Gladstone Land Q1 Earnings Call Highlights

Key Points

• Gladstone Land posted a Q1 net loss of about $4.3 million, but adjusted funds from operations rose to $3.1 million from $2 million a year earlier, helped by an early pistachio bonus payment. The company said tenant issues, vacant farms and more crop-participation arrangements continue to weigh on results.
• Management remains focused on liquidity and deleveraging, with about $150 million of immediately available capital and more than $110 million of unpledged properties. It also redeemed its Series D preferred stock, raised about $50 million through its ATM program in 2026, and used proceeds to reduce debt and repurchase preferred shares.
• Crop and market conditions were mixed but improving in key areas: pistachio and almond pricing is firming, and 2025 crop revenue is expected to exceed prior expectations. However, wine grapes remain weak, and 2026 pistachio output is uncertain after bloom-related heat impacts, even though broader farmland demand and water-rich properties are holding up well.

Gladstone Land NASDAQ: LAND reported a first-quarter net loss as management said it continues to work through tenant issues, vacant farms and a greater reliance on crop-participation arrangements, while early pistachio revenue helped lift adjusted funds from operations from a year earlier.

Chairman and Chief Executive Officer David Gladstone said the farmland real estate investment trust still owns about 99,000 acres across 144 farms in 14 states, along with about 56,000 acre-feet of water assets, all in California. The company did not buy or sell farms during the quarter, but Gladstone said management may consider selling additional farms over the next few quarters.

“If we're able to complete some of those, we'd like to use most of the proceeds to pay down debt and buy back preferred stock,” Gladstone said. He added that acquisition activity remains limited and that the company is taking a disciplined approach to any potential purchases.

Tenant and Leasing Issues Remain a Focus

Gladstone said market conditions affecting some permanent crops, particularly nuts and wine grapes, have led the company to modify certain lease structures. Those changes allow the company to participate more in crop upside but also require it to take on more farming risk.

The company continues to operate two properties with the help of third-party growers. Gladstone said the 2025 harvest came in “very strong,” particularly for almonds and pistachios, with yields generally meeting or exceeding internal projections. He said Gladstone Land has signed up most of the same farms under similar agreements for 2026 and expects similar earning patterns, though he cautioned that 2025 would be difficult to match.

Gladstone said crop insurance remains important in limiting downside risk. Over time, he said the company’s goal is to transition all farms back to more traditional lease structures with fixed base rents, but the timing depends on several factors, including lower interest rates.

The company has five leases scheduled to expire over the next six months, representing about 4% of total year-to-date lease revenue in 2026. Gladstone said the company is in discussions with existing tenants and prospective new tenants.

Gladstone also said eight farms are wholly or partially vacant, and management is working to return them to a stable income-producing status. The company is recognizing revenue on a cash basis for leases with four tenants. It resolved one such situation during the quarter but added two new tenants after they fell behind on rent payments.

Pistachio and Almond Markets Support Crop Revenue

Bill Reiman, who discussed farm operations and crop markets, said the marketing season for the 2025 almond and pistachio crops is about halfway complete. He said prices have been firming, especially for pistachios, and that larger-than-forecast yields should cause final 2025 crop revenue and profit to exceed expectations.

Looking ahead to the 2026 season, Reiman said winter ended with a weak snowpack across many Western U.S. watersheds, but many areas where Gladstone Land operates received above-normal rainfall, especially in early spring. He said spring soil water content is high and should help crops start strongly.

Reiman said almond bloom was complete as of April 1 and that the company’s locations “look pretty darn good,” with initial crop set stronger than last year. Pistachios face more uncertainty after a hot spell during bloom caused issues across the state, including crop abortion in some orchards. Reiman said the effect on Gladstone Land’s orchards is difficult to determine because 2026 is expected to be a lower-production “down year” for pistachios due to alternate bearing.

“There’s a chance that pricing outweighs the crop loss,” Reiman said, noting that reduced supply could put additional upward pressure on pricing.

