Brookdale Senior Living Inc. (BKD)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered strong operating momentum: Adjusted EBITDA rose 27% YoY to $124.1M on 4.9% RevPAR growth and 140 bps occupancy expansion; GAAP EPS was a loss of $0.28 (largely impacted by a $32.8M loss on extinguishment tied to reacquisition of three communities) .
• Guidance raised: FY25 RevPAR growth tightened up to 5.00%–5.75% (from 4.75%–5.75%) and Adjusted EBITDA increased to $440–$450M (from $430–$445M); positive FY25 Adjusted FCF of $30–$50M reiterated .
• Revenue/EPS vs S&P Global consensus: revenue (resident fees + mgmt fees) missed and GAAP EPS loss was wider, but Adjusted EBITDA beat; management emphasized favorable counter-seasonal occupancy and cost discipline as drivers of the EBITDA outperformance (see Estimates Context) .
• Near-term catalysts: monthly occupancy updates (already trending above 80% in April/May), execution on Ventas 55 divestiture timeline, and asset recycling of ~14 noncore owned communities; CEO search underway (min. ~6 months) .

What Went Well and What Went Wrong

• What Went Well

  • Adjusted EBITDA outperformed plan and consensus on stronger price/occupancy and lower lease cash outflows; $124.1M (+27% YoY) with same-community operating margin up 90 bps to 29.0% .
  • Counter-seasonal occupancy strength: same-community weighted average occupancy reached 80.0% (flat sequentially vs typical seasonal declines) with move-ins above historical averages; April/May updates showed further sequential gains .
  • Guidance raised on both RevPAR and Adjusted EBITDA, reflecting confidence in profitable occupancy growth and cost control; FY25 positive Adjusted FCF reiterated .
  • Quote: “RevPAR and adjusted EBITDA exceeded our expectations… and given the solid start to the year, we are happy to be able to raise our annual guidance.” – Interim CEO Denise Warren .

• What Went Wrong

  • GAAP loss widened YoY (loss of $65.0M vs $29.6M), driven primarily by a $32.8M loss on extinguishment for reacquisition of three sale-leaseback communities and higher interest expense .
  • Revenue (resident fees + management fees) and GAAP EPS were below S&P Global consensus for Q1 (see Estimates Context), despite operating momentum [GetEstimates Q1 2025]*.
  • Utilities and wage inflation pressured facility opex; G&A included $1.6M related to stockholder relations advisory matters .

Financial Results

• Core P&L, margins, and KPIs

• Liquidity and balance sheet highlights

  • Total liquidity at 3/31/25: $306.0M (cash $239.7M; revolver availability $66.3M). Decrease of $83.3M vs 12/31/24 primarily from cash paid for acquisitions (net of financing) during the quarter .
  • Consolidated cash facility operating lease payments decreased YoY due to owned conversions; total cash facility lease payments $62.6M Q1 (see 8-K supplement detail) .

• Segment snapshot (Q1 2025 vs Q1 2024 – Senior Housing)

  • Independent Living: Revenue $157.1M (+5.5% YoY); Segment Operating Income $54.2M (+11.5% YoY); occupancy +160 bps to 81.2% .
  • Assisted Living & Memory Care: Revenue $533.4M (+4.4% YoY); Segment Operating Income $149.6M (+8.8% YoY); occupancy +120 bps to 78.7% .
  • CCRCs: Revenue $87.0M (+3.0% YoY); Segment Operating Income $16.7M (+7.0% YoY); occupancy +240 bps to 78.5% .

Guidance Changes

Assumptions include only announced acquisition/disposition activity and, for modeling purposes, an Oct 1, 2025 disposition date for all 55 Ventas non-renewal communities to be transitioned or sold .

