Executive Summary

Solid quarter with modest growth and clean beat on Street expectations: revenue $12.93M (+3.8% YoY) vs S&P Global consensus $12.67M and diluted EPS $0.35 vs $0.30; AFFO $11.46M (+4.0% YoY) and payout ratio 79% maintained . Consensus figures marked with asterisks; see S&P disclaimer below.*
Balance sheet remained very conservative: 1.6% debt to total gross assets, $104.3M total liquidity, no maturities until May 2027; revolver shifted to variable at 8.50% as of 6/30/25 .
Tenant risk rose post-quarter: AYR (5.9% of rental revenue in 1H25) missed August rent; security deposits (~3.5 months per property) provide near-term cushion while NLCP enforces rights; Revolutionary Clinics vacated in July and is being re-leased .
Dividend held at $0.43 (annualized $1.72) with coverage intact; management emphasized “continued stability” and disciplined execution despite sector headwinds, a potential support for shares pending clarity on tenant outcomes .

What Went Well and What Went Wrong

What Went Well

Beat on revenue and EPS vs S&P Global consensus; YoY growth across revenue, FFO and AFFO despite industry pressure (Revenue +3.8% YoY to $12.93M; FFO $11.35M +7.7% YoY; AFFO $11.46M +4.0% YoY) . Consensus details marked with asterisks; see S&P disclaimer below.*
Strong liquidity and low leverage provide ample flexibility: $104.3M liquidity, 1.6% debt to gross assets, no maturities until May 2027 .
Dividend sustainability: $0.43 declared; 79% AFFO payout ratio within the 80–90% target range highlighted in investor materials .

“Quote”: “Our second quarter results demonstrate the continued stability of our business model… we generated revenue and AFFO growth while maintaining a 79% AFFO payout ratio” — Anthony Coniglio, CEO .

What Went Wrong

Tenant stress increased: AYR (5.9% of rental revenue in 1H25) did not pay August rent; properties were not expected to be included in noteholder transaction; NLCP holds deposits ≈3.5 months per site and intends to enforce rights .
Revolutionary Clinics vacated in July; property now marketed for re-leasing, which can be protracted in challenged markets .
Revolver moved to variable rate; interest cost at 8.50% on 6/30/25, a modest headwind to interest expense if drawn balances rise .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$12.46	$13.21	$12.93
Net Income Attributable to Common ($M)	$6.80	$6.30	$7.32
Diluted EPS ($)	$0.33	$0.31	$0.35
FFO ($M)	$10.54	$10.28	$11.35
FFO per share – diluted ($)	$0.50	$0.49	$0.54
AFFO ($M)	$11.02	$10.72	$11.46
AFFO per share – diluted ($)	$0.53	$0.51	$0.55
Net Income Margin (%)	54.6%	47.7%	56.6%

Estimates vs Actuals (S&P Global; consensus values marked with asterisks; see S&P disclaimer):

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue – Consensus ($M)*	$12.60*	$12.29*	$12.67*
Revenue – Actual ($M)	$12.46	$13.21	$12.93
Revenue Surprise (%)*	-1.2%*	+7.5%*	+2.1%*
Diluted EPS – Consensus ($)*	$0.33*	$0.29*	$0.30*
Diluted EPS – Actual ($)	$0.33	$0.31	$0.35
EPS Surprise (%)*	0.0%*	+6.9%*	+16.7%*

KPIs and Balance Sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Dividend per share ($)	$0.43	$0.43	$0.43
AFFO Payout Ratio (%)	83% (Q4)	84%	79%
Portfolio Leased (%)	100% (Q4)	100%	100%
Cash & Equivalents ($M)	$20.21	$19.94	$21.85
Total Liquidity ($M)	$102.6	$102.3	$104.3
Debt to Total Gross Assets (%)	1.6%	1.6%	1.6%
Wtd. Avg. Lease Term (yrs)	—	—	12.7
Rent Collected (%)	—	~98%	97% (By the Numbers)
AYR Exposure (% of rent)	—	—	5.9% (1H25)

Segment breakdown: Not applicable; NLCP reports as a single REIT platform.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q2 2025	$0.43 (Q1 2025)	$0.43	Maintained
Target AFFO payout ratio	Ongoing	80–90%	80–90%	Maintained
Financial guidance (Revenue/AFFO)	FY 2025	None provided	None provided	N/A

