0001140361-26-021627
SEC filingRevenue rose 27.3% to $5.4M from portfolio expansion, driving operating loss improvement of 57.1% to -$2.5M versus prior year, though net loss narrowed to -$986K amid higher real estate taxes and interest costs, with operating cash use escalating to -$2.8M.
MacKenzie Realty Capital, Inc. (MKZR) reported Q3 FY2026 results showing revenue growth and narrowed losses, driven by portfolio expansion amid a challenging real estate environment. Revenue reached $5.4 million, up 27.3% from $4.3 million in the prior-year quarter. This increase was mainly due to the growth in our investment portfolio since March 31, 2025, which boosted income generation capacity and supported our objective to generate both current income and capital appreciation through real estate-related investments.
Operating income improved to -$2.5 million, a 57.1% reduction in loss magnitude from -$5.8 million last year. This narrowing reflects the absence of prior-year pressures, though offset by rising operating expenses mainly due to higher real estate taxes at our Satellite Place Office Building. Other operating expenses decreased, primarily from lower transfer agent fees since March 31, 2025. The resulting operating margin of -46.0% highlights persistent expense pressures relative to revenue, exacerbated by the rise in overall interest rates that increased our variable-rate borrowing costs and interest expense.
Net income loss narrowed sharply to -$985.8 thousand from -$6.1 million, an 83.8% improvement. Diluted EPS reflected this progress unevenly at -$0.98 versus -$0.47, as a larger share count diluted per-share results despite the smaller overall loss. These outcomes underscore management's use of estimates in preparing financial statements, which affect reported asset values, liabilities, revenues, expenses, and unrealized gains or losses on investments.
Net cash provided by operating activities shifted to a use of -$2.8 million from near-breakeven -$53 thousand, indicating heightened cash consumption tied to operational scale-up and investments. This dynamic signals ongoing liquidity pressures, consistent with our real estate-focused strategy.
Looking forward, we intend to continue historical activities related to launching tender offers to purchase shares of non-traded REITs to boost short-term cash flow and support distributions, subject to portfolio constraints. The Board of Directors will continue to evaluate the dividend policy quarterly based on financial performance, liquidity needs, and market conditions. Results for interim periods are not necessarily indicative of full-year outcomes.