Track market-moving stories before they get noisy

“What I am increasingly optimistic about are the potential with drones,” Khosrowshahi said on Uber’s second-quarter earnings call.

Cutting food delivery times from roughly 30 minutes today to as little as 10 to 15 minutes could fundamentally change the customer experience, he argues.

Why Uber Is Looking UpUber has spent the past year expanding partnerships across robotaxis and sidewalk delivery robots as well as drone delivery company Flytrex.

“Drone delivery can cut the timing of delivery significantly,” Khosrowshahi said, acknowledging that it will take time before costs become sustainable. Even so, he believes the improvement in speed could make the technology compelling for consumers.

“Already… ordering dinner and getting it delivered to your home in 30 minutes is a magical experience,” he added. “We think in 15 minutes—it’s going to be, you know, 10 to 15 minutes—is going to be an even more magical experience.”

Uber’s Autonomous Strategy Goes Beyond Self-Driving Cars Uber is already working with partners including Serve Robotics Inc. (NASDAQ:SERV) and Cartken on sidewalk delivery robots. Drones represent the next frontier for faster deliveries.

“While we’re on the sidewalks now as it relates to our delivery business, we’re looking forward to getting in the air with some of the partners out there,” Khosrowshahi said.

The comments also underscore that Uber’s autonomous strategy is broader than self-driving cars.

Much of the company’s recent autonomous vehicle narrative has centered on partnerships with companies including Waymo, Zoox, Wayve and Nuro. But management is increasingly describing autonomy as an ecosystem that spans robotaxis, delivery robots and aerial drones, with Uber serving as the platform connecting those technologies to consumers.

For investors, the takeaway is that Uber’s automation strategy isn’t solely about replacing drivers. The company also sees faster deliveries as a meaningful opportunity to improve the customer experience—and Khosrowshahi believes reducing delivery times to 10 to 15 minutes could be one of the clearest examples of that vision coming to life.

Photo courtesy: Shutterstock

Market News and Data brought to you by Benzinga APIs

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

To add Benzinga News as your preferred source on Google, click here.

OpenAI CEO Sam Altman says artificial intelligence has entered the "singularity," a stage where AI progress could accelerate rapidly.

While that description can prove premature, increasingly capable models could still boost demand for Nvidia's (NVDA +3.44%) AI-optimized hardware and software offerings and Microsoft's (MSFT -1.09%) cloud and software products.

Image source: Getty Images.

On the Relentless podcast, Sam Altman said, "We're now, like, in the singularity." In its traditional sense, the singularity is the point in time when AI begins creating increasingly intelligent systems so quickly that progress becomes difficult for humans to predict or control.

Altman appears to be using "singularity" more broadly. Current AI can write code, find security flaws, and help researchers improve models. But there is no public evidence that it can independently design, train, and deploy increasingly capable successor systems.

OpenAI still treats AI self-improvement as an advanced capability that models must be tested for, rather than something they can already do reliably. Anthropic treats fully automated AI research and rapid acceleration in AI development as risks to monitor rather than established milestones.

Nvidia could win before the singularity arrives More capable AI models can increase the computing needed both to build them and to run them. This, in turn, drives demand for advanced processing and networking chips and high bandwidth memory.

Today's Change

(

3.44

%) $

7.28

Current Price

$

219.22

Nvidia is already benefiting from this trend. In the first quarter of fiscal 2027 (ending April 26, 2026), data center revenue rose 92% year over year to $75.2 billion. The company claimed that its new Dynamo software can help Blackwell chips process AI requests up to 7 times faster. The company's next-generation Vera Rubin systems are also moving into full production to run AI agents that handle longer and more complex tasks.

While increasing efficiency can limit Nvidia's growth by requiring fewer chips, lower costs could encourage much wider use of AI agents and reasoning models. Hence, Nvidia will benefit only if overall AI usage grows faster than the pace at which computing becomes more efficient. Custom chips from Microsoft, Alphabet, and Amazon add another competitive risk.

Microsoft can also turn stronger AI into revenue Microsoft can monetize stronger AI through Azure cloud infrastructure, its stake in OpenAI, and Microsoft 365 Copilot.

Today's Change

(

-1.09

%) $

-5.35

Current Price

$

487.46

The AI business is already gaining traction. In the fourth quarter of fiscal 2026 (ending June 30, 2026), Azure and other cloud services revenue rose 43% year over year. Microsoft 365 Copilot also surpassed 30 million paid users.

Microsoft does not own OpenAI, but is a primary cloud partner and a major shareholder. Microsoft will also receive a share of OpenAI's revenue through 2030 and can use its models and products under a nonexclusive license through 2032.

Microsoft, however, must balance the cost of supporting its AI growth. The company spent $35.8 billion on property, plant, and equipment expenses in the fourth quarter, more than double the amount in the same quarter of the prior year. Hence, the company needs to generate enough revenue to cover these rising infrastructure costs and deliver attractive returns.

Which stock benefits more? Nvidia and Microsoft are trading at 15.6 times and 20.3 times their forward earnings, respectively.

Nvidia looks more attractive today, provided overall AI usage continues to grow faster than improvements in computing efficiency and competition from custom chips.

-

Starting in 2028, the next generation of the F-53/F-59 chassis will be designed and commercialized by Blue Bird with Ford powertrains

MACON, Ga.--(BUSINESS WIRE)--Blue Bird Corporation (Nasdaq: BLBD), the leader in low and zero emission school buses, today announced a new collaboration to expand its commercial vehicle presence. As part of this initiative, Blue Bird has entered into a definitive agreement with Ford Motor Company to create the next generation of F-53/F-59 commercial stripped chassis. Under the agreement, Blue Bird will assume responsibility for the design, manufacturing, and sales of the next generation F-53/F-59 commercial stripped chassis, which will be paired with Ford’s powertrain solutions.

To accelerate the launch of the next generation chassis, Blue Bird will acquire the Detroit Assembly Plant assets of Detroit Chassis LLC (DCP) who is the long-time manufacturer of Ford's F-53 and F-59 stripped chassis platforms.

The collaboration between Ford and Blue Bird is expected to build on the complementary strengths of both organizations and support the continued evolution of commercial stripped chassis offerings, with new production anticipated to begin early in 2028.

“Ford has built an exceptional history in the commercial stripped chassis market, and we are honored to build on that foundation through our expanded collaboration,” said John Wyskiel, President and Chief Executive Officer of Blue Bird Corporation. “By combining the knowhow of Detroit Chassis, with Blue Bird's proven chassis design and manufacturing capabilities, along with Ford's industry-leading powertrain technology, we will bring the next generation F-53 and F-59 platform to market.”

Blue Bird and Ford are committed to ensuring a seamless transition for customers, fleets and dealers. Customers will have access to service and support through select dealers, providing continuity and reliability across the vehicle lifecycle.

“DCP has played an important role in manufacturing Ford's commercial stripped chassis platforms,” said Michael J. Guthrie, Chief Executive Officer and Chairman of Detroit Chassis LLC. “We are excited to work with Blue Bird to create exciting opportunities to build on that legacy, enhance growth opportunities for our team members, leverage our collective manufacturing expertise and continue delivering exceptional products and support to customers for years to come.”

"From box trucks to motorhomes, customers have placed their trust in Ford's F-53 and F-59 stripped chassis platforms for generations," said John Emmert, Ford Pro's global director of product marketing. " We're focused on continuing to serve this segment with Blue Bird products powered by Built Ford Tough powertrain technology as we carry this legacy forward for our customers."

The commercial stripped chassis market represents a significant long-term growth opportunity for Blue Bird. The company expects the collaboration with Ford and Detroit Chassis to further diversify its product portfolio, broaden its addressable market, and leverage its decades of experience designing and manufacturing purpose-built vehicle platforms.

About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 25,000 propane, natural gas, and electric powered buses sold. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird’s complete product and service portfolio, visit www.blue-bird.com.

More News From Blue Bird Corporation

Back to Newsroom

Cisco Systems Inc (NASDAQ:CSCO, XETRA:CIS) is set to report quarterly results after the market close on August 12, with UBS expecting the networking equipment maker to deliver revenue and earnings above consensus estimates, supported by accelerating demand for AI infrastructure and resilient campus networking spending.

UBS wrote that industry checks and commentary from hyperscale cloud providers and neocloud companies indicate demand for AI infrastructure strengthened over the past three months, supporting upside to both networking revenue and product orders in the July quarter.

The analysts expect networking revenue to exceed its forecast of $9.6 billion, which would represent 26% year-over-year growth, while product orders could also outperform expectations following strong demand for AI-related systems and optical products. UBS currently forecasts product order growth of 29% for the quarter after a 35% increase in the prior quarter.

The firm noted that strength in pluggables and networking systems, following more than $1 billion of Acacia orders last quarter, could provide an additional boost to orders.

While UBS sees revenue skewing to the upside, it expects elevated component costs to limit gross margin expansion to around 66%. Even so, the brokerage believes adjusted earnings per share could reach $1.19, above its own estimate of $1.16 and the Visible Alpha consensus of $1.17.

Looking ahead, UBS expects Cisco's guidance for the October quarter to come in above its current forecasts. The brokerage estimates October-quarter revenue of $16.24 billion, but believes the company could guide to a range of $16.6 billion to $16.8 billion, reflecting roughly 12% year-over-year growth as revenue from recent AI-related hyperscaler design wins becomes more heavily weighted toward the second half.

UBS also expects Cisco to issue a fiscal 2027 revenue outlook of $68 billion to $69 billion, supported by more than $2 billion of incremental AI-related revenue, taking total AI revenue above $6 billion. The brokerage forecasts fiscal 2027 adjusted earnings guidance of $4.78 to $4.84 per share, broadly in line with consensus expectations.

The firm said demand has improved across Cisco's business, with product orders strengthening in both AI infrastructure and campus networking. Although it expects order growth to moderate from the previous quarter due to tougher comparisons and the timing of hyperscaler deployments, UBS said recent industry checks remain positive.

UBS maintained a $132 price target on Cisco, above current levels of about $122, arguing the company's premium valuation is supported by its AI networking, silicon and optical portfolio, as well as durable demand for campus networking equipment. The firm added that a recovery in the company's security business during fiscal 2027 could provide an additional tailwind.

SAN FRANCISCO--(BUSINESS WIRE)--Fastly, Inc. (NASDAQ: FSLY), a leader in global edge cloud platforms, today announced financial results for its second quarter ended June 30, 2026.

