Americold Realty Trust Q1 2026 Earnings Report

Americold Realty Trust EPS Results

• Actual EPS: $0.29
• Consensus EPS: -$0.04
• Beat/Miss: Beat by +$0.33
• One Year Ago EPS: $0.34

Americold Realty Trust Revenue Results

• Actual Revenue: $629.87 million
• Expected Revenue: $613.77 million
• Beat/Miss: Beat by +$16.10 million
• YoY Revenue Growth: +0.20%

Americold Realty Trust Announcement Details

• Quarter: Q1 2026
• Date: 5/7/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, May 7, 2026
• Conference Call Time: 8:00AM ET

Americold Realty Trust (NYSE:COLD), Inc. is a real estate investment trust that owns, operates and develops temperature-controlled warehouses and distribution facilities. The company provides cold storage infrastructure for food producers, retailers, distributors and other customers whose products require refrigerated or frozen environments.

Americold’s services include refrigerated and frozen storage, handling, inventory management, transportation coordination and other supply-chain solutions. Its facilities support the movement of perishable products such as meat, seafood, dairy, fruits and vegetables, prepared foods and other temperature-sensitive goods from producers to retailers and consumers.

The company serves customers through a network of temperature-controlled properties in key food distribution markets across North America, Europe and the Asia-Pacific region. Americold became a publicly traded real estate investment trust in 2018 and has continued to focus on expanding and managing specialized cold-storage infrastructure.

Americold Realty Trust Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Joint venture with EQT: Americold is contributing 12 U.S. properties (~$1.3B seed pool) to a JV where EQT will hold 70%; Americold expects to receive approximately $1.1 billion (target close in Q3), retain a 30% share of NOI and earn ~$15–$20M/year in management fees while continuing to operate the assets.
• Positive Sentiment: Q1 financials and demand stabilizing: Q1 AFFO per share was $0.29 (above consensus) — the third consecutive quarter meeting/exceeding consensus — and physical occupancy was flat year‑over‑year with pricing marginally ahead of guidance, allowing management to maintain its full‑year AFFO guide.
• Negative Sentiment: Near‑term AFFO headwind from the JV: Management estimates the JV could be a roughly $0.10 per‑share AFFO headwind on a full‑year basis (about $0.06 for H2 2026), depending on timing of closing.
• Positive Sentiment: Cost and portfolio actions underway: Americold executed $30M of targeted indirect labor/SG&A savings in Q1 (reducing >400 positions), is actively exiting/idling underperforming sites, and completed creative portfolio moves (including a bought asset placed on a 15‑year NNN lease yielding ~10% ROI).
• Negative Sentiment: Operational pressures on NOI: Q1 warehouse NOI declined ~4.5% due to ongoing storage pricing pressure, lower throughput and a ~$2M energy cost headwind, though management notes pass‑throughs and hedges help mitigate energy exposure.

Presentation

[Operator]

Hello, welcome everyone joining today's Americold Realty Trust First Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Rich Leland. Please go ahead.

[Rich Leland, VP of Finance and Investor Relations and Corporate Treasurer at Americold Realty Trust]

Hello, and thank you for joining us today for Americold Realty Trust first quarter 2026 earnings conference call. In addition to the press release distributed this morning, we have filed a supplemental financial package with additional detail on our results. These materials are available on the investor relations section of our website at www.americold.com. This morning's conference call is hosted by Americold's Chief Executive Officer, Rob Chambers, along with Chris Papa, our Chief Financial Officer. Management will make some prepared comments after which we'll open up the call to your questions. Before we begin, let me remind you that management's remarks today may contain forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those anticipated.

[Rich Leland, VP of Finance and Investor Relations and Corporate Treasurer at Americold Realty Trust]

These forward-looking statements are based on current expectations, assumptions, and beliefs, as well as information available to us at this time, and speak only as of the date they are made. Management undertakes no obligation to update publicly any of these statements in light of new information or future events. During this call, we will also discuss certain non-GAAP financial measures, including NOI, Core EBITDA, net debt to pro forma core EBITDA, and AFFO, among others. The full definition of these non-GAAP financial measures and reconciliations to the comparable GAAP financial measures are contained in the supplemental financial package available on the company's website. Please note that all warehouse financial results are in constant currency and reflect the Q1 2026 same-store pool, unless otherwise noted. Now, I'll turn the call over to Rob for his prepared remarks.

[Rob Chambers, CEO at Americold Realty Trust]

Thank you, Rich, and thank you all for joining our first quarter 2026 earnings conference call. Before we begin, I would like to formally welcome Chris Papa to the team as our Chief Financial Officer. Chris started with us in February and brings more than two decades of experience leading investment grade rated and publicly traded REITs. Since joining the team, Chris has been fully engaged, meeting with leaders across the business, spending time with our investors and our customers, and touring our facilities. He brings a unique mix of qualifications and experiences, and I look forward to his many future contributions to drive our business forward. Turning to our first quarter financial results, we delivered AFFO of $0.29 per share above analyst consensus.

