Financial Performance - For Q3 2025, NexPoint Residential Trust reported a net loss of $7.8 million, compared to a net loss of $8.9 million in Q3 2024, reflecting a decrease in total expenses by approximately $3.1 million[6]. - Total revenues for Q3 2025 were $62.8 million, down from $64.1 million in Q3 2024, while NOI increased by 3.5% to $38.8 million[10]. - For the nine months ended September 30, 2025, FFO totaled $50.2 million, or $1.96 per diluted share, compared to $50.9 million, or $1.94 per diluted share, for the same period in 2024[10]. - The company reported a total net loss of $21.7 million for the nine months ended September 30, 2025, compared to a net income of $28.0 million for the same period in 2024[10]. - Core FFO per diluted share for YTD 2025 was $2.14, compared to $2.11 for YTD 2024, indicating a growth of 1.42%[30]. - The company reaffirmed its guidance for Core FFO per diluted share for the full year 2025, ranging from $2.66 to $2.84[34]. - The company anticipates a net loss between approximately $35.9 million and $31.3 million for the full year 2025, and between $14.1 million and $9.5 million for Q4 2025[40]. - For Q3 2025, the net loss was $7.821 million, an improvement from a net loss of $8.888 million in Q3 2024[65]. - FFO attributable to common stockholders for Q3 2025 was $15.899 million, slightly up from $15.658 million in Q3 2024, resulting in FFO per share - diluted of $0.63, compared to $0.60 in Q3 2024[65]. - Core FFO attributable to common stockholders for Q3 2025 was $17.715 million, down from $17.928 million in Q3 2024, with Core FFO per share - diluted increasing to $0.70 from $0.69[65]. - AFFO attributable to common stockholders for Q3 2025 was $20.232 million, a decrease from $20.587 million in Q3 2024, with AFFO per share - diluted at $0.80, compared to $0.79 in Q3 2024[65]. - Total revenues for the nine months ended September 30, 2025, were $187,990,000, down 3.4% from $194,654,000 in 2024[60]. - The YTD Same Store NOI for the nine months ended September 30, 2025, was $114,590,000, down 0.5% from $115,167,000 in 2024[64]. Revenue and Occupancy - The weighted average effective monthly rent per unit across all properties was $1,497, with physical occupancy at 93.6% as of September 30, 2025[6]. - Average effective rent decreased by 0.3% year-over-year for both Q3 and year-to-date periods[6]. - Same Store rental income decreased by 1.0% to $60,899,000 from $61,510,000 year-over-year[53]. - Same Store NOI for Q3 2025 was $38.819 million, an increase from $37.509 million in Q3 2024, reflecting a growth of 3.5%[48]. - As of September 30, 2025, Q3 Same Store properties were approximately 93.6% leased, a year-over-year decrease of 130 basis points[51]. - The total number of Same Store units was 12,946, with 12,115 units occupied as of September 30, 2025[64]. Capital Expenditures and Investments - The company completed 365 upgrades in Q3 2025, achieving an average monthly rent premium of $89 and a 21.3% ROI[6]. - Total capital expenditures for YTD 2025 were $26.186 million, an increase of 13.3% from $23.117 million in YTD 2024[67]. - Capitalized rehab expenditures for Q3 2025 were $2.017 million for interior improvements, a 76.8% increase from $1.141 million in Q3 2024[67]. - The company has completed upgrades on 4,925 units across various properties, with an average cost of $945 per unit and an overall ROI of 64.0%[72]. - The average rent increase post-rehab for the total weighted average of units was $1,334, reflecting a 13.7% increase from the pre-rehab average rent of $1,173[70]. - The total rehab budget for acquired properties amounted to $162,834,000, indicating a significant investment in property improvements[90]. Debt and Financing - The company entered into a $200 million revolving credit facility with J.P. Morgan on July 11, 2025[6]. - Total mortgage debt increased from $1,462,865 in Q3 2024 to $1,503,242 in Q3 2025, reflecting a rise of 2.74%[30]. - The leverage ratio (Total Debt to Market Capitalization plus Total Debt) increased from 57% in Q3 2024 to 65% in Q3 2025[30]. - The company’s total outstanding mortgage debt is $1,503,242,000, with a weighted average interest rate of 5.40%[76]. - The company has several interest rate swap agreements totaling a notional amount of $917,500,000, with a weighted average fixed rate of 1.361%[78]. - The company has a debt