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NH

NATIONAL HEALTH INVESTORS INC (NHI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid: NHI delivered diluted EPS of $0.74 (+4% YoY), NAREIT FFO/share of $1.14 (+3.6% YoY), normalized FFO/share of $1.15 (+2.7% YoY), and normalized FAD of $56.0M (+9.9% YoY) .
  • Both revenue and EPS exceeded Wall Street consensus for Q1 2025; revenue was $89.7M vs $84.0M est., and EPS was $0.745 vs $0.736 est. (bold beat) *.
  • Guidance raised: 2025 NAREIT FFO/share to $4.64–$4.70 (from $4.59–$4.66), normalized FFO/share to $4.68–$4.73 (from $4.59–$4.66), and FAD to $223.8–$226.4M (from $219.8–$223.6M) (bold raise) .
  • Catalysts: faster-than-expected acquisitions ($174.9M YTD at 8.2% initial yield), higher deferred rent collections (incl. Bickford), stronger NHC percentage rent, and an expanded senior housing pipeline (~$264M) .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Faster acquisitions and cash rent collections drove the beat; CEO: “first quarter results exceeding our internal expectations driven by acquisitions… higher deferral collections… and a step-up in the percentage rent from NHC” .
  • SHOP momentum intact despite seasonality: SHOP NOI +4.9% YoY to $3.1M; resident fees +5.2% YoY; occupancy +390bps YoY to ~89.2% .
  • Balance sheet/liquidity strong: net debt/adjusted EBITDA at low end of 4–5x target; $253M revolver availability; $135M cash; $409M ATM capacity; term loan extended to Dec-2025 .

What Went Wrong

  • SHOP sequential softness and incentives weighed on RevPOR/margins in Q1; management cited typical winter seasonality and a small one-time expense; reiterated 12–15% SHOP NOI growth for 2025 .
  • $1.2M transaction costs expensed for a large SHOP deal that fell through; normalized FFO and EPS absorbed ~$0.03/share impact .
  • Ongoing governance/activism noise around NHC lease renewal; proxy-related costs included ($0.264M in Q1; ~$1.8M for FY implied) .

Financial Results

Income Statement and Per-Share Metrics (Quarterly)

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$82.9 $85.8 $89.3
Rental Income ($USD Millions)$63.3 $65.8 $68.9
Resident Fees & Services ($USD Millions)$13.8 $14.0 $13.9
Interest Income & Other ($USD Millions)$5.9 $6.0 $6.5
Diluted EPS ($USD)$0.65 $0.95 $0.74
NAREIT FFO/share (Diluted) ($USD)$1.03 $1.24 $1.14
Normalized FFO/share (Diluted) ($USD)$1.03 $1.12 $1.15
Normalized FAD ($USD Millions)$49.4 $52.1 $56.0

Segment NOI Breakdown ($USD Millions)

Segment NOIQ3 2024Q4 2024Q1 2025
Real Estate Investments$66.3 $68.8 $72.4
SHOP$3.0 $3.3 $3.1
Non-Segment/Corporate$0.1 $0.2 $0.0
Total NOI$69.4 $72.2 $75.6

KPIs and Operational Metrics

KPIQ3 2024Q4 2024Q1 2025
SHOP Occupancy (%)88.6 89.4 ~89.2 (YoY +390 bps)
Deferred Rent Repayments (Quarter) ($USD Millions)~$1.9 ~$2.3 ~$2.0 (includes interest)
Investments Closed YTD ($USD Millions)—$237.5 in 2024 $174.9 YTD 2025 at 8.2% yield
Pipeline ($USD Millions)~$350 (Q3) ~$190 (Q4) ~$264 (Q1)

Actual vs Wall Street Consensus (Q1 2025) – S&P Global

MetricConsensusActualResult
Revenue ($USD Millions)$84.0*$89.7 Beat*
EPS (Primary) ($USD)$0.736*$0.745 Beat*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (Feb 25, 2025)Current Guidance (May 5, 2025)Change
NAREIT FFO/share (Diluted)FY 2025$4.59 – $4.66 $4.64 – $4.70 Raised
Normalized FFO/share (Diluted)FY 2025$4.59 – $4.66 $4.68 – $4.73 Raised
Normalized FAD ($USD Millions)FY 2025$219.8 – $223.6 $223.8 – $226.4 Raised
SHOP NOI Growth (YoY)FY 202512% – 15% 12% – 15% (maintained) Maintained
Unidentified InvestmentsFY 2025$225M at 8.1% avg yield +$155M additional at 8.2% avg yield (weighted to H2) Updated mix/timing