[Rob Chambers, CEO at Americold Realty Trust]

Chris will review the full details in just a few minutes, but I was pleased that all key metrics materialized in line or slightly better than our original guidance. I'm particularly encouraged that our physical occupancy was flat year-over-year, further supporting our belief that inventories levels have largely stabilized. These trends have continued in April. We believe that we should see a return to more normalized seasonal trends as we progress throughout the year. Our pricing metrics in the quarter also marginally overperformed expectations. Our commercial teams continue to lead with our value proposition, which we call the Americold Advantage, consisting of best-in-class service, technology solutions, and a suite of services rather than simply competing on price as you see from others in our industry.

[Rob Chambers, CEO at Americold Realty Trust]

Our customer churn rate remains low at 2.5%, further validating our view that service remains a top priority to our customers when considering their cold chain partner. During the quarter, we also successfully renewed 34% of the year's fixed committed contracts that were either month to month or set to expire in 2026. This represents approximately $100 million of revenue and extends the weighted average duration of our future expirations. Importantly, we held our total rent and storage revenue from fixed committed contracts at 59%. Very solid performance during a critical renewal period as customers continue to see the benefits of a fixed commitment structure. All of these metrics demonstrate our company-wide focus on commercial excellence as we navigate through the current market environment.

[Rob Chambers, CEO at Americold Realty Trust]

Since stepping into the CEO role, I've been laser-focused on setting a strong foundation for future growth while ensuring that we deliver on our financial commitments. Despite a continued challenging macro environment, we've now delivered three straight quarters that either met or exceeded AFFO per share consensus. Beyond our financial performance, we also made significant progress this quarter on each of our five key strategic priorities. As a reminder, we launched these objectives late last year to strengthen the foundation of our organization and set us up for long-term success. They include de-levering our balance sheet to maintain our investment grade profile, actively managing our portfolio of real estate assets for maximum value, streamlining our operations and right-sizing our cost structure, identifying unique opportunities to drive occupancy growth across our network, and selectively supporting our key customers and strategic partnerships.

[Rob Chambers, CEO at Americold Realty Trust]

Perhaps the most foundational of these priorities are the strategic actions that we are taking to strengthen our balance sheet. Earlier this morning, we announced the formation of a new joint venture with EQT Partners, one of the largest purpose-driven real estate investors in the world. EQT is a sophisticated investor in the space as they own one of the largest cold storage providers in Europe. They will hold a 70% interest in the JV as part of their infrastructure portfolio, with Americold contributing a seed pool of 12 properties across the U.S. worth over $1.3 billion. This represents a blended cap rate to the JV of approximately 7% or nearly $3,300 per pallet position. This is a significant premium to our public market valuation, which reflects the mission-critical nature of our assets.

[Rob Chambers, CEO at Americold Realty Trust]

As part of the agreement, we will continue to operate the assets, providing continuity of service to our customers, as well as providing ongoing asset management and development expertise to the JV. We anticipate closing the transaction in the third quarter, at which point Americold will receive approximately $1.1 billion in proceeds, which we intend to use to pay down a portion of our outstanding debt. As many of you are aware, joint ventures are a common structure across the REIT industry, and I'm thrilled to have EQT as a partner to help support our strategy. We expect to expand the platform in the future with additional development opportunities, and we already have one exciting new project for consideration, which I will discuss in just a moment.

[Rob Chambers, CEO at Americold Realty Trust]

As we look forward, our capital allocation priorities remain consistent: maintaining an investment-grade balance sheet, evaluating the portfolio for asset recycling opportunities, and continuing our disciplined approach to new capital deployment. Our second priority is to actively manage our portfolio to address underperforming properties while pursuing the highest and best use of our geographically diverse network of real estate assets. During our fourth quarter call, we indicated that we had identified nine additional facilities to exit or idle in 2026. Two of these exits were completed in Q1. Both of these facilities were leased, and we returned the keys to the owner at the end of the term after successfully shifting much of the customer inventory into our nearby facilities. These buildings will be torn down, removing over 62,000 pallet positions from the Atlanta market.

[Rob Chambers, CEO at Americold Realty Trust]

Of the remaining facilities, the majority have been idled and are actively being marketed for sale. While we continue to do our part to remove excess capacity from the industry, we continue to see smaller, less sophisticated operators remain under pressure. In the quarter, we've heard of several smaller operators and new market entrants either shutting their doors or struggling to meet their financial commitments. In many of those instances, we've been the beneficiary of volumes coming back to Americold, given our status as an industry leader. Beyond just exiting facilities, we are also pursuing attractive triple net leasing opportunities across the portfolio. During Q1, we identified one of these opportunities and purchased an existing leased facility at well below market value and subsequently entered into a 15-year triple net lease with a new tenant to fully occupy the space.