Reiman said all properties where the company has invested capital in crops are tracking to budget, though water expense may rise on a couple of ranches. He said pistachio markets remain particularly strong, with global demand growing and grower prices moving upward. He said the company expects minimum pricing for 2026 to be significantly higher than in 2025.

Almond prices have been steadier, Reiman said, with recent crop projections showing a crop similar to last year. Wine grape markets continue to underperform, though he said shortages in some white grape varietals are the first encouraging sign in a couple of years.

First-Quarter AFFO Rises on Early Pistachio Bonus

Chief Financial Officer Lewis Parrish said Gladstone Land recorded a first-quarter net loss of about $4.3 million and a net loss to common shareholders of $10 million, or $0.24 per share. Adjusted funds from operations were $3.1 million, or $0.08 per share, compared with $2 million, or $0.06 per share, in the same quarter last year.

Parrish said the increase in adjusted FFO was primarily driven by an early pistachio crop bonus payment, partially offset by tenant-related issues. Fixed base cash rents decreased by about $2.4 million from a year earlier, mainly due to lost revenue from one property shifted to direct operations and two tenants placed on non-rent status. The prior-year quarter also included a $2.4 million tenant termination fee.

Participation rents rose by about $4.4 million, primarily because one processor paid part of a 2025 pistachio crop bonus earlier than expected. Parrish said the remaining portion is expected to be recognized on the normal schedule in the fourth quarter. Net income from crop sales on directly operated farms was about $1.9 million in the quarter, also primarily tied to the early pistachio bonus payment.

Recurring cash operating expenses increased by about $750,000. Parrish attributed higher property operating expenses to supplemental water costs on one property and higher professional fees related to protecting California water rights. General and administrative expenses also rose due to higher legal and accounting fees.

Liquidity and Capital Allocation

Parrish said the company did not incur new borrowings or repay loans during the quarter, but it added unencumbered properties to credit facilities, increasing immediately available liquidity by about $50 million. In January, the company redeemed all of its Series D Term Preferred Stock to avoid a coupon increase from 5% to 8%.

So far in 2026, Parrish said Gladstone Land has raised about $50 million through its at-the-market common stock program. Along with proceeds from recent property sales, most of that capital has been used to reduce leverage, including redeeming the Series D preferred stock, repaying the line of credit and buying back preferred stock.

The company has repurchased more than $6 million of preferred stock in 2026 at an average repurchase yield of 7.4%, resulting in a gain of nearly $700,000, Parrish said.

Gladstone Land currently has about $150 million of immediately available capital and more than $110 million of unpledged properties that could be used as additional collateral. Parrish said more than 99% of borrowings are fixed-rate, with a weighted average interest rate of 3.41% locked in for another 2.5 years.

In April, the company declared a monthly common dividend of $0.0467 per share for the second quarter of 2026. Parrish said that represented a 5.9% annualized yield based on a stock price of $9.44.

Management Sees Stable Demand for Prime Farmland

Reiman said real estate markets in much of the Western U.S. appear to have bottomed, with some increased transaction activity, especially in pistachio orchards. He said coastal California values remain flat with higher-than-normal inventory, while Pacific Northwest values and rents are stable.

He also said the value gap is widening between properties with strong water resources and those without, a trend he expects to be permanent because of regulations and policy.

Gladstone closed by saying demand for prime farmland growing berries and vegetables remains stable, particularly in coastal regions. He said the company is seeing some improvement in certain permanent crops, though he cautioned that agriculture remains difficult to predict because crops are “outside” and “alive and growing.”

About Gladstone Land NASDAQ: LAND

Gladstone Land Corporation NASDAQ: LAND is a publicly traded real estate investment trust (REIT) that specializes in the acquisition and ownership of farmland in the United States. Established in 2013 and headquartered in Wayne, Pennsylvania, the company focuses on purchasing high-quality agricultural properties and leasing them to farmers under long‐term, triple‐net lease agreements. This model provides tenants with operational flexibility while generating stable, recurring rental income for investors.

The company's portfolio spans several key agricultural regions across the country, including California, the Midwest, and parts of the Southeast.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.