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TRANSCONTINENTAL REALTY INVESTORS INC (TCI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net income attributable to the Company was $0.17M ($0.02 EPS), down sharply vs Q1 2025 ($4.62M; $0.53 EPS) and vs Q2 2024 ($1.50M; $0.17 EPS); management cited lower interest income and a higher tax provision as the key drivers, partially offset by gains on real estate transactions .
  • Total revenue improved to $12.16M, +1.3% sequentially and +3.3% year over year; rental revenues rose to $11.51M (from $11.43M in Q1 and $11.19M in Q2 2024), primarily on higher occupancy at Stanford Center .
  • Portfolio KPIs improved: total occupancy reached 82% (multifamily 94%, commercial 57%), and the company sold 30 single-family lots for $1.4M, generating a $1.1M gain; TCI also paid off a $10.8M loan on 770 South Post Oak using cash on hand .
  • No formal guidance and no Q2 earnings call transcript were published; near-term stock narrative likely focuses on commercial occupancy momentum, asset sale gains, and deleveraging via loan payoff .

What Went Well and What Went Wrong

What Went Well

  • Occupancy improved: total occupancy reached 82% (multifamily 94%, commercial 57%); management noted rental revenue growth was “primarily due to an increase in occupancy at Stanford Center” .
  • Monetization of land assets: sold 30 lots at Windmill Farms for $1.4M, realizing a $1.1M gain on sale .
  • Operating expense discipline: net operating loss narrowed vs Q2 2024, aided by “a decrease in the cost of insurance and property taxes” .

What Went Wrong

  • Earnings compression: EPS fell to $0.02 vs $0.53 in Q1 and $0.17 in Q2 2024 as interest income declined and the tax provision increased .
  • Ongoing operating loss: net operating loss was $(0.83)M (vs $(0.64)M in Q1), indicating continued pressure at the operating level .
  • Advisory fee increased year over year: $2.01M vs $1.68M in Q2 2024, contributing to higher operating expenses vs prior year .

Financial Results

Sequential Comparison (Oldest → Newest)

MetricQ4 2024Q1 2025Q2 2025
Total revenue ($USD Millions)$11.79 $12.01 $12.16
Rental revenues ($USD Millions)$11.22 $11.43 $11.51
Other income ($USD Millions)$0.57 $0.58 $0.65
Total operating expenses ($USD Millions)$13.48 $12.64 $12.99
Net operating loss ($USD Millions)$(1.69) $(0.64) $(0.83)
Interest income ($USD Millions)$4.64 $4.63 $3.98
Interest expense ($USD Millions)$(1.84) $(1.78) $(1.74)
Gain on sale/write-down ($USD Millions)$(0.59) $3.89 $0.95
Income tax provision ($USD Millions)$0.11 $1.32 $2.04
Net income attrib. to Company ($USD Millions)$0.11 $4.62 $0.17
EPS (Basic & diluted)$0.01 $0.53 $0.02

Year-over-Year Comparison (Q2 2024 vs Q2 2025)

MetricQ2 2024Q2 2025
Rental revenues ($USD Millions)$11.19 $11.51
Other income ($USD Millions)$0.59 $0.65
Total revenue ($USD Millions)$11.77 $12.16
Property operating expenses ($USD Millions)$6.62 $6.53
Depreciation & amortization ($USD Millions)$3.14 $3.06
General & administrative ($USD Millions)$1.41 $1.38
Advisory fee to related party ($USD Millions)$1.68 $2.01
Total operating expenses ($USD Millions)$12.86 $12.99
Net operating loss ($USD Millions)$(1.08) $(0.83)
Interest income ($USD Millions)$5.20 $3.98
Interest expense ($USD Millions)$(1.86) $(1.74)
Equity income from JV ($USD Millions)$0.11 $0.00
Gain on sale/write-down ($USD Millions)$0.00 $0.95
Income tax provision ($USD Millions)$0.67 $2.04
Net income attrib. to Company ($USD Millions)$1.50 $0.17
EPS (Basic & diluted)$0.17 $0.02

