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Lineage, Inc. (LINE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.339B (+0.4% YoY); Adjusted EBITDA rose to $335M (+9.8% YoY) with margin expanding 210 bps to 25.0%; AFFO was $213M and AFFO/share was $0.83 (+72.9% YoY) .
  • GAAP net loss was $(80)M; diluted EPS $(0.33), driven by depreciation, amortization, FX losses, and acquisition/other costs .
  • 2025 guidance: Adjusted EBITDA $1.35–$1.40B and AFFO/share $3.40–$3.60; modeling support: net interest $250–$270M, current tax $35–$45M, maintenance capex $190–$205M, ~257M diluted shares .
  • Management highlighted continued margin expansion from productivity and energy initiatives; near‑term comps are tougher in 1H25 as inventories stabilized at low levels; LinOS pilots “exceeding expectations,” a potential medium‑term catalyst .

What Went Well and What Went Wrong

What Went Well

  • Margin and cash flow execution: Adjusted EBITDA +9.8% YoY to $335M; margin +210 bps to 25.0%; AFFO $213M and AFFO/share $0.83 (+72.9% YoY), reflecting productivity, lean operations and energy management .
  • Strategic positioning and technology: “LinOS…pilots are exceeding expectations…we believe [it] will transform warehouse operations” — CEO Greg Lehmkuhl .
  • Balance sheet/liquidity and dividend: Net debt/Adj. EBITDA at 4.9x with ~$1.8B liquidity; capacity to deploy $1.5B+ in 2025; quarterly dividend declared at $0.5275 (annualized $2.11) .

What Went Wrong

  • GAAP loss persisted: Q4 GAAP net loss $(80)M; diluted EPS $(0.33), influenced by depreciation ($181M), amortization ($55M), FX losses ($30M), and acquisition/other expenses ($39M) .
  • Warehousing KPIs still below prior-year levels: Economic occupancy 83.9% (−330 bps YoY) and physical occupancy 78.1% (−270 bps YoY); same-warehouse revenues down modestly .
  • GIS margin pressure: Global Integrated Solutions NOI margin fell to 14.8% (−300 bps YoY) in Q4 amid softer transportation markets .

Financial Results

Headline results (last three quarters)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$1.338 $1.335 $1.339
GAAP Diluted EPS ($)$(0.46) $(2.44) $(0.33)
Adjusted EBITDA ($USD Millions)$334 $333 $335
Adjusted EBITDA Margin (%)N/A24.9% 25.0%
AFFO per share ($)N/A$0.90 $0.83

Notes: Q4 YoY performance per press release: revenue +0.4%; Adjusted EBITDA +9.8% (+210 bps margin); AFFO +147.7%; AFFO/share +72.9% .

Segment performance (revenue and NOI)

SegmentQ2 2024 Revenue ($M)Q2 2024 NOI ($M)Q3 2024 Revenue ($M)Q3 2024 NOI ($M)Q4 2024 Revenue ($M)Q4 2024 NOI ($M)
Global Warehousing$966 $384 $972 $383 $980 $382
Global Integrated Solutions$372 $63 $363 $56 $359 $53

Operating KPIs (same-warehouse where applicable)

KPIQ2 2024Q3 2024Q4 2024
Economic occupancy (%)84.1% 84.1% 86.0%
Physical occupancy (%)77.4% 77.6% 80.3%
Throughput pallets (000s)11,255 11,272 11,220

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY2025—$1.35–$1.40B New
AFFO per shareFY2025—$3.40–$3.60 New
Net interest expenseFY2025—$250–$270M New
Current income tax expenseFY2025—$35–$45M New
Recurring maintenance capexFY2025—$190–$205M New
Adjusted diluted average sharesFY2025—~257M New
DividendQ4 2024$0.38/quarter (annualized $2.11) previously; declared$0.5275 per share declared for Q4’24 Increased declared payment in Q4’24 press (annualized rate reiterated)

