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NH

NATIONAL HEALTH INVESTORS INC (NHI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 total revenues were $89.847M, a beat versus Wall Street consensus of $84.104M; diluted EPS was $0.69, a slight miss versus $0.709 consensus. EBITDA was below consensus as non-recurring items and SHOP transition impacts flowed through; normalized FFO per share rose 28% YoY to $1.32 .*
  • Guidance raised for the third time in 2025: FY NAREIT FFO per share to $4.62–$4.65; Normalized FFO per share to $4.88–$4.91; FAD to $231.7–$233.5M. Same-store SHOP NOI growth was revised to 7–9% for 2025 (from 13–16%), while SHOP NOI from conversions and new investments increased to $5.8–$6.0M .
  • Strategic momentum in SHOP: seven properties transitioned and the first SHOP acquisition ($74.3M) closed Oct 1; consolidated SHOP NOI rose ~63% YoY, with more than $195M under signed LOIs at ~8.4% average initial yield .
  • Balance sheet catalysts: net debt/adjusted EBITDA at 3.6x (below target range), ~$1.1B liquidity, $350M of 5.35% bonds issued and 0.10% SOFR spread removed on bank facilities, supporting rapid execution on pipeline .

Note: Values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • SHOP scaling delivered: consolidated SHOP NOI up 62.6% YoY; transition of seven properties produced NOI above prior cash rent and expected to exceed original FY25 forecast ($3.7M) .
  • External growth and pipeline: first SHOP acquisition ($74.3M, 8.2% first-year NOI yield or 7.5% adjusted for recurring capex) and a $52.5M CCRC acquisition at 8.25% initial lease rate; ~$195M under LOIs at ~8.4% yields .
  • Balance sheet strength and guidance raise: net debt/adjusted EBITDA 3.6x; liquidity ~$1.1B; FY25 Normalized FFO per share midpoint now $4.90 (+10.4% YoY) and FAD $232.6M (+13.9% YoY), with dividend declared at $0.92 per share .

Management quote: “We’re raising our guidance for the third time this year. Our updated guidance represents over 10% NFFO per share growth at the midpoint… strongest annual growth since 2014” .

What Went Wrong

  • Same-store SHOP softness: same-store NOI declined 2.2% YoY; occupancy fell 110 bps YoY and 160 bps sequentially; ~16 units taken out of service and ~$0.2M non-recurring costs impacted results; margin declined 90 bps to 21.1% .
  • Rental income headwind from transitions: aggregate $6.9M reduction in rental income in Q3 tied to seven properties moved from leases to SHOP; included $12.1M write-off of straight-line rent receivable .
  • Higher G&A and operational variability: G&A rose 31.2% YoY on incentive comp and professional fees; management emphasized remediation efforts and operator focus to stabilize same-store portfolio performance .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$89.296 $90.662 $89.847
Revenue – Wall St Consensus ($USD Millions)$84.039*$86.162*$84.104*
Diluted EPS ($USD)$0.74 $0.79 $0.69
Primary EPS – Wall St Consensus ($USD)$0.736*$0.757*$0.709*
EBITDA ($USD Millions)$67.461*$72.806*$64.368*
EBITDA – Wall St Consensus ($USD Millions)$68.120*$71.086*$71.340*
EBITDA Margin %75.20%*78.98%*71.58%*
Net Income Margin %38.08%*40.12%*36.55%*

Note: Values marked with * retrieved from S&P Global.

Segment NOI breakdown:

Segment NOI ($USD Millions)Q1 2025Q2 2025Q3 2025
Real Estate Investments$72.428 $73.496 $66.022
SHOP$3.086 $3.821 $4.924
Total NOI$75.556 $77.352 $70.984

Selected KPIs and trajectory:

KPIQ3 2024Q3 2025Seq Change (Q2→Q3)
SHOP Same-Store NOI ($USD Millions)$3.027 $2.962 n/a
SHOP Same-Store NOI Margin %n/a21.1% n/a
SHOP Same-Store Occupancyn/a-110 bps YoY; -160 bps QoQ -160 bps
Cash Lease Revenue ($USD Millions)n/a$70.1 (↑ ~12% YoY) n/a

