Realty Income Corporation
O · NYSE
Next quarter
Reports Nov 2, 2026.
Consensus is $1.11 EPS for Sep 2026 across 7 estimates, ranging $1.09 to $1.11.
O Jun 2026
- 0.00%
- -0.54%
- $1.09
- $1.09
- —
- $1.55B
Reported results
- $1.55B
- $370.51M
- $0.37
Highlights
- AFFO growth: Diluted AFFO per share rose 3.8% year over year to $1.09, matching consensus, while AFFO increased 7.9% to $1.02 billion.
- Guidance raised: Realty Income lifted 2026 AFFO per share guidance to $4.44-$4.45 from $4.41-$4.44, implying approximately 4% growth at the midpoint.
- Investment pace: The company invested $2.6 billion during the quarter, or $2.1 billion on a pro-rata basis, at a 7.3% initial weighted average cash yield.
- Core portfolio: Same-store rental revenue increased 1.2% year over year to $1.17 billion; occupancy was 98.8%, and rent recapture on re-leased properties was 102.7%.
- Broader growth platform: Realty Income highlighted its hyperscale data center joint venture, which targets a $6 billion portfolio, and its expanding private-capital platforms, including the $1 billion Apollo transaction.
- Revenue and earnings: Total revenue rose 9.7% to $1.55 billion, while net income available to common stockholders increased to $344.0 million from $196.9 million, or $0.37 per diluted share versus $0.22.
- Balance sheet: Net debt to annualized pro forma Adjusted EBITDAre was 5.4x, or 5.2x including expected proceeds from unsettled ATM forward equity; pro-rata liquidity was $3.5 billion.
- Shareholder returns: The annualized dividend reached $3.252 per share after the 115th consecutive quarterly increase, representing 74.5% of quarterly diluted AFFO per share.
- Capital access: Subsequent to quarter-end, the company issued €600 million of 3.625% notes due 2032, expanded revolving credit capacity and commercial paper capacity to $5.5 billion each, and received an A rating with a stable outlook from Fitch.
Analysis
Realty Income delivered an in-line quarter on the company’s key recurring earnings measure: diluted AFFO per share was $1.09 versus consensus of $1.09, up from $1.05 a year ago and broadly stable with the prior quarter’s $1.09. Total revenue was $1.55 billion, up 9.7% year over year and essentially unchanged sequentially. Net income available to common stockholders was $344.0 million, or $0.37 per diluted share, compared with $196.9 million and $0.22 in the year-ago quarter and $320.9 million and $0.33 in Q1 2026.
The print was defined by continued external growth and the shift toward complementary capital channels, rather than by accelerating same-store trends. Realty Income invested $2.6 billion during the quarter, including loans, development and joint ventures, at a 7.3% initial cash yield; six-month investment volume reached $5.3 billion. Same-store rental revenue grew a more modest 1.2%, but occupancy remained high at 98.8% and re-leasing produced a 102.7% rent recapture rate. Management raised full-year AFFO guidance to $4.44-$4.45 per share, while leverage remained 5.4x. The company is also positioning its balance sheet and platform for larger opportunities, including a hyperscale data center venture and institutional private-capital partnerships.
AFFO and guidance
Recurring earnings improved despite meaningful share issuance and higher interest expense. AFFO per share increased 3.8% year over year to $1.09, while normalized FFO per share rose to $1.07 from $1.06. AFFO after common distributions was $265.3 million, up from $220.0 million a year earlier. For the first six months, AFFO per share was $2.22 versus $2.11, and management raised full-year guidance to $4.44-$4.45 per share from $4.41-$4.44.
- GAAP earnings: Net income available to common stockholders was $344.0 million, or $0.37 per diluted share, versus $196.9 million and $0.22 in Q2 2025.
- Revenue mix: Total revenue increased $137.3 million year over year to $1.55 billion. Interest and dividend income from loans and preferred equity rose $49.0 million to $88.5 million, reflecting portfolio growth.
- Cost pressure: Interest expense increased 10.0% to $312.1 million, while general and administrative expense rose 16.8% to $57.6 million as Realty Income continued investing in its platform.
