Realty Income's Q4 AFFO Meets Estimates, Revenues Beat & Rise Y/Y

Realty Income Corporation O reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $1.08, which met the Zacks Consensus Estimate. The reported figure compared favorably with the prior-year quarter’s AFFO of $1.05.

Results displayed year-over-year growth in the top line. The company benefited from improved occupancy and higher rents. However, a rise in interest expenses affected the results to some extent.

Total revenues were $1.49 billion, which surpassed the Zacks Consensus Estimate of $1.46 billion. The top line rose 11% year over year.

In 2025, Realty Income reported AFFO per share of $4.28, which outpaced the Zacks Consensus Estimate of $4.27. The figure compared favorably with the year-ago number of $4.19. Revenues of $5.75 billion jumped 9.1% year over year and topped the consensus mark of $5.72 billion.

O’s Q4 in Detail

In the fourth quarter, same-store rental revenues of $1.15 billion from 14,345 properties under lease witnessed a rise of 1.1% from the prior-year period.

The portfolio occupancy of 98.9% as of Dec. 31, 2025 increased 20 basis points sequentially, as well as year over year. In the reported quarter, the company achieved a rent recapture rate of 104.9% on re-leasing properties.

Interest expenses were up 7.5% year over year to $288.2 million in the reported quarter.

In the reported quarter, O acquired 114 properties for an aggregate value of $1.42 billion and invested $165.1 million in 49 properties under development.

The company sold 157 properties in the quarter, with net sales proceeds of $319.8 million and $67.4 million of gain on the sale of real estate.

O’s Balance Sheet

Realty Income exited the fourth quarter of 2025 with $4.12 billion of liquidity. This comprised cash and cash equivalents of $419.4 million, unsettled At-The-Market forward equity of $708.5 million and $3.51 billion of availability under its revolving credit facility.

Net debt to annualized pro-forma adjusted EBITDAre was 5.4X.

2026 Guidance by Realty Income

Management expects its 2026 AFFO per share to be in the band of $4.38-$4.42. The Zacks Consensus Estimate is pegged at $4.43, which is above the company’s guided range.

Full-year projections assume same-store rent growth of 1-1.3% and occupancy of around 98.5%. O now expects a full-year investment volume of approximately $8 billion.

Realty Income currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Realty Income Corporation Price, Consensus and EPS Surprise

Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote

Performance of Other Retail REITs

Simon Property Group, Inc.’s SPG fourth-quarter 2025 real estate funds from operations (FFO) per share of $3.49 surpassed the Zacks Consensus Estimate of $3.47. This compared favorably with the real estate FFO of $3.35 in the prior-year period.

Results reflected an increase in revenues, backed by a rise in the base minimum rent per square foot. SPG issued its guidance for 2026 real estate FFO per share.

Regency Centers Corporation REG reported fourth-quarter 2025 NAREIT FFO per share of $1.17, in line with the Zacks Consensus Estimate. The figure increased 7.3% from the prior-year quarter.

REG’s results reflected healthy leasing activity. It witnessed a year-over-year improvement in the same-property NOI and base rents during the quarter. The company issued its 2026 NAREIT FFO per share outlook.

Note:  Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research