maturity schedule that outlines principal payments of $1,503,242 due in 2026 and thereafter[84]. - The company expects interest expense obligations to include the impact of expected settlements on interest rate swaps, with total expected settlements through the terms of the swaps[84]. Market and Job Growth - NXRT has a total of 12,984 units across various markets, with a national average job growth rate of 5.07% projected by August 2025[22]. - The Raleigh-Cary market shows a job growth rate of 7.78%, with 625 NXRT units and 761.5 jobs added[22]. - The Orlando-Kissimmee-Sanford market has 1,172 NXRT units and a job growth rate of 7.18%, adding 101.4 jobs[22]. - The projected job growth in the Charlotte-Concord-Gastonia market is 7.10%, with 504 NXRT units and 93.6 jobs added[22]. - The Dallas-Fort Worth-Arlington market has 1,945 NXRT units and a job growth rate of 4.12%, adding 170 jobs[22]. - The Miami-Fort Lauderdale-West Palm Beach market has 1,959 NXRT units and a job growth rate of 5.43%, with 153.4 jobs added[22]. - The Phoenix-Mesa-Chandler market shows a job growth rate of 5.13%, with 2,009 NXRT units and 119.4 jobs added[22]. - The company forecasts a total of 29,077 jobs added across its markets, with an overall job growth rate of 5.0%[26]. - The Nashville-Davidson-Murfreesboro-Franklin market has 1,338 NXRT units and a job growth rate of 5.54%, adding 63 jobs[22]. Dividends - The board approved a quarterly dividend of $0.53 per share, a 3.9% increase from the previous dividend, marking a 157.3% increase since inception[6]. - The company declared dividends of $0.51 per common share in Q3 2025, up 10.3% from $0.46 in Q3 2024[65].

Core Insights - NexPoint Residential Trust, Inc. (NXRT) reported a net loss of $7.8 million for Q3 2025, a slight improvement from a net loss of $8.9 million in Q3 2024 [3][9] - The company maintained its full-year guidance and announced a quarterly dividend increase of 3.9% to $0.53 per share, marking a 157.3% increase since inception [3][33] - Total revenues for Q3 2025 were $62.8 million, down from $64.1 million in Q3 2024, while year-to-date revenues decreased to $189.2 million from $195.9 million [9][3] Financial Performance - For Q3 2025, Funds from Operations (FFO) were $15.9 million, Core FFO was $17.7 million, and Adjusted FFO (AFFO) was $20.2 million, showing slight variations compared to the previous year [3][9] - Year-to-date FFO totaled $50.2 million, Core FFO was $54.8 million, and AFFO reached $62.1 million, all reflecting a decrease from the same period in 2024 [3][9] - Net loss for the nine months ended September 30, 2025, was $21.7 million, compared to a net income of $28.0 million for the same period in 2024 [3][9] Operational Metrics - Occupancy rates for Same Store properties decreased by 130 basis points, with total revenue and Net Operating Income (NOI) both declining by 0.6% and 0.5%, respectively, for the nine months ended September 30, 2025 [3][9] - The average effective rent per unit across all properties was $1,497, with a physical occupancy rate of 93.6% as of September 30, 2025 [3][9] - The company completed 365 upgrades in Q3 2025, achieving an average monthly rent premium of $89 and a 21.3% return on investment [3][9] Debt and Financing - NXRT entered into a $200 million revolving credit facility with J.P. Morgan Chase Bank on July 11, 2025 [3][9] - Total mortgage debt stood at $1.5 billion as of Q3 2025, with a leverage ratio of 65% [26][9] Future Guidance - The company provided guidance for the full year 2025, projecting a net loss of $33.6 million and FFO attributable to common stockholders of $64.4 million [28][9] - The mid-point estimate for Core FFO per diluted share is projected at $2.75 for the year ended December 31, 2025 [29][9]

