Agree Realty Posts Strong Revenue Growth, Expands Portfolio

TL;DR

**ADC is aggressively expanding its real estate portfolio, but watch out for share dilution impacting per-share earnings despite strong revenue growth.**

AI Summary

Agree Realty Corporation reported robust financial performance for the three and nine months ended September 30, 2025. Total revenues increased by 18.7% to $183.2 million for the three months ended September 30, 2025, compared to $154.3 million in the same period of 2024. For the nine months, total revenues grew by 15.7% to $527.9 million from $456.4 million year-over-year. Net income attributable to common stockholders rose by 18.2% to $50.3 million for the three-month period, up from $42.5 million, while diluted net income per share remained stable at $0.45. However, for the nine months, net income attributable to common stockholders increased by 3.1% to $142.7 million, but diluted net income per share decreased to $1.30 from $1.37 in the prior year, primarily due to a significant increase in weighted average common shares outstanding to 109.9 million from 100.9 million. The company's real estate investments, net, expanded to $8.3 billion as of September 30, 2025, from $7.4 billion at December 31, 2024, reflecting substantial acquisition and development activities, with $1.09 billion spent on acquisitions and $102.1 million on development during the nine months ended September 30, 2025. Total assets reached $9.48 billion, up from $8.49 billion at year-end 2024. The company also increased its unsecured revolving credit facility and commercial paper notes borrowings significantly to $19.15 billion for the nine months ended September 30, 2025, compared to $598.0 million in the prior year, indicating active capital management.

Why It Matters

Agree Realty's continued expansion in real estate investments, with over $1 billion in acquisitions, signals aggressive growth in the net lease retail sector, potentially increasing its market share against competitors. For investors, the 18.2% increase in net income attributable to common stockholders for the quarter is positive, but the diluted EPS decline for the nine-month period due to share dilution warrants close attention. Employees and customers benefit from a growing, stable REIT, though increased debt from the revolving credit facility could introduce future interest rate risk. The company's strategic focus on industry-leading tenants and a large property portfolio of 2,603 properties positions it well in a competitive retail real estate market.

Risk Assessment

Risk Level: medium — The company's total liabilities increased significantly to $3.61 billion at September 30, 2025, from $2.98 billion at December 31, 2024, driven by a substantial increase in unsecured revolving credit facility and commercial paper notes to $389.0 million from $158.0 million. This increased leverage, coupled with a decrease in diluted EPS for the nine-month period to $1.30 from $1.37, indicates potential financial strain or increased sensitivity to interest rate fluctuations.

Analyst Insight

Investors should monitor Agree Realty's future capital deployment strategies and the impact of increased share count on per-share metrics. While revenue growth is strong, evaluate the efficiency of new acquisitions and development projects in driving accretive earnings per share, especially given the significant increase in debt and common stock issuance.

Financial Highlights

debt To Equity

0.61

revenue

$183.2M

operating Margin

N/A

total Assets

$9.48B

total Debt

$3.61B

net Income

$50.3M

eps

$0.45

gross Margin

N/A

cash Position

$13.7M

revenue Growth

+18.7%

Revenue Breakdown

Key Numbers

• $183.2M — Total Revenues (3 months) (Up 18.7% from $154.3M in Q3 2024)
• $527.9M — Total Revenues (9 months) (Up 15.7% from $456.4M in 9M 2024)
• $50.3M — Net Income Attributable to Common Stockholders (3 months) (Up 18.2% from $42.5M in Q3 2024)
• $142.7M — Net Income Attributable to Common Stockholders (9 months) (Up 3.1% from $138.4M in 9M 2024)
• $0.45 — Diluted Net Income Per Share (3 months) (Stable compared to $0.42 in Q3 2024)
• $1.30 — Diluted Net Income Per Share (9 months) (Down from $1.37 in 9M 2024 due to share dilution)
• $8.3B — Net Real Estate Investments (Increased from $7.4B at Dec 31, 2024)
• $1.09B — Acquisition of Real Estate Investments (Significant investment in 9 months ended Sep 30, 2025)
• 114.1M — Common Shares Issued and Outstanding (As of Sep 30, 2025, up from 107.2M at Dec 31, 2024)
• $3.61B — Total Liabilities (Increased from $2.98B at Dec 31, 2024)