Key assumptions include continued rent concessions/dispositions/loan repayments, deferred rent collections, and investments from announced subsequent events .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Investment Pipeline & AcquisitionsFunnel $1–2B; actionable pipeline ~$350M; $237.5M closed in 2024 at ~8.6% yields $174.9M YTD closed at 8.2% yield; evaluating ~$264M pipeline; expects 2025 investments materially higher than 2024 Accelerating deal flow; yields stable
SHOP Strategy & ConversionsConsidering triple-net to SHOP; sizing 5–10% portfolio by end-2025/early-2026; targeting RevPOR growth Converting 6 Discovery properties to RIDEA; targeting Q3 timing; NOI upside expected; guidance excludes conversion impacts Execution commencing; timing Q3
NHC Lease & Medicaid/RegulatoryOngoing discussion; market robust; blueprint advisor engaged; Medicaid/staffing watched % rent step-up contributed; renewal notice due mid-2026; activism noise; proxy costs included; Medicaid/provider tax cloud acknowledged Active engagement; governance pressure
Capital Markets & LiquidityRevolver recast; forward equity proceeds; plan to tap bonds in 2025 Cash $135M; revolver availability $253M; ATM capacity $409M; term loan extended; evaluating bond issuance windows; spreads widened Strong liquidity; cautious on timing
SHOP Fundamentals2024 SHOP NOI +32% YoY; margin +350bps; seasonality expected Q1 Q1 SHOP NOI +4.9% YoY; margin 22.1% (-10bps YoY); incentives rolling off; occupancy ~89% Seasonal dip; improving KPIs
SLM Restructuring/RecoveriesTransition/sales in Q3–Q4; reserves increased; recovery plan unfolding $2.5M loan repayment post-Q1; portfolio largely retented; mezz recovery TBD Recapture progressing

Management Commentary

  • CEO: “We are off to a solid start… acquisitions that closed sooner than expected, higher deferral collections… and a step-up in the percentage rent from NHC… we are increasing the mid-point of our guidance” .
  • CIO on portfolio conversion: “We’re making great progress on transitioning a portfolio of 6 properties… to a new RIDEA partnership. We see good NOI upside to this portfolio” .
  • CFO on guidance mechanics: “Our updated full year guidance… includes $155 million in additional new unidentified investments at an average yield of 8.2%… weighted to the third and fourth quarters” .
  • CIO on pipeline: “The buyer pool is somewhat limited… we expect that 2025 investments will be materially higher than 2024” .
  • Governance context: Land & Buildings noted preliminary proxy outcome and intends to monitor NHC lease renewal and capital allocation .

Q&A Highlights

  • NHC lease renewal and activism: Renewal notice due 6 months before end-2026; company engaged advisors; Medicaid/provider tax uncertainty acknowledged .
  • SHOP Q1 softness: Seasonality and a one-time expense; incentives to roll off; maintaining 12–15% NOI growth guidance; margin trajectory tied to RevPOR and occupancy >90% .
  • Discovery transitions: Targeting Q3 for triple-net to new operator/RIDEA; some transition “noise” anticipated; FAD guidance expected to be stable; straight-line receivable handling explained .
  • Capital markets: Bond market access likely in 2025; spreads widened from ~40bps to >200bps; minimum ~$300M deal size to ensure index liquidity .
  • SLM recoveries: $2.5M loan repayment received; further payments possible; buildings re-tenanted and improving .

Estimates Context

  • Q1 2025 beats: Revenue $89.7M vs $84.0M consensus; EPS $0.745 vs $0.736 consensus (bold beats). Management cited acquisitions, deferred rent collections (incl. Bickford), and NHC percentage rent step-up as drivers *.
  • Outlook implications: Raised FY 2025 FFO/FAD guidance; additional $155M unidentified investments weighted to H2; SHOP NOI growth target maintained—consensus may need to move higher on FFO/FAD and H2 contributions *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise quarter with improving cash rents and accelerated external growth pipeline—supports near-term FFO/FAD upside vs prior consensus *.
  • SHOP sequential dip looks transitory; incentives rolling off and Q2–Q4 trajectory should strengthen occupancy/RevPOR and margins; watch Q3 RIDEA conversion execution .
  • Liquidity is ample; flexibility to fund H2 pipeline and refinance maturities—monitor bond market window given spread volatility .
  • Governance/activism remains a watch item; NHC lease negotiations and Medicaid/provider tax visibility are key to valuation and rent sustainability .
  • External growth at ~8%+ initial yields is compelling; mix includes fee simple and loans with purchase options—expect H2 timing impacts on run-rate .
  • Dividend maintained at $0.90/share; FAD growth (+10% YoY midpoint) strengthens coverage—monitor conversion impacts and transition costs .
  • Near-term trading: Positive bias on beat/raise and pipeline momentum; medium-term thesis hinges on SHOP margin expansion, disciplined capital allocation, and NHC lease outcomes .