Core Viewpoint - NexPoint Residential Trust, Inc. announced a dividend increase of 3.9% per share, reflecting strong financial performance and commitment to returning value to shareholders [1]. Group 1: Dividend Announcement - The board of directors approved a dividend of $0.53 per share, payable on December 31, 2025, to stockholders of record on December 15, 2025 [1]. - This dividend represents a 3.9% increase over the previous quarter's dividend per share [1]. - Since its inception in 2015, the dividend has increased by 157.3% [1]. Group 2: Company Overview - NexPoint Residential Trust is a publicly traded real estate investment trust (REIT) listed on the New York Stock Exchange under the symbol "NXRT" [2]. - The company focuses on acquiring, owning, and operating middle-income multifamily properties with "value-add" potential in large cities and suburban areas, primarily in the Southeastern and Southwestern United States [2]. - NexPoint Residential Trust is externally advised by NexPoint Real Estate Advisors, L.P. [2].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - NexPoint Residential Trust, Inc. is set to host a conference call on October 28, 2025, to discuss its third quarter 2025 financial results [1]. Group 1: Conference Call Details - The conference call will take place at 11:00 a.m. ET and can be accessed by dialing 888-660-4430 for domestic callers or +1 646-960-0537 for international callers, using passcode Conference ID: 5001576 [2]. - A live audio webcast will be available on the Company's website, and a replay will be accessible shortly after the call for 60 days [2]. - A press release with the financial results will be issued before market open on the same day [3]. Group 2: Company Overview - NexPoint Residential Trust is a publicly traded REIT listed on the NYSE under the symbol "NXRT," focusing on acquiring, owning, and operating middle-income multifamily properties with "value-add" potential in major cities and suburban areas, primarily in the Southeastern and Southwestern United States [4]. - The Company is externally advised by NexPoint Real Estate Advisors, L.P., which has extensive experience in real estate [4].

Core Insights - The Federal Reserve's potential cuts to the Fed Funds rate are expected to influence the yield curve, particularly benefiting certain securities [1][6][27] - The current yield curve is upward sloping, but there are anomalies with short-term rates being higher than 2-year Treasuries [2][4] - A significant amount of capital is currently held in money market funds, which may shift to longer-duration Treasuries or high-yield securities as rates change [9][35] Yield Curve Dynamics - The yield curve typically slopes upward, with longer-duration bonds offering higher yields due to increased duration risk [1] - Recent trends show an inverted yield curve, but it has normalized with short-term rates above 4% due to the Fed Funds rate [2][4] - The Fed's recent cut to the Fed Funds rate to a range of 400 to 425 basis points is expected to lower short-term yields, with uncertain effects on long-term yields [6][7] Capital Flows and Investment Opportunities - An estimated $7.3 trillion is currently in money market funds, a 143% increase since pre-pandemic levels, indicating a potential shift in capital as rates decline [9][16] - If the Fed continues to cut rates, capital from money market funds may flow into long-duration Treasuries or high-yield securities, impacting market prices positively [17][19] - High-yield corporate bonds, high-dividend equities, and preferred stocks are expected to benefit from this capital influx [18][19] Company-Specific Insights - Gladstone Commercial (GOOD) stands to benefit from reduced interest expenses as its variable rate debt is linked to SOFR, with each 25 basis point cut reducing annual interest expense by approximately $1.156 million [22][24] - The anticipated cuts could lead to significant FFO and AFFO accretion for GOOD, enhancing its ability to maintain a high dividend yield of 9.5% [28] - Companies with high debt relative to equity, such as NexPoint Residential (NXRT), may also see benefits from lower interest rates, although their debt is largely hedged to fixed rates [33][34] Market Trends and Predictions - The REIT preferred market is expected to see increased activity as capital flows into high-yield securities, with many preferreds currently offering yields above 8% [36][38] - The market may bid up preferreds to or above par as interest rates decline, creating opportunities for capital appreciation [39][41] - Overall, the investment landscape is shifting towards high-yield securities as traditional risk-free options become less attractive [19][41]

