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Key Takeaways For QBTS, focus will be on bookings conversion, enterprise demand & progress after Quantum Circuits buyout. RGTI is expected to benefit from Novera deliveries, Cepheus-1 adoption and broader cloud platform activity.Both companies face high expectations. Continued R&D and commercialization spending may dampen profits. With IonQ (IONQ - Free Report) scheduled to release its second-quarter 2026 results today after market close, investor attention will next shift to D-Wave Quantum (QBTS - Free Report) and Rigetti Computing (RGTI - Free Report) , both set to report June-quarter results tomorrow.

The key question is whether the two pureplay quantum computing players can deliver results and business updates that validate their strong stock performance during the quarter. QBTS and RGTI shares surged 75.1% and 43.1%, respectively, in the April-June period, significantly outperforming the 26.6% gain in the Computer and Technology sector and the 14.6% advance in the S&P 500 index.

April-June Stock Comparison: QBTS, RGTI
Image Source: Zacks Investment Research

For D-Wave, key focus areas include bookings conversion, remaining performance obligations, enterprise demand and progress following the Quantum Circuits acquisition. For Rigetti, investors will closely monitor revenue recognition from Novera system deliveries, customer traction for its 108-qubit Cepheus platform, cloud usage and execution against its technology roadmap, while assessing whether management's commentary supports sustained commercial momentum into the second half of 2026.

D-Wave earnings missed estimates in three of the trailing four quarters and topped on one occasion, the average negative surprise being 351.22%.

On the contrary, Rigetti earnings topped estimates in each of the trailing four quarters with an average surprise of 29.17%.

How Are Q2 Estimates Poised for D-Wave and Rigetti?QBTS: The Zacks Consensus Estimate for the second-quarter bottom line has widened by one cent to a loss of 9 cents per share over the past seven days. However, the estimated figure indicates an 83.6% improvement from the year-ago figure.

The consensus mark for second-quarter revenues is pegged at $3.82 million, indicating a 23.2% year-over-year increase.

Image Source: Zacks Investment Research

RGTI: The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged at a loss of 3 cents per share over the past 60 days. The estimated figure indicates a 40% narrower loss from the year-ago figure.

The consensus mark for second-quarter revenues is pegged at $4.91 million, indicating a 173% year-over-year increase.

Image Source: Zacks Investment Research

What to Expect from D-Wave Quantum's Q2 ResultsD-Wave Quantum entered the second quarter of 2026 with strong commercial momentum after reporting record first-quarter bookings of $33.4 million and remaining performance obligations (RPO) of $42.4 million. This was largely supported by a $20 million system sale and a $10 million enterprise quantum computing-as-a-service agreement. Management indicated second-quarter revenues would be modestly higher sequentially, with a substantial portion of 2026 revenues expected in the second half as system deliveries progress. We expect bookings conversion, revenue recognition from system sales, RPO growth and enterprise adoption to act as crucial factors behind the second-quarter results.

Operationally, D-Wave continued expanding its dual-platform strategy following the Quantum Circuits acquisition, while advancing its gate-model roadmap and commercialization of its annealing systems. Progress in blockchain, AI-related customer deployments and additional system sales are expected to contribute to second-quarter top-line numbers of QBTS. However, continued investments in R&D, sales expansion and integration activities are likely to keep profitability under pressure despite improving business fundamentals.

What to Expect From Rigetti’s Q2 ResultsRigetti started the second quarter with improving commercial execution and continued technology milestones. First-quarter revenues nearly tripled year over year, driven by Novera quantum processing unit (QPU) deliveries, while management indicated that most of the remaining revenues from the previously announced Novera purchase orders would be recognized in the second quarter. The execution of these system deliveries, adoption of the newly launched 108-qubit Cepheus-1 platform and customer activity across Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum and qBraid are expected to have contributed to RGTI’s Q2 performance.

Management also reiterated its focus on improving system fidelity while maintaining a disciplined investment strategy supported by a debt-free balance sheet. Continued spending on R&D, fabrication and infrastructure, however, is likely to have weighed on near-term profitability as Rigetti prioritizes long-term technology leadership over short-term earnings.

What the Zacks Model Unveils for QBTS and RGTI StocksQBTS: Our proven model does not conclusively predict an earnings beat for D-Wave this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

D-Wave has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

RGTI: Rigetti has an Earnings ESP of 0.00% and a Zacks Rank #3. This combination also can't conclusively predict an earnings beat tomorrow.

Our TakeD-Wave and Rigetti head into their second-quarter earnings releases with solid operational momentum, but elevated expectations following their strong April-June stock rallies, which leave little room for disappointment. D-Wave's bookings conversion, enterprise demand and commercialization progress are the crucial factors this time, while Rigetti's execution on Novera system deliveries, cloud adoption and technology roadmap will remain key.

Although both companies continue to invest aggressively in R&D and commercialization, near-term profitability is likely to remain under pressure. While D-Wave's Zacks Rank reflects its stronger fundamental outlook, that of Rigetti suggests investors may prefer waiting for further evidence of sustained execution following its recent rally.

, /PRNewswire/ -- Gold Royalty Corp. ("Gold Royalty" or the "Company") (NYSE American: GROY) is pleased to announce the filing of its operating and financial results for the three and six months ended June 30, 2026. All amounts are expressed in U.S. dollars unless otherwise noted.

David Garofalo, Chairman and CEO of Gold Royalty, commented: "Gold Royalty's growth is in high gear with half-year revenues more than doubling year-over-year and over 40% growth in gold equivalent ounces* in the first half of 2026, both to new record levels. With our portfolio heavily concentrated in gold and copper and projected peer-leading growth in gold equivalent ounces over the next five years, Gold Royalty provides its shareholders strong leverage to gold and copper prices from mines in Tier One jurisdictions with top operators. In addition, our royalty-focused asset base has virtually no exposure to mine site cost inflation.

Our strong performance in the first half of the year has laid the foundation for what is expected to be a catalyst-rich second half. We look forward to continued volume and cash flow growth and progress at key projects including first production from Ren, construction start at South Railroad, commercial and full production achieved at Vareš, and reports or studies outlining expansion potential at Borborema, Côté, Granite Creek, Jerritt Canyon, and a proposed second shaft at Odyssey."

Second Quarter 2026 Highlights

Revenue of $6.7 million; Total Revenue, Land Agreement Proceeds and Interest* increased by approximately 80% to $7.9 million and GEOs* increased by approximately 31% to 1,757 GEOs*, when compared to the second quarter of 2025. Adjusted EBITDA* of $5.6 million (net income of $1.8 million), approximately 137% higher than the same period in 2025 Ended the quarter with over $11.3 million of cash, no debt and a fully undrawn $150 million credit facility, inclusive of a $25 million accordion feature Acquired an additional 0.875% net smelter return ("NSR") royalty interest over the Ren project for $6.25 million and, subsequent to quarter-end, acquired NSR royalties on the Sterling project and a portion of the Granite Creek mine for $0.8 million. All three assets are located in Nevada, USA. The Company remains on track to achieve its previously announced annual guidance of 7,500 - 9,300 GEOs in 2026.   * Total Revenue, Land Agreement Proceeds and Interest, Adjusted EBITDA, and GEOs ("Gold Equivalent Ounces") are non-IFRS measures and do not have a standardized meaning under IFRS. See "Non-IFRS Measures" below.

Selected Financial Highlights

The following table sets forth selected financial information for the three and six months ended June 30, 2026:

For three months ended
June 30

For the six months ended
June 30

(in thousands of dollars, except per share and GEOs amounts)

2026

2025

2026

2025

($)

($)

($)

($)

Revenue

6,732

3,823

13,910

6,961

Net income (loss)

1,783

(829)

3,554

(2,077)

Net income (loss) per share, basic

0.01

(0.00)

0.02

(0.01)

Net income (loss) per share, diluted

0.01

(0.00)

0.01

(0.01)

Cash provided by operating activities

3,723

1,069

8,197

3,556

Non-IFRS

Total Revenue, Land Agreement Proceeds and Interest(1)

7,933

4,412

17,295

7,989

Adjusted EBITDA(1)

5,599

2,363

12,598

4,036

Adjusted Net Income (loss)(1)

1,790

(66)

5,063

(1,312)

Adjusted Net Income (loss) Per Share, basic and diluted(1)

0.01

(0.00)

0.02

(0.01)

GEOs(1)

1,757

1,346

3,677

2,595

Statement of Financial Position

Total assets

850,113

740,246

850,113

740,246

Total non-current liabilities

120,778

177,217

120,778

177,217

__________

Note:

1)

Total Revenue, Land Agreement Proceeds and Interest, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Share, basic and diluted and GEOs are each non-IFRS measures and do not have a standardized meaning under IFRS. See "Non-IFRS Measures" below for further information.

Portfolio Update

Borborema Mine (2.75% NSR; "Borborema"): On July 10, 2026, Aura Minerals Inc. ("Aura") reported that 14,251 GEOs were produced at Borborema during the second quarter of 2026, representing a 17% decrease as compared to the previous quarter, as planned mine sequencing resulted in lower grades. Aura has reiterated that it remains on track to meet its guidance for the full year 2026.

For further information see Aura's news release dated July 10, 2026, available under its profile on www.sedarplus.ca.

