PECO's Q3 Net Income Soars 113% on Strong Revenue Growth

TL;DR

**PECO is crushing it with double-digit revenue growth and a massive net income jump, making it a solid buy in the retail REIT space.**

AI Summary

Phillips Edison & Company, Inc. (PECO) reported a robust financial performance for the three and nine months ended September 30, 2025. For the three months, total revenues increased by 10.3% to $182.67 million from $165.53 million in the prior year, while net income attributable to stockholders surged by 112.8% to $24.69 million from $11.60 million. Diluted earnings per share also rose significantly to $0.20 from $0.09. For the nine-month period, total revenues grew by 10.3% to $538.73 million from $488.34 million, and net income attributable to stockholders increased by 43.2% to $63.78 million from $44.54 million, with diluted EPS reaching $0.51 compared to $0.36. The company expanded its real estate portfolio, acquiring 11 properties and 2 outparcels for a total price of $282.04 million during the nine months ended September 30, 2025. Debt obligations, net, increased to $2.39 billion as of September 30, 2025, from $2.11 billion at December 31, 2024. Key risks include geographic concentration, with Florida, California, and Texas representing 11.9%, 11.1%, and 10.2% of annualized base rent, respectively, making the portfolio susceptible to regional economic events.

Why It Matters

This strong performance from Phillips Edison & Company indicates resilience in the grocery-anchored retail sector, a positive signal for investors seeking stable income streams in a competitive real estate market. The significant increase in net income and EPS demonstrates effective asset management and strategic acquisitions, potentially boosting investor confidence in PECO's growth trajectory. For employees, continued expansion and profitability suggest job security and potential for growth within the company. Customers benefit from a growing portfolio of necessity-based retail centers. The competitive context shows PECO outperforming, potentially drawing capital away from less stable retail REITs.

Risk Assessment

Risk Level: medium — The risk level is medium due to the geographic concentration of PECO's portfolio, with 11.9% of ABR in Florida, 11.1% in California, and 10.2% in Texas. This makes the company susceptible to adverse natural or economic events in these specific real estate markets. Additionally, debt obligations, net, increased by $275.78 million to $2.39 billion, which could pose a risk if interest rates continue to rise or economic conditions worsen.

Analyst Insight

Investors should consider increasing their exposure to PECO, given its strong revenue growth and significant net income increase. Monitor the company's debt management strategies and its performance in key geographic markets, particularly Florida, California, and Texas, for any signs of economic downturns.

Financial Highlights

debt To Equity

0.92

revenue

$182.67M

operating Margin

28.5%

total Assets

$5.26B

total Debt

$2.39B

net Income

$24.69M

eps

$0.20

gross Margin

71.5%

cash Position

$4.08M

revenue Growth

+10.3%

Revenue Breakdown

Key Numbers

• $182.67M — Total revenues for Q3 2025 (Increased by 10.3% from $165.53 million in Q3 2024)
• $24.69M — Net income attributable to stockholders for Q3 2025 (Increased by 112.8% from $11.60 million in Q3 2024)
• $0.20 — Diluted EPS for Q3 2025 (Increased from $0.09 in Q3 2024)
• $538.73M — Total revenues for YTD Q3 2025 (Increased by 10.3% from $488.34 million in YTD Q3 2024)
• $63.78M — Net income attributable to stockholders for YTD Q3 2025 (Increased by 43.2% from $44.54 million in YTD Q3 2024)
• $0.51 — Diluted EPS for YTD Q3 2025 (Increased from $0.36 in YTD Q3 2024)
• 11 — Number of properties acquired YTD Q3 2025 (Part of real estate acquisition activity)
• $282.04M — Total price of acquisitions YTD Q3 2025 (Reflects real estate portfolio expansion)
• $2.39B — Debt obligations, net, as of September 30, 2025 (Increased from $2.11 billion at December 31, 2024)
• 125.8M — Shares outstanding as of October 17, 2025 (Common stock shares)