Company Overview - NexPoint Residential Trust, Inc. (NXRT) is a publicly traded Real Estate Investment Trust (REIT) focused on acquiring, owning, and operating middle-income multifamily properties with "value-add" potential in large cities and suburban areas, primarily in the Southeastern and Southwestern United States [3]. Recent Developments - NXRT announced a dual listing of its common stock on NYSE Texas, effective August 19, 2025, while maintaining its primary listing on the New York Stock Exchange (NYSE) under the same ticker symbol "NXRT" [1]. - The Chief Investment Officer of NexPoint, Matt McGraner, emphasized the importance of the NYSE in NXRT's growth over the past decade and expressed pride in joining NYSE Texas as a Founding Member, reflecting support for Texas's pro-business values [2]. Strategic Importance - The dual listing on NYSE Texas is seen as a strategic move to support the expansion of capital markets infrastructure in Texas, highlighting the company's commitment to the region [2].

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements subject to significant risks, including economic conditions, geographic concentration, competition, and REIT status maintenance [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements subject to significant risks, including economic conditions, geographic concentration, competition, and REIT status maintenance - Forward-looking statements are based on current management beliefs and are subject to numerous known and unknown risks and uncertainties that are beyond the company's control[10](index=10&type=chunk)[11](index=11&type=chunk) - Key operational and market risks include: macroeconomic trends like inflation and high interest rates, concentration of properties in the Southeastern and Southwestern U.S., competition for acquisitions and tenants, and risks associated with a value-enhancement strategy[12](index=12&type=chunk) - Significant financial and corporate risks include: risks from substantial indebtedness, dependence on key personnel at the Adviser, conflicts of interest, and the necessity of maintaining REIT status for tax purposes[14](index=14&type=chunk) [PART I—FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements, including balance sheets, income statements, equity, cash flows, and notes, for Q2 and H1 2025 [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$1.86 billion** by June 30, 2025, while liabilities slightly rose and equity declined due to net loss and dividends Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Net Operating Real Estate Investments** | $1,763,255 | $1,793,223 | | **Total Assets** | **$1,857,201** | **$1,907,420** | | **Mortgages payable, net** | $1,466,530 | $1,463,650 | | **Total Liabilities** | **$1,504,147** | **$1,491,270** | | **Total Stockholders' Equity** | $347,890 | $410,368 | | **Total Liabilities and Stockholders' Equity** | **$1,857,201** | **$1,907,420** | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Q2 2025 saw a **$7.1 million net loss**, a shift from 2024's net income, primarily due to the absence of real estate sale gains Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $63,149 | $64,238 | $126,365 | $131,815 | | **Total expenses** | $55,246 | $57,442 | $111,039 | $115,737 | | **Gain on sales of real estate** | $0 | $18,686 | $0 | $50,395 | | **Net income (loss)** | **($7,061)** | **$10,638** | **($13,985)** | **$37,040** | | **Net income (loss) attributable to common stockholders** | ($7,033) | $10,596 | ($13,930) | $36,894 | | **Earnings (loss) per share - diluted** | **($0.28)** | **$0.40** | **($0.55)** | **$1.40** | [Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased to **$347.9 million** by June 30, 2025, due to a **$13.9 million net loss**, **$26.6 million in dividends**, and **$7.7 million in repurchases** - For the six months ended June 30, 2025, key changes to stockholders' equity included a **net loss of $13.9 million**, payment of **$26.6 million in common stock dividends**, and **$7.7 million in common stock repurchases**[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw **$48.2 million** from operations, **$18.7 million** used in investing, and **$35.4 million** used in financing, resulting in a **$5.9 million net cash decrease** Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $48,202 | $39,346 | | **Net cash provided by (used in) investing activities** | ($18,689) | $124,529 | | **Net cash used in financing activities** | ($35,426) | ($154,507) | | **Net increase (decrease) in cash** | ($5,913) | $9,368 | [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail REIT organization, accounting policies, 