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HEALTHPEAK PROPERTIES, INC. (DOC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered mixed results: GAAP total revenues of $694.3M slightly beat S&P Global consensus ($690.5M), while diluted EPS of $0.05 missed consensus ($0.0649) and EBITDA was below expectations; total same-store Cash (Adjusted) NOI grew 3.5% with strong CCRC and outpatient momentum . Values retrieved from S&P Global for consensus.
  • Guidance: company reaffirmed FFO as Adjusted per share ($1.81–$1.87) and same-store growth (3–4%), but lowered FY 2025 GAAP diluted EPS ($0.25–$0.31 from $0.30–$0.36) and diluted Nareit FFO ($1.78–$1.84 from $1.81–$1.87) .
  • Segment dynamics: outpatient medical showed 1.0M sq ft of leasing at 85% retention and +6% cash releasing spreads; lab executed 503k sq ft at 87% retention and +6% releasing spreads; CCRC same-store growth was 8.6% YoY .
  • Balance sheet/liquidity: Net Debt to Adjusted EBITDAre at 5.2x and ~$2.3B liquidity; company repaid $452M senior notes and maintained a $0.305 quarterly (monthly-paid) dividend ($1.22 annualized) .
  • Stock reaction catalysts: lowered GAAP/FFO guidance and lab occupancy headwinds weighed against strong outpatient/CCRC execution and visible development pipeline; management highlighted optionality for opportunistic buybacks and life science distress opportunities .

What Went Well and What Went Wrong

What Went Well

  • Outpatient leasing quality and pricing power: “We achieved 85% tenant retention, delivered a positive rent mark-to-market of 6%, and reported same-store cash NOI growth of 3.9%” .
  • Strategic development wins: two Northside Hospital outpatient projects in Atlanta ($148M), 78% pre-leased, mid-7% projected cash yields, underscoring health system-led growth in core markets .
  • CCRC performance resilience: “Portfolio now generating approximately $200M of annual NOI, including cash entry fees…50% higher than 2019” with occupancy at 86% and continued upside .

What Went Wrong

  • Lab occupancy pressure: total occupancy declined ~150 bps QoQ due to natural expirations, tenant migration, and capital-raising failures among a subset of tenants; management expects some further deterioration through year-end absent capital markets improvement .
  • Guidance reductions on GAAP EPS and diluted Nareit FFO reflect macro/regulatory uncertainty and lab headwinds despite reaffirmed FFO as Adjusted and same-store growth .
  • EBITDA miss versus consensus driven by weaker lab dynamics; Q2 EBITDA below consensus despite revenue beat (details in Financial Results/Estimates) . Values retrieved from S&P Global for consensus.

Financial Results

Per-Share Headline Metrics

MetricQ2 2024Q1 2025Q2 2025
Diluted EPS ($)$0.21 $0.06 $0.05
Nareit FFO per share ($)$0.44 $0.45 $0.43
FFO as Adjusted per share ($)$0.45 $0.46 $0.46
AFFO per share ($)$0.40 $0.43 $0.44

GAAP Totals and Margins

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($USD Millions)$695.5 $702.9 $694.3
Net Income ($USD Millions)$146.0 $42.8 $31.7
Net Income Margin (%)21.00%*6.09%*4.56%*
EBITDA ($USD Millions)$394.2*$401.0*$390.2*
EBITDA Margin (%)56.68%*57.06%*56.19%*

*Values retrieved from S&P Global.

Actual vs Consensus (Q2 2025)

MetricActualConsensusSurprise
Total Revenues ($USD Millions)$694.3 $690.5+$3.9
Diluted EPS ($)$0.05 $0.0649-$0.0149
EBITDA ($USD Millions)$390.2*$404.0-$13.8

*Actual EBITDA value retrieved from S&P Global. Consensus values retrieved from S&P Global.

Segment Revenues (GAAP)

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Outpatient Medical$332.5 $320.5 $320.5
Lab$214.3 $217.6 $209.2
CCRC$140.9 $148.9 $148.9
Other$6.9 $14.3 $14.3
Corporate Non-segment$1.0 $1.5 $1.5
Total Revenues$695.5 $702.9 $694.3

KPIs and Operating Statistics (Q2 2025)

KPIQ2 2025Notes
Same-Store Cash (Adjusted) NOI Growth (Total)3.5% Outpatient 3.9%, Lab 1.5%, CCRC 8.6%
Outpatient Leasing1.0M sq ft; 85% retention; +6% cash releasing spreads Additional 419k sq ft executed in July; 682k sq ft LOIs
Lab Leasing503k sq ft; 87% retention; +6% cash releasing spreads Additional 55k sq ft executed in July; 253k sq ft LOIs
Net Debt / Adjusted EBITDAre5.2x Adjusted EBITDAre $437.9M in Q2 2025
Liquidity~$2.3B Cash + revolver availability