Earnings Call Themes & Trends

Management Commentary

• Strategic priorities: “We are focused on improving operating performance, optimizing our real estate portfolio, reinvesting capital into our communities and reducing our leverage.” – Denise Warren, Interim CEO .
• Operating actions: “We are piloting new pricing promotions to boost occupancy… and deploying a SWAT team approach for select communities below 80% occupancy.” – Denise Warren .
• Margin/FCF focus: “Adjusted EBITDA… was above internal expectations and analyst consensus… first quarter adjusted free cash flow increased $30 million YoY to a positive $4 million.” – CFO Dawn Kussow .
• Seasonality: “We estimate… approximately $10M of an adjusted EBITDA headwind between the first and second quarters” from days, merit increases, and utilities .

Q&A Highlights

• Pricing strategy and guardrails: Targeted, community-level promotions—both up and down—aimed at accelerating occupancy while ensuring price growth exceeds expense growth to preserve margin .
• Low-occupancy remediation: 143 communities below 70%; 20% expected to exit (Ventas or dispositions) by year-end; high-opportunity response teams deployed, with early results and broader rollout .
• Dispositions and guidance: Benefits from the 14 noncore owned community sales are not embedded in FY25 guidance; proceed timing could modestly affect 2025 results .
• Macro tone: April occupancy up 30 bps sequentially and 90 bps YoY—best April since post-pandemic; guidance incorporates balanced view of macro uncertainty .
• CEO search: ~15–16 candidates reviewed; prioritizing operational excellence and strategic vision; process expected to take at least six months .

Estimates Context

• Q1 2025 vs S&P Global consensus (revenue defined as resident fees + management fees):
  • Revenue: Actual $780.1M* vs $816.9M* consensus (miss); # estimates: 4*
  • GAAP EPS: Actual $(0.2833)* vs $(0.1130)* consensus (miss); # estimates: 4*
  • EBITDA: Actual $124.0M* vs $112.8M* consensus (beat)
• Sequential context (Q4 2024 actuals vs consensus): Revenue $747.0M* actual; EPS $(0.2698); EBITDA $104.7M [GetEstimates]*.
• Forward estimates snapshot: Q2 2025 revenue $817.6M* (est.) vs actual later $778.2M*; EBITDA $115.2M* (est.) vs $118.8M* actual; Q3 2025 revenue $826.0M* (est.), EBITDA $106.1M* (est.) [GetEstimates]*.
• Implications: Expect estimate revisions to raise FY25 EBITDA following Q1 beat and guidance increase; revenue/EPS modeling may shift mix to occupancy-led EBITDA with GAAP volatility from one-time financing/impairment items.

Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

• Operating momentum is accelerating: 80%+ occupancy achieved with counter-seasonal strength; RevPAR and margins are improving, underpinning raised FY25 EBITDA guidance .
• EBITDA beats despite revenue/EPS misses highlight the importance of owned conversions (lower lease cash), cost discipline, and occupancy leverage to the BKD story .
• Expect near-term stock drivers from monthly occupancy prints (April/May sequential gains), visible execution on the Ventas 55 exit, and asset sales of 14 underperformers .
• Q2 seasonality (~$10M EBITDA headwind) is well telegraphed; focus should be on 2H occupancy/profit flow-through as merit and utilities normalize .
• Balance sheet/liquidity adequate post-acquisitions ($306M liquidity) with strategy to use proceeds and cash generation to reduce leverage over time .
• Leadership transition is active but strategy intact; expect continued emphasis on profitable occupancy, portfolio optimization, and cash generation during the search period .
• Risk watch: wage/utilities inflation, transaction timing (Ventas/community sales), and macro uncertainty; but favorable demand/supply backdrop and internal execution support multi-quarter improvement .

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Appendix – Additional context and disclosures

• Consolidated results and non-GAAP reconciliations are from BKD’s Q1 2025 press release and 8-K exhibits (including supplemental materials) .
• Guidance details and assumptions are from BKD’s Q1 2025 press release and 8-K .
• Call commentary and quotes are from BKD’s Q1 2025 earnings call transcript .
• Prior-quarter reference points are from Q4 2024 and Q3 2024 8-Ks .