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UDR, Inc. (UDR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $431.9M and diluted EPS was $0.12; FFO/share was $0.62 and FFOA/share was $0.65, with same‑store revenue +2.6% YoY and NOI +2.3% YoY .
  • Versus S&P Global consensus, revenue modestly beat ($431.9M vs $429.6M*), while diluted EPS ($0.12 vs $0.128*) and FFO/share ($0.62 vs $0.6295*) were slightly below; FFOA/share ($0.65) exceeded UDR’s prior Q3 guidance midpoint (0.63) .
  • Full‑year 2025 guidance was updated: Net income per share raised to $0.57–$0.59, FFOA/share raised to $2.53–$2.55, FFO/share maintained at $2.44–$2.46; same‑store revenue/expense midpoints lowered modestly; same‑store NOI midpoint unchanged .
  • Management highlighted a “cautious customer,” strong coastal performance, Sunbelt supply pressure, and opportunistic capital allocation (share repurchases ~$35M, Northern Virginia acquisition $147M to be funded with dispositions) as key stock reaction drivers .

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

What Went Well and What Went Wrong

What Went Well

  • FFOA/share beat internal expectations, prompting a second FY25 FFOA guidance raise: “FFOA per diluted share exceeded our expectations and drove our second FFOA per share guidance raise of 2025” .
  • Operating execution: occupancy 96.6%, YOY blended lease rate growth driven by renewals (+3.3%), and expenses moderated (same‑store expenses +3.1% YoY) with tax and insurance favorability; COO: “Same-Store revenue, expense, and NOI growth in the third quarter was stronger than consensus expectations” .
  • Capital allocation: ~$35M buybacks at ~20% discount to consensus NAV and ~7% FFOA yield; extended $350M term loan to Jan‑2029, swapped $175M at 4.0% fixed; liquidity >$1B; net debt/EBITDA 5.5x .

What Went Wrong

  • Near‑term leasing deceleration: blended lease rate growth slowed vs typical seasonality, with new lease rates -2.6% in Q3; management cited macro uncertainty and high national new supply .
  • Sunbelt underperformance amid elevated lease‑up inventory, limiting pricing power; coastal markets outperformed, but signs of caution (D.C. and Boston job growth moderation) emerged .
  • Versus consensus, diluted EPS and FFO/share were slightly below, despite FFOA strength (FFOA not a tracked consensus metric in all cases) .

Financial Results

Quarterly Performance and Trajectory

MetricQ1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$421.9 $425.4 $431.9
Diluted EPS ($)$0.23 $0.11 $0.12
FFO per diluted share ($)$0.58 $0.61 $0.62
FFOA per diluted share ($)$0.61 $0.64 $0.65
Same-Store NOI Growth YoY (%)2.8% 2.9% 2.3%
Same-Store Occupancy (%)97.2% 96.9% 96.6%

Q3 2025 Actual vs Guidance vs Consensus

MetricQ3 2025 ActualPrior Q3 Guidance Mid (from Q2)Consensus*
Total Revenues ($USD Millions)$431.9 N/A$429.6*
Diluted EPS ($)$0.12 $0.12 $0.128*
FFO per diluted share ($)$0.62 $0.62 $0.6295*
FFOA per diluted share ($)$0.65 $0.63 N/A

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

Regional Same-Store Results (Q3 2025 vs Q3 2024)

RegionRevenue GrowthExpense GrowthNOI GrowthOccupancyYOY Occupancy Change
West3.0% 4.3% 2.5% 96.7% +0.5%
Mid-Atlantic3.9% 4.0% 3.9% 96.7% +0.3%
Northeast3.9% 1.0% 5.5% 96.8% +0.4%
Southeast0.6% 2.2% -0.2% 96.2% +0.3%
Southwest-0.1% 4.5% -2.9% 96.9% +0.5%
Other1.1% 1.2% 1.1% 96.2% -0.4%
Total2.6% 3.1% 2.3% 96.6% +0.3%

KPIs (Q3 2025)

KPIValue
Effective Blended Lease Rate Growth0.8%
Effective New Lease Rate Growth-2.6%
Effective Renewal Lease Rate Growth3.3%
Annualized Turnover (Total)51.4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income per diluted shareFY 2025$0.53–$0.59 $0.57–$0.59 Raised
FFO per diluted shareFY 2025$2.42–$2.48 $2.44–$2.46 Maintained (midpoint unchanged)
FFOA per diluted shareFY 2025$2.49–$2.55 $2.53–$2.55 Raised
Same‑Store Revenue (YoY)FY 20251.75%–3.25% 2.20%–2.60% Lowered midpoint
Same‑Store Expense (YoY)FY 20252.50%–3.50% 2.40%–3.10% Lowered midpoint
Same‑Store NOI (YoY)FY 20251.50%–3.00% 2.00%–2.50% Unchanged midpoint
Net Income per diluted shareQ4 2025N/A$0.13–$0.15 New
FFO per diluted shareQ4 2025N/A$0.63–$0.65 New
FFOA per diluted shareQ4 2025N/A$0.63–$0.65 New
Dividend per shareFY 2025$1.72 $1.72 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Customer Experience & retentionCE strategy reduced turnover by ~300 bps YoY; occupancy ~97%; innovation driving rentable items Blended growth decelerated vs seasonality; retention continues to improve, with active customer touchpoints and reviews driving outcomes Retention improving; pricing growth moderating
Macro/supplyRaised FY25 FFOA and SS NOI guidance amid resilient demand; noted Sunbelt supply “Cautious customer,” high new supply nationally; occupancy-first tactics to maximize cash flow Macro caution rising; supply pressure persisting
Regional mixCoastal strength; Sunbelt lagging East/West Coasts near top of expectations; Sunbelt lagging; strong SF and Seattle; D.C./Boston caution Divergence continues (coasts > Sunbelt)
Capital allocationConsolidated Broadridge; preferred equity paybacks; liquidity ~$1.1B Buybacks ~$35M; extend term loan to 2029; swap to 4.0%; $147M Northern Virginia acquisition funded via dispositions Accretive recycling and de‑risking balance sheet
Data/technologyAnalytics platform informing capex, acquisitions; centralized leasing tools Data‑driven operating and investment decisions; platform predictive at asset level Scaling analytics; asset-level edge

