Ventas(VTR) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Highlights Ventas reported strong second-quarter 2025 results, driven by significant growth in its Senior Housing Operating Portfolio (SHOP), achieving a 9% year-over-year increase in Normalized FFO per share to $0.87 and a 13% growth in SHOP Same-Store Cash NOI, leading to improved full-year guidance - CEO Debra A. Cafaro highlighted an "unprecedented multiyear growth opportunity in senior housing" driven by secular demand, historically low new supply, and an attractive product offering[3] Q2 2025 Key Financial Metrics (YoY) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Attributable Net Income per share | $0.15 | +200% | | Normalized FFO per share | $0.87 | +9% | | Total Company Same-Store Cash NOI | N/A | +7% | | SHOP Same-Store Cash NOI | N/A | +13% | - Year to date, the company closed $1.1 billion in senior housing investments and settled 16.4 million shares for gross proceeds of $1.1 billion, with $0.7 billion of unsettled equity forward sales agreements remaining[7] Financial and Operating Results The company's strong Q2 performance was characterized by robust growth in its Senior Housing Operating Portfolio (SHOP), with a 13% increase in Same-Store Cash NOI, expanded senior housing investments to a $2 billion target, and an improved balance sheet with a reduced Net Debt-to-Adjusted EBITDA ratio of 5.6x Company-Level Financial Results Ventas demonstrated significant earnings growth in Q2 2025, with Attributable Net Income per share increasing by 200% to $0.15 and Normalized FFO per share growing by 9% to $0.87 year-over-year Q2 2025 Per Share Results vs. Q2 2024 | Metric | Q2 2025 ($/share) | Q2 2024 ($/share) | $ Change ($/share) | % Change | | :--- | :--- | :--- | :--- | :--- | | Attributable Net Income | $0.15 | $0.05 | $0.10 | 200% | | Nareit FFO* | $0.86 | $0.77 | $0.09 | 12% | | Normalized FFO* | $0.87 | $0.80 | $0.07 | 9% | Senior Housing Operating Portfolio (SHOP) Performance The SHOP segment was a key growth driver, with Same-Store Cash NOI increasing 13% year-over-year, fueled by an 8% rise in cash operating revenue, a 5% increase in Revenue per Occupied Room, and a 240 basis point improvement in average occupancy - SHOP Same-Store Cash NOI grew 13% YoY, or 15% YoY excluding a prior-year property tax refund[9] - Robust resident demand was observed, with accelerating average occupancy growth intra-quarter and strong net move-ins in June[10] External Growth and Investment Strategy Ventas is actively pursuing external growth focused on senior housing, having closed $1.1 billion in investments year-to-date and increasing its full-year 2025 investment volume expectation from $1.5 billion to $2.0 billion - The company increased its 2025 investment volume expectation to $2 billion, up from the previous estimate of $1.5 billion[11] Financial Position and Liquidity The company strengthened its financial position, improving its Net Debt-to-Further Adjusted EBITDA ratio to 5.6x, a 0.4x reduction from year-end 2024, and maintained substantial financial flexibility with $4.7 billion in liquidity as of June 30, 2025 - Net Debt-to-Further Adjusted EBITDA ratio improved to 5.6x, down 0.4x from year-end 2024, driven by SHOP growth and equity-funded investments[12] - Total liquidity stood at $4.7 billion, including availability under its revolving credit facility, cash, and unsettled equity forward sales agreements[13] Full Year 2025 Guidance Ventas raised its full-year 2025 guidance, increasing the midpoint for Normalized FFO per share from $3.41 to $3.44, reflecting strong SHOP segment performance and increased accretive investment activity, with the total investment target for 2025 raised to $2.0 billion Updated Full Year 2025 Per Share Guidance (as of 7/30/2025) | Metric | Previous Guidance (5/28/25) ($/share) | Updated Guidance (7/30/25) ($/share) | | :--- | :--- | :--- | | Attributable Net Income Range | $0.43 - $0.53 | $0.47 - $0.52 | | Nareit FFO Range* | $3.28 - $3.38 | $3.38 - $3.43 | | Normalized FFO Range* | $3.36 - $3.46 | $3.41 - $3.46 | | Normalized FFO Midpoint* | $3.41 | $3.44 | - The guidance increase is primarily driven by NOI growth in the SHOP segment and accretive senior housing investments, partially offset by higher net interest expense[16] - The guidance now includes the completion of $2.0 billion in 2025 investments, an increase from the prior assumption of $1.5 billion[16][42][45] Consolidated Financial Statements The consolidated financial statements detail the company's financial position and performance, showing total assets of $26.5 billion and total liabilities of $14.6 billion as of June 30, 2025, with Q2 total revenues increasing to $1.42 billion and net income attributable to common stockholders rising to $68.3 million Consolidated Balance Sheets As of June 30, 2025, Ventas reported total assets of $26.47 billion, a slight increase from year-end 2024, with total liabilities decreasing to $14.55 billion and total equity