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Lineage, Inc. (LINE)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue rose 0.9% year over year to $1.35B, while GAAP diluted EPS was a loss of $0.03; Adjusted EBITDA was $326M (down 2.4% YoY) and AFFO per share was $0.81 (up 8% YoY) .
  • Management lowered full-year 2025 guidance: Adjusted EBITDA to $1.29–$1.34B (from $1.35–$1.40B) and AFFO/share to $3.20–$3.40 (from $3.40–$3.60), citing muted seasonal inventory build; Q3 guide set at Adjusted EBITDA $326–$336M and AFFO/share $0.75–$0.79 .
  • Price per pallet improved sequentially and ~90% of contracts renegotiated; same-warehouse NOI improved sequentially, but occupancy lagged normal seasonal uplift into late Q2/early Q3 .
  • Stock catalyst: guidance reduction tied to delayed occupancy recovery despite expectations for sequential improvement in NOI and EBITDA in H2 .

What Went Well and What Went Wrong

What Went Well

  • AFFO/share grew 8% YoY to $0.81, with Core FFO up and Adjusted FFO reaching $211M; CEO highlighted “AFFO per share growth driven by continued focus on serving customers and operational excellence” .
  • Pricing stability and sequential improvement: same-warehouse storage revenue per physical occupied pallet rose ~5% vs Q1; ~90% of contracts renegotiated; minimum storage guarantees increased from 42.0% in Q1 to 44.9% in Q2 .
  • GIS segment strength: revenue +2% YoY to $380M, NOI +8% to $68M, margin +100 bps to 17.9%, with momentum in U.S. transport and D2C and expectation for double-digit NOI growth in H2 .

What Went Wrong

  • Global Warehousing NOI fell 4.4% YoY to $367M and total segment margin compressed 200 bps to 37.8% as occupancy declined versus elevated inventory in 1H24 .
  • Same-warehouse metrics weakened YoY: revenues -2.9%, NOI -6.3%, economic occupancy down 280 bps, physical occupancy down 230 bps, and throughput pallets down 3.2% .
  • Full-year guidance cut due to muted seasonal inventory build and tariff uncertainty; management quantified an H2 tariff headwind of ~$10M NOI in Q&A .

Financial Results

Consolidated P&L and Key Metrics

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.338 $1.292 $1.350
GAAP Diluted EPS ($)$(0.46) $0.01 $(0.03)
Adjusted EBITDA ($USD Millions)$334 $304 $326
Adjusted EBITDA Margin (%)25.0% 23.5% 24.1%
AFFO per share ($)$0.75 $0.86 $0.81

Segment Breakdown

SegmentQ2 2024 Revenue ($M)Q2 2025 Revenue ($M)Q2 2024 NOI ($M)Q2 2025 NOI ($M)Margin Q2 2024Margin Q2 2025
Global Warehousing$966 $970 $384 $367 39.8% 37.8%
Global Integrated Solutions (GIS)$372 $380 $63 $68 16.9% 17.9%

KPIs (Warehousing – Same Warehouse)

KPIQ2 2024Q1 2025Q2 2025
Physical Occupancy (%)76.9% 76.5% 74.6%
Economic Occupancy (%)83.4% 82.1% 80.6%
Storage Rev per Physical Occupied Pallet ($)$68.04 $65.36 $68.34
Throughput Pallets (000s)12,368 11,894 11,967
Same-Warehouse NOI ($M)366 337 343

Versus Wall Street Consensus (S&P Global)

MetricQ2 2024 EstimateQ2 2024 ActualQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 Actual
Revenue ($USD Millions)1,335.9*1,338 1,338.7*1,292 1,331.8*1,350
Primary EPS (GAAP) ($)(0.133)*(0.46) (0.099)*0.01 (0.064)*(0.03)
EBITDA ($USD Millions)327.3*277 (EBITDA) 323.9*280 (EBITDA) 319.5*277 (EBITDA)

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

Notes:

  • Company-reported EBITDA vs “EBITDA Consensus Mean” reflects EBITDA (not Adjusted EBITDA); company Adjusted EBITDA was $326M in Q2 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($B)FY 2025$1.35–$1.40 $1.29–$1.34 Lowered
AFFO per share ($)FY 2025$3.40–$3.60 $3.20–$3.40 Lowered
Adjusted EBITDA ($M)Q3 2025—$326–$336 Initiated
AFFO per share ($)Q3 2025—$0.75–$0.79 Initiated
G&A Expense, Cash ($M)FY 2025$480–$500 $460–$480 Lowered midpoint by ~$20M
Stock-based Comp ($M)FY 2025~140 ~140 Maintained
Interest Expense, Net ($M)FY 2025$260–$280 $265–$275 Maintained midpoint
Current Income Tax ($M)FY 2025$25–$35 $25–$35 Maintained
Recurring Maintenance Capex ($M)FY 2025$190–$205 $180–$195 Lowered midpoint by ~$10M
Adjusted Diluted Wtd Avg Shares (M)FY 2025~257 ~257 Maintained
Dividend per share (quarterly)Ongoing$0.5275 $0.5275 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/Technology (LinOS)Pilots exceeding expectations; transformative potential Pilots at conventional sites, double-digit productivity; broader rollout planned 6 sites live, 10 by YE; double-digit productivity; majority of conventional facilities over 2–3 years; minimal capex Strengthening execution
Supply Chain/SeasonalityReturn to normal seasonality expected 2025 Q2 expected YoY decline; H2 growth on seasonality Muted seasonal inventory build late Q2/early Q3; sequential improvements expected Q3/Q4 Seasonality delayed
Tariffs/MacroStabilizing inventories; cautious consumer Tariff policy uncertainty; ~15% US throughput tied to import/export ~$10M NOI headwind in H2 from tariffs; delayed occupancy uplift Macro headwind persists
Product/Category MixDiversification across proteins/seafood/veg Notable customer optimization efforts Chicken/beef solid; seafood stabilized but low sales; export markets potential with new trade deals Mixed by category
Regional TrendsGlobal footprint; Europe softness in GIS Normal seasonality in H2 US driving YoY occupancy decline; Europe/Australia holding better US weaker
Regulatory/Legaln/an/aMultiple law firm “investor alerts” press releases not operationally material; focus remains on operations [109]–[125]Noise not core driver
R&D/ExecutionLean, automation, patents Continued productivity initiatives Labor planning, next-gen LMS underpin LinOS; energy/safety/productivity gains Operational execution improving

Management Commentary

  • “We delivered second-quarter results in line with our expectations… AFFO per share growth… while navigating a challenging period for our industry.” – Greg Lehmkuhl, CEO .
  • “We experienced muted seasonal inventory levels late Q2 and early Q3 and are therefore lowering our outlook for the year… expect continued sequential improvement… taking a more measured view of the balance of the year.” – Greg Lehmkuhl .
  • “We are acutely focused partnering with our customers… LINOS pilots continue to accelerate and perform above our expectations, showing double digit productivity improvements.” – CEO prepared remarks .
  • “We ended the quarter with net debt of ~$7.4B and total liquidity of ~$1.5B… completed inaugural $500M investment grade bond offering at 5.25% coupon.” – CFO .
  • “Same WH storage revenue per physical occupied pallet +5% vs Q1… ~90% of contracts renegotiated… minimum storage guarantees increased from 42.0% to 44.9%.” – Management presentation .

Q&A Highlights

  • Occupancy/Seasonality: Guidance reduced as normal seasonal uplift arrived later than usual; expect sequential improvement but at more muted levels; July occupancy above April/May levels .
  • Pricing Stability: Sequential increase in rent/storage/blast per pallet driven by volume guarantees and FX; pricing environment competitive but stable with 2–3% price embedded .
  • Tariffs: ~$10M NOI headwind embedded in H2 guidance; customers redirect product amid policy uncertainty; chicken/beef holding; seafood low sales .
  • LinOS Rollout: 6 sites live, 10 by YE; double-digit labor productivity gains; majority of conventional facilities over 2–3 years; minimal incremental capex beyond operating rollout costs .
  • Interest Expense: Swaps rolling off drive ~$10M per quarter headwind in 2026 vs 2025; new $750M swap at ~3.2%; ongoing active management including currency financing options .
  • GIS Momentum: Strong YTD with expected double-digit NOI growth in H2 driven by transport and D2C .

Estimates Context

  • Q2 2025 revenue beat consensus ($1,350M actual vs $1,331.8M* estimate); GAAP diluted EPS beat (−$0.03 actual vs −$0.064* estimate). EBITDA (company-reported EBITDA $277M) was below SPGI EBITDA consensus ($319.5M*) but Adjusted EBITDA was $326M; consensus pertains to EBITDA not Adjusted EBITDA .
  • Prior quarters: Q1 2025 revenue missed ($1,292M vs $1,338.7M*), EPS beat (0.01 vs −$0.099*), EBITDA below ($280M EBITDA vs $323.9M*); Q2 2024 near inline on revenue and below on EPS .

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

Key Takeaways for Investors

  • Guidance reset is the key narrative driver; expect sequential improvement in H2 but occupancy uplift is delayed and muted vs historical norms .
  • Pricing is stable with higher minimum storage guarantees and high renegotiation completion, supporting margin resilience once volumes recover .
  • GIS provides diversification and growth with margin expansion and expected double-digit NOI growth in H2, offsetting warehousing softness .
  • LinOS and operational initiatives are tangible productivity levers (double-digit gains) with broader rollout in 2026; minimal capex intensity, potential structural margin tailwind .
  • Balance sheet/liquidity solid post inaugural IG bond; net debt/LTM Adjusted EBITDA at 5.7x, debt service covenant headroom strong; be mindful of 2026 interest headwind as swaps expire .
  • Near-term trading: Guidance cut and muted occupancy likely cap upside until data confirms H2 sequential improvement; watch USDA seasonality, tariff developments, and July/Aug trends .
  • Medium-term thesis: Operating leverage from price stability, LinOS productivity, GIS growth, and incremental NOI from M&A/greenfield pipeline ($109M future NOI from projects) positions LINE for margin expansion when inventories normalize .