Gladstone Land Announces Second Quarter 2025 Results

Please note that the limited information that follows in this press release is a summary and is not adequate for making an informed investment decision.

MCLEAN, VA / ACCESS Newswire / August 7, 2025 / Gladstone Land Corporation (Nasdaq:LAND) ("Gladstone Land" or the "Company") today reported financial results for the second quarter and year ended June 30, 2025. A description of funds from operations ("FFO"), core FFO ("CFFO"), and adjusted FFO ("AFFO"), all non-GAAP (generally accepted accounting principles in the United States) financial measures, appear at the end of this press release. All per-share references are to fully-diluted, weighted-average shares of common stock, unless noted otherwise. For further detail, please refer to the Quarterly Report on Form 10-Q (the "Form 10-Q"), which is available on the Investors section of the Company's website at www.GladstoneLand.com.

Second Quarter 2025 Activity:

• Timing Shift in Earnings Recognition: For the 2025 crop year, we modified lease agreements on six of our farms by reducing or eliminating fixed base rent amounts and, in some cases, providing cash lease incentives to certain tenants in exchange for significantly increasing the participation rent components. Additionally, we are currently operating two properties (encompassing four farms) under management agreements with third-party operators. As a result of these changes, we expect revenues from fixed base rents to be significantly lower throughout the year, while participation rents are anticipated to be considerably higher. This shift will delay the timing of revenue recognition and increase our reliance on participation rents, which are typically recognized once crop results are known, generally in the fourth quarter. As such, the majority of our revenue and annual earnings for 2025 are expected to be recognized in the fourth quarter.

• Portfolio Activity-Lease Activity: Executed four lease agreements expected to increase annual net operating income by approximately $166,000, or 9.3%, compared to the prior leases.

• Debt Activity-Loan Refinancing: Secured a new $10.6 million loan bearing interest at 6.31% (fixed for three years), which was used to repay a $10.3 million maturing loan that bore interest at 3.85%.

• Paid Distributions: Paid monthly cash distributions totaling $0.1401 per share of common stock during the quarter ended June 30, 2025.

Second Quarter 2025 Results:

Net loss for the quarter was approximately $7.9 million, compared to approximately $823,000 in the prior-year quarter. Net loss attributable to common stockholders during the quarter was approximately $13.9 million, or $0.38 per share, compared to approximately $6.7 million, or $0.19 per share, in the prior-year quarter. AFFO for the quarter was approximately $(3.5) million, or $(0.10) per share, compared to approximately $3.7 million, or $0.10 per share, in the prior-year quarter. Common stock dividends declared were approximately $0.14 per share for both periods.

Total cash lease revenues decreased, primarily due to a $6.8 million reduction in fixed base cash rents. This decrease was largely driven by modifications of certain lease agreements, as noted above, and ongoing vacancy and tenancy issues. Participation rents also decreased by approximately $975,000, primarily due to the accelerated recognition of certain revenue amounts in the prior year, as some information became available earlier than usual, enabling us to record those amounts in the first half of the year.

Excluding the second-quarter reversal of a capital gains fee earned during the first quarter of 2025, aggregate related-party fees decreased by approximately $67,000 during the current quarter, primarily due to a lower base management fee resulting from the sale of 19 farms since December 31, 2023. The capital gains fee is not payable until after the end of the fiscal year and is subject to further adjustment throughout the year if and when we dispose of additional assets. Excluding related-party fees, our remaining cash operating expenses decreased by approximately $135,000, primarily driven by a reduction in general and administrative expenses, particularly lower stockholder-related costs and reduced professional fees. This was partially offset by higher property operating expenses due to additional costs incurred to protect water rights on certain farms in California and elevated expenses related to farms that were vacant, direct-operated, or on non-accrual status, particularly increased property taxes. Interest expense decreased due to debt repayments made over the past year.

Cash flows from operations for the current quarter decreased by approximately $12.0 million compared to the prior-year quarter, primarily due to a reduction in cash received from fixed lease payments as a result of the lease modifications noted above, as well as lower cash collections from farms that were vacant, direct-operated, or on non-accrual status.

Subsequent to June 30, 2025:

• Portfolio Activity-California Water Activity: Purchased 1,530 gross acre-feet of water at a total cost of approximately $583,000, or approximately $381 per gross acre-foot.

• Debt Activity-Loan Repayments: Repaid a $10.4 million maturing bond that bore interest at a stated rate of 4.45%.

• Third Quarter Distributions: Declared monthly cash distributions of $0.0467 per share of common stock for each of July, August, and September (totaling $0.1401 per share of common stock for the quarter).

Comments from David Gladstone, President and CEO of Gladstone Land: "With the approach we've taken on certain of our western permanent crop farms, our earnings for 2025 will be more dependent on participation rents than in prior years, with the large majority expected to be recognized in the fourth quarter. We believe this structure will be the most profitable arrangement for this specific group of farms for the 2025 crop year, supported by their history of high yields and strong crop insurance coverage. Market trends for pistachios and almonds, the crops to which we are most exposed within this group, appear to be mostly positive. Pistachio prices are holding steady amid strong demand, with the recently announced minimum price for the 2025 crop matching last year's level, in line with our expectations. Almonds prices, after an initial dip following the release of the Almond Objective Forecast, have since rebounded somewhat and are currently 5% to 10% higher than they were at this time last year, and significantly above 2023 levels. We view these lease modifications as a temporary measure and continue to aim for a return to standard lease structures that include fixed base rents. If we are unable to reach satisfactory lease terms with tenants on these farms in the near future, we may also consider selling certain of these farms. In the meantime, we remain focused on enhancing long-term farm viability by pursuing opportunities to acquire additional water resources at below-market prices, further strengthening water security for our farms and growers. Our balance sheet remains in excellent condition, with nearly 100% of our outstanding debt held at fixed interest rates. We also continue to maintain strong liquidity, with over $150 million in immediately-available capital and more than $165 million in unencumbered properties that could be pledged as additional collateral, if needed."

Quarterly Summary Information
(Dollars in thousands, except per-share amounts)