NexPoint Residential Trust, Inc. (NXRT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was operationally mixed but incrementally positive: revenue was $63.216M and NOI $37.760M as Same Store NOI fell 3.8% YoY, while Core FFO/share rose to $0.75 (up a penny YoY) and management raised full-year Core FFO/share guidance midpoint to $2.75 .
• Against S&P Global consensus, revenue was essentially in line ($63.271M actual vs $63.235M est*) and GAAP EPS modestly better (−$0.265 actual vs −$0.273 est*), indicating a slight beat on both lines* .
• Management cited share repurchases ($7.6M at $34.29; 223,109 shares) and layering additional swaps ($100M at 3.489%) as drivers for the guidance lift and lower forward interest run-rate .
• The narrative is turning to rent growth: new lease pricing showed month‑to‑month acceleration; effective rent/unit ended at $1,495 (+0.3% q/q) and occupancy was 94.4% (95.5% leased as of late April) as markets like Las Vegas and Tampa led gains .
• Potential stock catalysts: continued buybacks at discounts to NAV (NAV midpoint $51.20), positive lease-rate inflection into peak season, and further swap activity lowering interest expense; risks include ongoing Same Store expense growth and a still‑negative GAAP EPS outlook .

What Went Well and What Went Wrong

• What Went Well

  • “We are tactically pushing rate increases and accelerating interior renovations into a fundamentally stronger peak leasing season…as of this morning, the portfolio is 95.5% leased” (Matt McGraner) .
  • Core FFO/share improved to $0.75 and FY25 Core FFO/share midpoint raised to $2.75, primarily due to buybacks and favorable swaps; management sees 5‑6 rate cuts embedded in the curve (Paul Richards) .
  • New lease growth inflected positively in multiple markets (Las Vegas, Tampa, DFW, South Florida); effective rents ended Q1 at $1,495 (+0.3% q/q) with 20 of 35 properties showing April improvement .

• What Went Wrong

  • Same Store pressure: Q1 Same Store revenues −1.0%, NOI −3.8%, average effective rent −1.3%, occupancy −30 bps YoY .
  • GAAP EPS remained negative (−$0.27) as the YoY comparison lapped a $31.7M gain on asset sales last year; total revenue declined YoY due partly to a smaller portfolio .
  • Expense headwinds persist (Same Store operating expenses +3.7% YoY; insurance +18.4% YoY within SS) and FY25 guidance still embeds flat to modestly negative Same Store NOI midpoint (−1.5%) .

Financial Results

Consensus vs. Actual (S&P Global)

Values with asterisk retrieved from S&P Global.

Segment Breakdown (Same Store vs Non-Same Store)

Key KPIs

Guidance Changes

Additional directional guidance: Q2 2025 NOI midpoint guidance is $37.776M .

Earnings Call Themes & Trends

Management Commentary

• Strategic focus: “We are tactically pushing rate increases and accelerating interior renovations into a fundamentally stronger peak leasing season ahead…as of this morning, the portfolio is 95.5% leased with a healthy 60‑day trend of 92%.” – Matt McGraner .
• Guidance drivers: “We…revising 2025 guidance…due to the share buyback program…current interest rate environment as well as plans to continue to layer in additional swaps.” – Paul Richards .
• On swaps: “We were…able to lock in a $100 million notional at sub‑3.5%…we’re seeing the curve retrace down to 5 to 6 cuts…that really does help the forward guidance.” – Paul Richards .
• On market rent backdrop: “Amidst this improving outlook, we have seen a…acceleration in new lease pricing power…effective rents ended the quarter at $1,495, up 30 bps from Q4 2024.” – Matt McGraner .
• NAV framework and capital allocation: “NAV per share range…$44.20–$68.20 (midpoint $51.20)…we have purchased 223,109 shares…at a 33% discount to our current NAV midpoint.” – Paul Richards .

