Executive Summary

Q2 delivered steady growth: Real Estate FFO rose to $1.154B ($3.05/sh), up 4.1% YoY; consolidated revenue was $1.50B (+2.8% YoY). Domestic NOI +4.2% and portfolio NOI +4.7% underscored operating strength .
Guidance: Midpoint of FY25 Real Estate FFO guidance was raised to $12.45–$12.65 (from $12.40–$12.65 in Q1); GAAP net income guidance nudged lower to $6.63–$6.83 (from $6.67–$6.92) .
Estimate context: Revenue beat S&P Global consensus ($1.50B vs $1.39B, ~+8%); Real Estate FFO/share printed roughly in line/slight beat vs $3.05*; S&P’s Primary EPS basis shows a miss ($1.36* actual vs $1.49* est), while company-reported diluted EPS was $1.70 .
Capital and dividend catalysts: Liquidity stood at ~$9.2B; Board raised the quarterly dividend to $2.15 (+4.9% YoY), payable Sept 30. Company sold $1.5B of new senior notes post-quarter, terming out September 2025 maturities .
Strategic: Simon acquired full ownership of Brickell City Centre retail/parking; management sees accretive upside, citing purchase at a cap rate above strip-center trades and below replacement cost .

What Went Well and What Went Wrong

What Went Well
- NOI growth and occupancy: Domestic NOI +4.2% and portfolio NOI +4.7% YoY; portfolio occupancy rose to 96.0%, with The Mills at a record 99.3% .
- Leasing velocity: ~1,000 leases for >3.6M sq ft signed in the quarter; ~30% were new deals; ~90% of 2025 expirations addressed ahead of this time last year .
- Strategic M&A and capital: Full ownership of Brickell City Centre secured; management emphasized attractive cap rate and below replacement value, positioning for NOI uplift. Liquidity of ~$9.2B supports flexibility; dividend raised to $2.15 .
- Quote: “Retail demand is really unabated… the physical shopping environment continues to be the place to be.” – David Simon .
What Went Wrong
- GAAP EPS optics on S&P basis: S&P “Primary EPS” actual $1.36* vs $1.49* est, a shortfall; company-reported diluted EPS was $1.70 (different methodology) .
- Macro headwinds linger: Management remains “cautious” on tariffs and geopolitical uncertainty; border/tourist centers not “outperforming” as in prior cycles; traffic up only ~1.5% .
- Interest income/expense drag: CFO cited lower interest income and higher interest expense as a ~$0.07 YoY headwind to Real Estate FFO/share growth dynamics, partially offset by operational gains .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($)	$1,458,266,000	$1,473,012,000	$1,498,459,000
Diluted EPS (GAAP)	$1.51	$1.27	$1.70
FFO / Share (diluted)	$2.90	$2.67	$3.15
Real Estate FFO / Share (diluted)	$2.93	$2.95	$3.05
Domestic Property NOI YoY %	—	+3.4%	+4.2%
Portfolio NOI YoY %	—	+3.6%	+4.7%

Estimate Comparisons (S&P Global):

Revenue: $1.3866B* est vs $1.4985B actual → beat .
FFO / Share (REIT): $3.0487* consensus vs $3.05 actual → in line/slight beat .
Primary EPS: $1.4912* est vs $1.3566* actual (S&P basis) vs company EPS $1.70 → miss on S&P’s Primary EPS; methodology differs from company diluted EPS .
Values marked with * retrieved from S&P Global.

U.S. Malls & Premium Outlets KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Occupancy	95.6%	95.9%	96.0%
Base Minimum Rent PSF	$57.94	$58.92	$58.70
Retailer Sales PSF (TTM)	—	$733	$736
Occupancy Cost	—	—	13.1% (end of Q2)
The Mills Occupancy	—	—	99.3%

NOI (At Share) – Select Periods

NOI (At Share)	Q2 2024	Q2 2025
Domestic Property NOI ($000s)	$1,331,079	$1,387,418
Portfolio NOI ($000s)	$1,413,555	$1,480,645

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Real Estate FFO / Share	FY 2025	$12.40–$12.65 (reaffirmed Q1)	$12.45–$12.65	Raised at low end; midpoint up $0.03
Net Income / Share (GAAP)	FY 2025	$6.67–$6.92	$6.63–$6.83	Lowered
Quarterly Dividend	Q3 2025	$2.10 (Q2 dividend)	$2.15 (declared Q3)	Raised

