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Community Healthcare Trust Inc (CHCT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 printed mixed metrics: revenue rose to $30.08M (+2.5% YoY; +2.7% QoQ), while diluted EPS was $0.03 as higher seasonal OpEx offset revenue gains .
  • Versus S&P Global consensus, revenue beat by ~$0.37M (+1.3%), but EPS missed by $0.04 (estimate $0.07 vs actual $0.03). Expect estimate revisions focused on EPS drivers and OpEx cadence.
  • Dividend was raised again to $0.47/share (annualized $1.88), sustaining a long-standing quarterly increase streak .
  • Management emphasized capital recycling over equity issuance at current share price, a selective acquisition pipeline (7 properties, $169.5M, 9.1–9.75% returns), and resolving the geriatric psychiatric tenant issue where $165k of rent and interest was received in Q1 .

Note: We searched for an Item 2.02 8‑K earnings release for Q1 2025 but did not find one in the corpus; we used the company’s earnings press release and full call transcript for primary sourcing .

What Went Well and What Went Wrong

What Went Well

  • Revenue inflected: total revenue rose to $30.08M (+2.5% YoY; +2.7% QoQ) aided by late Q4 acquisitions, reimbursement seasonality, and $165k from the geriatric operator .
  • AFFO resilience: AFFO/share held at $0.55 QoQ (AFFO ~$14.7M, +$0.1M QoQ) despite higher seasonal OpEx .
  • Strategic pipeline: Seven properties under definitive purchase agreements (~$169.5M) with expected returns of ~9.1–9.75%; management reiterated intent to fund with asset sales and revolver rather than equity at depressed prices .

Management quotes:

  • “We continue to see good leasing activity… while continuing to focus on property operating costs.”
  • “We… anticipate having sufficient capital from selected asset sales coupled with our increased revolver capacity to fund near-term acquisitions.”
  • “We are proud to have raised our dividend every quarter since our IPO.”

What Went Wrong

  • EPS miss: diluted EPS came in at $0.03, below the S&P Global consensus of $0.07*, as seasonal utilities/snow removal and higher G&A (noncash comp and annual items) pressured earnings .
  • Tenant risk overhang: the geriatric psychiatric operator (6 properties; ~$3.2M annual base rent plus ~$2.5M on notes) remains unresolved; Q1 payments were only $165k .
  • OpEx headwinds: Property operating expenses increased ~$0.6M QoQ to $6.1M due to seasonal utility and snowfall costs; G&A increased ~$0.3M QoQ to $5.1M on deferred comp amortization and annual employer adjustments .

Financial Results

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus
Revenues ($USD Millions)$29.33 $29.30 $30.08 $29.70*
Net Income ($USD Millions)$3.67 $1.83 $1.59 —
Diluted EPS ($USD)$0.11 $0.04 $0.03 $0.07*
FFO per share - Diluted ($USD)$0.53 $0.48 $0.47 —
AFFO per share - Diluted ($USD)$0.59 $0.55 $0.55 —
Net Income Margin (%)12.5% 6.2% 5.3% —
  • YoY revenue growth: +2.5% (Q1’25 vs Q1’24) .
  • QoQ revenue growth: +2.7% (Q1’25 vs Q4’24) .
  • Revenue beat vs consensus: +$0.37M; Beat (approx. +1.3%)*.
  • EPS miss vs consensus: -$0.04; Miss.*

S&P Global disclaimer: *Values retrieved from S&P Global.

KPIs

KPIQ3 2024Q4 2024Q1 2025
Occupancy (%)91.3% 90.9% 90.9%
WALT (years)6.8 6.7 6.7
Properties (count)198 200 201
Square Footage (M sq ft)~4.4 ~4.4 ~4.5
Dividend per share ($)$0.465 $0.4675 $0.47

Select Operating Detail (Q1 2025)

  • Property operating expense: $6.1M (+~$0.6M QoQ; seasonal utilities/snow) .
  • G&A expense: $5.1M (+~$0.3M QoQ; noncash comp amortization and annual employer adjustments) .
  • Interest expense: ~$6.4M (flat QoQ) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ1 2025$0.4675 (Q4 2024 declared) $0.47 (annualized $1.88) Maintained upward trend (raised)
Acquisition closings2025–20276–7 properties post-completion, ~$146–$169.5M, 9.1–9.75% returns; one slipped to Q1’25 from Q4’24 7 properties, ~$169.5M expected over 2025–2027; one expected in Q3 2025, others through 2025–2027 Timing updated; scope maintained
Capital raisingNear-termAvoid ATM at depressed share price; consider recycling; revolver upsized to $400M No ATM in Q1; continue capital recycling and revolver draws; keep leverage modest Maintained stance
Preferred stockNear-termNot favored historically Not a near-term consideration; evaluate options but bias to simple structure Maintained stance
Tenant resolution (geriatric psych)Q2–Q3 2025Small payments anticipated; multiple paths (sale/backfill) Expect more certainty by late Q2/early Q3; received $165k in Q1 Clarified timing; incremental progress