Q&A Highlights

• Guidance rationale: Core FFO raised “due to…more share buybacks…[and] locking in fixed rates that are a little bit better than…anticipating” via swaps (sub‑3.5% on $100M; potential for more) .
• Capital allocation: Expect to “maintain a steady buyback program…be opportunistic…recycle capital” with dispositions to fund repurchases when shares trade well below NAV .
• Value‑add cadence: Targeting to ramp in 2H, aiming “a couple of hundred a quarter” upgrades; willing to accept some occupancy retracement to push rent and create renovation opportunities .
• Operating costs: Q1 OpEx came in light; favorable insurance renewal on Apr 1; push to reduce maintenance payroll spend into 1H’26; taxes remain variable (esp. Texas), to be contested .
• Buyback thresholds: Management still likes repurchases at implied 6.25%–6.7% cap rates; would buy on “weak days and volatile days,” potentially up to ~10% off low end of NAV range .

Estimates Context

• Q1 2025 results were fractionally ahead of consensus: revenue $63.271M vs $63.235M est*, and GAAP EPS −$0.2646 vs −$0.2731 est* (3 and 6 estimates, respectively), indicating a slight beat on both lines* .
• FY25 Core FFO/share midpoint raised to $2.75; consensus paths may need to reflect lower interest costs from swaps and the share count impact of repurchases .
  Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

• The fundamental narrative is improving: new lease rate growth is inflecting in several NXRT markets with early‑Q2 momentum, positioning for better rent capture into peak leasing season .
• Financial leverage is hedged and manageable: ~$0.8B of swaps in place with an additional $100M added at 3.489%, and no meaningful maturities until 2028 post‑refinancings, supporting earnings visibility .
• Capital allocation remains shareholder‑friendly: active buybacks at ~33% discount to NAV midpoint and willingness to recycle assets to fund repurchases can be accretive to per‑share metrics .
• Watch expense lines: Same Store expenses rose 3.7% YoY with insurance a notable component (+18.4% YoY within SS), though insurance renewal terms improved as of April 1 and OpEx trends looked favorable in Q1 .
• Core FFO guidance was raised despite soft Same Store NOI midpoint; further swap activity or rate cuts could provide upside to interest expense run‑rate (and Core FFO) if executed prudently .
• Near‑term trading implication: Slight beats alongside a guidance lift and improving leasing data can support a constructive near‑term reaction; sustained confirmation of rent growth and continued buybacks are the key catalysts to re‑rate vs NAV .

Sources:  
– Q1 2025 press release and earnings supplement: revenues, EPS, NOI, FFO/Core FFO/AFFO, Same Store performance, guidance, debt and swaps, NAV **[1620393_20250429NY75251:0]** **[1620393_20250429NY75251:1]** **[1620393_20250429NY75251:3]** **[1620393_20250429NY75251:6]** **[1620393_20250429NY75251:7]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:6]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:7]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:8]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:9]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:10]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:11]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:13]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:16]** **[1620393_0000950170-25-059581_nxrt-ex99_1.htm:20]**.  
– Q1 2025 earnings call transcript: operating trends, guidance drivers, swaps, buybacks, market color, Q&A **[1620393_NXRT_3423810_1]** **[1620393_NXRT_3423810_2]** **[1620393_NXRT_3423810_3]** **[1620393_NXRT_3423810_4]** **[1620393_NXRT_3423810_5]** **[1620393_NXRT_3423810_7]** **[1620393_NXRT_3423810_8]** **[1620393_NXRT_3423810_12]**.  
– Prior quarters (trend analysis): Q4 2024 and Q3 2024 press/calls **[1620393_20250225NY26580:1]** **[1620393_NXRT_3417646_4]** **[1620393_1973173_2]** **[1620393_20241029NY42690:1]** **[1620393_20241029NY42690:2]**.  
– Consensus estimates from S&P Global: revenue and EPS for Q1 2025 (see asterisked values).