2024 dispositions, **$1.5 billion mortgage debt**, derivatives, repurchases, related-party transactions, and a new **$200 million credit facility** - There were no real estate acquisitions or dispositions during the six months ended June 30, 2025. In the same period of 2024, the company sold two properties for net proceeds of **$141.6 million**, generating a **gain of $50.4 million**[42](index=42&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, the company had approximately **$1.5 billion in mortgage debt** with a weighted average interest rate of **5.38%**. The company uses interest rate swaps with a notional amount of **$917.5 million** to hedge its floating-rate debt[50](index=50&type=chunk)[51](index=51&type=chunk)[58](index=58&type=chunk) - During the first six months of 2025, the company repurchased **223,109 shares** of common stock for **$7.7 million**. The Adviser voluntarily waived **$10.6 million in advisory and administrative fees** during the same period[71](index=71&type=chunk)[91](index=91&type=chunk) - Subsequent to the quarter end, on July 11, 2025, the company entered into a new **$200.0 million revolving credit facility** maturing in June 2028. A quarterly dividend of **$0.51 per share** was also declared[109](index=109&type=chunk)[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **35-property multifamily portfolio**, Q2 and H1 2025 net losses due to absent property sale gains, **1.1% Same Store NOI decline**, stable Core FFO, and a new **$200 million credit facility** [Overview](index=38&type=section&id=Overview) As of June 30, 2025, the company managed **35 multifamily properties** with **12,984 units**, **93.3% leased**, and an average monthly rent of **$1,500** Portfolio Snapshot as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of Properties | 35 | | Number of Units | 12,984 | | Occupancy | 93.3% leased | | Avg. Monthly Effective Rent | $1,500 | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q2 2025 net income declined by **$17.7 million** to a **$7.1 million net loss**, primarily due to the absence of **$18.7 million** in 2024 real estate sale gains Summary of Operating Results (in thousands) | Period | Metric | 2025 | 2024 | $ Change | | :--- | :--- | :--- | :--- | :--- | | **Q2** | **Net income (loss)** | **($7,061)** | **$10,638** | **($17,699)** | | | Gain on sales of real estate | $0 | $18,686 | ($18,686) | | **H1** | **Net income (loss)** | **($13,985)** | **$37,040** | **($51,025)** | | | Gain on sales of real estate | $0 | $50,395 | ($50,395) | [Non-GAAP Measurements](index=46&type=section&id=Non-GAAP%20Measurements) Non-GAAP analysis shows **Same Store NOI decreased 1.1% in Q2 2025**, with Core FFO per diluted share stable at **$0.71** and AFFO per diluted share at **$0.80** Same Store NOI Performance | Period | Same Store NOI (in thousands) | % Change YoY | | :--- | :--- | :--- | | **Q2 2025** | $38,036 | -1.1% | | **H1 2025** | $75,773 | -2.4% | FFO, Core FFO, and AFFO Per Diluted Share | Metric per Diluted Share | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **FFO** | $0.67 | $0.62 | $1.34 | $1.34 | | **Core FFO** | $0.71 | $0.69 | $1.45 | $1.43 | | **AFFO** | $0.80 | $0.79 | $1.64 | $1.62 | [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity relies on operations and credit facilities, with **$48.0 million cash** as of June 30, 2025, and a new **$200 million revolving credit facility** secured in July 2025 - Short-term liquidity is met through net cash from operations and credit facility capacity. Long-term needs are funded by various capital sources including debt, equity issuances, and property dispositions[205](index=205&type=chunk)[206](index=206&type=chunk) - A new **$200 million revolving credit facility** was established on July 11, 2025, maturing in June 2028, which replaces the prior facility that matured on June 30, 2025[226](index=226&type=chunk) Value-Add Program Capital Expenditures (in thousands) | Period | Interior Rehab | Exterior & Common Area | Total | | :--- | :--- | :--- | :--- | | **Q2 2025** | $1,329 | $91 | $1,420 | | **H1 2025** | $1,981 | $149 | $2,130 | [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate exposure on **$1.5 billion floating-rate debt**, with **62% hedged** by swaps; a **1.00% rate increase** would raise annual interest expense by **$5.5 million** - The company's main market risk is interest