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National Storage Affiliates Trust (NSA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered stabilizing operations with sequential improvement: total revenue $188.7M, diluted EPS $0.17, and Core FFO/unit $0.57; same-store NOI fell 5.7% YoY on lower occupancy and higher property expenses .
  • Results modestly exceeded Wall Street: revenue and EPS were above consensus; Core FFO/unit of $0.57 was above $0.558 consensus; management explicitly noted a beat on Core FFO/unit . Revenue consensus $183.8M*, EPS consensus $0.173*, Core FFO consensus $0.558*; actual: $188.7M , $0.17 , $0.57 .
  • Guidance reaffirmed: FY25 Core FFO/unit $2.17–$2.23; same‑store revenue −3.0% to −2.0%, NOI −5.75% to −4.25%; diluted EPS $0.71–$0.74 .
  • Catalysts: removal of 10 bps SOFR index add-on (~$1M annual interest savings) , rising contract rates, improved marketing conversion, and a new preferred‑equity JV program expected to broaden external growth .

What Went Well and What Went Wrong

What Went Well

  • Core FFO/unit beat and sequential fundamentals improved; CEO: “fundamentals have found a bottom and are beginning to trend upward” .
  • Digital consolidation driving demand: web shopping sessions up 23% YoY in October and conversion rate up 7.1% .
  • Balance sheet/liquidity intact with $544–$544M revolver availability and interest savings from SOFR adjustment removal ($1M annually) .

What Went Wrong

  • Same-store revenue −2.6% YoY and NOI −5.7% YoY; average occupancy −150 bps YoY, period-end occupancy 84.5% (−140 bps YoY) .
  • Property operating expenses up 4.9% YoY (marketing, property taxes, utilities), pressuring margins; NOI margin down 220 bps YoY to 69.0% .
  • Interest expense rose to $40.5M; other property-related revenue faced difficult comps tied to tenant insurance changes, intensifying near-term revenue headwinds .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)$193.6 $188.4 $188.8 $188.7
Diluted EPS ($)$0.18 $0.10 $0.19 $0.17
Core FFO per Share & Unit ($)$0.62 $0.54 $0.55 $0.57
Same-Store NOI ($USD Millions)$124.5 $116.4 $116.3 $117.4
Same-Store NOI Margin (%)71.2% 69.0% 68.8% 69.0%

Q3 actuals vs S&P Global consensus

MetricConsensusActualResult
Revenue ($USD)$183,837,660*$188,702,000 Beat
Diluted EPS ($)$0.17329*$0.17 In-line/Beat
Core FFO per Share & Unit ($)$0.55793*$0.57 Beat

Revenue breakdown

Metric ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
Rental Revenue$174.5 $169.5 $169.8 $169.9
Other Property-Related Revenue$7.4 $6.7 $6.8 $6.5
Management Fees & Other Revenue$11.7 $12.1 $12.2 $12.3
Total Revenue$193.6 $188.4 $188.8 $188.7

KPIs (Same-Store)

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)$174.8 $168.7 $169.0 $170.3
Property Operating Expenses ($USD Millions)$50.4 $52.2 $52.7 $52.8
NOI ($USD Millions)$124.5 $116.4 $116.3 $117.4
NOI Margin (%)71.2% 69.0% 68.8% 69.0%
Average Occupancy (%)86.5% 83.9% 84.2% 85.0%
Period-End Occupancy (%)85.9% 83.6% 85.0% 84.5%
Avg Annualized Rent per Occupied Sq Ft ($)$15.73 $15.70 $15.68 $15.67

