The RMR Group(RMR) - 2025 Q4 - Annual Results

Financial Performance - RMR Group reported net income of $7.6 million for the fiscal fourth quarter 2025, with a net income margin of 16.6%[19] - Adjusted Net Income attributable to RMR Group was $3.8 million, or $0.22 per diluted share, while Distributable Earnings were $14.3 million, or $0.44 per diluted share[19] - Adjusted EBITDA for the quarter was $20.5 million, with an Adjusted EBITDA margin of 42.9%[19] - Total revenues for the three months ended September 30, 2025, were $159,412, a decrease from $212,300 in the same period last year, representing a decline of approximately 25%[45] - Net income attributable to The RMR Group Inc. for the three months ended September 30, 2025, was $3,414, down from $5,336 in the same period last year, reflecting a decrease of about 36%[48] - The company reported operating income of $10,861 for the three months ended September 30, 2025, compared to $9,983 in the same period last year, indicating an increase of approximately 8.8%[48] - The adjusted net income attributable to The RMR Group Inc. was $10,885 for the three months ended September 30, 2025, with an adjusted diluted EPS of $0.22[59] - Distributable earnings for the three months ended September 30, 2025, were $14,252, with distributable earnings per share of $0.44[70] Assets and Liabilities - RMR Group's Assets Under Management (AUM) stood at $39.0 billion as of September 30, 2025[19] - The total assets of The RMR Group Inc. increased to $718,245 as of September 30, 2025, compared to $700,494 in the previous year, marking a growth of about 2.5%[54] - The company’s total liabilities stood at $316,232 as of September 30, 2025, compared to $281,077 a year earlier, reflecting an increase of approximately 12.5%[54] - Cash and cash equivalents held by The RMR Group Inc. totaled $19,478 as of September 30, 2025, down from $23,189 a year earlier[54] - Total liquidity as of September 30, 2025, was $162.3 million, including $62.3 million in cash and $100 million available on its revolving credit facility[20] Dividends and Payouts - The company declared a quarterly dividend of $0.45 per share, payable on or about November 13, 2025[11] - The RMR Group Inc. paid a total dividend of $12,391, which translates to $0.45 per share, with a payout ratio of 71.6% for the three months ended September 30, 2025[40] - The distribution payout ratio for the quarter was 71.6%[19] - The company expects to maintain dividends at current levels for more than three years based on its cash balance and expected distributable earnings[43] Acquisitions and Investments - The company acquired two garden-style apartment communities in North Carolina and Florida for a total of $147 million, enhancing its Enhanced Growth Venture portfolio[9] - RMR Group executed several refinancing transactions, including a $1 billion mortgage refinancing for Vertex Pharmaceuticals' headquarters[9] - RMR Group plans to sell its loan portfolio to Seven Hills Realty Trust, expecting net proceeds of approximately $16.7 million[20] Revenue and Service Performance - Total management, incentive, and advisory services revenue for the three months ended September 30, 2025, was $45,738, compared to $48,490 for the same period in 2024[70] Tax and Financial Strategy - Total tax distributions from The RMR Group LLC for the three months ended September 30, 2025, were $6,226,000, compared to $5,530,000 for the previous quarter, reflecting an increase of approximately 12.6%[81] - The RMR Group LLC's estimated tax liabilities are determined quarterly, leading to fluctuations in cash distributions based on ownership percentages[82] - The company emphasizes the importance of maintaining or increasing distributions to shareholders as part of its financial strategy[93] Risks and Future Outlook - RMR's future profitability is influenced by economic conditions, including interest rates and market trends, which may impact client performance and revenue[92] - The company faces risks related to client dependence, market conditions, and regulatory compliance, which could affect its financial performance[94] - RMR's ability to successfully integrate acquired businesses is crucial for realizing expected returns on investments[93] - The company is focused on enhancing its technology infrastructure and pursuing capital allocation strategies to limit risk exposure[92]