EPRT earnings analysis
What we found in EPRT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Essential Properties delivered 18.1% year-over-year revenue growth to $161.888 million, with operating income up 18.9% to $104.418 million and GAAP diluted EPS increasing to $0.34. Portfolio growth, 99.6% occupancy, long leases and strong operating cash flow support the underlying trajectory, although Q2 investment volume moderated sequentially. Offsetting factors are the sharp first-half increase in impairment and credit-loss provisions, higher interest expense, and a $400.0 million increase in principal debt. The 10-Q contains no formal revenue or EPS guidance, but management expects to fund $121.8 million of remaining development commitments by June 30, 2027.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth remained strong
- Q2 total revenue rose $24.826 million, or 18.1%, year over year to $161.888 million, driven by a $22.005 million increase in rental revenue and a $2.232 million increase in interest on loans/direct-financing lease receivables. Revenue also increased from $158.798 million in Q1 2026.
- Operating profit and margin expanded
- Income from operations increased $16.605 million, or 18.9%, year over year to $104.418 million. The operating margin was 64.5%, up from 64.1% a year ago and from approximately 56.5% in Q1 2026.
- GAAP earnings and AFFO increased
- Net income attributable to stockholders rose $11.075 million to $74.287 million from $63.212 million a year earlier; diluted GAAP EPS was $0.34, versus $0.32 in Q2 2025 and $0.28 in Q1 2026. AFFO increased to $110.117 million from $93.021 million.
- Portfolio scale and occupancy stayed strong
- The company completed $332.435 million of investments in Q2 across 103 properties, following $388.632 million in Q1. The portfolio reached 2,493 properties, $604.9 million of annualized base rent and 99.6% occupancy at June 30, 2026.
- Operating cash generation supports growth
- Operating cash flow was $209.9 million for the first six months of 2026, versus net income of $134.4 million. Cash and equivalents increased to $126.2 million at June 30 from $60.2 million at December 31, 2025.
- Long leases support internal growth
- Portfolio lease protections remain substantial: 97.1% of annualized base rent has contractual escalations averaging 1.9% annually, the weighted average remaining lease term was 14.3 years, and only 2.3% of annualized base rent expires before January 1, 2029.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Impairment and credit-loss charges rose
- First-half real-estate impairment expense increased to $18.195 million from $6.495 million, while the provision for credit losses was $3.257 million versus zero a year earlier. Q2 impairment was $1.365 million and the Q2 credit-loss provision was $2.635 million.
- Debt balance, cost and refinancing risk increased
- Total principal debt increased $400.0 million to $2.930 billion at June 30, 2026 from $2.530 billion at December 31, 2025, following the June issuance of $400.0 million of 5.380% senior notes due 2036. Weighted-average debt cost rose to 4.37% from 4.23%, and the $430.0 million 2027 term loan matures in February 2027.
- New-investment and tenant coverage softened
- Rent coverage on Q2 investments declined to 2.9x from 3.1x in Q1 2026 and 3.4x in Q2 2025. At the portfolio level, 3.9% of annualized base rent had unit-level rent coverage below 1.00x, exposing the company to tenant-performance pressure.
- New tax-protection agreement constraint
- A new risk factor versus the December 31, 2025 10-K says tax-protection agreements tied to contributed properties could constrain dispositions, debt actions and other strategic decisions, and could require substantial indemnification payments. The filing does not quantify the potential payment exposure.
- Capital-intensive growth requires funding access
- Growth investment requirements remain sizable: the company funded $684.0 million of real-estate and loan investments during the first six months, had $121.8 million of construction/reimbursement commitments left to fund by June 30, 2027, and used $586.2 million in investing cash flow. This increases reliance on external capital and asset-sale proceeds.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.34
- Operating margin
- 64.5%
What they said about what is next.
The 10-Q does not provide formal numeric earnings or revenue guidance. MD&A states that $121.8 million of remaining tenant construction/reimbursement commitments is expected to be funded by June 30, 2027, and that seven properties under contract as of July 17, 2026 carry a $31.8 million aggregate purchase price.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 22, 2026
- Essential Properties reported Q1 2026 total revenues of $158,798,000, up $29,444,000 (22.8% YoY) from $129,354,000 a year ago, driven by higher rental revenue. Operating income was $89,647,000 (operating margin ~56.5%)…
- 10-K · February 11, 2026
- Essential Properties continues to scale its single-tenant, long-term net-lease platform focused on middle‑market, service-oriented tenants, ending 2025 with a 2,300-property portfolio and $555.0 million of annualized…
- 10-Q · October 22, 2025
- Essential Properties reported Q3 total revenues of $144.934M (three months ended Sept. 30, 2025) and diluted EPS of $0.33, both up versus the prior-year quarter. Operating income was $93.736M (operating margin ~64.7%),…
- 10-Q · October 23, 2024
- Essential Properties reported total revenues of $117,132,000 for the quarter ended September 30, 2024, up from $91,657,000 in Q3 2023, with income from operations of $69,910,000. Net income attributable to stockholders…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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