Invitation Homes(INVH) - 2025 Q1 - Quarterly Results

Earnings Press Release Q1 2025 Highlights & CEO Comments Invitation Homes reported stable Q1 2025 results, marked by a credit outlook upgrade, favorable loan amendment, and accelerating new lease rent growth - S&P Global Ratings upgraded the company's outlook to 'Positive' from 'Stable' and reaffirmed its 'BBB' credit rating[7] - Amended a $725 million term loan, extending maturity to April 2030 and lowering the interest rate by 40 basis points[7] - CEO Dallas Tanner highlighted accelerating new lease rent growth, reaching 2.7% in preliminary April, with Same Store renewal rent growth at 5.2% in Q1[8] - The company reiterated its FY 2025 guidance, maintaining a cautious yet confident outlook on the core business[9] Financial Results Q1 2025 saw broad year-over-year growth in key financial metrics, with total revenues up 4.4% to $674 million and net income rising 16.4% to $166 million Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | Total Revenues | $674 million | +4.4% | | Net Income to Common Stockholders | $166 million | +16.4% | | Net Income per Share (diluted) | $0.27 | +16.5% | | Core FFO per Share | $0.48 | +3.5% | | AFFO per Share | $0.42 | +4.0% | Per Share Financial Results (Diluted) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $0.27 | $0.23 | | FFO | $0.45 | $0.43 | | Core FFO | $0.48 | $0.47 | | AFFO | $0.42 | $0.41 | Operating Results The Same Store portfolio showed solid Q1 2025 operating performance, with NOI growing 3.7% year-over-year, driven by 2.5% core revenue growth and flat operating expenses Q1 2025 Same Store Operating Results Snapshot (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | NOI Growth | 3.7% | N/A | | Core Revenues Growth | 2.5% | N/A | | Core Operating Expenses Growth | 0.0% | N/A | | Average Occupancy | 97.2% | 97.8% | | Blended Rental Rate Growth | 3.6% | 4.3% | | Renewal Rent Growth | 5.2% | 5.7% | | New Lease Rent Growth | (0.1)% | 0.7% | | Bad Debt % of Gross Rental Revenue | 0.7% | 0.8% | - Same Store Core Operating Expenses showed no growth year-over-year, due to a 1.0% increase in fixed expenses offset by a 2.1% reduction in controllable expenses[21] Investment and Property Management Activity In Q1 2025, the company acquired 631 homes for approximately $213 million and disposed of 470 homes for approximately $179 million - Acquisitions (wholly owned and JV) totaled 631 homes for approximately $213 million[22] - Dispositions (wholly owned and JV) totaled 470 homes for approximately $179 million in gross proceeds[22] Summary of Homes Owned and/or Managed as of 3/31/2025 | Category | 12/31/2024 | Q1 2025 Acquired/Added | Q1 2025 Disposed/Subtracted | 3/31/2025 | | :--- | :--- | :--- | :--- | :--- | | Wholly owned homes | 85,138 | 577 | (454) | 85,261 | | Joint venture owned homes | 7,622 | 54 | (16) | 7,660 | | Managed-only homes | 17,678 | 0 | (342) | 17,336 | | Total | 110,438 | 631 | (812) | 110,257 | Balance Sheet and Capital Markets Activity As of March 31, 2025, the company maintained a strong balance sheet with $1.36 billion in liquidity and $8.18 billion total debt, with no maturities before 2027 - Available liquidity was $1,364 million from unrestricted cash and undrawn revolving credit facility[24] - Total indebtedness was $8,184 million, with 83.0% unsecured and 87.5% fixed rate or swapped to fixed[24] - Net debt / TTM adjusted EBITDAre was 5.3x[24] - No debt is reaching final maturity before 2027[24] FY 2025 Guidance Invitation Homes reiterated its FY 2025 guidance, projecting Core FFO per share between $1.88 and $1.94, and Same Store NOI growth between 1.00% and 3.00% FY 