[Rob Chambers, CEO at Americold Realty Trust]

By eliminating the rent expense and acquiring the property at a discount, we are able to achieve an approximate 10% return on investment. We also signed several other new deals in the quarter and have increased our annualized leasing revenue by over $4 million, or about 7%, which you can see reflected on page 24 of the financial supplement. These are all great examples of the disciplined process we are taking to creatively ensure we are receiving the best value possible from our real estate assets. Our third priority is to right-size our cost structure and drive efficiencies across our operation. Late last year, we identified $30 million in potential savings within indirect labor and SG&A, and I'm pleased to report that all initiatives were completed in Q1 as expected. We are exploring additional cost actions, and Chris will discuss the details in a moment.

[Rob Chambers, CEO at Americold Realty Trust]

While we are taking cost out of the business, we are being extremely cautious to ensure that we retain the high level of customer service that Americold is known for in the industry. This quarter, I'm pleased to announce that our Fort Worth railhead site received the Warehouse of the Year Award from Kraft Heinz. This Award was measured by performance KPIs like turn times, inventory accuracy, fill rates, and others. It is a great example of our relentless pursuit of efficiency and high-quality service resulting in meaningful value to our customers. Congratulations to our team in Fort Worth. Our fourth priority is driving organic growth by leveraging our operational expertise, scale, and mission-critical infrastructure in adjacent and under-penetrated sectors. Late last year, we announced our initial win with On the Run in South Australia, one of the nation's most well-known convenience and petrol providers.

[Rob Chambers, CEO at Americold Realty Trust]

In February, we announced the expansion of our relationship to support their national network in Australia. As a reminder, we are providing tri-temperature warehousing services to replenish every product in the store and have expanded our coverage to 600 of their locations. Additionally, I am very pleased that we recently renewed our contract with KFC in Australia for an additional 10 years. Americold has been working with KFC stores for the last 30 years, and we will continue to support their restaurant network of approximately 500 stores on the East Coast of Australia for the next decade, providing tri-temperature warehousing and distributing all of their food and non-food materials.

[Rob Chambers, CEO at Americold Realty Trust]

As part of this extension, we're implementing a technology solution that will generate restaurant-level sales forecasts, recommend replenishment orders, and proactively optimize inventory positioning across the network. This technology will serve as the backbone of our store support solutions and is a great example of Americold's differentiated offering and the value we can provide to our QSR multi-unit customers. In North America, we successfully closed on a handful of new pet food and floral deals this quarter, expanding our presence in non-food categories. Our initial outreach into the pharmaceutical space resulted in a new storage commitment for probiotic products. These floral, pet food, and pharma deals will not be material to our results this year, they remain a great example of our ability to capture business in multiple new markets while the food industry remains under pressure.

[Rob Chambers, CEO at Americold Realty Trust]

One area that we're particularly excited about is our e-commerce business, which has been growing at a double-digit rate. We're currently onboarding three new accounts and shipped over 1 million packages last year. We've expanded our capabilities to five sites across the country and have the ability to cover 99.5% of the U.S. population in two days or less. Similar to our retail and QSR customers, e-commerce is operationally intensive, which gives us an advantage in pursuing new business given our experience in the area and the strength of the Americold operating system. On to our fifth priority. From a development perspective, our expansions in Sydney, Australia, and Christchurch, New Zealand, were both delivered on time and on budget during the quarter. Both expansions are dedicated to large grocery retailers and add critical capacity to both markets where our existing facilities are nearly full.

[Rob Chambers, CEO at Americold Realty Trust]

These facilities are great examples of the opportunity to strategically invest in markets that have not seen the level of speculative activity that has occurred in the U.S. Finally, as I mentioned earlier, one of the important benefits of our new partnership with EQT is the ability to pursue new development opportunities through the joint venture. While we have significantly narrowed our development pipeline and refined our internal requirements for capital allocation, there are certain customer-driven projects where it makes sense to support our key relationships. A great example of this is a new customer-dedicated project that we're kicking off with McCain Foods in Plover, Wisconsin. McCain is a top five customer for Americold with a nearly 35-year relationship. We have an existing plant-advantaged facility that is located adjacent to their manufacturing plant in Plover.

[Rob Chambers, CEO at Americold Realty Trust]

They want to consolidate portions of their cold storage network with an additional 56,000 pallet positions at the site. The project is backed by a 20-year fixed commitment agreement from McCain, and given the attractive profile of the project, we believe that this is the type of project that could fit well in the joint venture. This is truly a win-win transaction for all the parties involved, and we're honored that McCain chose us for this opportunity, and we look forward to servicing them for many more years to come. This win also highlights the importance of having a diverse network at every node in the supply chain. As customers evaluate their future networks, we continue to see large food manufacturers looking to consolidate significant piles of inventory back closer to production.

[Rob Chambers, CEO at Americold Realty Trust]

This is an area where Americold is a clear industry leader, and we're positioned to take advantage of this trend given our long-standing relationships and solutioning expertise. I am proud of our progress in each of our five key strategic priorities this quarter, with the joint venture representing a meaningful step towards our long-term leverage goal. As we continue to relentlessly pursue cost savings, portfolio management, and see our developments continue to come online, we're confident that our current playbook will build a strong foundation for future success. With that, I'll turn the call over to Chris to provide some additional details on our performance in the quarter, as well as some of the anticipated impacts to our financial statements from the new joint venture. Chris?

