Abstract

Kilroy Realty will report fourth-quarter results on February 09, 2026 Post Market; this preview compiles the latest financials, forecasts, and Street positioning to frame what investors should watch across revenue, margins, and funds-from-operations dynamics.

Market Forecast

Consensus and company-indicated forecasts for the current quarter point to revenue of $271.35 million, implying a year-over-year decline of 2.98%, with EBIT estimated at $73.13 million (up 0.14% YoY) and EPS of $0.29 (down 12.31% YoY). Forecast detail on gross profit margin, net margin, and adjusted EPS is limited; Street focus centers on stability in occupancy and lease spreads rather than margin expansion.

Main business performance is forecast to reflect stable rent collections and modest same-property pressure, with rental revenue remaining the core contributor. The segment with the greatest near-term potential is “Other,” albeit small at $4.84 million last quarter, where faster YoY growth from fees and ancillary services can provide incremental upside if sustained.

Last Quarter Review

Kilroy Realty’s last reported quarter delivered revenue of $279.74 million, a gross profit margin of 66.66%, GAAP net profit attributable to shareholders of $156.00 million, a net profit margin of 55.84%, and adjusted EPS of $0.38; year over year, revenue declined 2.17% and adjusted EPS fell 13.64%.

Quarter-on-quarter, net profit attributable to shareholders increased by 128.23%, supported by stronger non-operating items and disciplined operating expense control. By business line, rental revenue accounted for $274.91 million while other revenue contributed $4.84 million, underscoring the company’s heavy reliance on rents as the primary income stream.

Current Quarter Outlook

Main business: Rental income and occupancy trajectory

The current-quarter setup hinges on whether rental income can offset incremental roll-downs on expiring leases and any vacancy carry from recent move-outs. With revenue projected at $271.35 million and an expected year-over-year decline of 2.98%, investors will monitor leasing volume, cash and GAAP rent spreads, and tenant retention to evaluate top-line durability. A stable gross profit margin near the prior quarter’s 66.66% would indicate operating efficiency and manageable concessions, but mix and free-rent burn-offs could introduce volatility. Given office market dynamics and extended decision cycles among tenants, management’s commentary on pipeline quality and signed-not-opened assets could prove decisive for modeling 2026 revenue cadence.

Largest growth potential business: Ancillary and other revenue

Although still a modest portion of revenue, the “Other” category at $4.84 million last quarter can influence incremental growth if fee income, parking, and service recoveries trend higher. These streams are typically less cyclical than large-block leasing and can be supported by improving property utilization as tenants return to office in greater frequency. As management refines building services and amenity strategies, faster growth in Other revenue would help cushion pressure in base rents and provide a partial offset to declining lease rates on relets. Tracking the year-over-year change in this line item will help assess whether operational initiatives are taking hold.

Key stock drivers this quarter: Earnings quality and forward guide

Earnings quality will likely be judged on the relationship between GAAP net income and adjusted measures such as EPS and EBIT, particularly since last quarter’s GAAP net profit margin of 55.84% benefitted from items that may not recur. Investors are likely to scrutinize the bridge from property-level NOI to corporate-level earnings, including interest expense, capitalization trends, and any disposition or development gains or losses. Guidance for 2026 leasing, capital recycling intentions, and progress on development deliveries will be central to valuation as they inform both net asset value assumptions and forward FFO and EPS trajectories. Any update on balance sheet flexibility, including available liquidity and debt maturities, may also sway sentiment if refinancing costs shift the earnings path.

Analyst Opinions

Sell-side previews over the recent months skew cautious, with a majority leaning toward neutral-to-bearish stances on the near-term revenue trend and EPS trajectory. Commentary highlights the projected 2.98% year-over-year decline in revenue to $271.35 million and an EPS estimate near $0.29, framing a soft organic growth backdrop and limited near-term catalysts. Institutions emphasize that upside would likely require meaningfully better leasing spreads and occupancy improvement, while the base case assumes modest pressure in same-property revenue and a largely stable expense run-rate. As a result, the prevailing view expects an in-line to slightly below-consensus print absent positive surprises in leasing velocity or ancillary revenue growth, and the debate remains centered on visibility into 2026 stabilization paths rather than immediate acceleration.