10-Q · May 6, 2026
COPT Defense (CDP) reported a solid Q1 2026 with total revenue of $200.637M, exceeding consensus estimates of $197.592M, and EPS of $0.69 compared to an estimate of $0.68, reflecting a positive surprise. However,…
Earnings analysis · 10-Q
CDP earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
COPT Defense delivered Q2 revenue of $197.392 million, up 3.9% year over year, and GAAP diluted EPS of $0.40, up from $0.34; operating margin expanded to 32.03%. Core operating performance was led by $2.985 million of…
Read full summary
COPT Defense delivered Q2 revenue of $197.392 million, up 3.9% year over year, and GAAP diluted EPS of $0.40, up from $0.34; operating margin expanded to 32.03%. Core operating performance was led by $2.985 million of Defense/IT same-property NOI growth and 94.5% average occupancy, while first-half operating cash flow increased $27.5 million. Offsetting considerations are higher interest expense following the $400.0 million refinancing, lower construction-service activity, and substantial remaining 2026 development spending.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.4
- Operating margin
- 32.03%
What stood out
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Revenue and GAAP EPS grew year over year
Q2 revenue rose $7.477 million, or 3.9%, year over year to $197.392 million, although it declined $3.245 million, or 1.6%, sequentially from implied Q1 2026 revenue of $200.637 million. GAAP diluted EPS increased to $0.40 from $0.34 a year earlier and $0.34 in Q1 2026.
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Operating margin expanded 63 bps
Operating income was $63.230 million, producing a 32.03% operating margin, up from 31.40% in Q2 2025. Net income increased $8.393 million to $48.559 million, aided by a $6.442 million gain on real-estate sales.
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Core Defense/IT NOI and occupancy advanced
Same-property NOI rose $3.060 million to $114.967 million in Q2. Defense/IT same-property NOI contributed $106.661 million, up $2.985 million, while average portfolio occupancy improved 70 bps to 94.5%.
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Leasing activity supports portfolio stability
The portfolio ended June 30 at 94.1% occupied and 95.6% leased. During the first half, the company leased 2.2 million square feet, including 1.5 million square feet of renewals, for an 84.4% tenant-retention rate.
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Operating cash flow and liquidity improved
First-half operating cash flow increased $27.5 million year over year, driven largely by higher rental and occupancy rates and operating-portfolio growth. Liquidity included $24.2 million of cash, $528.0 million of revolver availability and $64.0 million of development-facility availability.
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Debt maturity was addressed
The company repaid $400.0 million of 2.25% notes at maturity in March 2026. It remained compliant with its debt covenants as of June 30, 2026.
What to watch
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Higher refinancing costs pressure earnings
Interest expense increased $3.506 million year over year in Q2 to $24.444 million after refinancing $400.0 million of 2.25% notes with 4.50% notes due 2030. A 1% increase in applicable variable rates would have increased first-half interest expense by approximately $1.0 million.
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Vacancy persists in select sub-portfolios
Occupancy remains uneven outside the core portfolio: the Other segment was 83.1% occupied at June 30, 2026, while Navy Support occupancy was 86.2%. Total portfolio occupancy of 94.1% was only 10 bps above the 94.0% level at December 31, 2025.
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Development spending remains capital intensive
Property additions totaled $120.819 million in the first six months of 2026, including $88.191 million for development or future development. Management expects another $85 million-$105 million of active-development spending in the remainder of 2026.
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No material risk-factor updates
Item 1A states there were no material changes to risk factors from the 2025 Annual Report on Form 10-K. Accordingly, this filing does not identify a newly changed risk-factor disclosure.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. Management expects $85 million-$105 million of spending on actively developed properties and approximately $55 million of tenant, capital-improvement and leasing costs during the remainder of 2026.
Earlier filings 4
10-K · February 20, 2026
COPT Defense (CDP) positions itself as a specialized Defense/IT-focused REIT, with 201 of 207 properties and 90.3% of annualized rental revenue concentrated in its Defense/IT Portfolio and a development pipeline and…
10-Q · August 1, 2024
COPT Defense Properties reported Q2 2024 total revenue of $187,343,000 (three months ended June 30, 2024), up 10.7% versus $169,196,000 in Q2 2023 and down modestly versus Q1 2024 ($193,266,000). Operating margin…
10-Q · August 2, 2023
Quarterly results show underlying portfolio strength in Defense/IT locations with higher occupancy (93.4% at June 30, 2023 vs 92.7% at Dec 31, 2022) and Same Properties NOI growth, but total GAAP revenue was down for…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.