American Healthcare REIT(AHR) - 2025 Q2 - Quarterly Results

American Healthcare REIT Second Quarter 2025 Results Key Highlights & Financial Performance The company reported strong Q2 2025 results with robust NOI growth and improved leverage, leading to increased full-year guidance Key Financial Metrics (Q2 2025) | Metric | Value | Period | | :--- | :--- | :--- | | GAAP Net Income (controlling interest) | $9.9 million | Q2 2025 | | GAAP Net Income per Diluted Share | $0.06 | Q2 2025 | | Normalized FFO (NFFO) per Diluted Share | $0.42 | Q2 2025 | | Total Portfolio Same-Store NOI Growth (YoY) | 13.9% | Q2 2025 | - The company's Net Debt-to-Annualized Adjusted EBITDA ratio improved significantly, decreasing from 4.5x as of March 31, 2025, to 3.7x as of June 30, 2025[5] - Year-to-date investment activity has been strong, with the company closing on approximately $255 million of new investments[5] - The company raised significant capital through its at-the-market (ATM) equity offering program, issuing over 5.4 million shares for gross proceeds of approximately $188.6 million during the quarter[5] Detailed Operating Results Total portfolio Same-Store NOI grew 13.9% in Q2, driven by exceptional performance in the SHOP and ISHC segments Same-Store NOI Growth by Segment | Segment | Same-Store NOI Growth (Q2 2025 vs Q2 2024) | Same-Store NOI Growth (YTD 2025 vs YTD 2024) | | :--- | :--- | :--- | | ISHC | 18.3% | 19.0% | | Outpatient Medical | 1.4% | 1.7% | | SHOP | 23.0% | 26.6% | | Triple-Net Leased Properties | 1.4% | 0.0% | | Total Portfolio | 13.9% | 14.5% | - Operational performance was supported by proactive expense management, incremental occupancy gains, and mid-single-digit Revenue per Occupied Room (RevPOR) growth[7] - The SHOP segment saw its highest quarterly move-in volume since before the pandemic, pushing spot Same-Store occupancy above 87.5% by the end of the quarter[8] Investment & Development Activities The company actively managed its portfolio through acquisitions, dispositions, and joint venture buyouts while advancing its development pipeline - During Q2 2025, the company acquired a SHOP asset for approximately $65.0 million and sold four Non-Core Properties for gross proceeds of approximately $33.5 million[10] - Subsequent to quarter end, the company purchased its partners' 51% outstanding interests in an unconsolidated joint venture of five campuses for total consideration of approximately $118.4 million[9][12] - The company has over $300 million of awarded deals in its investments pipeline, which it expects to close by the end of the year[13] - The total in-process development pipeline is expected to cost approximately $57.8 million, of which $23.8 million has been spent as of June 30, 2025[14] Balance Sheet & Capital Markets The company maintained a strong balance sheet with $733.5 million in liquidity and reduced leverage to 3.7x through active capital raising Key Balance Sheet Metrics | Metric | Value (as of June 30, 2025) | | :--- | :--- | | Total Consolidated Indebtedness | $1.55 billion | | Total Liquidity | $733.5 million | | Net-Debt-to-Annualized Adjusted EBITDA | 3.7x | - During Q2 2025, the company issued 5,451,577 shares through its ATM program for gross proceeds of approximately $188.6 million[16] - Subsequent to quarter end, the company settled a forward sales agreement by issuing 3,554,525 shares for net cash proceeds of approximately $126.0 million[16] Full Year 2025 Guidance The company raised its full-year 2025 guidance for NFFO per share and Same-Store NOI growth due to strong performance Updated Full-Year 2025 Guidance | Metric | Current FY 2025 Range | Prior FY 2025 Range | | :--- | :--- | :--- | | NFFO per diluted share | $1.64 to $1.68 | $1.58 to $1.64 | | Net income per diluted share | $0.33 to $0.37 | $0.29 to $0.35 | | Total Portfolio SS NOI Growth | 11.0% to 14.0% | 9.0% to 13.0% | | ISHC SS NOI Growth | 15.0% to 19.0% | 12.0% to 16.0% | | Outpatient Medical SS NOI Growth | 1.0% to 1.5% | (1.0%) to 1.0% | - The increase in guidance is primarily attributed to strong operating results in the ISHC and SHOP segments, as well as recent accretive capital allocation activity[5][18] Shareholder Distributions The Board of Directors declared a second-quarter 2025 cash distribution of $0.25 per share of common stock - A cash distribution of $0.25 per share was declared for the quarter ended June 30, 2025, and paid in July 2025 to stockholders of record as of June 30, 2025[21] Financial Statements & Reconciliations This section presents detailed unaudited financial statements and reconciliations of GAAP measures to key non-GAAP metrics Condensed Consolidated Financial Statements The financial statements show total assets of $4.51 billion and a Q2 net income of $9.9 million, a significant year-over-year increase Condensed Consolidated Balance Sheet | Balance Sheet (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $4,506,650 | $4,488,057 | | Total Liabilities | $2,044,006 | $2,183,895 | | Total Equity | $2,462,644 | $2,303,942 | Condensed Consolidated Income Statement | Income Statement (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $542,503 | $504,581 | | Total Expenses | $496,080 | $472,912 | | Net Income (loss) attributable to controlling interest | $9,908 | $1,979 | Non-GAAP Reconciliations Detailed reconciliations from GAAP Net Income show Q2 2025 Normalized FFO of $68.4 million and Adjusted EBITDA of $93.1 million FFO Reconciliation (Q2 2025) | FFO Reconciliation (in thousands) | Three Months Ended June 30, 2025 | | :--- | :--- | | Net income (loss) | $10,079 | | Adjustments (Depreciation, Impairment, etc.) | +$56,888 | | NAREIT FFO attributable to controlling interest | $66,796 | | Normalizing Adjustments | +$1,581 | | Normalized FFO attributable to controlling interest | $68,377 | EBITDA Reconciliation (Q2 2025) | EBITDA Reconciliation (in thousands) | Three Months Ended June 30, 2025 | | :--- | :--- | | Net income | $10,079 | | Interest, Taxes, Depreciation & Amortization | +$65,751 | | EBITDA | $75,830 | | Other Adjustments | +$17,267 | | Adjusted EBITDA | $93,097 | Earnings Guidance Reconciliation The guidance reconciles projected full-year 2025 Net Income per share to Normalized FFO per share - The guidance reconciliation bridges the gap between projected GAAP Net Income ($0.33-$0.37/share) and Normalized FFO ($1.64-$1.68/share) by accounting for items like depreciation and amortization[64] Definitions & Disclosures This section provides legal disclaimers and detailed definitions for non-GAAP financial measures used in the report - The report includes a "Forward-Looking Statements" safe harbor provision, cautioning readers that statements regarding future expectations are subject to risks and uncertainties[26] - The report provides detailed definitions for key non-GAAP financial measures used, including EBITDA, Adjusted EBITDA, NAREIT FFO, NFFO, and NOI[27][66][70][72][74]