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GLADSTONE LAND Corp (LAND)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $17.8M, down 21% year over year but up 45% quarter over quarter; diluted net loss to common was -$0.11 per share and AFFO was $0.04 per share . Versus S&P Global consensus, LAND delivered a revenue beat (+$2.7M) and EPS beat (+$0.16), with EBITDA above expectations, reflecting early participation rent recognition and strong pistachio pricing .*
  • Management reiterated that 2025 earnings are heavily weighted to Q4 due to lease modifications; pistachio harvest statements support recognizing ~$16.9M of participation rent revenue in Q4, with $5.1M cash already received .
  • Portfolio pruning and capital discipline continued: two Florida farms sold for $21.5M (+36% over cost, ~$6M gain), a $10.4M maturing bond repaid, and ~$10M raised through the ATM to position for the Series D preferred redemption before coupon steps up to 8% in Jan-2026 .
  • Liquidity remained strong: ~$170M immediately available capital, ~$150M unpledged properties, 99% of borrowings fixed at a ~3.39% WA rate for ~3 years—limiting rate volatility impact .
  • Near-term stock catalysts: Q4 participation rent realization, clarity on lease reversion back to fixed base rents, and any selective asset sales or Series D redemption path .

What Went Well and What Went Wrong

What Went Well

  • Strong nut crop performance and pricing: Pistachio orchards exceeded state averages and internal projections; almond prices trended upward through fall; management expects ~$16.9M Q4 revenue from three orchards based on processor statements .
  • Early evidence of participation rent recognition: Q3 participation rents rose ~$1.9M due to accelerated recognition and improved pricing, despite lower fixed base rents .
  • Balance sheet resilience: ~$170M immediately available capital, ~99% fixed-rate debt, WA interest 3.39%; repayment of a $10.4M bond and ATM issuance to mitigate preferred step-up risk .

What Went Wrong

  • AFFO pressure and headline GAAP loss to common: Q3 AFFO fell to $0.04 per share (from $0.13 YoY) and diluted net loss to common was -$0.11 due to lease changes, vacancies, and farm sales .
  • Occupancy and rent mix headwinds: Fixed base cash rents fell ~$5.4M YoY; occupancy dropped to 95.7%; six farms vacant and several leases on cash/non-accrual basis while participation rents are back-end loaded .
  • Wine grapes remain oversupplied; leases restructured and direct operations continue on some western properties, increasing property operating costs until normalization .

Financial Results

Income, EPS, AFFO and FFO

MetricQ3 2024Q2 2025Q3 2025
Total operating revenues ($USD Millions)$22.571 $12.296 $17.785
Net income ($USD Millions)$0.006 -$7.878 $2.087
Diluted net (loss) per common share (EPS)-$0.161 -$0.384 -$0.108
Diluted FFO per share ($)$0.167 -$0.092 $0.048
Diluted AFFO per share ($)$0.126 -$0.095 $0.039

Margins

MetricQ3 2024Q2 2025Q3 2025
EBITDA ($USD Millions)$17.172*$10.766*$16.239*
EBITDA Margin (%)76.0%*87.9%*91.0%*
Net Income Margin (%)0.03%*-64.34%*11.70%*

Asterisk values retrieved from S&P Global.*

KPIs

KPIQ3 2024Q2 2025Q3 2025
Farms owned (#)168 150 148
Acres owned (#)111,836 103,001 100,323
Occupancy rate (%)99.5% 95.9% 95.7%
Water assets (acre-feet)53,787 55,306 55,532
Total indebtedness ($USD Millions)$593.635 $558.917 $542.779

Estimates vs Actuals (S&P Global consensus)

MetricConsensusActualSurprise
Revenue ($USD Millions)$15.08$17.785 +$2.70M (beat)
Primary EPS ($)-0.265-0.108 +$0.16 (beat)
EBITDA ($USD Millions)$12.27$16.239*+$3.97M (beat)

Asterisk values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Participation rent revenue (pistachio harvest)Q4 2025No specific figure (Q2 indicated majority of earnings in Q4) ~$16.9M expected revenue; $5.1M initial cash installment received Raised (quantified)
Earnings timingFY 2025Majority recognized in Q4 due to lease modifications Majority recognized in Q4; strong pistachio pricing supports Q4 participation rents Maintained
Monthly dividend per common shareQ4 2025$0.0467 per month $0.0467 per month (Oct–Dec) Maintained
Lease renewals NOI upliftSubsequent eventsNot disclosed+$65K annual NOI (+6.6%) from two new leases New
Series D Term Preferred ($60.4M)By Jan 31, 2026Evaluating options; avoid coupon step-up Plan to redeem using mix of ATM equity and LOC (~6% blended cost); avoid 8% step-up Clarified plan

