Gladstone Land Corporation Q3 FY2025 earnings call

• Farmland Holdings: Owns ~100,000 acres on 148 farms in 15 states, leased to over 80 tenants growing 60+ crops. Water assets are in California.
• Sales Activity: Sold 1 property in Florida for $21.5M, a 36% premium over purchase price, generating a $6M gain. May consider additional farm sales.
• Lease Modifications: Adjusted lease structures on 6 properties to crop share, operated 2 properties with third-party operators. Pistachio harvest on 3 farms expected to bring $17M in Q4 2025, with first cash payment ~$5M. Transited vineyard lease in Napa back to traditional structure.
• Tenant Matters: 6 vacant farms, 2 properties under management agreements; working on solutions for tenants.
• Crop Markets: Pistachio and almond prices strong (EU and Middle East demand); wine grapes underperform. Weak dollar benefits exports.
• Water: Normal to wet cycle, enhancing water infrastructure, expecting 35-50% federal water allocation.

Gladstone Land Corporation owns approximately 100,000 acres of farmland and nearly 56,000 acre feet of water assets. For the third quarter, net income was about $2.1 million, net loss to common shareholders was $3.9 million or $0.11 per share, and adjusted FFO was $1.4 million or $0.04 per share compared to $4.5 million or $0.13 per share in the same quarter last year. Fixed base cash rents were $5.4 million lower year-over-year due to lease modifications, while participation rents increased by about $1.9 million.

• Anticipate higher participation rents in Q4 2025 from lease modifications.
• Plan to redeem Series B preferred stock to avoid coupon increase from 5% to 8% using common stock and line of credit.
• Declared $0.0467 per share monthly dividend for Q4 2025, 6.1% annualized yield. Hopeful for strong Q4 performance from crop sales.

• Interest rate volatility affecting financing costs.
• Uncertainty in crop markets due to tariffs, trade tensions, geopolitics.
• Potential challenges with tenant vacancies and lease restructurings.
• Wine grape market oversupply and underperformance.

Q: Talk about how the $16.9 million of revenue from the Pistachio harvest was versus expectations.

A: Moved from fixed leases to variable crop share, likely 2-3x previous revenue.

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

A: Series D matures Jan 2026, coupon increases to 8% if not redeemed. Plan to use common stock and line of credit, cost ~6% vs 5% current, better than 8%.

Q: Thoughts on the disposition market and potential for selling farms?

A: East Coast good, West Coast still recovering. Florida deal recent, potential for more sales.

Q: Liquidity for Series B redemption?

A: Can partially redeem, but 8% coupon not ideal. Current liquidity allows redemption, managing interest rate risk.