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SmartStop (SMA) Q2 Revenue Jumps 13%
The Motley Fool·2025-08-07 02:02

Core Insights - SmartStop Self Storage REIT reported its first earnings as a publicly traded entity, with total revenues of $66.8 million, surpassing consensus estimates of $56.8 million and reflecting a year-over-year increase of 12.9% [1][2] - Adjusted funds from operations (FFO) per diluted share and OP unit stood at $0.42, down 6.7% from $0.45 in Q2 2024, indicating some operational challenges despite overall revenue growth [1][6] - The company’s same-store net operating income decreased by 1.1%, highlighting underlying softness in performance despite a rise in occupancy to 93.1% [1][7] Financial Performance - Total debt decreased to $950 million from $1.32 billion at year-end 2024, aided by the capital raised from the IPO [5][10] - The company declared monthly distributions of $0.1315 per share for June and $0.1359 for July 2025, indicating a slight increase in dividends [11] - Full-year 2025 guidance was updated, projecting same-store net operating income growth of 0.6% to 1.6% in U.S. dollars, with adjusted FFO per share guidance raised to a midpoint of $1.85–$1.93 [12] Business Operations - SmartStop operates a large portfolio of self-storage properties, with over 18.7 million rentable square feet across 230 properties in the U.S. and Canada [3] - The company relies on its scale for operational efficiencies, managing operations internally rather than outsourcing [4] - New property acquisitions totaled nearly $200 million during the quarter, adding approximately 900,900 net rentable square feet and 8,260 units [8] Strategic Outlook - The company is focused on maintaining high occupancy rates and managing costs effectively, with ongoing efforts to scout acquisition opportunities [13] - The managed REIT platform has expanded, with assets under management reaching $973.9 million at quarter-end [9] - SmartStop's stronger balance sheet and investment-grade ratings position it well for disciplined growth while maintaining dividend payouts, appealing to income-focused investors [13]