Executive Summary

Q2 2024 delivered a return to GAAP profitability ($0.01 diluted EPS) on $504.6M revenue, with NFFO per share at $0.33; Same-Store NOI growth accelerated to 15.7% YoY, led by SHOP (+49.1%) and ISHC (+24.1%) .
Management raised full-year 2024 guidance materially: Total portfolio SS NOI growth to 12–14% (from 5–7%) and NFFO per share to $1.23–$1.27 (from $1.18–$1.24) on stronger operations, partially offset by higher interest expense expectations .
Leverage improved: Net Debt/Annualized Adjusted EBITDA moved to 5.9x in Q2 from 6.4x in Q1, supported by organic earnings growth and debt reduction earlier this year .
Distribution of $0.25 per share was paid July 19, 2024; conversion of all Class T and Class I shares to listed common occurred on August 5, 2024 (180 days post-listing), potentially enhancing float and investor accessibility .
Wall Street consensus estimates (S&P Global) were unavailable for AHTR at the time of analysis; as a result, explicit “vs. estimates” comparisons could not be made (values unavailable; S&P Global)¹.

What Went Well and What Went Wrong

What Went Well

Robust Same-Store NOI growth: Total +15.7% YoY, with SHOP +49.1% and ISHC +24.1%, showcasing strong pricing power and occupancy gains across RIDEA-operated assets .
Raised FY 2024 guidance: SS NOI growth to 12–14% and NFFO per share to $1.23–$1.27, reflecting better-than-expected operations across segments .
Management tone confident on demand tailwinds: “We expect the elevated levels of Same-Store NOI growth to persist due to the demand-supply imbalance present in long-term care,” said CEO Danny Prosky .

What Went Wrong

Outpatient Medical (OM) softness: Same-Store NOI declined slightly (-0.4% YoY) and OM remains guided to flat-to-down for FY 2024, underscoring steady but subdued fundamentals .
Interest expense headwind: The NFFO guidance increase was “partially offset by the increase in interest expense expectations,” tempering some earnings upside .
Real estate revenue down YoY for Q2: Real estate revenue declined to $46.6M vs $50.6M in Q2 2023, despite overall portfolio strength, highlighting lease transition dynamics and mix .

Financial Results

Sequential performance (oldest → newest)

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$482.6	$499.5	$504.6
GAAP Diluted EPS ($)	$(0.42)	$(0.04)	$0.01
NAREIT FFO per Share (Diluted) ($)	$0.13	$0.30	$0.32
Normalized FFO per Share (Diluted) ($)	$0.38	$0.30	$0.33

Year-over-year (YoY) comparison (oldest → newest)

Metric	Q2 2023	Q2 2024
Revenue ($USD Millions)	$467.6	$504.6
GAAP Diluted EPS ($)	$(0.19)	$0.01
NAREIT FFO per Share (Diluted) ($)	$0.42	$0.32
Normalized FFO per Share (Diluted) ($)	$0.37	$0.33

Segment breakdown (Same-Store NOI, old → new)

Segment SS NOI ($USD Millions)	Q2 2023	Q1 2024	Q2 2024
ISHC	$28.9	$33.7	$35.9
OM	$20.2	$20.1	$20.1
SHOP	$5.9	$7.8	$8.8
Triple-Net	$9.0	$9.3	$9.2
Total Portfolio	$64.0	$70.7	$74.0

Segment KPIs

KPI	Q4 2023	Q1 2024	Q2 2024
ISHC Avg Occupancy (%)	85.0	85.6	86.0
SHOP Avg Occupancy (%)	80.4	82.5	84.0
OM Ending Occupancy (%)	89.2	88.1	88.5
Triple-Net Avg Operator Occupancy (%)	87.4	91.0	91.7
SHOP RevPOR ($)	$4,631	$4,795	$4,934
Net Debt / Annualized Adjusted EBITDA (x)	8.5x (FY23)	6.4x	5.9x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
NAREIT FFO per Share (Diluted)	FY 2024	$1.13–$1.19	$1.17–$1.22	Raised
Normalized FFO (NFFO) per Share (Diluted)	FY 2024	$1.18–$1.24	$1.23–$1.27	Raised
Total Portfolio SS NOI Growth (%)	FY 2024	5–7	12–14	Raised
ISHC SS NOI Growth (%)	FY 2024	8–10	18–20	Raised
OM SS NOI Growth (%)	FY 2024	(0.5)–0.0	(0.5)–0.0	Maintained
SHOP SS NOI Growth (%)	FY 2024	25–30	45–50	Raised
Triple-Net SS NOI Growth (%)	FY 2024	1–3	1–3	Maintained
Distribution	Q2 2024	$0.25 declared/paid	$0.25 paid July 19, 2024	Maintained

Earnings Call Themes & Trends

Note: The Q2 2024 earnings call transcript could not be retrieved due to a document system error; themes below synthesize management’s press release remarks and prior-quarter releases.