2025 Guidance | Metric | FY 2025 Guidance Range | Guidance Midpoint | | :--- | :--- | :--- | | Core FFO per share — diluted | $1.88 to $1.94 | $1.91 | | AFFO per share — diluted | $1.58 to $1.64 | $1.61 | | Same Store Core Revenues growth | 1.75% to 3.25% | 2.5% | | Same Store Core Operating Expenses growth | 2.75% to 4.25% | 3.5% | | Same Store NOI growth | 1.00% to 3.00% | 2.0% | | Wholly owned acquisitions | $500M to $700M | $600M | | Wholly owned dispositions | $400M to $600M | $500M | - Guidance assumes FY 2025 Average Occupancy of 96.2% to 96.8% and Bad Debt of 60 to 90 basis points[30] - Guidance for Same Store Core Operating Expenses assumes a 5.0% to 6.0% increase in property taxes and a 2.0% to 3.0% reduction in insurance expenses[31] Consolidated Financial Statements Consolidated Balance Sheets As of March 31, 2025, total assets were $18.58 billion and total liabilities $8.82 billion, with investments in properties at $17.20 billion Consolidated Balance Sheet Highlights ($ in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $18,578,092 | $18,700,951 | | Investments in single-family properties, net | $17,203,322 | $17,212,126 | | Cash and cash equivalents | $84,387 | $174,491 | | Total Liabilities | $8,823,078 | $8,908,442 | | Secured debt, net | $1,383,383 | $1,385,573 | | Unsecured notes, net | $3,802,333 | $3,800,688 | | Total Equity | $9,755,014 | $9,792,509 | Consolidated Statements of Operations Q1 2025 total revenues grew to $674.5 million, driving net income to $166.3 million (up 16.4%), despite higher operating expenses, aided by property sales gains Consolidated Statements of Operations Highlights ($ in thousands) | Account | Q1 2025 (unaudited) | Q1 2024 (unaudited) | | :--- | :--- | :--- | | Total Revenues | $674,479 | $646,039 | | Rental revenues | $585,193 | $571,430 | | Total Expenses | $575,789 | $554,377 | | Property operating and maintenance | $237,449 | $230,397 | | Interest expense | $84,254 | $89,845 | | Gain on sale of property, net of tax | $71,666 | $50,498 | | Net Income | $166,282 | $142,786 | | Net income per common share — diluted | $0.27 | $0.23 | Schedule 1: Reconciliation of FFO, Core FFO, and AFFO This schedule reconciles GAAP Net Income to FFO, Core FFO, and AFFO, showing Q1 2025 FFO at $277.2 million, Core FFO at $298.3 million, and AFFO at $261.0 million Q1 2025 Reconciliation of FFO, Core FFO, and AFFO ($ in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income available to common stockholders | $165,517 | $142,158 | | FFO | $277,240 | $266,785 | | Core FFO | $298,320 | $288,283 | | AFFO | $260,973 | $251,161 | Per Share Reconciliation (Diluted) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | FFO per share | $0.45 | $0.43 | | Core FFO per share | $0.48 | $0.47 | | AFFO per share | $0.42 | $0.41 | Schedule 2: Capital Structure Information Diluted Shares Outstanding This schedule details diluted shares outstanding, with Q1 2025 weighted average at approximately 615.6 million for FFO, Core FFO, and AFFO calculations Weighted Average Diluted Shares for FFO, Core FFO, and AFFO | Period | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total common shares and units — diluted | 615,645,848 | 615,987,206 | Debt Structure and Leverage Ratios As of March 31, 2025, total debt was $8.18 billion with a 4.0% weighted average interest rate, predominantly unsecured and fixed-rate, and a Net Debt / TTM Adjusted EBITDAre ratio of 5.3x Debt Structure as of March 31, 2025 | Debt Type | Balance ($ thousands) | % of Total | Wtd Avg Interest Rate | Wtd Avg Years to Maturity | | :--- | :--- | :--- | :--- | :--- | | Total Secured | $1,389,410 | 17.0% | 