"Record second quarter results reflect strong execution and the deep trust customers place in our technology and our teams," said Kip Compton, CEO of Fastly. "Our platform strategy is driving business momentum, giving us the confidence to raise our full-year outlook."

($ in thousands, except per share data) (unaudited)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Revenue

$

183,317

$

148,709

$

356,338

$

293,183

Gross margin

GAAP gross margin

63.3

%

54.5

%

62.9

%

53.9

%

Non-GAAP gross margin(1)

65.8

%

59.0

%

65.5

%

58.2

%

Operating loss

GAAP operating loss

$

(14,433

)

$

(36,943

)

$

(38,328

)

$

(75,122

)

Non-GAAP operating income (loss)(1)

$

26,993

$

(4,594

)

$

46,136

$

(10,439

)

Net income (loss) per share

GAAP net loss per common share — basic and diluted

$

(0.10

)

$

(0.26

)

$

(0.23

)

$

(0.53

)

Non-GAAP net income (loss) per common share — basic(1)

$

0.17

$

(0.03

)

$

0.32

$

(0.08

)

Non-GAAP net income (loss) per common share — diluted(1)

$

0.15

$

(0.03

)

$

0.28

$

(0.08

)

For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this press release.

Second Quarter 2026 Financial Summary

Total revenue of $183.3 million, representing 23% year-over-year growth. Network Services revenue of $133.9 million, representing 17% year-over-year growth. Security revenue of $41.7 million, representing 43% year-over-year growth. Other revenue of $7.7 million, representing 69% year-over-year growth. Network Services revenue includes solutions designed to improve performance of websites, apps, APIs, and digital media. Security revenue includes products designed to protect websites, apps, APIs, and users. Other revenue includes Compute and Observability solutions. Generated $39.3 million of operating cash flow compared to $25.8 million of operating cash flow in the second quarter of 2025. Generated $3.6 million of positive free cash flow compared to $10.9 million in the second quarter of 2025. GAAP gross margin of 63.3%, compared to 54.5% in the second quarter of 2025. Non-GAAP gross margin1 of 65.8%, compared to 59.0% in the second quarter of 2025. GAAP net loss of $15.6 million, compared to $37.5 million in the second quarter of 2025. Non-GAAP net income1 of $26.2 million, compared to non-GAAP net loss1 of $5.0 million in the second quarter of 2025. GAAP net loss per basic and diluted share of $0.10, compared to $0.26 in the second quarter of 2025. Non-GAAP net income per basic share1 of $0.17, compared to non-GAAP net loss per basic share1 of $0.03 in the second quarter of 2025. Non-GAAP net income per diluted share1 of $0.15, compared to non-GAAP net loss per diluted share1 of $0.03 in the second quarter of 2025. Key Metrics

Remaining Performance Obligations (RPO)2 were $341 million, up 38% from $247 million in the second quarter of 2025. Fastly's top ten customers accounted for 37% of revenue in the second quarter of 2026 compared to 31% in the second quarter of 2025. Last 12-month net retention rate (LTM NRR)3 increased to 117% in the second quarter from 113% in the first quarter of 2026. Second Quarter Business and Product Highlights

Announced new research showing how rapidly growing AI traffic is reshaping the internet, growing 6.5x faster than human traffic this year, and why organizations need new strategies to manage machine traffic. Released a joint announcement with LALIGA on the collaboration of anti-piracy solutions that are designed to address illegal streaming of live sports and help rights holders prevent lost revenue. Announced a new partnership with Skyfire, enabling trusted commerce at the edge so enterprises can now securely identify, verify, and transact with AI agents in real time and at global scale, without re-architecting existing infrastructure. Released C++ SDK for Fastly Compute, enabling enterprises to secure, scale, and accelerate their C++ AI workloads, gaming features, and other low-latency applications. Third Quarter and Full Year 2026 Guidance

Q3 2026

Full Year 2026

Total Revenue (millions)

$184.0 - $190.0

$732.0 - $746.0

Non-GAAP Operating Income (millions)

$20.0 - $24.0

$88.0 - $96.0

Non-GAAP Net Income per share(4)(5)

$0.11 - $0.13

$0.50 - $0.54

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Fastly’s future GAAP financial results.

Conference Call Information

Fastly will host an investor conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, August 5, 2026.

To access the conference call, please pre-register and dial-in using this link at least 15 minutes prior to the 1:30 p.m. PT start time. Registrants will receive an email confirmation with dial-in details.

A live webcast of the event can be accessed using this link. A replay of the webcast will be available on https://investors.fastly.com starting approximately two hours after the event and archived on the site for one quarter.

About Fastly, Inc.

Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Universal Music Group, and SeatGeek. Learn more about Fastly at https://www.fastly.com, and follow us @fastly.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, statements regarding our future financial and operating performance and shareholder returns, including our outlook and guidance and ability to maintain and strengthen our liquidity position; our ability to acquire new customers, expand cross-sell opportunities, and grow market share; our ability to enrich our revenue mix with platform enhancements; the performance of our existing and new platform enhancements; our ability to accelerate global growth; our partnerships and collaborations; the performance, capabilities, and expectations regarding customer experiences with Fastly Compute, including its C++ SDK, Bot Management and DDoS Protection, and Next-Gen WAF; and Fastly's strategies, platform, and business plans. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including those more fully described in Fastly’s Annual Report on Form 10-K for the year ended December 31, 2025. Additional information will also be set forth in Fastly’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and other filings and reports that Fastly may file from time to time with the SEC. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses the following non-GAAP measures of financial performance: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP basic and diluted net income (loss) per common share, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, free cash flow and adjusted EBITDA. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings releases.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per common share, non-GAAP research and development, non-GAAP sales and marketing, and non-GAAP general and administrative differ from GAAP in that they exclude stock-based compensation expense and related employer payroll taxes, amortization of capitalized stock-based compensation - cost of revenue, amortization of acquired intangible assets, executive transition costs, and amortization of debt discount and issuance costs.

Adjusted EBITDA: excludes stock-based compensation expense and related employer payroll taxes, amortization of capitalized stock-based compensation - cost of revenue, gain on modification of lease, depreciation and other amortization expenses, amortization of acquired intangible assets, impairment expense, executive transition costs, interest income, interest expense, including amortization of debt discount and issuance costs, other expense (income), net, and income taxes.

Amortization of Acquired Intangible Assets: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases and acquisitions. Management considers its operating results without this activity when evaluating its ongoing non-GAAP performance and its adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and acquisitions and may not be reflective of our core business, ongoing operating results, or future outlook.

Amortization of Debt Discount and Issuance Costs: consists primarily of amortization expense related to our debt obligations. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook. These are included in our total interest expense.

Capital Expenditures: consists of cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.

Depreciation and Other Amortization Expense: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and may not be reflective of our core business, ongoing operating results, or future outlook.

Executive Transition Costs: consists of one-time cash charges recognized with respect to changes in our executive’s employment status. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results, or future outlook.

Free Cash Flow: calculated as net cash used in operating activities less purchases of property and equipment, net of proceeds from sale of property and equipment, and capitalized internal-use software costs. Management specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Management considers non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in Fastly's business and strengthening its balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

Gain on Modification of Lease: consists of a one-time non-cash charge recognized with respect to the modification of our leases. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results, or future outlook.

Impairment Expense: consists of charges related to our long-lived assets. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Income Taxes: consists primarily of expenses recognized related to state and foreign income taxes. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Expense: consists primarily of interest expense related to our debt instruments, including amortization of debt discount and issuance costs. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Income: consists primarily of interest income related to our marketable securities. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Other (Expense) Income, Net: consists primarily of foreign currency transaction gains and losses. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Stock-Based Compensation Expense and Related Employer Payroll Taxes: consists of expenses for stock options, restricted stock units, performance awards and other shares issued under our equity incentive plans or our Employee Stock Purchase Plan ("ESPP"), as applicable, and the related employer payroll taxes. Although stock-based compensation and its related employer payroll taxes are expenses for the Company, management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance, primarily because they are expenses not believed by management to be reflective of our core business, ongoing operating results, or future outlook. In addition, the value of some stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control.

Amortization of Capitalized Stock-Based Compensation - Cost of Revenue: in order to reflect the performance of our core business, ongoing operating results, or future outlook, and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies, similar to stock-based compensation, management considers it appropriate to exclude amortization of capitalized stock-based compensation from our non-GAAP financial measures.

Management believes these non-GAAP financial measures and adjusted EBITDA serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors' overall understanding of our current financial performance.

In the financial tables below, the Company provides a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this press release.

Key Metrics

1 Beginning with the quarter ended March 31, 2026, we are excluding stock-based compensation related employer payroll taxes from our non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) per common share — basic and non-GAAP net income (loss) per common share — diluted, because we consider our operating results without this activity when evaluating our ongoing non-GAAP net income (loss) performance and our adjusted EBITDA performance. We did not recast the presentation for all prior periods presented due to the immaterial amount of such payroll taxes.

2 Remaining Performance Obligations include future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied. During the third quarter of 2025, we identified an error in RPO calculations from certain contracts with a termination-for-convenience clause. We recast the presentation of RPO for all prior periods presented to reflect the correction of this error.

3 We calculate LTM Net Retention Rate by dividing the total customer revenue for the prior twelve-month period (“prior 12-month period”) ending at the beginning of the last twelve-month period (“LTM period”) minus revenue contraction due to billing decreases or customer churn, plus revenue expansion due to billing increases during the LTM period from the same customers by the total prior 12-month period revenue. We believe the LTM Net Retention Rate is supplemental as it removes some of the volatility that is inherent in a usage-based business model.

4 Non-GAAP net income per share is calculated as Non-GAAP net income divided by weighted average diluted shares for 2026.

5 Assumes weighted average diluted shares outstanding of 181.4 million in Q3 2026 and 180.3 million for the full year 2026.

  Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share amounts)

  Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Revenue

$

183,317

$

148,709

$

356,338

$

293,183

Cost of revenue(1)

67,366

67,593

132,206

135,269

Gross profit

115,951

81,116

224,132

157,914

Operating expenses:

Research and development(1)

42,071

42,221

84,043

79,650

Sales and marketing(1)

56,735

51,100

111,849

100,413

General and administrative(1)

31,578

24,323

66,568

52,558

Impairment expense

—

415

—

415

Total operating expenses

130,384

118,059

262,460

233,036

Loss from operations

(14,433

)

(36,943

)

(38,328

)

(75,122

)

Interest income

2,842

3,084

5,769

6,059

Interest expense

(3,348

)

(3,164

)

(6,654

)

(6,337

)

Other (expense) income, net

(400

)

39

(780

)

(41

)

Loss before income taxes

(15,339

)

(36,984

)

(39,993

)

(75,441

)

Income tax expense (benefit)

252

557

(3,878

)

1,248

Net loss

$

(15,591

)

$

(37,541

)

$

(36,115

)

$

(76,689

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.10

)

$

(0.26

)

$

(0.23

)

$

(0.53

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

157,596

145,780

155,598

144,539

________________ (1) Includes stock-based compensation expense as follows:

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Cost of revenue

$

2,757

$

2,573

$

5,293

$

4,512

Research and development

11,902

11,755

21,932

20,648

Sales and marketing

10,344

8,176

19,697

14,869

General and administrative

10,169

3,831

23,231

11,888

Total

$

35,172

$

26,335

$

70,153

$

51,917

  Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited, in thousands, except per share data)

  Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Gross profit

GAAP gross profit

$

115,951

$

81,116

$

224,132

$

157,914

Stock-based compensation expense and related employer payroll taxes(1)

3,026

2,573

5,773

4,512

Amortization of capitalized stock-based compensation - Cost of revenue

1,694

1,581

3,383

3,222

Amortization of acquired intangible assets

—

2,475

—

4,950

Non-GAAP gross profit

$

120,671

$

87,745

$

233,288

$

170,598

GAAP gross margin

63.3

%

54.5

%

62.9

%

53.9

%

Non-GAAP gross margin

65.8

%

59.0

%

65.5

%

58.2

%

Research and development

GAAP research and development

$

42,071

$

42,221

$

84,043

$

79,650

Stock-based compensation expense and related employer payroll taxes(1)

(12,967

)

(11,755

)

(24,355

)

(20,648

)

Non-GAAP research and development

$

29,104

$

30,466

$

59,688

$

59,002

Sales and marketing

GAAP sales and marketing

$

56,735

$

51,100

$

111,849

$

100,413

Stock-based compensation expense and related employer payroll taxes(1)

(10,869

)

(8,176

)

(21,009

)

(14,869

)

Amortization of acquired intangible assets

(2,160

)

(2,279

)

(4,319

)

(4,580

)

Executive transition costs

—

—

(262

)

—

Non-GAAP sales and marketing

$

43,706

$

40,645

$

86,259

$

80,964

General and administrative

GAAP general and administrative

$

31,578

$

24,323

$

66,568

$

52,558

Stock-based compensation expense and related employer payroll taxes(1)

(10,710

)

(3,831

)

(24,302

)

(11,888

)

Executive transition costs

—

—

(1,061

)

(335

)

Gain on modification of lease

—

736

—

736

Non-GAAP general and administrative

$

20,868

$

21,228

$

41,205

$

41,071

Operating income (loss)

GAAP operating loss

$

(14,433

)

$

(36,943

)

$

(38,328

)

$

(75,122

)

Stock-based compensation expense and related employer payroll taxes(1)

37,572

26,335

75,439

51,917

Amortization of capitalized stock-based compensation - Cost of revenue

1,694

1,581

3,383

3,222

Executive transition costs

—

—

1,323

335

Gain on modification of lease

—

(736

)

—

(736

)

Amortization of acquired intangible assets

2,160

4,754

4,319

9,530

Impairment expense

—

415

—

415

Non-GAAP operating income (loss)

$

26,993

$

(4,594

)

$

46,136

$

(10,439

)

Net income (loss)

GAAP net loss

$

(15,591

)

$

(37,541

)

$

(36,115

)

$

(76,689

)

Stock-based compensation expense and related employer payroll taxes(1)

37,572

26,335

75,439

51,917

Amortization of capitalized stock-based compensation - Cost of revenue

1,694

1,581

3,383

3,222

Executive transition costs

—

—

1,323

335

Gain on modification of lease

—

(736

)

—

(736

)

Amortization of acquired intangible assets

2,160

4,754

4,319

9,530

Impairment expense

—

415

—

415

Amortization of debt discount and issuance costs

366

217

767

434

Non-GAAP net income (loss)

$

26,201

$

(4,975

)

$

49,116

$

(11,572

)

Non-GAAP net income (loss) per common share — basic

$

0.17

$

(0.03

)

$

0.32

$

(0.08

)

Non-GAAP net income (loss) per common share — diluted

$

0.15

$

(0.03

)

$

0.28

$

(0.08

)

Weighted average basic common shares

157,596

145,780

155,598

144,539

Weighted average diluted common shares

180,304

145,780

178,410

144,539

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

(unaudited, in thousands, except per share data)

  Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Reconciliation of GAAP to Non-GAAP diluted shares

GAAP diluted shares

157,596

145,780

155,598

144,539

Other dilutive equity awards

22,708

—

22,812

—

Non-GAAP diluted shares

180,304

145,780

178,410

144,539

Non-GAAP diluted net income (loss) per share

$

0.15

$

(0.03

)

$

0.28

$

(0.08

)

Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Adjusted EBITDA

GAAP net loss

$

(15,591

)

$

(37,541

)

$

(36,115

)

$

(76,689

)

Stock-based compensation expense and related employer payroll taxes(1)

37,572

26,335

75,439

51,917

Amortization of capitalized stock-based compensation - Cost of revenue

1,694

1,581

3,383

3,222

Gain on modification of lease

—

(736

)

—

(736

)

Depreciation and other amortization

11,129

13,505

21,449

27,155

Amortization of acquired intangible assets

2,160

4,754

4,319

9,530

Amortization of debt discount and issuance costs

366

217

767

434

Impairment expense

—

415

—

415

Executive transition costs

—

—

1,323

335

Interest income

(2,842

)

(3,084

)

(5,769

)

(6,059

)

Interest expense

2,982

2,947

5,887

5,903

Other expense (income), net

400

(39

)

780

41

Income tax expense (benefit)

252

557

(3,878

)

1,248

Adjusted EBITDA

$

38,122

$

8,911

$

67,585

$

16,716

Condensed Consolidated Balance Sheets

(unaudited, in thousands)

  As of
June 30, 2026

As of
December 31, 2025

ASSETS

Current assets:

Cash and cash equivalents

$

89,798

$

180,563

Marketable securities

247,700

181,196

Accounts receivable, net of allowance for credit losses

114,216

118,029

Prepaid expenses and other current assets

27,333

26,921

Total current assets

479,047

506,709

Property and equipment, net

220,354

186,785

Operating lease right-of-use assets, net

58,213

52,067

Goodwill

670,356

670,356

Intangible assets, net

21,232

25,771

Other assets

54,441

57,789

Total assets

$

1,503,643

$

1,499,477

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

20,124

$

17,612

Accrued expenses

52,937

70,669

Long-term debt, current

—

38,557

Operating lease liabilities, current

30,100

24,427

Deferred revenue

34,266

35,234

Other current liabilities

5,096

7,499

Total current liabilities

142,523

193,998

Long-term debt, net

323,958

323,282

Operating lease liabilities, non-current

44,234

43,921

Other long-term liabilities

2,111

8,698

Total liabilities

512,826

569,899

Stockholders’ equity:

Common stock

3

3

Additional paid-in capital

2,141,909

2,044,103

Accumulated other comprehensive loss

(493

)

(41

)

Accumulated deficit

(1,150,602

)

(1,114,487

)

Total stockholders’ equity

990,817

929,578

Total liabilities and stockholders’ equity

$

1,503,643

$

1,499,477

  Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

  Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Cash flows from operating activities:

Net loss

$

(15,591

)

$

(37,541

)

$

(36,115

)

$

(76,689

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation expense

12,720

14,962

24,612

30,129

Amortization of intangible assets

2,262

4,878

4,539

9,778

Non-cash lease expense

6,887

5,694

13,085

11,349

Amortization of debt discount and issuance costs

366

217

767

434

Amortization of deferred contract costs

4,733

4,847

9,491

9,697

Stock-based compensation

35,172

26,335

70,153

51,917

Deferred income taxes

(23

)

327

(4,353

)

749

Provision for credit losses

1,014

1,048

2,532

1,994

(Gain) loss on disposals of property and equipment

(9

)

(43

)

267

(43

)

Accretion of discounts and amortization of premiums, net

(1,019

)

(1,356

)

(1,817

)

(1,982

)

Impairment expense

—

415

—

415

Non-cash interest expense

969

969

969

969

Other adjustments

(57

)

(84

)

(275

)

292

Changes in operating assets and liabilities:

Accounts receivable, net

14,807

669

1,281

(3,324

)

Prepaid expenses and other current assets

2,227

121

(412

)

2,337

Other assets

(3,195

)

(6,076

)

(1,845

)

(8,171

)

Accounts payable

1,497

3,446

8,309

6,021

Accrued expenses

(2,651

)

1,577

872

(1,806

)

Operating lease liabilities

(7,114

)

(2,332

)

(12,923

)

(7,888

)

Other liabilities

(13,661

)

7,725

(10,937

)

16,908

Net cash provided by operating activities

39,334

25,798

68,200

43,086

Cash flows from investing activities:

Purchases of marketable securities

(87,262

)

(93,440

)

(266,602

)

(272,926

)

Maturities of marketable securities

24,329

37,836

201,472

45,805

Purchases of property and equipment

(31,623

)

(9,852

)

(52,644

)

(12,457

)

Proceeds from sale of property and equipment

10

44

10

44

Capitalized internal-use software

(4,148

)

(4,542

)

(7,884

)

(9,305

)

Net cash used in investing activities

(98,694

)

(69,954

)

(125,648

)

(248,839

)

Cash flows from financing activities:

Repayment of convertible senior notes

—

—

(38,593

)

—

Payments of other debt issuance costs

—

—

(502

)

—

Repayments of finance lease liabilities

—

(537

)

—

(2,248

)

Proceeds from exercise of vested stock options

92

279

1,135

687

Proceeds from employee stock purchase plan

2,397

1,240

4,676

3,371

Net cash provided by (used in) financing activities

2,489

982

(33,284

)

1,810

Effects of exchange rate changes on cash and cash equivalents

(1

)

177

(33

)

255

Net decrease in cash and cash equivalents

(56,872

)

(42,997

)

(90,765

)

(203,688

)

Cash and cash equivalents at beginning of period

146,670

125,484

180,563

286,175

Cash and cash equivalents at end of period

$

89,798

$

82,487

$

89,798

$

82,487

Free Cash Flow

(unaudited, in thousands)

  Three months ended
June 30,

Six months ended
June 30,

2026

2025

2026

2025

Net cash provided by operating activities

$

39,334

$

25,798

$

68,200

$

43,086

Capital expenditures(1)

(35,761

)

(14,887

)

(60,518

)

(23,966

)

Free Cash Flow

$

3,573

$

10,911

$

7,682

$

19,120

More News From Fastly, Inc.

