CubeSmart

Second-quarter revenue was $87 million, down 1% from Q1. Adjusted gross margin was 33% versus 36% in Q1, and adjusted EBITDA was $8.5 million versus $8.3 million in Q1, with adjusted EBITDA margin improving to 9.8% from 9.5% (a 30 basis point increase). Wholesale revenue increased 16% sequentially to $18.4 million. Operating cash flow was positive $4 million, including a $10 million one-time note receivable settlement, capex was $2 million, and free cash flow was negative $3.5 million. Cash ended the quarter at $15.5 million versus $18.9 million at the end of Q1. On guidance, management expects capex to average less than $3 million per quarter and said the Pennsylvania asset sale should add $10 million of gross proceeds; the company is also working to close divestitures in Florida, California, Illinois and Pennsylvania. Pro forma for the 10 continuing markets after announced divestitures, adjusted EBITDA margin was 11.7%.

David Hart framed the quarter around liquidity, balance sheet repair, and simplification of the footprint. He emphasized the completed debt restructuring that extends $271 million of senior debt until at least December 2028, and highlighted ongoing exits from Florida, California, Illinois, and the newly announced Pennsylvania sale. His tone was constructive but cautious, pointing to cost cuts, improved margin sequentially, Delaware adult-use launch, and new Ohio stores as the operating upside while acknowledging continued sector headwinds.

Derek Watson focused on the mechanics behind the numbers: revenue of $87 million, adjusted gross margin of 33%, adjusted EBITDA of $8.5 million, and 9.8% adjusted EBITDA margin. He attributed weaker gross margin to inventory obsolescence, wholesale inventory reduction, pricing pressure, discounting, and about a 4 percentage point gross-margin drag from unabsorbed overhead and underutilized production facilities. On liquidity, he cited $4 million of operating cash flow, $2 million of capex, $15.5 million of quarter-end cash, $7 million in contracted divestiture proceeds, and about $11 million in debt-refinancing costs, while noting roughly $23 million in annualized cost savings from 2024 restructuring plus about $2 million more from a smaller Q2 labor action.

There was no analyst Q&A in the transcript provided, so no new concerns or follow-up questions were raised on the call. Management’s commentary instead centered on executing divestitures, improving cash generation, and using portfolio simplification to offset sector pricing pressure. The clearest forward-looking points were the Pennsylvania transaction, continued store openings in Ohio and Virginia, and continued cost reduction through year-end 2025.