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Lease modifications & participation rentsShift to participation rents on 6 farms; 2 direct-operated; majority of 2025 earnings to be recognized in Q4 Participation rents up ~$1.9M; fixed base cash rents -$5.4M YoY; majority of earnings to be realized in Q4 Consistent execution; Q4 realization nearing
Nut crop market dynamicsAlmond momentum recovering post USDA forecast shock; pistachio guaranteed base price matching 2024 Pistachios above state averages; almond prices trending upward weekly; demand strong in EU/Middle East; weaker USD helps exports Improving pricing/yields
Wine grapes oversupplySlow contracts; pricing modestly higher vs year ago but weak industry backdrop Severe oversupply persists; leases restructured; direct operations continue on some vineyards Ongoing headwind
Water security & SGMAAggressive water purchases; infrastructure; ~55k acre-feet; strong storage strategy ~55.5k acre-feet; expectation of 35–50% minimum allocations; continued infrastructure investment; wet cycle benefits Structural advantage maintained
Dispositions and capital allocationQ1: 7 farms sold; Q2: refinancing and plan to sell Florida farms Q3: 2 Florida farms sold ($21.5M, +36% over cost, ~$6M gain); selective sales under review Active recycling, disciplined
Liquidity and debt profile>$150–$180M available; ~99% fixed-rate debt; WA ~3.39% >$170M available; ~99% fixed-rate; WA ~3.39%; ATM equity raised; bond repaid Stable, proactive

Management Commentary

  • “Based on [processor] statements, we expect to recognize about $17 million in revenue in the fourth quarter from these three orchards alone. We also received the first cash payment, a little over $5 million.” — David Gladstone (CEO) .
  • “Our pistachio orchards performed well above state averages and also exceeded our own internal projections, both crop quality and volume.” — Bill Reiman (Managing Director) .
  • “Over 99% of our borrowings are at fixed rates, with a weighted average interest rate of 3.39% locked in for nearly three years.” — Lewis Parrish (CFO) .
  • “We view these lease modifications as a temporary measure and continue to aim for a return to standard lease structures that include fixed base rents.” — Press Release .

Q&A Highlights

  • Pistachio harvest: Analyst probed ~$16.9M Q4 revenue; management indicated variable structure likely yields “two or three times” relative to prior fixed leases, with full Q4 clarity forthcoming .
  • Series D redemption: ~$60.4M outstanding; plan is mix of common ATM (6.1%) and LOC (<6%) to avoid 8% coupon step-up in Jan-2026; partial redemption possible but 8% in stack is undesirable .
  • Disposition market: East Coast solid; West Coast improving but still constrained; opportunistic Florida sale completed; further selective sales ongoing discussions .
  • Lease reversion: Aim to revert modified leases back to fixed base rents; ongoing renewals with +$65K NOI uplift post quarter end .

Estimates Context

  • Q3 actuals vs S&P Global consensus: Revenue $17.785M vs $15.08M (beat), EPS -$0.11 vs -$0.265 (beat), EBITDA $16.24M vs $12.27M (beat). Back-half weighted revenue recognition and strengthened pistachio pricing drove the outperformance .*
  • With ~$16.9M pistachio revenue slated for Q4 and ongoing almond pricing strength, Street models likely need upward revisions to Q4 participation rents and FY-25 EBITDA, while normalizing lower fixed base rents until leases revert .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term setup favorable: Q4 should capture the bulk of 2025 earnings via participation rents; pistachio harvest metrics and pricing support upside to cash realization in Q4 .
  • Beat-and-raise feel on qualitative guidance: Explicit ~$16.9M pistachio revenue expectation in Q4 plus early cash receipts de-risk the quarter; monitor additional almond sales cadence .
  • AFFO trajectory: While Q3 AFFO was $0.04, Q4 weighting implies sequential improvement; consider run-rate beyond FY-25 as leases revert back to fixed base rents in 2026 .
  • Balance sheet safety net: High fixed-rate debt share and ample liquidity reduce refinancing risk; proactive steps toward the Series D redemption mitigate the 8% step-up .
  • Portfolio optimization: Expect continued selective dispositions and potential lease reversion; East Coast assets and water-secured West Coast nuts are likely focus points .
  • Structural water advantage: ~55.5k acre-feet position and infrastructure support resilience through future SGMA/drought regimes; potential ancillary revenue from water banking .
  • Trading implications: Stock may react to Q4 realization and clarity on lease normalization; watch updates on crop price trends (pistachios/almonds), disposition proceeds, and Series D redemption execution .

Notes:

  • The 8-K press release and earnings call constitute the Q3 2025 primary sources; no additional relevant LAND press releases were found for Q3 beyond the 8-K exhibit .
  • Prior quarters referenced for trend analysis: Q1 2025 and Q2 2025 8-Ks and the Q2 2025 earnings call .