4.0% | 3.3 | | Total Unsecured | $6,795,000 | 83.0% | 4.0% | 5.8 | | Total Debt | $8,184,410 | 100.0% | 4.0% | 5.4 | - Net Debt / TTM Adjusted EBITDAre stood at 5.3x[51] - S&P Global Ratings upgraded the outlook to 'Positive' from 'Stable' on April 3, 2025, reaffirming the 'BBB' rating[55] - The company is in compliance with all unsecured facility and public bond covenants, with significant headroom on all metrics[51] Debt Maturity Schedule The debt maturity schedule shows no maturities in 2025 or 2026, with the first significant maturity of $989 million in 2027 and the largest concentration in 2029 - There are no debt maturities in 2025 and 2026, assuming all extension options are exercised[56] Debt Maturities by Year ($ in thousands) | Year | Balance | % of Total | | :--- | :--- | :--- | | 2027 | $989,024 | 12.1% | | 2028 | $750,000 | 9.2% | | 2029 | $2,945,000 | 36.0% | | 2030 | $450,000 | 5.5% | | Thereafter | $3,550,386 | 43.4% | | Total | $8,184,410 | 100.0% | - A $725 million term loan originally maturing in June 2029 was amended post-quarter end to mature in April 2030, not reflected in the table[57] Active Swap Schedule As of March 31, 2025, active interest rate swaps totaled $1.925 billion notional value with a 2.96% weighted average strike rate, including a $300 million forward-starting swap Active Swaps as of March 31, 2025 | Metric | Value | | :--- | :--- | | Total Notional | $1,925,000,000 | | Weighted Average Strike Rate | 2.96% | - A forward-starting swap for $300 million with a strike rate of 2.99% becomes effective in July 2025[60] Schedule 3: Summary of Operating Information by Home Portfolio Summary of Operating Information by Home Portfolio Q1 2025 operating performance shows the Same Store portfolio (78,078 homes) with 2.5% Core Revenue growth and 3.7% NOI growth, consistent with the Total Portfolio Q1 2025 YoY Operating Performance ($ in thousands) | Metric | Total Portfolio | Same Store Portfolio | | :--- | :--- | :--- | | Core Revenues | | | | Q1 2025 | $608,953 | $571,050 | | Change YoY | 2.5% | 2.5% | | Core Operating Expenses | | | | Q1 2025 | $193,331 | $176,399 | | Change YoY | 0.4% | 0.0% | | Net Operating Income | | | | Q1 2025 | $415,622 | $394,651 | | Change YoY | 3.5% | 3.7% | Same Store Portfolio Core Operating Detail Q1 2025 Same Store NOI grew 3.7% to $394.7 million, driven by 2.5% Core Revenue growth and flat Core Operating Expenses, with controllable expenses decreasing 2.1% Same Store Core Operating Detail YoY Change (Q1 2025 vs Q1 2024) | Category | Change YoY | | :--- | :--- | | Core Revenues | +2.5% | | Total Fixed Expenses | +1.0% | | Total Controllable Expenses | -2.1% | | Core Operating Expenses | 0.0% | | Net Operating Income | +3.7% | Same Store Quarterly Operating Trends Q1 2025 Same Store quarterly trends show sequential improvements, with average occupancy at 97.2%, new lease rent growth improving to -0.1%, and blended rent growth at 3.6% Same Store Quarterly Operating Trends | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Average Occupancy | 97.2% | 96.8% | 97.8% | | Turnover Rate | 5.0% | 5.2% | 5.2% | | Average Monthly Rent | $2,431 | $2,417 | $2,359 | | Rental Rate Growth: | | | | | Renewals | 5.2% | 4.1% | 5.7% | | New leases | (0.1)% | (2.2)% | 0.7% | | Blended | 3.6% | 2.2% | 4.3% | Schedule 4: Home Characteristics by Market As of Q1 2025, the wholly owned portfolio comprised 85,261 homes with 95.2% average occupancy and $2,424 average monthly rent, concentrated in Western US and Florida Wholly Owned Portfolio Characteristics by Region (Q1 2025) | Region | Number of Homes | Average Occupancy | Average Monthly Rent | Percent of