, /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced operating results for the three and six months ended June 30, 2026. All per share amounts presented in this press release are on a diluted per common share basis unless stated otherwise.

COMPANY HIGHLIGHTS:

For the three months ended June 30, 2026:

Net income available to common stockholders was $344.0 million, or $0.37 per share Adjusted Funds from Operations ("AFFO") per share increased 3.8% to $1.09 per share, compared to the three months ended June 30, 2025 Invested $2.6 billion; our Pro-Rata Share was $2.1 billion at an Initial Weighted Average Cash Yield of 7.3% Net Debt to Annualized Pro Forma Adjusted EBITDAre was 5.4x Achieved a rent recapture rate of 102.7% on properties re-leased Events subsequent to June 30, 2026:

In July 2026, issued €600.0 million of 3.625% senior unsecured notes due July 2032                                                      In July 2026, amended and restated our unsecured revolving credit facility to $5.5 billion and commercial paper programs to $5.5 billion In August 2026, assigned a Long-Term Issuer Default Rating of 'A' with a Stable Outlook from Fitch Ratings CEO Comments

"Our results reflect the strength of Realty Income's diversified platform and our disciplined approach to capital allocation," said Sumit Roy, Realty Income's Chief Executive Officer. "As demonstrated by our recently announced $6 billion hyperscale data center joint venture and the continued expansion of our Realty Income Investment Management platform, we are leveraging our scale, relationships, and track record to access new sources of growth while maintaining the same disciplined underwriting standards that have defined Realty Income for decades."

"Supported by the resilience of our core portfolio and contributions from these complementary growth channels, we delivered another quarter of solid AFFO per share growth and invested approximately $2.6 billion, or $2.1 billion at our share, during the quarter. As a result, we are pleased to raise our 2026 AFFO per share guidance to $4.44 - $4.45, reflecting approximately 4% growth rate at the midpoint."

Select Financial Results

The following summarizes our select financial results (dollars in millions, except per share data):

Three months ended

June 30,

Six months ended

June 30,

2026

2025

2026

2025

Total revenue

$     1,547.7

$     1,410.4

$     3,096.4

$     2,790.9

Net income available to common stockholders (1)

$       344.0

$       196.9

$       655.7

$       446.7

Net income per share

$         0.37

$         0.22

$         0.70

$         0.50

Funds from operations available to common stockholders (FFO) (2)

$       996.6

$       955.7

$     1,990.2

$     1,893.4

FFO per share 

$         1.07

$         1.06

$         2.13

$         2.11

Normalized funds from operations available to common
  stockholders (Normalized FFO) (2)

$       998.7

$       956.1

$     2,003.0

$     1,894.0

Normalized FFO per share

$         1.07

$         1.06

$         2.14

$         2.11

Adjusted funds from operations available to common stockholders
  (AFFO) (2)

$     1,022.1

$       947.5

$     2,079.7

$     1,897.2

AFFO per share

$         1.09

$         1.05

$         2.22

$         2.11

(1)

The calculation to determine net income available to common stockholders includes provisions for impairment of real estate, provisions for credit losses on loans and financing receivables, gain on sales of real estate, and foreign currency gain and loss. These items can vary from quarter to quarter and can significantly impact net income available to common stockholders and period to period comparisons.

(2)

FFO, Normalized FFO, and AFFO are non-GAAP financial measures. Normalized FFO is based on FFO and adjusted to exclude merger, transaction, and other costs, net and AFFO further adjusts Normalized FFO for unique revenue and expense items. Please see the Glossary for our definitions and explanations of how we utilize these metrics. Please see pages 10 and 11 herein for reconciliations to the most directly comparable GAAP measure.

Dividend Increases 

In June 2026, we announced the 115th consecutive quarterly dividend increase, which is the 135th increase since our listing on the New York Stock Exchange ("NYSE") in 1994. The annualized dividend amount as of June 30, 2026 was $3.252 per share. The amount of monthly dividends paid per share increased 0.7% to $0.812 in the three months ended June 30, 2026, as compared to $0.806 during the three months ended June 30, 2025, representing 74.5% of our diluted AFFO per share of $1.09 during the three months ended June 30, 2026.

Real Estate Portfolio Update

As of June 30, 2026, we owned or held interests in 15,588 properties, which were leased to 1,798 clients doing business in 92 industries. Our diversified portfolio of commercial properties under long-term, net lease agreements is actively managed with a weighted average remaining lease term of approximately 8.6 years. Our portfolio of commercial real estate has historically provided dependable rental revenue supporting the payment of monthly dividends. As of June 30, 2026, portfolio occupancy was 98.8% with 188 properties available for lease or sale, as compared to 98.9% as of March 31, 2026 and 98.6% as of June 30, 2025. Our property-level occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and include properties owned by unconsolidated joint ventures. Below is a summary of our portfolio activity for the periods indicated below:

Changes in Occupancy

Three months ended June 30, 2026

Properties available for lease as of March 31, 2026

172

Lease expirations (1)

480

Re-leases to same client

(385)

Re-leases to new client

(34)

Vacant dispositions

(45)

Properties available for lease as of June 30, 2026

188

Six months ended June 30, 2026

Properties available for lease as of December 31, 2025

173

Lease expirations (1)

800

Re-leases to same client

(605)

Re-leases to new client

(57)

Vacant dispositions

(123)

Properties available for lease as of June 30, 2026

188

(1)

Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.

During the three months ended June 30, 2026, the new Annualized Base Rent on re-leased units was $110.3 million, as compared to the previous annual rent of $107.4 million on the same units, representing a rent recapture rate of 102.7% on the re-leased units. Please see the Glossary for our definition of Annualized Base Rent.

During the six months ended June 30, 2026, the new Annualized Base Rent on re-leased units was $183.5 million, as compared to the previous annual rent of $178.2 million on the same units, representing a rent recapture rate of 103.0% on the re-leased units.

Investment Summary
The following table summarizes our investments for the periods indicated below (dollars in millions):

Three months ended June 30, 2026

Six months ended June 30, 2026

Investment

Pro-Rata
Share(1)

Weighted
Average
Term
(Years) (1)

Number of
Properties

Investment

Pro-
Rata
Share (1)

Weighted
Average
Term
(Years) (1)

Number of
Properties

Acquisitions

U.S. wholly-owned

$     887.3

$  887.3

10.8

52

$   1,259.7

$ 1,259.7

10.5

135

U.S. Core Plus Fund

672.5

180.1

12.2

37

843.9

246.0

11.6

58

Europe wholly-owned

243.9

243.9

9.7

5

1,000.0

1,000.0

6.7

47

Non-wholly owned(2)

—

—

—

—

280.1

238.5

14.1

6

Total real estate acquisitions(3)

$   1,803.7

$ 1,311.3

10.7

94

$   3,383.7

$ 2,744.2

9.4

246

Initial Weighted Average Cash
  Yield(4)

6.4 %

6.5 %

Real estate properties under
  development

U.S. wholly-owned

$       44.2

$    44.2

16.6

24

$       74.5

$    74.5

17.1

43

Europe wholly-owned

17.2

17.2

12.2

12

51.3

51.3

13.9

20

Non-wholly owned(2)

74.0

73.3

7.6

14

165.4

164.1

8.7

29

Total real estate properties
  under development(3)

$     135.4

$  134.7

11.1

50

$     291.2

$  289.9

11.8

92

Initial Weighted Average Cash
  Yield(4)

7.6 %

7.5 %

Other investments(5)

U.S. wholly-owned

$     513.3

$  513.3

4.0

—

$   1,233.1

$ 1,233.1

3.8

—

Europe wholly-owned

93.4

93.4

2.8

—

345.1

345.1

3.5

—

Other wholly-owned

22.0

22.0

1.7

—

82.0

82.0

1.9

—

Total other investments

$     628.7

$  628.7

3.8

—

$   1,660.2

$ 1,660.2

3.7

—

Initial Weighted Average Cash
  Yield(4)

9.2 %

8.3 %

Total investments

$   2,567.8

$ 2,074.7

8.1

144

$   5,335.1

$ 4,694.3

7.2

338

Initial Weighted Average Cash
  Yield(4)

7.3 %

7.2 %

Supplementary Information:

Total U.S. and other volume

$ 1,677.9

$ 3,011.4

Initial Weighted Average Cash
  Yield(4)

7.4 %

7.4 %

Total Europe volume

$  396.8

$ 1,682.9

Initial Weighted Average Cash
  Yield(4)

7.0 %

7.0 %

Investment Grade Clients(6)

38 %

40 %

Initial Weighted Average Cash
  Yield - U.S. Core Plus Fund(4)

6.0 %

5.8 %

Initial Weighted Average Cash
  Yield - U.S. Wholly-owned(4)

7.5 %

7.5 %

(1)

Reflects adjustments for our Pro-Rata Share based on our proportionate economic ownership of our joint ventures (which adds our economic ownership percentage of unconsolidated entities and deducts noncontrolling interests). Please see the Glossary for our definition of Pro-Rata Share for more information.

(2)

Non-wholly owned represents U.S. and European investments not 100% owned by Realty Income, excluding the U.S. Core Plus Fund.

(3)

For the three months ended June 30, 2026, our clients occupying the new properties are 34.0% retail, 65.0% industrial, and 1.0% other property types based on Cash Income. For the six months ended June 30, 2026, our clients occupying the new properties are 50.3% retail, 47.8% industrial, and 1.9% other property types based on Cash Income. Please see the Glossary for our definition of Cash Income.

(4)

Initial Weighted Average Cash Yield is a supplemental operating measure. Cash Income used in the calculation of Initial Weighted Average Cash Yield for investments for the three and six months ended June 30, 2026 includes $1.4 million and $3.8 million, respectively, received as settlement credits as the reimbursement of free rent periods. Please see the Glossary for our definitions of Initial Weighted Average Cash Yield and Cash Income.

(5)

Represents various loans across the U.S. and Europe, including construction loans in Mexico related to Realty Income's strategic partnership with GIC, as well as loans associated with a data center joint venture.

(6)

Represents approximate percentage of annualized cash income generated by investments from Investment Grade Clients at the date of investment. Please see the Glossary for our definition of Investment Grade Clients.

