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Brookdale Senior Living Inc. (BKD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered continued operating momentum with consolidated weighted average occupancy at 80.1% (+200 bps YoY), Adjusted EBITDA at $117.1M (+19.7% YoY), and second consecutive quarter of positive Adjusted Free Cash Flow ($19.9M) .
  • Versus S&P Global consensus, BKD missed on revenue ($778.24M vs $817.63M) and EPS (-$0.18 vs -$0.14); management highlighted Adjusted EBITDA above internal expectations and analyst consensus on the call . Values retrieved from S&P Global.*
  • Annual 2025 guidance was raised again: RevPAR YoY growth to 5.25–6.00% (from 5.00–5.75%) and Adjusted EBITDA to $445–$455M (from $440–$450M); Adjusted Free Cash Flow maintained at $30–$50M .
  • Catalyst watch: CFO flagged seasonal headwinds and extra workdays/holidays producing ~-$10M sequential Adjusted EBITDA headwind in Q3; updated Ventas transition timing reduces FY25 Adjusted EBITDA by ~$2M vs prior modeling assumptions .

What Went Well and What Went Wrong

What Went Well

  • Profitable occupancy inflection: consolidated weighted average occupancy >80% for first time since 2020, with month-end occupancy accelerating to 82.6% in July; same community occupancy 80.7% (+190 bps YoY) .
  • Strong cash generation: net cash provided by operating activities rose to $83.6M (+$27.9M YoY) and Adjusted Free Cash Flow improved to $19.9M from -$5.5M in Q2 2024 .
  • Guidance raised for second straight quarter; interim CEO emphasized “we’ve now surpassed the important 80% occupancy mark that is a critical inflection point for cash flow generation” .

What Went Wrong

  • GAAP EPS and revenue below consensus; EPS -$0.18 and total revenue (excluding reimbursed costs basis used by S&P) $778.24M missed Street; Adjusted EBITDA growth was offset by higher wage, R&M, incentive comp, and advertising expense .
  • G&A increased on one-time items: $10.4M in transaction, legal, and organizational restructuring costs tied to leadership change and stockholder advisory matters .
  • Management flagged Q3 seasonal and calendar headwinds (utilities, extra workdays/holidays) and updated Ventas transition schedule as potential near-term drags on sequential margin/EBITDA .

Financial Results

Core P&L and Profitability (quarters ordered oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$780.9 $813.9 $812.9
Resident Fees ($USD Millions)$744.4 $777.5 $775.6
Net Income (Loss) ($USD Millions)$(83.9) $(65.0) $(43.0)
Diluted EPS ($USD)$(0.37) $(0.28) $(0.18)
Adjusted EBITDA ($USD Millions)$98.5 $124.1 $117.1

Year-over-Year (Q2 comparison)

MetricQ2 2024Q2 2025YoY Change
Total Revenue ($USD Millions)$777.5 $812.9 +$35.4 (+4.6%)
Resident Fees ($USD Millions)$739.7 $775.6 +$35.9 (+4.9%)
Net Income (Loss) ($USD Millions)$(37.7) $(43.0) -$5.3 (-14.0%)
Diluted EPS ($USD)$(0.17) $(0.18) -$0.01
Adjusted EBITDA ($USD Millions)$97.8 $117.1 +$19.3 (+19.7%)

Versus S&P Global Consensus (Q2 2025)

MetricConsensusActualSurprise
Revenue ($USD Millions)$817.63$778.24-$39.39 (miss)
Primary EPS ($USD)-$0.1365-$0.1569-$0.0204 (miss)
# of Estimates (EPS / Revenue)4 / 4——
Note: S&P revenue basis excludes reimbursed costs incurred on behalf of managed communities; “Actual” aligns to BKD’s “Total Senior Housing and All Other Revenue” ($778.237M). Values retrieved from S&P Global.*

Segment Breakdown (Q2 2025)

SegmentRevenue ($USD Millions)Operating Income ($USD Millions)Operating Margin
Senior Housing Owned Portfolio$503.6 $131.9 26.2%
Senior Housing Leased Portfolio$272.0 $81.4 29.9%
All Other (Mgmt Fees)$2.6 $2.6 100.0%
Combined Segment Operating Income—$215.9 27.7%

KPIs and Cash Flow (quarters ordered oldest → newest)

KPIQ4 2024Q1 2025Q2 2025
Weighted Avg Occupancy (Consolidated)79.4% 79.3% 80.1%
RevPAR ($)$4,873 $5,090 $5,080
RevPOR ($)$6,136 $6,416 $6,343
Net Cash Provided by Operating Activities ($USD Millions)$45.2 $23.4 $83.6
Adjusted Free Cash Flow ($USD Millions)$(11.5) $3.8 $19.9
Total Liquidity ($USD Millions)$389.3 $306.0 $350.0

Same Community (Q2 2025)

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$655.6 $687.3
Facility Operating Expense ($USD Millions)$471.6 $494.2
Operating Income ($USD Millions)$184.0 $193.1
Operating Margin28.1% 28.1%
Weighted Avg Occupancy78.8% 80.7%
RevPAR ($)$4,957 $5,195
RevPOR ($)$6,287 $6,436

