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American Healthcare REIT, Inc. (AHR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered strong operational momentum: revenue rose to $542.7M, Normalized FFO/share was $0.40, and total portfolio Same-Store NOI grew 21.6% year over year; GAAP diluted EPS was $(0.21) due largely to a $45.8M real estate impairment .
  • Managed segments were the engine: SHOP SS NOI +66.6% YoY and ISHC (Trilogy) SS NOI +28.0% YoY in Q4, reflecting occupancy gains, pricing power, and margin expansion; total portfolio SS NOI growth for FY 2024 was 17.7% .
  • Balance sheet inflected positively: Net Debt/Annualized Adjusted EBITDA improved to 4.3x from 8.5x a year ago, aided by nearly $1.4B of 2024 equity raises (including ATM) and portfolio pruning .
  • 2025 outlook: management guided to NFFO/share of $1.56–$1.60 and total portfolio SS NOI growth of 7–10%, with double‑digit growth targeted in SHOP and ISHC; near‑term Q1 seasonality (fewer days, payroll tax resets, winter utilities) implies flattish Trilogy NOI vs Q4 before growth re-accelerates into spring/summer .
  • Catalysts/risks: balance‑sheet capacity, accretive SHOP acquisitions ($70.5M under contract) and ISHC development starts ($136.6M), versus outpatient medical move‑outs (flat to slightly negative OM SS NOI expected) and policy headlines around Medicaid (Trilogy exposure ~21% of revenue, with pivot flexibility) .

What Went Well and What Went Wrong

  • What Went Well

    • Senior housing-led outperformance: Q4 SS NOI growth of 66.6% in SHOP and 28.0% in ISHC; COO: “our ISHC and SHOP segments once again produced exceptional results… year-over-year Same-Store NOI growth, respectively” .
    • Margin expansion and pricing power: SHOP SS NOI margin reached 22.2% in Q4, up 734 bps YoY; ISHC SS NOI margin reached 18.9%, up 279 bps YoY, supported by occupancy and rate discipline .
    • Deleveraging and liquidity: Net Debt/Annualized Adjusted EBITDA improved to 4.3x with ~$984M liquidity; CFO: “raise[d] additional equity… dramatically improve[d] our balance sheet” .

  • What Went Wrong

    • GAAP loss from non-cash items: Q4 GAAP diluted EPS $(0.21), driven by a $(45.8)M impairment; total net other expense also weighed on results .
    • Outpatient medical headwinds: guidance contemplates OM SS NOI flat to ±1% in 2025; management noted known tenant move‑outs and high-80s occupancy trends .
    • Near-term seasonality: management flagged Q1 cadence headwinds (fewer days, payroll tax resets, higher utilities) with Trilogy likely flattish Q1 vs Q4 before resuming growth .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Millions)$504.6 $523.8 $542.7
GAAP Diluted EPS ($)$0.01 $(0.03) $(0.21)
NAREIT FFO per Share – Diluted ($)$0.32 $0.27 $0.37
Normalized FFO per Share – Diluted ($)$0.33 $0.36 $0.40
Adjusted EBITDA ($USD Millions)$82.5 $87.0 $91.2
Cash NOI ($USD Millions)$83.1 $100.5 $103.5
Net Debt / Annualized Adjusted EBITDA (x)5.9x 5.1x 4.3x

Segment Same-Store NOI – Q4 2024 vs Q4 2023

SegmentQ4 2023 SS NOI ($USD Millions)Q4 2024 SS NOI ($USD Millions)YoY Growth
ISHC$41.9 $53.7 28.0%
Outpatient Medical$19.7 $20.0 1.3%
SHOP$6.0 $9.9 66.6%
Triple-Net Leased$7.1 $7.2 1.7%
Total Portfolio$74.7 $90.8 21.6%

KPIs (operating trajectory across prior two quarters and current)

KPIQ2 2024Q3 2024Q4 2024
ISHC Average Occupancy (%)86.0% 86.9% 87.5%
SHOP Average Occupancy (%)84.0% 85.2% 86.0%
SHOP RevPOR ($)$4,934 $5,006 $5,136
OM Ending Occupancy (%)88.5% 88.1% 87.9%

Notes:

