Lineage Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Caitlin Burrows - Goldman Sachs International - Analyst : I was wondering if you could talk a little bit more about that expected lower US new business in 4Q. I guess, how important is new business versus existing business throughout the year and in 4Q specifically? And how has new business fared to date? And are you suggesting some change for 4Q? Or is it more of the same?

Question: Michael Goldsmith - UBS AG - Analyst : Greg, can you provide an update on the pricing strategy during the quarter, just given some of the demand headwinds that you talked about and then also the supplies? So I'm just trying to get an update on how you've approached pricing as a lever to maintain occupancy.

Question: Steve Sakwa - Evercore Inc - Analyst : Greg, I appreciate the added color you provided on the excess capacity. And it's nice to see that you guys didn't take as big of a hit on occupancy. But given that there's still a lot of excess capacity, I guess, in the market overall and there's still some new supply to come on in '26, I guess just what are your expectations looking forward on that physical occupancy? And how is that excess capacity kind of being absorbed and priced in the marketplace against the existing stock?

Question: Craig Mailman - Citibank Cameroon SA - Analyst : Just as we think about the third consecutive guidance cut we've had, I'm just kind of curious, if you guys are having this much trouble underwriting your own portfolio, like how do we get comfortable with yields on the capital you're deploying into development and potential acquisitions that we're not going to be a couple of hundred basis points kind of below pro forma here because looking at your schedule, you still have a lot to stabilize in terms of the portfolio? I think only about 15% kind of stabilized here. And just a second one to sneak it in here. Just have you guys thought about -- is a REIT maybe the right structure for this company, given the fact that you guys are more of a 3PL than you are a real estate company and it might be beneficial for you to be able to retain capital and redeploy that? Just some thoughts there.

Question: Ronald Kamdem - Morgan Stanley - Analyst : Just a lot of really helpful breadcrumbs on 2026 with the interest guidance and so forth. I just -- going back to the question of excess capacity. I was just wondering if you could sort of think about the next 12 to 18, and in this sort of environment, what can you control? And what do you think sort of the pricing versus occupancy impact can be and so forth? So what have you sort of seen in this sort of environment?

Question: Michael Carroll - RBC Capital Markets Inc - Analyst : Greg, can you give us some color on how Lineage was able to push their guarantee contracts up a little bit this quarter? I mean, is it abnormal to do this in the third quarter? And is that the reason why economic occupancy was up bigger sequentially in 3Q versus fiscal occupancy?

Question: Alexander Goldfarb - Piper Jaffray Inc - Analyst : And first, Robb with the BB, welcome aboard. Rob with the single B. Congrats on retirement. And Ki Bin, welcome to the inside. Greg, you mentioned that international is performing much better versus the U.S. Is it simply a matter of the excess supply, and that's really the difference? Or are there other things at work? I mean, there are always trade disputes from country-to-country. There are always geopolitical things, inflation tension, whatever happening overseas. So I'm just trying to isolate what the key difference is for why global is performing well versus the US, and I wonder if it's simply the supply or if there's other factors at work?

Question: Omotayo Okusanya - Deutsche Bank AG - Analyst : Yes. Ki Bin, welcome aboard. Rob with the BB, also welcome aboard. First quarter in a while you guys really haven't done much on the acquisition side. Just curious what you're seeing from that perspective. I know I kind of curious, again, is it just really more tied to your overall cost of equity right now that you slowed down or kind of how you're kind of looking at acquisitions going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 1:00PM, LINE.OQ - Q3 2025 Lineage Inc Earnings Call

Question: Daniel Guglielmo - Capital One Securities Inc - Analyst : You all mentioned the stronger international trends versus the US, which does align some with what we've seen for other global brands this earnings season. Can you just remind us what the rough revenue breakdown is between the U.S. and international? And then are there certain international markets where you see opportunities to lean in?

Question: Vikram Malhotra - Mizuho Securities USA LLC - Analyst : Congrats to everyone on their new roles. I guess just two clarifications. One, on just the numbers, maybe you can share some color on what you've seen in October, specifically to keep sort of the occupancy seasonal uptick. Your peers sort of assume the occupancy does an uptick. So why are you still assuming occupancy upticks? And just on the comment on you can get pricing next year, I mean if there's still supply volumes are muted, like what gives you confidence on pricing? So that's just the first. And then second, do you mind sharing some specific examples -- like all the acquisitions you've done in the past 5 years, maybe just give us some overall sense of how underwriting -- how actual performance has trended versus underwriting in terms of whether it's NOI growth or yields or anything else, just to give the sense of what those properties recently acquired are doing?

Question: Blaine Heck - Wells Fargo Securities LLC - Analyst : Just following up on guidance. With respect to the fourth quarter, it's a relatively wide range between $0.68 and $0.78. So can you just share your thoughts on what key drivers or line items are kind of the biggest variables that could result in AFFO coming in towards the upper or lower end of the range?

Question: Samir Khanal - Bofa Merrill Lynch Asset Holdings Inc - Analyst : I guess, Greg, I was looking at this chart on Page 30, which is the presentation you have up there, where you show economic and physical, an 80% economic today; I mean do you have data going back prior to, let's say, '21 and even 2020? Just trying to see if there was any other time before 2020 or '21, where occupancy was below 80%. It's clearly been a problem forecasting occupancy in this business. So I was trying to figure out how today's levels compare to historically before 2020.

Question: Michael Mueller - JPMorgan Chase & Co - Analyst : Curious, what are your larger customers telling you at this time about volume expectations for 2026? And have you seen any customers wanting to shrink their fixed commitment agreement yet?

Question: Todd Thomas - KeyBanc Capital Markets Inc - Analyst : Just in terms of the tariff uncertainty that you cited and the decrease in container traffic, it seems like some of this is just lost business, but is there an impact on inventory levels as a result of this decrease in container traffic that you mentioned that might create some pent-up demand to the extent that there's improved visibility or if there's some change around tariffs here? How could this sort of play out in the quarters ahead?

Question: Nicholas Thillman - Robert W. Baird & Co Inc - Analyst : Good morning, everyone. Just as we think about the excess capacity you all highlighted within the presentation, we're hearing a lot from the food manufacturers on restructuring, rationalizing supply chains. I was wondering if there's anything Lineage just been doing on their own network, whether it be closing underutilized facilities or just rationalizing their footprint within the US being a large player that could maybe close that gap with excess capacity we're just seeing from a national picture. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 1:00PM, LINE.OQ - Q3 2025 Lineage Inc Earnings Call

Question: Omotayo Okusanya - Deutsche Bank AG - Analyst : Yes. Could you talk a little bit about sort of labor on your same-store pool, kind of pretty well managed; but on the non-same-store pool, some kind of large year-over-year increases kind of understanding, you've added kind of new assets over time? But just curious, are these new rule assets have, again, lower occupancy assets but already fully staffed or kind of what's kind of happening on the nonsame-store side to kind of have these really large jobs with the increased number of facilities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 1:00PM, LINE.OQ - Q3 2025 Lineage Inc Earnings Call

Question: Caitlin Burrows - Goldman Sachs International - Analyst : I had a question on the pricing side. So one of the concerns I've heard from investors is that I think it's like half of your portfolio one-year agreements. So those were recently reset in '25. But the other half, that means, they're on leases from a few years ago. Maybe you could tell us how far back they go. But what's the risk of rent roll outs from those older contracts that were established a few years ago in '26? And is that incorporated into your view of low single-digit rate increase in '26? Or is that '26 low single-digit price increase only related to those one-year agreements and the rest could be an incremental headwind?