Revenue | | :--- | :--- | :--- | :--- | :--- | | Western US | 30,719 | 96.8% | $2,595 | 39.2% | | Florida | 26,560 | 94.7% | $2,529 | 32.4% | | Southeast US | 18,664 | 94.5% | $2,077 | 18.6% | | Texas | 5,615 | 92.1% | $2,137 | 5.7% | | Midwest US | 3,513 | 95.6% | $2,420 | 4.0% | | Total / Average | 85,261 | 95.2% | $2,424 | 100.0% | Schedule 5: Same Store Operating Information by Market Same Store Core Revenues Growth Summary Q1 2025 Same Store Core Revenues grew 2.5% YoY, driven by a 3.1% increase in average monthly rent, with sequential growth of 1.2% across all regions Q1 2025 Same Store Core Revenues Growth (YoY) | Region | Avg. Monthly Rent Change | Avg. Occupancy Change | Core Revenues Change | | :--- | :--- | :--- | :--- | | Western US | +2.9% | -0.3% | +2.6% | | Florida | +2.9% | -0.6% | +2.1% | | Southeast US | +3.5% | -1.0% | +3.1% | | Texas | +2.5% | -0.9% | +1.8% | | Midwest US | +4.2% | -1.0% | +3.5% | | Total | +3.1% | -0.6% | +2.5% | Q1 2025 Same Store Core Revenues Growth (Sequential vs Q4 2024) | Region | Core Revenues Change | | :--- | :--- | | Western US | +1.0% | | Florida | +1.2% | | Southeast US | +1.3% | | Texas | +1.5% | | Midwest US | +1.5% | | Total | +1.2% | Same Store NOI Growth and Margin Summary Q1 2025 Same Store NOI grew 3.7% YoY, with Core NOI margin expanding to 69.1%, notably driven by 17.5% NOI growth in Texas due to expense reduction Q1 2025 Same Store NOI Growth (YoY) | Region | Core Revenues Change | Core OpEx Change | NOI Change | Core NOI Margin Q1 2025 | | :--- | :--- | :--- | :--- | :--- | | Western US | +2.6% | -0.6% | +3.5% | 76.8% | | Florida | +2.1% | +0.4% | +3.1% | 62.5% | | Southeast US | +3.1% | +5.9% | +1.8% | 67.9% | | Texas | +1.8% | -17.4% | +17.5% | 63.6% | | Midwest US | +3.5% | +3.7% | +3.4% | 59.7% | | Total | +2.5% | 0.0% | +3.7% | 69.1% | Q1 2025 Same Store NOI Growth (Sequential vs Q4 2024) | Region | NOI Change | | :--- | :--- | | Western US | +1.1% | | Florida | +0.4% | | Southeast US | +0.4% | | Texas | +13.7% | | Midwest US | +1.0% | | Total | +1.3% | Same Store Lease-Over-Lease Rent Growth Q1 2025 Same Store blended lease-over-lease rent growth was 3.6%, with 5.2% on renewals and -0.1% on new leases, led by 6.4% blended growth in the Midwest Q1 2025 Same Store Rental Rate Growth | Region | Renewal Leases | New Leases | Blended Average | | :--- | :--- | :--- | :--- | | Western US | 5.0% | 1.5% | 4.0% | | Florida | 5.1% | (1.8)% | 3.0% | | Southeast US | 5.7% | (0.3)% | 3.8% | | Texas | 4.0% | (2.9)% | 1.7% | | Midwest US | 6.7% | 5.5% | 6.4% | | Total / Average | 5.2% | (0.1)% | 3.6% | Schedule 6: Cost to Maintain and Capital Expenditure Detail Same Store Cost to Maintain, net Q1 2025 Same Store Total Cost to Maintain, net, was $63.1 million or $808 per home, slightly lower than Q1 2024, comprising recurring operating and capital expenditures Same Store Cost to Maintain, net ($ in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total recurring operating expenses, net | $28,925 | $29,799 | | Total Recurring Capital Expenditures | $34,184 | $33,557 | | Total Cost to Maintain, net | $63,109 | $63,356 | | Total Cost to Maintain, net (Per Home) | $808 | $811 | Total Wholly Owned Portfolio Capital Expenditure Detail Q1 2025 total capital expenditures for the wholly owned portfolio increased to $57.9 million, primarily driven by Recurring CapEx and Value Enhancing CapEx Total Capital Expenditures ($ in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Recurring CapEx | $37,092 | $36,923 | | Value Enhancing CapEx | $13,023 | $7,300 | | Initial Renovation CapEx | $6,869 | $7,698 | | Disposition CapEx | $952 | $716 | | Total Capital