Public Storage (PSA) Q2 2024 earnings summary

Executive summary

• Net income allocable to common shareholders was $468.4 million ($2.66 per diluted share) for Q2 2024, down from $528.3 million ($3.00 per share) year-over-year, mainly due to higher depreciation and interest expense.

• Core FFO per diluted share was $4.23 for Q2 2024, a 1.2% decrease year-over-year; FFO per share was $4.30, up 0.2%.

• Q2 performance exceeded expectations for existing customer behavior and occupancy, but move-in rents for new customers were down 14%, more than the originally forecasted 6% decline.

• $200 million in common shares were repurchased during Q2 2024, reflecting confidence in the business and capital position.

• Acquisitions and development remain a key growth driver, with 240 facilities acquired since 2022 and a robust development pipeline.

Financial highlights

• Q2 2024 self-storage revenues were $1.10 billion, up 4.1% year-over-year; net income allocable to common shareholders was $468.4 million, down 11.3% year-over-year.

• Core FFO for Q2 was $4.23 per share, a 1.2% decline year-over-year, matching the decline in Q1.

• Same-store revenues declined 1% year-over-year, driven by lower occupancy and move-in rents, partially offset by strong in-place customer behavior.

• Same-store net operating income declined 1.6% in Q2, with an operating margin of 79.3%.

• Operating cash flow for the first half of 2024 was $1.56 billion; cash and equivalents at June 30, 2024: $542.3 million.

Outlook and guidance

• 2024 Core FFO per share guidance revised to $16.50–$16.85, about 1% lower than prior midpoint.

• Guidance for same-store revenue growth revised to a midpoint of -1% for 2024, assuming move-in rents down 12% for the year and occupancy averaging down 80 basis points.

• Same-store revenue growth expected between -1.5% and -0.5%; net operating income growth between -3.0% and -1.3%.

• $450 million in new development activity planned for 2024, a record level.

• Non-same-store pool expected to deliver $110 million incremental NOI in 2025 and beyond.