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NAREIT FFO per diluted shareFY 2025$4.46–$4.50 $4.62–$4.65 Raised
Normalized FFO per diluted shareFY 2025$4.78–$4.82 $4.88–$4.91 Raised
Normalized FAD ($USD Millions)FY 2025$227.9–$229.8 $231.7–$233.5 Raised
Same-Store SHOP NOI growthFY 202513%–16% 7%–9% Lowered
SHOP conversion + new investment NOIFY 2025$3.6–$3.7M $5.8–$6.0M Raised
Unidentified new investmentsFY 2025$105M at ~8.1% yield $75M at ~8.0% yield Lowered size
Dividend per shareQ4 2025n/a$0.92 declared, payable Jan 30, 2026 Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
SHOP expansion and strategyQ1/Q2 emphasized evaluating SHOP portfolios; seven property transition planned Aug 1; guiding 12–15% SHOP NOI growth for 2025 Seven properties transitioned to SHOP; first SHOP acquisition ($74.3M); consolidated SHOP NOI up ~63% YoY; raising view for SHOP contribution and expecting more in 2026 Accelerating
Pipeline & capital deploymentQ1 pipeline ~$264M; Q2 LOIs ~$129.9M at ~8% yields ~$195M under LOIs at ~8.4% yields; additional ~$154M under evaluation; excludes portfolio deals Growing and higher yield mix
Balance sheet & liquidityNet debt/adj EBITDA 3.9x (below target), liquidity >$750M (Q2) Net debt/adj EBITDA 3.6x; liquidity ~$1.1B; $350M 5.35% notes; 0.10% SOFR spread removed Strengthening
Same-store SHOP performanceQ1/Q2: positive momentum, seasonality noted; guidance initially 12–15% growth Same-store NOI -2.2% YoY; occupancy down; remediation in progress; margin 21.1% Near-term soft; remediation underway
NHC lease/renewalQ1: stronger than forecast step-up in percentage rent from NHC Legal effectiveness of renewal notice questioned due to default provisions; market-rate reset if valid; Blueprint Advisors engaged Uncertain; potential arbitration/litigation
Competitive landscapeNot highlighted previouslyCompetition for SHOP portfolios rising (REITs, PE); NHI leverages no financing contingencies and relationships to secure off-market deals More competitive; strategic differentiation

Management Commentary

  • CEO Eric Mendelsohn: “We’re raising our guidance for the third time this year… The momentum at NHI is building… well positioned to capitalize on the generational growth in the senior housing industry over the next decade” .
  • CIO Kevin Pascoe: “Total SHOP NOI increased by 62.6%… same store NOI… declined 2.2% year over year… we have taken measures to improve the occupancy and operations… expect… double-digit levels in 2026” .
  • CFO John Spaid: “Net income per share was $0.69… NAREIT FFO… $1.09… normalized FFO… $1.32… FAD… $62.2M… net debt to adjusted EBITDA 3.6x… liquidity approximately $1.1 billion” .

Q&A Highlights

  • SHOP remediation and units offline: Management detailed pricing, tour process, staffing incentives, and a California building project requiring first-floor units to be taken offline to address plumbing issues properly; corrective measures are in place .
  • NHC renewal legality: Renewal option validity hinges on default status; if invalid, negotiation could include third parties; if valid, renewal at market rate; legal review ongoing .
  • Pipeline scale and reporting: Pipeline well over $1B, with larger portfolios excluded from reported LOIs until signed due to lower hit rates; mix includes SHOP, triple-net, and loan-to-own .
  • Guidance bridge: Better-than-expected SHOP conversion activity and loan receivable payoffs drove credit loss reserve reversals; same-store SHOP growth lowered to 7–9% for 2025; interest expense benefited from lower variable rates and favorable bond issuance .
  • Bickford update: Occupancy up 90 bps sequentially to 86.1%; trailing 12-month EBITDA coverage 1.49x; continued deferral repayment with potential monetization at April 2026 reset .

Estimates Context

  • Revenue: Beat. Q3 2025 actual $89.847M vs consensus $84.104M; Q2 actual $90.662M vs $86.162M; Q1 actual $89.296M vs $84.039M. Bold beat for Q3 revenue. *
  • EPS: Slight miss. Q3 diluted EPS $0.69 vs $0.709 consensus; Q2 beat ($0.79 vs $0.757); Q1 in-line/beat ($0.74 vs $0.736). *
  • EBITDA: Miss. Q3 actual $64.368M vs $71.340M consensus; Q2 beat ($72.806M vs $71.086M); Q1 below consensus ($67.461M vs $68.120M).*

Note: Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 was fundamentally strong on top line with a clear revenue beat; EPS and EBITDA softness reflect transition accounting and near-term same-store headwinds rather than a deteriorating core .
  • Guidance upgrades and balance sheet improvements are the key stock catalysts: three guidance raises YTD, lower leverage (3.6x) and ~$1.1B liquidity enable rapid execution on ~8%+ yield opportunities .
  • SHOP scaling is the primary narrative into 2026: recent transitions and acquisitions should more than double SHOP NOI contribution in 2026; watch same-store remediation and operator execution to validate margin and occupancy recovery .
  • Monitor NHC lease process: legal and market-rate dynamics could create optionality or uncertainty; outcome may influence rent trajectory and perceived risk .
  • Near-term modeling updates: raise FY25 revenue and Normalized FFO per share to new ranges; trim same-store SHOP growth to 7–9% and adjust interest expense lower per revised rate terms and bond pricing .
  • Pipeline conversion timing is important for Q4/Q1 prints: ~$195M under LOIs at ~8.4% yields and additional ~$154M pipeline suggest continued external growth; financing flexibility (no contingencies) differentiates NHI in competitive bid processes .
  • Dividend support strengthened: FAD guidance raised; $0.92 dividend declared—liquidity and coverage look adequate for continuation, contingent on pipeline execution and same-store improvements .