ESSENTIAL PROPERTIES REALTY TRUST, INC. (EPRT) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 delivered solid growth and execution: total revenues rose to $137.06M (+25% y/y) and diluted net income per share was $0.32; AFFO/share increased 7% y/y to $0.46 .
Results vs consensus: revenue beat by ~3% ($137.06M vs $132.91M*); S&P Global “Primary EPS” was essentially in line (actual 0.3093* vs 0.3108*), while GAAP diluted EPS was $0.32 (Primary EPS and revenue estimates and actuals via S&P Global)*.
Guidance raised: 2025 AFFO/share to $1.86–$1.89 (up from $1.85–$1.89) and 2025 investment volume to $1.0–$1.2B (up from $0.9–$1.1B) on strong H1 investment pace and healthy pipeline; cash G&A guidance maintained at $28–$31M .
Balance sheet/liquidity remain strengths: pro forma net debt/Annualized Adjusted EBITDAre at 3.5x and ~$1.3B of available liquidity support continued external growth without incremental equity for 2025; ATM added ~$119M in Q2, with $507M of forward equity unsettled as of quarter-end .
Catalysts: guidance raise, robust deployment at 7.9% cash/9.7% GAAP yields, and disciplined balance sheet management are positive; management still expects eventual cap-rate compression as competition returns, but has not seen it yet in their opportunity set .

What Went Well and What Went Wrong

What Went Well
- Strong external growth at attractive economics: $334.0M closed at 7.9% cash cap and 9.7% GAAP yield; management called the market “exceptional,” enabling longer WALTs and better escalators (19.5 years; 2.2% bumps) .
- Portfolio health resilient: occupancy 99.6%, weighted-average rent coverage 3.4x; same-store rent growth 1.4% in Q2; no noteworthy credit events and Zips bankruptcy outcomes consistent with historical recoveries and budget .
- Capital position reinforced: ~$119M ATM issuance, pro forma leverage 3.5x, ~$1.3B liquidity; management reiterated no need for incremental equity to hit 2025 plan .
What Went Wrong
- Slight sequential occupancy dip (to 99.6%) and 9 vacant properties (~$27M of asset value)—management framed as immaterial and concentrated mostly in restaurants with expected recoveries consistent with history .
- Higher G&A to support growth (Q2 G&A $10.7M vs $8.7M y/y), though cash G&A of $7.2M stayed within the full-year $28–$31M guidance .
- Car wash mix near the 15% soft ceiling after Whissel acquisition; management comfortable but still expects cap-rate compression as competition returns over time .

Financial Results

Quarterly performance (oldest → newest):

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD ‘000)	119,708	129,354	137,062
Net Income Attributable to Stockholders ($USD ‘000)	55,374	56,108	63,212
Diluted Net Income per Share ($)	0.30	0.29	0.32
Net Income Margin %	46.3%	43.4%	46.1%

Q2 2025 vs prior year and vs S&P Global consensus:

Metric	Q2 2024	Q2 2025 Actual	Q2 2025 Consensus
Total Revenues ($USD ‘000)	109,268	137,062	132,907*
Diluted EPS ($)	0.29	0.32	Primary EPS 0.3108* (actual 0.3093*)
AFFO per Share (Diluted) ($)	0.43	0.46	N/A

Notes: All “Consensus” and “Primary EPS” values marked with an asterisk are from S&P Global (Capital IQ).

KPIs and operating metrics:

KPI	Q1 2025	Q2 2025
Occupancy	99.7%	99.6%
WALT (years)	14.0	14.3
Weighted Avg Rent Coverage	3.5x	3.4x
Top 10 Tenants (% of cash ABR)	17.3%	17.6%
Investments ($) / Cash & GAAP Cap Rate	$307.7M at 7.8%/9.4%	$334.0M at 7.9%/9.7%
Dispositions ($) / Cash Cap Rate	$24.3M at 6.9%	$46.2M at 7.3%
Net Debt / Annualized Adjusted EBITDAre (Reported / Pro Forma)	4.3x / 3.4x	4.5x / 3.5x
Total Available Liquidity	~$1.5B	~$1.3B
Service-/Experience-based ABR	93.3%	93.0%
Cash G&A (Quarter)	$7.6M	$7.2M