Borden Mine (0.5% NSR, partial royalty coverage; "Borden"): In a news release dated July 1, 2026, Discovery Silver Corp. changed its name to Discovery Mining Ltd. ("Discovery"). On May 14, 2026, Discovery reiterated its commitment to an extensive exploration program at Borden, including highlighting success from resource conversion and extension drilling. Three drill rigs are involved in infill and extension of the East Lower Zone and two surface drills are exploring to the northwest of the mine. We note that our royalty coverage is expected to increase as operations trend towards the east, which follows the orebody along trend and down plunge as the mine deepens. Discovery's sustaining capital expenditures in the first quarter were largely focused on capital development at Borden.

For further information see Discovery's news release dated May 14, 2026, available under its profile on www.sedarplus.ca.

Canadian Malartic / Odyssey Mine (3.0% NSR, partial royalty coverage; "Odyssey"): On July 29, 2026, Agnico Eagle Mines Limited ("Agnico Eagle") reported that the first phase of shaft sinking was completed in July 2026, reaching a depth of 1,586 metres. Activities will transition to the headframe change-over and completion of the first loading station, which remains on schedule, to support first production through Shaft #1 in the second quarter of 2027. Exploration drilling continued to yield positive results in multiple areas of the Odyssey mine, including 13.7 g/t gold over 14.6 metres in the newly-defined Artemis zone within the internal zones of the Odyssey deposit.

Agnico Eagle also noted that remediation work at the Barnat open pit is expected to be completed in the third quarter of 2026 after the July 1, 2026 rock mass movement which was previously disclosed on July 2, 2026. Mining activities are anticipated to resume in the fourth quarter of 2026.

For further information see Agnico Eagle's news release dated July 29, 2026, available under its profile on www.sedarplus.ca.

Côté Gold Mine (0.75% NSR, partial royalty coverage; "Côté"): In a news release dated June 1, 2026, IAMGOLD announced an updated consolidated mineral resource estimate for the Côté Gold Mine, with estimated measured and indicated mineral resources increasing by 13% to 12.7 million ounces and inferred mineral resources increasing by 63% to 2.0 million ounces, in each case on a 100% basis inclusive of mineral reserves, as compared with the December 31, 2025 statement. IAMGOLD also stated that the estimate will support an updated technical report and mine plan expected in the fourth quarter of 2026.

For further information see IAMGOLD's news release dated June 1, 2026, available under its profile on www.sedarplus.ca.

Cozamin Mine (1.0% NSR, partial royalty coverage; "Cozamin"): On July 30, 2026, Capstone Copper Corp. ("Capstone") noted that Cozamin production was consistent with the planned mine sequence and the operation is trending towards the upper end of its 2026 guidance range on strong performance. Production in 2026 is expected to be consistently weighted throughout the year.

For further information see Capstone's news release dated July 30, 2026, available under its profile on www.sedarplus.ca.

Granite Creek Project (10.0% NPI and a 0.5% NSR partial royalty coverage acquired subsequent to quarter end; "Granite Creek"): On June 25, 2026, i-80 Gold Corp. ("i-80") disclosed that the feasibility study for Granite Creek is now expected to be completed in the third quarter of 2026, compared to the second quarter as previously announced. i-80 also stated that positive drill results from Granite Creek continued to support the potential expansion of the mineralized body and were being incorporated into ongoing technical work evaluating feed for the Lone Tree Plant.

For further information see i-80's news release dated June 25, 2026, available under its profile on www.sedarplus.ca.

Jerritt Canyon Project (0.5% NSR; "Jerritt Canyon"): First Majestic Silver Corp. ("First Majestic") started an exploration drilling program in the second quarter of 2026 and plans for a total of 42,000 m of drilling in 2026. Restart activities continue to advance and First Majestic remains focused on progressing technical studies and site preparations to support the planned resumption of mining operations in the second half of 2027.

For further information, see First Majestic's second quarter report released July 30, 2026, available under its profile on www.sedarplus.ca.

La Mina Project (2.0% NSR; "La Mina"): GoldMining Inc. ("GoldMining") announced the results of an updated preliminary economic assessment ("PEA") under NI 43-101 on April 28, 2026. The La Mina Project PEA demonstrates an after-tax net present value ("NPV") (5%) of $1.0 billion and an after-tax internal rate of return ("IRR") of 32%, based on a gold price of $3,500/oz, copper price of $4.70 per pound and silver price of $40/oz, with an estimated initial payback period of 2.7 years. The study contemplates an over 11-year mine life with average annual gold-equivalent production of 152,400 ounces during the first five years and estimated life of mine all-in sustaining costs of $1,045/oz Au (by-product basis). See "Notice to Investors".

For further information see GoldMining's news release dated April 28, 2026 and GoldMining's technical report titled "NI 43-101 Technical Report and Preliminary Economic Assessment for the La Mina Gold-Copper Mineral Deposit, Antioquia, Republic of Colombia" and dated effective April 22, 2026, available under its profiles at www.sedarplus.ca and www.sec.gov.

São Jorge Project (1.0% NSR, "São Jorge"): GoldMining announced highlights of a positive PEA on June 11, 2026 which showcased an after-tax NPV at a 5% discount rate of $532 million, an after-tax IRR of 42% at a base case gold price of $3,500/oz, and an initial payback of 2.8 years. See "Notice to Investors".

For further information see GoldMining's news release dated June 11, 2026 and GoldMining's technical report titled "NI 43-101 Technical Report and Preliminary Economic Assessment for the São Jorge Gold Project, Pará State, Brazil" and dated effective June 9, 2026, available under its profiles at www.sedarplus.ca and www.sec.gov.

South Railroad Project (0.44% NSR, partial royalty coverage; "South Railroad"): In a news release dated May 11, 2026, Orla disclosed that South Railroad remained on track for a mid-2026 construction start, subject to receipt of the Bureau of Land Management Record of Decision. Orla also stated that purchase orders had been issued for critical long-lead equipment, a contract had been awarded for the mine water treatment plant, and detailed engineering was 41% complete at the end of the first quarter.

In a news release dated July 9, 2026, Orla stated that receipt of the final permits for South Railroad remained an important catalyst for the second half of 2026.

In a news release dated July 31, 2026, Equinox Gold Corp. and Orla announced the successful completion of their previously announced business combination. 

For further information see Orla's news releases dated May 11, 2026, July 9, 2026, and July 31, available under its profile on www.sedarplus.ca.

Vareš Mine (100% copper stream with ongoing payments of 30% of the spot copper price; "Vareš"): On July 30, 2026, DPM Metals ("DPM") reported that Vareš produced approximately 35,000 GEOs in the second quarter including 1.3 million pounds copper, in line with the planned ramp up of the mine to full production. Payable metals sold of approximately 26,000 GEOs was lower than the GEOs produced due primarily to timing of deliveries. DPM stated that it has continued to make strong progress at Vareš, with development rates in-line with expectations. Vareš is expected to remain on track to achieve full production run-rate of 850,000 tonnes per year by the end of 2026.

For further information see DPM's announcement dated July 30, 2026, available under its profile on www.sedarplus.ca.

Royalty Generator Model Update

Our royalty generator model continues to generate positive results. We have generated 56 royalties since the acquisition of Ely Gold Royalties Inc. in 2021 through this model. We currently have 38 properties subject to land agreements and six properties under lease generating land agreement proceeds. The model continued to incur low operating costs to maintain our mineral interests in the second quarter of 2026.

2026 Outlook

The Company maintains its previously announced forecast of between 7,500 and 9,300 GEOs in 2026, which includes approximately 684 GEOs relating to Land Agreement Proceeds credited against other mineral interest and interest payments, and is based on an assumed gold price of $5,150 per ounce, and an assumed copper price of $5.75 per pound.

Commodity prices will affect calculation of GEOs from copper (and other metals) stream and royalties and from Land Agreement Proceeds and other payments. Please see our news release dated March 18, 2026 for a sensitivity table to illustrate the potential variability of our 2026 guidance to gold and copper metal prices.

Second Quarter 2026 Results Conference Call Details

A conference call will be held at 11:00 a.m. ET (8:00 a.m. PT) on Thursday, August 6, 2026 to discuss these results. To participate, please use one of the following methods:

Webinar: Click here

US and Canada (toll-free): 1-833-890-3060

International: 1-412-206-6408

The second quarter 2026 results presentation will be available on Gold Royalty's website at www.goldroyalty.com and a replay of the event will be available following the presentation.

About Gold Royalty Corp.

Gold Royalty Corp. is a gold-focused royalty company offering creative financing solutions to the metals and mining industry. Its mission is to invest in high-quality, sustainable and responsible mining operations to build a diversified portfolio of precious metals royalty and streaming interests that generate superior long-term returns for our shareholders. Gold Royalty's diversified portfolio currently consists primarily of net smelter return royalties on gold properties located in the Americas.

Qualified Person

Alastair Still, P.Geo., Director of Technical Services of the Company, is a "qualified person" as such term is defined under Canadian National Instrument 43-101 and has reviewed and approved the technical information disclosed in this news release.

Notice to Investors

The PEAs respecting the La Mina and São Jorge projects referenced herein are each preliminary in nature, and there is no certainty that the reported results will be realized. Mineral resources used for such PEAs include inferred mineral resources which are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves, and there is no certainty that the projected economic performance will be realized.

For further information regarding the project updates regarding properties underlying the Company's royalties, stream and other interests, please refer to the disclosures of the operators thereof, including the news releases referenced herein and the other disclosures of such operators. Disclosure relating to properties in which Gold Royalty holds interests is based on information publicly disclosed by the owners or operators of such properties. The Company generally has limited or no access to the properties underlying its interests and is largely dependent on the disclosure of the operators of its interests and other publicly available information. The Company generally has limited or no ability to verify such information. Although the Company does not have any knowledge that such information may not be accurate, there can be no assurance that such third-party information is complete or accurate.