increasing to $11.59 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | $26,474,929 | $26,186,906 | | Total Liabilities | $14,553,769 | $15,047,081 | | Total Equity | $11,592,461 | $10,829,596 | Consolidated Statements of Income For Q2 2025, Ventas generated total revenues of $1.42 billion, up from $1.20 billion in the prior-year period, with net income attributable to common stockholders reaching $68.3 million, or $0.15 per diluted share Q2 2025 Income Statement Highlights (in thousands) | Account | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | | Total Revenues | $1,420,893 | $1,200,980 | | Total Expenses | $1,378,235 | $1,220,064 | | Net Income | $71,462 | $21,168 | | Net Income Attributable to Common Stockholders | $68,264 | $19,387 | Non-GAAP Financial Measures and Reconciliations This section provides detailed reconciliations of non-GAAP measures like Funds From Operations (FFO), Net Operating Income (NOI), and Adjusted EBITDA to their GAAP counterparts, offering supplemental views on the company's operating performance, property-level results, and credit strength Funds From Operations (FFO) Reconciliation For Q2 2025, Ventas reconciled Net Income Attributable to Common Stockholders of $68.3 million to Nareit FFO of $395.3 million and Normalized FFO of $400.1 million, with Normalized FFO per share at $0.87, a 9% increase year-over-year Q2 2025 FFO Reconciliation (in thousands, except per share) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | | Net Income Attributable to Common Stockholders | $68,264 | $19,387 | | Nareit FFO | $395,343 | $317,192 | | Normalized FFO | $400,143 | $329,119 | | Normalized FFO per share | $0.87 | $0.80 | Full Year 2025 Guidance Reconciliation The company provides a reconciliation for its updated 2025 guidance, projecting a Normalized FFO per share range of $3.41 to $3.46, based on $2.0 billion in senior housing investments, ~$200 million in disposition proceeds, and a full-year weighted average diluted share count of 461 million FY 2025 Guidance Reconciliation (Per Share) | Metric | Low ($/share) | High ($/share) | | :--- | :--- | :--- | | Net income attributable to common stockholders | $0.47 | $0.52 | | Nareit FFO attributable to common stockholders | $3.38 | $3.43 | | Normalized FFO attributable to common stockholders | $3.41 | $3.46 | - Updated guidance assumptions include increased senior housing investment volume to $2.0 billion and a slightly higher weighted average share count of 461 million[42] Same-Store Cash NOI Reconciliation In Q2 2025, Total Same-Store Cash NOI was $485.3 million, a 6.6% increase year-over-year, led by the SHOP segment's 13.3% increase to $226.1 million, with OM&R and NNN segments growing by 1.7% and 1.0% respectively Q2 2025 Same-Store Cash NOI Growth by Segment (YoY) | Segment | Q2 2025 Same-Store Cash NOI ($ thousands) | % Increase | | :--- | :--- | :--- | | SHOP | $226,068 | 13.3% | | OM&R | $135,912 | 1.7% | | NNN | $123,368 | 1.0% | | Total | $485,348 | 6.6% | Adjusted EBITDA and Net Debt Reconciliation The company's Net Debt to Further Adjusted EBITDA ratio improved sequentially and from year-end 2024, standing at 5.6x for Q2 2025, compared to 5.7x in the prior quarter and 6.0x at year-end 2024, indicating a strengthening credit profile Net Debt / Further Adjusted EBITDA Trend | Quarter Ended | Ratio (x) | | :--- | :--- | | June 30, 2025 | 5.6x | | March 31, 2025 | 5.7x | | December 31, 2024 | 6.0x | Definitions of Non-GAAP Measures This section provides the company's specific definitions for key non-GAAP financial measures such as Adjusted EBITDA, Further Adjusted EBITDA, NOI, Cash NOI, Same-Store, and Constant Currency, crucial for understanding supplemental performance metrics - The company defines NOI as total revenues less property-level operating expenses, third-party capital management expenses, and interest and other income[53] - Same-store properties are defined as those owned, consolidated, and operational for the full period in both comparison periods, with specific stabilization criteria for newly developed or acquired assets[55][56] About Ventas and Forward-Looking Statements Ventas is an S&P 500 REIT with approximately 1,400 properties focused on senior housing, medical buildings, and research centers, with the report including cautionary statements on forward-looking information and outlining risk factors like regulatory changes and macroeconomic conditions - Ventas is a leading S&P 500 REIT with a portfolio of approximately 1,400 properties in North America and the United Kingdom, focusing on the senior housing and healthcare sectors[20] - The press release contains forward-looking statements subject to various risks and uncertainties, and the company does not undertake a duty to update them[25][26] - Key risk factors include exposure to governmental regulations, macroeconomic conditions like inflation and interest rates, reliance on third-party managers, and the financial condition of tenants and borrowers[27][28]