No formal revenue/earnings guidance was issued; management reiterated dividend and target payout philosophy .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Tenant health/credit	Q4: Calypso arrears covered by escrow; Revolutionary paying ~50% and in receivership . Q1: ~98% rent collected; two tenants impacted metrics .	AYR missed August rent; ~3.5 months deposits per site; Revolutionary Clinics vacated in July; re-leasing underway .	Worsened (AYR non-pay adds risk)
Capital deployment/unfunded commitments	Entered 2025 with C3 CT unfunded ~$11.0M; pause mechanisms tied to tenant performance .	Unfunded: C3 CT $11.04M remains; management on call indicated a pause evaluating options (call transcript references) .	Cautious/paused
Leverage/liquidity	Low leverage (1.6%), >$100M liquidity; revolver fixed through 5/5/25 .	1.6% debt-to-assets; $104.3M liquidity; revolver now variable at 8.50% as of 6/30 .	Stable liquidity; higher variable rate
Rent collections	Q1 collections ~98% including deposits for one tenant .	“By the Numbers” 97% rent collected; AYR August unpaid post quarter .	Slightly lower; monitor AYR
Regulatory/macro	2024: Industry headwinds; restructuring at select tenants .	Call commentary focused on conservative underwriting and low leverage amid reform uncertainty .	Unchanged cautious tone

Management Commentary

Strategic stance: Emphasis on stability, disciplined execution, and dividend coverage in a challenged cannabis real estate market .
Balance sheet philosophy: Maintain under-levered position and pursue quality transactions; discussion on sale-leaseback appetite and measured deployment given subdued cultivation build-out demand (analyst Q&A) .
Tenant actions: AYR non-payment in August addressed with security deposits and enforcement of lease rights; Revolutionary Clinics property actively marketed post-vacancy .

Notable quote: “We generated revenue and AFFO growth while maintaining a 79% AFFO payout ratio” — Anthony Coniglio, CEO .

Q&A Highlights

Tenant exposure and collections: Management confirmed AYR missed August rent; deposits provide partial coverage; other tenants current through August per call discussions and press release details .
Capital commitments: On the ~$11M C3 Hartford build-out, management indicated a pause while evaluating options; cautious stance on funding in 2H25 absent clear tenant returns .
Balance sheet and leverage: Reiterated preference to remain under-levered, preserving capacity for opportunistic, appropriately priced sale-leasebacks .

Estimates Context

Beat vs S&P Global consensus: Q2 revenue $12.93M vs $12.67M estimate; EPS $0.35 vs $0.30; Q1 also beat revenue and EPS; Q2’24 was roughly in line on EPS and slightly under on revenue (see Estimates table above). Values with asterisks retrieved from S&P Global.*
Post-quarter risk suggests potential estimate revisions: AYR non-payment from August and Revolutionary Clinics vacancy may lead to modest downward adjustments to 2H25 revenue/AFFO until properties are re-leased or obligations resume .

S&P Global disclaimer: Consensus values marked with an asterisk were retrieved from S&P Global.*

Key Takeaways for Investors

Quality of earnings: Clean beat on revenue and EPS with stable AFFO and an 79% payout ratio — dividend appears well-covered on current run-rate .
Risk management: Low leverage (1.6% debt/gross assets) and >$100M liquidity give NLCP time and flexibility to work through tenant issues and pursue selective growth .
Watchlist risks: AYR non-payment from August and Revolutionary Clinics vacancy could pressure near-term revenue/AFFO; monitor re-leasing progress and deposit utilization cadence .
Interest-rate sensitivity: Revolver now variable; if drawn levels increase, interest expense could drift higher absent offsetting rent escalators or accretive deals .
Capital deployment: Management remains disciplined; unfunded C3 commitments likely on hold until visibility improves, limiting growth but protecting cash yields near term .
Dividend durability: Maintaining $0.43/share with sub-80% payout supports income investors; sustainability hinges on resolving AYR/Revolutionary impacts over the next few quarters .
Potential catalysts: Re-leasing Fitchburg MA and clarity on AYR outcomes; any favorable regulatory developments could rekindle sale-leaseback activity and tenant fundamentals .

Sources and documents read in full:

Q2 2025 8-K and earnings press release with financials and non-GAAP reconciliations .
Q2 2025 dividend and call scheduling press releases .
Prior quarters’ releases: Q1 2025 and Q4 2024 for trend analysis .
Investor presentation (Aug 7, 2025) for supplemental KPIs .
Earnings call transcript and summaries (external): Seeking Alpha, Investing.com, GuruFocus .

NewLake Capital Partners, Inc. (NLCP)·Q2 2025 Earnings Summary