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevPAR YoY GrowthFY 20255.00%–5.75% 5.25%–6.00% Raised
Adjusted EBITDA ($USD Millions)FY 2025$440–$450 $445–$455 Raised
Adjusted Free Cash Flow ($USD Millions)FY 2025$30–$50 $30–$50 Maintained
Ventas non-renewal transition timingFY 2025Modeled 10/01/2025 Later-than-Oct 1 schedule; ~-$2M vs prior modeled impact Timing headwind

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Occupancy bands and SWAT teamsPandemic recovery and occupancy rebuild; foundational execution SWAT teams active across 137 communities; >95% band communities up from 73 to 88; <70% band down from 143 to 129 Improving mix; targeted remediation accelerating
Pricing vs incentivesRate increases drove RevPOR; cautious marketing spend “Brookdale is not slashing rate”; selective/local incentives to drive move-ins in low-occupancy assets; RevPOR +2.4% YoY same community Balanced: protect rate, targeted discounts
Tariffs/macro, seasonalityHurricane/natural disaster costs and calendar effects noted Early Q2 softness amid macro/tariff discussions; Q3 headwind ~-$10M sequential from utilities/extra day/holidays Near-term headwind; momentum expected to continue
Portfolio optimization (Ventas, dispositions)Ventas amendment non-renewal of 55 communities; acquisitions of leased assets Transition schedule later in year; expect negative pressure during transition; ~28 additional assets identified for exit Ongoing pruning; long-term margin/FCF uplift
Leverage/refinancing2027 debt refinanced at lower rates; liquidity improved Adjusted annualized leverage improved to 9.3x; plan to pull assets out of collateral pool by improving performance Deleveraging path intact
Health features (Health Plus)Clinical programming recognized Health Plus rollout to ~200 communities; 80% fewer urgent care visits, 66% fewer hospitalizations; length-of-stay benefit Differentiated care; retention driver
Governance/leadershipCEO transition announced (April) CEO search progressing; board engagement and G&A rationalization ongoing Stabilizing governance; cost focus continues

Management Commentary

  • Denise Warren (Interim CEO): “We’ve now surpassed the important 80% occupancy mark that is a critical inflection point for cash flow generation… we remain intensely focused on delivering continued profitable occupancy and operating income growth” .
  • Denise Warren: “Brookdale is not slashing rate. We remain focused on profitable occupancy and maximizing fixed cost leverage” .
  • Dawn Kussow (CFO): “Second quarter adjusted EBITDA… was above internal expectations and analyst consensus estimates… our sequential occupancy growth was better than the industry average” .
  • Chad White (GC): On Health Plus outcomes—“residents… get 80% fewer urgent care visits, 66% fewer hospitalizations… improves length of stay and financial results” .

Q&A Highlights

  • Occupancy strategy: Focus on lifting <70% band and optimizing >80% properties for pricing power; SWAT teams delivering 350 bps occupancy and ~7% RevPAR growth in targeted assets since Q4 .
  • Pricing/discounting: Selective/local incentives aimed at occupancy-challenged communities; management avoids broad-based rate cuts; expects RevPOR to outpace EXPOR over time .
  • Early-quarter softness and summer momentum: Macro/tariff uncertainty weighed on early move-ins; June/July occupancy accelerated (+50–60 bps sequential); economics to show more fully in Q3 .
  • Cash flow priorities and CapEx: Positive Adjusted FCF driven by operations; continued “first impressions”/front-of-house investments to support sales conversion; proceeds from dispositions to reinvest and delever .
  • Guidance clarifications: ~-$10M seasonal/holiday/utilities headwind from Q2→Q3; updated Ventas schedule ~-$2M vs prior assumptions .

Estimates Context

  • Q2 2025 results versus S&P Global consensus: revenue $778.24M vs $817.63M (miss), EPS -$0.1569 vs -$0.1365 (miss); 4 estimates on both metrics. Note: S&P revenue basis excludes reimbursed costs (BKD “Total Senior Housing and All Other Revenue”) . Values retrieved from S&P Global.*
  • Implications: Despite Adjusted EBITDA beat vs qualitative expectations, Street models likely adjust for rate/expense mix, seasonal headwinds in Q3, and Ventas timing impacts; positive FCF trajectory and guidance raise support medium-term estimate resilience .

Key Takeaways for Investors

  • Occupancy momentum is durable and above the 80% cash-flow inflection; July month-end reached ~83.3%—supportive for H2 FCF and deleveraging .
  • Expect near-term sequential margin/EBITDA pressure in Q3 from seasonality/extra workdays/holidays/utilities (~-$10M), with partial offset from June/July occupancy carry-through .
  • Portfolio optimization (Ventas non-renewals and asset sales) is a tactical near-term headwind but strategically accretive to RevPAR, margins, and FCF as challenged assets exit .
  • Rate discipline intact—management rejects broad rate cuts; targeted incentives are localized, aiming to lift underperformers while protecting pricing in >80% occupancy assets .
  • Health Plus rollout is a differentiator likely to improve resident outcomes, retention/length of stay, and local sales conversion, supporting medium-term margin expansion .
  • Liquidity strengthened to $350M; Adjusted annualized leverage improved to 9.3x; deleveraging path hinges on sustained EBITDA growth and dispositions .
  • Trading lens: Watch Q3 prints for seasonal headwinds vs occupancy carry-through, cadence of Ventas transitions, and any further guidance tweaks; medium-term thesis rests on operating leverage, disciplined pricing, and portfolio pruning .
Notes:
* Values retrieved from S&P Global