Orion Properties 2025 Q2 Earnings Narrowed Losses Amid Revenue Decline

Orion Properties (ONL) reported its fiscal 2025 Q2 earnings on August 6, 2025. The results showed a 7.0% year-over-year revenue decline, while the company significantly narrowed its net loss. Guidance was mixed, with an increase in Core FFO and a reduction in Net Debt to EBITDA expectations.

Revenue for Orion Properties fell 7.0% year-over-year to $37.30 million in 2025 Q2. The majority of the company’s revenue came from its rental operations, which accounted for $37.10 million. Supplemental income from a fee structure tied to an unconsolidated joint venture added $203,000, bringing the total revenue to $37.30 million. The decline in rental income reflects ongoing challenges in its property portfolio.

The company narrowed its net loss to $25.10 million in Q2 2025, a 25.7% improvement compared to a $33.80 million loss in the same period a year ago. Earnings per share also improved, with losses narrowing to $0.45 from $0.60 in Q2 2024. While the improvement in losses is positive, the earnings remain negative.

Price action showed mixed signals, with the stock down 0.00% on the day but up 9.40% month-to-date. However, a strategy of buying the stock after a revenue increase quarter-over-quarter and holding for 30 days underperformed significantly, returning -76.64% over the past three years. This underperformance was marked by high volatility of 47.53% and a negative Sharpe ratio of -0.83, indicating poor risk-adjusted returns. Despite a maximum drawdown of 0.00%, the strategy’s negative returns highlight the high risk of timing the stock post-earnings reports.

Despite the continued losses, the CEO, Paul McDowell, noted progress in key strategic initiatives, including leasing 639,000 square feet year-to-date and the sale of 23 properties since the spin-off. The company is pivoting toward dedicated use assets (DUAs) to enhance tenant quality and build a more resilient portfolio. McDowell emphasized that while the transformation is ongoing, the company remains committed to long-term growth and shareholder value.

Orion Properties increased its 2025 Core FFO guidance range while lowering its Net Debt to Adjusted EBITDA expectations. The company expects to continue selling non-core assets and advancing its strategic shift toward DUAs. As of June 30, 2025, the Net Debt to Annualized Year-to-Date Adjusted EBITDA stood at 6.93x. Forward-looking activities include the pending sales of five traditional office properties and ongoing lease negotiations, including a lease in Kennesaw, Georgia, set to begin in April 2028.

Additional news surrounding Orion Properties includes a 13.76% decline in revenue and a 42.60% reduction in net losses for the first half of 2025 compared to the same period in 2024. The company, which operates in the office REIT sector, is structured as an internally managed REIT and focuses on high-quality suburban office assets in the U.S. under long-term net leases. Founded in Maryland in July 2021, Orion Properties is engaged in the ownership and management of commercial real estate primarily leased to creditworthy tenants.