Second-quarter results from American Realty Capital Properties (NYSE:VER) are officially in, and the company topped Wall Street expectations with strong results. Yet the biggest takeaway is the evidence revealing the massive transition the company has undertaken in just one year's time.

The strong quarter
In the second quarter, American Realty Capital Properties announced its adjusted funds from operations (AFFO) jumped to $0.24 per share, a 26% gain relative to the second quarter of 2013. This narrowly edged the $0.23 expectation by Wall Street analysts.

In October of last year, American Realty Capital Properties acquired Cole Real Estate Investments in an $11 billion move as it became the largest publicly traded net-lease REIT. As a result, the raw numbers of its results are even more eye-opening.

Source: Flickr / JeepersMedia.

The growth in top-line revenue of American Realty Capital Properties was up to $382 million, a 595% gain over the same period last year. But it must be noted the company has seen its total real estate investments grow from $7.5 billion to $18.1 billion.

The company also highlighted it has roughly $250 million acquisitions left to meet its $4.5 billion target for the full year, and it has continued to refine its debt obligations in an effort to "[take] advantage of the current rate environment."

As a result, David Kay, the President of ARCP, noted it continues to expect its full-year AFFO per share to be between $1.13 and $1.19, which is above the $1.06 AFFO per share expectation of Wall Street analysts.

All things considered, the second-quarter results posted by ARCP were both impressive and encouraging as the company continues to undergo massive change.

The remarkable change
Yet one of the most revealing things in the results from the earnings in the most recent quarter was the evidence of the monumental change the company has undergone over the last year.

As previously noted, American Realty Capital Properties purchased Cole Real Estate in October, but in May, it also announced the sale of its multi-tenant shopping centers, and its acquisition of more than 500 properties where Red Lobster operates.

In examining the progress of these moves, there were a number of stunning pictures of just how markedly different the company is now relative to 12 months ago.

As shown in the chart below, the composition of its property portfolio has undergone significant change:

Source: Company Investor Relations.

While the dramatic shift away from investment-grade tenants is a bit troubling, the fact the average lease is now more than two years longer is an encouraging sight.

In addition to the change in its property portfolio, there is also the astounding growth in the amount of stock the company has issued:

Source: S&P Capital IQ.

This explains why a glance toward its raw top- or bottom-line numbers doesn't reveal much of anything for individual investors, because while the pie itself may be bigger, so too are the number of slices dividing it up.

The key takeaway
The National Association of REITs notes that "REITs tend to generate a stable and consistent income stream for investors," and while ARCP has clearly delivered a consistent and stable stream of income and earnings, its foundational operations and composition has been anything but that over the last year thanks to its sizable expansion and growth.

While this clearly hasn't been a bad thing for ARCP -- in fact, just the opposite, as its AFFO per share is up nearly 30% through the first six months of the year -- it does mean any previous conclusions and determinations need to be reevaluated with this in mind, and more work needs to be done before a definitive investment conclusion can be made.