Executive Summary

Q2 2025 showed sequential operational improvement (contract rate, occupancy, rent roll-down), but macro softness and Sunbelt supply pressure drove same store NOI down 6.1% and prompted a guidance cut; FY2025 Core FFO per share was reduced to $2.17–$2.23 from $2.30–$2.38 .
Reported revenue was $188.842M and diluted EPS was $0.19; Core FFO per share was $0.55 . Wall Street consensus from S&P Global indicated Primary EPS 0.16* vs actual 0.129*, and revenue $185.48M* vs actual $184.90M*; news sources likewise noted slight misses on EPS ($0.19 vs $0.20) and revenue ($188.84M vs $188.87M). Bold misses were modest and driven by demand softness and elevated concessions .
Occupancy improved sequentially to 85.0% (Q1: 83.6%), but remained 220 bps below prior year; marketing and property taxes pushed OpEx higher, compressing margins .
Stock reacted negatively (~3.09% premarket), with the guidance revision and persistent demand/supply headwinds as catalysts .

What Went Well and What Went Wrong

What Went Well

Sequential improvement in contract rate, occupancy, and rent roll-down spread; management highlighted “positive momentum from our enhanced marketing and revenue management strategies,” expecting full benefits from internalizing the PRO structure .
Management fees and other revenue increased (+$2.7M YoY for Q2; +$5.8M YTD), partially offsetting NOI pressure .
Balance sheet liquidity remained solid with ~$544.1M available on the $950M revolver at quarter-end .

Quote: “During the second quarter, we realized sequential improvement from the prior quarter...these positives were outweighed by continued softness in storage demand...which also impacted the pace of realizing the benefits from the internalization of our PRO structure” — CEO David Cramer .

What Went Wrong

Same store NOI declined 6.1% YoY; same store revenue fell 3.0% while property OpEx rose 4.6% (marketing, repairs & maintenance, property taxes) .
Sunbelt markets faced ongoing supply pressure and low existing home sales; elevated concessions used to drive volume hurt near-term revenue realization .
Core FFO per share declined 11.3% YoY to $0.55, with higher interest expense also weighing on FFO/unit .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($USD Millions)	$190.118	$188.354	$188.842
Diluted EPS ($)	$0.15	$0.10	$0.19
FFO per share and unit ($)	$0.59	$0.52	$0.54
Core FFO per share and unit ($)	$0.60	$0.54	$0.55
Same Store NOI ($USD Millions)	$120.850	$116.412	$116.255
Same Store NOI Margin (%)	70.8%	69.0%	68.8%
Occupancy at Period End (Same Store, %)	84.7%	83.6%	85.0%
Avg Annualized Rental Revenue/Occupied Sq Ft (Same Store, $)	$15.60	$15.70	$15.68

Actual vs S&P Global Consensus (Q2 2025)

Metric	Consensus	Actual
Primary EPS Consensus Mean*	0.16*	0.1293*
Revenue Consensus Mean* ($USD)	185,478,610*	184,897,000*
EBITDA Consensus Mean* ($USD)	122,912,050*	111,509,000*
Primary EPS - # of Estimates*	3*	3*
Revenue - # of Estimates*	5*	5*

Values retrieved from S&P Global.*

Revenue Breakdown (Q2 2025 vs Q2 2024)

Metric ($USD Millions)	Q2 2024	Q2 2025
Rental Revenue	$174.369	$169.838
Other Property-Related Revenue	$6.557	$6.774
Management Fees and Other Revenue	$9.522	$12.230
Total Revenue	$190.448	$188.842

Same Store Operating Results (771 Stores)

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenues ($USD Millions)	$174.184	$168.657	$168.975
Property OpEx ($USD Millions)	$50.407	$52.245	$52.720
NOI ($USD Millions)	$123.777	$116.412	$116.255
NOI Margin (%)	71.1%	69.0%	68.8%
Average Occupancy (%)	86.6%	83.9%	84.2%
Avg Annualized Rent/Occupied Sq Ft ($)	$15.72	$15.70	$15.68

Key KPIs and Balance Sheet

Metric	Q1 2025	Q2 2025
Net Debt / Annualized Current Quarter Adjusted EBITDA (x)	6.9x	6.8x
Fixed Charge Coverage (TTM) (x)	2.7x	2.6x
Total Leverage Ratio (%)	45.1%	45.8%
Revolver Availability ($USD Millions)	~$522.5	~$544.1