Same Store Rental Revenue
The following summarizes our Same Store Rental Revenue for 14,619 properties under lease for the three and six months ended June 30, 2026 and 2025 (dollars in millions):

Three months ended

June 30,

Six months ended

June 30,

% Increase

2026

2025

2026

2025

Three Months

Six Months

Same Store Rental Revenue

$    1,169.2

$    1,155.5

$    2,335.2

$    2,311.7

1.2 %

1.0 %

For purposes of comparability, Same Store Rental Revenue is presented on a constant currency basis using the applicable exchange rate as of June 30, 2026. Same Store Rental Revenue also includes our Pro-Rata Share of rental revenue from properties owned by unconsolidated joint ventures and amounts attributable to noncontrolling interests based on their respective ownership percentages. Please see the Glossary to see definitions of our Same Store Pool and Same Store Rental Revenue.

Property Dispositions
The following summarizes our property dispositions (dollars in millions):

Three months ended June 30, 2026

Six months ended June 30, 2026

Properties sold

80

177

Net sales proceeds

$                                              160.7

$                                                348.6

Gain on sales of real estate

$                                                38.3

$                                                 73.9

Liquidity and Capital Markets

Liquidity
As of June 30, 2026, we had $3.5 billion total available liquidity at our Pro-Rata Share(1), comprised of the components summarized below (dollars in millions):

Cash and cash equivalents (2)

$                                            534.6

Availability under credit facilities (3)

3,152.7

Unsettled At-the-Market ("ATM") forwards (4)

1,228.3

Less: commercial paper borrowings

(1,441.4)

Total available liquidity at our Pro-Rata Share

$                                          3,474.2

(1)

 Please see the Glossary for our definition of Pro-Rata Share for more information.

(2)

Reflects adjustments based on our proportionate economic ownership of our joint ventures. Calculated as cash and cash equivalents per the consolidated balance sheet of $552.6 million, plus our Pro-Rata Share of unconsolidated entities cash of $23.4 million, less adjustments allocable to noncontrolling interests of $41.4 million.

(3)

Represents our availability under the $4.0 billion revolving credit facility and our Pro-Rata Share of availability under the $1.38 billion Fund credit facility, which includes a $1.0 billion revolving facility, and a $380.0 million term loan which was fully drawn as of June 30, 2026.

 (4)

As of June 30, 2026, we had outstanding forward-sale agreements under our ATM program for a total of 21.1 million shares of common stock, which have been executed at a weighted average price of $58.34 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates).

Capital Raising
During the three months ended June 30, 2026, we raised $843.0 million of proceeds from the sale of common stock at a weighted average price of $61.52 per share, primarily through the sale of 13.7 million shares of common stock pursuant to forward sale agreements under our ATM program. As of August 5, 2026, approximately 22.5 million shares of common stock subject to ATM forward sale agreements remain unsettled, of which 1.4 million shares were sold in July 2026, representing approximately $1.3 billion in expected net proceeds and a weighted average initial gross price of $60.34 per share. ATM net sale proceeds assume full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates.

On July 1, 2026, our U.S. Core Plus Fund called $265.7 million of capital from third-party investors, resulting in an indirect ownership of 23.6% in the Fund.

In July 2026, we issued €600.0 million of 3.625% senior unsecured notes due July 2032 (the "2032 Notes"). The public offering price for the 2032 Notes was 99.518% of the principal amount for an effective annual yield to maturity of 3.716%.

In April 2026, we issued $800.0 million of 4.750% senior unsecured notes due April 2033 (the "April 2033 Notes"). The public offering price for the April 2033 Notes was 98.261% of the principal amount for an effective yield to maturity of 5.047%. Interest is paid semi-annually. In connection with the issuance, we executed a $500 million U.S. Dollar-to-Euro 7-year cross currency swap, resulting in approximately €436 million of proceeds and an effective fixed-rate, Euro-denominated yield to maturity of approximately 4.07% and coupon rate of 3.81%. On a combined basis, the Notes and related swap resulted in an effective blended yield to maturity of approximately 4.44% and blended coupon rate of 4.16%.

Expanded Revolving Credit Facilities and Commercial Paper Programs
In July 2026, we closed on the recast and expansion of our $5.5 billion multicurrency unsecured revolving credit facilities, upsized from the prior $4.0 billion capacity. In addition, we also announced an expanded combined capacity of $5.5 billion for our global commercial paper programs, upsized from the prior $3.0 billion combined capacity.

'A' Credit Rating from Fitch Ratings
On August 3, 2026, Fitch Ratings assigned Realty Income a Long-Term Issuer Default Rating of 'A' with a Stable Outlook. In its press release, Fitch Ratings cited Realty Income's long operating history and cycle-tested performance, durable cash flow, portfolio diversification, and strong access to multiple sources of capital as key drivers supporting its 'A' rating.

Guidance

Summarized below are approximate estimates of the key components of our 2026 earnings guidance (with 2026 actual results for comparison):

Revised 2026
Guidance

Prior 2026
Guidance(1)

YTD Actuals at 
June 30, 2026

Net income per share(2)

$1.59 - $1.60

$1.60 - $1.63

$0.70

Real estate depreciation per share

$2.66

$2.65

$1.36

Other adjustments per share(3)

$0.19

$0.16

$0.16

AFFO per share

$4.44 - $4.45

$4.41 - $4.44

$2.22

Same store rent growth

1.1% - 1.3%

1.0% - 1.3%

1.0 %

Occupancy

Approx 98.5%

Approx 98.5%

98.8 %

Cash G&A expenses (% of total Gross Asset Value)(4)(5)

21 - 22 bps

20 - 23 bps

11 bps

Property expenses (non-reimbursable) (% of total
revenue)(6)

Approx 1.5%

Approx 1.5%

1.4 %

Income tax expenses

$100 - $110 million

$100 - $110 million

$52 million

Investment volume (at 100%)

$10.0 billion

$9.5 billion

$5.3 billion

Lease termination income

$45 - $50 million

$45 - $50 million

$41 million

(1)

As issued on May 6, 2026.

(2)

Net income per share excludes future impairment and foreign currency or derivative gains or losses due to the inherent unpredictability of forecasting these items.

(3)

Includes net adjustments for gains or losses on sales of properties, impairments, and merger, transaction, and other non-recurring costs.

(4)

Cash G&A represents 'General and administrative' expenses as presented in our consolidated statements of income, less share-based compensation costs. 

(5)

Please see the Glossary for our definition of Gross Asset Value. 

(6)

Total revenue excludes client reimbursements.

Conference Call Information

In conjunction with the release of our operating results, we will host a conference call on August 5, 2026 at 2:00 p.m. PDT to discuss the operating results. To access the conference call, dial (833) 816-1264 (United States) or (412) 317-5632 (International). When prompted, please ask for the Realty Income conference call.

A telephone replay of the conference call can also be accessed by calling (855) 669-9658 (United States) or (412) 317-0088 (International) and entering the conference ID 5929348. The telephone replay will be available through August 12, 2026.

A live webcast will be available in listen-only mode by clicking on the webcast link on the company's home page at www.realtyincome.com. A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. No access code is required for this replay.

Supplemental Materials

Supplemental Operating and Financial Data for the three and six months ended June 30, 2026 is available on our corporate website at www.realtyincome.com/investors/quarterly-and-annual-results.

About Realty Income

Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of June 30, 2026, we have a portfolio of over 15,500 properties in all 50 U.S. states, the United Kingdom ("U.K."), and eight other countries in Europe. We are known as "The Monthly Dividend Company®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 673 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having increased our dividend for over 31 consecutive years. Additional information about the company can be found at www.realtyincome.com. Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (www.realtyincome.com/investors), press releases, SEC filings and public conference calls and webcasts.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimate," "anticipate," "assume," "expect," "believe," "intend," "continue," "should," "may," "likely," "plan," "seek," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of our business, strategy, plans, and the intentions of management; joint ventures, partnerships, and portfolio including management thereof; our platform; growth and capital strategies including our private capital business, investment pipeline and intentions to acquire or dispose of properties (including geographies, timing, partners, clients and terms); re-leases, re-development and speculative development of properties and expenditures related thereto; operations and results; guidance; our share repurchase program; settlement of shares of common stock sold pursuant to forward sale confirmations under our ATM program; dividends, including the amount, timing and payments of dividends; and macroeconomic and other business trends, including interest rates and trends in the market for long-term leases of freestanding, single-client properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about us which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms, structure and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in real estate, private capital, credit and mezzanine investments, and joint ventures or co-investment ventures, including solvency, defaults under leases, bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the threat and outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; and the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships and other arrangements; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release may not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made or to reflect the occurrence of unanticipated events.

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts) (unaudited)

Three months ended

June 30,

Six months ended

June 30,

2026

2025

2026

2025

REVENUE

Rental (including reimbursements) (1)

$    1,426,467

$    1,338,188

$    2,867,284

$    2,651,245

Interest income on financing receivables

32,024

32,382

64,154

65,017

Interest and dividend income on loans and preferred equity
investments

88,517

39,480

158,627

74,216

Other

703

328

6,373

405

Total revenue

1,547,711

1,410,378

3,096,438

2,790,883

EXPENSES

Depreciation and amortization

644,677

647,849

1,274,952

1,256,784

Interest

312,083

283,824

604,023

552,198

Property (including reimbursements)

112,439

107,422

229,282

214,103

General and administrative

57,605

49,329

116,490

93,373

Provisions for impairment of real estate

54,185

142,255

144,350

239,673

Provisions for credit losses on loans and financing receivables

7,258

1,108

46,361

20,279

Merger, transaction, and other costs, net

2,058

331

12,845

610

Total expenses

1,190,305

1,232,118

2,428,303

2,377,020

Gain on sales of real estate

38,260

38,566

73,902

61,103

Foreign currency and derivative loss, net

(8,824)

(4,388)

(25,844)

(6,933)

Equity in earnings of unconsolidated entities

2,204

3,269

4,873

7,626

Other income, net

7,275

7,369

22,385

14,536

Income before income taxes

396,321

223,076

743,451

490,195

Income taxes

(25,808)

(24,065)

(52,003)

(39,722)

Net income

370,513

199,011

691,448

450,473

Net income attributable to noncontrolling interests

(26,558)

(2,092)

(35,727)

(3,739)

Net income available to common stockholders

$      343,955

$      196,919

$      655,721

$      446,734

Funds from operations available to common stockholders (FFO)

$      996,600

$      955,748

$    1,990,201

$    1,893,403

Normalized funds from operations available to common
  stockholders (Normalized FFO)

$      998,658

$      956,079

$    2,003,046

$    1,894,013

Adjusted funds from operations available to common
  stockholders (AFFO)

$    1,022,120

$      947,491

$    2,079,673

$    1,897,207

Amounts available to common stockholders per common share:

Net income per common share, basic and diluted

$           0.37

$           0.22

$          0.70

$          0.50

FFO per common share:

Basic

$           1.07

$           1.06

$          2.14

$          2.11

Diluted

$           1.07

$           1.06

$          2.13

$          2.11

Normalized FFO per common share:

Basic

$           1.07

$           1.06

$          2.15

$          2.11

Diluted

$           1.07

$           1.06

$          2.14

$          2.11

AFFO per common share:

Basic

$           1.10

$           1.05

$          2.23

$          2.11

Diluted

$           1.09

$           1.05

$          2.22

$          2.11

Cash dividends paid per common share

$        0.8115

$        0.8055

$       1.6215

$       1.6015

(1)

Includes client reimbursements of $91.1 million and $87.4 million for the three months ended June 30, 2026 and 2025, respectively, and $188.6 million and $174.8 million for the six months ended June 30, 2026 and 2025, respectively. Additionally, includes reserves to rental revenue, exclusive of non-cash reserves, of $4.6 million and $10.9 million for the three months ended June 30, 2026 and 2025, respectively, and $11.0 million and $17.1 million for the six months ended June 30, 2026 and 2025, respectively.

FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FUNDS FROM OPERATIONS (Normalized FFO)
(in thousands, except per share amounts) (unaudited)

FFO and Normalized FFO are non-GAAP financial measures. Please see the Glossary for our definitions and
explanations of how we utilize these metrics.

Three months ended

June 30,

Six months ended

June 30,

2026

2025

2026

2025

Net income available to common stockholders

$      343,955

$    196,919

$       655,721

$       446,734

Depreciation and amortization

644,677

647,849

1,274,952

1,256,784

Depreciation of furniture, fixtures and equipment

(802)

(604)

(1,589)

(1,142)

Provisions for impairment of real estate

54,185

142,254

144,350

239,672

Gain on sales of real estate

(38,260)

(38,566)

(73,902)

(61,103)

Proportionate share of adjustments for unconsolidated entities

9,021

9,085

18,499

15,340

FFO adjustments allocable to noncontrolling interests

(16,176)

(1,189)

(27,830)

(2,882)

FFO available to common stockholders

$      996,600

$    955,748

$     1,990,201

$     1,893,403

FFO allocable to dilutive noncontrolling interests

2,344

2,417

4,377

4,842

Diluted FFO

$      998,944

$    958,165

$     1,994,578

$     1,898,245

FFO available to common stockholders

$      996,600

$    955,748

$     1,990,201

$     1,893,403

Merger, transaction, and other costs, net

2,058

331

12,845

610

Normalized FFO available to common stockholders

$      998,658

$    956,079

$     2,003,046

$     1,894,013

Normalized FFO allocable to dilutive noncontrolling interests

2,344

2,417

4,377

4,842

Diluted Normalized FFO

$    1,001,002

$    958,496

$     2,007,423

$     1,898,855

FFO per common share:

Basic

$           1.07

$        1.06

$           2.14

$           2.11

Diluted

$           1.07

$        1.06

$           2.13

$           2.11

Normalized FFO per common share:

Basic

$           1.07

$        1.06

$           2.15

$           2.11

Diluted

$           1.07

$        1.06

$           2.14

$           2.11

Distributions paid to common stockholders

$      756,779

$    727,450

$     1,514,811

$     1,439,274

FFO after distributions

$      239,821

$    228,298

$       475,390

$       454,129

Normalized FFO after distributions

$      241,879

$    228,629

$       488,235

$       454,739

Weighted average number of common shares used for FFO and
  Normalized FFO:

Basic

932,307

902,966

932,133

897,338

Diluted

937,344

906,398

937,117

900,797

ADJUSTED FUNDS FROM OPERATIONS (AFFO)
(in thousands, except per share amounts) (unaudited)

AFFO is a non-GAAP financial measure. Please see the Glossary for our definition and an explanation of how we utilize
this metric.

Three months ended

June 30,

Six months ended

June 30,

2026

2025

2026

2025

Net income available to common stockholders

$      343,955

$    196,919

$      655,721

$      446,734

Cumulative adjustments to calculate Normalized FFO (1)

654,703

759,160

1,347,325

1,447,279

Normalized FFO available to common stockholders

998,658

956,079

2,003,046

1,894,013

Debt-related non-cash items:

Amortization of net debt discounts and deferred financing costs

17,696

8,257

33,074

14,890

Amortization of acquired interest rate swap value (2)

1,530

3,555

3,061

7,266

Capital expenditures from operating properties:

Leasing costs and commissions

(1,944)

(1,985)

(3,298)

(2,865)

Recurring capital expenditures

—

(221)

(170)

(240)

Other non-cash items:

Provisions for credit losses on loans and financing receivables

7,258

1,109

46,361

20,280

Amortization of share-based compensation

9,268

8,110

20,651

14,009

Straight-line rent and expenses, net

(39,536)

(30,226)

(79,046)

(74,038)

Amortization of above and below-market leases, net

16,883

6,287

30,763

21,613

Deferred tax expense

281

413

1,718

309

Proportionate share of adjustments for unconsolidated entities

(320)

(1,678)

(774)

(1,641)

Executive severance charge (3)

255

—

1,846

—

Other adjustments (4)

12,091

(2,209)

22,441

3,611

AFFO available to common stockholders

$    1,022,120

$    947,491

$    2,079,673

$    1,897,207

AFFO allocable to dilutive noncontrolling interests

2,338

2,401

4,772

4,802

Diluted AFFO

$    1,024,458

$    949,892

$    2,084,445

$    1,902,009

AFFO per common share:

Basic

$           1.10

$        1.05

$          2.23

$          2.11

Diluted

$           1.09

$        1.05

$          2.22

$          2.11

Distributions paid to common stockholders

$      756,779

$    727,450

$    1,514,811

$    1,439,274

AFFO after distributions

$      265,341

$    220,041

$      564,862

$      457,933

Weighted average number of common shares used for AFFO:

Basic

932,307

902,966

932,133

897,338

Diluted

937,344

906,398

937,117

900,797

(1)

See Normalized FFO calculations on page 10 for reconciling items.

(2)

Includes the amortization of the purchase price allocated to interest rate swaps acquired in our merger with Spirit Realty Capital, Inc.

(3)

The executive severance charge reflects certain benefits related to our Chief Legal Officer's expected departure in September 2026.

(4)

Includes primarily non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, obligations related to financing lease liabilities, and adjustments allocable to noncontrolling interests.

HISTORICAL FFO AND AFFO
(in thousands, except per share amounts) (unaudited)

For the three months ended June 30,

2026

2025

2024

2023

2022

Net income available to common stockholders

$    343,955

$    196,919

$    256,804

$    195,415

$    223,207

Depreciation and amortization, net of furniture,
  fixtures and equipment

643,875

647,245

604,960

471,981

408,948

Provisions for impairment of real estate

54,185

142,254

87,204

29,815

7,691

Gain on sales of real estate

(38,260)

(38,566)

(25,153)

(7,824)

(40,572)

Proportionate share of adjustments for unconsolidated
  entities

9,021

9,085

6,380

(465)

9,860

FFO adjustments allocable to noncontrolling interests

(16,176)

(1,189)

(1,062)

(937)

(319)

FFO available to common stockholders

$    996,600

$    955,748

$    929,133

$    687,985

$    608,815

Merger, transaction, and other costs, net

2,058

331

2,754

341

2,729

Normalized FFO available to common stockholders

$    998,658

$    956,079

$    931,887

$    688,326

$    611,544

FFO per diluted share

$         1.07

$         1.06

$         1.07

$         1.02

$         1.01

Normalized FFO per diluted share

$         1.07

$         1.06

$         1.07

$         1.02

$         1.02

AFFO available to common stockholders

$  1,022,120

$    947,491

$    921,074

$    671,737

$    583,728

AFFO per diluted share

$         1.09

$         1.05

$         1.06

$         1.00

$         0.97

Cash dividends paid per common share

$      0.8115

$      0.8055

$      0.7765

$      0.7650

$      0.7410

Weighted average diluted shares outstanding - FFO,
  Normalized FFO, and AFFO

937,344

906,398

872,520

676,388

603,091

For the six months ended June 30,

2026

2025

2024

2023

2022

Net income available to common stockholders

$    655,721

$    446,734

$    386,500

$    420,431

$    422,576

Depreciation and amortization, net of furniture,
  fixtures and equipment

1,273,363

1,255,642

1,185,401

922,916

812,232

Provisions for impairment of real estate

144,350

239,672

175,401

42,993

14,729

Gain on sales of real estate

(73,902)

(61,103)

(41,727)

(12,103)

(50,728)

Proportionate share of adjustments for unconsolidated
  entities

18,499

15,340

11,054

(465)

12,095

FFO adjustments allocable to noncontrolling interests

(27,830)

(2,882)

(1,813)

(1,496)

(673)

FFO available to common stockholders

$  1,990,201

$  1,893,403

$  1,714,816

$  1,372,276

$  1,210,231

Merger, transaction, and other costs, net

12,845

610

96,858

1,648

9,248

Normalized FFO available to common stockholders

$  2,003,046

$  1,894,013

$  1,811,674

$  1,373,924

$  1,219,479

FFO per diluted share

$         2.13

$         2.11

$         2.01

$         2.05

$         2.02

Normalized FFO per diluted share

$         2.14

$         2.11

$         2.12

$         2.06

$         2.04

AFFO available to common stockholders

$  2,079,673

$  1,897,207

$  1,783,945

$  1,322,466

$  1,163,826

AFFO per diluted share

$         2.22

$         2.11

$         2.09

$         1.98

$         1.94

Cash dividends paid per common share

$      1.6215

$      1.6015

$      1.5460

$      1.5165

$      1.4805

Weighted average diluted shares outstanding - FFO,
  Normalized FFO and AFFO

937,117

900,797

854,806

669,903

599,201

ADJUSTED EBITDAre
(dollars in thousands) (unaudited)

Three months ended

June 30, 2026

Net income

$              370,513

Interest

312,083

Income taxes

25,808

Depreciation and amortization

644,677

Executive severance charge

255

Provisions for impairment of real estate

54,185

Provisions for credit losses on loans and financing receivables

7,258

Merger, transaction, and other costs, net

2,058

Gain on sales of real estate

(38,260)

Foreign currency and derivative loss, net

8,824

Equity in earnings of unconsolidated entities

(2,204)

Adjusted EBITDAre (1)

$           1,385,197

Annualized Adjusted EBITDAre (1)

$           5,540,788

Annualized Pro Forma Adjustments

$              111,889

Annualized Pro Forma Adjusted EBITDAre (1)

$           5,652,677

Total debt per the consolidated balance sheet, excluding deferred financing costs and net discounts

$          30,990,552

Less: Cash and cash equivalents

(552,648)

Net Debt

$          30,437,904

Less: Expected proceeds from unsettled forward equity (2)

(1,228,280)

Net Debt - Inclusive of Unsettled ATM Forward Equity

$          29,209,624

Net Debt/Annualized Pro Forma Adjusted EBITDAre (1)

                     5.4x 

Net Debt/Annualized Pro Forma Adjusted EBITDAre - Inclusive of Unsettled ATM Forward Equity(1)

                     5.2x 

(1)

Adjusted EBITDAre, Annualized Adjusted EBITDAre, Annualized Pro Forma Adjusted EBITDAre, Net Debt/Annualized Pro Forma Adjusted EBITDAre, and Net Debt/Annualized Pro Forma Adjusted EBITDAre - Inclusive of Unsettled ATM Forward Equity are non-GAAP financial measures. Please see the Glossary for our definitions of these terms and an explanation of how we utilize these metrics.