Unless otherwise indicated, the technical and scientific disclosure contained or referenced in this news release, including any references to mineral resources or mineral reserves, was prepared by the project operators in accordance with Canadian National Instrument 43-101, which differs significantly from the requirements of the U.S. Securities and Exchange Commission applicable to domestic issuers. Accordingly, the scientific and technical information contained or referenced in this news release may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.

Forward-Looking Statements:

Certain of the information contained in this news release constitutes "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and U.S. securities laws (collectively, "forward-looking statements"), including but not limited to statements regarding: the Company's outlook for 2026, including estimated future GEOs and contractual payments, expectations regarding the Company's portfolio growth, the operations and/or development of the projects underlying the Company's royalties, stream and other interests, including the estimates of the operators thereof  and other statements regarding the Company's plans and strategies. Such statements can be generally identified by the use of terms such as "may", "will", "expect", "intend", "believe", "plans", "anticipate" or similar terms. Forward-looking statements are based upon certain assumptions and other important factors, including assumptions of management regarding the accuracy of the disclosure of the operators of the projects underlying the Company's interests, their ability to achieve disclosed plans and targets, macroeconomic conditions, commodity prices and the Company's ability to finance future growth and acquisitions. Forward-looking statements are subject to a number of risks, uncertainties and other factors which may cause the actual results to be materially different from those expressed or implied by such forward-looking statements including, among others, any inability to any inability of the operators of the properties underlying the Company's royalties, stream and other interests to execute proposed plans for such properties or to achieved planned development and production estimates and goals, risks related to the operators of the projects in which the Company holds interests, including the successful continuation of operations at such projects by those operators, risks related to exploration, development, permitting, infrastructure, operating or technical difficulties on any such projects, the influence of macroeconomic developments, commodity price and counterparty risks, the ability of the Company to carry out its growth plans and other factors set forth in the Company's Annual Report on Form 20-F for the year ended December 31, 2025 and its other publicly filed documents under its profiles at www.sedarplus.ca and www.sec.gov. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

Non-IFRS Measures

We have included, in this document, certain performance measures, including: (i) Total Revenue, Land Agreement Proceeds and Interest; (ii) Adjusted EBITDA; (iii) Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share, basic and diluted; and (iv) GEOs which are each non-IFRS measures. The presentation of such non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. These non-IFRS measures do not have any standardized meaning prescribed by IFRS Accounting Standards and other companies may calculate these measures differently.

Total Revenue, Land Agreement Proceeds and Interest

Total Revenue, Land Agreement Proceeds and Interest are determined by adjusting revenue for the impact of: land agreement proceeds credited against other mineral interests, interests earned on gold-linked loan, one-time adjustment related to the purchase of Pedra Branca Royalty, and royalty revenue earned through Borborema Royalty Limited Partnership ("Borborema LP") joint venture. We have included this information as management believes certain investors use this information to evaluate our performance in comparison to other gold royalty companies in the precious metal mining industry.

The following is a reconciliation of Total Revenue, Land Agreement Proceeds and Interest to total revenue for the three and six months ended June 30, 2026 and 2025:

For the three months ended
June 30

For the six months ended
June 30

2026

2025

2026

2025

(in thousands of dollars)

($)

($)

($)

($)

Royalty

6,136

1,981

13,169

3,097

Streaming

1,037

720

2,010

1,204

Advance minimum royalty and pre-production royalty

25

877

371

1,955

Land agreement proceeds

271

459

779

1,032

Interest income credited against gold-linked loan

464

375

966

701

Total Revenue, Land Agreement Proceeds and Interest

7,933

4,412

17,295

7,989

Land agreement proceeds credited against other mineral interests

—

(214)

(20)

(327)

Interest income credited against gold-linked loan

(464)

(375)

(966)

(701)

One-time adjustment related to the purchase of Pedra Branca Royalty(1)

(284)

—

(1,284)

—

Royalty revenue earned through Borborema LP joint venture(2)

(453)

—

(1,115)

—

Revenue

6,732

3,823

13,910

6,961

__________

Notes:

1)

Consist of portion of royalty payments which relates to the sales of residual ore produced in the last quarter of 2025 in the Pedra Branca mine, and was due to the former holder of the royalty.

2)

Represents our proportionate share of revenue from our 50.0022% interest in the Borborema LP joint venture, which holds an NSR on the Borborema mine.

Adjusted EBITDA

Adjusted EBITDA is determined by adjusting net income (loss) for the impact of: depletion, depreciation, finance costs, current and deferred tax expenses, interest income credited against gold-linked loan, one-time adjustment related to the purchase of Pedra Branca Royalty and royalty revenue earned through Borborema LP joint venture, transaction related and non-recurring general and administrative expenses(1), non-cash share-based compensation, share of loss in associate, dilution loss in associate, share of profit in joint venture, change in fair value of gold-linked loan, change in fair value of short-term investments, change in fair value of embedded derivative, foreign exchange loss (gain), loss (gain) on loan modification and other income. We have included this information as management believes certain investors use this information to evaluate our performance in comparison to other gold royalty companies in the precious metal mining industry. The table below provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods indicated:

3)

Transaction related and non-recurring general and administrative expenses comprised of operating expenses that are not expected to be incurred on an ongoing basis. During the three and six months ended June 30, 2026, transaction related and non-recurring general and administrative expenses primarily consisted of professional fees related to accounting advisory services.

For the three months ended
June 30

For the six months ended
June 30

2026

2025

2026

2025

(in thousands of dollars)

($)

($)

($)

($)

Net income (loss)

1,783

(829)

3,554

(2,077)

Depletion

1,754

418

3,145

509

Depreciation

19

20

40

39

Finance costs

161

2,236

504

4,441

Current tax expense

128

47

144

118

Deferred tax expense (recovery)

889

(387)

1,900

(27)

Land Agreement Proceeds credited against other mineral interests

—

214

20

327

Interest income credited against gold-linked loan

464

375

966

701

One-time adjustment related to the purchase of Pedra Branca Royalty(1)

284

—

1,284

—

Royalty revenue earned through Borborema LP joint venture(2)

453

—

1,115

—

Share of profit in joint venture(2)

(310)

—

(763)

—

Transaction related and non-recurring general and administrative expenses

48

40

81

101

Share-based compensation

715

650

1,450

1,342

Share of loss in associate

—

50

—

80

Dilution loss in associate

—

73

—

73

Change in fair value of gold-linked loan

(444)

(425)

(1,036)

(715)

Change in fair value of short-term investments

(203)

(47)

(67)

27

Change in fair value of embedded derivative

—

(180)

—

(280)

Foreign exchange (gain) loss

(45)

81

(40)

52

Loss (gain) on loan modification

—

—

500

(693)

Other (income) expense

(97)

27

(199)

18

Adjusted EBITDA

5,599

2,363

12,598

4,036

__________

Notes:

1)

Consist of portion of royalty payments which relates to the sales of residual ore produced in the last quarter of 2025 in the Pedra Branca mine, and was due to the former holder of the royalty.

2)

Represents our proportionate share of revenue from our 50.0022% interest in the Borborema LP joint venture, which holds an NSR on the Borborema mine.

Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share, basic and diluted

Adjusted Net Income (Loss) is calculated by adjusting net income (loss) for the impact of: land agreement proceeds credited against other mineral interests, interest income credited against gold-linked loan, one-time adjustment related to the purchase of Pedra Branca Royalty, accretion of convertible debentures, transaction related and non-recurring general and administrative expenses(1), share of loss in associate, dilution loss in associated, changes in fair value of embedded derivative, short-term investments and gold-linked loan, loss (gain) on loan modification, foreign exchange loss (gain) and other income. Adjusted Net Income (Loss) Per Share, basic and diluted, have been determined by dividing the Adjusted Net Income (Loss) by the weighted average number of common shares for the applicable period. Management believes that they are useful measures of performance as they adjust for items which are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. The following is a reconciliation of net income (loss) to Adjusted Net Income (Loss), Per Share, basic and diluted for the periods indicated:

1)

Transaction related and non-recurring general and administrative expenses comprised of operating expenses that are not expected to be incurred on an ongoing basis. During the three and six months ended June 30, 2026, transaction related and non-recurring general and administrative expenses primarily consisted of professional fees related to accounting advisory services.

For the three months ended
June 30

For the six months ended
June 30

2026

2025

2026

2025

(in thousands of dollars, except per share amount)

($)

($)

($)

($)

Net income (loss)

1,783

(829)

3,554

(2,077)

Land Agreement Proceeds credited against other mineral interests

—

214

20

327

Interest income credited against gold-linked loan

464

375

966

701

One-time adjustment related to the purchase of Pedra Branca Royalty(1)

284

—

1,284

—

Accretion of convertible debentures

—

555

—

1,074

Transaction related and non-recurring general and administrative expenses

48

40

81

101

Share of loss in associate

—

50

—

80

Dilution loss in associate

—

73

—

73

Change in fair value of gold-linked loan

(444)

(425)

(1,036)

(715)

Change in fair value of short-term investments

(203)

(47)

(67)

27

Change in fair value of embedded derivative

—

(180)

—

(280)

Foreign exchange (gain) loss

(45)

81

(40)

52

Loss (gain) on loan modification

—

—

500

(693)

Other (income) expense

(97)

27

(199)

18

Adjusted Net Income (Loss)

1,790

(66)

5,063

(1,312)

Weighted average number of common shares

Basic

230,811,330

170,553,644

230,106,914

170,407,047

Diluted

239,253,267

170,553,644

240,317,602

170,407,047

Adjusted Net Income (Loss) Per Share

Basic

0.01

(0.00)

0.02

(0.01)

Diluted

0.01

(0.00)

0.02

(0.01)

__________

Note:

1)

Consist of portion of royalty payments which relates to the sales of residual ore produced in the last quarter of 2025 in the Pedra Branca mine, and was due to the former holder of the royalty.