  • GAAP diluted EPS volatility reflects non-cash impairment in Q4; FFO/NFFO better isolates cash earnings power for REITs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net income per diluted shareFY 2025N/A$0.26–$0.30 New
NAREIT FFO per diluted shareFY 2025N/A$1.49–$1.53 New
Normalized FFO per diluted shareFY 2025N/A$1.56–$1.60 New
Total Portfolio SS NOI growthFY 2025N/A7%–10% New
ISHC SS NOI growthFY 2025N/A10%–12% New
Outpatient Medical SS NOIFY 2025N/A(1%)–1% New
SHOP SS NOI growthFY 2025N/A18%–22% New
Triple-Net SS NOIFY 2025N/A(1.5%)–(0.5%) New
G&A ExpenseFY 2025N/A$48–$50M New
Interest ExpenseFY 2025N/A$97–$102M New
Other IncomeFY 2025N/A$4–$6M New
Development SpendFY 2025N/A$80–$100M New
Expected investments to closeH1 2025N/A~$86.4M New
DividendQ4 2024—$0.25 paid Jan 17, 2025 —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Senior housing demand/supply, pricing powerQ2: Demand-supply imbalance and elevated SS NOI outlook; Q3: occupancy climbing and SHOP RevPOR growth .Expect revenue growth to outpace expense growth; double‑digit SS NOI again in SHOP and ISHC as fundamentals remain robust .Strengthening
Balance sheet deleveragingNet Debt/Adj EBITDA: 5.9x (Q2) → 5.1x (Q3) .4.3x at Q4; CFO highlights equity raises and improved capacity .Improving
Outpatient medical leasingFY24 OM SS NOI ~flat in guidance; minor growth in Q3 .Known tenant move-outs, high‑80s occupancy; 2025 OM SS NOI (1%) to 1% .Flat to slight decline
Medicaid/policy backdrop—Limited Trilogy Medicaid exposure (~21% of revenue) and ability to pivot; management skeptical of deep SNF rate cuts sticking .New watch item
External growth pipelineQ2: exercised ISHC purchase options; Q3: Trilogy buy‑in; WA portfolio acquired .Under contract for ~$70.5M SHOP; mid‑6% to ~8% initial yields; ISHC development starts planned .Building

Management Commentary

  • CEO (Prosky): “We delivered strong earnings and achieved attractive NOI growth… As we look ahead to 2025… we expect to deliver both solid earnings per share and Same-Store NOI growth” .
  • COO (Willhite): “Our ISHC and SHOP segments once again produced exceptional results in the fourth quarter with 28.0% and 66.6% year‑over‑year Same‑Store NOI growth… strong senior housing fundamentals… sustained margin expansion” .
  • CFO (Peay): “We were able to strategically raise additional equity… and also dramatically improve our balance sheet… ending the year with Net Debt‑to‑Annualized Adjusted EBITDA of 4.3x” .
  • CEO (call): “We finished 2024 within the increased NFFO/share guidance… strong balance sheet provides flexibility… guidance does not include unannounced investments” .

Q&A Highlights

  • Q1 cadence/seasonality: Trilogy NOI expected flattish Q1 vs Q4 due to payroll tax resets, higher winter utilities, and fewer days; growth resumes thereafter; SHOP may see modest seasonal headwinds while Trilogy SNF occupancy improves during flu season .
  • Outpatient Medical move-outs: management already engaging tenants; expects occupancy to remain in high‑80s with backfills offsetting renewals at reduced footprints; OM SS NOI guided flat to ±1% .
  • Medicaid discussion: Trilogy Medicaid revenue ~21%; ability to pivot capacity to AL/IL/MA/private pay if reimbursement unattractive; broader industry unlikely to sustain deep SNF rate cuts without access issues, per management .
  • External growth pipeline/yields: Under contract to acquire ~$70.5M of SHOP; targeting mid‑6% to ~8% initial yields with a focus on AL/MC assets and moderate value‑add potential alongside regional operators .
  • Development timing/returns: 2025 plan includes 2 new Trilogy campuses plus villas/expansions ($136.6M projects); stabilization timelines compressing (12–18 months) with low double‑digit stabilized campus yields; expansions can be mid‑teens (smaller tickets) .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at request time due to data access limits; as a result, we cannot determine beat/miss versus Wall Street for Q4 2024. Values from S&P Global were not retrieved due to rate limits.

Where estimates may need to adjust:

  • Management’s 2025 NFFO/share guidance ($1.56–$1.60) and SS NOI growth (7–10%) imply double‑digit earnings growth; consensus may move to reflect stronger managed segment growth and improved leverage ratios, while trimming OM expectations per the flat to slightly negative OM SS NOI guidance .

Key Takeaways for Investors

  • Momentum intact in managed segments: double‑digit SS NOI growth and continued margin expansion in SHOP and ISHC should support 2025 earnings growth; Q4 SS NOI: SHOP +66.6% YoY, ISHC +28.0% YoY; 2025 SS NOI guidance: SHOP +18–22%, ISHC +10–12% .
  • Balance sheet now a tailwind: Net Debt/Adj EBITDA at 4.3x provides capacity to fund accretive acquisitions and development while maintaining discipline; ~$984M liquidity at year‑end .
  • Near-term cadence: expect a seasonal pause in Q1 NOI (Trilogy) before re‑acceleration; focus on spring/summer leasing/pricing to drive 2025 trajectory .
  • External growth pipeline actionable: ~$70.5M of SHOP deals under contract and ~ $80–$100M development spend planned in 2025, with targeted mid‑6%–~8% yields and low double‑digit stabilized returns on campuses .
  • OM steady-to-soft: plan for flat to slightly negative OM SS NOI given known move‑outs; backfilling expected but may not fully offset in 2025 .
  • Policy watch, manageable exposure: Medicaid headlines bear watching; Trilogy’s ~21% Medicaid revenue and ability to pivot mix mitigate risk according to management .
  • Dividend continuity: Q4 2024 dividend of $0.25/share was paid Jan 17, 2025; capital plan balances growth with returns to shareholders .

All citations refer to AHR’s Q4 2024 8‑K earnings release, supplemental, press releases, and the Q4 2024 earnings call transcript as noted above.