Lineage Q2 2025 slides: Revenue edges up while company cuts full-year guidance

Lineage Inc. (NASDAQ:LINE) reported modest revenue growth in its second-quarter 2025 financial results released on August 6, but lowered its full-year guidance amid ongoing operational challenges. The cold storage and logistics provider saw its stock price rise 2.99% to $44.44 in the previous trading session, though it remains well below its 52-week high of $88.78.

Quarterly Performance Highlights

Lineage reported total revenue of $1,350 million for Q2 2025, representing a slight increase of 0.9% compared to the same period last year. However, the company posted a GAAP net loss of $7 million, or $0.03 per diluted common share. Adjusted EBITDA decreased by 2.4% to $326 million, with the adjusted EBITDA margin contracting by 90 basis points to 24.1%.

Despite these challenges, Adjusted Funds From Operations (AFFO) showed significant improvement, increasing 55.1% to $211 million, with AFFO per share rising 8.0% to $0.81.

"Our second quarter results reflect the resilience of our business model in a challenging environment," said Greg Lehmkuhl, President and CEO of Lineage, according to the presentation materials. "While we continue to face headwinds in certain segments, our strategic initiatives and operational efficiencies are driving improvements in our cash flow metrics."

The company’s balance sheet as of June 30, 2025, shows total assets of $19,444 million, up from $18,661 million at the end of 2024. Cash and cash equivalents declined to $82 million from $175 million, while long-term debt increased to $5,735 million from $4,906 million.

Detailed Financial Analysis

The global warehousing segment, which represents Lineage’s core business, showed mixed results. Warehouse storage metrics indicate modest improvement with revenue per pallet increasing by 0.8%. The company maintained relatively stable economic occupancy rates, an important indicator of facility utilization efficiency.

The detailed breakdown of the global warehousing segment reveals the operational dynamics driving the company’s performance. For the three months ended June 30, 2025, the segment generated substantial revenue from both storage and services components.

Same warehouse results provide insight into the performance of Lineage’s established facilities, offering a clearer picture of organic growth excluding the impact of acquisitions and new developments.

Meanwhile, the non-same warehouse results reflect the company’s expansion efforts and the performance of newly acquired or developed facilities. This segment shows how recent investments are contributing to overall results.

The Global Integrated Solutions segment, which encompasses Lineage’s value-added services beyond basic storage, generated revenues of $380 million for the three months ended June 30, 2025, compared to $372 million in the same period of 2024. This represents a 2.2% increase, outperforming the company’s overall growth rate.

Forward-Looking Statements

In a significant update, Lineage revised its full-year 2025 guidance downward. The company now expects adjusted EBITDA of $1.29 to $1.34 billion, compared to its previous guidance of $1.35 to $1.40 billion announced during the Q1 earnings call. Similarly, AFFO per share guidance was lowered to $3.20 to $3.40 from the prior range of $3.40 to $3.60.

For the third quarter of 2025, Lineage projects adjusted EBITDA of $326 to $336 million and AFFO per share of $0.75 to $0.79.

This downward revision contrasts with the company’s more optimistic outlook from the first quarter, when management anticipated a return to same-store growth in the second half of the year. The adjusted EBITDA has decreased from $340 million in Q1 to $326 million in Q2, indicating continued operational challenges.

The reconciliation of EBITDA and Adjusted EBITDA provides important context for understanding the company’s non-GAAP financial metrics and the adjustments made to arrive at these figures.

Strategic Initiatives

Despite the operational challenges, Lineage completed several strategic initiatives during the quarter. Most notably, the company successfully executed its inaugural $500 million investment grade bond offering, consisting of 5-year unsecured notes with a 5.25% coupon. This transaction demonstrates market confidence in Lineage’s long-term prospects despite near-term headwinds.

The company also maintained its commitment to shareholder returns, declaring a quarterly dividend of $0.5275 per share, which represents an annualized dividend rate of $2.11 per share.

Capital expenditures remain focused on both maintenance and growth initiatives. For the three months ended June 30, 2025, Lineage invested $35 million in maintenance capital expenditures for its global warehousing segment, slightly higher than the $34 million spent in the same period last year.

The company continues to pursue external growth opportunities, with significant investments in acquisitions and development projects. These strategic investments are part of Lineage’s long-term plan to expand its global footprint and enhance its service offerings, though they may pressure short-term financial results as new facilities ramp up to full operational capacity.

As Lineage navigates through the remainder of 2025, investors will be closely watching whether the company can reverse the trend of declining EBITDA and deliver on its revised guidance while maintaining its dividend and growth initiatives in an increasingly challenging operating environment.

Full presentation:

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