Abstract

Realty Income will release its fourth-quarter 2025 results on February 24, 2026 Post Market, and investors will watch revenue, margins, and adjusted EPS alongside leasing and acquisition updates.

Market Forecast

Consensus for the current quarter indicates that Realty Income’s revenue is expected at 1.42 billion, with EBIT at 670.59 million and adjusted EPS at 0.39, reflecting forecast year-over-year growth of 9.79% in revenue, 2.94% in EBIT, and 1.29% in EPS. Margin commentary implies a stable-to-slightly easing gross profit margin profile near last quarter’s level and a net profit margin broadly consistent with recent ranges, though exact market estimates for margins are not specified. The main business continues to be rent from net-lease properties, which is projected to benefit from portfolio growth and sustained high occupancy, with incremental contribution from reimbursements and other income. The most promising segment remains base rent excluding reimbursables, which last quarter contributed 1.30 billion and typically grows with completed acquisitions, development deliveries, and rent escalators; year-over-year expansion is implied by the revenue forecast trend.

Last Quarter Review

Realty Income’s prior quarter delivered revenue of 1.47 billion, a gross profit margin of 92.76%, GAAP net profit attributable to common shareholders of 316.00 million, a net profit margin of 21.43%, and adjusted EPS of 0.35, with the quarter-on-quarter change in net profit at 60.36% and adjusted EPS up 16.67% year over year. Management’s financial execution was highlighted by operating leverage consistent with the net-lease model as well as resilient rent collection, resulting in high gross profitability and stronger absolute earnings. Main business performance was led by rent excluding reimbursables at 1.30 billion, supplemented by rent with reimbursements at 82.52 million and other income at 84.05 million, aligning with double-digit year-over-year revenue growth of 10.49%.

Current Quarter Outlook (with major analytical insights)

Core Net-Lease Rental Income

Realty Income’s core revenue engine is long-duration, triple-net rental income indexed to contractual escalators. For the current quarter, the finance tool’s forecast of 1.42 billion in total revenue, together with marginally higher EBIT and EPS estimates, indicates stable operations with modest growth driven by completed acquisitions and a high occupancy baseline. Within the quarter, the key operational levers will be new rent commencements, retention on expiring leases, and the cadence of investment volume that closed earlier in the year flowing through to revenue days. The company’s gross profit margin near 92.76% reflects the net-lease structure in which tenants cover most operating costs. That model supports resilient cash margins even as financing costs remain an input to bottom-line variability. A stable net profit margin around low-20% levels last quarter suggests that interest expense, G&A, and non-cash items were manageable; maintaining or slightly improving this through the current quarter will likely hinge on blend-and-extend leasing, balance between fixed and floating debt, and timing of capital markets activity. From a demand perspective, tenant sectors including convenience, dollar stores, quick-service restaurants, and home improvement retailers have generally shown stable foot traffic and sales. If portfolio churn remains low and dispositions are modest relative to acquisitions, the quarter should reflect positive rent growth, supporting the forecast revenue increase of 9.79% year over year.

Most Promising Growth Contributor: Base Rent Excluding Reimbursables

Base rent excluding reimbursables was 1.30 billion last quarter and typically captures the full impact of acquisitions, rent escalations, and new lease commencements. This line item is the most scalable driver of earnings power because it is directly tied to investment deployment and the cap rates achieved on new transactions. As integration of recently closed acquisitions rolls through the quarter, this category should show the clearest year-over-year uplift in dollars. Given the finance tool’s current-quarter revenue estimate, incremental contribution likely comes from rent associated with properties acquired over the prior quarters reaching a full quarter of revenue recognition. The magnitude of cap-rate spreads to the company’s cost of capital will inform whether EBIT and EPS expand faster than revenue. The estimate implies modest operating leverage in EBIT (2.94% year-over-year) and EPS (1.29% year-over-year), consistent with prudent balance-sheet management during a period of elevated interest costs. While reimbursables and other income can add variability due to timing, the base rent line exhibits higher predictability. A key watch item is whether lease escalators and rent commencements offset any temporary downtime from tenant restructurings or asset recycling; the revenue forecast trajectory suggests the net effect remains positive this quarter.

Stock Price Drivers This Quarter

The first driver is capital deployment visibility and the announced pipeline. Investors typically gauge full-year acquisition guidance and how much of the quarter’s revenue growth is attributable to stabilized assets. A stronger-than-expected update on investment volume or cap-rate trends can support multiple expansion by indicating durable external growth. The second driver is the cost of capital and liability management. With financing costs still a swing factor for net-lease REIT earnings, any commentary on refinancing, terming out debt, or utilization of forward equity will influence the path of net profit margin and EPS. Maintaining a laddered maturity profile and fixed-rate bias helps stabilize quarterly earnings, which aligns with the modest EPS growth forecast. The third driver is portfolio quality and tenant health. Disclosures around rent collections, occupancy, and exposure to pressured categories will shape market perception of cash-flow durability. Stable occupancy and rent coverage should corroborate the high gross margin model and support the revenue and EBIT estimates. Any notable tenant credit resolution, blend-and-extend outcome, or high-profile disposition could affect sentiment in the near term.

Analyst Opinions

Analyst sentiment leans positive, with the majority expressing a constructive view on Realty Income’s near-term earnings path and dividend sustainability given high-visibility rental streams. Several well-followed research desks have highlighted that externally sourced growth from acquisitions completed over the past year should continue to flow into reported revenue and funds from operations over the next few quarters. The supportive tone is anchored in stable occupancy, contractual rent escalations, and an improving backdrop for net-lease transaction activity, which together underpin the forecast 9.79% revenue growth this quarter. Positive views emphasize that EBIT and EPS forecasts show incremental operating leverage despite a higher interest-rate environment, suggesting that liability management and disciplined capital deployment are offsetting cost pressures. Analysts point out that last quarter’s double-digit revenue growth and a 92.76% gross profit margin demonstrate the resilience of the business model. They also note that near-term catalysts could include updates on acquisition cap rates, guidance on deployment pace, and confirmation of consistent rent collections, which would validate the outlook embedded in current estimates. In the constructive camp, a prominent institutional desk highlighted that Realty Income’s diversified tenant base and long-dated leases provide a cushion against cyclical volatility, allowing the company to compound rental income as transactions season. Another large brokerage reiterated its favorable stance based on the expected continuation of high occupancy and the potential for modest spread expansion in acquisition yields relative to funding costs, which would enhance long-run cash flow conversion. Overall, the balance of published research over the past six months skews bullish rather than bearish, with the prevailing expectation that this quarter’s results will track in line with the mid-single-digit to low-double-digit revenue growth forecast and modest EPS expansion.