[Chris Papa, CFO at Americold Realty Trust]

Thanks, Rob, and good morning, everyone. I'm excited to participate this morning on my first call as Americold's Chief Financial Officer. As Rob mentioned, since joining, I have met with our leaders, investors, customers, and toured several of our facilities. I have been impressed by the capability, discipline, and service that our teams bring every day. I believe the scale, diversity, and mission-critical nature of our assets when coupled with our operational expertise creates a compelling value proposition that is difficult to replicate. I look forward to helping unlock this value for our shareholders. One of my first priorities when I arrived was to fully engage in the strategic capital raise initiative that our management team and board have been diligently pursuing for the past several months.

[Chris Papa, CFO at Americold Realty Trust]

I am very familiar with real estate joint ventures and the partnership with EQT not only strengthens Americold's balance sheet by funding debt repayment, improving liquidity, and reducing future development risk, but also allows us to preserve operational control and cash flow from the assets. As Rob mentioned, we expect the transaction to close in the third quarter, at which point we will receive approximately $1.1 billion in cash proceeds. We plan to use these proceeds to repay all of our 2026, 2027, and a portion of our 2028 U.S. dollar-denominated debt maturities. We will continue to operate these warehouses and receive a management fee of approximately $15 million-$20 million each year.

[Chris Papa, CFO at Americold Realty Trust]

We will also receive 30% of the NOI generated by the venture, which will be recorded on our P&L under the line item titled Income Loss from Investments in Partially Owned Entities. These 12 properties represent approximately $231 million in revenue and $103 million in NOI for fiscal 2025. At the end of Q1, our net debt to pro forma core EBITDA was 7.1x, this transaction on a pro forma basis would reduce this by about three-quarters of a term. This reflects significant progress toward our goal of 6x or less. We believe this joint venture, along with our portfolio optimization, ongoing cost actions, and stabilizing industry fundamentals, gives us strong confidence in our ability to achieve this goal, we remain committed to maintaining our investment grade profile.

[Chris Papa, CFO at Americold Realty Trust]

While we don't know the exact timing of when the transaction will close, we estimate that the JV could be a full year headwind to AFFO of approximately $0.10 per share, or roughly $0.06 per share for the second half of 2026. The ultimate impact will depend on when the deal closes. Since the business is currently performing in line to slightly ahead of our expectations, we believe that we will be able to offset most, if not all, of this impact. We are proud of our ability to preserve our AFFO guide for the year and simultaneously execute a strategic transaction to reduce leverage and significantly improve our balance sheet position. We will provide more granular updates to our individual guidance components as the deal nears completion.

[Chris Papa, CFO at Americold Realty Trust]

Beyond the joint venture, I next want to discuss our first quarter results, where we delivered AFFO per share of $0.29, exceeding analyst consensus. We were encouraged to see same-store physical occupancy stabilize, with economic occupancy contracting slightly less than anticipated. While we are not updating our full-year occupancy and pricing assumptions, this is certainly encouraging performance. Outside of the U.S., we were pleased to see throughput in both Europe and Asia Pacific increase from the prior year, and Europe's physical occupancy increased by over 800 basis points in the quarter. This is very strong performance and reflects the positive impact of the new business that was won by the international team over the past couple of quarters.

[Chris Papa, CFO at Americold Realty Trust]

Our Q1 warehouse NOI decreased 4.5% as expected, driven by the ongoing pricing pressure in the storage market and lower throughput, as well as a modest $2 million headwind from energy costs this quarter. As a reminder, almost all of our customer contracts have the ability to pass through abnormal cost increases. In addition to the power surcharge mechanism, we also lock in power rates in deregulated states, which represents about 25% of our portfolio. We have pursued energy saving best practices for many years, and we are also leveraging AI to strategically pull power from the grid during non-peak hours. As a reminder, power expense is only about 6% of our same-store warehouse costs, and we plan to leverage all available mitigation strategies to continue managing these costs closely and minimize future P&L impacts.

[Chris Papa, CFO at Americold Realty Trust]

As Rob mentioned, one of our key priorities for the year is to optimize our cost structure. We were pleased to see core SG&A for the quarter came in relatively flat year-over-year, absent the impact of certain accruals that can fluctuate in Q1 and serve to offset the typical wage rate inflation across the business. Late last year, we identified $30 million in savings between both indirect labor and SG&A. We are pleased to report that these were fully executed, and we reduced indirect labor by over 400 positions in Q1. Additionally, we recently commenced the second phase of this project to identify further cost savings opportunities in other parts of our business, as well as to explore ways to enhance efficiency within our organizational structure.