GEOs

GEOs are determined by dividing Total Revenue, Land Agreement Proceeds and Interest by the average gold prices for the applicable period:

(in thousands of dollars, except Average Gold Price/oz and GEOs)

Average
Gold Price/oz

Total
Revenue,
Land
Agreement
Proceeds
and Interest

GEOs

For the three months ended March 31, 2025

2,865

3,577

1,249

For the three months ended June 30, 2025

3,279

4,412

1,346

For the six months ended June 30, 2025

7,989

2,595

For the three months ended March 31, 2026

4,875

9,362

1,920

For the three months ended June 30, 2026

4,516

7,933

1,757

For the six months ended June 30, 2026

17,295

3,677

SOURCE Gold Royalty Corp.

Key Takeaways BigBear.ai is targeting multi-drone mission management with its vendor-agnostic ConductorOS platform.Second-quarter revenues rose 13% to $36.7 million, while backlog increased 9% to $269.6 million.A software-first approach could differentiate BigBear.ai from drone hardware rivals AeroVironment and Kratos. BigBear.ai Holdings, Inc. (BBAI - Free Report) is positioning itself to become a key player in AI-powered autonomous mission management, with multi-drone orchestration emerging as one of its most promising growth opportunities. The company's second-quarter 2026 update highlighted ConductorOS, an AI platform designed to enable a single operator to manage fleets of drones from multiple manufacturers. This capability addresses one of the military's biggest operational challenges — processing massive volumes of data while reducing operator workload. The company believes this technology aligns well with the rapidly expanding demand for autonomous defense systems.

The opportunity appears substantial. Management pointed to growing investments in autonomous warfare and counter-drone technologies, supported by rising geopolitical tensions and increasing defense modernization efforts. ConductorOS is designed to transform one operator into the command center for a multi-vendor drone fleet, making it relevant for surveillance, reconnaissance and mission coordination. These trends reinforce BigBear.ai's strategy of delivering mission-ready AI for complex defense environments rather than competing in broader enterprise AI markets.

The company's improving financial position provides additional support for this strategy. Second-quarter revenues increased 13% year over year to $36.7 million, gross margin expanded 781 basis points to 32.8%, backlog rose 9% from 2025-end to $269.6 million, and management reaffirmed its full-year revenue guidance of $135-$165 million. BigBear.ai also ended the quarter with roughly $410 million in cash and investments, giving it flexibility to invest in product development and pursue acquisitions that could strengthen its autonomous systems portfolio.

How BigBear.ai Compares With Its Closest Drone AI RivalsBigBear.ai competes with AeroVironment (AVAV - Free Report) and Kratos Defense & Security Solutions (KTOS - Free Report) in AI-enabled autonomous defense technologies, unmanned systems and mission software.

AeroVironment has established a strong position in tactical drones and loitering munitions, with deep relationships across the United States and allied defense agencies. However, AeroVironment primarily generates revenues from unmanned aircraft platforms, whereas BigBear.ai is differentiating itself through AI-driven mission software that can orchestrate fleets from multiple drone manufacturers using its ConductorOS platform. This vendor-agnostic approach could broaden adoption across diverse defense environments.

Kratos Defense is another important competitor with strengths in unmanned aerial systems, autonomous aircraft and defense technologies. While Kratos Defense has significant expertise in drone hardware and tactical platforms, BigBear.ai is concentrating on the software layer that enables a single operator to control multiple autonomous assets simultaneously while reducing cognitive workload. As military organizations increasingly emphasize interoperable, AI-powered mission management instead of standalone platforms, BigBear.ai's software-first strategy could provide a differentiated competitive advantage alongside AeroVironment and Kratos Defense.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 41.6% year to date (YTD), underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s YTD Price Performance

Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 9.62, as evidenced by the chart below.

P/S Ratio (F12M)

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 30 days, as shown below. The estimated figure indicates a narrower loss from the year-ago loss of 82 cents per share.

EPS Trend of BBAI

Image Source: Zacks Investment Research

Revenue of $176.1 million, compared to revenue of $154.5 million in Q2 2025 GAAP net income of $16.8 million compared to GAAP net income of $28.9 million in Q2 2025 Non-GAAP adjusted net income (1) of $38.7 million, compared to non-GAAP adjusted net income(1) of $34.5 million in Q2 2025 Signed $900 million High-Assay, Low-Enriched Uranium (HALEU) Enrichment award contract with U.S. Department of Energy Grew contingent Low-Enriched Uranium (LEU) and HALEU enrichment backlog to $3.0 billion Selected Geiger Brothers as construction contractor for major uranium enrichment plant expansion Signed first-of-a-kind, large-scale commercial HALEU supply agreement that potentially includes prepayments Raising full year 2026 hiring guidance in Piketon, Ohio Expecting completion of first new centrifuge in Oak Ridge, Tennessee, by year-end 2026 , /PRNewswire/ -- Centrus Energy Corp. (NYSE: LEU) ("Centrus" or the "Company") today reported second quarter 2026 results. The Company reported net income of $16.8 million for the three months ended June 30, 2026, which is $0.85 (basic) and $0.77 (diluted) per common share. This translates to adjusted net income(1) of $38.7 million for the three months ended June 30, 2026, which is adjusted EPS(1) of $1.95 (basic) and $1.77 (diluted) per common share.

"This was another strong quarter of financial and operational progress for Centrus that included a number of commercial wins for our future enrichment business as we capitalize on strong industry tailwinds and our operational momentum," said Centrus Energy President and CEO Amir Vexler.

"Operationally we continued on full-execution mode for our centrifuge manufacturing and expansion programs. Our strategy includes risk-reducing measures like locking in a majority of the suppliers deemed critical with larger commitments to help insulate the project from potential price fluctuations. Simultaneously, we further strengthened our financial position by signing our HALEU award while securing possible prepayments from offtakers. Our progress has allowed us to announce that our first new centrifuge will be competed in Oak Ridge before the end of the year."

"In general, we continue to see healthy demand momentum with consistent constrained supply, resulting in upward pressure on SWU prices. Our operational progress coupled with strong demand signals across all our end-markets has provided Centrus with strong backlog growth and momentum, and we look forward to further capitalizing on our position as the only publicly-traded, proven enricher in the market."

(1)A reconciliation of non-GAAP results are detailed in the Financial Results section. Additional information can be found in the materials on the Centrus investor relations website at https://investors.centrusenergy.com.

Financial Results

Centrus generated total revenue of $176.1 million and $154.5 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $21.6 million (or 14%).

Revenue from the LEU segment was $153.4 million and $125.7 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $27.7 million (or 22%). The Company had uranium revenue of $53.4 million for the three months ended June 30, 2026. Separative work units (SWU) revenue decreased by $25.7 million as a result of a 23% decrease in the volume of SWU sold, partially offset by a 3% increase in the average price of SWU sold.

Revenue from the Technical Solutions segment was $22.7 million and $28.8 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $6.1 million (or 21%). The decrease in revenue was primarily attributable to a $5.9 million decrease in revenue generated by the HALEU production contract with the Department of Energy ("DOE") signed in 2022 ("HALEU Operation Contract"), while the remaining change was related to other contracts. Revenue from the HALEU Operation Contract is recorded on a cost-plus-incentive-fee basis and includes a target fee for Phases 2 and 3 of the contract.

Cost of sales for the LEU segment was $101.8 million and $75.0 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $26.8 million (or 36%). Uranium costs increased primarily as a result of an increase in the volume of uranium sold. SWU costs decreased as a result of a 23% decrease in the volume of SWU sold, partially offset by a 13% increase in the average unit cost of SWU sold.

Cost of sales for the Technical Solutions segment was $24.4 million and $25.6 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $1.2 million (or 5%). The decrease was primarily attributable to an $1.9 million decrease in costs incurred under the HALEU Operation Contract, while the remaining change was generally attributable to other contracts.

The Company recognized gross profit of $49.9 million and $53.9 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $4.0 million (or 7%).

Gross profit for the LEU segment was $51.6 million and $50.7 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.9 million (or 2%). LEU customers generally have multi-year contracts that carry annual purchase commitments, not quarterly commitments. The gross profit in our LEU business varies based upon the timing of those contracts. The pricing applied to deliveries varies depending upon the market conditions at the time the contract was signed. The increase for the three months ended June 30, 2026 was primarily due to the change in the composition of contracts quarter over quarter.

Gross profit (loss) for the Technical Solutions segment was a loss of $1.7 million and profit of $3.2 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $4.9 million (or 153%). The decrease was primarily attributable to the HALEU Operation Contract.

Net income was $16.8 million and $28.9 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $12.1 million (or 42%). The decrease was primarily attributable to an increase in selling general, and administrative costs of $12.8 million (driven by the $17.2 million increase in stock-compensation expense related to non-employee tax withholdings of RSUs), an increase in advanced technology costs of $7.5 million and a decrease in gross profit of $4.0 million. This was partially offset by an increase of $8.3 million in investment income and a decrease of $3.7 million in income tax expense.

