Core Insights - CareTrust REIT experienced significant growth in 2025, with a market cap increase of 61% to $8.2 billion and a total shareholder return of approximately 439% over ten years [1][3] - The company is focused on strategic expansion, including entering the UK care home market and enhancing its operational capabilities [2][5] - The skilled nursing and senior housing environments are stable, with expectations for continued growth in 2026 [5][20] Financial Performance - In Q4 2025, normalized FFO increased by 42.7% to $104.1 million, and normalized FAD rose by 38.7% to $103 million [13] - For the full year, normalized FFO per share increased by 17.3% to $1.76, while normalized FAD per share also increased by 14.3% to $1.76 [13][14] - The company anticipates normalized FFO per share for fiscal year 2026 to be between $1.90 and $1.95, representing a year-over-year increase of 9.4% [14] Investment Strategy - CareTrust REIT's investment pipeline is robust, currently estimated at approximately $500 million, with a focus on UK care homes and skilled nursing facilities [10][22] - The company completed $562 million in investments during Q4, including its first SHOP deal, and has closed an additional $215 million in investments since year-end [8][9] - The company maintains a disciplined underwriting framework and aims for low double-digit IRR on investments [12][38] Market Environment - The skilled nursing operating environment is stable, with improved labor conditions and regulatory support, leading to optimistic growth prospects [20] - Competition in the SHOP sector is increasing, with cap rates compressing as more investors seek exposure [12][23] - The company is leveraging its strong operator relationships to identify off-market opportunities and maintain a competitive edge [43]

Financial Data and Key Metrics Changes - For Q4 2025, normalized FFO increased 42.7% over the prior quarter to $104.1 million, and normalized FAD increased 38.7% to $103 million [16] - On a per-share basis, normalized FFO increased $0.07, or 17.5%, to $0.47 per share, and normalized FAD increased $0.05, or 12.2%, to $0.46 per share [16] - For the full year, normalized FFO per share increased $0.26, or 17.3%, to $1.76 per share, and normalized FAD increased $0.22, or 14.3%, to $1.76 per share [16] Business Line Data and Key Metrics Changes - In Q4, approximately $562 million of investments were completed, including the first SHOP deal involving three communities in Texas with 270 assisted living and memory care units [12] - The blended stabilized yield on Q4 investments was 8.8% [12] - Since year-end, another approximately $215 million of investments were closed, including 6 skilled nursing facilities and 2 care homes in the UK [13] Market Data and Key Metrics Changes - The investment pipeline remains strong at approximately $500 million, with about half in UK care homes, a third in skilled nursing, and the remainder in a small SHOP deal and loans [14] - The competition in the SHOP segment is noted to be the most intense, with cap rates compressing as investors seek exposure to operating trends [14][35] Company Strategy and Development Direction - The company aims to be a unique healthcare REIT focused on disciplined investments in assets and operators that can significantly impact senior housing and care [11] - The strategic push into the UK care home market and the expansion of SHOP capabilities are key growth engines for the company [10][15] - The company is committed to maintaining a strong balance sheet while pursuing external growth opportunities [19][60] Management's Comments on Operating Environment and Future Outlook - The skilled nursing operating environment is described as stable and supportive, with operators eager to return to growth mode [9][25] - Management expresses confidence in achieving substantial growth in 2026, supported by a deeper and more capable team and new market opportunities [10][42] - The company anticipates a year-over-year increase in normalized FFO per share guidance for fiscal year 2026 of $1.90-$1.95, representing a 9.4% increase [18] Other Important Information - The company sold 6.5 million shares on a forward basis at an average price of $37.30, generating gross proceeds of approximately $242.5 million [17] - The company maintains low leverage with net debt to EBITDA of 0.7 times and a fixed charge coverage ratio of 10.5 times as of year-end [19] Q&A Session Summary Question: Guidance and expectations for the pipeline going forward - Management indicated that they are seeing consistent inbound interest in SHOP deals and are evaluating both large and small opportunities [22][23] Question: Sustainability of coverage levels in skilled nursing facilities - Management believes the skilled nursing environment is currently strong, with operators ready to grow and occupancy levels providing room for improvement [25] Question: Focus of data analytic hires - The data science team is primarily focused on enhancing SHOP capabilities but will impact the entire organization [30] Question: Details on the investment pipeline - The pipeline consists of approximately half UK care homes, a third US skilled nursing, and a mix of SHOP and other deals [34] Question: Competitive landscape in property types - SHOP is noted as the most competitive segment, with significant capital pursuing deals [35] Question: Future funding strategies - Management plans to balance between equity issuances and utilizing balance sheet capacity as opportunities arise [59]

Financial Data and Key Metrics Changes - The company reported same-store NOI growth of 16.4% across the total portfolio, marking the seventh consecutive quarter of double-digit same-store NOI growth [7] - Normalized funds from operation (NFFO) reached $0.44 per fully diluted share in Q3, reflecting a 22% year-over-year increase [22] - The company increased its full-year 2025 NFFO guidance to a range of $1.69-$1.72 per fully diluted share, implying growth in excess of 20% year-over-year at the midpoint [23] - Net debt to EBITDA improved to 3.5x, representing a 0.2-time improvement from the previous quarter and a 1.6-time improvement from Q3 2024 [25] Business Line Data and Key Metrics Changes - Trilogy's same-store NOI grew 21.7% year-over-year, with occupancy averaging 90.2% in Q3, up more than 270 basis points from last year [12] - Shop segment same-store NOI increased 25.3%, with revPOR up 5.6% year-over-year and NOI margins expanding nearly 300 basis points to 21.5% [14] - Integrated senior health campuses' same-store NOI growth guidance was increased to a range of 17%-20% [23] Market Data and Key Metrics Changes - Medicare Advantage accounted for 7.2% of total resident days at Trilogy during Q3, up from 5.8% a year ago, indicating a shift towards higher reimbursement sources [13] - Construction starts across senior housing remain near historic lows, while demographic growth in the 80+ cohort accelerates, supporting a multi-year runway for further occupancy gains [15] Company Strategy and Development Direction - The company is focused on building durable long-term growth through operating alignment with best-in-class regional operators and disciplined capital allocation [10] - The company has closed over $575 million in acquisitions year-to-date, with a pipeline of awarded deals standing at well over $450 million [9][20] - The inaugural corporate responsibility report was published, reflecting the company's commitment to governance, social, and sustainability priorities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current operating environment for long-term care, citing strong demand tailwinds and positive occupancy trends [8] - The company expects to maintain occupancy gains achieved through the busy spring and summer selling season, despite entering a historically slower winter season [12] - Management anticipates continued pricing power, expecting to price at a rate higher than inflation [31] Other Important Information - The company executed $13 million of non-core dispositions, concentrating capital within its operating portfolio [19] - The company is leveraging Trilogy's centralized revenue management system across other operating partners to optimize revenue [16] Q&A Session Summary Question: What is the maximum occupancy upside from 90%? - Management indicated that the maximum upside from 90% to 100% is 10%, with expectations for metrics to continue moving in their favor due to supply-demand fundamentals [29] Question: How competitive is the current market for acquisitions? - Management noted that while there are more assets coming to market, the competition is not overly intense, with many deals being brought through operating partners [32][80] Question: Can you discuss the acquisition strategy regarding independent living versus assisted living? - Management stated that the strategy encompasses all types, focusing on quality buildings that provide good earnings growth, with a preference for newer products [87]