[Chris Papa, CFO at Americold Realty Trust]

Our goal is not only to reduce expenses, but also to optimize how our teams operate and collaborate across the company. I look forward to sharing the outcome of this broader analysis with you on next quarter's call. Additionally, as Rob mentioned earlier, we have made great progress with our portfolio management initiative, which is another one of our five key priorities for the year. As a reminder, when a site has no customers and minimal operating costs or otherwise meets the held for sale accounting criteria, we move their expenses to transactions, strategic initiatives, and other costs on our P&L. You can see on page 22 of the supplement that we have included additional detail regarding these costs, which have decreased substantially versus the prior year.

[Chris Papa, CFO at Americold Realty Trust]

When we exit sites, we are often able to terminate the lease or find an interested buyer in a fairly short period of time. Proceeds from the sale of our own properties will assist with de-levering our balance sheet. Additionally, since I joined the company, we have asked the team to do a review of our expansion and development projects to reassess our assumptions around the timing of stabilization dates, cash flows, and expected yields given the duration of the current macro environment. While certain of these projects have been impacted more than others, many of them have in some way felt the effects of the soft market conditions that are impacting our industry. We will update you on the results of this review in the coming quarters.

[Chris Papa, CFO at Americold Realty Trust]

In the short time I have been with Americold, I have been impressed by the team's focus on delivering the strategic priorities for the year. I believe these priorities are the best blueprint to building a strong foundation for the future and that this team can bring that vision to life. I am proud to be part of such a talented group of people and look forward to leveraging my expertise to further unlock this company's potential. Now, I would like to turn the call back over to Rob for some closing comments. Rob?

[Rob Chambers, CEO at Americold Realty Trust]

Thanks, Chris. I'm very pleased with our results this quarter and remain confident in the long-term direction of our business. In my discussions with customers over the past several months, they remain cautious with their outlook for the year. However, they are increasingly mentioning investments in innovation as well as increased marketing and promotional spend, all with a focus on consumer value. These actions are intended to help drive organic volume growth. In fact, we've seen this reflected in their earnings releases over the past several months, with several customers reporting sales growth in the first quarter of the year. I hope to see this continue to gain traction as we navigate through the balance of the year. As I've mentioned in the past, this is not a team that is standing still and waiting for a rebound in demand.

[Rob Chambers, CEO at Americold Realty Trust]

I'm very proud of the significant progress that we are making across all five of our key priorities while also delivering on our financial commitments. The formation of the joint venture is a significant accomplishment, strengthening the balance sheet, illuminating the disconnect between public and private markets, and supporting future developments. It is also a testament to this team and this organization's ability to execute, as well as the board's focus on unlocking shareholder value. With disciplined capital allocation, a sharpened focus on operational excellence, and unwavering dedication to customer service, I believe we are well equipped to create meaningful growth over time. I wanna thank our associates around the world for their continued hard work and our shareholders for their ongoing trust and support. Operator, we're now ready to open the call for questions.

[Operator]

Thank you. If you'd like to ask a question, press the star and one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We do ask that you limit yourself to one question, and we'll pause for just a moment to allow everyone a chance to queue. We will take our first question from Michael Griffin with Evercore ISI. Please go ahead.

[Michael Griffin, Analyst at Evercore ISI]

Great. Thanks. Wondering if you could give a little bit more color on the facilities being contributed to the JV, you know, where they are along the cold chain, the age, customer mix, kind of anything, you know, that might have stood out for these assets. You know, would you say it's indicative of the portfolio quality overall if that call it, you know, 7% transaction cap rate? Lastly, I know you mentioned the cap rate compared to marks. How should we think about this deal on sort of a EV to EBITDA, but a multiple basis? Thank you.

[Rob Chambers, CEO at Americold Realty Trust]

Thanks, Michael. Let me start with the portfolio that we're contributing to the joint venture. I think what you said is right. I mean, the facilities are a good representation of the broader North American portfolio. You know, what we see would be facilities that are geographically diverse, facilities that are across each of the nodes in the supply chain, along with some conventional and automation as well. We think it's a very good mix of facilities. It's one that EQT was certainly excited about being part of a joint venture.

[Rob Chambers, CEO at Americold Realty Trust]

You know, from our perspective, we're also very excited that we'll continue to have a meaningful ownership stake in those facilities and be able to operate them and provide the level of continuity, to our customers that they would expect. It's a significant accomplishment, out of the gate here and we're very excited about it.

[Michael Griffin, Analyst at Evercore ISI]

Thank you.

[Rob Chambers, CEO at Americold Realty Trust]

Go ahead.

[Operator]

Are we ready for the next question? Apologize.

[Rob Chambers, CEO at Americold Realty Trust]

Sure.

[Operator]

Okay, we'll go to our next question. Brendan Lynch with Barclays.

[Brendan Lynch, Analyst at Barclays]

Hey, great. Thanks for taking the question. Maybe just on the physical occupancy growth that you saw in the quarter, can you disaggregate that between consolidation to fewer facilities versus just the industry improving?

