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MID AMERICA APARTMENT COMMUNITIES INC. (MAA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was operationally steady but mixed vs consensus: GAAP diluted EPS was $0.92 while S&P “Primary EPS” printed 0.876* vs 0.862* consensus (beat); revenue was $549.9M vs $551.4M* consensus (slight miss); Adjusted EBITDAre was $305.9M vs $306.7M* consensus (slight miss). Same Store revenue fell 0.3% YoY and Same Store NOI declined 2.6% YoY, offset by stronger renewals and record retention .
  • Management reaffirmed the full‑year Core FFO midpoint ($8.77), narrowed the range ($8.65–$8.89), trimmed GAAP EPS guidance ($5.25–$5.49 from $5.51–$5.83), and lowered expense growth assumptions on favorable taxes and insurance; Q3 Core FFO guided to $2.08–$2.24 (mid $2.16) .
  • Demand/supply setup improved: absorption outpaced deliveries for four consecutive quarters; blended lease pricing turned positive (+0.5%) with July new lease rates tracking best YTD; retention was record high and delinquency just 0.3% of billed rents .
  • Balance sheet remains a differentiator (Net Debt/Adj. EBITDAre 4.0x; ~94% fixed-rate debt; 6.7 years average maturity), enabling selective development (pipeline ~$943M, eight active projects) and potential M&A as opportunities arise .

What Went Well and What Went Wrong

  • What Went Well

    • Resilient operations with record resident retention; Same Store blended lease rate growth turned positive to +0.5% (renewals +4.7%; delinquency ~0.3% of billed rents), supporting stable 95.4% occupancy .
    • Expense tailwinds emerging: 2025 real estate tax growth midpoint cut to 0.25% and insurance to +1.3% YoY; Same Store expense growth midpoint lowered to 2.25%, preserving the full‑year Same Store NOI midpoint at -1.15% .
    • Improving demand/supply: “absorption across our markets [is] the highest level in over 25 years,” with absorption outpacing deliveries for four straight quarters; July new lease pricing is best YTD and occupancy ended July at 95.7% .

  • What Went Wrong

    • Growth still pressured: Same Store revenue -0.3% YoY and Same Store NOI -2.6% YoY in Q2, reflecting supply pressure and operator focus on occupancy; average effective rent/unit -0.5% YoY .
    • New lease pricing remains a headwind near-term (-4.8% in Q2), particularly in Austin, Phoenix, and parts of Nashville; management expects positive new lease spreads more likely in 2026 .
    • Lease-up portfolio weighed on non-Same Store performance (unfavorable $0.02/sh vs plan), contributing to the mixed result relative to guidance despite favorable overhead and taxes .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Rental and other property revenues ($M)$549.8 $549.3 $549.9
GAAP Diluted EPS ($)$1.42 $1.54 $0.92
FFO/share – diluted ($)$2.21 $2.21 $2.19
Core FFO/share – diluted ($)$2.23 $2.20 $2.15
Core AFFO/share – diluted ($)$2.03 $2.04 $1.85
Total NOI ($M)$344.9 $347.9 $335.2

Comparison vs S&P Global consensus – Q2 2025

MetricConsensus*Actual*Result
Revenue ($)551,366,980549,902,000Miss
Primary EPS ($)0.8620.876Beat
EBITDA ($)306,724,210305,091,000Miss
Values retrieved from S&P Global.*

Segment/Portfolio mix – Q2 2025 vs Q2 2024

CategoryOperating Revenues Q2’25 ($000)Operating Revenues Q2’24 ($000)NOI Q2’25 ($000)NOI Q2’24 ($000)
Same Store Communities518,955 520,420 319,612 328,310
Non‑Same Store Communities13,690 16,206 7,561 9,184
Lease‑up/Development10,491 3,288 4,441 972
Commercial/Land6,766 6,521 3,634 3,658
Total549,902 546,435 335,248 340,639

Key operating KPIs

KPIQ4 2024Q1 2025Q2 2025
Avg. Physical Occupancy (%)95.6% 95.6% 95.4%
Avg. Effective Rent/Unit ($)1,684 1,690 1,690
Blended Lease Rate Growth (%)-2.0% -0.5% 0.5%
New Lease Rate Growth (%)-8.0% -6.3% -4.8%
Renewal Lease Rate Growth (%)4.2% 4.5% 4.7%
Resident Turnover (TTM, %)42.0% 41.5% 41.0%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP EPS – dilutedFY 2025$5.51–$5.83 (mid $5.67) $5.25–$5.49 (mid $5.37) Lowered
Core FFO/share – dilutedFY 2025$8.61–$8.93 (mid $8.77) $8.65–$8.89 (mid $8.77) Range narrowed; midpoint maintained
Core AFFO/share – dilutedFY 2025$7.63–$7.95 (mid $7.79) $7.67–$7.91 (mid $7.79) Range narrowed; midpoint maintained
Same Store property revenue growthFY 2025-0.35% to 1.15% (mid 0.40%) -0.20% to 0.40% (mid 0.10%) Lowered
Same Store operating expense growthFY 20252.45%–3.95% (mid 3.20%) 1.75%–2.75% (mid 2.25%) Lowered
Same Store NOI growthFY 2025-2.15% to -0.15% (mid -1.15%) -1.90% to -0.40% (mid -1.15%) Midpoint maintained
Avg. physical occupancyFY 2025N/A95.40%–95.80% (mid 95.60%) Introduced
Core FFO/share (quarterly)Q3 2025N/A$2.08–$2.24 (mid $2.16) Initial Q3 guide

