MacKenzie Realty Capital (MKZR) Q2 2024 Earnings Report

MacKenzie Realty Capital’s QQ2 2024 results show a pronounced revenue expansion alongside deteriorating bottom-line profitability. Revenue rose to $7.97 million in the quarter, up 122.9% year-over-year and 61.0% quarter-over-quarter, supported by a robust gross margin of 68.5%. Yet the company reported a substantial operating loss of $4.55 million and a net loss of $4.93 million, driven largely by a large non-operating expense line of $9.24 million, which overshadowed core operating performance. EBITDA was negative at $0.31 million and the EBITDA margin stood at -3.94%, signaling that the current revenue trajectory is not yet translating into positive cash generation or earnings power.

From a balance sheet and liquidity perspective, MKZR entered the period with solid liquidity: cash and cash equivalents of $12.17 million and short-term investments of $16.54 million, plus a favorable current ratio of 4.19x. However, operating cash flow was negative at $1.10 million and free cash flow was also negative, underscoring ongoing cash-generation challenges. Leverage remains a material consideration: long-term debt of $96.41 million, total debt of $96.41 million, and a net debt position of about $84.24 million, with a debt-to-capitalization ratio of roughly 65.5% and an interest coverage of -2.31x. The company’s dividend yield is attractive at about 4.5%, but the payout is not supported by current earnings, given a negative net income and a negative payout dynamic implied by the reported ratios.

With no specific forward guidance available in the dataset, investors should focus on stabilization of operating performance, normalization of non-operating costs, and improvement in cash flow and coverage metrics to assess sustainable value. The absence of disclosed management targets makes the near-term path uncertain, placing emphasis on cost discipline, NOI trajectory, asset management actions, and refinancing options as key drivers of the investment thesis.