Americold Realty Trust, Inc. Q2 FY2025 earnings call

• Customer Service: Americold was recognized as a top 3PL and cold storage provider by Food Logistics Magazine. Same-store economic occupancy declined slightly, but there were new retail wins in Europe. Rent and storage revenue from fixed commitments was 60% for the quarter. • Labor: Investments in training, engagement, and retention have paid dividends, with a perm-to-temp hours ratio of 75-25, contributing to the growth in same-store warehouse services margins. • Pricing: Same-store rent and storage revenue per economic occupied pallet increased approximately 1% year-over-year, and same-store services revenue per throughput pallet increased by 4%. The team is strategically defending market share while maintaining pricing architecture. • Development Activity: Key projects completed in the second quarter include the Allentown expansion, Kansas City greenfield facility with CPKC, and the Dubai flagship build with DP World. The development pipeline is healthy at approximately $1 billion in low-risk opportunities aligned with the strategy.

In the second quarter, same-store economic occupancy declined slightly compared to the first quarter. Same-store warehouse services margins improved year-over-year by 90 basis points to 13.3%. Second quarter same-store rent and storage revenue per economic occupied pallet increased approximately 1% year-over-year, and same-store services revenue per throughput pallet increased by 4%. Rent and storage revenue from fixed commit contracts was 60% for the quarter. Within the Global Warehouse segment, the top 25 customers account for approximately 50% of Global Warehouse revenue and the churn rate remains below 4%.

• AFFO per share was revised to $1.39 to $1.45 per share. • Expect same-store economic occupancy levels to decrease by approximately 250 to 450 basis points and same-store throughput to decrease by 1% to 4% for the year. • Sequentially, throughput is anticipated to lift slightly from Q2 to Q3, with occupancy levels modestly building in Q4. The outlook was reduced due to continued market headwinds such as demand and supply challenges.

• Industry-wide headwinds including interest rates, tariffs, inflation, government benefit reductions, and excess capacity are pressuring occupancy rates across the industry. • Customers are taking control of their cold chain needs, which may impact demand for third-party warehouses. • Uncertainty regarding the improvement of macroeconomic parameters, which is crucial for occupancy and revenue growth.

Q: Samir Khanal from Bank of America inquired about pricing competitiveness and fixed commits.

A: George and Rob discussed pricing pressure, with handling pricing maintained due to value-add services, and fixed commits structured as multiyear agreements with a 60% target.

Q: Steve Sakwa from Evercore ISI asked about revenue growth pressure and new capital deployment.

A: George and Jay talked about demand headwinds affecting revenue and new capital deployment with a 10%-12% return hurdle.

Q: Greg McGinniss from Scotiabank questioned the lack of seasonal uplift and demand factors.

A: George and Jay explained there was no expected seasonal lift and macroeconomic factors impacting demand.

Q: Todd Thomas from KeyBanc Capital Markets asked about customers integrating cold chain needs and noncore dispositions.

A: George discussed customers using their own cold storage first, and noncore dispositions being leased assets.

Q: Craig Mailman from Citi asked about other income and 2026 catalysts.

A: Jay explained components of other income, and George discussed global investment opportunities.

Q: Blaine Heck from Wells Fargo asked about customers' internal capacity and development NOI.

A: George discussed customers using their own space, and Jay explained incremental NOI from developments.