Adjusted EBITDA Growth
Adjusted EBITDA increased 3.3% year-over-year to $314 million in Q1 2026, beating expectations and reflecting operational resilience.
Lineage, Inc.
· LINE
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +8.30%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call conveyed cautious optimism: operational results in Q1 beat expectations (EBITDA +3.3%, revenue flat, stabilized occupancy trends, pricing progress and strong international performance) and management reinforced a disciplined plan for cost savings, development ramp and technological productivity gains. However, meaningful near-term challenges remain, including AFFO per share decline due to hedge expirations, weakened throughput and container volumes (-17% YoY), pockets of excess capacity in late-supply U.S. markets, and leverage that is above target. Management reiterated full-year guidance while expressing increased conviction in achieving the midpoint, signaling stability but continued caution.
Company Guidance
Lineage reiterated 2026 guidance with annual same‑store NOI down 4% to 1%, total warehouse NOI −2% to +1%, GIS NOI 0%–2%, adjusted EBITDA $1.25B–$1.30B and AFFO $2.75–$3.00 per share (fully diluted share count ~260M in Q2, ~259M for the year), while saying Q1 results increased conviction toward the midpoint; Q1 metrics included adjusted EBITDA $314M (+3.3% YoY), AFFO $201M or $0.78/sh (−9.3% YoY), same‑store NOI −0.9% YoY, same‑store physical occupancy 76.4% (−290 bps sequential), economic occupancy 82%, rent/storage/blast revenue per physical pallet +2.2% YoY, throughput −3.3% and services revenue per throughput pallet +50 bps; management noted FX helped same‑store NOI by ~250 bps in Q1 (≈100 bps expected in Q2), admin expense should normalize to ~$120M–$125M/quarter, a $50M+ admin cost reduction is targeted (≈half in 2026, full in 2027 with ~$15M upfront spend), balance sheet at ~$7.9B net debt with $1.6B liquidity and ~$600M maturities in 2026, adjusted net debt/transaction EBITDA 5.3x (reported leverage 6.0x; target 5.0–5.5x), and development upside from 22 projects (>$1.2B invested to date, expected >$150M incremental EBITDA when stabilized and a non‑same‑store ramp toward ~ $20M/quarter).
Revenue Stability
Total revenue was essentially flat year-over-year in Q1 2026, indicating stabilization amid industry headwinds.
AFFO and Comparable Adjustments
Total AFFO was $201 million ($0.78 per share). The reported AFFO per share declined 9.3% YoY to $0.78, largely driven by expiration of prior-year interest rate hedges; excluding that hedging impact AFFO per share was essentially flat.
Pricing Momentum
Same-store rent, storage and blast revenue per physical pallet increased 2.2% year-over-year (fourth consecutive quarter of YoY increases). Management has secured ~70% of target rate increases and expects net price increases of 1%–2% for 2026.
Occupancy and Economic Occupancy
Same-store physical occupancy ended Q1 at 76.4% (sequential decline of 290 bps but only ~30 bps YoY), with economic occupancy at 82%, suggesting better-than-expected stabilization of core operations.
Growth Capital and Development Pipeline
Invested $130 million in growth capital during the quarter; 22 facilities under construction/ramping; $1.2 billion already invested in these projects with expected incremental EBITDA of over $150 million when stabilized.
Technology and OpEx Savings Target
LinOS implementation at 11 conventional facilities (targeting rollout to at least 20 facilities in 2026) and reiterated 3–5 year OpEx savings target of $110 million tied to automation/AI and operational improvements.
Segment Performance — Global Warehousing & GIS
Global Warehousing total warehouse NOI rose 1.1% YoY to $364 million and same-store NOI was down only 0.9% YoY to $347 million (ahead of expectations). Global Integrated Solutions NOI was flat at $57 million while GIS NOI margin expanded 190 bps to 18.3% after divestitures of lower-margin businesses.
Balance Sheet Liquidity & Manageable Near-Term Maturities
Ended the quarter with $7.9 billion of total net debt and $1.6 billion of total liquidity; approximately $600 million of debt maturing in 2026 which management characterizes as manageable given capital market access.
Cost Rationalization Plan
Announced targeted administrative and indirect cost reductions of $50 million+ with roughly half expected to be realized in 2026 and full benefit in 2027 (one-time upfront investment of ~$15 million).
Operator
Ladies and gentlemen, thank you for joining us, and welcome to Lineage's First Quarter 2026 Earnings Conference Call. [Operator Instructions]. I will now hand the conference over to Ki Bin Kim, Head of Investor Relations. Please go ahead.
Ki Bin Kim
Thank you. Welcome to Lineage's discussion of its first quarter 2026 financial results. Joining me today are Greg Lehmkuhl, Lineage's President and Chief Executive Officer; and Robb LeMasters, Chief Financial Officer. Our earnings presentation, which includes supplemental financial information, can be found on our Investor Relations website at ir.onelineage.com. Following management's prepared remarks, we'll be happy to take your questions. Before we start, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our filings with the SEC. These risks could cause our actual results to differ materially from those expressed in or implied by our comments.
Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. In addition, reference will be made to certain non-GAAP financial measures. Information regarding our use of these measures and a reconciliation of non-GAAP to GAAP measures can be found in the press release and supplemental package that was issued this morning. Unless otherwise noted, reported figures are rounded and comparisons of the first quarter of 2026 ar...
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