[Rob Chambers, CEO at Americold Realty Trust]

Yeah. There's really essentially nominal to no impact on the consolidation of the facilities because, you know, we adjusted that same store pool at the end of last year. The impact to physical occupancy in Q1 was a result of industry stabilization, along with a combination of new business wins coming in, some market share gains that we've seen as we've seen some of the volumes that had previously been with some of these small providers come back in. I think when you look at the overall impact of physical occupancy being flat to slightly up, it was driven by industry fundamentals, new business wins and some market share gains.

[Operator]

Thank you. We'll go next to Viktor Fediv with Scotiabank. Please go ahead.

[Viktor Fediv, Analyst at Scotiabank]

Good morning. Thank you for taking my question. I have a follow-up on this JV financials. Looks like EQT will be retaining 70%.

[Viktor Fediv, Analyst at Scotiabank]

You will be getting $1.1 billion in cash proceeds, which kind of implies $1.6 billion of total value. Just trying to understand puts and takes here and what is involved.

[Chris Papa, CFO at Americold Realty Trust]

Well, I mean, you know, the total transaction size is $1.3 billion. Given the debt we're planning on putting on the project, and our equity contributed to the venture, we think we'll be able to pull out about $1.1 billion of proceeds from the venture.

[Operator]

Thank you. We'll take our next question from Craig Mailman with Citi. Please go ahead.

[Craig Mailman, Analyst at Citi]

Hey, guys. Michael Griffin asked earlier about the EV to EBITDA multiple. I don't think I heard an answer on that. Does the 7% cap equate to somewhere around 9%-10% EV to EBITDA multiple? Maybe give us some guide rails there. Chris, to your commentary that you guys are putting debt in the JVs, is that 0.75x term reduction on debt to EBITDA, is that on a look-through basis? Like, if you assume the JV debt, do you still get that 0.75x of a term reduction, or a form of that? Thanks.

[Chris Papa, CFO at Americold Realty Trust]

Sure. I'll answer that, the second question first. Yeah, the three-quarters of a term we talked about includes picking up our share of the debt from the JV. We'd be picking up our 30% portion of that debt as well as the EBITDA. I'll let Scott address the EV to EBITDA question.

[Scott Henderson, EVP and Chief Investment Officer at Americold Realty Trust]

Hey, Craig. Good morning. If you think about the math around this one, $1.3 billion enterprise value for the JV, an NOI strip before fee of roughly $110 million. Then with a fee around $17 million to get to a net NOI strip of low $ 90s million, and that gets you to the 7% cap rate that we quoted. Hopefully, those parts help answer the question on a yield basis, which you can convert to a multiple. When you think about the fee strip in this business, given the operational intensive nature and the amount of work that goes into it, looks a little bit different than I'd say your traditional industrial business.

[Chris Papa, CFO at Americold Realty Trust]

Craig, I'd add that, you know, if you look at it on an EV to EBITDA basis, it's, you know, this valuation implies, you know, 200 basis point increase over where the stock is currently trading.

[Operator]

Thank you. We'll go next to Michael Goldsmith with UBS. Please go ahead. Your line is open.

[Michael Goldsmith, Analyst at UBS]

Good morning. Thanks a lot for taking my questions. Seems like you were active on the renewals of fixed committed contracts during the quarter. Maybe can you talk a little bit about the negotiations with your tenants? You know, what was the feedback from them? What was their ability to absorb pricing or they're asking for concessions? Just trying to get a sense of what you're hearing from your tenant base and how that ties to, you know, your overall pricing power. Thank you.

[Rob Chambers, CEO at Americold Realty Trust]

Yeah. Thanks, Michael. I mean, I think the work that we did in the quarter on fixed commitments is one of the certainly one of the highlights of the quarter. As we mentioned in our prepared remarks, we were able to work through 34% of all the fixed commitment contracts that were month to month or had expirations in 2026. We said, now for several quarters, just as a reminder, that, you know, these contracts tend to be relatively ratable throughout the year, meaning there's not a whole lot of, you know, outsized, renewals in one quarter or another. That 34% represents great progress in a single quarter.

[Rob Chambers, CEO at Americold Realty Trust]

We continue to be very pleased by the conversations that we're having that we think are extremely constructive given the fact that, you know, our customers re-recognize the value of having that fixed commitment structure. You know, despite the fact that, you know, we recognize and acknowledge that there's more capacity in the industry than there has been historically, we've been able to maintain that 59% of our total rent and storage revenue being derived from these fixed commitment contracts. You know, I think the metrics, you know, speak for themselves. It's playing out probably slightly better than what we had planned in our guide. You saw that our economic occupancy was down slightly while our physical occupancy was flat. That's exactly what we assumed would happen, a slight contraction.

[Rob Chambers, CEO at Americold Realty Trust]

It is less of a decrease in terms of economic occupancy than what we had planned. Very encouraged to see that. On the pricing side of the equation, our pricing metrics are marginally better than what we had guided to. Storage on a constant currency basis was down slightly year-over-year. That does tend to be the storage side of the business does tend to be the side of the business that gets discounted a little bit more than the handling, just given the margin profile. We're making sure we're being thoughtful. We're making sure we're market competitive on the pricing and that we're responding to the current environment. At the same time, you know, we continue to lead with our value proposition.

