Executive Summary

Q1 2025 headline results were weak on GAAP due to fewer asset sales and non-cash items: total revenue $128.3m, GAAP EPS -$0.30, and Adjusted EBITDA $98.2m (vs $203.2m in Q1 2024 driven by a $106m gain last year) .
Operations and fee engine improved: Baseline EBITDA rose 5% YoY to $108.3m; investment management fees grew 17% YoY to $25.0m; same-property multifamily NOI rose 4.3% on occupancy and rent gains .
Balance sheet actions are a 2025 catalyst: management expects >$400m of asset-sale/recap proceeds in 2025 (≈$200m targeted for Q2) to reduce unsecured debt (including KWE notes due November); 96% of debt fixed/hedged; weighted-average rate 4.7% and maturity 4.8 years .
The investment platform continues to scale in rental housing credit: $724m Q1 originations with >$1b Q2 pipeline; fee-bearing capital stands at $8.7b; UK/Ireland financing conditions supportive (recent €-portfolio refi at ~4.1%) .

What Went Well and What Went Wrong

What Went Well
- Fee momentum and core earnings power: Baseline EBITDA up 5% YoY to $108.3m; investment management fees up 17% YoY to $25.0m as credit platform originations accelerated . Quote: “We deployed or committed approximately $1 billion of capital in Q1… pipeline totaling $2.5 billion… all within the rental housing sector” — CEO Bill McMorrow .
- Multifamily fundamentals: same-property NOI +4.3% YoY on 0.6 pts occupancy and 3.1% revenue growth; blended leasing spreads +1.5% with renewals +3% and new lease rents flipping positive from Q4 .
- Liability management progress and hedging: completed $510m (JV share) Irish apartment refi at ~Euribor+1.95% (~4.1% current), 96% of debt fixed/hedged, WAM 4.8 years; $5m cash received from hedges in Q1 (not netted in interest expense) .
What Went Wrong
- GAAP optics and YoY comp: GAAP EPS -$0.30 vs $0.19 in Q1 2024, largely due to the non-repeat of prior-year gains on sale (Q1’24 had $106.4m gain) and non-cash charges; Adjusted EBITDA fell to $98.2m from $203.2m YoY .
- Revenue miss vs consensus: SPGI consensus revenue $227.1m vs actual $128.3m; SPGI Primary EPS consensus -$0.19 vs reported GAAP EPS -$0.30 (Primary EPS methodology differs) . Values retrieved from S&P Global*.
- Credit spread pressure: management noted 30–40 bps spread compression amid more competition from insurers/banks/private lenders, though underwriting quality remains high .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenue ($m)	$127.5	$135.5	$128.3
Net (Loss) Income to Common ($m)	$(77.4)	$33.1	$(40.8)
GAAP Diluted EPS ($)	$(0.56)	$0.24	$(0.30)
Adjusted EBITDA ($m)	$66.4	$190.8	$98.2
Baseline EBITDA ($m)	$101.7	$97.8	$108.3
Investment Mgmt Fees ($m)	$21.6	$29.9	$25.0

Estimate comparison (Q1 2025):

Revenue: Actual $128.3m vs SPGI Consensus $227.1m* → miss.
EPS: GAAP Diluted -$0.30 vs SPGI Primary EPS Consensus -$0.189* → worse (note metric definitions differ).
Values retrieved from S&P Global*.

Revenue mix (Q1 2025 vs Q1 2024):

Line Item ($m)	Q1 2024	Q1 2025
Rental	$97.4	$97.3
Hotel	$9.3	$0.0
Investment Management Fees	$21.3	$25.0
Loan	$8.1	$5.8
Other	$0.3	$0.2
Total Revenue	$136.4	$128.3

KPI snapshot

KPI	Q4 2024	Q1 2025
Same-Property Multifamily NOI YoY	+6.5%	+4.3%
Baseline EBITDA ($m)	$97.8	$108.3
Adjusted EBITDA ($m)	$190.8	$98.2
Estimated Annual NOI ($m)	$467	$473
Fee-Bearing Capital ($b)	$8.8	$8.7
Cash & Equivalents ($m)	$217.5	$356.6
Revolver Drawn ($m)	$98.3	$273
Debt: Fixed/Hedged	97%	96%
Wtd Avg Effective Interest Rate	4.6%	4.7%
Wtd Avg Maturity (years)	4.9	4.8

Segment exposure (Estimated Annual NOI, Q1 2025)

Sector	Est. Annual NOI to KW ($m)
Multifamily (Market Rate + Affordable)	$301.7
Office	$122.8
Industrial	$18.3
Retail	$11.6
Loans (Interest Income Proxy)	$18.9
Total	$473.3

