Core Viewpoint - Extra Space Storage Inc. (NYSE:EXR) is recognized as one of the best real estate stocks to buy according to hedge funds, despite recent caution from Wells Fargo regarding the storage REIT sector [1][9]. Financial Performance - In Q4 2025, Extra Space reported core FFO growth of 2.5% for the quarter and 1.1% for the full year, indicating a slight improvement in operating conditions [3]. - Same-store revenue returned to growth, increasing by 0.4% during the quarter, supported by stronger revenue trends [3]. Market Conditions - CEO Joseph Margolis noted that 16 of the company's top 20 markets experienced year-over-year gains in move-in rates, suggesting improving customer demand [3]. - Wells Fargo expressed caution about the storage REIT sector, highlighting that stocks had already risen about 9% year-to-date due to optimism related to housing trends, but warned that 2026 outlooks might fall slightly below expectations [2]. Capital Allocation and Growth Strategy - The company repurchased approximately $141 million of its own shares, acquired 27 operating properties for $305 million, and issued $80 million in bridge loans, demonstrating a disciplined approach to capital allocation [4]. - The broad external growth platform of Extra Space is positioned to create opportunities across various channels, enhancing its competitive edge [4]. Cost Management - CFO Jeff Norman reported that same-store operating costs increased by only 1.1%, reflecting improved cost control measures [5]. - Property taxes decreased by 3.4%, and property operating expenses, including utilities, fell by more than 5%, contributing to overall cost management [5]. Marketing and Revenue Momentum - Increased marketing spending, although partially offsetting savings from cost control, has driven stronger move-in activity and supported revenue momentum heading into 2026 [6].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-32269 EXTRA SPACE STORAGE INC. (Exact name of registrant as specified in its charter) Maryland 20-1076777 (State or other jurisdic ...

Joseph Margolis: As they absorb the new supply that was delivered in the last few years. We feel better with regard to our positioning going into 2026 than we did heading into 2025, and in our ability to gradually accelerate performance as fundamentals continue to improve through 2026. I will now turn the time over to Jeffrey Norman.For the full year, we added 379 stores and 281 net new stores to the program, bringing our total managed portfolio to 1,856 stores. Our diversified external growth platform cont ...

Financial Data and Key Metrics Changes - The company reported a Core FFO growth of 2.5% in Q4 2025 and 1.1% for the full year, despite challenging operating conditions [5] - Same-store revenue growth returned to positive at 0.4% in Q4 2025, compared to only two markets achieving this in Q4 2024 [5] - Same-store NOI growth was 0.1% for the quarter, with operating expenses increasing only 1.1% [9][10] Business Line Data and Key Metrics Changes - The company strategically repurchased approximately $141 million of common shares and closed on 27 operating stores for $305 million, totaling 69 stores for $826 million for the year [6] - The company added 379 stores and 281 net new stores to its managed portfolio, bringing the total to 1,856 stores [7] Market Data and Key Metrics Changes - In Q4 2025, 16 of the top 20 markets experienced positive year-over-year move-in rates, contributing to revenue growth [5] - As of mid-February 2026, occupancy was at 92.5%, down 40 basis points year-over-year, while rates for new customers increased slightly over 6% [20] Company Strategy and Development Direction - The company aims to capitalize on improving market fundamentals and expects gradual performance acceleration in 2026 [8] - The focus remains on a diversified external growth platform, with most acquisitions expected to be in joint venture formats to enhance returns [30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery in storage fundamentals, with guidance for 2026 same-store revenue ranging from -0.5% to +1.5% [11] - The company does not anticipate significant changes in the housing market or pricing restrictions in Los Angeles County affecting operations [11] Other Important Information - The company maintains a strong balance sheet with 93% of total debt at fixed rates and a weighted average interest rate of 4.3% [10] - Management highlighted the importance of job growth and supply dynamics as key drivers for the storage industry [43] Q&A Session Summary Question: Same-store revenue guidance and expectations - Management indicated that the midpoint of guidance implies generally flat same-store revenue growth, with potential for acceleration or deceleration based on market conditions [16][18] Question: Trends in street rates - Management confirmed that trends observed in Q4 2025 continued into early 2026, with positive signals in occupancy and new customer rates [20] Question: Expense guidance and confidence - Management attributed lower expense growth expectations to normalizing property taxes and improved efficiencies in other areas [25][28] Question: Acquisition volume guidance - Management clarified that most acquisitions in 2026 will be in joint venture formats to enhance returns, leading to a lower guidance number compared to previous years [30] Question: Regulatory environment impact - Management noted that recent regulatory changes in California have not significantly affected leasing activity, and they remain prepared to address potential regulatory challenges [41][51] Question: Discounting strategy and promotional environment - Management explained that their discounting strategy is channel-based and will remain unchanged unless data indicates a need for adjustment [64] Question: Use of AI in operations - Management discussed the integration of AI in pricing models and marketing strategies, emphasizing its potential to enhance operational efficiency [67] Question: Future of store managers - Management affirmed the importance of store managers in customer interactions and asset management, indicating no plans to eliminate these roles [96][98]