KPIs and Portfolio Actions

KPI / ActionQ4 2024Q1 2025Q2 2025
Total occupancy (%)81% 80% 82%
Multifamily occupancy (%)94% 94% 94%
Commercial occupancy (%)53% 53% 57%
Windmill Farms lots sold (#)30 30 30
Gain on lot sales ($USD Millions)$1.1 $1.1 $1.1
770 South Post Oak loan payoff ($USD Millions)——$10.8
Mountain Creek construction loan ($USD Millions)$27.5 ——

Note: No segment revenue breakdown provided in the company’s Q2 materials; occupancy by property type is disclosed .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
All metricsQ3–FY 2025N/ANo formal guidance provided in Q2 press materialsMaintained: no guidance

Earnings Call Themes & Trends

Note: No Q2 earnings call transcript was found in the available documents set.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Occupancy trajectoryQ4: total 81%, MF 94%, commercial 53% ; Q1: total 80%, MF 94%, commercial 53% Total 82%, MF 94%, commercial 57% Improving commercial occupancy; total modest uptick
Commercial leasing (Stanford Center)Q4: 45k sq ft lease signed; +14% occupancy; +20% rent/sq ft; starts April 2025 Rental revenue increase “primarily due to an increase in occupancy at Stanford Center” Execution flowing through revenues
Interest income dynamicsQ4: $4.64M ; Q1: $4.63M $3.98M (declined) Declining
Tax provisionQ4: $0.11M ; Q1: $1.32M $2.04M (higher) Rising headwind
Capital allocation / debt mgmtQ4: $27.5M construction loan for Mountain Creek Paid off $10.8M loan on 770 South Post Oak Deleveraging on legacy asset

Management Commentary

  • “Rental revenues increased $0.3 million… primarily due to an increase in occupancy at Stanford Center.”
  • “Our decrease in net operating loss was due to a $0.1 million decrease in operating expenses… primarily due to a decrease in the cost of insurance and property taxes.”
  • “During the three months ended June 30, 2025, we sold 30 single family lots… for $1.4 million, resulting in a gain on sale of $1.1 million.”
  • “On May 30, 2025, we paid off the $10.8 million loan on 770 South Post Oak with cash on hand.”

Q&A Highlights

  • No Q2 2025 earnings call transcript was available; no Q&A highlights to report from this period.

Estimates Context

MetricQ2 2025 ConsensusQ2 2025 Actual
EPSN/A*$0.02
RevenueN/A*$12.16M

Values retrieved from S&P Global.*

Given limited coverage, Wall Street consensus was unavailable; estimate adjustments will likely reflect lower interest income run-rate and higher tax provision seen in Q2 .

Key Takeaways for Investors

  • EPS compression to $0.02 reflects lower interest income and a higher tax provision; watch for stabilization of interest income drivers and tax normalizing into 2H .
  • Commercial occupancy improved to 57%, and Stanford Center leasing is contributing to rental revenue; continued execution on commercial leasing is a key upside lever .
  • Operating expense control is evident (insurance and property taxes lower), helping narrow operating loss vs prior year; maintaining this discipline remains important .
  • Asset monetization continues to add value (Windmill Farms lots), but Q2 gains were smaller than Q1; cadence of dispositions will impact quarterly earnings volatility .
  • Deleveraging via the $10.8M loan payoff is positive for financial flexibility; focus turns to funding needs versus cash generation in coming quarters .
  • With no formal guidance and limited Street coverage, stock may trade on occupancy milestones, leasing updates (Stanford Center and broader commercial portfolio), and transactional gains rather than earnings estimates .
  • Near-term: monitor commercial occupancy trajectory and tax provision; medium-term: track Mountain Creek development progress and broader capital allocation (debt repay vs development) .