Management Commentary

  • CEO on customer tone and strategy: “With that backdrop of a cautious customer... our strategy is really an occupancy first, and we’ll match the market on rate... maximize revenue, maximize cash flow” .
  • COO on Q3 operations: “Same-Store revenue, expense, and NOI growth in the third quarter was stronger than consensus expectations... occupancy remains strong in the mid-96 percent range... expense growth is more moderate” .
  • CFO on capital allocation and liquidity: “We repurchased ~930,000 shares... total consideration of $35M... extended the maturity date of our $350M senior unsecured term loan... entered into a swap... fixed rate of 4.0%... more than $1B of liquidity... net debt to EBITDA was 5.5x” .
  • COO on regional performance: “San Francisco alongside Seattle are our two top performing markets... Sunbelt markets... still lag... due to elevated levels of new supply” .

Q&A Highlights

  • 2026 earn‑in: Management expects roughly flat 2026 same‑store revenue earn‑in given Q4 blended rates of -1% to -2% and regional dispersion (East +40–70 bps; West +50–80 bps; Sunbelt -120 to -150 bps) .
  • Occupancy‑first posture: Team leaned into reducing Q4 expirations (~15% overall; less in Sunbelt) to support occupancy and total revenue amidst seasonal softness .
  • Concessions: Portfolio‑wide concessions increased to ~1.5 weeks from ~0.7–1 week; more pressure in TX/FL/D.C.; less in Baltimore/Boston/Nashville/OC/SF .
  • Northern Virginia acquisition: Underwritten year‑1 NOI yield mid‑5%; adjacency to existing UDR asset expected to drive ~500 bps margin lift over time via platform efficiencies; funded via dispositions and reverse 1031 .
  • JV strategy: LaSalle JV remains a priority with ~$500M incremental buying power; exploring balance sheet contributions and external acquisitions .
  • Other income: ~8.5% growth; Wi‑Fi (+63%), parking (+11%), package lockers and pet fees up double‑digit; offset by lower short‑term furnished rentals/common area rentals .

Estimates Context

  • Q3 2025 revenue beat consensus ($431.9M vs $429.6M*) and FFOA/share beat UDR’s guidance midpoint (0.65 vs 0.63); diluted EPS ($0.12 vs $0.128*) and FFO/share ($0.62 vs $0.6295*) were modest misses .
  • FY 2025 consensus: FFO/share ~2.529*, diluted EPS ~0.601*, revenue ~$1.702B*; UDR raised FY25 FFOA and net income guidance midpoints (FFOA 2.53–2.55; net income 0.57–0.59) .

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

Key Takeaways for Investors

  • FFOA strength drove a second FY25 guidance raise; expect investor focus on FFOA vs FFO, given slight consensus misses on EPS/FFO/share .
  • Near‑term leasing tone is cautious, with occupancy‑first tactics and modest blended rent pressure; coastal strength offsets Sunbelt supply headwinds—monitor regional mix and Q4 blend trajectory .
  • Capital recycling (Northern Virginia acquisition funded by dispositions) and $35M buybacks signal accretive capital allocation; term‑loan extension and swaps lower spread risk and fix rate on portion of debt .
  • Same‑store revenue/expense midpoints lowered but NOI midpoint maintained—implies margin discipline amid slower top‑line growth .
  • Liquidity >$1B and net debt/EBITDA 5.5x support flexibility; debt maturities limited through 2026 (6% of total post November payoff) .
  • Estimates may need minor adjustments: raised FY25 FFOA and net income guidance could lift FFOA/EPS frameworks, while same‑store revenue midpoint reduction may temper top‑line expectations .
  • Trading implications: FFOA beat and guidance raise are positives; watch narrative on Q4 blended rates, Sunbelt pricing pressure, and execution on planned dispositions/acquisition closing for sentiment .

Additional Q3 2025 Context and Press Releases

  • Board refresh: Richard B. Clark appointed to the Board, expanding to nine members .
  • Corporate Responsibility: Seventh annual Corporate Responsibility Report published; Top Workplaces recognition continued .
  • Earnings logistics: Q3 2025 call held Oct 30; replay details provided .