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
Senior housing demand & occupancy	Recovery trajectory; occupancy above pre-pandemic levels in ISHC; SHOP accelerating	Elevated SS NOI growth expected to persist due to demand-supply imbalance	Improving
Pricing power (RIDEA ops)	Early evidence from Oregon portfolio with Compass Senior Living	“Further enhance pricing power strategies” in ISHC/SHOP; RevPOR growth supports SS NOI	Strengthening
Balance sheet deleveraging	Largest REIT offering since 2018, ~$721M debt repaid; leverage to low-6x	Net Debt/Adj. EBITDA to 5.9x; expect continued improvement with dispositions/earnings	Improving
OM segment	Stable but muted growth; SS NOI positive but low	Slight SS NOI decline (-0.4% YoY); FY 2024 guidance flat-to-down	Flat-to-Soft
Dispositions/portfolio optimization	Sold ~$195M non-core assets in 2023; continued opportunistic sales	~$15.6M sold YTD; continuing to market assets with ~$65M proceeds target	Ongoing
Regulatory/macro (rates)	Interest expense savings via swaps and deleveraging	Higher interest expense expectations partially offset NFFO raise	Mixed

Management Commentary

CEO (Danny Prosky): “Growth in the first half of 2024 is exceeding the expectations we set at the beginning of the year prompting our upward revisions to Same-Store NOI growth guidance and NFFO guidance… we expect the elevated levels of Same-Store NOI growth to persist due to the demand-supply imbalance present in long-term care.”
COO (Gabe Willhite): “Property performance across our ISHC and SHOP segments remains strong… occupancy gains in addition to positive RevPOR growth in the first half of the year will continue to benefit Same-Store NOI growth results in the back half of 2024 and into early 2025.”
CFO (Brian Peay): “We are increasing our full year 2024 Same-Store NOI growth and earnings guidance… robust organic earnings growth thus far has allowed us to further improve our company’s leverage profile with improving Net-Debt-to-Annualized-Adjusted EBITDA.”

Q&A Highlights

The Q2 2024 earnings call transcript was unavailable due to a retrieval error; based on the press release, management clarified that higher interest expense expectations partially offset the NFFO raise, and reaffirmed confidence in SS NOI growth and leverage improvement trajectory .

Estimates Context

S&P Global/Capital IQ consensus estimates for AHTR were unavailable due to a mapping issue at the time of analysis, so explicit “vs. consensus” comparisons cannot be provided (values unavailable; S&P Global)¹.
Given the magnitude of guidance raises (SS NOI and NFFO), sell-side models will likely need to reflect higher SS NOI growth and NFFO per share ranges; OM guidance remains flat-to-down, anchoring segment expectations .

Key Takeaways for Investors

Momentum accelerating in RIDEA-operated segments: ISHC and SHOP drove Q2 SS NOI strength, supported by occupancy and RevPOR; narrative supports continued outperformance into H2’24 .
Attractive risk-reward as leverage trends lower: Net Debt/Adj. EBITDA improved to 5.9x; management targets further progress via dispositions and organic growth .
Guidance reset meaningfully higher: SS NOI growth and NFFO per share ranges raised; watch for estimate revisions and potential stock reaction to sustained execution .
OM is a relative drag: Slight SS NOI decline and unchanged negative-to-flat guidance; remain attentive to lease roll and retention metrics in OM .
Capital markets catalysts: Class T/I share conversion to listed common increases tradable float; quarterly $0.25 dividend maintained .
Strategic portfolio actions ongoing: YTD non-core sales and ISHC lease buyouts (3 campuses, ~$45.8M) support focus on core earnings drivers .
Near-term trading: Bias to the upside if SS NOI strength persists and leverage continues to drop; downside sensitivity tied to interest expense trajectory and OM softness .

¹ Estimates unavailable; values would normally be retrieved from S&P Global.

American Healthcare REIT, Inc. (AHTR)·Q2 2024 Earnings Summary