Backlog

The Company's backlog across both segments is $4.5 billion as of June 30, 2026 and extends to 2040. Our LEU segment backlog as of June 30, 2026 is approximately $3.7 billion. The LEU backlog is the estimated aggregate dollar amount of revenue for future SWU and uranium deliveries primarily under medium and long-term contracts with fixed commitments and approximately $3.0 billion in contingent LEU and HALEU sales commitments, a $2.4 billion of which are under definitive agreements, in support of potential construction of LEU and HALEU production capacity at the Piketon, Ohio facility. The contingent sales commitments tend to relate to achievement of operational milestones. Our Technical Solutions segment backlog is approximately $0.8 billion as of June 30, 2026, and includes both funded amounts (services for which funding has been both authorized and appropriated by the customer), unfunded amounts (services for which funding has not been appropriated), and unexercised options. The current DOE budget proposed for fiscal year 2027 does not include further funding for the operation of the HALEU cascade under the HALEU Operation Contract, which represents approximately $0.8 billion of the Technical Solutions backlog as of June 30, 2026. Separately, DOE has communicated that it does not currently intend to exercise further options under the HALEU Operation Contract.

2026 Outlook

The Company is updating some of its financial and operational guidance for the full year 2026 based on information available to the Company at the time of this release.

Financial 2026 Outlook
For the full year 2026, on a consolidated basis, Centrus expects:

Total revenue to be in the range of $450 million to $500 million Total capital deployment to be in the range of $350 million to $500 million, driven by increased investment in the Company's industrial build out related to its centrifuge manufacturing Operational 2026 Outlook
For the full year 2026, on a consolidated basis, Centrus expects to:

Finalize contracts with all partners identified as critical to its industrial build out Hire at least 100 net new employees for its Oak Ridge, Tennessee, facility Hire at least 175 net new employees for its Piketon, Ohio, facility up from 100 net new employee hires Release a Certified for Construction package Complete its first centrifuge in Oak Ridge, Tennessee The Company's 2026 guidance is subject to a number of assumptions and uncertainties that could affect results either positively or negatively. Variations from these expectations could cause differences between this guidance and the ultimate results. This includes the assumption of no significant change in restrictions in our ability to receive and sell Russian LEU or other uranium products, no significant economic disruptions or downturns, the successful implementation of our planned expansion projects, and that current business operations will continue on an ongoing basis.

About Centrus Energy Corp.

Centrus Energy is a trusted American supplier of nuclear fuel and services for the nuclear power industry, helping meet the growing need for clean, affordable, carbon-free energy. Since 1998, the Company has provided its utility customers with more than 1,850 reactor years of fuel, which is equivalent to more than 7 billion tons of coal. 

With world-class technical and engineering capabilities, Centrus is pioneering production of High-Assay, Low-Enriched Uranium and is leading the effort to restore America's uranium enrichment capabilities at scale so that we can meet our clean energy, energy security, and national security needs. Find out more at www.centrusenergy.com or follow us on LinkedIn and X.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as "expects", "anticipates", "intends", "plans", "believes", "will", "should", "could", "would" or "may" and other words of similar meaning. These forward-looking statements are based on information available to us as of the date of this news release and represent management's current views and assumptions with respect to future events and operational, economic and financial performance. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control and which may be exacerbated by any worsening of the global business and economic environment including but not limited to, risks and uncertainties related to the following:

the war in Ukraine and other geopolitical conflicts, including the resulting bans, laws, tariffs, sanctions or other government measures, and actions by third parties, including contractual counterparties, as a result of such conflicts that could directly or indirectly impact our ability to obtain, deliver, transport, sell or collect payment for, LEU or the SWU and natural uranium hexafluoride components of LEU; our reliance on third party suppliers to provide essential products and services to us; restrictions on imports and exports, including those imposed under the RSA, and related to international trade legislation; our lease to our facility in Piketon, Ohio and our government contracts, including related to government shutdowns, changes to the U.S. government's appropriated funding levels for HALEU and the government's inability to satisfy its obligations; our receipt of additional task orders under the HALEU Production Contract, LEU Production Contract and HALEU Deconversion Contract and, if awarded, the nature, timing and amount thereof; our ability to obtain new contracts or funding to be able to continue operations; whether or when government demand for HALEU or LEU for government or commercial uses will materialize and at what level; the impact and potential extended duration of a supply/demand imbalance in the market for LEU; significant competition from major LEU producers, including foreign competitors, who may be less cost sensitive than we are; limitations on our ability to compete in foreign markets; pricing trends and demand in the uranium and enrichment markets, especially in light of the potential of limited supply and our dependence on others for deliveries of LEU; our ability to successfully implement our planned expansion projects in Piketon, Ohio and Oak Ridge, Tennessee, including our ability to raise the capital necessary for such projects; our ability to successfully integrate artificial intelligence technologies into our operations; natural and other disasters; pandemics and other health crises; the fact that our revenue is largely dependent on our largest customers and our sales backlog; our long-term liabilities, including our postretirement health and life benefit obligations, our 0% Convertible Notes and our 2.25% Convertible Notes; failures or security, including cybersecurity, breaches of our information technology systems; and the impact of, or changes to, government regulation and policies or interpretation of laws or regulations, including by the U.S. Securities and Exchange Commission, the DOE, the U.S. Department of Commerce, and the U.S. Nuclear Regulatory Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this news release and in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025, under Part II, Item 1A - "Risk Factors" in our Quarterly report on Form 10-Q for the quarter ended March 31, 2026,  under Part II, Item 1A - "Risk Factors" in our Quarterly report on Form 10-Q for the quarter ended June 30, 2026, and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this news release, except as required by law.

Contacts:

Investors and Media: Neal Nagarajan at [email protected]

CENTRUS ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME

(Unaudited; in millions, except share and per share data)

Three Months Ended

 June 30,

Six Months Ended

 June 30,

2026

2025

2026

2025

Revenue:

Separative work units

$      100.0

$      125.7

$      141.6

$      177.0

Uranium

53.4

—

56.4

—

Technical solutions

22.7

28.8

54.8

50.6

Total revenue

176.1

154.5

252.8

227.6

Cost of Sales:

Separative work units and uranium

101.8

75.0

118.5

95.1

Technical solutions

24.4

25.6

52.9

45.7

Total cost of sales

126.2

100.6

171.4

140.8

Gross profit

49.9

53.9

81.4

86.8

Advanced technology costs

10.8

3.3

29.7

6.3

Selling, general and administrative

26.2

13.4

36.2

21.7

Amortization of intangible assets

2.5

3.7

4.3

4.8

Operating income

10.4

33.5

11.2

54.0

Nonoperating components of net periodic benefit loss

1.0

1.0

2.0

1.9

Interest expense

4.2

3.1

8.2

6.5

Investment income

(16.3)

(8.0)

(33.3)

(15.3)

Extinguishment of long-term debt

—

—

—

(11.8)

Other (income) expense, net

(0.1)

—

0.2

0.1

Income before income taxes

21.6

37.4

34.1

72.6

Income tax expense

4.8

8.5

7.3

16.5

Net income and comprehensive income

$        16.8

$        28.9

$        26.8

$        56.1

Net income per share:

   Basic

$        0.85

$        1.63

$        1.35

$        3.23

   Diluted

$        0.77

$        1.59

$        1.21

$        3.22

Average number of common shares outstanding (in thousands):

   Basic

19,879

17,703

19,826

17,344

   Diluted

21,891

18,121

22,114

17,406

CENTRUS ENERGY CORP.
NON-GAAP ADJUSTED OPERATING INCOME, ADJUSTED NET INCOME AND
ADJUSTED NET INCOME PER SHARE RECONCILIATION TABLE

The Company measures Operating Income, Net Income and Net Income per Share both on a GAAP basis and on an adjusted basis ("Adjusted Operating Income", "Adjusted Net Income" and "Adjusted Net Income per Share") to exclude short-term, non-capitalizable costs related to the expansion of our operations in Piketon, Ohio and Oak Ridge, Tennessee to scale up uranium enrichment operations ("Growth Costs") and stock-based compensation. Growth Costs relate to the initial phase of our expansion projects (e.g. manufacturing readiness and the training and onboarding of new employees) and are included as Advanced Technology Costs on the Condensed Consolidated Statements of Operations and Comprehensive Income. The Company expects to stop expensing Growth Costs as costs related to our expansion projects become capitalizable. We incur expense related to stock-based compensation which are included as Selling, General and Administrative expense on the Condensed Consolidated Statements of Operations and Comprehensive Income.

We believe Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income per Share, which are non-GAAP financial measures, provide investors with additional understanding of the Company's overall financial performance as well as its strategic financial planning analysis and period-to-period comparability. These metrics are useful to investors because they reflect how management evaluates the Company's ongoing operating performance from period-to-period after removing certain transactions and activities that affect comparability of the metrics and are not reflective of the Company's core operations.

Our calculation of Adjusted Operating Income, Adjusted Net Income, and Adjusted Net Income per Share may not be comparable to similarly named measures reported by other companies.