No formal revenue, margin, OpEx, OI&E, tax rate guidance was provided.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Capital allocation (equity vs recycling)Upsized revolver; avoid equity at depressed price; consider asset sales; possible buybacks if authorized No ATM issuance; pursue selected asset sales and revolver; buybacks discussed but not priority Stable discipline
Acquisition pipeline7 properties, ~$169.5M, 9.1–9.75% returns; timing pushed out by approvals/hurricanes 7 properties, ~$169.5M; one expected in Q3; others through 2025–2027; selective near-term pace Consistent; timing refined
Tenant risk (geriatric psych)No Q3 rent; stabilization efforts; expect resolution in “couple of quarters”; total obligation ~$6M/yr $165k payment in Q1; expect clarity by late Q2/early Q3; ~$3.2M rent + ~$2.5M notes Incremental improvement
Occupancy & WALT91.3% / 6.8 years (Q3); 90.9% / 6.7 years (Q4) 90.9% / 6.7 years (flat QoQ) Stable
Dividend trajectory$0.465 (Q3); $0.4675 (Q4) $0.47 (Q1) Continued modest raises
Macro/tariffs—Healthcare providers not in crosshairs of tariff debates; portfolio stability Neutral

Management Commentary

  • Pipeline and capital: “We… anticipate having sufficient capital from selected asset sales coupled with our increased revolver capacity to fund near-term acquisitions… all while maintaining modest leverage levels.”
  • Operations cadence: “Both our occupancy and our weighted average remaining lease term remained flat quarter-over-quarter at 90.9% and 6.7 years… good leasing activity… focus on property operating costs.”
  • AFFO and FFO: “FFO… $0.47… down slightly from $0.48 in the fourth quarter… AFFO totaled $14.7M… remained the same quarter-over-quarter at $0.55.”
  • Dividend: “Raised… to $0.47 per common share… annualized dividend of $1.88 per share.”
  • Tenant update: “We… received rent and interest payments of $165,000 in the first quarter… evaluating strategic alternatives, including potential sale…”

Q&A Highlights

  • Tenant resolution timeline: Expect “additional certainty towards the end of the second quarter, beginning of the third quarter” regarding buyer interest and next steps for the geriatric operator .
  • Contractual obligations: Annual base rent ~$3.2M; notes add ~$2.5M; total just under $6M owed; Q1 payment $165k .
  • Acquisition funding: Will use selected asset sales and revolver draws; avoid equity at current price; buybacks are discussed but not first choice given pipeline .
  • Preferred stock: Not a near-term consideration; bias to simple capital structure .
  • Georgia sale-leaseback: $9.7M purchase plus $1.4M TIs (~$11M asset), lease commencement expected early Q3 2025; anticipated annual return ~9.5% .

Estimates Context

  • Revenue: Actual $30.08M vs consensus $29.70M; Beat by ~$0.37M (+1.3%)*.
  • EPS: Actual $0.03 vs consensus $0.07; Miss by $0.04*.
  • Coverage: # of estimates — EPS: 1; Revenue: 4*.
    Drivers of divergence: Higher seasonal utilities/snow removal and G&A timing/noncash items weighed on EPS despite revenue tailwinds .

S&P Global disclaimer: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mixed print likely keeps focus on cash cost normalization: revenue strength offset by seasonal OpEx/G&A timing; monitor OpEx run-rate into Q2–Q3 for EPS recovery .
  • Dividend signal remains supportive: continued quarterly raises with AFFO/share stable at $0.55, underscoring cash flow resilience .
  • Capital discipline intact: no ATM at current price; expect asset recycling plus revolver to fund selective, high-return pipeline; watch near-term dispositions .
  • Tenant overhang has a near-term timeline: expect clarity by late Q2/early Q3; incremental payments in Q1 reduce tail risk modestly .
  • Pipeline offers AFFO growth potential without equity: 7 properties (~$169.5M, 9.1–9.75% returns) staged through 2025–2027; Q3 closing targeted for at least one asset .
  • Trading setup: revenue beat vs EPS miss suggests focus on margin cadence and tenant resolution as the next catalysts; watch for any asset sale announcements and Q3 lease commencements on the Georgia facility .
  • Risk checks: Monitor interest expense stability, seasonal OpEx normalization, and occupancy in the 91–93% “steady-state” band noted by management .

Other relevant Q1 2025 press releases: dividend increase to $0.47 (payable May 23, record May 9) and call schedule on April 30 .