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- **Record Investment Performance**: $370M Q3 investments at 8% cash yield, driving AFFO up 12% YoY. 
- **Portfolio Strength**: 1.6% rent growth, 3.6x coverage, and 40bps watch list reduction. 
- **2026 Outlook**: $1.98-$2.04 AFFO target (+6-8%), supported by $1-1.4B investments. 
- **Capital Discipline**: 3.8x leverage, $1.4B liquidity, and 63% dividend payout ratio. 
- **Strategic Growth**: Industrial assets expanded to 3.5% of ABR with no concentration risk.

**【CEO Summary Section】**
- **Revenue and Investment Growth**: Q3 2025 investments reached $370 million, with 70% sourced from repeat tenants. Weighted average initial cash yield was 8%, and GAAP yield hit 10%, the highest on record. 
- **Portfolio Performance**: Same-store rent growth of 1.6%, up from 1.4% Q2. Rent coverage improved to 3.6x, with 120bps decline in ABR under 1x coverage. Tenant credit watch list reduced by 40bps. 
- **Guidance Updates**: AFFO per share raised to $1.87-$1.89 (prev $1.84-$1.86). 2026 AFFO guidance set at $1.98-$2.04 (+6-8%), with $1-1.4B investment target. 
- **Capital Allocation**: $1.4B liquidity, 3.8x leverage. $400M 10-year bond issued at 5.4% coupon to extend debt maturity. 

**【CFO Financial Commentary】**
- **Financial Results**: Q3 AFFO of $0.48 (+12% YoY), total AFFO $96.2M (+24% YoY). G&A expenses $10.2M, 6.7% of revenue (vs 5.1% YoY). Dividend payout ratio 63%. 
- **Balance Sheet**: Pro forma net debt/EBITDA 3.8x. $140M retained free cash flow annually. $521M unsettled forward equity to support 2026 investments. 
- **Cost Efficiency**: Cash G&A guidance $31-35M, down 4.7% of revenue (vs 5.1% YoY). 

**【Q&A Key Highlights】**
- **Cap Rate Compression**: Expect mid- to high 7% pipeline cap rates, driven by stable interest rates. 10-year Treasury decline from 4.5% to 4.0%. 
- **Competition Response**: 35% of deals won through reliability and execution, not price. 2026 investment pipeline remains strong. 
- **Credit Management**: Credit loss experience 30bps vs budget, no material impairments. 7 assets sold ($11.5M) at 6.6% yield to manage risk. 
- **Industrial Expansion**: 18.6-year lease terms, 2.3% escalations. Industrial assets now 3.5% of ABR, with no concentration risk (top 20 tenants 27.6% of ABR).

Essential Properties Realty Trust (EPRT)-23 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

EPRT

EPRT fundamentals

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