Financial Data and Key Metrics Changes - The company reported a positive Core FFO growth of 2.5% in Q4 2025 and 1.1% for the full year, despite challenging operating conditions [5] - Same-store revenue growth returned to positive at 0.4% in Q4 2025, compared to only two markets achieving this in Q4 2024 [5] - Same-store NOI growth was 0.1% for the quarter, with operating expenses increasing only 1.1% [9][10] Business Line Data and Key Metrics Changes - The company strategically repurchased approximately $141 million of common shares and closed on 27 operating stores for $305 million, totaling 69 stores for $826 million for the year [6] - The managed portfolio grew to 1,856 stores, with 379 stores added and 281 net new stores for the year [7] Market Data and Key Metrics Changes - In Q4, 16 of the top 20 markets experienced positive year-over-year move-in rates, contributing to revenue growth [5] - As of mid-February 2026, occupancy was at 92.5%, down 40 basis points year-over-year, while rates for new customers increased slightly over 6% [20] Company Strategy and Development Direction - The company aims to capitalize on improving market fundamentals and expects gradual performance acceleration in 2026 [8] - The strategy includes a focus on joint ventures for acquisitions to enhance returns and maintain a conservative balance sheet [30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery in storage fundamentals, with guidance for same-store revenue growth in 2026 ranging from -0.5% to +1.5% [11] - The company does not anticipate significant changes in the housing market or pricing restrictions in Los Angeles County impacting their outlook [11] Other Important Information - The company has a strong balance sheet with 93% of total debt at fixed rates and a weighted average interest rate of 4.3% [10] - Management highlighted the importance of job growth and supply dynamics as key drivers for the storage industry [44] Q&A Session Summary Question: Same-store revenue guidance and trends - Management indicated that the midpoint of guidance implies generally flat same-store revenue growth, with potential for both acceleration and deceleration depending on market conditions [16][17] Question: Update on street rate trends - Management confirmed that trends from Q4 continued into early 2026, with positive signals in occupancy and new customer rates [20] Question: Confidence in lower expense guidance - Management attributed lower expense guidance to normalizing property taxes and improved efficiencies in other areas [26][28] Question: Acquisition volume guidance - The company expects most acquisitions in 2026 to be in joint venture formats to enhance returns, with flexibility to adjust guidance based on market opportunities [30] Question: Impact of regulatory changes in California - Management noted that recent legislation did not significantly affect leasing activity, as their disclosure practices were already robust [42] Question: Interplay between rate and occupancy - Management clarified that pricing decisions are made dynamically based on occupancy and market conditions, rather than a fixed strategy [50] Question: ECRI strategy and customer behavior - Management did not disclose specifics on ECRI contributions but indicated that it remains a competitive advantage [82] Question: Supply expectations and market exposure - Management expects a modest reduction in new store deliveries, particularly in oversupplied markets, based on internal and external data sources [88][89]