(2)

As of June 30, 2026, we had outstanding forward sale agreements under our ATM program for a total of 21.1 million shares of common stock, which have been executed at a weighted average forward price of $58.34 per share (assuming full physical settlement of all outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with respect to settlement dates).

The Annualized Pro Forma Adjustments, which include transaction accounting adjustments in accordance with U.S. GAAP, consist of adjustments to incorporate Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDAre calculation for the period indicated below (in thousands):

Three months ended

June 30, 2026

Annualized pro forma adjustments from investments acquired or stabilized

$               121,946

Annualized pro forma adjustments from investments disposed

(10,057)

Annualized Pro Forma Adjustments

$               111,889

Adjusted Free Cash Flow
(in thousands) (unaudited)

Adjusted Free Cash Flow and Annualized Adjusted Free Cash Flow are non-GAAP financial measures. Please see the
Glossary for our definition and an explanation of how we utilize these metrics. 

Six months ended June 30,

2026

2025

Net cash provided by operating activities

$                   2,019,585

$                   1,848,185

Changes in net working capital

33,518

4,203

Capital expenditures (1)

(50,406)

(32,838)

Distributions paid to common stockholders

(1,514,811)

(1,439,274)

Distributions paid to noncontrolling interests

(17,750)

(5,976)

Merger, transaction, and other costs, net

12,845

610

Adjusted Free Cash Flow

$                     482,981

$                     374,910

Annualized Adjusted Free Cash Flow

$                     965,962

$                     749,820

(1)

Excludes capital expenditures which directly generate incremental rental revenue on our leases.

Reconciliation of Same Store Rental Revenue to Rental Revenue (Including Reimbursements)
(in thousands) (unaudited)

Same Store Rental Revenue is a non-GAAP financial measure. Please see the Glossary for our definition and an
explanation of how we utilize this metric.

Three months ended

June 30,

Six months ended

June 30,

2026

2025

2026

2025

Rental revenue (including reimbursements)

$     1,426,467

$     1,338,188

$     2,867,284

$     2,651,245

Constant currency adjustment (1)

(4,172)

(1,064)

(9,507)

10,213

Straight-line rent and other non-cash adjustments

4,017

570

4,237

(285)

Contractually obligated reimbursements by our clients

(88,423)

(86,236)

(181,715)

(171,379)

Revenue from excluded properties (2)

(138,254)

(71,273)

(250,242)

(133,590)

Other excluded revenue (3)

(1,780)

(9,503)

(42,110)

(10,769)

Revenue from unconsolidated entities (4)

27,347

29,111

54,119

54,870

Revenue attributable to noncontrolling interests (5)

(56,015)

(44,265)

(106,904)

(88,604)

Same Store Rental Revenue

$     1,169,187

$     1,155,528

$     2,335,162

$     2,311,701

(1)

For purposes of comparability, Same Store Rental Revenue is presented on a constant currency basis using the applicable exchange rate as of June 30, 2026. 

(2)

Please see the Glossary for our definitions of Same Store Pool and Same Store Rental Revenue.

(3)

"Other excluded revenue" primarily consists of reimbursements related to lease termination fees and other settlement income.

(4)

Represents our Pro-Rata Share of rental revenue from properties owned by unconsolidated joint ventures.

(5)

Represents the portion of rental revenue attributable to noncontrolling interest based on their pro-rata ownership.

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts) (unaudited)

June 30, 2026

December 31, 2025

ASSETS

Real estate held for investment, at cost:

Land

$                    18,906,217

$                    18,368,029

Buildings and improvements

45,672,483

43,824,410

Total real estate held for investment, at cost

64,578,700

62,192,439

Less accumulated depreciation and amortization

(9,466,261)

(8,778,536)

Real estate held for investment, net

55,112,439

53,413,903

Real estate and lease intangibles held for sale, net

153,134

91,784

Cash and cash equivalents

552,648

434,842

Accounts receivable, net

1,134,987

1,053,487

Lease intangible assets, net

5,616,706

5,717,241

Goodwill

4,932,199

4,932,199

Investment in loans and financing receivables, net

4,888,860

3,271,002

Investment in unconsolidated entities

1,348,453

1,256,456

Other assets, net

2,702,049

2,624,698

Total assets

$                    76,441,475

$                    72,795,612

LIABILITIES AND EQUITY

Distributions payable

$                        259,252

$                        255,171

Accounts payable and accrued expenses

1,119,132

1,060,969

Lease intangible liabilities, net

1,457,071

1,493,958

Other liabilities

1,020,290

1,066,809

Revolving credit facilities and commercial paper

2,762,585

2,023,414

Term loans, net

2,760,395

1,701,615

Mortgages payable, net

37,085

37,761

Notes payable, net

25,091,588

25,031,947

Total liabilities

$                    34,507,398

$                    32,671,644

Stockholders' equity:

Common stock and paid in capital, par value $0.01 per share,
1,300,000 shares authorized, 946,202 and 933,975 shares issued
and outstanding as of June 30, 2026 and December 31, 2025,
respectively

$                    50,845,906

$                    49,861,660

Distributions in excess of net income

(11,391,151)

(10,527,984)

Accumulated other comprehensive income

94,802

105,019

Total stockholders' equity

$                    39,549,557

$                    39,438,695

Noncontrolling interests

2,384,520

685,273

Total equity

$                    41,934,077

$                    40,123,968

Total liabilities and equity

$                    76,441,475

$                    72,795,612

GLOSSARY

Adjusted EBITDAre. The National Association of Real Estate Investment Trusts ("Nareit") established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it believed would provide investors with a consistent measure to help make investment decisions among certain REITs. Our definition of "Adjusted EBITDAre" is generally consistent with the Nareit definition, other than our adjustment to remove foreign currency and derivative gain and loss and merger, transaction, and other costs, net. We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter as earnings (net income) before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) executive severance charge, (v) provisions for impairment of real estate, (vi) provisions for credit losses on loans and financing receivables, (vii) merger, transaction, and other costs, net, (viii) gain on sales of real estate, (ix) foreign currency and derivative gain and loss, net, and (x) equity in earnings of unconsolidated entities. Our Adjusted EBITDAre may not be comparable to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful measure of a REIT's performance because it provides a view of our operating performance, analyzes our ability to meet interest payment obligations before the effects of income tax, depreciation and amortization expense, provisions for impairment, provisions for credit losses on loans and financing receivables, gain on sales of real estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-cash items that industry observers believe are less relevant to evaluating the operating performance of a company. In addition, EBITDAre is widely followed by industry analysts, lenders, investors, rating agencies, and others as a means of evaluating the operating performance of business activities prior to servicing debt obligations. Adjusted EBITDAre should be considered along with, but not as an alternative to, net income as a measure of our operating performance.

Adjusted Free Cash Flow, a non-GAAP financial measure, is defined as net cash provided by operating activities, less certain capital expenditures, distributions paid to common stockholders and noncontrolling interests, merger, transaction, and other costs, net, and changes in net working capital. We believe adjusted free cash flow to be a useful liquidity measure for us and our investors by helping to evaluate our ability to generate cash beyond what is needed to fund capital expenditures, debt service and other obligations. Notwithstanding cash on hand and incremental borrowing capacity, adjusted free cash flow reflects our ability to grow our business through investments and acquisitions, as well as our ability to return cash to shareholders through dividends. Adjusted free cash flow is not considered under generally accepted accounting principles to be a primary measure of an entity's residual cash flow available for discretionary spending, and accordingly should not be considered an alternative to operating income, net income, or amounts shown in our consolidated statements of cash flows.

Adjusted Funds From Operations (AFFO), a non-GAAP financial measure, is defined as FFO adjusted for unique revenue and expense items, which we believe are not as pertinent to the measurement of our ongoing operating performance. Most companies in our industry use a similar measurement to AFFO, but they may use the term "CAD" (for Cash Available for Distribution) or "FAD" (for Funds Available for Distribution). We believe AFFO provides useful information to investors because it is a widely accepted industry measure of the operating performance of real estate companies used by the investment community. In particular, AFFO provides an additional measure to compare the operating performance of different REITs without having to account for differing depreciation assumptions and other unique revenue and expense items which are not pertinent to measuring a particular company's ongoing operating performance. Therefore, we believe that AFFO is an appropriate supplemental performance metric, and that the most appropriate GAAP performance metric to which AFFO should be reconciled is net income available to common stockholders.

Annualized Adjusted EBITDAre, a non-GAAP financial measure, is calculated by multiplying Adjusted EBITDAre for the applicable quarter by four. Management believes the use of an Annualized Adjusted EBITDAre metric is meaningful because it represents our run rate operating performance for the period presented.

Annualized Adjusted Free Cash Flow, a non-GAAP financial measure, is calculated by annualizing Adjusted Free Cash Flow.

Annualized Base Rent represents our Pro-Rata Share of contractual monthly base rent for all leases in place and exchange rates as of the balance sheet date, multiplied by 12, and excludes percentage rent and income on loans and preferred equity investments. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. Total annualized base rent has not been reduced to reflect reserves recorded as reductions to GAAP rental revenue in the periods presented. We believe total annualized base rent is a useful supplemental operating measure, as it excludes properties that were no longer owned at the balance sheet date and includes the annualized rent from properties acquired during the quarter.

