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GETTY REALTY CORP /MD/ (GTY)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered steady operating results with total revenues of $53.257M, diluted EPS of $0.24, FFO/share $0.49, and AFFO/share $0.59; management raised FY 2025 AFFO guidance to $2.40–$2.41 per share, citing year‑to‑date investments and resolution of a tenant bankruptcy .
  • Investment activity accelerated: $66.1M deployed across 28 properties at an 8.1% initial cash yield in Q2; $95.5M year‑to‑date; committed pipeline >$90M expected to fund over 6–9 months .
  • Portfolio metrics remained strong: occupancy 99.7%, WALT ~10 years, nearly 100% rent collections, tenant rent coverage 2.6x; convenience stores and car washes both showed improving coverage (second consecutive quarter) .
  • Potential stock reaction catalysts: guidance raise, accelerating acquisition pace and high initial cash yields, disciplined leverage (net debt/EBITDA 5.2x; 4.6x incl. forward equity) with no maturities until 2028, offset by a one‑time environmental litigation accrual impacting GAAP results but excluded from AFFO .

What Went Well and What Went Wrong

What Went Well

  • “Getty delivered another quarter of consistent results, highlighted by accelerating investment activity, continued earnings growth, and stable portfolio performance” .
  • Acquisition engine re‑accelerated: $66.1M in Q2 at 8.1% yield (9 QSRs, 6 auto service, 5 c‑stores, 4 car washes), with post‑quarter $18.5M and $90M+ pipeline priced in the high‑7% cap rate area .
  • Portfolio quality and cash flows: occupancy 99.7%, WALT ~10 years; nearly 100% rent collections; tenant rent coverage improved to 2.6x across c‑stores and car washes as new‑to‑industry sites matured .

What Went Wrong

  • GAAP net earnings declined year‑over‑year (to $14.014M; $0.24/share vs $0.30/share in Q2 2024) driven by higher environmental expense accruals and elevated depreciation from growth investments .
  • Environmental litigation accrual of ~$5.1M in adjustments (environmental expenses $5.341M vs $(0.150)M in Q2 2024) pressured GAAP results; management emphasized these items are excluded from AFFO and vary period to period .
  • Interest expense increased (to $10.904M vs $9.662M in Q2 2024) reflecting higher borrowings/cost of debt, partially offsetting operating income .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Revenues ($USD Millions)$49.937 $52.239 $52.330 $53.257
Diluted EPS (GAAP)$0.30 $0.39 $0.25 $0.24
Net Income ($USD Millions)$16.711 $22.295 $14.786 $14.014
Net Income Margin %33.46%*42.05%*28.26%*26.31%*

Values with asterisk retrieved from S&P Global.

Q2 2025 vs Wall Street Consensus (S&P Global)

MetricConsensusActualSurprise
Revenue ($USD Millions)$51.587*$53.257 +$1.670 (+3.2%)*
Primary EPS (S&P definition)$0.275*$0.328*+$0.053 (+19.2%)*
Diluted EPS (GAAP)—$0.24 —
FFO / Share (REIT)$0.562*$0.49 -$0.072 (-12.8%)*
AFFO / Share—$0.59 —

Values with asterisk retrieved from S&P Global. Note: S&P “Primary EPS” may differ from GAAP diluted EPS; FFO definitions can vary versus company‑reported NAREIT FFO.

Segment/Breakdown

  • Getty is a net lease REIT without GAAP operating segments; portfolio mix disclosed qualitatively (QSR, auto service, convenience stores, car wash) .

Selected KPIs and Balance Sheet

KPIQ2 2025Prior QuarterPrior Year
Occupancy99.7% 99.7% 99.7%
WALT~10 years ~10 years ~10 years
Tenant Rent Coverage (TTM)2.6x 2.5x–2.6x (improving) 2.5x
Rent Collections~100% ~100% ~100%
Annual Rent Escalators~1.8% ~1.8% ~1.8%
Annualized Base Rent~$204M (+9.9%) ~$202M ~$186M
Investments (Quarter)$66.1M @ 8.1% yield $10.9M @ 7.8% yield $76.4M @ 8.9% yield
YTD Investments$95.5M @ 8.1% yield $17.3M @ 7.7% yield $209.0M FY 2024
Pipeline (Committed)>$90M >$110M >$35M
Net Debt / EBITDA5.2x (4.6x incl. forward equity) ~5.3x ~5.2x
Fixed Charge Coverage3.9x ~3.8x ~3.7x
Weighted Avg Debt Maturity5.1 years 5.7 years 5.5 years
Cost of Debt (WACD)4.5% ~4.5% 3.9%–6.1% blended
Total Outstanding Debt$925.0M $907.5M $907.5M
ATM Forward Equity Settlements1.2M shares; $32.8M net 0.4M; $11.0M net 0.993M entered in Q4
Forward Equity Outstanding~3.9M shares; ~$118.8M gross ~5.0M; ~$153.4M gross ~5.4M; ~$164.8M gross

