Gladstone Land Corporation Q3 FY2025 earnings call

Farmland Holdings

• Currently owns about 100,000 acres on 148 farms and nearly 56,000 acre feet of water assets in California.
• Operates with a disciplined approach to investments due to high interest rates, with no new farms acquired.

Sales Activity

• Completed sale of 1 property in Florida with 2 farms for $21.5M, a 36% premium over original purchase price, generating a ~$6M gain.

Lease Modifications

• Adjusted lease structures on 6 permanent crop properties to a percentage of gross crop sales instead of fixed rent. Operated 2 properties with third-party operators.
• Expect to recognize ~$17M in revenue in Q4 2025 from 3 pistachio orchards, with first cash payment over $5M received.

Crop Markets

• Nut crops (especially pistachios) show resilience with strong demand from EU and Middle East; almond prices rebounded. Wine grape markets underperform due to oversupply.
• Water assets: Normal to wet cycle, enhancing water delivery storage infrastructure.

Gladstone Land Corporation owns approximately 100,000 acres of farmland on 148 farms and nearly 56,000 acre feet of water assets in California. There is no detailed breakdown of revenue contribution by product segment provided in the transcript.

Forward-Looking

• Anticipate higher participation rents in Q4 2025 from lease modifications.
• Plan to redeem Series B term preferred stock to avoid coupon increase from 5% to 8%.
• Expect strong Q4 performance from ongoing crop sales.
• Believe inflation in food sector will increase farmland values, especially for healthy foods.

Risks

• Geopolitical rhetoric and trade tensions impacting export markets.
• Weakness in wine grape markets leading to oversupply.
• Volatility in interest rates affecting financing costs.
• Tenancy issues causing vacancies and revenue loss.

Q: Talk about how that $16.9 million of revenue from the Pistachio harvest was versus what you were expecting?

A: If leased a few years ago, would have received fixed lease amount; now with variable rate, likely 2 or 3x higher.

Q: What's the cost associated with redeeming the Series B and the timing?

A: Cost is around 6%, plan to use common stock and line of credit to redeem Series B to avoid coupon increase from 5% to 8%.

Q: Are there disposition opportunities, particularly outside of California?

A: East Coast is good, West Coast still recovering; potential to generate capital via selling farms.

Q: Where are you today in terms of having the liquidity you'd like to fully pay down the Series B?

A: Can partially redeem, but having any product at 8% is not ideal; current liquidity allows partial or full redemption, managing interest rate risk.