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AMERICOLD REALTY TRUST (COLD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was resilient operationally but softer on volumes: revenue fell 5.4% YoY to $629.0M as warehouse throughput and transportation softened; AFFO/share was $0.34, in line with expectations, and Core EBITDA margin edged up 10 bps YoY to 23.5% despite macro headwinds .
  • Management reduced 2025 guidance on weaker consumer confidence/tariff overhang: AFFO/share to $1.42–$1.52 (from $1.51–$1.59), same‑store revenue growth to 0–2% (from 2–4%), while raising non‑same‑store NOI on Houston and retail wins .
  • Strategic moves continued: 5% dividend hike to $0.23 and a ~$127M Houston acquisition tied to a large retail fixed‑commit win; fixed‑commit rent/storage now ~60% of revenue, supporting pricing durability and occupancy visibility .
  • Stock reaction catalysts: lowered outlook on macro/tariffs, but continued mix shift to fixed commitments, improving services margins, and retail/customer wins should frame estimate revisions and sentiment into 2H seasonality .

What Went Well and What Went Wrong

  • What Went Well

    • Fixed commitments reached 60% of rent/storage revenue, marking 16 consecutive quarters of progress; management stressed customer value and pricing discipline: “the value we provide…has not diminished…we are more capable of balancing price and volume” .
    • Services margin execution: same‑store services margin rose 110 bps YoY in Q1; management reiterated goal to exceed 12% services margins for 2025, supported by labor stability and Project Orion .
    • Strategic growth: acquired a Houston facility (~$127M) to support a major retail fixed‑commit contract and increased the dividend by 5% to $0.23, signaling confidence in cash generation .

  • What Went Wrong

    • Top‑line softness: total revenue down 5.4% YoY to $629.0M, with transportation revenues down and warehouse volumes lower; GAAP diluted EPS was a loss of $0.06 vs. +$0.03 in Q1 2024 on higher SG&A (Orion) and closed‑site charges .
    • Occupancy/volume pressure: total warehouse economic occupancy fell to 74.7% (−470 bps YoY) and physical occupancy to 63.3% (−560 bps), reflecting lower inventories and macro/tariff‑driven demand caution .
    • Guidance cut: AFFO/share to $1.42–$1.52 (from $1.51–$1.59), same‑store rev growth to 0–2% (from 2–4%), and Transportation/Managed NOI to $40–$44M (from $44–$48M) on a weaker macro backdrop .

Financial Results

Key metrics trend (quarters ordered oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$674.2 $666.4 $629.0
Core EBITDA ($USD Millions)$157.2 $155.6 $147.6
Core EBITDA Margin %23.3% 23.3% 23.5%
AFFO per diluted share ($)$0.35 $0.37 $0.34
GAAP diluted EPS ($)$(0.01) $(0.13) $(0.06)
Same‑Store Services Margin %14.5% 13.2% 11.3%

Q1 2025 vs S&P Global consensus (selected)

MetricQ1 2025 ActualS&P Global Consensus*Surprise
Revenue ($USD Millions)$629.0 $666.46*−5.6%
Primary EPS ($)— GAAP diluted EPS: $(0.06) 0.0485*— (note: S&P “Primary EPS” basis differs from GAAP)

Segment performance (Q1 YoY)

SegmentRevenue Q1 2024 ($M)Revenue Q1 2025 ($M)NOI Q1 2024 ($M)NOI Q1 2025 ($M)
Warehouse$597.7 $575.4 $197.1 $196.6
Transportation$56.9 $44.0 $11.5 $7.3
Third‑Party Managed$10.4 $9.6 $2.2 $2.0

KPIs and operating metrics (quarters ordered oldest → newest)

KPIQ1 2024Q4 2024Q1 2025
Global Warehouse Margin %33.0% 33.2% 34.2%
Same‑Store Services Margin %10.1% 13.2% 11.3%
Economic Occupancy – Total Warehouse %79.4% 77.4% 74.7%
Physical Occupancy – Total Warehouse %68.9% 66.9% 63.3%
Fixed‑Commit % of Rent & Storage Revenue—59.0% 60.1%
Rent & Storage Rev per Avg Physical Pallet ($)$70.71 $70.37 $72.74
Services Rev per Throughput Pallet ($)$36.27 (Global) $37.53 (Global) $36.74 (Global)