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AFFO per ShareFY 2025$2.38–$2.41 $2.40–$2.41 Raised midpoint
Dividend per ShareQ3 2025 (Oct 9 payment)$0.47 (declared Apr 22) $0.47 (declared Jul 22) Maintained

Notes: Guidance excludes prospective acquisitions/dispositions and capital markets activity (including settlement of forward equity) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Investment Pace & Cap RatesFY2024: $209M deployed; initial yields ~8.3% ; Q1: $10.9M at 7.8% yield; pipeline >$110M $66.1M at 8.1%; YTD $95.5M; pipeline >$90M priced high‑7% Accelerating activity; pricing steady high‑7% to ~8%
Car Wash Exposure & Coverage2024: sector growth; some tenant issues (ZIPS noted later) Coverage improved for second consecutive quarter; ZIPS repositioning largely complete; no watchlist issues Improving fundamentals; selective additions
Tariffs/Macro & Bid‑AskQ1: macro uncertainty; liquidity ample; no maturities until 2028 Market more willing to transact; sellers embracing higher‑rate pricing; limited tariff exposure for tenants Better transaction backdrop
Balance Sheet & LiquidityExpanded revolver to $450M; $125M notes; no maturities to 2028 Net debt/EBITDA 5.2x (4.6x incl. forward equity); fixed charge coverage 3.9x; >$400M liquidity Disciplined leverage; strong liquidity
Environmental/LitigationFY2024: environmental expenses modest; variability noted Environmental litigation accrual booked; excluded from AFFO; case progressing One‑time accrual; underlying cash AFFO intact

Management Commentary

  • “We are experiencing positive momentum across our business, including identifying new investment opportunities, raising our full‑year 2025 earnings guidance, and reporting increased tenant rent coverage.” — CEO Christopher J. Constant .
  • “Year to date, we have closed $95.5 million of investments at an initial cash yield of 8.1%… operators are taking a noticeably more constructive stance towards moving deals forward.” — CEO .
  • “Our rents continue to be well covered with a trailing 12‑month tenant rent coverage ratio of 2.6 times.” — COO Mark Olear .
  • “As a result of our year‑to‑date investment activity and the repositioning of the Zips portfolio, we are increasing our full year 2025 AFFO per share guidance to a range of $2.40–$2.41.” — CFO Brian Dickman .

Q&A Highlights

  • Transaction market health: Analysts probed bid‑ask tightening; management cited broader willingness to transact and steady pricing in high‑7% cap rates; deal timelines typically 60–120 days for acquisitions/sale‑leasebacks .
  • Car wash sector: With ZIPS largely resolved, management sees no watchlist issues; coverage ramping as new sites mature; focus remains on larger, established platforms; some consolidation noted (e.g., Whistle/Driven US, Circle K, Quick Quack) .
  • Lease terms and escalators: No change to structure; escalations hover around ~2%; priority remains unitary master leases and appropriate credit protections .
  • Environmental accrual: CFO clarified accrual related to long‑standing litigation; excluded from AFFO; seen as positive progress toward resolution .

Estimates Context

  • Q2 revenue modestly beat S&P Global consensus ($53.257M actual vs $51.587M consensus; +3.2%)* .
  • S&P “Primary EPS” beat ($0.328 actual vs $0.275 consensus; +19.2%)*; note GAAP diluted EPS reported by the company was $0.24 .
  • FFO/share missed S&P consensus ($0.49 actual vs $0.562 consensus; -12.8%)*; be mindful that FFO definitions can vary (company reports NAREIT FFO) .
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance raise and accelerating investment deployment at attractive initial yields (high‑7% to ~8%) support 2H earnings trajectory .
  • Strong underwriting and portfolio metrics (99.7% occupancy, 2.6x rent coverage, nearly 100% collections) underscore resilience in convenience and automotive retail tenants .
  • Balance sheet positioned for growth: >$400M liquidity, forward equity in place, no maturities until 2028; leverage within targeted 4.5–5.5x range .
  • Car wash stabilization and selective additions reduce prior risk narrative; consolidation trends favor scaled operators in Getty’s focus set .
  • Environmental accrual is a non‑core, variable item excluded from AFFO; near‑term GAAP noise should not distract from core cash flow performance .
  • Near‑term trading: narrative likely driven by guidance raise and acquisition cadence; watch for 3Q closings from pipeline and additional forward equity settlements .
  • Medium‑term thesis: reinvestment into diversified essential retail assets at accretive spreads, disciplined balance sheet, and steady organic rent growth (~1.8% escalators) supports durable AFFO/share growth and dividends .

References: Press release (Q2 results, guidance, KPIs) –; 8‑K furnishing release –; Dividend and scheduling press releases ; Q1 2025 results –; Q4 2024 results –; Earnings call transcript (prepared remarks and Q&A) – –.