Guidance Changes

Metric	Period	Previous Guidance (May 2025)	Current Guidance (Aug 2025)	Change
Core FFO per share and unit	FY 2025	$2.30–$2.38	$2.17–$2.23	Lowered
Same Store Total Revenue Growth	FY 2025	(1.25)% to +1.25%	(3.0)% to (2.0)%	Lowered
Same Store Property OpEx Growth	FY 2025	3.0% to 4.0%	3.25% to 4.25%	Slightly Raised Midpoint
Same Store NOI Growth	FY 2025	(2.8)% to 0.0%	(5.75)% to (4.25)%	Lowered
G&A (ex SBC, $M)	FY 2025	$45.5–$47.5	$42.0–$44.0	Lowered
Equity-based Compensation ($M)	FY 2025	$8.0–$8.5	$8.0–$8.5	Maintained
Mgmt Fees & Other Revenue ($M)	FY 2025	$49.5–$51.5	$49.0–$51.0	Slightly Lowered
Core FFO from Unconsol. Ventures ($M)	FY 2025	$21.5–$23.5	$20.5–$22.5	Lowered
Acquisitions (at share, $M)	FY 2025	$100–$300	$50–$100	Lowered
Dispositions (at share, $M)	FY 2025	$100–$300	$100–$300	Maintained
Diluted EPS ($)	FY 2025	$0.63–$0.69	$0.71–$0.74	Raised (mix effects)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Demand/Macro	Q4: results in line; set up to realize PRO internalization benefits; no 2025 debt maturities . Q1: sequential improvement implied trough behind; economic uncertainty acknowledged .	Continued softness from low existing home sales and Sunbelt supply pressure; concessions elevated to drive volume .	Worsening vs prior expectations
Occupancy	Q4: 84.4% period-end same store . Q1: 83.6% period-end; sequential improvement anticipated .	85.0% period-end; sequentially better but -220 bps YoY .	Improving sequentially
Pricing/Rate Management	Q1: street rates and in-place rents grew sequentially Jan–Apr .	Contract rate and rent roll-down spread improved sequentially .	Improving
Expenses	Q4/Q1: property taxes, insurance, marketing pressured OpEx .	Marketing, repairs & maintenance, property taxes drove OpEx up; margins compressed .	Persistent pressure
Technology/AI Initiatives	Not emphasized in Q4/Q1 press releases.	Call highlights included AI-enabled call center and My Storage Navigator tool adoption gains .	Building momentum
Internalization of PRO Structure	Q4: completed; expected accretion . Q1: integration costs, benefits expected .	Benefits realization slower due to macro conditions; still expected over time .	Delayed timing

Management Commentary

Strategic message: NSA is seeing sequential operational momentum but macro/supply headwinds are delaying expected benefits; marketing and revenue management are improving KPIs, with continued expectations to realize full benefits of internalizing the PRO structure .
Quote: “We are seeing positive momentum from our enhanced marketing and revenue management strategies, and we still expect to realize the full benefits from the internalization of our PRO structure.” — David Cramer, CEO .

Q&A Highlights

Modest top-line misses and guidance cut drove investor focus on timing of demand recovery and Sunbelt supply normalization; management emphasized sequential occupancy improvement to 85.0% and continued marketing initiatives .
Balance sheet/liquidity: no near-term maturities and ample revolver capacity; Net Debt/EBITDA improved to 6.8x (from 6.9x) .
Technology initiatives: AI-enabled call centers and My Storage Navigator highlighted as improving customer interactions and operational efficiency .
Dispositions: Sold 10 non-core properties with proceeds used to pay down debt; investors probed capital recycling cadence .

Estimates Context

S&P Global consensus indicated Primary EPS of 0.16* vs actual 0.129*, and revenue of $185.48M* vs actual $184.90M* for Q2 2025, implying slight misses; EBITDA came in below consensus as well (actual $111.51M* vs $122.91M*). Values retrieved from S&P Global.*
Public coverage also cited slight misses vs forecasts (EPS $0.19 vs $0.20; revenue $188.84M vs $188.87M), consistent with a modest negative premarket reaction .

Key Takeaways for Investors

Guidance reset: The lowered Core FFO per share range and same store growth assumptions reflect a more conservative view amid demand softness and supply pressure; any improvement in existing home sales or Sunbelt supply absorption could be upside catalysts .
Sequential progress: Occupancy and rate metrics improved sequentially, suggesting operational momentum that could translate into margin stabilization once OpEx growth moderates .
Margin watch: Elevated marketing, R&M, and property taxes are compressing NOI margins; monitor OpEx trajectory and concessions usage to gauge near-term revenue recovery .
Balance sheet/liquidity: Leverage and coverage ratios remain within covenants with ~$544M revolver availability; dispositions help fund debt paydown and portfolio optimization .
Tech/AI initiatives: Early traction from call center AI and digital tools may support conversion/retention, but benefits are likely incremental; track adoption metrics shared in future calls .
Dividend stability: The Board maintained the $0.57 quarterly dividend in May and August; income investors should track FFO coverage and payout ratios as fundamentals evolve .
Trading implications: Near term, the guidance cut and slight consensus misses are likely to cap upside; watch for evidence of demand normalization (seasonal leasing strength, improved home turnover) and pricing power recovery as potential rerating triggers .

National Storage Affiliates Trust (NSA)·Q2 2025 Earnings Summary