Executive Summary

Solid operating quarter with 4.8% Same Property NOI growth, record-like small-shop occupancy (93.8%), and strong blended re-leasing spreads (16.4%) while completing a $306M California portfolio sale and redeploying into the Sun Belt; NAREIT FFO/share was $0.45 and Core FFO/share was $0.44 .
2025 guidance: Raised SPNOI growth to 4.0–5.0% (from 3.5–4.5%) and sharply increased net income/share to $1.43–$1.49 on the gain from asset sales; NAREIT FFO/share ($1.83–$1.89) and Core FFO/share ($1.79–$1.83) maintained .
Balance sheet strengthened: total liquidity $787.1M, net debt/Adj EBITDA improved to 2.8x, positioning IVT to be active on back-half acquisitions (net investment guide ~ $100M) .
Versus S&P Global consensus, revenue modestly beat, while S&P “Primary EPS” missed; management emphasized REIT operating metrics (FFO) and reiterated full-year FFO ranges, with the main swing factor being timing of acquisitions in H2 .
Potential stock catalysts: accelerated Sun Belt rotation and leasing momentum (spreads, occupancy), SPNOI raise, and visible pipeline; risk watch: consumer softness/bankruptcies embedded via higher bad debt assumption and back-half execution risk on acquisitions .

What Went Well and What Went Wrong

What Went Well
- Executed strategic portfolio rotation: sold five California properties for $306.0M; recognized $90.9M gain; acquisitions of four centers ($105.4M) in AZ, NC, SC, and GA; subsequent July buys in TX and VA increased reinvestment pace .
- Operating strength persisted: SPNOI +4.8% YoY, blended re-leasing spreads 16.4%, leased occupancy 97.3%, small-shop occupancy 93.8% (all-time high) .
- Management tone confident on pipeline and H2 activity: “we feel very confident that we're going to get to that $100 million” net acquisition guide; noted potential to exceed if more opportunities unlock .
What Went Wrong
- EPS comparability is noisy: GAAP EPS of $1.23 was driven by the $90.9M gain on sales; S&P “Primary EPS” tracking indicated a miss vs consensus, underscoring limited usefulness of EPS for REITs vs FFO .
- Back-half weighted acquisitions: guidance sensitivity skewed to timing; if activity slips, results trend toward low end of FFO range .
- Macro/bad debt: consumer less confident; reserve framed at 65–85 bps of revenue to reflect bankruptcies and potential fallout (updating from 75–100 bps earlier), a slight headwind vs Q1 clean bad debt .

Financial Results

Historical quarterly performance (GAAP and REIT operating metrics)

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue / Total Income ($M)	$67.42	$73.77	$73.55
Net Income ($M)	$1.50	$6.79	$95.94
Diluted EPS ($)	$0.02	$0.09	$1.23
NAREIT FFO ($M)	$30.07	$37.16	$35.48
NAREIT FFO/Share ($)	$0.44	$0.48	$0.45
Core FFO ($M)	$29.13	$36.23	$34.34
Core FFO/Share ($)	$0.43	$0.46	$0.44
Same Property NOI ($M)	$40.67	$47.29	$42.63
SPNOI Growth YoY (%)	—	6.1%	4.8%

Q2 2025 versus consensus (S&P Global; see note)

Metric	Actual	Consensus	Result
Revenue ($)	$73,551,000	$72,714,750*	Bold: Beat
Primary EPS ($)	$0.0374*	$0.07*	Bold: Miss

Values marked with * retrieved from S&P Global.

Operating KPIs

KPI	Q1 2025	Q2 2025
Leased Occupancy (%)	97.3%	97.3%
Small Shop Leased Occupancy (%)	93.4%	93.8%
Anchor Leased Occupancy (%)	99.5%	99.5%
Leased-to-Economic Occupancy Gap (bps)	190	180
Blended Re-leasing Spread (%)	9.6%	16.4%
Adjusted EBITDA ($M)	$44.00	$42.15
Liquidity ($M)	$577.4	$787.1
Net Debt / Adjusted EBITDA (x)	4.1x	2.8x

Segment breakdown: Not applicable; IVT reports consolidated retail property operations, with extensive property-level detail provided in the supplemental .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income per diluted share	FY 2025	$0.27–$0.33	$1.43–$1.49	Raised (sale gain)
NAREIT FFO/share	FY 2025	$1.83–$1.89	$1.83–$1.89	Maintained
Core FFO/share	FY 2025	$1.79–$1.83	$1.79–$1.83	Maintained
Same Property NOI Growth	FY 2025	3.5%–4.5%	4.0%–5.0%	Raised
G&A ($)	FY 2025	$34.25–$35.75M	$34.25–$35.75M	Maintained
Interest expense, net ($)	FY 2025	$31.0–$31.5M	$31.0–$31.5M	Maintained
Net investment activity	FY 2025	~ $100M	~ $100M	Maintained
Expected uncollectibility (bps of revenue)	FY 2025	75–100 bps	65–85 bps	Improved assumption
Dividend (declared)	Q2 2025	—	$0.2377/sh (paid July 15)	—