The following tables present a reconciliation of the operating income, the most directly comparable GAAP measure, to Adjusted Operating Income, a reconciliation of the net income, the most directly comparable GAAP measure, to Adjusted Net Income, and a reconciliation of the net income per share, the most directly comparable GAAP measure, to Adjusted Net Income Per Share, for each of the periods indicated:

Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025

Three Months Ended June 30, 2026

Three Months Ended June 30, 2025

GAAP

Growth
Costs

Stock-
Based
Compensation

Adjusted
(Non-
GAAP)

GAAP

Growth
Costs

Stock-
Based
Compensation

Adjusted
(Non-
GAAP)

Gross profit

$    49.9

$      —

$      —

$    49.9

$    53.9

$      —

$      —

$    53.9

Advanced technology costs

10.8

(10.6)

—

0.2

3.3

(3.1)

—

0.2

Selling, general and
administrative

26.2

—

(17.7)

8.5

13.4

—

(4.2)

9.2

Amortization of intangible assets

2.5

—

—

2.5

3.7

—

—

3.7

Operating income

10.4

10.6

17.7

38.7

33.5

3.1

4.2

40.8

Nonoperating components of net
periodic benefit loss

1.0

—

—

1.0

1.0

—

—

1.0

Interest expense

4.2

—

—

4.2

3.1

—

—

3.1

Investment income

(16.3)

—

—

(16.3)

(8.0)

—

—

(8.0)

Other (income) expense, net

(0.1)

—

—

(0.1)

—

—

—

—

Income before income taxes

21.6

10.6

17.7

49.9

37.4

3.1

4.2

44.7

Income tax expense

4.8

2.4

4.0

11.2

8.5

0.7

1.0

10.2

Net income and comprehensive
income

$    16.8

$     8.2

$    13.7

$    38.7

$    28.9

$     2.4

$     3.2

$    34.5

Net income per share:

   Basic

$    0.85

$    0.41

$    0.69

$    1.95

$    1.63

$    0.14

$    0.18

$    1.95

   Diluted

$    0.77

$    0.37

$    0.63

$    1.77

$    1.59

$    0.13

$    0.18

$    1.90

Average number of common
shares outstanding (in
thousands):

   Basic

19,879

—

—

19,879

17,703

—

—

17,703

   Diluted

21,891

—

—

21,891

18,121

—

—

18,121

Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025

Six Months Ended June 30, 2026

Six Months Ended June 30, 2025

GAAP

Growth
Costs

Stock-
Based
Compensation

Adjusted
(Non-
GAAP)

GAAP

Growth
Costs

Stock-
Based
Compensation

Adjusted
(Non-
GAAP)

Gross profit

$    81.4

$      —

$      —

$    81.4

$    86.8

$      —

$      —

$    86.8

Advanced technology costs

29.7

(27.6)

—

2.1

6.3

(4.4)

—

1.9

Selling, general and
administrative

36.2

—

(18.1)

18.1

21.7

—

(4.7)

17.0

Amortization of intangible assets

4.3

—

—

4.3

4.8

—

—

4.8

Operating income

11.2

27.6

18.1

56.9

54.0

4.4

4.7

63.1

Nonoperating components of net
periodic benefit loss

2.0

—

—

2.0

1.9

—

—

1.9

Interest expense

8.2

—

—

8.2

6.5

—

—

6.5

Investment income

(33.3)

—

—

(33.3)

(15.3)

—

—

(15.3)

Extinguishment of long-term
debt

—

—

—

—

(11.8)

—

—

(11.8)

Other (income) expense, net

0.2

—

—

0.2

0.1

—

—

0.1

Income before income taxes

34.1

27.6

18.1

79.8

72.6

4.4

4.7

81.7

Income tax expense

7.3

6.2

4.1

17.6

16.5

1.0

1.1

18.6

Net income and comprehensive
income

$    26.8

$    21.4

$    14.0

$    62.2

$    56.1

$     3.4

$     3.6

$    63.1

Net income per share:

   Basic

$    1.35

$    1.08

$    0.71

$    3.14

$    3.23

$    0.20

$    0.21

$    3.64

   Diluted

$    1.21

$    0.97

$    0.63

$    2.81

$    3.22

$    0.20

$    0.21

$    3.63

Average number of common
shares outstanding (in
thousands):

   Basic

19,826

—

—

19,826

17,344

—

—

17,344

   Diluted

22,114

—

—

22,114

17,406

—

—

17,406

CENTRUS ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

Six Months Ended June 30,

2026

2025

OPERATING

Net income

$               26.8

$               56.1

Adjustments to reconcile net income to cash used in operating activities:

Depreciation and amortization

5.1

5.4

Deferred tax assets

7.0

15.5

Equity-related compensation

18.1

4.7

Revaluation of inventory borrowings

(0.6)

3.6

Gain on extinguishment of 8.25% Notes

—

(11.8)

Amortization of debt issuance costs and discount

2.7

—

Other reconciling adjustments, net

0.2

1.3

Changes in operating assets and liabilities:

Accounts receivable

5.1

48.6

Inventories

(92.5)

(221.5)

Inventories owed to customers and suppliers

43.0

111.2

Other current assets

(0.6)

1.3

Accounts payable and other liabilities

(5.3)

(6.1)

Payables under inventory purchase agreements

16.4

97.6

Deferred revenue and advances from customers, net of deferred costs

(38.4)

(12.6)

Pension and postretirement benefit liabilities

(3.7)

(3.9)

Other changes, net

—

(0.1)

Cash (used in) provided by operating activities

(16.7)

89.3

INVESTING

Capital expenditures

(94.8)

(5.7)

Cash used in investing activities

(94.8)

(5.7)

FINANCING

Proceeds from the issuance of common stock, net

53.9

139.9

Common stock withheld for tax obligations under stock-based compensation plan

(0.4)

(2.5)

Payment of interest classified as debt

—

(3.5)

Payment of principal to redeem 8.25% Notes

—

(74.3)

Cash provided by financing activities

53.5

59.6

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(0.2)

(0.2)

(Decrease) Increase in cash, cash equivalents and restricted cash

(58.2)

143.0

Cash, cash equivalents and restricted cash, beginning of period

1,960.1

704.0

Cash, cash equivalents and restricted cash, end of period

$           1,901.9

$             847.0

Six Months Ended June 30,

2026

2025

Supplemental cash flow disclosures:

Cash paid for interest

$                 4.5

$                4.4

Cash paid for income taxes

Federal

$                   —

$                 —

State

$                  0.2

$                0.3

Foreign

$                   —

$                 —

Non-cash activities:

Adjustment of right to use lease assets from lease modification

$                  —

$                1.3

Property, plant and equipment included in accounts payable and accrued liabilities

$               21.0

$                0.6

Reclassification of equity-based compensation from equity to liability

$                 0.8

$                 —

CENTRUS ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share and per share data)

June 30,2026

December 31,2025

ASSETS

Current assets:

Cash and cash equivalents

$           1,868.5

$           1,957.2

Accounts receivable

25.6

30.7

Inventories

377.1

322.9

Deferred costs associated with deferred revenue

33.2

40.9

Other current assets

12.7

11.9

Total current assets

2,317.1

2,363.6

Property, plant and equipment, net of accumulated depreciation of $7.5 million and
$6.7 million as of June 30, 2026 and December 31, 2025, respectively

142.5

29.5

Deposits for financial assurance

33.2

2.7

Intangible assets, net

16.9

21.2

Deferred tax assets

15.0

21.9

Other long-term assets

6.3

7.0

Total assets

$           2,531.0

$           2,445.9

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$               74.0

$               41.6

Payables under inventory purchase agreements

34.8

18.5

Inventories owed to customers and suppliers

235.7

192.7

Deferred revenue and advances from customers

85.0

131.1

Short-term inventory loans

—

38.9

Current debt

—

—

Total current liabilities

429.5

422.8

Long-term debt

1,177.5

1,174.8

Postretirement health and life benefit obligations

68.8

72.2

Pension benefit liabilities

2.9

3.0

Advances from customers

—

—

Long-term inventory loans

—

—

Other long-term liabilities

6.9

8.0

Total liabilities

1,685.6

1,680.8

Stockholders' equity:

Preferred stock, par value $1.00 per share, 20,000,000 shares authorized

Series A Participating Cumulative Preferred Stock, none issued

—

—

Class A Common Stock, par value $0.10 per share, 70,000,000 shares authorized,
19,233,658 and 18,945,365 shares issued and outstanding as of June 30, 2026
and December 31, 2025, respectively

1.9

1.9

Class B Common Stock, par value $0.10 per share, 30,000,000 shares authorized,
719,200 shares issued and outstanding as of June 30, 2026 and December 31,
2025

0.1

0.1

Excess of capital over par value

815.9

762.3

Retained earnings

28.3

1.5

Accumulated other comprehensive loss

(0.8)

(0.7)

Total stockholders' equity

845.4

765.1

Total liabilities and stockholders' equity

$           2,531.0

$           2,445.9

SOURCE Centrus Energy Corp.

Key Takeaways Microchip will showcase an end-to-end PCIe Gen 6 storage architecture with Micron's 9650 NVMe SSDs.The platform offers higher bandwidth, lower latency and scalable connectivity for AI, HPC and cloud workloads.Microchip's broader portfolio may shorten development cycles and improve interoperability. Microchip Technology (MCHP - Free Report) announced on Tuesday (Aug. 4) that it will showcase an end-to-end PCIe Gen 6 storage architecture, which combines its Switchtec PCIe Gen 6 switches with Micron’s (MU - Free Report) 9650 NVMe solid-state drives (SSDs). The architecture will strengthen MCHP’s prospects in the rapidly expanding AI and enterprise data-center market. The collaboration with Micron expands MCHP’s opportunity across hyperscalers, enterprise-server manufacturers, storage vendors and semiconductor companies building CPU- and GPU-based platforms. It also strengthens Microchip’s competitive prowess against Broadcom (AVGO - Free Report) and Astera Labs (ALAB - Free Report) .

