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American Healthcare REIT, Inc. (AHR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong operating momentum: total revenue was $540.6M, GAAP diluted EPS was $(0.04), NAREIT FFO/share $0.35, and NFFO/share $0.38, with Same-Store NOI growth of 15.1% year over year led by SHOP (+30.7%) and ISHC (+19.8%) .
  • Management raised full-year 2025 guidance: Total Portfolio SS NOI growth to 9–13% (midpoint +250 bps), NFFO/share to $1.58–$1.64 (midpoint +$0.03), reflecting strength in ISHC and SHOP and accretive capital markets activity .
  • Capital position improved: Net Debt-to-Annualized Adjusted EBITDA at 4.5x; ~$47.7M of equity issued via ATM at $30.22/share, with total liquidity of ~$634.5M to fund external growth and developments .
  • Portfolio actions support mix upgrade: ISHC lease buyout ($16.1M), non-core disposals, and subsequent $65M SHOP acquisition; pipeline awarded >$300M of potential acquisitions (not included in guidance) .
  • Near-term stock catalysts: guidance raise, accelerating spring/summer demand in SHOP, and visibility on accretive acquisitions and developments; modest Q1 impairment ($21.7M) clouded GAAP results but non-GAAP metrics were resilient .

What Went Well and What Went Wrong

What Went Well

  • Operating outperformance and guidance raise: SS NOI +15.1% YoY (SHOP +30.7%, ISHC +19.8%); FY25 SS NOI midpoint increased to 11% and NFFO/share midpoint to $1.61, citing stronger demand and accretive capital markets activity .
  • Strategic capital execution: ATM issuance of 1.58M shares for $47.7M at $30.22/share with Net Debt-to-Annualized Adjusted EBITDA at 4.5x enhances capacity for external growth .
  • Management confidence on demand and execution: “strong demand for long-term care led to great performance…mitigate any previously anticipated occupancy losses,” with upbeat outlook for spring/summer .

What Went Wrong

  • GAAP net loss from impairment: $(6.8)M net loss, $(0.04) diluted EPS in Q1; impairment ($21.7M) and other non-operating items weighed on GAAP results despite non-GAAP strength .
  • Outpatient Medical softness persisted: same-store OM growth +2.0% in Q1, but management continues to prune smaller/off-campus assets and expects OM to be roughly flat near-term .
  • Triple-net leased properties declined: SS NOI down 1.4% YoY in Q1; segment remains <10% of NOI and is being managed for stability rather than growth .

Financial Results

Core Financials vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$499.5 $542.7 $540.6
GAAP Diluted EPS ($)$(0.04) $(0.21) $(0.04)
NAREIT FFO per Diluted Share ($)$0.30 $0.37 $0.35
Normalized FFO per Diluted Share ($)$0.30 $0.40 $0.38

Interpretation:

  • Sequentially, revenue was modestly down vs Q4 due to seasonality and asset pruning, while non-GAAP profitability remained elevated; YoY expansion driven by SHOP and ISHC strength, RevPOR gains, expense discipline, and demand resilience .

Segment Same-Store NOI Breakdown

SegmentSS NOI ($USD Thousands) Q1 2024SS NOI ($USD Thousands) Q1 2025YoY Growth
ISHC$49,086 $58,820 +19.8%
Outpatient Medical$17,870 $18,227 +2.0%
SHOP$7,867 $10,286 +30.7%
Triple-Net Leased$7,244 $7,143 (1.4)%
Total Portfolio$82,067 $94,476 +15.1%

KPIs

KPIQ1 2024Q4 2024Q1 2025
ISHC Same-Store Occupancy (%)86.4 87.8 88.8
SHOP Same-Store Occupancy (%)84.0 87.6 86.6
SHOP RevPOR ($)$4,823 $4,966 $5,112
ISHC Cash NOI Margin (%) (SS)16.8 18.1 18.4
SHOP Cash NOI Margin (%) (SS)15.8 18.5 19.0

Estimates vs Actual (Wall Street—S&P Global)

MetricConsensus (Q1 2025)Actual (Q1 2025)
Revenue ($USD)$541.55M*$540.60M
GAAP Primary EPS ($)$0.055*$(0.04)
FFO / Share (REIT) ($)$0.362*$0.35 (NAREIT FFO/share)

