Americold (COLD) Q2 AFFO Surges 350%

Americold Realty Trust (COLD -0.76%), a real estate investment trust focused on temperature-controlled warehouses and supply chain infrastructure, released its Q2 2025 earnings on August 7, 2025. The headline results were a strong beat: adjusted funds from operations per share (a key REIT profit metric, often called AFFO) came in at $0.36, sharply higher than the $0.08 analysts expected. Revenue (GAAP) also exceeded predictions at $650.7 million, above the $643.7 million consensus forecast. However, both Adjusted FFO (non-GAAP) per share and revenue declined compared to Q2 2024. Management assessed the quarter as demonstrating solid operational discipline and ongoing progress in technology and contracts, even as softer demand and lower occupancy challenged the business. The company also trimmed its full-year 2025 financial outlook, citing subdued warehouse trends and persistent macroeconomic headwinds.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Focus

Americold Realty Trust specializes in the ownership and operation of temperature-controlled warehouses used for the storage and distribution of perishable foods. Its network includes hundreds of facilities worldwide, providing refrigerated and frozen storage for producers, distributors, and retailers. This infrastructure is critical to the food supply chain, supporting quick movement and strict safety standards.

The company’s recent strategy centers on three main areas: growth through strategic acquisitions and partnerships, investment in advanced technology such as enterprise resource planning systems, and expanding fixed storage commitment contracts with customers. These areas help Americold secure steady revenue, improve operational efficiency, and better serve long-term clients, which are key to success in the cold storage industry. Customer relationships are a major asset, with the top 25 customers—including many leading food brands and grocers—accounting for 51% of warehouse revenue in 2024.

Quarterly Developments and Segment Highlights

During Q2 2025, Americold beat both profit (non-GAAP EPS) and revenue (GAAP) expectations, but experienced declines compared to last year. Revenue (GAAP) dropped 1.5% year over year due to decreasing warehouse segment performance, with warehouse revenues (GAAP) down by $6.3 million (1.1%) to $594.1 million. Net operating income (NOI, a non-GAAP metric) in the global warehouse segment fell 1.7% to $201.0 million. The drops were mainly due to lower occupancy: average economic occupancy slipped to 73.8%, down 430 basis points, while physical occupancy fell 500 basis points to 62.8% in Q2 2025. Throughput—the number of pallets moved—declined 2.7%. These changes reflect food supply trends and customers keeping inventory lean as demand softened.

Despite weaker occupancy and volumes, the company managed to boost pricing, with same-store rent and storage revenue per economically occupied pallet on a constant currency basis increasing approximately 2%, and same-store services revenue per throughput pallet increasing over 3% in Q1 2025. Total rent and storage revenue per economically occupied pallet was up 1.9%, and revenue per throughput pallet for warehouse services rose 4.1%. Fixed commitment contracts accounted for 60% of rent and storage revenue in Q1 2025. As of June 30, 2025, fixed commitment rent and storage contracts made up 59.7% of storage revenue and 61.4% of total warehouse segment revenue in Q2 2025. Management noted that customers value these fixed commitments to ensure capacity during seasonal demand spikes and to support supply chain reliability.

Americold executed several strategic projects in the quarter. It launched new facilities in Kansas City (in partnership with railroad operator CPKC), Allentown (to meet expanded customer demand), and Dubai (a joint venture with DP World, a logistics company, in a multi-temperature storage facility) in Q2 2025. The Houston acquisition, completed late in the first quarter, is expected to support new retail customer growth and use of capital. The company has also been consolidating operations into owned facilities and exiting leased properties to optimize asset utilization and boost long-term profitability.

Technology investment remains a point of emphasis. Project Orion, which is the company’s initiative to upgrade its enterprise resource planning (ERP) system and streamline operations, continues to impact selling, general, and administrative expenses. Despite higher upfront costs, management reported margin improvements in warehouse services, up 90 basis points year over year to 13.3% on a same-store basis in Q2 2025. These system upgrades, which went live in North America and Asia-Pacific, are designed to deliver greater efficiency, better analytics, and stronger cybersecurity across the business.

The company reported total liquidity of $937.0 million as of June 30, 2025, with net debt of $3.9 billion as of Q2 2025. Its net debt to pro-forma Core EBITDA ratio was approximately 6.3x as of Q2 2025—a high figure for a real estate investment trust, but one managed through stable cash flows and a mostly fixed-rate debt structure. Over 95.2% of Americold’s debt was unsecured as of June 30, 2025, and about 92.7% carried a fixed interest rate as of June 30, 2025. The company raised its quarterly dividend by 5% to $0.23 per share in Q2 2025, paid on July 15, 2025.

Looking Ahead and Guidance

Management revised its outlook for FY2025 to reflect ongoing soft demand and continued pressure on occupancy and throughput. The new forecast for adjusted funds from operations (non-GAAP) per share is $1.39 to $1.45 for 2025, down from the previous $1.42 to $1.52 guidance. The company also cut its warehouse same-store revenue growth projection (constant currency) for 2025 to a range of (4.0%) to 0.0%, down from earlier estimates of 0.0% to 2.0%. Warehouse segment same-store NOI growth (constant currency) is now expected to be 50 to 100 basis points below the associated revenue change for FY2025, compared to a previous goal of outperforming revenue by 100 basis points. These shifts are directly attributed to continued low consumer confidence, inventory reductions by food industry customers, and softer end-market demand for refrigerated storage and logistics.

Americold is pulling back on maintenance capital expenditures, now planning $60–70 million instead of $80–85 million in 2025, but expects to maintain its development pipeline at $200–300 million in new projects in 2025. Leadership emphasized continued investment in technology, the importance of fixed contracts to revenue visibility, and plan to further rationalize the asset portfolio by exiting lower-return leased sites. With no clear improvement in industry demand trends, management will focus on cost control and efficiency until conditions improve. The company raised its dividend by 5% to $0.23 per share in Q2 2025.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.