Executive Summary

Q2 2025 delivered steady operating performance with AFFO/diluted share up to $0.33 (+3.1% YoY) and net income/diluted share of $0.04; management raised full‑year AFFO/share guidance to $1.29–$1.31 and lifted net investment activity guidance to $125–$175M, citing improved cost of capital and robust pipeline .
Investment execution was strong: $117.1M gross acquisitions at a 7.8% blended cash yield (company’s highest quarterly cash yield on record) and $60.4M of dispositions at a 6.5% yield; portfolio ended at 705 properties, 99.9% occupied, 9.8‑year WALT .
Balance sheet/liquidity improved with $46.1M raised via the ATM, total liquidity of $594M, and adjusted net debt/Annualized Adjusted EBITDAre at 4.6x (5.9x on an unadjusted basis); weighted average interest rate was 4.58% and debt maturity 3.8 years at quarter‑end .
Stock catalysts: guidance raise, record acquisition yields (though expected to normalize to ~7.4–7.5%), accelerating external growth, and potential credit rating pursuit; post‑quarter, NTST priced an upsized forward common stock offering at $17.70/share to support growth .

What Went Well and What Went Wrong

What Went Well
- Highest quarterly acquisition yield on record: $117.1M at 7.8% blended cash yield, supported by relationship-driven C‑store opportunities and long WALT (15.7 years) .
- Guidance raised: AFFO/share midpoint up $0.01 to $1.29–$1.31; net investment guidance raised to $125–$175M on improved cost of capital and spreads; quarterly dividend increased 2.4% to $0.215/share .
- Balance sheet/liquidity: $46.1M raised via ATM; adjusted net debt/Annualized Adjusted EBITDAre at 4.6x with $594M liquidity; no material maturities until Feb 2028 including extensions .
What Went Wrong
- GAAP EPS missed S&P Global consensus (see Estimates Context) despite revenue slightly topping expectations; mix shift and non‑cash items continue to create divergence between GAAP and AFFO .
- Rising interest expense and impairments weighed on GAAP; interest expense rose to $12.6M in Q2, impairments were $4.4M, and D&A increased, reflecting portfolio growth and recycling .
- Management cautioned Q2’s 7.8% acquisition yield is unlikely to repeat; back‑half opportunities are blending to ~7.4–7.5% given more investment‑grade mix and market pricing .

Financial Results

Per‑share earnings metrics

Metric (per diluted share)	Q4 2024	Q1 2025	Q2 2025
Net (Loss) / Income	$(0.07)$	$0.02$	$0.04$
FFO	$0.32$	$0.29$	$0.31$
Core FFO	$0.32$	$0.30$	$0.31$
AFFO	$0.32$	$0.32$	$0.33$

Revenue and EBITDA

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD)	—	$45.91M	$48.29M
Adjusted EBITDAre ($USD)	$37.08M	$38.13M	$38.83M

Actual vs. S&P Global consensus (reported quarter)

Metric	Q2 2025 Actual	Q2 2025 Consensus	Result
Revenue ($USD)	$48.29M	$48.13M*	Beat
GAAP Diluted EPS ($)	$0.04	$0.0678*	Miss
EBITDA ($USD)	$38.61M*	$38.37M*	Beat

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

KPIs – Investment activity

Metric	Q1 2025	Q2 2025
Gross Investments ($USD)	$90.68M	$117.06M
Dispositions ($USD)	$40.29M	$60.39M
Net Investment Activity ($USD)	$45.69M	$49.35M
Acquisition Cash Yield (%)	7.7%	7.8%
Acquisition WALT (years)	9.2	15.7

KPIs – Portfolio snapshot

Metric	Q4 2024	Q1 2025	Q2 2025
Properties (Investments)	687	695	705
ABR ($USD)	$165.07M	$168.70M	$172.89M
Occupancy (%)	99.9%	99.9%	99.9%
WALT (years)	9.8	9.7	9.8
Investment Grade (%)	55.8%	54.7%	52.2%
IG Profile (%)	15.0%	16.0%	16.5%

Balance sheet & liquidity

Metric	Q1 2025	Q2 2025
Net Debt / Ann. Adj. EBITDAre (x)	6.0x	5.9x
Adjusted Net Debt / Ann. Adj. EBITDAre (x)	4.7x	4.6x
Total Liquidity ($USD)	$584.04M	$594.21M
Unused Revolver ($USD)	$385.35M	$372.85M
Cash & Equivalents ($USD)	$14.21M	$19.74M
Unsettled Forward Equity (Net Value, $USD)	$184.48M	$201.62M
Wtd. Avg. Interest Rate (%)	—	4.58%
Wtd. Avg. Debt Maturity (years)	—	3.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
AFFO per share	FY 2025	$1.28–$1.30	$1.29–$1.31	Raised
Net investment activity ($USD)	FY 2025	$75–$125M	$125–$175M	Raised
Cash G&A ($USD)	FY 2025	$14.5–$15.5M	$15.0–$15.5M	Raised (low end)
Quarterly dividend ($/share)	Q3 2025	$0.210 (Q2 dividend)	$0.215	Raised 2.4%

