EQUITY RESIDENTIAL (EQR) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 was operationally solid with strong urban performance (San Francisco, New York), record Q3 resident retention, and same-store NOI up 2.8% year over year; however, late-quarter demand softening (notably Washington, D.C.) led management to lower the full-year same-store revenue midpoint and EPS range .
Versus S&P Global consensus, EQR beat on revenue ($782.4M actual vs $779.7M consensus*) and FFO/share ($1.05 actual vs $1.015 consensus*), while S&P’s Primary EPS “actual” differs from company diluted GAAP EPS ($0.76) due to estimate definitions; company EPS was supported by property sale gains .
Guidance was reset: FY2025 same-store revenue midpoint trimmed 15 bps to 2.75%, EPS lowered (midpoint down $0.45), FFO/share midpoint down ~$0.06, while Normalized FFO/share midpoint held at $4.00; Q4 guidance implies EPS $0.59–$0.63, FFO/share $1.01–$1.05, NFFO/share $1.02–$1.06 .
Stock reaction catalysts: continued share repurchases (~1.5M shares for ~$99.1M at $64.26 average), urban momentum (AI-led San Francisco, tight supply New York), and visibility to materially lower competitive supply in 2026; offset by D.C. softness and sticky concessions in high-supply markets .

What Went Well and What Went Wrong

What Went Well
- Record third-quarter retention and high occupancy (96.3% portfolio), with blended rate +2.2%; urban San Francisco and New York led performance .
- Revenue and FFO/share beats vs S&P consensus; same-store NOI +2.8% YoY and QoQ stability driven by renewals and other income initiatives .
- Management emphasized technology/AI initiatives improving operations (50% faster applications; upcoming AI service request module), positioning for efficiency and customer satisfaction in 2026: “accelerating investment in technology to enhance both financial and customer service results” .
What Went Wrong
- Late-September demand softening, notably in Washington, D.C., with increased concessions and net effective pricing down ~4% YoY in district submarkets; led to lower same-store revenue midpoint .
- Blended rate landed at low end (2.2%), with new lease change at -1.0% and seasonal pull-forward; expansion markets (Denver, Dallas, Austin, Atlanta) face significant lack of pricing power .
- FY EPS guidance cut largely on lower expected property sale gains and insurance/litigation/environmental reserve expense; bulk Wi-Fi revenue rollout delays pushed part of other income to 2026 .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue (Rental Income, $USD Millions)	$748.3	$768.8	$782.4
GAAP EPS – Diluted ($USD)	$0.38	$0.50	$0.76
FFO per Share – Diluted ($USD)	$0.99	$0.98	$1.05
Normalized FFO per Share – Diluted ($USD)	$0.98	$0.97	$1.02

Estimates vs Actuals (S&P Global consensus; asterisk denotes S&P Global values)

Metric	Q3 2025 Consensus*	Q3 2025 Actual
Revenue ($USD)	$779.7M*	$782.4M
Primary EPS ($USD)	$0.446*	$0.374*
FFO / Share (REIT) ($USD)	$1.015*	$1.05

Note: Values retrieved from S&P Global.* Primary EPS (S&P metric definition) may differ from company-reported diluted GAAP EPS; EQR’s diluted GAAP EPS was $0.76, aided by property sale gains .

Same Store Results (% Change)

Metric	Q3’25 vs Q3’24	Q3’25 vs Q2’25
Revenues	+3.0%	+0.7%
Expenses	+3.6%	+2.5%
NOI	+2.8%	-0.2%

Residential Operating KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Physical Occupancy	96.1%	96.6%	96.3%
% Residents Renewing	56.7%	60.1%	58.5%
New Lease Change	-1.3%	-0.1%	-1.0%
Renewal Rate Achieved	4.6%	5.2%	4.5%
Blended Rate	2.0%	3.0%	2.2%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Same Store Physical Occupancy	FY 2025	96.4%	96.4%	Maintained
Same Store Revenue Change	FY 2025	2.6%–3.2%	2.5%–3.0%	Lowered (midpoint -0.15%)
Same Store Expense Change	FY 2025	3.5%–4.0%	3.5%–4.0%	Maintained
Same Store NOI Change	FY 2025	2.2%–2.8%	2.1%–2.6%	Lowered (midpoint -0.15%)
EPS ($)	FY 2025	$2.96–$3.02	$2.52–$2.56	Lowered (midpoint -$0.45)
FFO / Share ($)	FY 2025	$4.03–$4.09	$3.98–$4.02	Lowered (midpoint -$0.06)
Normalized FFO / Share ($)	FY 2025	$3.97–$4.03	$3.98–$4.02	Maintained (midpoint unchanged)
Acquisitions ($)	FY 2025	$1.0B	$750M	Lowered
Dispositions ($)	FY 2025	$1.0B	$750M	Lowered
Weighted Avg Debt Outstanding ($)	FY 2025	$8.15–$8.25B	$8.225–$8.275B	Slightly Raised
Net Interest Expense (Normalized FFO basis) ($)	FY 2025	$304.5–$308.5M	$306–$310M	Slightly Raised
Capitalized Interest ($)	FY 2025	$12.5–$13.5M	$12–$13M	Slightly Lowered
Property Management Expense ($)	FY 2025	$135.5–$137.5M	$133–$135M	Lowered
G&A Expense ($)	FY 2025	$63.5–$67.5M	$63.5–$67.5M	Maintained
Diluted Weighted Avg Shares & Units (MM)	FY 2025	391.5	390.9	Lowered
EPS ($)	Q4 2025	N/A	$0.59–$0.63	New
FFO / Share ($)	Q4 2025	N/A	$1.01–$1.05	New
Normalized FFO / Share ($)	Q4 2025	N/A	$1.02–$1.06	New
Common Dividend ($/share)	Q3 2025	N/A	$0.6925 (paid Oct 10, 2025)	Declared