Expenditures | $57,936 | $52,637 | Schedule 7: Adjusted Property Management and G&A Reconciliation This schedule reconciles GAAP Property Management and G&A expenses, showing Q1 2025 adjusted property management at $35.1 million and adjusted G&A at $18.6 million Adjusted Expense Reconciliation ($ in thousands) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted property management expense | $35,088 | $29,639 | | Property management expense (GAAP) | $36,739 | $31,237 | | Adjusted G&A expense | $18,627 | $17,056 | | G&A expense (GAAP) | $29,518 | $23,448 | Schedule 8: Acquisitions, Dispositions, and Homebuilder Pipeline Acquisitions and Dispositions In Q1 2025, the company acquired 577 wholly owned homes for $336k average cost and disposed of 454 homes for $382k average sales price Q1 2025 Wholly Owned Portfolio Activity | Activity | Homes | Average Price/Cost | | :--- | :--- | :--- | | Acquisitions | 577 | $336,057 | | Dispositions | 454 | $381,734 | - Estimated stabilized cap rate on wholly owned acquisitions was 5.9%[94] - Cap rate on wholly owned dispositions was 2.1% based on trailing 12-month NOI[94] Expected Acquisition Pipeline of New Homes from Homebuilders As of March 31, 2025, the homebuilder acquisition pipeline consists of 1,801 new homes under contract, with 1,245 expected for delivery in the remainder of 2025 - The acquisition pipeline from homebuilders consists of 1,801 new homes under contract as of March 31, 2025[95] Pipeline Rollforward | Description | Number of Homes | | :--- | :--- | | Pipeline as of December 31, 2024 | 2,031 | | Q1 2025 additions and cancellations (net) | 142 | | Q1 2025 deliveries | (372) | | Pipeline as of March 31, 2025 | 1,801 | Estimated Delivery Schedule | Period | Number of Homes | | :--- | :--- | | Q2-Q4 2025 | 1,245 | | 2026 | 426 | | Thereafter | 130 | Glossary and Reconciliations Glossary of Terms This section defines key GAAP and non-GAAP financial and operating metrics, including FFO, Core FFO, AFFO, NOI, and Same Store Portfolio, clarifying calculation methodologies - FFO (Funds from Operations): Defined by Nareit as net income excluding gains/losses from sales of depreciated real estate, plus real estate depreciation and amortization[112] - Core FFO: FFO adjusted for items like non-cash interest, share-based compensation, severance, and casualty losses[112] - AFFO (Adjusted FFO): Core FFO less Recurring Capital Expenditures[112] - Same Store Portfolio: Includes wholly owned homes stabilized for at least 15 months prior to the comparison year, providing a basis for organic growth comparison[125][127] Reconciliations of Non-GAAP Measures This section provides detailed reconciliations of key non-GAAP measures, including Same Store NOI, Adjusted EBITDAre, and Net Debt to TTM Adjusted EBITDAre ratio, to their GAAP counterparts Reconciliation of Net Income to Same Store NOI (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income available to common stockholders | $165,517 | | Plus/Minus various adjustments | ... | | NOI (Total Portfolio) | $415,622 | | Non-Same Store NOI | ($20,971) | | Same Store NOI | $394,651 | Reconciliation of Net Income to Adjusted EBITDAre (TTM Ended Mar 31, 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income available to common stockholders | $476,523 | | Plus/Minus various adjustments | ... | | EBITDAre | $1,338,577 | | Plus/Minus various adjustments | ... | | Adjusted EBITDAre | $1,512,591 | Net Debt / TTM Adjusted EBITDAre Calculation (as of Mar 31, 2025) | Component | Amount (in thousands) | | :--- | :--- | | Net Debt (A) | $7,996,867 | | Adjusted EBITDAre (B) | $1,512,591 | | Ratio (A / B) | 5.3x |