The combination of Microchip’s Switchtec PCIe Gen 6 switches with Micron’s high-performance 9650 NVMe SSDs offers greater bandwidth, lower latency and scalable storage connectivity for AI, high-performance computing (HPC) and cloud workloads. Micron’s 9650 is positioned as the first PCIe Gen 6 data-center SSD and offers as much as twice the performance of PCIe Gen 5 drives. Pairing these drives with MCHP’s Switchtec switches allows multiple high-speed storage devices to connect efficiently with processors, accelerators and memory resources. This is particularly relevant in disaggregated computing architectures, where data must move rapidly among increasingly distributed compute and storage components.

The combination also highlights the performance advantages of Microchip’s latest Switchtec platform. The company’s PCIe Gen 6 switches are manufactured using a 3-nanometer process, support configurations of up to 160 lanes and are designed to deliver lower power consumption in high-density AI systems. Microchip offers Switchtec switches along with storage controllers, memory controllers, retimers, power-management devices and timing products, which reflects the company’s focus on offering a broader system-level solution rather than competing with a stand-alone switching component.

This broader portfolio could give Microchip an important competitive advantage. Customers adopting PCIe Gen 6 must address switching, signal integrity, storage control, timing, power and management-software requirements simultaneously. MCHP can potentially supply several of these elements, supported by its ChipLink tools, unified management software and cross-product visibility. Such integration can shorten customer development cycles, improve interoperability and raise the amount of Microchip content in each platform. It also supports MCHP’s Total System Solutions strategy, under which an anchor-product design win can lead to the attachment of several complementary Microchip products.

MCHP Faces Tough CompetitionBroadcom competes with Microchip in PCIe switches, PCIe retimers, networking, and storage connectivity, while Astera Labs offers PCIe Gen 6 fabric switches, PCIe retimers and CXL memory connectivity.

Broadcom is rapidly strengthening its position across AI infrastructure, creating competitive pressure for Microchip in high-performance data centers. The company expects AI semiconductor revenue to reach $56 billion in FY2026, up approximately 180% year over year, with revenue projected to exceed $100 billion in FY2027, driven by custom AI accelerators (XPUs) and networking solutions for six major hyperscale AI customers.

Astera Labs’ close alignment with hyperscale cloud providers and GPU platform roadmaps position it to capture an increasing share of next-generation AI server designs. One of the company's biggest competitive strengths is its Scorpio AI Fabric Switch portfolio. Astera Labs said Scorpio X-Series has entered volume production and is expected to become its largest product family in the third quarter, one quarter earlier than previously expected. The company is already shipping multiple Scorpio X configurations into hyperscale AI platforms and expects deployments to expand across additional customers by year-end.

MCHP’s Share Price Performance, Valuation & EstimatesShares of Microchip have appreciated 21.8% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 18.6%.

MCHP Stock’s Price Performance
Image Source: Zacks Investment Research

The MCHP stock is trading at a premium, with a forward 12-month price/earnings of 23.44X compared with the broader sector’s 21.96X. Microchip has a Value Score of D.

MCHP’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Microchip’s fiscal 2027 earnings is currently pegged at $3.14 per share, up by a nickel over the past 30 days, suggesting 91.46% growth from fiscal 2026’s reported figure.
 

Microchip currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

From a stock price perspective, Uber Technologies (UBER -5.29%) has struggled this year. Shares are down 20% year-to-date.

From a business perspective, however, things seem to be going quite well. The company reported earnings on Aug. 5, and many experts were impressed by the results. Gross bookings surged 22% year-over-year. The number of trips, meanwhile, grew by 18%, suggesting Uber has been able to flex some pricing power.

Most impressively, Uber was able to post roughly $2 billion in operating income, up 40% versus the year prior. That income translated to diluted earnings per share of $1.17. Uber struggled to achieve profitability in its early years. But the company has been consistently profitable over the last two years.

Uber’s core business isn’t very capital intensive. Its drivers are typically the ones purchasing and maintaining their equipment. That has allowed higher earnings to translate into higher cash flows.

“[T]railing twelve-month free cash flow exceeded $10 billion for the first time in Uber’s history,” Uber announced, “giving us the flexibility to both invest for the future and pursue strategic opportunities, while continuing to reduce our share count.”

Where exactly will Uber be investing its new cash? There’s one obvious answer: robotaxis.

Today's Change

(

-5.29

%) $

-3.81

Current Price

$

68.18

Can Uber dominate the robotaxi market?I have long been a fan of Tesla’s (TSLA -1.77%) robotaxi ambitions. A growing number of experts believe that robotaxis will be a multi-trillion-dollar market. Some even believe the global market will one day be worth $10 trillion. Tesla not only has impressive access to capital, but it also has the ability to manufacture its own self-driving vehicles.

For now, Uber does not share all of these advantages. While profitable with positive cash flows, Uber is just 13% the size of Tesla That limits its relative ability to raise capital. Uber also doesn’t have the ability to produce its own vehicles. That’s why it has forged deals with the likes of Lucid Group (LCID -13.88%) and Rivian (RIVN -1.27%), companies that have committed to delivering tens of thousands of vehicles to help power Uber’s future robotaxi fleet.

Image source: Getty Images

Make no mistake, Uber is well-positioned to compete in the robotaxi market long term. The company has invested aggressively to shore up its weaknesses.

During the latest earnings call, management stressed that it would continue taking direct equity positions in key suppliers, shoring up their balance sheets to ensure those suppliers not only stay in business, but produce products for the benefit of Uber’s robotaxi roadmap.

Unlike Uber’s legacy business, however, robotaxis are already proving to be capital intensive. “Uber would need billions of dollars over the next four to five years to support autonomous-driving partners as they scale,” a report from Reuters warns. Shares actually fell in value after Uber reported earnings on Aug. 5, largely due to investor concerns regarding capital allocation.

Uber is clearly committed to pursuing robotaxis. And it’s not hard to understand why. If autonomous vehicles become the norm, ride-sharing services would experience a sudden transformation. If Uber lacks a robotaxi fleet, its ability to compete long-term would suffer.

With production capabilities already paid for and online, Tesla clearly has the advantage in pursuing robotaxis. But Tesla’s market cap is also considerably higher. The choice for investors here is simple: invest in the leader at a premium, or bet on the laggard trading at a much lower valuation.

Key Takeaways NIKE is expanding innovation across running, training, basketball and football to strengthen portfolio.Sport-led marketing, athlete engagement and wholesale partnerships are central to its turnaround.Management expects performance momentum to gradually revive Sportswear and Jordan businesses. NIKE, Inc. (NKE - Free Report) is sharpening its focus on performance-driven products as it looks to reignite sales growth and strengthen its competitive position. The company is accelerating innovation across key categories such as running, training, basketball, football and outdoor, while introducing new silhouettes, refreshing its product portfolio and strengthening its presence in performance-led wholesale channels.

NIKE is doubling down on performance products as it executes its turnaround strategy and seeks to restore sustainable growth. Management is also prioritizing sport-focused marketing and deeper engagement with athletes to reinforce the brand's competitive edge. Through innovations in such categories, along with a more disciplined product pipeline and renewed emphasis on athletic performance, the company aims to attract consumers and reduce its reliance on lifestyle offerings.

Under its Sport Offense operating model, NIKE is accelerating innovation across key performance categories, while intensifying sport-led marketing and deepening engagement with athletes, consumers and wholesale partners. By aligning product innovation, brand storytelling, marketplace execution and local consumer experiences around sport, the company aims to reinforce its competitive advantage.

Management believes this performance-first strategy is NIKE's core point of differentiation and will create a halo effect that gradually revitalizes its Sportswear and Jordan franchises, driving healthier consumer demand, improved full-price sell-through and sustainable long-term growth.

While macroeconomic pressures, soft discretionary spending and persistent weakness in the Sportswear and Jordan Streetwear businesses are expected to weigh on near-term performance, management remains confident that disciplined execution of its performance-led strategy will restore sustainable top-line growth over time. Investors will be watching closely to see whether continued momentum across performance categories can offset weakness in lifestyle products, improve marketplace health and ultimately drive stronger revenue growth, margin expansion and sustained earnings in the coming quarters.

NKE’s Competitionlululemon athletica inc. (LULU - Free Report) continues to benefit from the progress with its Power of Three X2 growth strategy. LULU remains focused on its long-term growth strategy, which centers on continuous product innovation, enhancing the guest experience and expanding its international presence to drive sustainable growth. lululemon’s international business remains one of its strongest growth levers, supported by robust demand in China and other global markets.

adidas AG (ADDYY - Free Report) is focused on revitalizing brand momentum through continuous innovation, operational improvements and strategic growth initiatives. The company is prioritizing profitability and long-term competitiveness by maintaining disciplined inventory management, enhancing cost efficiency and advancing sustainability efforts. Additionally, adidas is strengthening its global presence through localized market strategies, increased digital capabilities and the expansion of its retail footprint to drive sustainable growth.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 33.6% in the past six months compared with the industry’s decline of 28.4%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 22.44X compared with the industry’s average of 19.6X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 35.1%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past 30 days.

Image Source: Zacks Investment Research

Walmart Inc (NYSE:WMT, XETRA:WMT)'s upcoming second quarter earnings report could act as a positive catalyst for the stock despite expectations for slower comparable sales growth, according to UBS analysts, which argued that investors are focusing too heavily on a single metric rather than the retailer's longer-term earnings potential.