rate risk. As of June 30, 2025, **62% of its $1.5 billion in floating-rate debt** was effectively fixed through interest rate swaps[259](index=259&type=chunk) Interest Rate Sensitivity Analysis | Change in Interest Rates | Annual Increase to Interest Expense (in thousands) | | :--- | :--- | | 0.25% | $1,380 | | 0.50% | $2,760 | | 1.00% | $5,520 | [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the quarter, June 30, 2025[264](index=264&type=chunk) - No material changes to internal control over financial reporting occurred during the second quarter of 2025[266](index=266&type=chunk) [PART II—OTHER INFORMATION](index=70&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to materially adversely affect its financial condition or operations - Management is not aware of any legal proceedings likely to have a material adverse effect on the company[269](index=269&type=chunk) [Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the 2024 Annual Report have occurred[270](index=270&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Securities](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Securities) The company repurchased **223,109 shares** for **$7.7 million** in H1 2025, with **$77.8 million** remaining under the repurchase program Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining (in millions) | | :--- | :--- | :--- | :--- | | April 1 – April 30 | 223,109 | $34.29 | $77.8 | | May 1 – May 31 | — | — | $77.8 | | June 1 – June 30 | — | — | $77.8 | [Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the period[273](index=273&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations or reporting requirements - This item is not applicable to the company[274](index=274&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) No other material information is required to be reported for this period - There is no other information to report for this period[275](index=275&type=chunk) [Exhibits](index=72&type=section&id=Item%206.%20Exhibits) Exhibits include the 2025 Long Term Incentive Plan, award agreements, a new Credit Agreement, and CEO/CFO certifications - Key exhibits filed include the new 2025 Long Term Incentive Plan, a new Credit Agreement dated July 11, 2025, and required CEO/CFO certifications[277](index=277&type=chunk)

Core Viewpoint - NexPoint Residential Trust reported a mixed second quarter for 2025, with GAAP earnings per diluted share of ($0.28), beating estimates, but revenue of $63.1 million slightly missed expectations, indicating operational challenges in rents and occupancy despite dividend growth [1][2]. Financial Performance - GAAP earnings per diluted share were ($0.28), exceeding estimates by $0.06, while revenue was $63.1 million, falling short of the $63.19 million forecast [1][2]. - Year-over-year changes included a 170% decline in EPS from $0.40 in Q2 2024, and a 1.7% decrease in revenue from $64.2 million [2]. - Funds from operations (FFO) increased to $16.9 million ($0.67 per diluted share), up from $16.3 million ($0.62 per share) [7]. Operational Highlights - The company upgraded 555 units in Q2 2025, significantly up from 113 in the same quarter last year, achieving an average monthly rent premium of $73 and a 26.0% return on investment for upgraded units [5]. - Same-store average effective rent decreased by 1.3% year-over-year to $1,500, and same-store occupancy fell by 80 basis points to 93.3% [6]. Business Strategy - NexPoint focuses on value-add investments, renovating Class B multifamily properties to enhance value and attract tenants [3][4]. - The company is externally managed and relies on floating-rate debt, with a portion hedged through interest rate swaps to manage risk [4]. Capital Allocation - The company repurchased 223,109 shares at an average price of $34.29, totaling $7.65 million, representing a significant discount to the net asset value per share of $50.31 [9]. - No property acquisitions or dispositions occurred in the quarter, but management remains focused on share buybacks and potential future disposals [9]. Dividend and Guidance - A quarterly dividend of $0.51 per share was paid, resulting in a dividend yield of 6.18%, with AFFO coverage at 1.57 times the current payout [10]. - Management affirmed guidance for core FFO per share at $2.75 and same-store NOI growth at (1.5)% for FY2025, with a revised EPS midpoint guidance of ($1.31) [11].