Earnings Call Themes & Trends

TopicQ4 2024 (Prev‑2)Q1 2025 (Prev‑1)Q2 2025 (Current)Trend
Supply vs demandPeak deliveries “now peaked”; recovery expected in 2025 Decline in new deliveries to accelerate; pricing trends improved sequentially Absorption highest in 25+ years; outpaced deliveries 4 straight quarters; fewer units available to lease Improving
Lease pricingBlended -2.0% (Q4) Blended -0.5%; sequential improvement vs 2024 Blended +0.5%; July new lease rates best YTD; back-half blended ~0.8% expected Improving (renewals strong; new leases still negative)
Occupancy/retention95.6% occ.; turnover 42% 95.6% occ.; turnover 41.5% 95.4% occ.; record retention; delinquency ~0.3% Stable/strong
Expenses (taxes/insurance)Q4 Same Store expense +3.4% YoY FY expense guide mid 3.2% Taxes midpoint cut to 0.25%; insurance +1.3%; FY expense mid 2.25% Easing headwind
Development/M&A2,312 units in development; selective buys/sells 7 active; $851.5M pipeline 8 active; $942.5M; Charleston start (6.1% yield); K.C. deal under contract Selectively expanding
Regional color——Strength in VA, Charleston, Greenville; Austin/Phoenix/Nashville weaker; Atlanta improving Mixed by market

Management Commentary

  • “Absorption across our markets [is] the highest level in over 25 years… absorption has now outpaced new deliveries for four consecutive quarters… helping market conditions to firm up.” – CEO Brad Hill .
  • “Blended pricing for the quarter was 0.5%… stable average physical occupancy of 95.4%… net delinquency representing just 0.3% of billed rents.” – Ops commentary .
  • “We are lowering the midpoint of [2025] effective rent growth guidance to negative 0.25%… lowering Same Store property operating expense growth… real estate tax expense… midpoint to 0.25%… insurance… to 1.3%… maintaining the midpoint of our full‑year core FFO guidance at $8.77.” – CFO Clay Holder .
  • “We started construction on a 336‑unit suburban project in Charleston… expected… stabilized NOI yield of 6.1%, bringing our active pipeline to 2,648 units at nearly $1 billion.” – CEO Brad Hill .
  • “July pricing is trending better than the second quarter… current occupancy at the end of July is 95.7%… renewal… growth rates… in the 4.5% range.” – Operations update .

Q&A Highlights

  • New lease spreads: management no longer expects positive new lease spreads in Q3; 2026 “looks a lot better” for positive new lease pricing; loss‑to‑lease ~2% in July (seasonally peak), expected to narrow into year‑end .
  • Market color: Austin remains most pressured (supply), Phoenix and downtown‑adjacent Nashville challenged; Atlanta showing the largest YoY improvement among large markets in blended pricing + occupancy .
  • Transactions: limited distress; few trades; Q2 cap rates tracked ~4.7% on small sample; leverage could rise to 4.5–5.0x (>$1B capacity) for compelling opportunities .
  • Expenses: Multiple municipalities producing favorable assessments; tax valuations could be a tailwind (or less of a headwind) over the next cycles; insurance premiums renewed down overall .

Estimates Context

  • Versus S&P Global consensus in Q2 2025: Revenue modest miss ($549.9M vs $551.4M*); “Primary EPS” beat (0.876 vs 0.862*); EBITDA slight miss ($305.1M vs $306.7M*) with 7–15 estimates contributing by line. Target price consensus is $149.52 based on 25 estimates* [GetEstimates].
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core earnings power intact: Despite near‑term supply headwinds and a softer new lease backdrop, MAA reaffirmed its Core FFO midpoint and tightened the range, aided by cost discipline (taxes, insurance) and record retention .
  • Inflection building for 2026: Absorption outpacing deliveries for four consecutive quarters and decelerating starts should progressively restore pricing power; management now frames positive new lease spreads as more likely in 2026 .
  • Near‑term 2H cadence: Expect modest sequential improvement with Q3 Core FFO guided to $2.08–$2.24; blended pricing guided ~0.8% for 2H; renewals mid‑4% remain a stabilizer .
  • Watch the lease‑up drag: Lease‑up NOI underperformed plan in Q2 amid slower velocity; stabilization milestones (3 in Q3, 2 in Q4) could reduce the earnings headwind into year‑end .
  • Expense tailwinds are material: Lower‑than‑planned tax assessments and improved insurance terms cut expense growth expectations, supporting NOI preservation in 2025 .
  • Balance sheet optionality: 4.0x Net Debt/Adj. EBITDAre, ~94% fixed, 6.7‑year tenor provide flexibility to pursue select development (6–6.5% yields) and targeted acquisitions as pricing rationalizes .
  • Geographic mix matters: Mid‑tier markets (VA, Charleston, Greenville) are outperforming; monitor recovery trajectories in Austin, Phoenix and downtown‑adjacent Nashville; Atlanta is improving from a low base .

Notes:

  • Q2 press release and full supplemental schedules, including reconciliations and guidance detail, are furnished in the 8‑K (Exhibits 99.1 and 99.2) dated July 30, 2025 .
  • Q1 2025 and Q4 2024 prior‑quarter comps sourced from period press releases and supplemental data .