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core FFO per Share & Unit ($)FY 2025$2.30–$2.38 $2.17–$2.23 Lowered (Q2), Maintained (Q3)
Same-Store Total Revenue Growth (%)FY 2025−1.25% to +1.25% −3.0% to −2.0% Lowered (Q2), Maintained (Q3)
Same-Store NOI Growth (%)FY 2025−2.8% to 0.0% −5.75% to −4.25% Lowered (Q2), Maintained (Q3)
Property Operating Expenses Growth (%)FY 20253.0%–4.0% 3.25%–4.25% Slightly higher (Q2), Maintained (Q3)
Diluted EPS ($)FY 2025$0.63–$0.69 $0.71–$0.74 Raised (Q2), Maintained (Q3)
G&A excl. Equity Comp ($M)FY 2025$45.5–$47.5 $42.0–$44.0 Lowered (Q2), Maintained (Q3)
Equity-Based Comp ($M)FY 2025$8.0–$8.5 $8.0–$8.5 Maintained
Mgmt Fees & Other Rev ($M)FY 2025$49.5–$51.5 $49.0–$51.0 Maintained/Minor tweak
Core FFO from Unconsol. JVs ($M)FY 2025$21.5–$23.5 $20.5–$22.5 Lowered (Q2), Maintained (Q3)
Acquisitions at Share ($M)FY 2025$100–$300 $50–$100 Lowered (Q2), Maintained (Q3)
Dispositions at Share ($M)FY 2025$100–$300 $100–$300 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Inflection in fundamentalsSequential improvement; trough behind; lowered FY25 same-store guide in Q2 due to Sunbelt supply and housing softness CEO: majority of markets showed sequential improvement; confident worst is behind Improving
Pricing/ECRI and discountsECRI cadence unchanged; magnitude improving; Q2 discounts elevated, compressing move-in rates Contract rates +160 bps YoY in Oct; discounts still a drag (100–150 bps impact) Improving net, discounts easing gradually
Digital/Marketing executionInternalization progress slower in Q2; continued investment in paid search Web sessions +23% YoY, conversion +7.1%; sustained paid marketing push Positive
Macro/housing & supplySunbelt supply pressures; low existing-home sales muting demand Outlook constructive: expected rate cuts, lower new supply in ’26; demand could recover Constructively improving
Balance sheet & debt costsLeverage ~6.9x (Q1); revolver capacity >$520M (Q1) Removed SOFR index add-on (10 bps) → ~$1M annual interest savings; net debt/EBITDA 6.7x Incremental improvement
External growth/JVsCapital recycling ongoing; JV acquisition in Q2 New preferred-equity JV with IRE; $105M pref, 10% preferred return, potential ROFO pipeline Expanding avenues

Management Commentary

  • “During the third quarter, the majority of our markets showed sequential improvement in same store revenue growth, which supports our view that fundamentals have found a bottom and are beginning to trend upward.” — CEO David Cramer .
  • “Our positive momentum is supported by… enhanced marketing and revenue management… capital recycling… preferred investment program. Adding strategies like this will help return NSA to being a growth company.” — CEO David Cramer .
  • “Subsequent to quarter-end, we amended our credit facility to remove the 10 bps SOFR index adjustment… nearly $1 million of annual interest savings.” — CFO Brandon Togashi .

Q&A Highlights

  • Preferred-equity JV structure: NSA contributes 75% of equity as preferred (10% coupon), accrual in early years; many deals reach 10% by year 3; potential ROFO adds future pipeline; tenant insurance program provides incremental revenue .
  • Move-in rates vs revenue: Q3 move-in rates +4.9% YoY but discounts reduced effective rates by ~100–150 bps; other property-related revenue faced tough comps; Oct move-in rates +14% YoY with ~150 bps discount impact .
  • Occupancy trajectory: aiming to start 2026 closer to flat YoY (vs −150–170 bps in late 2025); focus on closing occupancy gap while maintaining rate .
  • Marketing effectiveness: web sessions +23% YoY, conversion +7.1%; continued paid search investment where ROI is visible .

Estimates Context

  • Q3 comparison: NSA modestly exceeded Street on revenue, EPS, and Core FFO/unit; management called out a Core FFO/unit beat .
  • Forward outlook (S&P Global consensus):
    • Q4 2025: Revenue $180.5M*, diluted EPS $0.1563*, Core FFO/unit $0.5458*
    • Q1 2026: Revenue $181.1M*, diluted EPS $0.1528*, Core FFO/unit $0.5406*
    • Q2 2026: Revenue $184.3M*, diluted EPS $0.1750*, Core FFO/unit $0.5517*
      Values retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential stabilization with improving pricing and marketing conversion suggests trend better than mid‑year trough; expect same‑store revenue declines to moderate further into Q4 and 2026 .
  • Expense pressure (taxes, utilities, marketing) remains a headwind, but guidance implies easing into Q4; monitor NOI margin recovery vs 69% exit rate .
  • Interest savings (~$1M annually) and 6.7x net debt/EBITDA provide incremental support to FFO trajectory; maturities benign until H2’26 .
  • Preferred‑equity JV adds a capital‑light growth avenue with potential 10%+ returns and captive pipeline; could sustain external growth without stressing leverage .
  • Street estimates likely need mild upward revisions to reflect revenue and Core FFO beats and October momentum; watch discount trends and tenant insurance normalization .
  • Trading lens: near‑term catalysts include Q4 same‑store improvement and visibility on JV deployments; medium‑term thesis hinges on lower supply and easing mortgage rates supporting storage demand in 2026 .

Notes:

  • All figures with an asterisk are values retrieved from S&P Global.
  • Document citations are provided in brackets after each figure or statement.