[Rob Chambers, CEO at Americold Realty Trust]

I think as, you know, this environment has played out longer. Really what customers are seeing is that customer service is the most important decision-making factor in who they partner with. You know, price is important, but if your product isn't showing up on time and in full, and if you can't invest in your customer base, and you can't grow with them, and you don't have the technology solutions, and your only value proposition is price, you eventually return back to the industry leaders. That's exactly what we're seeing. Constructive conversation, and I think great progress this quarter.

[Operator]

Thank you. We'll take our next question from Michael Carroll with RBC Capital Markets. Please go ahead. Your line is open.

[Michael Carroll, Analyst at RBC Capital Markets]

Thanks. Rob, is there a specific mandate for the new joint venture? As in, does Americold need to contribute specific future investments or development opportunities in the JV, or does this need to be agreed upon by both parties to be able to do it, similar to, like, the McCain development that you talked about in your prepared remarks?

[Rob Chambers, CEO at Americold Realty Trust]

Yeah, yeah. Look, I mean, we wanna scale this venture, you know, we'll be working to provide, you know, first looks of development opportunities to the joint venture. There's no mandate that if the venture passes on those that we can't do those on our own accord. We'll be providing some first looks related to development projects to the venture. We think that's the best path forward. You know, given the opportunity to do some off-balance sheet development to ensure that there's less volatility to earnings there. Outside of that, no mandate to contribute other stabilized assets. This is gonna be a great partnership.

[Rob Chambers, CEO at Americold Realty Trust]

You know, we're confident we found the right partner in EQT, given their level of sophistication in this space and the alignment of our mission and our values. A big step for both parties.

[Operator]

Thank you. We'll take our next question from Nick Thillman with Baird. Please go ahead.

[Nick Thillman, Analyst at Baird]

Hey, good morning. You wanted to touch a little bit more on just the joint venture assets being contributed and the profile of them. As we think of it relative to your fixed commitment contracts, is it similar to that 60% of that revenue associated with those assets is similar in mix? What the average duration of those contracts are on those assets being contributed. Maybe secondly, just a point of clarification on the $110 million of NOI. Does that include the handling and services NOI contribution as well? Thanks.

[Rob Chambers, CEO at Americold Realty Trust]

Yeah. On the NOI, it does. It's both the storage and handling NOI. I would say the portfolio is very representative of the broader, you know, Americold pool. Again, these sites are geographically diverse. There's some conventional, there's some automation, there are customer dedicated, there are multi-tenant, there are fixed commitments, there are transactional agreements. Be thinking about it as very similar to, you know, the broader portfolio. You know, the Americold wholly owned portfolio will look very similar pre and post. You know, that's exactly what EQT was looking for, and that's exactly what we felt like was the right path to seed the JV.

[Operator]

Thank you. We'll take our next question from Mike Mueller with JPMorgan. Please go ahead.

[Mike Mueller, Analyst at JPMorgan]

Yeah. Hi. I think this kind of a dumb clarification question, but the release says that EQT isn't baked into guidance. Chris, when you were talking about the transaction in your comments, you mentioned that you're kind of proud to maintain guidance while this is kind of going on simultaneously. I guess, is it in guidance or is it not guidance?

[Rob Chambers, CEO at Americold Realty Trust]

Yeah. Yeah. Let me start. Chris can jump in. I mean, look, I mean, we're sitting here on May 7th, you know, as we look at the trajectory of the business and we look at, you know, the fact that the metrics were coming in line to above our expectations. Absent the joint venture, you know, we would be thinking about the business trending towards the higher end of our original guide. Now that we have this joint venture that is, you know, still subject to traditional closing conditions and we don't have the final date of when the JV will close.

[Rob Chambers, CEO at Americold Realty Trust]

When we look at it on a pro forma basis, what we can sit here today and tell you is when we factor in the closing of a joint venture assumed during the third quarter, that we'll be able to absorb the impact of that JV and maintain our original guide. You know, as we get a little bit closer to the closing of the JV, we'll be able to provide more specific details around each one of the guidance parameters. The punchline here is we're maintaining our guide inclusive of the impacts of the joint venture in 2026.

[Chris Papa, CFO at Americold Realty Trust]

Just to be more specific about the guidance. The original guidance that we had given obviously did not include the JV, but it also did not include any incremental cost optimization initiatives. Those two things, going obviously in different directions. Coupled with, as Rob said, our business performing slightly ahead of expectations, gave us confidence to keep it in that $1.20-$1.30 range from an AFFO perspective. We'll come back with more details in the second quarter as we get as the JV and the cost optimization initiatives materialize.

[Operator]

Thank you. We'll go next to Alexander Goldfarb with Piper Sandler. Please go ahead.