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology Initiatives	Emphasis on innovation; operational centralization	AI-driven application processing (50% time reduction); service request AI module pilot; tech-led efficiency push	Expanding deployment
Supply & Pricing	Elevated supply pressuring Sunbelt; cautious absorption underwriting	D.C. softness; concessions sticky; expansion markets lack pricing power; 2026 supply down sharply	Near-term pressure; medium-term relief
Macro/Tariffs/Government	Economic uncertainty noted	Uncertainty from tariffs, job growth pause, National Guard deployment, government shutdown impacting D.C. sentiment	Headwind in D.C.
Regional Trends	San Francisco/NY improving; Seattle gradual; Sunbelt challenged	SF best in 2025 (AI epicenter); NY strong; LA urban weaker; Boston urban outperforming suburban but softer; D.C. late-quarter softness	Urban coastal strength; selective softness
Regulatory/Legal	Insurance reserves/litigation impacted NFFO adjustments	Positive zoning moves (CA transit hubs); watching NYC mayoral race, Seattle election; rent control risk limited given exposure	Balanced policy outlook
Capital Allocation	Raised NFFO guidance in Q2; $500M notes; acquisitions/dispositions	~$99.1M buybacks; acquisitions/dispositions guidance lowered; selective acquisitions; focus on private-public arbitrage via dispositions	Tilt to buybacks
Retention/Occupancy	Record-low Q1 turnover; high occupancy	Record Q3 retention; occupancy 96.3%; renewals ~4.25% expected in Q4	Strong retention sustained

Management Commentary

“Our portfolio, with its unique exposure to the well performing urban centers of San Francisco and New York, produced good results in the quarter… Going forward, we expect our accelerating investment in technology to enhance both financial and customer service results.” — Mark J. Parrell, President & CEO .
“We began to see weakness in traffic during the back half of September… most pronounced in Washington, DC… This… led us to adjust down the midpoint of our annual same-store revenue guidance by 15 basis points to 2.75%.” — Mark J. Parrell .
“The recovery in San Francisco, particularly downtown, is real… San Francisco will be our best-performing market in 2025 and most likely again in 2026.” — Michael Manelis, COO .
“We repurchased approximately $100 million of stock… our stock presents a compelling value at current levels, making us selective and limited in our acquisition activity for the time being.” — Mark J. Parrell .
“We’ve tightened our range… estimating full-year 2025 NFFO/share of $3.98 to $4.02, leaving the midpoint unchanged… slightly reduced same-store NOI should be offset by expected continued improvements in lease-up NOI and lower property management expense.” — Bret McLeod, CFO .

Q&A Highlights

Estimates and setup for 2026: Embedded growth (earn-in) expected similar to 2025 start; lower competitive supply across coastal markets supports forward momentum .
Buybacks vs acquisitions: Management leaning to buybacks funded by dispositions of lower-forward-growth assets; careful not to “descale” the company; watch tax gain limits .
Washington, D.C.: District submarkets saw concessions rise; net effective prices down ~4%; retention stable but top-of-funnel slowed; expected to persist near term; sharp supply decline in 2026 supports recovery .
Concessions: Average ~7 days per move-in in Q3, likely ~8 days in Q4; sticky in some high-supply submarkets; minimal concessions on renewals .
Innovation: AI application processing tool cut processing time by ~50%; next module to optimize service requests and workforce utilization .
Capital markets/transactions: Private market liquid for middle-market assets (~4.75% caps), weaker bid for larger/mixed-use; shares viewed more attractive currently .
Regulation: Positive supply-side policies (CA transit hub zoning); limited direct rent control exposure; monitoring NYC and Seattle political developments .

Estimates Context

Revenue: Beat — $782.4M actual vs $779.7M consensus* .
FFO/share: Beat — $1.05 actual vs $1.015 consensus* .
Primary EPS: Company GAAP diluted EPS was $0.76; S&P “Primary EPS” shows $0.374 actual vs $0.446 consensus*, reflecting definitional differences and property sale gains in company EPS .
Outlook implication: Same-store revenue midpoint lowered; NFFO midpoint maintained; expect consensus revisions to reflect D.C. softness, slower other income rollout, and Q4 guidance ranges .

Note: Values retrieved from S&P Global.*

Key Takeaways for Investors

Urban coastal exposure (SF, NY) is a differentiator and near-term growth driver; 2026 competitive supply set to fall materially, supporting pricing power and NOI .
Q3 operational beats vs consensus on revenue and FFO/share; strong retention and occupancy underpin stability despite seasonal pull-forward and D.C. softness .
Guidance reset de-risks the year: EPS lower on sale gains and reserves; NFFO midpoint held; Q4 ranges modestly below Q3 for EPS/FFO, with NFFO slightly above Q3 midpoint .
Capital allocation shifting toward buybacks funded by dispositions; expect select asset sales and cautious acquisitions while private cap rates hover ~5% .
Watch concessions in high-supply markets and late-season demand trends; renewal engine and other income levers (bulk Wi-Fi) support revenue resiliency as rollout continues .
Policy backdrop constructive in some states; limited rent control exposure; regulatory clarity and lower supply bolster medium-term thesis .
Near-term trading: Focus on catalysts — buyback pace, urban strength narratives (AI in SF, tight NY supply), D.C. stabilization signals, and confirmation of 2026 supply declines noted by management .