expenses, which negatively impacted results despite revenue growth [1][10] Financial Performance - Same-store revenues remained mostly flat year over year at $665.6 million, while same-store operating expenses rose 8.6% to $191.4 million, leading to a 3.1% decrease in same-store net operating income (NOI) to $474.2 million [3] - Interest expenses increased by 6.6% to $146.1 million, exceeding the estimate of $143.8 million [4] - The company narrowed its 2025 core FFO forecast to a range of $8.05-$8.25, with the midpoint unchanged, based on expectations of negative growth in same-store revenues and an increase in same-store expenses [10][11] Portfolio Activity - During the April-June quarter, Extra Space Storage acquired one operating store for approximately $12.1 million and stakes in two joint venture properties for $326.4 million, gaining full ownership of 27 properties [5] - The company added 93 stores (74 stores net) to its third-party management platform, managing a total of 2,163 stores as of June 30, 2025 [6] Balance Sheet Position - As of June 30, 2025, Extra Space Storage had $125.0 million in cash and cash equivalents, an increase from $119.6 million as of March 31, 2025 [7] - The percentage of fixed-rate debt to total debt was 77.6%, with a combined weighted average interest rate of 4.4% and a weighted average maturity of around 4.3 years [7] Shareholder Actions - The company did not issue any shares under its at-the-market program during the second quarter and had $800 million available for issuance as of June 30, 2025 [8] - Extra Space Storage repurchased 68,585 shares of common stock for $8.6 million under its stock repurchase program, with an additional $491.4 million authorized for future buybacks [8]