Key Players & Entities

• Agree Realty Corporation (company) — registrant and REIT
• Richard Agree (person) — Executive Chairman and founder
• New York Stock Exchange (regulator) — exchange where ADC common stock is listed
• $183.2 million (dollar_amount) — total revenues for three months ended September 30, 2025
• $527.9 million (dollar_amount) — total revenues for nine months ended September 30, 2025
• $50.3 million (dollar_amount) — net income attributable to common stockholders for three months ended September 30, 2025
• $1.09 billion (dollar_amount) — acquisition of real estate investments for nine months ended September 30, 2025
• $102.1 million (dollar_amount) — development of real estate investments for nine months ended September 30, 2025
• $9.48 billion (dollar_amount) — total assets as of September 30, 2025
• $3.61 billion (dollar_amount) — total liabilities as of September 30, 2025

FAQ

Risk Factors

• Interest Rate Sensitivity [high — market]: The company's financial results are sensitive to changes in interest rates. Rising interest rates can increase borrowing costs for new debt and refinancing existing debt, potentially impacting profitability and the ability to acquire new properties. The company's total debt increased to $3.61 billion as of September 30, 2025, from $2.98 billion at December 31, 2024.
• Tenant Concentration Risk [medium — market]: A significant portion of rental income may be derived from a limited number of tenants. The inability of a major tenant to meet its lease obligations could have a material adverse effect on the company's financial condition and results of operations. Specific tenant details are not provided in this summary.
• Real Estate Investment Strategy Execution [high — operational]: The company's growth strategy relies on successful acquisition and development of real estate. Failure to identify attractive investment opportunities, complete acquisitions or developments on time and within budget, or effectively manage the acquired properties could hinder growth. The company invested $1.09 billion in acquisitions and $102.1 million in development during the nine months ended September 30, 2025.
• Leverage and Debt Covenants [high — financial]: The company utilizes debt to finance its operations and growth. Significant leverage increases the risk of financial distress if cash flows are insufficient to service debt obligations. The company's total liabilities increased to $3.61 billion from $2.98 billion, and its unsecured revolving credit facility and commercial paper notes borrowings increased significantly to $389 million from $158 million.
• REIT Compliance [medium — regulatory]: As a Real Estate Investment Trust (REIT), Agree Realty Corporation must comply with specific tax laws and regulations. Failure to maintain its status as a REIT could result in significant tax liabilities and negatively impact its financial performance.

Industry Context

Agree Realty Corporation operates in the net lease real estate sector, a segment characterized by long-term leases where tenants are responsible for property operating expenses. The industry is influenced by interest rate environments, tenant creditworthiness, and demand for specific retail and industrial property types. Growth in e-commerce continues to shape tenant demand, favoring well-located, modern facilities.

Regulatory Implications

As a publicly traded REIT, Agree Realty Corporation is subject to SEC regulations and specific IRS rules governing REITs. Compliance with these regulations is crucial for maintaining its tax-advantaged status. Any changes in tax laws or increased regulatory scrutiny could impact the company's operations and profitability.

What Investors Should Do

1. Monitor share count changes and their impact on EPS.
2. Analyze the drivers of revenue growth and acquisition pipeline.
3. Evaluate the company's leverage and debt management strategy.
4. Assess the impact of rising interest rates on future financing and property valuations.

Glossary

Real estate investments, net

The company's portfolio of properties held for investment, net of accumulated depreciation. (Represents the core asset base of the company, showing significant growth to $8.3 billion.)

Lease intangibles, net

The value attributed to favorable lease agreements, amortized over the lease term. (Indicates the value of in-place leases, with a notable increase to $967 million.)

Diluted net income per share

Net income divided by the total number of diluted common shares outstanding, accounting for all potential dilutive securities. (Decreased to $1.30 for the nine months due to an increase in shares outstanding.)

Unsecured revolving credit facility and commercial paper notes

A line of credit that does not require collateral and short-term debt instruments, used for general corporate purposes and working capital. (Borrowings increased significantly to $389 million, indicating active use of credit facilities for funding.)

Accumulated depreciation

The total depreciation expense recognized for an asset since its acquisition. (Reduces the book value of buildings, reflecting the usage and age of the properties.)