[Alexander Goldfarb, Analyst at Piper Sandler]

Hey. Good morning. Good morning down there. Question: as you guys were doing the strategic review, and I'm guessing that it's not done, how does exiting, you know, regions, you know, there's discussion in the press, you know, that, you know, perhaps, you know, maybe certain regions overseas to exit or larger outright sales? Just trying to see, is the JV, is this it and you're done? I mean, you have two activists, you know, as part of the company. Is this JV done or there are other potential strategic initiatives in work that could include exiting, whether it's regions or larger parts, larger portfolios?

[Rob Chambers, CEO at Americold Realty Trust]

Yeah. Let me maybe just take a step back so that I can answer the question holistically. I mean, you know, since I took the role in September, you know, my one of my first priorities was to sit down with the board and really develop what you know, our key strategic initiatives were gonna be for 2026. Top of the list was strengthening the foundation and delevering the balance sheet. You know, with knowing that that was a priority, you know, we started a process right then and there to evaluate multiple different options to get there. We've looked at different geographies, portfolio management, this joint venture opportunity.

[Rob Chambers, CEO at Americold Realty Trust]

During that review process, it was very clear that there was, you know, tremendous interest from institutional investors, not just in this asset class, but also to have a continuing partnership with Americold. As we started down the path of evaluating this option, you know, specifically, we felt like it met all of our objectives. This option obviously strengthens our balance sheet. It gives us the opportunity to pay down debt materially and lower leverage. This transaction highlights the large gap between public and private valuations in this space. Again, these facilities are being contributed $3,300 per pallet position, where we trade at $1,500 per pallet position right now. So, you know, a significant premium.

[Rob Chambers, CEO at Americold Realty Trust]

This supports our ability to do development with our key strategic customers in a customer dedicated manner. It allows us to continue to have a meaningful ownership percentage in these facilities and provide the level of continuity to our customers that we expect, and do it all with a partner that we really feel has the right level of sophistication, experience, and is aligned from a values perspective. This is the right deal. We're confident in that. We certainly are always open to options that create shareholder value. I think we're doing within our priority list several other key initiatives, the portfolio optimization and management with the 19 sites over the last two years that we're idling and/or exiting is having a meaningful impact on our results.

[Rob Chambers, CEO at Americold Realty Trust]

The great things that we're doing to grow this business organically, you can see in our occupancy and our pricing. You know, I think this puts us on a trajectory to get to our long-term leverage goal, but we're always open to continue to evaluate opportunities on a go-forward basis.

[Chris Papa, CFO at Americold Realty Trust]

Alex, if you think about it from a balance sheet perspective, we talked about in our prepared remarks that this transaction, we expect to have an impact of reducing our debt to EBITDA of about three quarters of return. You know, this it's, it's a meaningful contribution toward our deleveraging. It also allows us to start thinking about things on a go-forward basis on a more targeted basis. Continuing to do more targeted capital recycling, plus the cost optimization initiatives that are underway will continue to also move the needle on deleveraging down toward that 6x or less target. I think we can be more surgical on a go-forward basis. You know, certainly we're considering options as we continue to manage the business.

[Operator]

Thank you. We'll take a follow-up question from Mike Mueller, JPMorgan. Your line is open.

[Mike Mueller, Analyst at JPMorgan]

Yeah. Hey, real quick, on a prior question about JVs, the JV and development. Rob, I think you said, you know, we're gonna provide some first looks to the JV. Is it you have the choice to provide a first look on development to the JV, or you kind of have to do all U.S. development first looks to the JV?

[Scott Henderson, EVP and Chief Investment Officer at Americold Realty Trust]

Hey, hey, Mike. Good morning. It's Scott. Yes, we've given EQT our exclusive partner to look at those joint ventures and then there's optionality after that if that does not go into the joint venture. Hopefully, that answers the question. It's targeted to North America, Mike. We'll be focusing on some potential expansion opportunities in the seed pool as well as things like build to suits, like the project Rob highlighted on the call.

[Rob Chambers, CEO at Americold Realty Trust]

I think, you know, as we wrap up here, I just wanna highlight again, as we move forward and sitting here today, in May, we've got very clear priorities. This team is now a track record of demonstrating our ability on executing against those priorities and delivering on our guide and our financial commitments. I thank all of our associates for helping us support that and delivering every day and look forward to continuing that track record.

[Operator]

That does bring us to the end of our question and answer session. We'd like to thank everybody for joining today's call. We appreciate your time and participation. You may now disconnect.

Participants

Executives

• Chris Papa, CFO
• Rich Leland, VP of Finance and Investor Relations and Corporate Treasurer
• Rob Chambers, CEO
• Scott Henderson, EVP and Chief Investment Officer

Analysts

• Alexander Goldfarb, Analyst at Piper Sandler
• Brendan Lynch, Analyst at Barclays
• Craig Mailman, Analyst at Citi
• Michael Carroll, Analyst at RBC Capital Markets
• Michael Goldsmith, Analyst at UBS
• Michael Griffin, Analyst at Evercore ISI
• Mike Mueller, Analyst at JPMorgan
• Nick Thillman, Analyst at Baird
• Viktor Fediv, Analyst at Scotiabank