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BRT Apartments Corp. (BRT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 results modestly beat consensus: GAAP EPS was ($0.14) vs ($0.15) estimate and revenue was $24.20M vs $23.96M estimate; FFO per diluted share held flat at $0.29 and AFFO rose to $0.36, indicating stable cash earnings despite higher operating costs * [GetEstimates Q2 2025]*.
  • Combined portfolio NOI slipped 3.4% YoY to $15.1M and NOI margin compressed sequentially, driven by higher repairs/maintenance and utilities; insurance costs continued to decline YoY, partially offsetting expense pressure .
  • Strategic activity remained constructive: BRT acquired “1322 North” (214 units, Auburn, AL) via an 80% JV, financed with a 5.38% fixed, interest-only mortgage; the company contributed $10.7M equity and drew $7.0M on its credit facility to fund its share .
  • Capital return continues: BRT repurchased 63,356 shares in Q2 at $15.84 and 142,080 YTD at $16.79; authorization remaining was ~$8.75M as of June 30 and August 1, 2025, supporting per‑share AFFO/NAV accretion .

What Went Well and What Went Wrong

What Went Well

  • Stable cash earnings: FFO/diluted share remained $0.29 and AFFO/diluted increased to $0.36 YoY, reflecting resilient core cash generation despite a GAAP net loss .
  • Portfolio densification in a targeted market: “The purchase of 1322 North is another example of our strategy of investing in properties in the Southeast…with low supply and high demand for quality” — Jeffrey A. Gould, CEO .
  • Expense tailwind from insurance: Combined insurance costs fell 18.0% YoY in Q2; modest year-to-date declines also aided margins relative to other rising controllable expenses .

What Went Wrong

  • NOI pressure and expense creep: Combined NOI fell 3.4% YoY; repairs and maintenance rose 19.1% YoY, utilities +3.5%, and real estate taxes +3.4%, weighing on margins .
  • Interest expense drift: Consolidated interest expense increased to $5.71M in Q2 (+$0.21M YoY), reflecting rate environment and debt structure; JV interest expense remained elevated .
  • Texas softness and mixed market performance: Consolidated Texas revenues fell 6.0% YoY with NOI down 12.0%; several markets showed weaker NOI despite occupancy improvements, indicating limited pricing power amid new supply .

Financial Results

Core Results vs Prior Periods and Estimates

MetricQ4 2024Q1 2025Q2 2025
Total Revenues ($USD Millions)$23.969 $24.106 $24.197
Net Loss ($USD Millions)$(2.070) $(2.352) $(2.566)
GAAP Diluted EPS ($)$(0.11) $(0.12) $(0.14)
FFO per diluted share ($)$0.37 $0.30 $0.29
AFFO per diluted share ($)$0.37 $0.39 $0.36

Combined Portfolio Revenues, Operating Income and NOI Margin

MetricQ4 2024Q1 2025Q2 2025
Combined Revenues ($USD Millions)$28.573 $28.646 $28.817
Total Combined Operating Income ($USD Millions)$15.278 $15.656 $15.100
NOI Margin (%)53.5% 54.6% 52.4%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Average Occupancy (Combined)93.6% 93.7% 94.1%
Weighted Avg Monthly Rent per Occupied Unit (Consolidated)$1,371 $1,371 $1,358

Consensus vs Actual (Q2 2025)

MetricConsensus# of EstimatesActualBeat/Miss
GAAP EPS ($)$(0.15)*1*$(0.14) Beat by $0.01
Revenue ($USD Millions)$23.962*3*$24.197 Beat by $0.235M

Values marked with * retrieved from S&P Global.