Financial Data and Key Metrics Changes - The company reported a Core FFO growth of 2.5% in Q4 2025 and 1.1% for the full year, despite challenging operating conditions [5] - Same-store revenue growth returned to positive at 0.4% in Q4 2025, compared to only two markets achieving this in Q4 2024 [5] - Same-store NOI growth was 0.1% for the quarter, with operating expenses increasing by only 1.1% [9][10] Business Line Data and Key Metrics Changes - The company strategically repurchased approximately $141 million of common shares and closed on 27 operating stores for $305 million, totaling 69 stores for $826 million for the year [6] - The managed portfolio grew to 1,856 stores, with 379 stores added in 2025 [7] Market Data and Key Metrics Changes - In Q4 2025, 16 of the top 20 markets experienced positive year-over-year move-in rates, contributing to revenue growth [5] - As of mid-February 2026, occupancy was at 92.5%, down 40 basis points year-over-year, while rates for new customers increased slightly over 6% [19] Company Strategy and Development Direction - The company aims to gradually accelerate performance as market fundamentals improve through 2026, with a focus on maintaining a flexible and conservative balance sheet [11] - The guidance for 2026 reflects a slow recovery in storage fundamentals, with same-store revenue expected to range from -0.5% to +1.5% [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positioning going into 2026, citing improvements in new customer move-in rates and same-store revenue [8] - The company does not anticipate significant changes in the housing market or pricing restrictions in Los Angeles County affecting their outlook [11] Other Important Information - The company has a low leverage balance sheet, with 93% of total debt at fixed rates and a weighted average interest rate of 4.3% [10] - The company is actively using AI and machine learning to enhance operational efficiency and marketing strategies [66][67] Q&A Session Summary Question: Same-store revenue guidance interpretation - Management clarified that the midpoint of guidance implies generally flat same-store revenue growth, with potential for acceleration or deceleration based on market trends [15][16] Question: Trends in street rates - Management reported that trends observed in Q4 2025 continued into early 2026, with occupancy and rates showing positive signals [19] Question: Confidence in lower expense guidance - Management attributed lower expense guidance to normalizing property taxes and improved efficiencies in other expense categories [24][25] Question: Acquisition volume guidance - The company expects most acquisitions in 2026 to be in joint venture formats, which may lower capital requirements while enhancing returns [27][28] Question: Transition of street rates to same-store NOI - Management noted that it takes time for new rates to impact same-store NOI due to customer churn rates [34][36] Question: Regulatory environment impact - Management indicated that recent regulatory changes in California have not significantly affected leasing activity [40][41] Question: Job growth as a demand driver - Management highlighted job growth as a key factor for self-storage performance, particularly in Sun Belt markets [42] Question: Discounting strategy - The company employs a channel-based discounting strategy, with selective discounts offered based on occupancy and unit type [63] Question: AI and operational efficiencies - Management discussed the use of AI for both external marketing and internal operations, indicating a focus on leveraging technology for efficiency [66][67] Question: Supply expectations - Management expects a continued incremental reduction in new store deliveries, particularly in oversupplied markets [85][86]

Key Takeaways EXR posted Q4 core FFO of $2.08, beating estimates, as revenues rose 4.3% year over year.Same-store NOI edged up 0.1% despite a 70-basis-point drop in occupancy to 92.6%.Extra Space Storage sees 2026 core FFO of $8.05-$8.35 on flat to negative same-store NOI growth.Extra Space Storage Inc. (EXR) reported fourth-quarter 2025 core funds from operations (FFO) per share of $2.08, surpassing the Zacks Consensus Estimate of $2.03. The figure increased 2.05% from the prior-year quarter.The results re ...

Financial Performance - For the quarter ended December 2025, Extra Space Storage (EXR) reported revenue of $857.47 million, up 4.3% year-over-year [1] - EPS for the quarter was $2.08, compared to $1.24 in the same quarter last year, indicating significant growth [1] - The reported revenue exceeded the Zacks Consensus Estimate of $851.03 million by 0.76%, and the EPS also surpassed the consensus estimate of $2.03 by 2.29% [1] Key Metrics - Same-store square foot occupancy was reported at 92.6%, slightly below the estimated 93.1% [4] - Property rental revenues were $734.23 million, exceeding the average estimate of $731.87 million, reflecting a year-over-year increase of 3.8% [4] - Management fees and other income reached $33.99 million, surpassing the average estimate of $32.09 million, with a year-over-year growth of 9.8% [4] - Tenant reinsurance revenues were $89.25 million, above the average estimate of $88.44 million, marking a 6.6% increase year-over-year [4] - Same-store rental revenues were $664.23 million, slightly below the estimated $665.27 million, but showed a remarkable year-over-year increase of 59.7% [4] - Net income per diluted share was $1.36, exceeding the average estimate of $1.13 [4] - Equity in earnings and dividend income from unconsolidated real estate entities was $16.93 million, slightly above the average estimate of $16.79 million [4] - Net operating income for same-store properties was $475.9 million, surpassing the estimated $473.41 million [4] Stock Performance - Shares of Extra Space Storage have returned -0.2% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Extra Space Storage (EXR) reported quarterly funds from operations (FFO) of $2.08 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, and showing an increase from $2.03 per share a year ago [1][2] Financial Performance - The FFO surprise for the quarter was +2.29%, with the company surpassing consensus FFO estimates three times over the last four quarters [2] - Revenues for the quarter ended December 2025 were $857.47 million, surpassing the Zacks Consensus Estimate by 0.76%, compared to $821.9 million in the same quarter last year [3] Stock Performance - Extra Space Storage shares have increased by approximately 11.5% since the beginning of the year, while the S&P 500 has gained 0.5% [4] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $2.02 on revenues of $849.89 million, and for the current fiscal year, it is $8.25 on revenues of $3.44 billion [8] - The estimate revisions trend for Extra Space Storage was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The REIT and Equity Trust - Other industry is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [9]