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Diluted EPS (GAAP)FY 2025$0.30 – $0.36 $0.25 – $0.31 Lowered
Diluted Nareit FFO per shareFY 2025$1.81 – $1.87 $1.78 – $1.84 Lowered
FFO as Adjusted per shareFY 2025$1.81 – $1.87 $1.81 – $1.87 Maintained
Total Same-Store Cash (Adjusted) NOI GrowthFY 20253.0% – 4.0% 3.0% – 4.0% Maintained
DividendQ3 2025$0.305 per quarter (monthly $0.10167) $0.305 per quarter (monthly $0.10167) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/TechnologyBuilding platform; structured investments; operational upgrades underway Completed enterprise-wide tech upgrade; deploying AI tools (Copilot, ChatGPT) to improve productivity and real-time insights Positive execution momentum
Regulatory/MacroPolicy environment uncertain but supportive of innovation; NIH funding growth; potential FDA efficiency gains CMS proposed rule reversing inpatient-only default—“very positive” for higher-acuity outpatient; FDA modernization initiatives cited Improving policy backdrop
Outpatient PerformanceConsistent strength, high retention, 7% rent MTM in 2024; internalization benefits 85% retention, +6% releasing spreads; 1.0M sq ft executed + sizable July LOIs; core-market concentration strategy Strong and stable
Lab Dynamics2024 leasing strong; watch list stable; barbell demand; redevelopment ramp planned Occupancy down; credit issues from capital-raising failures; renewal-heavy mix (85%); green shoots: supply removal, M&A, improved sentiment Near-term challenged; leading indicators improving
Capital AllocationDry powder; $500M investments targeted; loans with purchase options in core submarkets Buybacks optionality ($300M past ~15 months); life science distress “enormous opportunity” at right time Flexible/offensive posture
CCRC StrategyEntry-fee structure and operator changes driving outsized growth Strong demand, pricing power, and expense control; sequential occupancy seasonality normal Sustained outperformance

Management Commentary

  • “The proposed rule [CMS inpatient-only list] would reverse that, and the default option would be to allow the outpatient setting. This would be very positive for our business.” — Scott Brinker .
  • “Our team completed an enterprise-wide technology upgrade…foundation for rapid deployment of additional AI capabilities.” — Scott Brinker .
  • “We ended the second quarter with net debt to adjusted EBITDA of 5.2 times and nearly $2.3 billion of liquidity.” — Kelvin Moses .
  • “Life science distress at the right time is going to be an enormous opportunity…we’ll be patient and thoughtful and disciplined.” — Scott Brinker .
  • “The portfolio [CCRC] is now generating approximately $200 million of annual NOI…50% higher than in 2019.” — Scott Brinker .

Q&A Highlights

  • Lab occupancy decline drivers: roughly one-third expirations, one-third tenant migration/expansions, one-third capital-raising failures; monitoring additional headwinds through year-end .
  • Capital markets context: signs of improvement (secondary market, large-cap M&A), but 2H occupancy trajectory depends on fundraising conditions; watch list still a “handful” within small/private biotech subset (~10% of portfolio is small/private, not all at risk) .
  • Leasing mix: lab renewals dominated Q2 (85%), but pipeline skewing toward new leasing; early renewals reduce 2026–2028 maturity buckets and tend to require low capital .
  • Outpatient retention and demand: strong hospital retention, 91–92% occupancy; non-renewals generally idiosyncratic (growth constraints/retirements), not concentration risk .
  • AI demand and supply takeout: AI sucking up office/lab-adjacent availability in Bay Area; some landlords marketing alternative uses; potential competitive positive for South San Francisco .

Estimates Context

  • Q2 2025 vs S&P Global consensus: revenues $694.3M vs $690.5M (beat), diluted EPS $0.05 vs $0.0649 (miss), EBITDA $390.2M vs $404.0M (miss); EPS estimates count: 7; revenue estimates count: 9. Values retrieved from S&P Global.
  • Forward quarters: consensus implies low-single-digit revenue trajectory into Q4 2025/Q1 2026 and flattish EBITDA, consistent with reaffirmed FFO as Adjusted guidance band. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: expect lab occupancy to face incremental pressure absent an improved capital-raising backdrop; results likely remain bifurcated, with outpatient/CCRC offsetting lab softness — watch July LOIs conversion and signed-not-yet-occupied commencements .
  • Guidance framing: FY 2025 GAAP EPS and diluted Nareit FFO ranges were lowered; FFO as Adjusted and same-store growth maintained — model updates should reflect lower GAAP profitability metrics while core cash generation remains intact .
  • Outpatient engine: continued pricing power (+6% cash releasing spreads) and strong relationships in scaled, high-growth markets (Atlanta, Dallas, Houston, etc.) underpin organic and development-led growth .
  • CCRC outperformance: durable demand and retooled entry-fee structure deliver higher NOI with further occupancy upside; seasonality in SNF component does not alter trajectory .
  • Optionality: with 5.2x net debt/EBITDAre and ~$2.3B liquidity, Healthpeak can refinance CP balances opportunistically, pursue accretive distress loans/acquisitions in life science, and consider buybacks at attractive levels .
  • Policy tailwinds: CMS inpatient-only proposal and FDA modernization efforts favor higher-acuity outpatient volumes and potentially faster R&D cycles, supporting DOC’s outpatient and lab platforms over time .
  • Watchlist risk contained: small/private biotech exposure is about 10% of portfolio and not uniformly at risk; diversification across credit tenants (health systems, large biopharma) mitigates downside .