Postal Realty Trust (PSTL) Q3 2024 earnings summary

Executive summary

• Portfolio expanded to 1,653 properties across 49 states and Puerto Rico, primarily leased to USPS, with 99.6% occupancy and a weighted average lease term of ~3 years; 134 properties acquired for $61.4 million year-to-date.

• Revenue grew 22% year-over-year in Q3 2024, driven by acquisitions and new lease terms with USPS; rental income up 21.6% for the quarter and 18.0% for the nine months.

• Net income for Q3 2024 was $1.1 million ($0.03 per diluted share), down from $1.2 million in Q3 2023; nine-month net income was $2.6 million, down 15.7%.

• Cash flows from operations increased to $24.3 million for the nine months, supporting ongoing acquisitions and dividends.

• Declared and paid $0.24 per share quarterly dividend, totaling $0.72 per share year-to-date, with dividend growth since IPO.

Financial highlights

• Q3 2024 revenues: $19.7 million, up 22.1% year-over-year; nine-month revenues: $55.0 million, up 17.8%.

• FFO: $7.1 million ($0.24 per share); AFFO: $8.8 million ($0.30 per share) for Q3 2024.

• Operating expenses rose 21.2% in Q3 and 17.3% for the nine months, mainly due to property acquisitions.

• Interest expense increased 30.5% in Q3 and 27.5% for the nine months, reflecting higher borrowings and rates.

• Sold two properties for $6.3 million at a 4.9% exit cap rate, originally purchased for $3.6 million.

Outlook and guidance

• Same-store cash NOI growth expected to exceed 4% for 2023, at least 3.25% for 2024, and at least 3% for 2025.

• 29 properties under contract for $10.6 million and 13 properties acquired post-quarter for $4.2 million.

• Targeting $90 million in acquisitions for 2024 at or above a 7.5% weighted average cap rate.

• $96.4 million remaining under ATM equity program for future capital needs.

• Cash G&A expense guidance for 2024 remains $9.5–$9.8 million.