CubeSmart Q2 2025 Earnings Call Highlights: Strong Pricing Power and Strategic Expansion Drive Growth

CubeSmart reported a solid beat and raise for Q2, with key indicators exceeding expectations. Occupancy increased by 190 basis points from trough to peak, and net effective rates for new customers grew by 28.3%. However, same-store revenue growth was down 0.5% YoY, and move-in rates were down 4% YoY. The company added 30 stores to its third-party management platform and maintains a strong balance sheet with a net debt-to-EBITDA ratio of 4.7 times.

CubeSmart (NYSE: CUBE) reported mixed but encouraging results for the second quarter of 2025, showcasing a blend of stabilizing fundamentals and ongoing challenges. The company's occupancy increased by 190 basis points from trough to peak, while net effective rates for new customers grew by 28.3% [1]. However, same-store revenue growth was down 0.5% year-over-year (YoY), and move-in rates decreased by 4% YoY [2].

The company added 30 stores to its third-party management platform, bringing the total to 873 stores at quarter-end [2]. This platform, which generates fee income without capital investment, is projected to contribute $41M to $42M for the year. Despite the addition of new stores, the company's core same-store portfolio saw a 1.1% decrease in net operating income, driven by a 0.5% revenue decline and a 1.2% expense increase [2].

CubeSmart's financial results reflect a challenging but gradually improving environment. The company reported a diluted EPS of $0.36 and FFO per share of $0.65, representing a 1.6% increase YoY [2]. This modest growth was achieved despite ongoing pressure on same-store metrics. The company maintained its quarterly dividend at $0.52 per share but experienced increased interest expenses due to higher debt levels and interest rates [2].

The company's significant $452.8M acquisition of an 80% interest in HVP IV has strengthened its consolidated portfolio, which now includes 659 stores [2]. However, this expansion has also increased interest expenses by $6.3M YoY, with the average debt balance rising from $2.96B to $3.43B and interest rates climbing from 3.01% to 3.32% [2].

CubeSmart's Q2 results indicate that the company is navigating a challenging but improving self-storage REIT environment. The company's updated full-year FFO guidance range of $2.54 to $2.60 per share suggests growing confidence in the sector's fundamentals. The same-store NOI decline projection has been improved to between -2.75% and -1.25%, compared to the previous -4.00% to -1.75% forecast [2].

The company's strong balance sheet, with a net debt-to-EBITDA ratio of 4.7 times, supports its ability to manage through challenging times and capitalize on opportunities as they arise [1].

References:
[1] https://www.ainvest.com/news/cubesmart-q2-2025-earnings-call-discrepancies-demand-recovery-occupancy-trends-revenue-growth-insights-2508/
[2] https://www.stocktitan.net/news/CUBE/cube-smart-reports-second-quarter-2025-pmrvl2ou1qxc.html