Invitation Homes(INVH) - 2025 Q2 - Quarterly Results

Earnings Press Release Q2 2025 Highlights & CEO Comments Invitation Homes reported strong Q2 2025 results, marked by significant net income growth, robust resident demand, and strategic capital market activities Q2 2025 Key Performance Indicators (YoY) | Metric | Q2 2025 Value | YoY Change | | :--- | :--- | :--- | | Net Income per Diluted Share | $0.23 | +92.7% | | Total Revenues | $681 million | +4.3% | | Core FFO per Share | $0.48 | +1.7% | | AFFO per Share | $0.41 | +3.4% | | Same Store NOI Growth | 2.5% | N/A | | Same Store Average Occupancy | 97.2% | -40 bps | - The CEO highlighted strong execution, noting a 42.4% YTD increase in net income per share and a 3.7% rise in YTD AFFO per share, driven by high occupancy and disciplined cost management[7][8] - Strategic capital activities included an S&P credit rating outlook upgrade to 'Positive', an amendment to a $725 million term loan resulting in a 40 basis point interest rate reduction, and the launch of a $33 million developer lending program in Houston[10] Financial Results The company's Q2 2025 financial results demonstrated significant year-over-year growth in net income and per-share metrics, primarily driven by Net Operating Income growth Per Share Financial Results (Diluted) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $0.23 | $0.12 | $0.50 | $0.35 | | FFO | $0.45 | $0.34 | $0.90 | $0.77 | | Core FFO | $0.48 | $0.47 | $0.97 | $0.94 | | AFFO | $0.41 | $0.40 | $0.84 | $0.81 | - Q2 2025 total revenues grew to $681 million from $653 million in Q2 2024, while property operating and maintenance expenses rose to $244 million from $234 million[12] - The year-over-year increase in Core FFO per share (+1.7% for Q2, +2.6% for YTD) and AFFO per share (+3.4% for Q2, +3.7% for YTD) was primarily attributed to NOI growth[14][15] Operating Results The Same Store portfolio demonstrated strong Q2 2025 operating results with a 2.5% year-over-year NOI increase, driven by revenue growth and controlled expenses Q2 2025 Same Store Operating Results Snapshot (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | NOI Growth | 2.5% | N/A | N/A | | Core Revenues Growth | 2.4% | N/A | N/A | | Core Operating Expenses Growth | 2.2% | N/A | N/A | | Average Occupancy | 97.2% | 97.6% | -40 bps | | Blended Rental Rate Growth | 4.0% | 5.0% | -100 bps | | Bad Debt % of Gross Rental Revenue | 0.6% | 0.7% | -10 bps | - Q2 Same Store Core Revenues growth of 2.4% was driven by a 2.6% increase in Average Monthly Rent and a 6.8% increase in other income, partially offset by a 40 basis point decline in Average Occupancy[19] - Q2 Same Store Core Operating Expenses increased 2.2% YoY, due to a 3.9% rise in controllable expenses and a 1.3% rise in fixed expenses[21] Investment and Property Management Activity In Q2 2025, the company actively managed its portfolio with significant acquisitions and dispositions, launched a new developer lending program, and ended the quarter with 110,388 homes owned or managed - Q2 2025 acquisitions totaled 1,040 homes for ~$350M, while dispositions included 358 homes for ~$141M, across both wholly owned and joint venture portfolios[23] - A new developer lending program was launched with a $33 million loan commitment for a 156-home community in Houston, which includes an option for the company to acquire the community upon stabilization[25] Summary of Homes Owned and/or Managed as of 6/30/2025 | Category | Start of Q2 | Acquired/Added | Disposed/Subtracted | End of Q2 | | :--- | :--- | :--- | :--- | :--- | | Wholly owned homes | 85,261 | 939 | (295) | 85,905 | | Joint venture owned homes | 7,660 | 101 | (63) | 7,698 | | Managed-only homes | 17,336 | 0 | (551) | 16,785 | | Total | 110,257 | 1,040 | (909) | 110,388 | Balance Sheet and Capital Markets Activity As of June 30, 2025, the company maintained a strong balance sheet with substantial liquidity, a predominantly unsecured and fixed-rate debt structure, and favorable capital market activities - The company has $1,275 million in available liquidity and a Net debt / TTM adjusted EBITDAre of 5.3x[28] - Total indebtedness was $8.253 billion, with 83.1% being unsecured and 87.7% being fixed-rate or swapped to fixed-rate. Approximately 90% of wholly owned homes are unencumbered[28] - S&P Global Ratings upgraded the company's outlook to 'Positive' from 'Stable' and reaffirmed its 'BBB' credit rating. A $725 million term loan was amended, extending its maturity to 2030 and reducing its interest rate by 40 basis points[29] FY 2025 Guidance Invitation Homes reaffirmed its full-year 2025 guidance, projecting Core FFO per share between $1.88 and $1.94 and Same Store NOI growth between 1.00% and 3.00% - The full year 2025 guidance remains unchanged from the initial guidance provided in February 2025[31] FY 2025 Guidance | Metric | FY 2025 Guidance Range | FY 2025 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 NOI growth | 1.00% to 3.00% | 2.0% | | Wholly owned acquisitions | $500M to $700M | $600M | | Wholly owned dispositions | $400M to $600M | $500M | - Guidance assumptions include a 5.0% to 6.0% increase in property taxes and a 2.0% to 3.0% reduction in insurance expenses for FY 2025[33] Consolidated Financial Statements Consolidated Balance Sheets As of June 30, 2025, the consolidated balance sheet shows total assets of $18.66 billion, a slight decrease from year-end 2024, with total equity at $9.71 billion Key Balance Sheet Items ($ in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $18,662,005 | $18,700,951 | | Total Liabilities | $8,956,709 | $8,908,442 | | Total Equity | $9,705,296 | $9,792,509 | Consolidated Statements of Operations Q2 2025 consolidated statements of operations show total revenues of $681.4 million and a substantial increase in net income to $140.9 million, or $0.23 per diluted share Q2 Statement of Operations Highlights (YoY, $ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $681,401 | $653,451 | | Total Expenses | $579,600 | $565,297 | | Net Income | $141,367 | $73,431 | | Net Income per Share (Diluted) | $0.23 | $0.12 | - Year-to-date 2025 net income available to common stockholders was $306.2 million, a significant increase from $215.1 million in the same period of 2024[46] Schedule 1: Reconciliation of FFO, Core FFO, and AFFO This schedule reconciles GAAP net income to non-GAAP metrics, showing Q2 2025 FFO of $279.4 million, Core FFO of $296.7 million, and AFFO of $253.4 million after adjustments FFO, Core FFO, and AFFO Per Share (Diluted) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | FFO per share | $0.45 | $0.34 | $0.90 | $0.77 | | Core FFO per share | $0.48 | $0.47 | $0.97 | $0.94 | | AFFO per share | $0.41 | $0.40 | $0.84 | $0.81 | Schedule 2: Capital Structure Information Diluted Shares Outstanding This schedule details the weighted average diluted share counts for Q2 2025, with 613.3 million for net income and 615.8 million for FFO, Core FFO, and AFFO calculations Weighted Average Diluted Shares (Q2 2025) | Calculation For | Share Count | | :--- | :--- | | Net Income | 613,261,904 | | FFO, Core FFO, and AFFO | 615,771,167 | Debt Structure and Leverage Ratios As of June 30, 2025, the company's debt structure featured $8.25 billion in total debt, predominantly unsecured and fixed-rate, with a Net Debt / TTM Adjusted EBITDAre of 5.3x, and full covenant compliance Debt Structure as of June 30, 2025 | Debt Type | Balance ($ in thousands) | % of Total | | :--- | :--- | :--- | | Secured | $1,388,398 | 16.9% | | Unsecured | $6,865,000 | 83.1% | | Total Debt | $8,253,398 | 100.0% | - The Net Debt / TTM Adjusted EBITDAre was 5.3x, and the company maintained investment-grade credit ratings, including a 'BBB' rating with a 'Positive' outlook from S&P Global Ratings[53] - The company is in compliance with all major financial covenants for its unsecured facilities and public bonds, with significant headroom on ratios like total leverage (29.0% vs. ≤60% requirement) and fixed charge coverage (4.3x vs. ≥1.5x