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net income per diluted share ($)FY 2025$0.26–$0.30 $0.29–$0.35 Raised
NAREIT FFO per diluted share ($)FY 2025$1.49–$1.53 $1.49–$1.55 Raised upper bound
NFFO per diluted share ($)FY 2025$1.56–$1.60 $1.58–$1.64 Raised
Total Portfolio SS NOI Growth (%)FY 20257.0–10.0 9.0–13.0 Raised
ISHC SS NOI Growth (%)FY 202510.0–12.0 12.0–16.0 Raised
Outpatient Medical SS NOI Growth (%)FY 2025(1.0)–1.0 (1.0)–1.0 Maintained
SHOP SS NOI Growth (%)FY 202518.0–22.0 20.0–24.0 Raised
Triple-Net Leased SS NOI (%)FY 2025(1.5)–(0.5) (1.5)–(0.5) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q1 2025)Trend
Seasonality & cadenceQ4 call flagged Q1 seasonality: fewer days, utility and payroll resets; Trilogy flat sequentially; SHOP modest headwinds from flu season .Q1 commentary confirmed winter headwinds; still strong YoY growth; sharp uptick in April move-ins expected to sustain .Seasonal headwinds giving way to spring/summer strength.
Medicare Advantage & qualityFocus on quality ratings (Trilogy CMS >4 stars) and MA expansion potential ; rates negotiated; dynamic tailwind .Substantial MA expansion at attractive rates; contracts typically percentage of Medicare (Oct 1 resets) .Strengthening MA tailwind tied to quality outcomes.
Medicaid & value-based carePolicy uncertainty discussed; Trilogy low Medicaid mix (~21%) and flexibility to pivot; value-based add-ons potential .Expect inflation-like rate increases in July; opportunity for value-based outperformance later in year .Manageable risk with multiple levers; potential upside via quality add-ons.
Revenue management & pricingEmphasis on rate optimization, reduced concessions, dynamic pricing (Trilogy ahead of curve) .Continued street rate increases; fewer concessions; dynamic pricing driving RevPOR and margins .Ongoing margin tailwind from revenue optimization.
External growth & pipelineUnder contract SHOP assets; developments; pipeline building .>$300M awarded pipeline; focus on newer, higher-quality assets; off-market sourcing .Visible accretive growth pipeline.
Outpatient Medical strategyPruning non-core/off-campus OM assets; expect high-80s occupancy and flat growth .Active dispositions of smaller OM assets; cleaning up portfolio .Incremental portfolio quality improvements; low growth.
Tariffs/macro impactsSupply constrained; development challenged by financing costs; strong fundamentals .Limited near-term tariff effects; construction costs may stay elevated; demand supports higher rates .Macro benign-to-positive for operating portfolio; development still tight.

Management Commentary

  • CEO: “Despite a challenging winter season, strong demand for long-term care led to great performance for our diversified healthcare portfolio…For the balance of 2025, we expect demand to continue strengthening as we enter the warmer spring and summer selling seasons.” .
  • CFO: “Demand within our ISHC segment exceeded…expectations…enabling us to raise our full-year 2025 NOI growth and earnings guidance.” .
  • COO: “Our operating portfolio segments performed well to start the year…demand…for post-acute care skilled nursing beds helped offset impacts from the colder winter months.” .
  • CEO (call): “We achieved 15.1% same-store NOI growth…we are increasing our full year same-store NOI growth expectations for the Trilogy segment…we have already seen a sharp uptick in move-ins since the end of Q1.” .

Q&A Highlights

  • Capital allocation and funding: First source of capital is retained earnings; dispositions of lower-growth assets; opportunistic ATM use when pricing attractive; sufficient capacity for pipeline .
  • Pipeline details and strategy: >$300M awarded, mix skewed to SHOP; newer assets, mid-6% to 8% going-in yields; many off-market; focus on operator partnerships .
  • Medicaid and MA mechanics: Anticipated Medicaid rate resets around July tied to inflation; value-based care add-ons possible; MA contracts as percentage of Medicare, with expansion driving census and rate tailwinds .
  • Pricing and margin drivers: Street rate hikes, reduced concessions, dynamic pricing per unit (aviation/hospitality methodology) sustaining RevPOR and margins .
  • OM dispositions cadence: 14 OM assets outside same-store—2 sold, 2 under contract; portfolio cleanup underway, not financial engineering .

Estimates Context

  • Q1 2025 actual revenue of $540.6M was slightly below S&P Global consensus of $541.6M; GAAP diluted EPS of $(0.04) missed consensus of $0.055; NAREIT FFO/share of $0.35 was modestly below FFO/share consensus of $0.362 (NFFO/share $0.38 is above NAREIT FFO but not directly comparable to the FFO consensus)* .
  • Analyst coverage depth: Primary EPS estimates count = 4; Revenue estimates count = 6 for Q1 2025; limited but improving coverage for a relatively new listed REIT*.
  • Implication: Street models likely need upward revisions to FY25 SS NOI and NFFO/share following guidance raise; GAAP EPS noise from impairments less relevant to REIT valuation; focus should remain on FFO/NFFO and SS NOI trajectory*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Operating momentum is intact with broad-based demand and superior revenue management, translating into strong SS NOI across ISHC and SHOP; guidance increases reinforce trajectory .
  • Expect sequential acceleration into Q2/Q3 as spring/summer selling season drives SHOP move-ins; MA expansion and quality mix optimization should support Trilogy rates and margins .
  • Capital optionality supports accretive growth: balance sheet at 4.5x Net Debt/Annualized Adjusted EBITDA and sizeable liquidity; disciplined ATM usage and portfolio pruning fund higher-quality assets .
  • Watch the pipeline: >$300M of awarded deals (not in guidance) provides upside potential later in 2025, likely modest EPS impact this year but more material in 2026 .
  • REIT valuation lens: FFO/NFFO and SS NOI growth matter more than GAAP EPS; Q1 impairment depressed GAAP results but underlying non-GAAP metrics remain robust .
  • OM segment remains a drag but being actively optimized; ongoing dispositions should improve portfolio mix and long-term growth profile .
  • Near-term catalysts: Additional guidance raises (if summer demand outperforms), closing/accretion from awarded acquisitions, and sustained RevPOR gains with reduced concessions .