Segment breakdown: EPRT reports a single net-lease portfolio with no separate operating segments disclosed in the earnings materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
AFFO per Share (Fully Diluted)	FY 2025	$1.85–$1.89	$1.86–$1.89	Raised low end (+$0.01)
Investment Volume	FY 2025	$0.9–$1.1B	$1.0–$1.2B	Raised
Cash G&A Expense	FY 2025	$28–$31M	$28–$31M	Maintained
Dividend per Share (Quarterly)	Q2 2025	$0.295 (Q1)	$0.30 (declared 6/2, paid 7/14)	Raised (~2%)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Competition & Cap Rates	Expect modest cap-rate compression; pipeline mid–high-7%	Volatility reduced competition; pipeline supportive of upper half guidance	“Investment market … exceptional”; 7.9% cash/9.7% GAAP in Q2; still expect cap rates to trend lower eventually	Gradual compression expected; not yet material
Portfolio Credit/Occupancy	Stable; 99.7% occupancy; Zips 20bps ABR; positive re-leasing stats	Watchlist down 50bps; 99.7% occupancy	99.6% occupancy; rent coverage 3.4x; Zips outcome in line with budget	Stable
Capital Markets/Leverage	Revolver upsized to $1.0B; pro forma 3.8x	Pro forma 3.4x; unsettled forward equity $410M; no incremental equity needed	Pro forma 3.5x; unsettled forward equity $507M; optionality to repay revolver and tap bond market	Strong, flexible
Industry Mix (Car Wash, Entertainment)	Car wash pared to 14.2% ABR	Car wash 13.9%; added Dave & Buster’s exposure	Near 15% soft ceiling; Whissel (Driven Brands) portfolio acquired; >2x coverage	Managed near soft cap
Macro/Tariffs	Services focus limits tariff exposure	Tariffs largely tangential given 93% service exposure	No notable tariff impacts; stable trends	Minimal impact
Pipeline/Deployment	Mid–high-7% pricing; solid pipeline	Strong H1 run-rate; $443M YTD by late April	$642M H1; pipeline consistent with high-7% caps	Robust

Management Commentary

Strategy/Outlook: “The year has played out positively relative to our expectations… resilient portfolio trends, strong execution on the investment front, and proactive capital markets activity… we have increased our investment and earnings outlook for the year.” — Pete Mavoides, CEO .
Competitive dynamics: “I don’t know when [competition] is coming… There’s a substantial amount of capital… targeted towards net-lease investments… I’ll stick to my guns and say it’s coming.” — Pete Mavoides .
Balance sheet discipline: “Our pro forma leverage is 3.5 times, and we have $1.3 billion of liquidity… we do not need to raise any incremental capital to achieve our guidance range this year.” — Pete Mavoides .
Capital markets optionality: “We still view the bond market as the logical long-term source for permanent debt capital… we can be opportunistic somewhere in the second half.” — Mark Patten, CFO .

Q&A Highlights

Competition/cap rates: Management continues to see ample opportunities at attractive yields; expects eventual cap-rate compression as competition returns, but has not yet seen it in the current pipeline .
Occupancy/vacancy: 9 properties currently vacant (~$27M of value), largely in restaurants, with expected recoveries consistent with history; not material to the portfolio .
Car wash exposure/Whissel: EPRT managed exposure down to create capacity for Whissel portfolio; transaction economics inside quarterly average; portfolio coverage >2x .
Capital plan: $507M unsettled forward equity included in diluted share count under treasury stock method; modest AFFO/share headwind expected again in Q3; potential bond market issuance remains a tool .
Near-term pipeline: ~$290M at ~7.8% cap rates in pipeline; slow Q3-to-date closings attributed to July 4th timing, not a structural issue .

Estimates Context

Revenue beat: Q2 total revenue of $137.06M vs S&P Global consensus of $132.91M*; positive surprise driven by sustained deployment at high cash/GAAP yields and portfolio growth .
EPS in line: S&P Global Primary EPS actual 0.3093* vs consensus 0.3108*; GAAP diluted EPS reported by the company was $0.32 .
AFFO/share: Company-reported $0.46; S&P Global consensus for AFFO/share was not available in the dataset used; investors will likely nudge up FY AFFO given the raised FY range and strong H1 deployment .
Notes: Asterisked values are from S&P Global (Capital IQ).

Key Takeaways for Investors

Guidance raise across AFFO/share ($1.86–$1.89) and investment volume ($1.0–$1.2B) underscores momentum and visibility; this is a constructive signal for estimate revisions and sentiment .
External growth remains attractive: $334M at 7.9% cash/9.7% GAAP yields in Q2 with 19.5-year WALTs and 2.2% bumps; pipeline consistent, supporting continued NOI and AFFO expansion .
Balance sheet optionality is a differentiator: ~3.5x pro forma net debt/Adj EBITDAre and ~$1.3B liquidity provide capacity to fund growth without dilutive equity in 2025; potential bond issuance offers terming flexibility .
Credit is stable with idiosyncratic risks managed: 99.6% occupancy, 3.4x rent coverage, and Zips resolution aligned with budget support low loss content; diversified tenant base (Top 10 only 17.6% ABR) mitigates concentration risk .
Watch for cap-rate trajectory: Management continues to expect eventual compression as competition re-enters; near-term, EPRT’s relationship-driven origination and small-deal focus are preserving attractive yields .
Industry mix prudence: Car wash near the 15% soft ceiling remains under active management; acquisitions are balanced across industries, with entertainment and convenience stores also in focus .
Dividend growth intact: Quarterly dividend raised to $0.30 (annualized $1.20), with a ~65% AFFO payout ratio in Q2—supporting both return of capital and retained cash to fund growth .

Citations

Q2 2025 press release (financials, portfolio, guidance, dividend):
Q2 2025 earnings call (themes, Q&A, pipeline, balance sheet):
Q1 2025 press release and call (trend context):
Q4 2024 press release and call (trend context):
Dividend increase PR (6/2):

Notes on estimates: Asterisked consensus/actuals in tables and text are from S&P Global (Capital IQ).