Service Properties Trust (NasdaqGS:SVC) Q4 2025 Earnings call February 26, 2026 10:00 AM ET Company ParticipantsBrian Donley - Treasurer and CFOChris Bilotto - President and CEOJesse Abair - VPKevin Barry - Senior Director of Investor RelationsConference Call ParticipantsJack Armstrong - Director and Senior Equity AnalystJohn Massocca - Senior Research AnalystTyler Batory - Executive Director and Senior AnalystOperatorGood morning, welcome to the Service Properties Trust Fourth Quarter 2025 Earnings Confere ...

Thomas Appio: Thank you, Garen, and welcome to everyone joining our earnings call today. Our year concluded with an impressive eleventh consecutive quarter of growth in both revenue and adjusted EBITDA, reflecting our organization's consistent performance. This success is powered by our global team’s unwavering commercial focus and operational excellence, as full year results exceeded our guidance on all key metrics. The fourth quarter gave us an opportunity to reflect on the progress we have made over the ...

Bausch Health (NYSE:BHC) Q4 2025 Earnings call February 18, 2026 05:00 PM ET Company ParticipantsGaren Sarafian - VP and Head of Investor RelationsGlen Santangelo - Managing DirectorJJ Charhon - EVP and CFOJonathan Sadeh - CMO and Head of Research and DevelopmentLes Sulewski - VP of Spec Pharma and Biotech Equity ResearchThomas Appio - CEOUmer Raffat - Equity Research of Biotech, Pharma-major, and Specialty PharmaConference Call ParticipantsMichael Freeman - Equity Research AnalystNone - AnalystNone - Analy ...

Core Viewpoint - The Very Group has successfully refinanced its key borrowings, extending maturities to 2029-2030 and reducing debt by £150 million ($203.9 million), which strengthens its financial position and supports future growth [1][2][4]. Group 1: Refinancing Details - The refinancing extends all note tranches within the group's £1.77 billion UK securitisation facility to February 1, 2029, with improved margins [1]. - The company has renewed its £150 million super senior revolving credit facility, pushing its maturity to February 2030 [1][2]. Group 2: Debt Reduction and Financial Impact - After meeting a deleveraging condition on its senior secured notes, the retailer cut the coupon rate from 13.25% to 9.75% and extended maturity to August 2030 from August 2027 [2]. - Carlyle's capital injection has reduced total group debt by £150 million, reinforcing the capital structure and ensuring funding for the next three financial years under the securitisation programme [2][3]. Group 3: Market Position and Performance - The Very Group's CFO stated that securing long-term funding reflects lender confidence in the business's strength, providing a stable platform for continued investment in digital and customer propositions [3]. - In the six weeks to December 27, 2025, Very UK retail sales rose by 1.9% year on year, driven by strong demand in home (up 7.9%) and toys and beauty (up 6.4%) [4].

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Strategic Focus - The company plans to prioritize office leasing and retenanting Studio Plaza, with low overall lease expirations expected in 2026 [1] - Key development projects include the construction of high-end residential units at Landmark Residences and 10900 Wilshire, with additional residential development sites being planned [1][5] - The company aims to capitalize on attractive acquisition opportunities in the market, where current valuations are significantly discounted [1] Financial Performance - In 2025, the company executed nearly $2 billion in debt transactions, extending maturity profiles and strengthening the balance sheet [2] - Revenue for 2025 increased by 1.8% to $249 million, driven by growth in both office and multifamily revenues [11] - Funds from Operations (FFO) decreased to $0.35 per share, attributed to increased interest expenses and lower interest income [11] Leasing Activity - The company signed 896 office leases totaling 3.4 million square feet in 2025, with a positive net absorption of 100,000 square feet in the fourth quarter [8][3] - The retention rate for office leases remains around 70%, with a focus on maintaining a balance between new and renewal leases [29][37] - The average office leasing cost in the fourth quarter was $5.76 per square foot per year, remaining competitive compared to other office REITs [9] Market Outlook - The company expresses confidence in the long-term fundamentals of its markets and the quality of its portfolio, despite potential challenges ahead [4] - Positive demand trends were observed across various sectors, including financial services, legal, health services, education, and real estate [8] - The company is cautiously optimistic about occupancy growth, monitoring market conditions closely [12][62] Development Pipeline - The company is advancing its development portfolio, with construction expected to commence at 10900 Wilshire in 2026, converting the existing office tower into residential units [5][6] - Additional residential projects are in the planning stages, with expectations of yields above 8% upon completion [36][25] - The company is actively engaged in architectural planning for new projects, indicating a robust development pipeline [24]