Notes: Guidance movements reflect a higher Real Estate FFO outlook driven by operating upside and platform contributions, while GAAP EPS is tempered by non-operating items (interest and mark-to-market effects) per management commentary .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Leasing demand & occupancy	Robust 2024 leasing; occupancy 96.5% YE’24; Q1’25 occupancy 95.9% with positive rental PSF trend	~1,000 leases for >3.6M sq ft; occupancy 96.0%; Mills 99.3%; demand “unabated”	Improving, tight markets
Macro/tariffs & consumer	Macro solid through Q1; minimal tariff focus in PRs	Cautious on tariffs/geopolitics; traffic up ~1.5%; border/tourist assets underperforming historic outperformance	Cautious tone persists
Strategic M&A	Q4’24: active redevelopment; Q1’25: Italy outlets acquired; Jakarta Premium Outlets opened	Full control of Brickell City Centre; bought at attractive cap rate and below replacement; pipeline of selective opportunities	Accretive external growth
Capital markets/liquidity	YE’24 liquidity ~$10.1B; Q1’25 ~$10.1B; refinanced/extended revolver	~$9.2B liquidity at Q2; post-Q2 issued $1.5B notes to refinance Sep’25 maturity	Proactive liability mgmt
Platform/Other investments	2024 ABG/Catalyst gains; Q1’25: mark-to-market headwind on exchangeable bonds	$0.21/sh non-cash gain tied to Catalyst deconsolidation; Klepierre share price move affected exchangeable bonds	Mixed, non-GAAP noise

Management Commentary

Strategic positioning: “Retail demand is really unabated… the physical shopping environment continues to be the place to be.” – David Simon .
Operating momentum: “Real estate FFO was $3.05 per share… Domestic property NOI increased 4.2%… Portfolio NOI… 4.7%.” – Brian McDade .
Leasing progress: “We signed approximately 1,000 leases for more than 3.6M sq ft… Nearly 90% of our leases expiring through 2025 are complete.” – Brian McDade .
Brickell thesis: “We bought it at a higher cap rate than strip centers… below replacement cost… we’ll do better leasing and managing the asset.” – David Simon .
Macro caution: “We’re still very cautious about the economic environment… tariffs are a real cost… however, we remain optimistic about U.S. growth.” – David Simon .

Q&A Highlights

Leasing strength despite uncertainty: Demand “unabated” across categories; small tenants performing better than feared despite tariff concerns .
Occupancy optimization: Focus shifts to merchandising and replacing underperformers to drive further gains; Mills at 99.3% occupancy .
Acquisitions: Simon seeks opportunities priced below replacement with platform synergies; prefers off‑market over auctions; additional deals possible in 2025 .
Anchor boxes/JCPenney: Complexity around OpCo/PropCo structures; intent depends on economics; “purchase price matters” .
Guidance tone: Raised Real Estate FFO; cautious on tariffs into 2025; 2026 could be cleaner once tariff cost-sharing stabilizes .
Financing: Secured financings largely for JV partners; unsecured 10‑year issuance around ~5% for Simon; post‑Q2 $1.5B notes placed to refinance 2025 debt .

Estimates Context

Q2 2025 results vs S&P Global consensus:
- Revenue: $1.50B actual vs $1.39B est → beat (≈+8%)* .
- FFO / Share (REIT): $3.05 actual vs $3.0487 est → in line/slight beat* .
- Primary EPS: $1.3566 actual vs $1.4912 est on S&P “Primary EPS” basis → miss*, while company-reported diluted EPS was $1.70 (definitions differ) .
  Values marked with * retrieved from S&P Global.

Implications: Street models may lift revenue and NOI run-rate assumptions; FFO/share likely nudged up modestly given in-line print and raised FY25 Real Estate FFO guidance; GAAP EPS estimates may require reconciliation to S&P methodology.

Key Takeaways for Investors

Durable operating momentum: NOI growth (+4–5% YoY) and high occupancy (96.0%, Mills 99.3%) support sustained Real Estate FFO trajectory; leasing backfill remains a lever .
Guidance skew positive on core earnings: FY25 Real Estate FFO midpoint raised; GAAP EPS trimmed for non-operating items, reinforcing focus on FFO as the key REIT metric .
Balance sheet flexibility: ~$9.2B liquidity and new $1.5B notes reduce near-term refinancing risk; covenant cushion remains strong with fixed charge coverage ~4.6x (supplement) .
Accretive external growth: Brickell City Centre adds a high-quality, urban asset at attractive economics; management sees further selective opportunities .
Macro risks manageable: Tariffs and tourism/border softness are watch items; demand and traffic are holding, with 1.5% traffic growth and strong back-to-school start per management .
Dividend growth: Dividend raised to $2.15 for Q3 2025 (+4.9% YoY), supported by FFO growth and payout discipline .
Trading lens: Narrative anchored in operating resilience, disciplined capital allocation, and selective M&A; upside from continued rent mark-to-market and redevelopment pipeline at ~9% blended yields .

SIMON PROPERTY GROUP INC /DE/ (SPG)·Q2 2025 Earnings Summary