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NexPoint Residential Trust, Inc. (NXRT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was operationally soft: revenue fell to $63.8M, diluted EPS swung to a loss of ($1.06), and NOI declined to $38.9M; Core FFO per diluted share was $0.68 versus $0.75 in Q4 2023 .
  • Management executed major balance-sheet work: refinancing 34 loans extended weighted-average maturities to ~7 years and reduced the adjusted weighted-average interest rate to 2.96% (post-swaps), eliminating meaningful maturities until 2028 .
  • 2025 guidance initiated: Core FFO per diluted share $2.56–$2.83 (midpoint $2.70); Same Store NOI growth -3.5% to +0.5% (midpoint -1.5%); acquisitions/dispositions $0–$200M each, signaling a transition year before expected supply relief in 2H 2025–2026 .
  • Dividend sustained: Board approved $0.51 for Q1 2025; Q4 dividend was $0.51 (+10.3% q/q in October), with 2024 dividends 1.47x covered by Core FFO (68% payout) .

What Went Well and What Went Wrong

What Went Well

  • Significant refinancing reduced adjusted weighted-average interest cost to 2.96% and extended maturities, removing near-term debt cliffs; “with the completion of these refinancings, the company has no meaningful debt maturities until 2028” .
  • NAV support and capital allocation: Management published NAV per share of $44.56–$58.52 (midpoint $51.54), continued repurchases at a ~36–37% discount to NAV midpoints earlier in 2024, and highlighted ongoing private/public arbitrage .
  • Operating discipline: Bad debt improved to 0.9% in Q4 and averaged 1.3% for FY 2024 (vs. 2.7% in 2023), with retention starting 2025 above 53% Jan–Feb, supporting stabilized occupancy entering the year .

What Went Wrong

  • Topline/margins softer: Q4 revenue fell to $63.8M (from $68.9M), NOI to $38.9M (from $42.2M), and Core FFO/share to $0.68 (from $0.75); Same Store NOI declined 0.4% y/y .
  • One-offs impacted GAAP earnings: higher loss on extinguishment/modification (+$22.9M y/y) and lower gains on real estate sales (-$20.9M y/y) drove the GAAP net swing to ($26.9)M in Q4 .
  • Near-term headwinds in certain markets: Raleigh occupancy down due to elevated supply and staffing transitions; Atlanta rent pressure offset partly by bulk Wi-Fi revenues; management guides 2025 Same Store NOI midpoint to -1.5% .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$64.2 $64.1 $63.8
Diluted EPS ($)$0.40 $(0.35) $(1.06)
NOI ($USD Millions)$38.9 $38.1 $38.9
FFO per diluted share ($)$0.62 $0.60 $(0.25)
Core FFO per diluted share ($)$0.68 $0.69 $0.68
AFFO per diluted share ($)$0.80 $0.79 $0.78
Same Store KPIsQ4 2023Q4 2024
Occupancy (%)94.7% 94.7%
Avg Effective Monthly Rent ($)$1,516 $1,491
Same Store NOI ($USD Millions)$39.059 $38.884
Segment Breakdown (Markets)Unit Mix (%)Avg Effective Rent 2024 ($)Occupancy 2024 (%)
South Florida15.1% 2,120 95.4%
Phoenix15.5% 1,443 93.8%
Dallas/Fort Worth15.0% 1,226 96.3%
Orlando9.0% 1,560 94.5%
Atlanta13.0% 1,463 93.9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Earnings (loss) per diluted share ($)FY 2025N/A(1.33) to (1.05); Midpoint (1.19) Initiated
Core FFO per diluted share ($)FY 2025N/A2.56 to 2.83; Midpoint 2.70 Initiated
Same Store Rental Income (y/y)FY 2025N/A-0.5% to +1.0%; Midpoint +0.2% Initiated
Same Store Total Revenue (y/y)FY 2025N/A-0.2% to +1.3%; Midpoint +0.5% Initiated
Same Store Total Expenses (y/y)FY 2025N/A+2.4% to +4.9%; Midpoint +3.7% Initiated
Same Store NOI (y/y)FY 2025N/A-3.5% to +0.5%; Midpoint -1.5% Initiated
Acquisitions ($M)FY 2025N/A$0–$200 Initiated
Dispositions ($M)FY 2025N/A$0–$200 Initiated
Quarterly Dividend ($/share)Q1 2025$0.51 (Q4 2024) $0.51 (declared Feb 25, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Capital structure & interest costsPlan to refinance to reduce SOFR spread from 158 bps to 100–110 bps by 2027, offsetting swap maturities ; Refinanced 17 properties, raised dividend Refinanced 34 loans, extended maturities to ~7 years; adjusted weighted-average interest rate cut to 2.96%; no meaningful maturities until 2028 Improving cost of capital and term profile
Operating supply/deliveriesRecord deliveries pressuring rents; steady occupancy Supply sharply pulled back in Q4 to ~37k units, lowest since Q4 2011; positioning for better H2 2025–2026 Easing supply outlook
Bulk Wi-Fi/tech monetizationValue-add ROI across appliances/tech packages Bulk Wi-Fi rollout in Atlanta added revenue amid rent pressure; 1-gig fiber retrofit Expanding ancillary revenue
Bad debt & retentionElevated in 2023 (2.7%) but declining Bad debt 0.9% in Q4; retention >53% Jan–Feb 2025 Improving collections and tenant stability
Value-add executionContinuous upgrades with 20%+ ROI 2024 cumulative upgrades: 8,348 interiors, 4,730 appliances, 11,389 tech; 2025 plan to accelerate with targeted ROIs Sustained internal growth driver

