Alexandria Real Estate Equities' free cash flow margin fell to the lowest point in the company's record. Revenue for the quarter was $671.2 million, down 10.7% year on year, while adjusted EPS of −$0.03 against the analysts' average estimate of $0.00 was a beat of 0.0%. The shares fell 5.0% in the session after the release, while the S&P 500 rose 1.3%.
How Alexandria Real Estate Equities' quarter compared with the analysts' estimate
The beat sits at the edge of a thin record. Alexandria beat the analysts' average estimate in two of the last eight reported quarters, and the current quarter's 0.0% beat falls at the edge of that record, meaning the company has missed or matched the average estimate in the other six quarters.
The revenue growth rate of −9.9% is below every past reading in the company's own record, which ran from −8.4% to 25.0%
The slowdown reaches back further than this quarter alone. Revenue growth in six of the previous eight quarters outpaced this quarter's. Over the trailing twelve months, revenue fell 9.9%, a change of 1.5 percentage points for the worse on the rate a quarter earlier, placing it below every past reading in the company's record, which ran from −8.4% to 25.0%.
What Alexandria Real Estate Equities now guides to
Guidance for the year ending December 31, 2026 calls for adjusted funds from operations per share of $6.38 to $6.42, with same property net operating income expected to change between −10.5% and −8.5%. The company kept its fourth-quarter 2026 annualized net debt and preferred stock to adjusted EBITDA ratio at 5.6 to 6.2, and its occupancy target for operating properties at 86.2% to 87.8% as of December 31, 2026.
How the market took Alexandria Real Estate Equities' results
The shares fell 5.0% in the session after the release, while the S&P 500 rose 1.3%. That move compares with a typical results-day move of 3.3% for the stock, measured over previous reports. The release does not say why the shares moved.
What Alexandria Real Estate Equities' next report has to show
The next report will show whether the revenue decline, at 9.9% over the trailing twelve months, moves from that rate, and whether the free-cash-flow margin moves from its current −1.8%. Guidance for same property net operating income of −10.5% to −8.5% leaves open whether cost control offsets the revenue decline.