Year-Over-Year Comparison

Agree Realty Corporation has demonstrated robust revenue growth, with total revenues increasing by 18.7% for the quarter and 15.7% year-to-date, driven by significant acquisition and development activities totaling $1.09 billion and $102.1 million respectively. While net income attributable to common stockholders also saw an increase, diluted EPS for the nine-month period declined due to a substantial rise in weighted average common shares outstanding. The company's balance sheet shows expansion, with net real estate investments growing to $8.3 billion and total assets reaching $9.48 billion, accompanied by a significant increase in total liabilities to $3.61 billion, reflecting active capital deployment and financing.

Key Financial Figures

• $0.0001 — ange on Which Registered Common Stock, $0.0001 par value ADC New York Stock Exchan

Filing Documents

• adc-20250930x10q.htm (10-Q) — 3326KB
• adc-20250930xex22.htm (EX-22) — 44KB
• adc-20250930xex31d1.htm (EX-31.1) — 12KB
• adc-20250930xex31d2.htm (EX-31.2) — 12KB
• adc-20250930xex32d1.htm (EX-32.1) — 6KB
• adc-20250930xex32d2.htm (EX-32.2) — 6KB
• 0001104659-25-101233.txt ( ) — 13985KB
• adc-20250930.xsd (EX-101.SCH) — 78KB
• adc-20250930_cal.xml (EX-101.CAL) — 105KB
• adc-20250930_def.xml (EX-101.DEF) — 405KB
• adc-20250930_lab.xml (EX-101.LAB) — 681KB
• adc-20250930_pre.xml (EX-101.PRE) — 564KB
• adc-20250930x10q_htm.xml (XML) — 2968KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 1 Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 2 Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2025 and 2024 3 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 5 Notes to Condensed Consolidated Financial Statements 6 Item 2 :

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3 :

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 44 Item 4 :

Controls and Procedures

Controls and Procedures 45 PART II Other Information Item 1 :

Legal Proceedings

Legal Proceedings 46 Item 1A :

Risk Factors

Risk Factors 46 Item 2 : Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3 : Defaults Upon Senior Securities 46 Item 4 : Mine Safety Disclosures 46 Item 5 : Other Information 46 Item 6 : Exhibits 47

SIGNATURES

SIGNATURES 49 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements AGREE REALTY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) (Unaudited) September 30, December 31, 2025 2024 ASSETS Real estate investments Land $ 2,787,363 $ 2,514,167 Buildings 6,123,531 5,412,564 Less accumulated depreciation ( 677,700 ) ( 564,429 ) 8,233,194 7,362,302 Property under development 64,047 55,806 Net real estate investments 8,297,241 7,418,108 Real estate held for sale, net 706 — Cash and cash equivalents 13,696 6,399 Cash held in escrow 3,182 — Accounts receivable - tenants, net 117,602 106,416 Lease intangibles, net of accumulated amortization of $ 546,136 and $ 461,419 at September 30, 2025 and December 31, 2024, respectively 966,964 864,937 Other assets, net 84,639 90,586 Total Assets $ 9,484,030 $ 8,486,446 LIABILITIES Mortgage notes payable, net $ 41,718 $ 42,210 Unsecured term loan, net 347,900 347,452 Senior unsecured notes, net 2,583,685 2,237,759 Unsecured revolving credit facility and commercial paper notes 389,000 158,000 Dividends and distributions payable 29,927 27,842 Accounts payable, accrued expenses, and other liabilities 161,782 116,273 Lease intangibles, net of accumulated amortization of $ 48,671 and $ 46,003 at September 30, 2025 and December 31, 2024, respectively 56,777 46,249 Total Liabilities 3,610,789 2,975,785 Commitments and contingencies (Note 11) EQUITY Preferred stock, $ .0001 par value per share, 4,000,000 shares authorized, 7,000 shares Series A outstanding, at stated liquidation value of $ 25,000 per share, at September 30, 2025 and December 31, 2024 175,000 175,000 Common stock, $ .0001 par value, 360,000,000 and 180,000,000 shares authorized, 114,134,251 and 107,248,705 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 11 10 Additional paid-in-capital 6,247,

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