How did Realty Income perform in Q4 2025 on a recurring earnings basis?

AFFO per diluted share was $1.08 in Q4 2025, up from $1.05 in Q4 2024, and total AFFO was $996.7 million, up from $921.9 million. Same store rental revenue rose 1.1%, and occupancy reached 98.9%. AFFO is the more reliable indicator of recurring earnings because GAAP net income in the quarter was affected by gains on sales and impairment charges.

Is the dividend covered by earnings?

Yes. Dividends paid in 2025 were $3.217 per share, equal to 75.2% of diluted AFFO per share of $4.28. The annualized dividend was $3.240 at year-end, and the company has increased it for 113 consecutive quarters, most recently in December 2025.

What does the 2026 guidance imply for investors?

The company guided 2026 AFFO per share to $4.38–$4.42, roughly 2.8% growth at the midpoint, and about 9% total operational return including the dividend yield. Guidance also assumes about $8.0 billion of investment volume, same store rent growth of 1.0%–1.3%, and occupancy near 98.5%. Actual results could differ because they depend on deal timing and the cost of capital.

How is the company funding its growth, and what is the dilution risk?

Funding is coming from ATM equity forward sales (42.0 million shares settled in 2025 for $2.4 billion), new debt including the January 2026 $862.5 million convertible note, and third-party capital through the U.S. Private Fund and the GIC partnership. About 12.6 million shares, worth roughly $708.5 million in expected net proceeds, remain unsettled as of February 24, 2026, so share count will keep rising and per-share metrics will depend on deploying that capital at accretive yields.

Why do GAAP net income and AFFO differ so much?

GAAP net income includes depreciation of about $2.5 billion, which is a large non-cash charge on real estate, as well as gains or losses on property sales, impairments, and foreign currency or derivative items. FFO and AFFO add back depreciation and remove these items, so the gap between the two measures mostly reflects accounting treatment rather than cash generation.

O 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 24, 2026. Cited figures are marked; the original filing is the authoritative source.

Realty Income (NYSE: O) reported Q4 and full-year 2025 results that show steady core growth alongside a heavy investment and capital-raising program.

For Q4 2025, net income available to common stockholders was $296.1 million^a, or $0.32 per diluted share, versus $0.23 a year earlier, and AFFO per share was $1.08, up from $1.05. For full-year 2025, AFFO per share was $4.28, up 2.1% from $4.19, and total investment reached $6.3 billion at a 7.3% initial weighted average cash yield. Same store rental revenue grew 1.1% in Q4 and 1.3% for the year, portfolio occupancy rose to 98.9%, and the rent recapture rate was 104.9% in the quarter.

Management guided 2026 AFFO per share to $4.38^b–$4.42 (about 2.8% growth at the midpoint) and initial investment volume to roughly $8.0 billion. The quarter's net income is inflated by a $67.4 million gain on property sales and is partly offset by $124.4 million in impairment provisions, so the $0.32 headline figure is noisy and AFFO is the better gauge of run-rate earnings. Leverage was stable at 5.4x Net Debt to Annualized Pro Forma Adjusted EBITDAre.

Funding came from roughly $2.4 billion^c of ATM equity in 2025, a $862.5 million convertible note issued in January 2026, and new institutional capital through the U.S. Private Fund and a GIC partnership. Dividend coverage remained healthy: the 2025 AFFO payout ratio was 75.2%, and the dividend has been raised for 113 consecutive quarters. For investors, the key questions are whether the company can deploy the 2026 pipeline at accretive yields (current initial yields are about 7%) while keeping leverage near 5.4x and dilution from ATM issuance manageable.

The Fund and GIC partnership diversify the capital base but also add fee and structural complexity. Meanwhile, the company is expanding internationally, including its first Mexico investment, and its Europe exposure now makes up a meaningful share of Annualized Base Rent.

02—Key points

Key Highlights

Q4 2025 AFFO per diluted share was $1.08, up from $1.05 a year earlier; full-year 2025 AFFO per share was $4.28, up 2.1%.
Q4 2025 net income available to common stockholders was $296.1 million ($0.32 per share), boosted by a $67.4 million gain on sales and reduced by $124.4 million of impairment provisions.
2026 AFFO per share guidance is $4.38–$4.42, implying about 2.8% growth at the midpoint, with initial investment volume guided to about $8.0 billion.
Full-year 2025 investment of $6.3 billion (pro-rata $6.2 billion) came at a 7.3% initial weighted average cash yield; Q4 investment of $2.4 billion was at 7.1%.
Portfolio occupancy rose to 98.9%, same store rental revenue grew 1.1% in Q4 and 1.3% for the year, and the Q4 rent recapture rate was 104.9%.
Net Debt to Annualized Pro Forma Adjusted EBITDAre was 5.4x; the company raised $2.4 billion through ATM forwards in 2025 and issued $862.5 million of 3.5% convertible notes in January 2026.
The company announced a GIC build-to-suit joint venture (over $1.5 billion of commitments), its first Mexico investment ($200 million takeout commitment), and a U.S. Private Fund raising about $1.5 billion in commitments.

03—Questions

Frequently Asked Questions

How did Realty Income perform in Q4 2025 on a recurring earnings basis?
AFFO per diluted share was $1.08 in Q4 2025, up from $1.05 in Q4 2024, and total AFFO was $996.7 million, up from $921.9 million. Same store rental revenue rose 1.1%, and occupancy reached 98.9%. AFFO is the more reliable indicator of recurring earnings because GAAP net income in the quarter was affected by gains on sales and impairment charges.
Is the dividend covered by earnings?
Yes. Dividends paid in 2025 were $3.217 per share, equal to 75.2% of diluted AFFO per share of $4.28. The annualized dividend was $3.240 at year-end, and the company has increased it for 113 consecutive quarters, most recently in December 2025.
What does the 2026 guidance imply for investors?
The company guided 2026 AFFO per share to $4.38–$4.42, roughly 2.8% growth at the midpoint, and about 9% total operational return including the dividend yield. Guidance also assumes about $8.0 billion of investment volume, same store rent growth of 1.0%–1.3%, and occupancy near 98.5%. Actual results could differ because they depend on deal timing and the cost of capital.
How is the company funding its growth, and what is the dilution risk?
Funding is coming from ATM equity forward sales (42.0 million shares settled in 2025 for $2.4 billion), new debt including the January 2026 $862.5 million convertible note, and third-party capital through the U.S. Private Fund and the GIC partnership. About 12.6 million shares, worth roughly $708.5 million in expected net proceeds, remain unsettled as of February 24, 2026, so share count will keep rising and per-share metrics will depend on deploying that capital at accretive yields.
Why do GAAP net income and AFFO differ so much?
GAAP net income includes depreciation of about $2.5 billion, which is a large non-cash charge on real estate, as well as gains or losses on property sales, impairments, and foreign currency or derivative items. FFO and AFFO add back depreciation and remove these items, so the gap between the two measures mostly reflects accounting treatment rather than cash generation.

04—Continue

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