Financial Data and Key Metrics Changes - Revenue increased by 1.8% to $249 million compared to Q4 2024, driven by both office and multifamily revenues [13] - Funds from Operations (FFO) decreased to $0.35 per share, and Adjusted Funds from Operations (AFFO) decreased to $53 million due to increased interest expenses and lower interest income [13] - Same-property cash Net Operating Income (NOI) decreased by 1.4% for the quarter, primarily due to higher office operating expenses, although multifamily NOI growth partially offset this [13] Business Line Data and Key Metrics Changes - The company achieved 100,000 sq ft of net positive office absorption in Q4, with strong demand and high retention rates [4] - Multifamily segment reported full occupancy and a nearly 5% increase in same-property cash NOI compared to the prior year [4] - The company signed 896 office leases totaling 3.4 million sq ft for the full year of 2025, with 224 office leases covering 906,000 sq ft signed in Q4 [11] Market Data and Key Metrics Changes - Office tenant demand was diversified across various industries, with no single segment exceeding 20% of tenant demand in Q4 [11] - The company noted that financial services, legal, health services, education, and real estate led the demand [11] - The only market that experienced a dip in Q4 was Hawaii, while all other markets in L.A. showed positive movement [102] Company Strategy and Development Direction - The company plans to focus on office leasing and re-tenanting Studio Plaza, with a straightforward strategic plan for 2026 [6] - Construction is set to begin on 10900 Wilshire, converting an existing office tower into residential units, and the Landmark Residences redevelopment is also underway [5][8] - The company aims to capitalize on attractive acquisitions in the current market cycle, believing that current valuations offer significant discounts to long-term values [6][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of their markets and the quality of their portfolio, despite acknowledging potential challenges in 2026 [6] - The company remains cautious about occupancy growth, with guidance reflecting increased interest expenses and no assumptions of occupancy growth despite positive Q4 results [13][14] - Management noted that political initiatives and regulations could impact operations and G&A costs in 2026 [51][53] Other Important Information - The company executed nearly $2 billion in debt transactions at competitive rates, extending its maturity profile and strengthening its balance sheet [5] - Management indicated that the anti-rent gouging ordinance has not materially impacted their operations or rent growth [91][94] - The company has significant development sites in Honolulu, with plans to build additional residential units as market conditions align [75] Q&A Session Summary Question: Stock performance and acquisition strategy - Management indicated a preference for acquisitions over stock buybacks, citing concerns about increasing leverage through buybacks [19][21] Question: Market demand and absorption trends - Management expressed hope that positive absorption trends indicate a fundamental shift in market demand, although caution remains for the upcoming year [22][23] Question: Industry consolidation impact - Management does not foresee significant negative impacts from media industry consolidation, believing it may rejuvenate demand for their tenants [29] Question: Development pipeline and yields - Management confirmed that they are actively planning additional residential projects, with expected yields above 8% [34][58] Question: Guidance on straight-line rent and NOI - Management explained that higher straight-line rent guidance reflects existing leases and new leasing activity, but they are not ready to provide specific NOI breakdowns for Studio Plaza [39] Question: UCLA lease expirations and political initiatives - Management clarified that UCLA operates independently across departments, and political initiatives have led to increased G&A costs but have not materially impacted operations [46][51]

RT Flood (@ThinkingUSD)If you want to really learn about the world just follow the money. Every single war revolves around financing and capital formation. Every single cultural revolution and change of power occurred around debt needing to be refinanced. ...