Guidance Changes

MetricPeriodPrevious Guidance (Feb 20, 2025)Current Guidance (May 8, 2025)Change
Same‑Store Warehouse Revenue Growth (CC)FY20252.0%–4.0% 0.0%–2.0% Lowered
Same‑Store NOI Growth (CC)FY2025200 bps > revenue 100 bps > revenue Lowered
Non‑Same‑Store NOIFY2025$0M–$7M $7M–$13M Raised
Transportation & Third‑Party Managed NOIFY2025$44M–$48M $40M–$44M Lowered
Total SG&AFY2025$280M–$289M (incl. SBC $27.5–$29.5M; Orion amort. $13–$15M) $270M–$280M (incl. SBC $29–$31M; Orion amort. $11–$13M) Lowered (mix shift)
Interest ExpenseFY2025$145M–$150M $153M–$157M Raised
Current Income Tax ExpenseFY2025$8M–$10M $8M–$10M Maintained
Non‑Real Estate D&AFY2025$139M–$149M $139M–$149M Maintained
Maintenance CapexFY2025$82M–$88M $80M–$85M Lowered
Development StartsFY2025$200M–$300M $200M–$300M Maintained
Adjusted FFO per shareFY2025$1.51–$1.59 $1.42–$1.52 Lowered
Notes: CC = constant currency; Orion = Project Orion.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Tariffs/Macro & Consumer ConfidenceQ3 ‘24 noted lower occupancy tied to consumer habits; resilience via pricing and services margin expansion . Q4 ‘24 continued lower occupancy; services margin gains .Management says macro changed “drastically” in last 30–45 days; tariffs dampening confidence; prudently cutting 2025 outlook .Deteriorated; guidance reset.
Pricing DisciplineQ3/Q4 ‘24 growth driven by pricing initiatives and rate escalations; services margin records .Holding pricing; ~2% storage and >3% services price uplift in Q1 despite competitive discounting .Still positive; competitive pressure rising.
Fixed Commitments & Occupancy GapQ3 ‘24 fixed commit rev ~58.1%; gap between economic and physical occupancy widened . Q4 ‘24 fixed commit rev 59.0% .Fixed commit at ~60%; management views 10% gap as normal for customer flexibility; long‑term contracts, no annual resets .Structural mix improving; gap acceptable.
Development/Partnerships (CPKC/DP World; Ahold)Announced Dallas‑Fort Worth automation; strong pipeline; bond issuance to fund growth .Kansas City, Allentown, Dubai go live in Q2; Ahold automated sites ramp in 2H; Houston acquisition for retail win .Execution progressing; low‑risk, partner‑led builds.
Project Orion (Tech)Q4 ‘24: higher software/security costs weighed on Core EBITDA; but services productivity improved .Incremental licensing (~$4M) and capitalized labor tailwinds lapped; expected to aid 2025 services margins >12% .Transition costs moderating; benefits accruing.

Management Commentary

  • “We are pleased with our first quarter 2025 results…delivering AFFO of $0.34 per share in line with expectations…enhancements we have made to our technology and operating platforms…created a more solid and resilient foundation” .
  • “The catalyst for [the Houston] acquisition was a new fixed commitment contract with one of the world’s largest retailers…allowing for a more efficient allocation of inventory across both sites” .
  • “The direct impacts [of tariffs] are relatively modest…[but] the ongoing trade rhetoric…has already had an impact on consumer confidence…Given these increased headwinds, we thought it was prudent to adjust our outlook” .
  • “Rent and storage revenue from fixed commitment contracts increased again this quarter to 60%, achieving our previously stated goal…a testament to our industry leadership” .

Q&A Highlights

  • Macro/tariffs drove the guidance cut: management cited a “completely different” backdrop vs initial guide; customers are pausing expansions and waiting for stability .
  • Pricing vs competition: COLD implemented contractual GRIs; saw ~2% storage and >3% services price uplift; willing to defend share but emphasizes value and service moats vs price‑led peers .
  • Occupancy gap and fixed commits: 10% gap viewed as “center of the fairway” for seasonal needs; contracts are multi‑year with prenegotiated GRIs and no annual resets .
  • Development ramp risk limited: several 2025 projects are not demand‑driven (e.g., Kansas City/Port St. John logistics advantages) and/or fully fixed‑commit (Ahold) .
  • Sales pipeline execution vs timing: ~50% of $200M pipeline closed YTD; inventory onboarding slower in current environment, muting back‑half seasonality .

Estimates Context

  • S&P Global consensus vs actual (Q1 2025): revenue $666.46M* vs actual $629.0M (miss ~5.6%); S&P Primary EPS 0.0485* vs S&P “actual” 0.0329*; management reported GAAP diluted EPS of $(0.06) and AFFO/share of $0.34 .
  • Implications: Revenue shortfall and macro reset likely drive modest estimate reductions for FY25 AFFO and segment NOI, partly offset by raised non‑same‑store NOI (Houston, retail) and SG&A reductions .
  • Balance sheet remains manageable for growth: liquidity ~$651M; net debt/TTM Core EBITDA ~5.9x; $400M 5.6% notes due 2032 priced in Q1, closed Q2 .

Values marked with an asterisk (*) were retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance reset reflects macro caution, not operational backsliding; margin execution and fixed‑commit mix (60%) support earnings quality as volumes normalize .
  • Near‑term trading setup: headline miss vs consensus revenue and lower FY guide are likely overhangs; watch for confirmation of typical 2H seasonal inventory build (management assumes muted but positive) .
  • Medium‑term thesis: continued services margin uplift (>12% target), tech/Orion benefits, and retail wins (Houston plus Ahold automation ramp) support NOI growth durability .
  • Price discipline vs discounting peers should preserve yield per pallet; fixed‑term structures with GRIs and cost pass‑throughs insulate pricing power .
  • Portfolio optimization (lease exits, asset sales, JV moves) and mix shift to owned assets should enhance margins through cycle .
  • Capital structure/liquidity adequate for pipeline execution; recent notes extend ladder; interest expense up modestly in 2025 guide, partially offset by lower SG&A .
  • Dividend raised 5% signals confidence in cash flow; monitor AFFO cadence vs lowered range for sustainability into 2026 .