Note: FY2024 prior guide for AFFO/share was $3.16–$3.20 (Q3 release) and actual FY2024 AFFO/share came in at $3.29 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/Technology (LinOS)Focus on operational effectiveness; tech and automation highlighted in MD&A Emphasis on automation and underwriting returns (9–11%) LinOS pilots “exceeding expectations”; broader rollout prep in 2025 Improving
Supply chain/inventoryInflation easing; occupancy/throughput impacted by inventory rationalization “Demand stable but down vs PY” amid rebalancing; muted seasonal lift Market stabilized at low inventories; normal seasonality assumed; tougher 1H comps Stabilizing
PricingCustomer rate actions to offset inflation Seeking inflationary price increases; customer partnerships “Inflationary level pricing” expected; mix can mask price Stable
New supply/competition—Pockets of spec development; some market softness (e.g., Florida) New capacity peaked in 2023; down ~50% in 2024/2025; expect further declines Easing medium term
GIS/transportation—GIS down on excess capacity/softer transport; margin −170 bps GIS margin 14.8% (−300 bps YoY); expect rebound on new wins in 2025 Soft, poised to recover
Macro/tariffs—Resilient across cycles; customers can shift sourcing; global port presence Similar stance reiterated Stable

Management Commentary

  • “Our LinOS initiative is on track, and our early pilots are exceeding expectations…we believe [it] will transform warehouse operations” — Greg Lehmkuhl, CEO .
  • “We expect full year [2025] adjusted EBITDA of $1.35–$1.40B and AFFO per share of $3.40–$3.60…guidance assumes normal seasonality…with no market improvement” — Greg Lehmkuhl .
  • “The industry has stabilized at these lower levels…we’re well positioned for strong operating leverage on any incremental growth” — Rob Crisci, CFO .
  • “New capacity peaked in 2023 and came down ~50% in both 2024 and 2025 vs 2023…we expect deliveries to continue to decrease” — CEO .

Q&A Highlights

  • Occupancy/seasonality: Management framed 2025 as a “normal seasonality” year; expects 47–48% of NOI/EBITDA in 1H and 52–53% in 2H; 1H comps tougher due to elevated inventories in 1H24 .
  • Pricing: Company targets “inflationary level pricing,” with occasional volume/price trade-offs depending on market supply–demand and customer needs .
  • Capital deployment: Balance sheet supports $1.5B+ capacity in 2025; pipeline spans development and M&A; funding assumed via cash/debt in model (no equity in baseline) .
  • Supply additions: Spec development peaked and is declining; high build costs and capital costs likely pressure new entrants; potential consolidation opportunities for Lineage .
  • LinOS detail: 2025 is about proving functionality across facility types; benefits largely beyond 2025; pilots receiving strong internal adoption .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 EPS/revenue/EBITDA but it was unavailable at this time due to API limit constraints. As such, we cannot provide a results vs. consensus comparison for Q4 2024. Where investors track revisions, Adjusted EBITDA and AFFO/share guidance for FY2025 were introduced at $1.35–$1.40B and $3.40–$3.60, respectively, with modeling details provided for interest, taxes, maintenance capex, and share count .

Key Takeaways for Investors

  • Margin expansion story intact: Adj. EBITDA margin reached 25.0% in Q4 on disciplined cost, productivity, and energy management — a multi-quarter trend that underpins 2025 growth despite conservative demand assumptions .
  • Volume optionality from low inventories: With industry inventories stabilized at low levels, a restock cycle would drive operating leverage; guidance prudently assumes no improvement from today’s levels .
  • Technology edge building: Early LinOS pilots “exceeding expectations,” suggesting medium‑term labor/productivity gains beyond 2025 as deployment scales .
  • Balanced capital allocation: Investment‑grade balance sheet (4.9x net debt/Adj. EBITDA) and ~$1.8B liquidity supports $1.5B+ 2025 deployment opportunity set (greenfield/M&A), a potential driver of incremental NOI .
  • Segment mix to watch: GIS margin compressed on transportation softness; management expects improvement in 2025 as new wins ramp — a modest tailwind to NOI .
  • KPIs improving sequentially: Physical occupancy rose from 77.6% (Q3) to 80.3% (Q4), with economic occupancy up as well; continued normalization would support throughput and same‑warehouse NOI .
  • Dividend continuity: Q4 cash dividend of $0.5275/share declared; annualized rate of $2.11 underscores cash flow durability while funding growth .