Gladstone Land Corporation Q2 FY2025 earnings call

• Farmland holdings: ~103 acres on 150 farms in 15 states, water assets in California.
• Lease structure: Modified leases on 6 properties, operating 2 properties with third-party operators; aim to transition back to traditional fixed base rents.
• Crop performance: Almonds showing positive momentum, harvest started; pistachio market strong with good demand, 2025 crop sold out early; wine grape vineyards hope to recover costs.
• Water assets: Invested in water infrastructure, stored 55,000 acre feet of water; addressing Sigma regulations impact on properties.
• Financing: Refinanced $10M loan, repaid $10M bond; $150M available capital and $170M unpledged properties as collateral.

Gladstone Land has about 103 acres on 150 different farms across 15 states, with water assets in California totaling over 55,000 acre feet (equivalent to ~18 billion gallons). They have 8 properties under modified lease agreements or direct operation by third-parties. Leasing activity: 4 new standard lease agreements entered during the quarter, expected to increase annual NOI by ~$166,000 (9%). One property in Florida is classified as held for sale.

• Expect higher participation rents in H2 2025 from lease modifications.
• Monthly dividend of $0.0467 per share declared for Q3 2025, maintaining current level.
• Assessing options for refinancing Series D bonds due Jan 2026, considering property sales and line of credit.

• Market trading activity affecting stock price.
• High cost of capital impacting acquisition and operation decisions.
• Uncertainties in crop yields, pricing, and income recognition from crop share components.
• Impact of water regulatory changes (Sigma) on property values and operations.

Q: Follow-up on participation rents, how much in 4Q 2025?

A: Difficult to say precisely, but likely ~60%-65% this year with rest in subsequent periods.

Q: Expectations for Series D redemption in Jan 2026?

A: Assessing options, including using proceeds from property sales, line of credit.

Q: Other crop types showing softness?

A: Annual row crops have short-term whims from weather, but permanent crops like nuts are the main focus.

Q: Impact of Sigma on properties?

A: Land values bifurcating, properties with weak water access dropping, those with good infrastructure maintaining value; team spends much time on Sigma issues.

Q: Water usage decrease?

A: 44-acre foot decrease due to tenant transition and well transfer, using stored water for irrigation.