Financial Performance - Achieved net income attributable to common stockholders of $1.36 per diluted share, a 9.7% increase year-over-year[5] - Funds from operations (FFO) attributable to common stockholders was $1.99 per diluted share, with Core FFO at $2.08 per diluted share, reflecting a 2.5% increase year-over-year[5] - Total revenues for Q4 2025 reached $857.5 million, a 4.3% increase from $821.9 million in Q4 2024[39] - Net income attributable to common stockholders for Q4 2025 was $287.4 million, up 9.5% from $262.5 million in Q4 2024[39] - Same-store rental revenues for the year ended December 31, 2025, were $2.65 billion, slightly up from $2.64 billion in 2024[40] - Total same-store net operating income for the year ended December 31, 2025, was $1.88 billion, compared to $1.92 billion in 2024, reflecting a decrease of 1.8%[40] - The company expects fully diluted earnings per share for the year ending December 31, 2026, to range between $4.40 and $4.70[41] - Net income for the year ending December 31, 2026, is estimated to be between $1.00 billion and $1.08 billion[42] Operational Metrics - Same-store revenue increased by 0.4% and same-store net operating income (NOI) increased by 0.1% compared to the prior year[5] - Reported ending same-store occupancy of 92.6% as of December 31, 2025, down from 93.3% as of December 31, 2024[5] - Same-store net rental income for Q4 2025 was $639,489,000, a 0.5% increase from Q4 2024's $636,530,000[1] - Total same-store revenues for the year ended December 31, 2025, reached $2,648,814,000, reflecting a 0.1% increase from $2,645,534,000 in 2024[1] - Same-store operating expenses increased by 1.1% to $188,329,000 in Q4 2025, compared to $186,299,000 in Q4 2024[1] - The company reported a total of 1,871 stores in its same-store pool for 2026[42] Investments and Acquisitions - Acquired 27 operating stores for a total cost of $304.8 million and seven additional stores for approximately $106.9 million[5] - Acquired joint venture interests for $342.2 million, now wholly owning 28 properties previously held by partners[7] - The company sold its interest in nine of ten properties held in a joint venture, resulting in a net gain of $45.2 million during Q4 2025[17] Shareholder Actions - Repurchased 1,089,659 shares of common stock for $140.9 million at an average price of $129.32 per share[5] - The company paid a fourth quarter common stock dividend of $1.62 per share on December 31, 2025[24] Debt and Assets - As of December 31, 2025, the company's percentage of fixed-rate debt to total debt was 82.1%[22] - Total assets increased to $29.26 billion in 2025 from $28.85 billion in 2024, reflecting a growth of approximately 1.4%[38] - Real estate assets, net, rose to $25.00 billion in 2025, up from $24.59 billion in 2024, indicating an increase of about 1.7%[38] - The company's total liabilities increased to $14.94 billion in 2025 from $13.99 billion in 2024, representing a growth of approximately 6.8%[38] - The company reported an accumulated deficit of $1.45 billion as of December 31, 2025, compared to $899.34 million in 2024, showing a significant increase in losses[38] Future Outlook - For 2026, the company expects improving results due to strengthening customer rates and moderating new supply[6] - Core FFO estimates for 2026 range from $8.05 to $8.35 per share, with same-store revenue growth projected between (0.50)% and 1.50%[25] - Estimated same-store rental revenues for 2026 are projected to be between $2.69 billion and $2.75 billion[42] - Interest expense for the year ending December 31, 2026, is estimated at approximately $595 million[42] Risk Factors - The company faces risks including adverse changes in economic conditions, competition, and potential liabilities related to environmental contamination[34] - The company emphasizes the importance of maintaining its REIT status for U.S. federal income tax purposes to ensure operational viability[34] Management and Operations - Added 78 stores to the third-party management platform, bringing the total to 2,263 managed stores[5] - The company managed a total of 2,263 stores as of December 31, 2025, including 1,856 stores for third-party owners[19] - The company originated $80.4 million in mortgage and mezzanine bridge loans and sold $16.2 million in mortgage bridge loans[5] - The company originated $80.4 million in bridge loans during Q4 2025, with outstanding balances of approximately $1.5 billion at the end of the quarter[18] - The company defines FFO (Funds From Operations) as net income excluding gains or losses on sales of operating stores and impairment write-downs, plus depreciation and amortization related to real estate[32] - Core FFO excludes non-core revenues and expenses, providing a clearer picture of operating performance, particularly post-merger with Life Storage[33] - The same-store pool consists of 1,804 stores that are wholly-owned and stabilized, allowing for a more accurate evaluation of operating performance[35]