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 / Q1’25)	Current Period (Q2’25)	Trend
Capital deployment & cost of capital	Measured deployment to start 2025; raised AFFO midpoint in Q1; strong liquidity added in Jan via new term loan and upsized revolver .	WACC improved; raised $46.1M via ATM; raised AFFO and investment guidance .	Improving
Acquisition yields & pipeline	Q4: 7.4% cash yield; Q1: 7.7% .	Q2: 7.8% (record), expected to normalize to ~7.4–7.5% H2 as mix tilts to IG .	Positive but normalizing
Portfolio credit & credit losses	Portfolio remained resilient; high occupancy .	Assume ~25 bps full‑year credit loss (down from 75 bps prior); unit‑level rent coverage 3.9x and minimal losses since inception .	Improving
Tenant concentration & dispositions	Record Q4 dispositions; recycling capital .	$60.4M Q2 dispositions; Walgreens exposure near 3.5% with 1–2 more sales likely; demand robust for dollar stores/1031 buyers .	De‑risking
Ratings & debt costs	New/extended facilities in Jan 2025 .	Initiating rating agency dialogues; potential ~30 bps reduction in debt costs upon IG rating .	Potential upside
Internal growth (lease terms/escalators)	Emphasis on quality and WALT .	Long WALT on new buys; focus on improving internal growth via escalators .	Stable/positive

Management Commentary

“We completed $117.1 million of investments at a blended cash yield of 7.8%… and $60.4 million of dispositions at a 6.5% cash yield… we are increasing our 2025 guidance range for both net investment activity and AFFO per share.” — CEO Mark Manheimer .
“We can source transactions about 150–160 bps wide of what we think our WACC is at the current moment.” — CFO Dan Donlan on equity issuance discipline .
“We will not sacrifice our balance sheet for growth… with our cost of capital having meaningfully improved… we can now afford to be more acquisitive.” — CEO .

Q&A Highlights

Capital deployment and spreads: H2 acquisitions expected to blend ~7.4–7.5% as mix shifts; comfortable issuing equity when >100 bps spread over WACC; currently ~150–160 bps spread achievable .
Dispositions/tenant concentration: Executed attractive sales (e.g., CVS at 5.5% cap; Advance Auto low‑6% caps); Walgreens exposure targeted below 3% with 1–2 additional sales; robust 1031 and institutional demand for dollar store assets .
Credit/rent loss: Full‑year assumption now ~25 bps credit loss vs 75 bps prior, reflecting strong tenant health and coverage .
Ratings path: Initiating conversations; potential ~30 bps reduction in borrowing costs upon IG rating; no such benefit embedded in 2025 guide .
Balance sheet cadence: Will settle forward equity opportunistically while maintaining debt/gross assets <35% to preserve pricing tiers; no material maturities until Feb 2028 (with extensions) .

Estimates Context

Q2 revenue slightly beat S&P Global consensus ($48.29M actual vs $48.13M*), while GAAP EPS missed ($0.04 actual vs $0.0678*). EBITDA also modestly exceeded consensus ($38.61M* actual vs $38.37M*). Values with asterisk (*) retrieved from S&P Global.
Given AFFO/share met internal expectations ($0.33 vs $0.32 in Q1) and guidance was raised, Street AFFO models likely drift higher on increased net investment activity and modestly higher cash G&A, with partial offset from expected normalization of acquisition yields to ~7.4–7.5% .

Key Takeaways for Investors

Guidance momentum: Raised AFFO/share and net investment guidance signal confidence in pipeline and cost of capital; dividend increased 2.4% .
External growth engine: H2 investment yields should normalize to ~7.4–7.5% but spreads remain adequate to issue equity selectively (>100 bps threshold) .
Portfolio quality intact: 99.9% occupancy, 9.8‑year WALT, 68.7% of ABR IG or IG‑profile; credit loss assumption reduced to ~25 bps for 2025 .
De‑risking via recycling: Accretive dispositions reduce concentration (e.g., Walgreens) and fund higher‑yielding buys, supporting per‑share growth .
Balance sheet flexibility: $594M liquidity, adjusted leverage 4.6x; potential IG rating could trim borrowing costs by ~30 bps and further enhance spreads .
Capital markets optionality: Post‑quarter forward equity offering at $17.70 provides dry powder to scale while timing settlement to investment needs .
Trading setup: Watch execution on H2 acquisitions, additional Walgreens sales, and any rating developments; estimate revisions should skew positive given raised guide and pipeline visibility .

Additional primary-source references used

Q2 2025 earnings press release and detailed reconciliations .
Q2 2025 earnings call transcript (prepared remarks and Q&A) .
Q1 2025 earnings press release (trend checks) .
Q4 2024 earnings press release (trend checks) .
Q2 2025 capital markets press releases on forward offering (launch and pricing) .