Segment/Market Concentration (Q2 2025 – Consolidated NOI Top Contributors)

StateQ2 2025 NOI ($USD Thousands)
Mississippi$2,030
Tennessee$1,986
Alabama$1,490
Florida$1,237
Georgia$1,226

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Portfolio focus (occupancy emphasis)FY 2025Emphasize stable average occupancy until rental rate lift achievable Reiterated in Q1 outlook; no numeric update in Q2 materials Maintained
Rent growth backdropFY 2025–2026New supply muting rent growth until 2026 across Sunbelt; expect better growth in 2026 Reiterated Maintained
Controllable expense growthFY 2025Expected to grow modestly vs 2024 No Q2 change disclosed Maintained
Insurance expenseFY 2025Expected to decline Actual YTD declines observed (Q2: −18% YoY insurance) Trend consistent
Share repurchase authorizationThrough Dec 2026Increased to $10M; extension approved ~$8.75M remaining authorization as of 6/30 and 8/1/2025 Active utilization
DividendQ2 2025Prior quarter dividend $0.25/share Declared $0.25 payable July 9, 2025 Maintained

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available in the document set. Themes below reflect management’s published outlook and supplemental materials.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Sunbelt supply and rent growthNew supply muting rent growth until 2026; focus on occupancy Stable occupancy emphasis; pricing power still constrained Unchanged cautious
Expenses (insurance, controllables)Insurance expected to decline; controllables to grow modestly Insurance down 18% YoY; repairs/maintenance +19%; utilities +3.5% Mixed tailwinds/headwinds
Capital allocationExtended repurchase to $10M; balance sheet flexibility $2.38M YTD buybacks; ~$8.75M remaining authorization Accretive buybacks continue
Market/asset strategyPatient on asset growth; opportunistic preferred equity and acquisitions Acquisition of 1322 North (Auburn, AL), leveraging JV structure Incremental execution
Balance sheetNo maturities until Q3 2025; $40M revolver availability $7M revolver draw in July for acquisition; facility matures 2027 Liquidity utilized prudently

Management Commentary

  • “The purchase of 1322 North is another example of our strategy of investing in properties in the Southeast, especially in markets that are growing with low supply and high demand for quality. This acquisition is a continuation of our approach to drive, over-time, AFFO and NAV per share growth by investing in properties that we can seamlessly integrate with our existing portfolio.” — Jeffrey A. Gould, President & CEO .
  • Q2 supplemental emphasizes use of pro‑rata JV disclosures and non‑GAAP measures (FFO, AFFO, NOI) with detailed reconciliations to GAAP to help investors assess operating performance .

Q&A Highlights

A full Q2 2025 earnings call transcript was not available in the indexed documents; therefore, Q&A themes and any guidance clarifications from live remarks could not be assessed from primary sources.

Estimates Context

  • Street consensus (S&P Global): GAAP EPS ($0.15) on 1 estimate and revenue $23.962M on 3 estimates; actual GAAP EPS ($0.14) and revenue $24.197M modestly beat both, suggesting expectations were calibrated to muted rent growth and modest operating leverage [GetEstimates Q2 2025]* .
  • Forward sensitivity: With expenses still elevated in several categories and JV earnings lower YoY ($299k vs $389k), near‑term estimate revisions may track small adjustments to NOI and FFO, balanced by insurance relief and portfolio densification .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Slight beats on GAAP EPS and revenue underscore resilient portfolio earnings in a constrained rent-growth backdrop; cash metrics (FFO/AFFO) remain stable to modestly higher, supporting dividend coverage and buybacks .
  • Margin pressure persists from repairs/maintenance and utilities, while insurance is a clear tailwind; watch cost trends into Q3/Q4 as supply absorption advances in Sunbelt markets .
  • The Auburn acquisition adds scale and adjacency to an existing market, financed with fixed, interest‑only debt, improving operating integration and potential AFFO/NAV per share over time; JV equity structures temper single‑asset risk .
  • Active capital return continues with ~$8.75M remaining repurchase authorization and $2.38M YTD deployed, aiding per‑share metrics amid muted organic rent growth .
  • Near‑term trading: Modest beats plus accretive capital allocation are supportive, but multiple expansion likely hinges on clearer margin stabilization and evidence of rent lift as new supply moderates.
  • Medium‑term thesis: Focus on occupancy discipline, selective acquisitions/preferred equity, and declining insurance costs can rebuild NOI momentum into 2026, positioning AFFO per share for incremental growth .

Sources: Q2 2025 supplemental and 8‑K furnishing (Aug 7, 2025) ; press releases (Aug 7, July 21, June 4, 2025) ; Q1 2025 supplemental (May 8, 2025) ; Q4 2024 supplemental (Mar 12, 2025) .