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Portfolio rotation (California exit)	Q1: Expected to fully/meaningfully exit CA in 2025; assets largely awarded; redeploy to Southeast/Sun Belt	Completed sale of five CA assets ($306M) and plan to sell remaining San Pedro by YE; proceeds reinvested into Sun Belt	Accelerating execution; near full CA exit
Acquisition pipeline & timing	Q1: $1.5–$2.0B pipeline; net acquisitions ~$100M FY; back-half weighted	Pipeline ~ $1B steady; confident to hit $100M; could exceed if opportunities unlock; timing dictates guide position	Healthy pipeline; H2 weighted
Leasing momentum	Q4: SPNOI +7.1%; leased occupancy 97.4%	SPNOI +4.8% YoY; blended spreads 16.4%; small-shop occupancy 93.8% (high watermark)	Strong, improving spreads
Bad debt / tenant health	Q1: Reserve 75–100 bps; minimal bankruptcy exposure YTD	Reserve refined to 65–85 bps; includes recent bankruptcies and possible fallout	Slightly better assumption; still cautious
Macro (consumer, tariffs)	Q1: Noted pending tariffs; uncertain impact; essential retail resilience	Consumer less confident; inflation pressures; retailers resilient; escalators and occupancy drive growth	Cautious but steady
Balance sheet	Q1: Net debt/Adj EBITDA 4.1x; 100% fixed debt	Net debt/Adj EBITDA 2.8x; $787M liquidity; term loan discussions ahead of 2026/27 maturities	Stronger leverage, liquidity

Management Commentary

“This quarter marks a significant milestone…we successfully completed the disposition of the majority of our California assets…while maintaining strong full year Same Property NOI and FFO growth guidance.” – DJ Busch, CEO .
“We are raising our same property NOI growth expectations for the year to 4%–5%…we remain extremely confident in our acquisition pipeline and expect to be active in the second half of 2025.” – DJ Busch .
“Same property NOI…+4.8%…drivers: embedded rent escalations (~150 bps), occupancy gains (~110 bps), re-leasing spreads (~80 bps)…partially offset by net expense reimbursements (-20 bps).” – Mike Phillips, CFO .
“New leases were signed at a 44.1% spread, renewals 9.2%, blended 16.4%…over 90% of renewal leases had 3%+ annual escalators.” – Christy David, COO .

Q&A Highlights

Guidance sensitivity and timing: If transaction activity “froze,” results skew toward the low end of FFO range; better timing can push toward the high end .
California sale growth profile vs Southeast: Southeast markets offer more favorable unlevered risk-adjusted returns vs CA over next few years .
Competitive acquisitions: Strong institutional interest in grocery-anchored centers; IVT redeploying CA proceeds competitively into preferred Sun Belt assets .
Small-shop occupancy ceiling: Direct visibility into another ~100 bps of potential gains, contingent on Tenant health and macro .
Pipeline size and confidence: Roughly ~$1B of real opportunities canvassed; confident in hitting ~$100M net acquisitions; capacity to do more .

Estimates Context

Q2 2025 revenue beat S&P Global consensus ($73.55M actual vs $72.71M estimate) . Values marked with * retrieved from S&P Global.
S&P “Primary EPS” printed below consensus ($0.0374* actual vs $0.07* estimate), reflecting differences in EPS treatment amid large one-time gains; management continues to emphasize FFO per share as the relevant REIT metric (NAREIT FFO/share $0.45; Core FFO/share $0.44) . Values marked with * retrieved from S&P Global.
Implication: Street models may need upward adjustments to SPNOI for FY (4–5% raised), while FFO ranges were maintained; estimate risk is largely timing of H2 acquisitions and any incremental bad debt .

Key Takeaways for Investors

Portfolio upgrade on track: California monetization completed with quick reinvestment into higher-growth Sun Belt markets; expect near full CA exit by YE .
Internal growth intact: SPNOI raised to 4–5% for FY; small-shop occupancy and escalators support durable cash flow growth .
External growth visibility: H2-weighted pipeline with balance sheet capacity; FFO guide maintained with timing the key swing factor .
Leasing power evident: 16.4% blended re-leasing spreads, 91% retention, and >90% renewals with 3%+ annual escalators .
Balance sheet is a differentiator: Liquidity $787M and net leverage low (2.8x net debt/Adj EBITDA) allow disciplined but opportunistic deployment .
Model notes: Use revenue beat, unchanged FFO ranges, and higher SPNOI; monitor back-half transactions and bad debt assumptions (now 65–85 bps of revenue) .
Trading lens: Positive narrative on Sun Belt rotation and SPNOI raise; near-term stock moves likely hinge on evidence of continued H2 deal flow and sustained leasing momentum .

S&P Global note: Values marked with * retrieved from S&P Global.

InvenTrust Properties Corp. (IVT)·Q2 2025 Earnings Summary