Annualized Pro Forma Adjusted EBITDAre, a non-GAAP financial measure, is defined as Annualized Adjusted EBITDAre, which includes transaction accounting adjustments in accordance with U.S. GAAP, adjusted to incorporate Adjusted EBITDAre from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of during the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter. Our calculation includes all adjustments consistent with the requirements to present Annualized Adjusted EBITDAre on a pro forma basis in accordance with Article 11 of Regulation S-X. The ratio of our net debt to our Annualized Pro Forma Adjusted EBITDAre is also used to determine the vesting of performance share awards granted to our executive officers.

Cash Income represents expected rent for real estate acquisitions as well as rent to be received upon completion of the properties under development. For unconsolidated entities and consolidated entities with noncontrolling interests, this represents our Pro-Rata Share of the cash income. For loans receivable and preferred equity investments, this represents earned interest income and preferred dividend income, respectively.

Funds From Operations (FFO), a non-GAAP financial measure, consistent with the Nareit definition, is net income available to common stockholders, plus depreciation and amortization of real estate assets, plus provisions for impairments of depreciable real estate assets, and reduced by gain on property sales. Presentation of the information regarding FFO and AFFO is intended to assist the reader in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and AFFO in the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO and AFFO should not be considered measures of liquidity, of our ability to make cash distributions, or of our ability to pay interest payments. We consider FFO to be an appropriate supplemental measure of a REIT's operating performance as it is based on a net income analysis of property portfolio performance that adds back items such as depreciation and impairments for FFO. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT using historical accounting for depreciation could be less informative. The use of FFO is recommended by the REIT industry as a supplemental performance measure. In addition, FFO is used as a measure of our compliance with the financial covenants of our credit facility.

Gross Asset Value is total assets before accumulated depreciation and amortization.

Initial Weighted Average Cash Yield for acquisitions and properties under development is computed as Cash Income for the first twelve months following the acquisition date, divided by the total cost of the property (including all expenses borne by us), and includes our Pro-Rata Share of Cash Income from unconsolidated joint ventures and consolidated entities with noncontrolling interests. Initial weighted average cash yield for loans receivable and preferred equity investments is computed using the Cash Income for the first twelve months following the acquisition date, divided by the total cost of the investment.

Investment Grade Clients are our clients, our clients that are subsidiaries or affiliates of companies, and credit investments secured with a real estate property leased to a tenant, that as of the balance sheet date, have a credit rating of Baa3/BBB- or higher from one of the three major rating agencies (Moody's/S&P/Fitch).

Net Debt/Annualized Pro Forma Adjusted EBITDAre, a ratio used by management as a measure of leverage, is calculated as net debt (which we define as total debt, excluding deferred financing costs and net discounts, less cash and cash equivalents), divided by Annualized Pro Forma Adjusted EBITDAre.

Net Debt/Annualized Pro Forma Adjusted EBITDAre - Inclusive of Unsettled ATM Forward Equity, a ratio used by management as a measure of leverage, is calculated as net debt inclusive of unsettled ATM forward equity (which we define as total debt, excluding deferred financing costs and net discounts, less cash and cash equivalents, less expected proceeds from unsettled ATM forward equity as of the balance sheet date), divided by Annualized Pro Forma Adjusted EBITDAre.

Normalized Funds from Operations Available to Common Stockholders (Normalized FFO), a non-GAAP financial measure, is FFO excluding merger, transaction, and other costs, net.

Pro-Rata Share represents our proportionate economic ownership of our joint ventures, which is derived by applying our economic ownership percentage of each such joint venture to calculate our proportionate share of the relevant line item information being presented, and aggregating that information for all such joint ventures. For balance sheet information and other capital-based metrics, we apply our economic ownership percentage as of the end of the applicable period being presented, and for activity- and earnings-based metrics, we apply our weighted average economic ownership percentage for the applicable period being presented, unless otherwise specified.

We believe this form of presentation offers insights into the financial performance and condition of our company as a whole, given the significance of our joint ventures that are accounted for either under the equity method or consolidated with the third parties' share included in noncontrolling interest, although the presentation of such information may not accurately depict the legal and economic implications of holding a noncontrolling interest in the joint venture. We do not control the unconsolidated joint ventures in which we are invested for purposes of GAAP and do not represent legal claim to such items.

The operating agreements of the joint ventures may contain provisions that would cause us to receive a different economic percentage of distributions from the joint venture under certain circumstances, such as the amount of capital contributed by each investor and whether any contributions are entitled to priority distributions. Similarly, upon a liquidation of any such joint venture, subject to the applicable terms of the operating agreement of such joint venture, we generally would be entitled to the applicable percentage of residual cash or other assets that remain only after repayment of all liabilities, priority distributions, and initial equity contributions. In addition, the economic interests in any joint venture may be different than our other legal interests or rights in such joint venture.

We provide pro-rata financial information because we believe it assists investors and analysts in estimating our economic interest in our joint ventures when read in conjunction with our reported results under GAAP. Other companies may calculate their proportionate interest differently than we do, limiting the usefulness as a comparative measure. Due to these limitations, the non-GAAP pro-rata financial information should not be considered in isolation or as a substitute for our consolidated financial statements as reported under GAAP.

Same Store Pool, for purposes of determining the properties used to calculate our same store rental revenue, includes all properties that we owned for the entire year-to-date period, for both the current and prior year except for properties during the current or prior year that were: (i) vacant at any time, (ii) under development or redevelopment, or (iii) involved in eminent domain and rent was reduced.

Same Store Rental Revenue excludes straight-line rent, the amortization of above and below-market leases, and reimbursements from clients for recoverable real estate taxes and operating expenses. For purposes of comparability, same store rental revenue is presented on a constant currency basis by applying the exchange rate as of the balance sheet date to base currency rental revenue. We present same store rental revenue on a pro-rata basis to account for our share of same store rental revenue related to unconsolidated and consolidated joint ventures. For purposes of comparability, we calculate our Pro-Rata Share using our ownership percentage as of June 30, 2026 to same store rental revenue for the three and six months ended June 30, 2026 and 2025.

SOURCE Realty Income Corporation

Anne-Marie Megela
VP & Global Head of Investor Relations

Hello. This is Anne-Marie Megela, Head of Global Investor Relations at The Kraft Heinz Company. I'd like to welcome you to our second quarter 2026 business update. During the following remarks, we will make forward-looking statements regarding our expectations for the future, including related to our business plans and expectations, strategy, efforts and investments and related timing and expected impacts.

These statements are based on how we see things today, and actual results may differ materially due to risks and uncertainties. Please see the cautionary statements and risk factors contained in today's earnings release, which accompanies these remarks as well as our most recent 10-K, 10-Q and 8-K filings for more information regarding these risks and uncertainties.

Additionally, we will refer to non-GAAP financial measures, which exclude certain items from our financial results reported in accordance with GAAP. Please refer to today's earnings release and the non-GAAP information that accompany these remarks, which are available on our website at ir.kraftheinzcompany.com under News & Events for a discussion of our non-GAAP financial measures and reconciliations to the comparable GAAP financial measures.

Today, our Chief Executive Officer, Steve Cahillane, will provide an update on our business performance and overall strategy. Andre Maciel, our Chief Global Financial Officer, will then provide a financial review of the second quarter results, and we will conclude by discussing our 2026 outlook. We have also scheduled a separate live question-and-answer session with analysts. You can access our question-and-answer session at ir.kraftheinzcompany.com. A replay will also be available following the event through the same website. With that, I will now turn

Etsy said Wednesday it's laying off about 220 employees, or roughly 12% of its workforce, as the online marketplace looks to simplify its organizational structure and innovate faster in an increasingly competitive e-commerce industry.

Etsy CEO Kruti Patel Goyal, who took over the helm at the beginning of this year, told staffers in a memo that the job cuts will position the company for "building the organization we believe Etsy needs for the future."

Most of the cuts will impact Etsy's product and engineering teams, the company said.

The layoffs, which were announced alongside Etsy's second-quarter earnings results, aren't a cost-cutting effort, but are intended to help the company "lean in during a period of strong momentum so that we can move faster and execute with even greater focus," Etsy wrote in its letter to shareholders.

The cuts also weren't driven by artificial intelligence, an Etsy spokesperson said.

"You've heard me say that our first priority was to get the business growing again," Patel Goyal wrote in the staff memo. "Our ultimate goal, though, has always been to take Etsy to the next level of growth so we can fully deliver on our mission and our potential. We are now at the point where we need to make that shift - to build the team, culture, and organization that will make that possible."

Read more CNBC tech newsSpaceX revenue jumps 92% and AI costs soar in first earnings report since IPONJ files antitrust suit against Amazon, alleging it unlawfully wielded power over delivery contractorsPalantir stock skyrockets on 'otherworldly' commercial revenue — here's what's driving the demandHow the 'Baby iPhone' and an Apple supplier leak explain China's recent supply chain movesEtsy runs a digital marketplace that's known for its assortment of handcrafted and artisanal wares. The company's business boomed during the Covid-19 pandemic, as shoppers flocked to online retailers in droves, but it struggled to keep that momentum going once lockdowns eased and consumers returned to physical stores.

The company has also faced growing pressure to compete with rivals like Amazon and Walmart, along with newer e-commerce entrants TikTok Shop and Temu.

Under Patel Goyal and her predecessor, Josh Silverman, the company has looked to double down on its reputation as a marketplace for unique products, while weeding out mass-produced, generic items from resellers. In a warning shot to Amazon, the company in June launched a "Shop Other Jeffs" advertising campaign during the retail giant's Prime Day promotion that featured "non-billionaire makers" named Jeff.

It's also made improvements to search capabilities on its website to show more personalized results to shoppers and help them discover items faster.

So far, the changes appear to be bearing fruit. For the second quarter, sales came in at $668.3 million, while analysts surveyed by LSEG expected $649.1 million. Sales on its core marketplace grew 9.3%.

The company boosted its full year guidance for gross merchandise sales, or the dollar value of items sold, projecting they'll grow in the mid-single-digit range, up from low-single-digit growth.

Etsy lost an adjusted 36 cents per share, compared with adjusted earnings per share of 25 cents one year earlier. The company said the results reflect the impact of its sale last June of musical instrument marketplace Reverb.

Etsy has been offloading other brands in its portfolio as part of its effort to focus on the core marketplace business. The company last month completed its sale of Depop to eBay for $1.2 billion, roughly a year after it acquired the secondhand marketplace for $1.6 billion.