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
Asset sales/recaps cash proceeds	FY 2025	n/a	“> $400m” in 2025; ~$200m targeted for Q2	Initiated quantitative target
Q2 dispositions timing	Q2 2025	n/a	“Almost all… latter part of June”	Timing clarity
Debt reduction focus	2025	Deleveraging priority	Use proceeds to reduce unsecured debt incl. KWE notes due Nov 2025	Reiterated plan
KWE Eurobonds remaining	2025	€ Notes partially redeemed	~$330m remaining, maturity Nov 2025	Status quantified
Fee revenue growth goal	Multi-year	n/a	Targeting 20–25% annual fee revenue growth	Target articulated
Loan originations pipeline	Q2 2025	>$1b in process (Q4’24 outlook)	“Over $1b in Q2 originations in process,” rental-housing focused	Maintained momentum
Common dividend	Q2 2025	$0.12	Declared $0.12 per share (payable July 3, 2025)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Investment management fee growth	Q3: +39% YoY fees; fee-bearing capital $8.8b; UK SFR JV launched . Q4: +83% YoY fees; $99m FY fees; debt platform $1.4b Q4 originations .	+17% YoY fees to $25m; fee-bearing capital $8.7b; expanding into mezz/preferred JV with Tokyu; >$1b Q2 originations pipeline .	Positive, scaling credit and equity platforms.
Multifamily fundamentals	Q3: NOI tailwinds from stabilization; SSS NOI rising . Q4: SSS market-rate NOI +5.6% YoY .	SSS NOI +4.3% YoY; blended spreads +1.5%; renewals +3%; new leases turned positive; lower turnover (28% vs 35% LY) .	Improving occupancy/rents with seasonal tailwinds.
Office	Q3: Stable Europe; actions to lease-up . Q4: Europe SSS stable; W. U.S. mixed .	90% stabilized occupancy; Europe healthier (92%); Dublin leasing strongest Q1 in 3 years; 17% rent uplifts on UK leases .	Europe supportive; U.S. still mixed but stable.
Deleveraging/asset sales	Q3: €175m KWE redemption announced . Q4: $122m Q4 cash from sales; plan to reduce unsecured debt .	>$400m 2025 asset-sale/recap cash, ~$200m Q2; applies to unsecured debt reduction incl. KWE notes .	Continuing; catalysts in Q2–Q4.
Credit spreads/competition	n/a	n/a	More competition compressing spreads 30–40 bps; underwriting quality high .
Affordable housing/Vintage	n/a	n/a	5.5% NOI growth; ~15% tenants with HUD support; monitoring policy but no issues seen .

Management Commentary

“We deployed or committed approximately $1 billion of capital in Q1… Activity has picked up in Q2 with our current committed pipeline totaling $2.5 billion of loan originations and real estate equity acquisitions, all within the rental housing sector.” — CEO Bill McMorrow .
“Baseline EBITDA for Q1 came in at $108 million, a 5% increase year-over-year… We anticipate reducing our unsecured debt in the near term as we execute our asset sale plan.” — CFO Justin Enbody .
“Blended leasing spreads increased to 1.5%, including 3% growth on renewals… turnover was some of the lowest on record with an annualized rate of 28% vs 35% in Q1 of 2024.” — President Matt Windisch .
“We expect to generate over $400 million in proceeds from non-core asset sales during the remainder of 2025… allocated toward… reduction of unsecured debt and to support the continued growth of our investment management platform.” — Press Release .

Q&A Highlights

Fee growth vs. fee-bearing capital: Management reiterated confidence in achieving 20–25% annual fee revenue growth; timing differences exist because future funding commitments don’t immediately enter fee-bearing capital .
Credit spreads and competition: Pricing pressure of ~30–40 bps vs a year ago amid more insurer/bank/private lender activity; relationships and repeat sponsors help maintain pipeline .
Dispositions cadence/cap rates: ~$150–200m Q2 closings expected in late June; no cap-rate guidance until closings, but European rate cuts could support favorable exit yields on planned European sales .
Capital allocation: Buybacks subordinate to near-term unsecured debt reduction (incl. 2025 KWE bond); management views stock undervaluation but prioritizes deleveraging .
Affordable housing policy exposure: ~15% of tenants have HUD support; no current impact observed; some potential payment timing delays monitored .

Estimates Context

Q1 2025	Actual	SPGI Consensus	Result
Revenue ($m)	$128.3	$227.1*	Miss
EPS (Primary/GAAP)	GAAP Diluted: -$0.30	Primary EPS: -$0.189*	Below (different EPS definitions)

Notes: SPGI “Primary EPS” methodology may differ from GAAP diluted EPS reported by KW. Values retrieved from S&P Global*. There is limited Street focus on KW’s GAAP revenue/EPS given proportional consolidation nuances; investors often track Baseline EBITDA and fee growth, for which no widely published consensus was cited in company materials.

Key Takeaways for Investors

Deleveraging catalyst: >$400m 2025 asset-sale/recap proceeds (≈$200m targeted for Q2) aimed at unsecured debt reduction (incl. KWE Nov-2025 notes); expect balance sheet optics to improve through 2H25 as transactions close .
Core engine strengthening: Baseline EBITDA +5% YoY and fee revenue +17% YoY, supported by $724m Q1 originations and >$1b Q2 pipeline in rental housing credit; measurable fee growth runway from $4.5b of future fundings .
Multifamily momentum into peak leasing: SSS NOI +4.3% YoY with new lease rents turning positive and lower turnover; near-term seasonal strength should support NOI trajectory absent macro shocks .
European tailwinds: Lower-rate environment and strong Irish/UK demand (e.g., €-portfolio refi ~4.1%, Dublin/UK leasing) could aid dispositions and office stabilization economics versus U.S. comps .
Modeling nuance: GAAP revenue/EPS can diverge from investor “true north” metrics (Baseline EBITDA, fee revenues); focus on fee growth, SSS NOI, asset-sale execution, and net debt path.
Trading setup: Stock sentiment should hinge on visible progress against Q2 closing targets and KWE bond paydown, plus sustained fee/NOI growth; any slippage in dispositions/timing or further spread compression in credit platform are key risks .

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Footnotes:
SPGI consensus figures marked with an asterisk (*) are Values retrieved from S&P Global.

Kennedy-Wilson Holdings, Inc. (KW)·Q1 2025 Earnings Summary