Financial Data and Key Metrics Changes - The company reported Distributable Earnings of $0.47 per share, Adjusted Net Income of $0.20 per share, and Adjusted EBITDA of $19.5 million, all exceeding or at the high end of expectations [4][16] - Recurring service revenues were approximately $43 million, a sequential quarter decrease of about $2.5 million, primarily due to the wind down of AlerisLife's business [16] - The company expects recurring service revenues to decrease to approximately $41 million in the next quarter [17] Business Line Data and Key Metrics Changes - DHC sold 69 properties for approximately $605 million in 2025, with a focus on improving SHOP NOI margins and selling non-core assets [5][6] - SVC sold 112 hotels for $859 million in 2025 and announced the early redemption of $300 million of its senior unsecured notes [7] - ILPT successfully refinanced over $1.2 billion of debt in 2025 and materially increased its dividend [8] Market Data and Key Metrics Changes - RMR arranged nearly 10 million square feet of leasing at rental rates approximately 13% higher than previous rents for the same space [11] - The managed residential portfolio ended the year with approximately 93% occupancy and a resident retention rate of over 70% [12] Company Strategy and Development Direction - The company is focused on private capital growth initiatives and has hired experienced personnel to enhance its fundraising efforts [11][12] - RMR is actively exploring investment opportunities in multifamily, retail, and select development projects [29] - The company aims to raise approximately $250 million for its enhanced growth venture fundraising [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of multifamily assets, noting strong operational results and tenant retention [39] - The company anticipates a challenging fundraising environment but remains focused on residential and select development opportunities [12][29] - Management expects to see an increase in quarterly Adjusted EBITDA from additional dividends on increased investments in Seven Hills [20] Other Important Information - The company ended the quarter with nearly $150 million of total liquidity, including nearly $50 million in cash [22] - The bankruptcy process for OPI remains ongoing, with updates to be provided as new information becomes available [9] Q&A Session Summary Question: Comments on Peter's addition and fundraising efforts - Management clarified that the addition of Peter is to bolster existing fundraising efforts, focusing on both U.S. and international capital [24][25] Question: Products for capital raising - Management indicated a focus on multifamily, loans, and retail investments for capital raising in 2026 [27][29] Question: Performance of multifamily assets - Management highlighted strong operational results and tenant retention in multifamily assets, with expectations of continued performance [38][39] Question: Adjusted net income guidance - Management explained the expected decrease in adjusted net income due to various factors, including lower construction management fees and the impact of asset sales [42][43] Question: Investment outlook for loans - Management views lending as a growth engine and expects an active year for new loans through Seven Hills [45][46] Question: Timeline for multifamily fund capital raising - Management aims to raise capital for the multifamily fund as soon as possible, with expectations for completion within fiscal year 2026 [49][50]

Financial Data and Key Metrics Changes - The company reported a fourth quarter net loss of $36.9 million, or $0.21 per share, with FFO totaling $14.6 million, or $0.08 per diluted share, in line with consensus estimates [24] - Property level NOI was $70 million, slightly below forecast due to increased operating costs [25] - The company anticipates 2026 FFO at a midpoint of $0.55 per diluted share, representing a 5.8% increase compared to 2025 [27] Business Line Data and Key Metrics Changes - The wholly owned core portfolio is 88.3% occupied and 90.4% leased, with leasing activity for the year approximating 1.6 million sq ft [3][4] - The company executed 415,000 sq ft of leases in the fourth quarter, including 157,000 sq ft in the wholly owned portfolio [4] - The annual tour volume in 2025 outpaced 2024 by 20% in physical tours and 45% on a square footage basis [6][7] Market Data and Key Metrics Changes - In Philadelphia, the largest sub-market, occupancy is at 95% and leasing at 97%, with only 6% of space rolling through 2028 [7] - The company captured 30% market share of new leasing activity in Market West and University City, significantly outperforming its previous 15% share [8] - The Pennsylvania suburbs are 89.4% leased, with Radnor at 91% [9] Company Strategy and Development Direction - The 2026 business plan focuses on returning to earnings growth, stabilizing One Uptown and 3151, and an accelerated sales program to reduce debt [16] - The company plans to maintain minimal balances on its $600 million unsecured line of credit and aims to return to investment-grade metrics [10] - The sales activity target for 2026 is projected between $280 million and $300 million, with an average cap rate around 8% [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating platform enables capitalization on improving real estate market conditions, with expectations for further improvement in 2027 [37] - The company is optimistic about the leasing activity and market dynamics, particularly in CBD Philadelphia and University City [59] - Management highlighted the importance of executing the sales program to generate liquidity and improve credit metrics [39] Other Important Information - The company has no unsecured bonds maturing until November 2027 and plans to refinance higher-priced bonds to reduce interest costs [10] - The company is actively evaluating recapitalization opportunities for joint ventures, with plans to maintain a minority stake [23] - The anticipated redevelopment of an existing ATX building is expected to cost between $30 million and $40 million, with a potential cash yield north of 8% [70] Q&A Session Summary Question: What is the hurdle for refinancing bonds? - Management indicated that the focus is on executing the sales program to generate liquidity and improve credit metrics before considering bond refinancing [39] Question: How will the $125 million earmarked for debt or share repurchase be allocated? - The primary objective is to reduce leverage first, with share buybacks considered only after achieving debt reduction goals [40][41] Question: Is there a part of the portfolio that is undervalued? - Management believes the entire portfolio is undervalued and is evaluating which assets to sell based on market conditions and growth potential [46] Question: What is the status of the life science incubator space? - There are signs of activity and expansion in the life science sector, particularly in cell and gene therapy, with a healthy pipeline of tenants [50][51] Question: What is the overall pipeline and demand by market? - The company has a robust pipeline of 1.5 million sq ft, with strong demand in CBD Philadelphia and University City, and a mix of 60% office and 40% life science in development [61][62]