CDPMEDIUM SIGNALFINANCIAL10-K

CDP's net income declined substantially while the company expanded its debt position and property portfolio during fiscal 2026.

The meaningful reduction in net income alongside increased borrowing suggests potential pressure on profitability despite portfolio expansion. The company added six new operating properties and expanded total square footage, but this growth appears to have come at the cost of near-term earnings performance.

Comparing 2026-02-20 vs 2025-02-21View on EDGAR →
FINANCIAL ANALYSIS

CDP's financial profile reflects a company in expansion mode with mixed results. Total assets grew modestly to $4.7B while debt increased more substantially to $2.8B, indicating increased leverage to fund growth initiatives. However, net income declined meaningfully to $97.4M, suggesting that the company's property portfolio expansion has not yet translated into proportional earnings growth, raising questions about the near-term return on invested capital.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
-49.2%
$191.7M$97.4M

Net income declined 49.2% — review whether driven by operations, interest costs, or non-recurring items.

Share Buybacks
Cash Flow
+21.3%
$1.7M$2.1M

Share repurchases increased 21.3% — management returning capital, signals confidence in intrinsic value.

Total Debt
Balance Sheet
+15.7%
$2.4B$2.8B

Debt rose 15.7% — additional borrowing for investment or operations; monitor coverage ratios.

Total Liabilities
Balance Sheet
+15.6%
$2.7B$3.1B

Liabilities increased 15.6% — monitor debt-to-equity ratio and interest coverage.

Total Assets
Balance Sheet
+10.5%
$4.3B$4.7B

Asset base grew 10.5% — expansion through organic growth, acquisitions, or capital deployment.

LANGUAGE CHANGES
NEW — 2026-02-20
PRIOR — 2025-02-21
ADDED
As of February 4, 2026, 113,207,660 of COPT Defense Properties common shares were outstanding.
Management s Discussion and Analysis of Financial Condition and Results of Operations 23 I tem 7A.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 40 I tem 9A.
Our property portfolio is predominantly comprised of office properties and single-tenant data center shells.
As of December 31, 2025, our Defense/IT Portfolio included: 201 operating properties totaling 23.2 million square feet.
We owned 24 of these properties totaling 4.3 million square feet through unconsolidated real estate joint ventures; fiveproperties under development that will total approximately 646,000 square feet upon completion; and approximately 1,000 acres of land controlled that we believe could be developed into approximately 10.6 million square feet.
We also owned sixother operating properties totaling 2.0 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of December 31, 2025.
In addition to owning real estate, CDPLP also owns subsidiaries that provide real estate services such as property management, development and construction services primarily for our properties but also for third parties, most of which are tenants.
The hub of our data center portfolio is in Northern Virginia, one of the largest data center markets in the world due in large part to its central location along the United States Eastern Seaboard, robust fiber connectivity infrastructure and access to reliable and affordable utilities required to support operations.
In 2025, we continued our annual participation in the Global Real Estate Sustainability Benchmark survey, which is widely recognized for measuring the environmental, social and governance performance of real estate companies and funds, and earned an overall score of Green Star on the survey, representing the highest quadrant of achievement, for the 11th consecutive year.
REMOVED
At February 5, 2025, 112,699,445 of COPT Defense Properties common shares were outstanding.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23 ITEM 7A.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 39 ITEM 9A.
As of December 31, 2024, our Defense/IT Portfolio included: 195 operating properties totaling 22.4 million square feet comprised of 16.5 million square feet in 164 office properties and 5.9 million square feet in 31 single-tenant data center shells.
We owned 24 of these data center shells through unconsolidated real estate joint ventures; four properties under development (two office properties and two data center shells) that will total approximately 606,000 square feet upon completion; and approximately 1,020 acres of land controlled that we believe could be developed into approximately 11.0 million square feet.
We also owned eight other operating properties totaling 2.1 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of December 31, 2024.
In addition to owning real estate, CDPLP also owns subsidiaries that provide real estate services such as property management, development and construction services primarily for our properties but also for third parties.
Demand drivers for our Defense/IT Portfolio include: high-priority facilities and missions of USG organizations and agencies supporting defense and national security activities, such as intelligence, surveillance, reconnaissance, missile defense, cybersecurity, space exploration, research and development and advanced weapons systems testing and engineering, in Maryland, Northern Virginia, Washington, DC, Huntsville, Alabama and San Antonio, Texas; and data center shells developed in response to demand driven by advancements in cloud computing and Artificial Intelligence.
Our data center shells in operations or under development as of December 31, 2024 were located in Northern Virginia, one of the largest data center markets in the world due in large part to its central location along the United States Eastern Seaboard, robust fiber connectivity infrastructure and access to reliable and affordable utilities required to support operations.
We have participated in the annual Global Real Estate Sustainability Benchmark survey, which is widely recognized for measuring the environmental, social and governance ( ESG ) performance of real estate companies and funds, and earned an overall score of Green Star on the survey in each of the last 10 years, representing the highest quadrant of achievement.
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