Key Players & Entities

• Phillips Edison & Company, Inc. (company) — registrant
• PECO (company) — ticker symbol
• Phillips Edison Grocery Center Operating Partnership I, L.P. (company) — operating partnership
• Phillips Edison Grocery Center OP GP I LLC (company) — sole general partner of Operating Partnership
• SEC (regulator) — U.S. Securities and Exchange Commission
• Florida (location) — 11.9% of ABR
• California (location) — 11.1% of ABR
• Texas (location) — 10.2% of ABR
• Nasdaq Global Select Market (market) — exchange for common stock
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Geographic Concentration [medium — market]: The portfolio has significant concentration in Florida (11.9% of annualized base rent), California (11.1%), and Texas (10.2%). This makes the company susceptible to adverse economic events or conditions in these specific regions.
• Increased Debt Levels [medium — financial]: Net debt obligations increased to $2.39 billion as of September 30, 2025, from $2.11 billion at December 31, 2024. This higher leverage could increase financial risk and impact the company's ability to service its debt.
• Real Estate Portfolio Management [medium — operational]: The company's performance is tied to the successful management and leasing of its grocery-anchored shopping centers. Any downturn in retail or grocery sectors, or operational inefficiencies, could negatively impact revenue and profitability.
• Interest Rate Sensitivity [medium — financial]: As a REIT with significant debt, the company is exposed to fluctuations in interest rates. Rising interest rates could increase borrowing costs and negatively impact net income and cash flow.

Industry Context

Phillips Edison & Company operates within the retail real estate sector, specifically focusing on grocery-anchored shopping centers. This segment is generally considered defensive due to the essential nature of grocery-related retail. The industry is influenced by consumer spending habits, e-commerce penetration, and the financial health of national and regional retailers. Trends include the increasing importance of omni-channel strategies and the demand for well-located, necessity-based retail destinations.

Regulatory Implications

As a publicly traded REIT, PECO is subject to SEC regulations and reporting requirements. REITs also have specific tax rules that require them to distribute a significant portion of their taxable income to shareholders annually. Compliance with these regulations is crucial for maintaining their tax-advantaged status.

What Investors Should Do

1. Monitor debt levels and leverage ratios.
2. Analyze same-store rent growth and occupancy rates.
3. Assess the impact of geographic concentration.
4. Evaluate the success of recent property acquisitions.

Key Dates

• 2025-09-30: Quarter and Nine-Month Period End — Reporting period for the 10-Q, showing strong revenue growth and net income increases.
• 2025-12-31: Prior Year End — Baseline for comparison of balance sheet items, notably debt obligations.
• 2024-09-30: Prior Year Quarter and Nine-Month Period End — Comparison period for revenue, net income, and EPS growth.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. (PECO operates as a REIT, which has specific tax and operational implications.)

Omni-channel grocery-anchored neighborhood and community shopping centers

Shopping centers anchored by grocery stores that cater to necessity-based goods and services, with a focus on both physical and online customer engagement. (Describes PECO's core investment strategy and property type.)

Annualized Base Rent (ABR)

The total rent collected from all tenants over a 12-month period, excluding percentage rent and other variable income. (Used to quantify the geographic concentration risk of the portfolio.)

Net Investment in Real Estate Assets

The value of real estate assets after deducting accumulated depreciation and amortization. (Represents the book value of the company's core property holdings.)

Accumulated Deficit

The cumulative net losses of a company since its inception. (Indicates that PECO has historically incurred more expenses than revenues, though current operations are profitable.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Phillips Edison & Company has demonstrated strong top-line growth, with total revenues increasing by 10.3% for both the three and nine months ended September 30, 2025. Net income attributable to stockholders saw a substantial surge of 112.8% in Q3 and 43.2% year-to-date, leading to significant improvements in diluted EPS. While the company has expanded its real estate portfolio through acquisitions, its net debt obligations have also risen from $2.11 billion to $2.39 billion, indicating increased financial leverage. No new significant risk factors were highlighted in this filing compared to the previous period, but existing risks such as geographic concentration remain relevant.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share PECO Nasdaq Global Select Mar

Filing Documents

• peco-20250930.htm (10-Q) — 1640KB
• peco_20250930-exx221.htm (EX-22.1) — 3KB
• peco_20250930-ex311.htm (EX-31.1) — 9KB
• peco_20250930-ex312.htm (EX-31.2) — 10KB
• peco_20250930-ex321.htm (EX-32.1) — 4KB
• peco_20250930-ex322.htm (EX-32.2) — 4KB
• peco-20250930_g1.jpg (GRAPHIC) — 330KB
• peco-20250930_g2.jpg (GRAPHIC) — 163KB
• peco-20250930_g3.jpg (GRAPHIC) — 47KB
• peco-20250930_g4.jpg (GRAPHIC) — 43KB
• peco-20250930_g5.jpg (GRAPHIC) — 52KB
• peco-20250930_g6.jpg (GRAPHIC) — 47KB
• 0001476204-25-000108.txt ( ) — 8936KB
• peco-20250930.xsd (EX-101.SCH) — 46KB
• peco-20250930_cal.xml (EX-101.CAL) — 89KB
• peco-20250930_def.xml (EX-101.DEF) — 215KB
• peco-20250930_lab.xml (EX-101.LAB) — 634KB
• peco-20250930_pre.xml (EX-101.PRE) — 435KB
• peco-20250930_htm.xml (XML) — 929KB