External growth platform
Investment volume was the central operating driver. Realty Income deployed capital across wholly owned real estate, its U.S. Core Plus Fund, development projects, loans and other investments, while emphasizing new sources of capital and exposure beyond the traditional net-lease portfolio.
- Quarterly deployment: Total investment was $2.57 billion, including $1.80 billion of acquisitions, $135.4 million of development and $628.7 million of other investments. The company’s pro-rata share was $2.07 billion at a 7.3% initial weighted average cash yield.
- Year-to-date scale: Six-month investment volume reached $5.34 billion, or $4.69 billion on a pro-rata basis, at a 7.2% yield across 338 properties and other investments.
- Data centers: The Cloud Capital joint venture targets up to $1.4 billion of Realty Income investment for a 45% stake in three Northern Virginia hyperscale data centers valued at more than $6.0 billion, with lease terms of 15 to 20 years. The first stabilized asset closed after quarter-end.
- Private capital: The Apollo venture contributed $1.0 billion of cash in exchange for a 49% interest in a joint venture holding 492 retail properties. Realty Income also called $948.0 million of third-party capital for its U.S. Core Plus Fund during the first half.
Portfolio performance
The core portfolio remained highly occupied, but same-store growth was moderate. The company’s scale and diversification supported stable leasing outcomes, with re-leasing economics above the prior rent despite a small sequential decline in occupancy.
- Occupancy: Realty Income owned or held interests in 15,588 properties leased to 1,798 clients across 92 industries. Portfolio occupancy was 98.8%, versus 98.9% at March 31, 2026 and 98.6% a year earlier.
- Same-store growth: Same-store rental revenue increased 1.2% year over year to $1.17 billion in the quarter and 1.0% to $2.34 billion for the first six months.
- Re-leasing: The company resolved 419 of 480 quarterly lease expirations through re-leasing to existing or new clients. New annualized base rent was $110.3 million versus prior rent of $107.4 million, a 102.7% recapture rate.
- Portfolio composition: Retail represented 78.3% of annualized base rent, industrial 16.2%, gaming 3.1% and other property types 2.4%. The weighted average remaining lease term was approximately 8.6 years.
Capital and leverage
Realty Income continued to fund growth through a combination of equity, debt and third-party capital. The balance sheet absorbed substantial investment activity while leverage stayed within the company’s stated range, and post-quarter-end financing actions improved capacity and rating support.
- Leverage: Net debt to annualized pro forma Adjusted EBITDAre was 5.4x, compared with 5.2x after giving credit for $1.23 billion of expected proceeds from unsettled ATM forward equity.
- Equity issuance: The company raised $843.0 million during the quarter, primarily through 13.7 million ATM forward shares sold at a weighted average price of $61.52. As of August 5, 2026, unsettled forward sales represented approximately $1.3 billion of expected net proceeds.
- Liquidity: Pro-rata liquidity was $3.47 billion at June 30, including $534.6 million of cash, $3.15 billion of facility availability and $1.23 billion of unsettled ATM proceeds, less $1.44 billion of commercial paper borrowings.
- Post-quarter financing: Realty Income issued €600.0 million of 3.625% notes due 2032 and expanded its revolving credit facilities and global commercial paper programs to $5.5 billion each. Fitch subsequently assigned an A rating with a stable outlook.
Dividend and distributions
The dividend continued to grow, supported by recurring cash earnings and a moderate payout ratio. Realty Income announced its 115th consecutive quarterly dividend increase in June, extending its long record of monthly distributions.
- Dividend level: The annualized dividend was $3.252 per share as of June 30, following a quarterly per-share increase to $0.812 paid during the period and to $0.2710 beginning in July.
- Coverage: Quarterly dividends represented 74.5% of diluted AFFO per share of $1.09. First-half distributions of $1.6215 per share represented 73.0% of first-half diluted AFFO per share of $2.22.
- Cash generation: Adjusted free cash flow was $483.0 million for the first six months, up from $374.9 million a year earlier, after operating cash flow, capital expenditures, distributions and other adjustments.
