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Introduction & Market Context
Lineage Inc (NASDAQ:LINE) released its first quarter 2025 financial results on April 30, 2025, reporting expected seasonal declines in revenue and EBITDA while announcing significant strategic agreements with Tyson Foods (NYSE:TSN). The cold storage and logistics company’s stock rose 1.45% to close at $56.49 on April 29, with an additional 0.89% gain in pre-market trading following the earnings release.
The company emphasized that Q1 performance reflected a return to normal seasonality compared to elevated inventory levels in the prior year, with sequential improvement expected throughout 2025. Despite the quarterly decline, Lineage maintained its full-year 2025 guidance, signaling confidence in stronger second-half performance.
Quarterly Performance Highlights
Lineage reported first quarter revenue of $1.29 billion, down 3% year-over-year, while Adjusted EBITDA decreased 7% to $304 million. The company’s Adjusted EBITDA margin contracted by 110 basis points to 23.5%. Despite these declines, Adjusted Funds From Operations (AFFO) per share increased 6% to $0.86, demonstrating the company’s ability to generate improved shareholder returns even amid challenging conditions.
As shown in the following chart of quarterly financial results, the company has experienced fluctuating performance over recent quarters, with the current quarter showing expected seasonal weakness:
In the Global Warehousing segment, same warehouse physical occupancy remained relatively strong at 76.5%, though down from 79.1% in the prior year period. Economic occupancy similarly declined to 82.1% from 85.1% in Q1 2024. The company noted that its LinOS warehouse execution system and lean initiatives are helping to offset cost increases, with same warehouse cost of operations down 2% year-over-year.
The following slide details the performance of the Global Warehousing segment, showing the impact of normal seasonality on revenues and NOI:
Strategic Initiatives
The most significant announcement in the presentation was Lineage’s landmark agreements with Tyson Foods, which include:
1. Acquisition of four cold storage assets (in Pottsville, PA; Olathe, KS; Rochelle, IL; and Tolleson, AZ) for $247 million
2. Agreements to design, build, and operate two next-generation, fully automated cold storage warehouses with Tyson Foods as an anchor customer
3. Tyson Foods to occupy the newly developed Hazelton, PA warehouse as an anchor customer
The company expects these agreements to generate over $100 million in stabilized EBITDA when complete. The deal involves welcoming approximately 1,000 Tyson Foods employees to Lineage and represents a significant expansion of the company’s footprint and capabilities.
The following slide provides detailed information about the Tyson Foods agreements:
In addition to the Tyson Foods deal, Lineage announced the acquisition of three warehouse campuses from Bellingham Cold Storage for $121 million on April 1, complementing its existing portfolio in the Pacific Northwest. The company also deployed approximately $67 million for development projects, including completing one semi-automated expansion and commencing one fully automated expansion at high-utilization European sites.
Segment Performance
The Global Integrated Solutions segment, which includes transportation, food service, redistribution, and direct-to-consumer services, reported revenue of $348 million, down 3% year-over-year. Despite the decline, the segment maintained a strong NOI margin of 16.4%, equal to the prior year period.
The company noted that new business wins from the second half of 2024 are coming online throughout 2025, and that GIS transportation solutions are increasingly in focus as customers react to US tariff announcements. Management expects sequential improvement in this segment each quarter, with double-digit growth projected for the second half of the year.
As shown in the following segment breakdown, transportation represents 60% of the Global Integrated Solutions business:
Capital Structure & Guidance
Lineage reported total debt of $5.2 billion with a weighted average interest rate of 2.6% and approximately 3.5 years remaining on the weighted average term. Net debt and debt-like obligations totaled $6.7 billion, resulting in a leverage ratio of 5.2x. The company maintained strong liquidity of approximately $1.7 billion, including $197 million in available cash and about $1.5 billion in capacity on its revolving credit facility.
The following slide provides an overview of the company’s capital structure:
Despite the seasonal weakness in Q1, Lineage maintained its full-year 2025 guidance, projecting:
- Adjusted EBITDA of $1,350-$1,400 million (including approximately $25 million contribution from announced acquisitions)
- AFFO per share of $3.40-$3.60 (including approximately $0.05 contribution from announced acquisitions)
The company noted it is monitoring tariff uncertainty causing customer hesitancy but remains confident in its full-year outlook:
Forward-Looking Statements
Lineage’s management emphasized that normal seasonality implies approximately 47% of full-year NOI will be generated in the first half of 2025. They expect a year-over-year decline in Q2 similar to Q1, followed by a return to growth in the second half due to normal seasonality and easing comparisons to the prior year.
The company highlighted its competitive advantages, including increasing NOI and same warehouse growth yielding additional investment capacity, strong cash flow and tax-efficient REIT structure creating an efficient cost of capital, and accretive capital deployment in development projects and M&A supporting future NOI growth.
As illustrated in the company’s growth strategy slide, these advantages fuel a virtuous cycle of expansion:
Lineage’s greenfield and expansion projects represent a significant growth driver, with projects completed within the last 36 months and those currently in process expected to generate $137 million in stabilized NOI, compared to $34 million in LTM NOI achieved to date. This represents an incremental $103 million in potential NOI as these projects reach stabilization.
The company’s focus on technology and automation, particularly through its LinOS warehouse execution system, continues to be a key differentiator. Management noted that LinOS is exceeding expectations in initial pilots, with productivity improvements helping to offset cost increases and improve operational efficiency.
Full presentation:
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