UBS wrote that expectations heading into the report appear "balanced, perhaps even subdued," with the market looking for roughly 3.5% comparable sales growth at Walmart US, down from 4.1% in the first quarter.

The firm noted that Walmart's valuation has also declined and investor positioning is less crowded than ahead of recent earnings reports, creating what it views as one of the company's more attractive setups in recent quarters.

The analysts argued that any moderation in reported comparable sales growth is likely to reflect temporary factors rather than deterioration in Walmart's business.

"In many respects, this quarter is a classic example of the market mistaking deceleration for deterioration," UBS wrote.

The firm expects headwinds in Walmart's Health & Wellness segment, including the impact of Maximum Fair Pricing legislation and slowing GLP-1 demand, to weigh on overall comparable sales by around 100 basis points in the second quarter. UBS said those pressures are masking continued strength in the retailer's core grocery and general merchandise businesses, which account for roughly 83% of sales.

UBS expects Walmart to continue gaining market share in key categories while benefiting from investments in value, convenience and faster delivery. The analysts also said some moderation in general merchandise reflects lower pricing growth as tariff-related inflation eases rather than weakening consumer demand.

Looking beyond quarterly sales, UBS maintained that Walmart's long-term investment case remains supported by productivity initiatives, supply chain modernization, automation and the expansion of higher-margin businesses.

The firm forecasts Walmart's alternative revenue streams will grow from about $21 billion in 2025 to $28 billion in 2026 and $36 billion in 2027, providing additional earnings growth and greater flexibility to invest in pricing and customer acquisition while maintaining profitability.

UBS also expects Walmart to reaffirm its full-year guidance for constant-currency sales growth of 3.5% to 4.5% and adjusted earnings per share of $2.75 to $2.85.

The analysts noted that investor expectations for earnings have moderated since the start of the year and are now closer to the upper end of management's guidance range, which they believe could make it easier for the company to meet or exceed market expectations.

Looking to the second half of the year, UBS expects Walmart's expanded price rollbacks, persistent inflation and continued e-commerce growth to support sales trends in the third and fourth quarters.

"The most important takeaway from Q2 may be that Walmart's investment case is becoming less dependent on a single quarter's comp and increasingly tied to the durability of its earnings power," UBS wrote.

"If that proves correct, then a quarter that appears merely solid on the surface could ultimately reinforce why Walmart remains one of the highest-quality long-duration growth stories in retail."

UBS shares traded hands at $111 on Wednesday, flat this year.

Shopify Inc. (SHOP) Q2 2026 Earnings Call August 5, 2026 8:30 AM EDT

Company Participants

Shane Kleinstein
Harley Finkelstein - President
Jeff Hoffmeister - Chief Financial Officer

Conference Call Participants

Hoi-Fung Wong - Oppenheimer & Co. Inc., Research Division
Bryan Smilek - JPMorgan Chase & Co, Research Division
Michael Morton - MoffettNathanson LLC
Terrell Tillman - Truist Securities, Inc., Research Division
Adam Wood - Morgan Stanley, Research Division
Deepak Mathivanan - Cantor Fitzgerald & Co., Research Division
Thomas Ingham - CIBC Capital Markets, Research Division
Gabriela Borges - Goldman Sachs Group, Inc., Research Division
Arjun Bhatia - William Blair & Company L.L.C., Research Division

Presentation

Shane Kleinstein

Good morning, and thank you for joining Shopify's Second Quarter 2026 Conference Call. I'm Shane Kleinstein, Director of Investor Relations. And joining us today are Harley Finkelstein, Shopify's President; and Jeff Hoffmeister, our CFO.

After their prepared remarks, we will open it up for your questions. Today's call will include certain forward-looking statements that are based on assumptions and therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements.

We undertake no obligation to update or revise these statements, except as required by law. You can read about these assumptions, risks and uncertainties in our press release this morning as well as in our filings with the U.S. and Canadian regulators. We'll also speak to adjusted financial measures and other non-GAAP measures, which are not a substitute for GAAP financial measures. Reconciliations between the two are provided in our press release.

And finally, we report in U.S. dollars, so all amounts discussed today are in U.S. dollars unless otherwise indicated.

With that, I'll turn the call over to Harley.

Harley Finkelstein
President

Good morning, and thanks, everyone, for joining us today. We've got another exceptional quarter to talk

Fluid H1 2026 RecapH1 was a half of real scale for Fluid — across metrics, product, and ecosystem reach.Top-level metricsFluid closed the first half of the year with $3.6B in total market size, $1.6B in active loans, and $18.1B in trading volume: #4 among lending protocols across all chains, and #2 DEX on Ethereum.

FinancialsRevenue reached ~$1.8M for the quarter, per Token Terminal. Fees generated totaled ~$9.5M, driven by asset price movement, DEX volatility, and leverage demand. About $FLUID Reserve and Buybacks continued at ~1.3% of supply.

Fluid's core productsFluid's five products all draw from one Fluid Liquidity Layer — a single Liquidity Layer powering all finance:

Fluid Lend — Deposit and earn.

Fluid Vaults — Borrow against collateral, up to 95% LTV, the highest in DeFi — made possible by an advanced liquidation engine that also enables partial liquidations to keep positions safe.

Fluid DEX — With Smart Collateral + Smart Debt — deep trading liquidity with new financial primitives.

Fluid Lite — Automated, one-click yield strategies for ETH and fixed interest USD yield.

Fluid LaaS — The most efficient way to bootstrap liquidity onchain for institutions, asset issuers, and RWAs — for a fraction of the cost. Isolated capital — not shared Liquidity Layer funds.

Built with Fluid TechnologyBeyond Fluid's own products, the same Liquidity Layer powers what partners build on top of it:

Curated Markets — Isolated, risk-curated markets, built and owned by partners on Fluid's rails. Like Bitwise's institutional vault.

Jupiter Lend (Solana) — Fluid Powered, by Jupiter Exchange.

Venus Flux (BNB Chain) — Fluid-powered, by Venus Protocol.

Where the Liquidity Layer is finding product-market fitFluid's capital efficiency has found real product-market fit as the cheapest way for stablecoin, RWA, and yield-bearing asset issuers to bootstrap liquidity and grow — built on three pillars: liquidity, utility, and distribution across all chains, including integration into Jupiter, the largest user base in crypto.

RWA-backed loans crossed ~$300M this quarter.

Liquidity-as-a-ServiceAn end-to-end managed service to bootstrap onchain liquidity — up to $500M in DEX liquidity per facility, with Fluid sourcing the entire balance sheet and managing the full position across all EVM chains and Solana. The asset issuer gets liquidity without operational lift. USD Lite depositors earn fixed income. Fluid earns the excess fee as protocol revenue. LaaS has already closed more than $100M in commitments.

Some of our first partners include:

USDai: a $100M facility supporting DEX liquidity for $USDai and $sUSDai

Huma Finance: DEX liquidity for $PST

Ecosystem expansionSolana now makes up roughly half of Fluid's total TVL. Two non-EVM ecosystem expansions are in the pipeline, including bringing Sui its first institutional credit market.

The white-label model continues to compound: Jupiter Lend, powered by Fluid, is now a $2B market. Bitwise × Ethena launched as the first third-party risk curator on Fluid, a $500M market. Venus Flux extended Fluid's engine into the BNB ecosystem.

Resilience, tested and rebuiltOn March 22nd, a malicious actor gained unauthorized access to Resolv's signing infrastructure, minting approximately $80M of uncollateralized USR. Fluid carried roughly $100M of exposure to the asset. The resulting shortfall — about $9.7M, or roughly 10% of total exposure — was covered directly from the DAO treasury. Every lender was made whole, there’s no users' funds lost. 

The response reshaped the quarter's engineering priorities:

Asset Listing Framework extended due diligence into offchain and cross-chain infrastructure, with granular asset documentation now published for every listing.

Black-swan infrastructure cut the time to react to market events down to minutes.

Granular limits are designed to shrink future shortfalls well below the ~10% seen during the Resolv incident.

Oracle v2 references multiple independent data points and can restrict risk-increasing actions — like borrowing or withdrawing — against a depegged asset, while still permitting actions that reduce risk, like repaying or depositing.

What's nextThe introduction of AGI3 — a proposed strategic partnership to bring regulated institutional capital onchain through a permissioned instance of Fluid, backed by Kinetic Group. That proposal is still live for DAO review, but it sets the direction for where Q3 has already gone.

Already underway in Q3

A full rebrand. New identity, new visual system, and a sharper articulation of what Fluid actually is: one Liquidity Layer powering apps, vaults, assets, and funds.

AGI3. The proposal moved from draft to live governance forum post, now open for community review and a DAO vote.

What's coming next

Solana DEX v1 — soon.

DEX v2 — development complete. Learn more about what's coming.

Fixed-Rate Borrowing — select any loan duration and lock in a fixed rate upfront, eliminating variable-rate exposure entirely. Genuine predictability in onchain borrowing, for the first time, enabling serious capital planning for individuals and institutions alike.

Custodied Collateral — offchain custody, onchain borrowing. A direct bridge between traditional finance custody requirements and DeFi's capital efficiency.

Institutional Deployments— new institutional asset managers, who set risk parameters and lending conditions across the Fluid ecosystem, turning the Liquidity Layer into programmable, professionally managed credit markets. 

Stay Fluid 🌊

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