Financial Data and Key Metrics Changes - The company reported a net loss of $7 million or a loss of $0.28 per diluted share on total revenue of $63.1 million for Q2 2025, compared to a net income of $10.6 million or $0.40 earnings per diluted share on total revenue of $64.2 million for the same period in 2024 [5][6] - Core FFO for Q2 was $18 million or $0.71 per diluted share, an increase from $0.69 per diluted share in Q2 2024 [6][7] - The company paid a second-quarter dividend of $0.51 per share, with a 1.39 times coverage by Core FFO and a payout ratio of 72.2% [7] Business Line Data and Key Metrics Changes - Same store rent and occupancy decreased by 1.3% and 0.8% respectively, leading to a 1.1% decrease in same store NOI compared to Q2 2024 [6][12] - The company completed 555 full and partial upgrades during the quarter, leasing 381 upgraded units with an average monthly rent premium of $73 and a 26% return on investment [6][7] - Since inception, the company has completed 9,113 upgrades, resulting in an average monthly rental increase of $165 and a 20.8% return on investment [6] Market Data and Key Metrics Changes - Same store total revenue was down 20 basis points, with four out of ten markets achieving at least 1% growth, particularly Atlanta and South Florida with 3.6% and 2.3% growth respectively [12][14] - The second quarter same store NOI margin registered at 60.9%, with five out of ten markets achieving year-over-year NOI growth of 1% or greater [13][14] - The national delivery outlook is expected to contract to a GFC level output of just 77,000 units per quarter, supporting the thesis on accelerating fundamentals in 2026, 2027, and 2028 [17] Company Strategy and Development Direction - The company is focused on optimizing maintenance operations and implementing AI technology to drive efficiencies and reduce staffing costs [15][22] - The company plans to maintain a balanced approach by driving occupancy, managing controllable expenses, and supporting steady NOI growth despite transitional operating environments [24] - The company is optimistic about capital recycling in the second half of the year through targeted acquisitions and dispositions [24] Management's Comments on Operating Environment and Future Outlook - Management noted that while bad debt has improved significantly, new supply pressures are expected to be short-term challenges, with stabilization anticipated in late 2025 [20] - The company expects second half 2025 revenue to be more muted than initially thought, with an average occupancy expectation of 94% [21] - Management highlighted that despite decelerating rents, growth is still expected compared to the trough in 2024, supported by stabilizing occupancy and improving collections [21][23] Other Important Information - The company entered into a new five-year $100 million SOFR swap at a fixed rate of 3.489% [8] - A $200 million corporate revolving credit facility was established, with an option to increase by an additional $200 million upon lender consent [10][11] Q&A Session Summary Question: How much of the $8 million in recurring capitalized maintenance expenditures year to date are non-revenue producing? - Management indicated that elevated spending is skewed towards non-revenue generating activities due to refinancing activities and significant projects in Nashville [27][28] Question: What drove the larger increase in the rehab program to over 500 units in Q2? - Management attributed the increase to a focus on identifying opportunities and deploying resources faster than expected [30][31] Question: What is driving the lower churn costs? - Management noted that higher retention rates and targeted upgrades to existing units are contributing to lower churn costs [43][44]