Management Commentary

  • “Based on our current estimates of cap rates in our markets and forward NOI, we are reporting a NAV per share range as follows: $44.56 on the low end; $58.52 on the high end; and $51.54 at the midpoint.”
  • “Holistically, these refinancings reduced NXRT's weighted average interest on the total debt by 48 basis points to 6.21% before the impact of interest rate swap contracts… accounting for the hedging impact of the swaps, NXRT's adjusted weighted average interest rate was reduced from 3.64% to 2.96%.”
  • “Q4 saw another sharp pullback… to just 37,000 quarterly units in the quarter. That's the lowest level since Q4 of 2011… we expect a transition year, leading to outsized growth in 2026 and 2027.”
  • “Bad debt continues to trend down finishing Q4 at 90 basis points. And for the full year, we averaged 1.3%, which was down from 2023's average of 2.7%.”

Q&A Highlights

  • Atlanta revenue drivers: Bulk Wi-Fi rollout across three assets and 1-gig fiber retrofit helped offset rent pressure; management also expects bad debt improvement in 2025 in the market .
  • Raleigh occupancy: Temporary pressures from elevated new supply and personnel changes; management expects improvement as supply picture gets better, especially in back half of the year .
  • Interest expense in 2025: Swap expirations and lower spreads provide a benefit; management quantified a ~$0.12 per share benefit embedded in guidance from spread reduction (160 bps to 109 bps), with potential upside if Fed cuts materialize .

Estimates Context

Wall Street consensus (S&P Global) was unavailable due to SPGI daily request limits at the time of retrieval. As a result, we cannot present formal “vs. estimates” comparisons for Q4 2024 EPS and revenue in this recap. If needed, we can refresh consensus once access is restored.

MetricQ4 2024 ConsensusQ4 2024 Actual
EPS (Primary, $)Unavailable – SPGI limit$(1.06)
Revenue ($USD Millions)Unavailable – SPGI limit$63.8

Key Takeaways for Investors

  • Near-term headwinds persisted: Q4 revenue and NOI declined y/y and Core FFO/share slipped to $0.68; 2025 Same Store NOI midpoint (-1.5%) signals an operational transition year before anticipated supply relief .
  • Balance-sheet durability improved: Comprehensive refinancing extended maturities to ~7 years and reduced adjusted interest to 2.96%, eliminating meaningful maturities until 2028—de-risking the equity and supporting flexibility .
  • NAV-supportive actions: Published NAV midpoint $51.54 and opportunistic repurchases at substantial discounts underscore management’s focus on unlocking private/public arbitrage .
  • Operating fundamentals stabilizing: Bad debt and retention trends improved, and bulk Wi-Fi/tech initiatives add ancillary revenue to offset rent pressure in select markets .
  • Dividend maintained with healthy coverage: Q1 2025 dividend at $0.51; 2024 Core FFO coverage 1.47x (68% payout) offers income support amid transition year .
  • Value-add remains core: 2025 plan to accelerate selective rehabs with strong projected ROIs, supporting rent growth and internal earnings power into 2026–2027 .
  • Watch catalysts: Supply trend inflection, execution on value-add ramp, and potential rate cuts could improve Core FFO trajectory vs. conservative guidance .

Appendix: Additional Data Points

  • Q4 2024 FFO, Core FFO, AFFO (attributable to common): FFO ($6.5)M; Core FFO $17.7M; AFFO $20.3M .
  • Same Store portfolio metrics (FY 2024): Occupancy 94.7%; Avg effective rent $1,491; Same Store NOI $154.1M (+0.9% y/y) .
  • Debt and leverage: Total mortgage debt $1.503B (FY 2024); Net debt $1.477B; Leverage ratio (Net Debt/EV) 58% .
  • 2025 guidance reconciliations: Core FFO midpoint $71.1M; AFFO midpoint $81.7M; 1Q 2025 NOI midpoint ~$37.1M .