Lineage (NASDAQ:LINE) executives said fourth-quarter results came in “in line or slightly ahead” of internal expectations as the refrigerated warehouse operator continued to work through an industry backdrop marked by new supply, softer import/export volumes, and a post-COVID inventory reset that management said is largely behind the company.
Fourth-quarter results and operating trends
For the fourth quarter of 2025, Lineage reported flat total revenue year-over-year and adjusted EBITDA down 2% to $327 million. Total AFFO was $214 million and AFFO per share was $0.83, both flat year-over-year but ahead of management’s expectations. CEO Greg Lehmkuhl said the quarter’s AFFO performance was helped by “better management of maintenance capital expenditures” and “more advanced cash tax planning” than initially expected.
Operationally, management highlighted occupancy improvement as a key late-year development. Same-store physical occupancy improved sequentially by 400 basis points to 79.3%, which Lehmkuhl said signaled a return toward more normalized seasonality. Year-over-year physical occupancy was down only 50 basis points, though management noted the company is entering 2026 at a slightly lower occupancy level than it entered 2025. Executives also reiterated that economic occupancy continues to track physical occupancy and that the company expects a similar spread between the two metrics as seen in 2025.
Pricing held up despite macro headwinds. The company said same-store rent and storage revenue per pallet rose by more than 1.5% year-over-year, and by over 3% for the total warehouse segment. However, throughput-related activity was weaker: throughput volumes declined 2.8%, and warehouse services revenue per throughput pallet fell 70 basis points. Management attributed some of the pressure to lower import/export volumes, with container volumes down 9% year-over-year in the quarter. Same-store NOI declined 5% year-over-year, in line with guidance.
Segment performance: Warehousing vs. Integrated Solutions
In the global warehouse segment, fourth-quarter total warehouse NOI declined 2.4% year-over-year to $373 million, and same-store NOI declined 5% to $340 million, which LeMasters said was consistent with prior guidance. For the full year, total warehouse NOI declined 3.3% to $1.48 billion, with same-store NOI growth of -5.8%.
The Global Integrated Solutions (GIS) segment was a bright spot. Fourth-quarter GIS EBITDA increased 15% to $61 million, and full-year GIS EBITDA rose 9% to $251 million. Fourth-quarter NOI margin improved by 470 basis points to 19.5%. LeMasters said the quarter benefited from the absence of a lower-margin European business that had been exited, and he described the fourth-quarter margin level as a reasonable “run rate” to consider, while also noting GIS tends to be seasonally stronger in the second and third quarters.
Capital allocation, development pipeline, and asset sales
Lineage invested $170 million of growth capital in the quarter, primarily in development projects. Management said the company has 24 facilities under construction or in ramp/stabilization, representing more than $1 billion of previously invested capital. Lehmkuhl said these assets are expected to generate more than $150 million of incremental EBITDA once stabilized.
Lineage also sold a non-core Santa Maria, California asset for $60 million at a “mid-6” cap rate. Lehmkuhl described the facility as a “medium-quality” asset that was single-user and did not support surrounding public customers; the user wanted to buy it. Management pointed to recent cold storage transactions and said it has been “pleasantly surprised” by private-market pricing, citing “strong mid-teen EBITDA multiples” that translate into “low-6% to mid-6% cap rates,” depending on geography and asset mix. Executives said they are evaluating the portfolio for additional value-unlocking options, including joint ventures or partial monetizations, but emphasized there was nothing further to announce.
Balance sheet and cost-savings initiatives
Lineage ended the quarter with $7.7 billion of total net debt and $1.9 billion of total liquidity. The company issued EUR 700 million of seven-year bonds at a 4.125% coupon and entered into a $1.25 billion floating-to-fixed forward swap at 3.15% through February 2028. These followed a $500 million U.S. dollar bond offering in June 2025 with a 5.25% coupon. Net debt to adjusted EBITDA was 6.0x, and management provided a supplemental “adjusted net debt to transaction adjusted EBITDA” ratio of 5.2x that adjusts for development investments and timing of acquisitions/dispositions.
On expenses, management announced an accelerated push to reduce administrative and indirect costs, targeting $50 million+ in annualized savings by year-end 2026 through streamlining and centralizing select functions. LeMasters said the company expects about half of the savings to benefit 2026 results, with the full run-rate impact expected in 2027. He added the effort spans both corporate admin and indirect site-level costs, and the company is also examining how technology and AI can “do more with less.”
2026 guidance and industry backdrop
For 2026, Lineage guided to same-store NOI growth of -4% to -1%, adjusted EBITDA of $1.25 billion to $1.3 billion, and AFFO per share of $2.75 to $3.00. Additional guidance items included:
- Admin expense: $465 million to $480 million
- Stock-based compensation: $125 million
- Interest expense: $340 million to $360 million
- Current tax expense (AFFO): $20 million to $30 million
- Recurring CapEx: $170 million to $180 million
Management said it expects same-store NOI performance to begin at the lower end of the annual range and improve into the second half, supported by development ramp, contributions from 2025 M&A, and productivity and SG&A initiatives. The company also expects headwinds to AFFO from expiring interest rate hedges and the annualized interest expense of bond issuances completed in 2025.
In its macro outlook, management assumed a similar operating environment to 2025 and did not include potential upside from factors such as tariff resolution, lower interest rates, or tax relief. In warehousing, Lineage expects 1% to 2% net pricing increases and said it had already worked through about 65% of its warehousing revenue base in contract discussions as of the call.
Executives reiterated that import/export volumes remain a key variable. Lehmkuhl said import/export activity is at a “historic low,” which pressured results in the fourth quarter and is expected to remain a headwind in the first quarter of 2026. In GIS, management guided to slower growth partly due to fuel-related impacts—because fuel is marked up, lower fuel reduces revenue—and because cheaper trucking can pressure the company’s rail business through modal shifts.
On supply and demand, management again cited CBRE data showing U.S. public refrigerated warehouse supply increased 14.5% from 2021 to 2025 on a square-foot basis, while consumer demand for the categories stored in Lineage’s network grew 5%, implying 9.5% excess capacity over four years. Lehmkuhl said new supply is expected to slow meaningfully in 2026 and described customer switching as most pronounced in the first one to two years after new supply comes online, with some customers returning to Lineage due to service levels. Management also discussed mitigation tools such as idling facilities and exploring alternative uses; LeMasters said Lineage idled 10 sites in 2025, removing around 1% of supply, with a “pretty negligible” overall impact on NOI and occupancy.
Finally, the company provided an update on LinOS, its proprietary warehouse execution system. Lehmkuhl said LinOS has been deployed to 10 sites and is expected to at least double in 2026, with the company targeting $110 million in run-rate savings over three to five years, consistent with prior commentary.
About Lineage (NASDAQ:LINE)
Lineage Logistics, Inc (NASDAQ: LINE) is a leading provider of temperature-controlled industrial real estate and supply chain solutions. The company specializes in refrigerated and frozen storage, transportation, and ancillary services designed to support the global perishable goods industry. From food manufacturers and distributors to retailers and foodservice operators, Lineage offers tailored temperature management solutions that help clients optimize inventory turnover, reduce waste, and maintain product quality throughout the cold chain.
Lineage’s core services include ambient, refrigerated and frozen warehousing, cross-docking, transloading, and dedicated transportation.