FINANCIAL STATEMENTS (CONDENSED AND UNAUDITED)

FINANCIAL STATEMENTS (CONDENSED AND UNAUDITED) 2 CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 202 4 2 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 3 CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 4 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 6 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 ORGANIZATION 8 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 8 NOTE 3 LEASES 9 NOTE 4 REAL ESTATE ACTIVITY 10 NOTE 5 OTHER ASSETS, NET 12 NOTE 6 DEBT OBLIGATIONS 13 NOTE 7 DERIVATIVES AND HEDGING ACTIVITIES 14 NOTE 8 COMMITMENTS AND CONTINGENCIES 14 NOTE 9 EQUITY 15 NOTE 10 EARNINGS PER SHARE 16 NOTE 11 RELATED PARTY TRANSACTIONS 17 NOTE 12 FAIR VALUE MEASUREMENTS 17 NOTE 13 REPORTABLE SEGMENTS 19 NOTE 14 SUBSEQUENT EVENTS 20 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 21 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 40 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 41 PART II. ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 41 ITEM 1A.

RISK FACTORS

RISK FACTORS 41 ITEM 2 . UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 41 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 41 ITEM 4. MINE SAFETY DISCLOSURES 42 ITEM 5. OTHER INFORMATION 42 ITEM 6. EXHIBITS 42

SIGNATURES

SIGNATURES 43 PHILLIPS EDISON & COMPANY SEPTEMBER 30, 2025 FORM 10-Q 1 w PART I FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS PHILLIPS EDISON & COMPANY, INC. CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (Condensed and Unaudited) (In thousands, except per share amounts) September 30, 2025 December 31, 2024 ASSETS Investment in real estate: Land and improvements $ 1,952,657 $ 1,867,227 Building and improvements 4,293,614 4,085,713 In-place lease assets 540,571 523,209 Above-market lease assets 77,587 76,359 Total investment in real estate assets 6,864,429 6,552,508 Accumulated depreciation and amortization ( 1,928,005 ) ( 1,771,052 ) Net investment in real estate assets 4,936,424 4,781,456 Investment in unconsolidated joint ventures 36,594 31,724 Total investment in real estate assets, net 4,973,018 4,813,180 Cash and cash equivalents 4,076 4,881 Restricted cash 1,735 3,768 Goodwill 29,066 29,066 Other assets, net 246,209 195,328 Real estate investment and other assets held for sale 8,250 — Total assets $ 5,262,354 $ 5,046,223 LIABILITIES AND EQUITY Liabilities: Debt obligations, net $ 2,385,326 $ 2,109,543 Below-market lease liabilities, net 117,316 116,096 Accounts payable and other liabilities 156,805 163,692 Deferred income 22,722 22,907 Liabilities of real estate investment held for sale 461 — Total liabilities 2,682,630 2,412,238 Commitments and contingencies (see Note 8) — — Equity: Preferred stock, $ 0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at September 30, 2025 and December 31, 2024 — — Common stock, $ 0.01 par value per share, 1,000,000 shares authorized, 125,710 and 125,120 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 1,257 1,251 Additional paid-in capital ("APIC") 3,661,270 3,646,801 Accumulated other comprehensive income ("AOCI") 980 4,305 Accumulated deficit ( 1,385,714 ) ( 1,332,435 ) Total stockholders' equity 2,277,793 2,319,922 Noncontrolling interests 301,931 314,063 Total equity

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Condensed and Unaudited) 1. ORGANIZATION Phillips Edison & Company, Inc. ("we," the "Company," "PECO," "our," or "us") was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P. (the "Operating Partnership"), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly-owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership. We are a real estate investment trust ("REIT") that invests primarily in omni-channel grocery-anchored neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to three unconsolidated institutional joint ventures, Grocery Retail Partners I LLC ("GRP I"), Necessity Retail Venture LLC ("NRV"), and Neighborhood Grocery Catalyst Fund LLC ("NGCF"), in which we have partial ownership interests, and one private fund (collectively, the "Managed Funds"). As of September 30, 2025, we wholly-owned 303 real estate properties. Additionally, we owned a 14 % interest in GRP I, which owned 20 properties, a 20 % ownership interest in NRV, which owned two properties ( one of which was acquired in 2025), and a 31 % interest in NGCF, which owned three properties ( two of which were acquired in 2025). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our condensed consolidated interim financial statements. Certain of our

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