10-QPeriod: Q2 FY2022

Extra Space Storage Inc. Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 5, 2022For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) reported strong performance for the second quarter and first half of 2022, demonstrating robust revenue growth and improved profitability. Total revenues increased by 25.4% for the quarter and 24.6% year-to-date, driven primarily by a significant 26.9% and 26.0% rise in property rental revenue, respectively. This growth is attributed to a substantial increase in average rental rates for both new and existing customers, alongside contributions from strategic acquisitions. The company also saw a notable increase in management fees and other income, reflecting an expanding third-party management portfolio. Profitability metrics also showed significant improvement, with net income attributable to common stockholders up 38.2% for the quarter and 32.2% year-to-date. Funds From Operations (FFO) attributable to common stockholders and unit holders also saw strong growth, increasing by 31.5% for the quarter and 33.3% year-to-date. Same-store net operating income surged by 26.0% and 26.7% for the quarter and year-to-date periods, respectively, indicating healthy operational performance in established properties. The company continues to expand its physical footprint through acquisitions, demonstrating a commitment to growth and market leadership in the self-storage sector.

Financial Highlights

42 data points
Beta

Revenue

$474.99M

78.1% Gross Margin

Net Income

$232.13M

48.9% Net Margin

EPS (Diluted)

$1.73

Total Assets

$11.04B

Cash & Equivalents

$58.73M

Free Cash Flow

$352.92M

Financial Statements
Beta
Revenue$474.99M
Cost of Revenue$104.25M
Gross Profit$370.74M
Operating Expenses$213.57M
Operating Income$275.67M
Interest Expense$47.47M
Net Income$232.13M
EPS (Basic)$1.73
EPS (Diluted)$1.73
Shares Outstanding (Basic)134.19M
Shares Outstanding (Diluted)142.74M

Key Highlights

  • 1Total revenues increased by 25.4% to $475 million for the quarter and 24.6% to $918.5 million for the first six months of 2022, driven by property rental revenue growth.
  • 2Net income attributable to common stockholders rose by 38.2% to $232.1 million for the quarter and 32.2% to $435.7 million for the first six months.
  • 3Same-store net operating income (NOI) showed significant strength, growing by 26.0% for the quarter and 26.7% year-to-date, reflecting improved rental rates and operational efficiencies.
  • 4The company completed 29 store acquisitions totaling $406.8 million in cash and assumed liabilities during the first six months of 2022.
  • 5Acquisition of Bargold Storage Systems for approximately $179.3 million was completed on June 1, 2022, adding 17,000 storage units.
  • 6Funds From Operations (FFO) attributable to common stockholders and unit holders increased by 31.5% to $303.6 million for the quarter and 33.3% to $590.0 million for the first six months.
  • 7The company maintained strong liquidity, with $58.7 million in cash and cash equivalents and access to revolving credit facilities.

Frequently Asked Questions

The primary driver of Extra Space Storage's revenue growth in the second quarter of 2022 was the significant increase in property rental revenue, which rose by 26.9%. This was largely due to higher average rental rates for both new and existing customers, as well as contributions from recent acquisitions.

Profitability significantly improved. Net income attributable to common stockholders increased by 38.2% to $232.1 million for the quarter and by 32.2% to $435.7 million for the six-month period. Funds From Operations (FFO) also showed strong growth, up 31.5% for the quarter and 33.3% year-to-date.

Extra Space Storage continues to pursue growth through strategic acquisitions, as evidenced by the purchase of 29 wholly-owned stores and the acquisition of Bargold Storage Systems in the first half of 2022. The company also manages a growing portfolio of third-party stores.

The same-store performance remains very strong. Same-store net operating income (NOI) increased by 26.0% for the quarter and 26.7% year-to-date, driven by higher rental rates. While occupancy saw a slight decrease in same-store properties, the overall increase in rental rates more than offset this.