requirement)[53] Debt Maturity Schedule The company maintains a well-staggered debt maturity profile with no significant final maturities until 2027, extending a manageable ladder of maturities out to 2036 - There is no debt reaching final maturity in 2025 or 2026. The next maturity is $988 million of secured debt in 2027[58] Active Swap Schedule As of June 30, 2025, Invitation Homes had $2.0 billion in active interest rate swaps with a weighted average strike rate of 3.08%, plus a $300 million forward-starting swap - The company has $2.0 billion in active notional swaps to manage interest rate risk on its floating-rate debt[61] Schedule 3: Summary of Operating Information by Home Portfolio Summary of Operating Information by Home Portfolio This schedule compares the Q2 2025 performance of the Total Portfolio against the Same Store Portfolio, showing 2.9% and 2.5% NOI growth respectively Q2 2025 YoY Growth Comparison | Metric | Total Portfolio | Same Store Portfolio | | :--- | :--- | :--- | | Core Revenues Growth | 3.0% | 2.4% | | Core Operating Expenses Growth | 3.2% | 2.2% | | NOI Growth | 2.9% | 2.5% | Same Store Portfolio Core Operating Detail Detailed Q2 2025 Same Store operating results show 2.4% core revenue growth and 2.2% core operating expense growth, leading to 2.5% NOI growth - Q2 2025 Same Store Core Revenues grew 2.4% YoY, while Core Operating Expenses grew 2.2% YoY, resulting in 2.5% NOI growth[67] - Within expenses, fixed expenses (property taxes, insurance, HOA) grew 1.3% YoY, while controllable expenses (R&M, personnel, turnover) grew 3.9% YoY[67] Same Store Quarterly Operating Trends Quarterly trends for the Same Store portfolio show stable high occupancy at 97.2% in Q2 2025, with blended rental rate growth of 4.0%, moderating from Q2 2024 Same Store Quarterly Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Average Occupancy | 97.2% | 97.3% | 97.6% | | Turnover Rate | 6.2% | 5.0% | 6.2% | | Average Monthly Rent | $2,445 | $2,431 | $2,382 | | Blended Rent Growth | 4.0% | 3.6% | 5.0% | Schedule 4: Home Characteristics by Market This schedule provides a Q2 2025 snapshot of the wholly owned portfolio by market, highlighting geographic diversification and key revenue contributions from Western US and Florida regions Top 5 Markets by Revenue Contribution (Wholly Owned) | Market | Number of Homes | Average Monthly Rent | Percent of Revenue | | :--- | :--- | :--- | :--- | | Atlanta | 12,634 | $2,088 | 12.6% | | South Florida | 8,134 | $3,109 | 11.9% | | Southern California | 7,184 | $3,183 | 10.9% | | Tampa | 9,658 | $2,307 | 10.7% | | Phoenix | 9,214 | $2,069 | 9.6% | Schedule 5: Same Store Operating Information by Market Same Store Core Revenues Growth Summary This schedule details Q2 2025 Same Store core revenue growth by market, with the Midwest leading at 4.3% YoY and Florida showing the weakest growth at 1.9% Q2 2025 Same Store Core Revenues Growth (YoY) by Region | Region | Core Revenues Change | | :--- | :--- | | Midwest US | 4.3% | | Southeast US | 3.1% | | Western US | 2.4% | | Florida | 1.9% | | Texas | 1.5% | | Total | 2.4% | Same Store NOI Growth and Margin Summary This schedule breaks down Q2 2025 Same Store NOI growth by market, with Texas leading at 9.9% YoY and the Southeast showing the weakest performance at 0.5% Q2 2025 Same Store NOI Growth (YoY) by Region | Region | NOI Change | | :--- | :--- | | Texas | 9.9% | | Midwest US | 5.2% | | Florida | 2.8% | | Western US | 2.2% | | Southeast US | 0.5% | | Total | 2.5% | Same Store Lease-Over-Lease Rent Growth This schedule details Q2 2025 Same Store lease-over-lease rent growth, with the Midwest achieving the highest blended growth at 8.1% and overall blended growth at 4.0% Q2 2025 Blended Rent Growth by Region | Region | Renewal Leases | New Leases | Blended Average | | :--- | :--- | :--- | :--- | | Midwest US | 7.5% | 10.5% | 8.1% | | Southeast US | 5.1% | 2.7% | 4.4% | | Western US | 4.1% | 3.3% | 3.9% | | Florida | 5.0% | 0.3% | 3.6% | | Texas | 3.2% | 0.4% | 2.5% | | Total / Average | 4.7% | 2.2% | 4.0% | Schedule 6: Cost to Maintain and Capital Expenditure Detail This schedule details Q2 2025 property maintenance costs, showing Same Store Total Cost to Maintain (net) at $75.0 million and total wholly owned capital expenditures at $70.4 million Same Store Cost to Maintain, net (Q2 2025) | Category | Amount ($ in thousands) | | :--- | :--- | | Total recurring operating expenses, net | $36,150 | | Total Recurring Capital Expenditures | $38,851 | | Total Cost to Maintain, net | $75,001 | Total Wholly Owned Portfolio Capital Expenditure Detail (Q2 2025) | Category | Amount ($ in thousands) | | :--- | :--- | | Recurring CapEx | $42,949 | | Value Enhancing CapEx | $18,314 | | Initial Renovation CapEx | $8,269 | | Disposition CapEx | $869 | | Total Capital Expenditures | $70,401 | Schedule 7: Adjusted Property Management and G&A Reconciliation This schedule reconciles Q2 2025 GAAP G&A expenses of $23.6 million to an adjusted non-GAAP G&A of $16.7 million, primarily by excluding share-based compensation Adjusted G&A Expense Reconciliation (Q2 2025, $ in thousands) | Item | Amount | | :--- | :--- | | G&A expense (GAAP) | $23,591 | | Adjustments: | | | Share-based compensation expense | ($6,898) | | Severance expense | ($35) | | Adjusted G&A expense | $16,658 | Schedule 8: Acquisitions, Dispositions, and Homebuilder Pipeline Acquisitions and Dispositions In Q2 2025, the company acquired 939 wholly owned homes and disposed of 295 homes, with active acquisition markets in Texas and Florida, and joint venture activity Q2 2025 Wholly Owned Portfolio Activity | Activity | Homes | Average Price/Cost | | :--- | :--- | :--- | | Acquisitions | 939 | $336,425 | | Dispositions | 295 | $375,120 | - Estimated stabilized cap rates on wholly owned acquisitions averaged 5.7%, while cap rates on dispositions averaged 1.8%[100] Expected Acquisition Pipeline of New Homes from Homebuilders As of June 30, 2025, the company has an acquisition pipeline of 1,338 new homes under contract from homebuilders, with most deliveries expected in the second half of 2025 Acquisition Pipeline Summary | Metric | Value | | :--- | :--- | | Total Homes in Pipeline | 1,338 | | Avg. Estimated Cost Basis | $340,000 | | Estimated Deliveries in Q3-Q4 2025 | 732 | | Estimated Deliveries in 2026 | 474 | Glossary and Reconciliations Glossary of Terms This section provides detailed definitions for key financial and operating metrics, including non-GAAP measures like FFO, Core FFO, AFFO, and Same Store Portfolio, ensuring reporting transparency - Defines key non-GAAP metrics like FFO (Funds from Operations), Core FFO, and AFFO (Adjusted Funds from Operations) which are used to evaluate the performance of real estate companies[118] - Explains the composition of the 'Same Store Portfolio,' which includes wholly owned homes that have been stabilized for at least 15 months, providing a basis for organic, like-for-like performance comparison[131][133] - Details the definitions and calculation methods for financial covenants related to the company's unsecured credit facilities and public bonds, which are critical for assessing financial health and risk[138][148] Reconciliations This section provides detailed numerical reconciliations of non-GAAP financial measures to GAAP, including bridges from Net Income to Same Store NOI and Adjusted EBITDAre, ensuring transparency of performance metrics - Provides a reconciliation from GAAP Net Income to Same Store NOI, showing adjustments for items like interest, depreciation, G&A, and non-same store operations[161][162] - Includes a detailed reconciliation of GAAP Net Income to Adjusted EBITDAre, adjusting for interest, taxes, depreciation, amortization, and other specific items like share-based compensation and casualty losses[165] - Presents the calculation for Net Debt / TTM Adjusted EBITDAre, a key leverage ratio, by reconciling total debt from the balance sheet to net debt and dividing by the trailing twelve months Adjusted EBITDAre[169]