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UH

UNIVERSAL HEALTH REALTY INCOME TRUST (UHT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered stable revenue ($24.55M) and flat diluted EPS ($0.34) while net income margin expanded vs Q4 2024; FFO per diluted share declined modestly YoY to $0.86 as property-level income and higher interest expense weighed on results .
  • Management flagged increased borrowing costs and constrained capital market access due to higher rates; line-of-credit borrowings stood at $349.5M with $75.5M available capacity at quarter end .
  • No formal revenue/EPS guidance was provided; dividend policy remained constructive with a Q1 dividend of $0.735 and a subsequent June increase to $0.740, signaling confidence in cash flow durability .
  • Wall Street consensus estimates (S&P Global) for Q1 2025 EPS/revenue were not available; target price consensus stood at $43.00 based on 1 estimate*.

What Went Well and What Went Wrong

What Went Well

  • Net income margin improved sequentially to ~19.5% from ~18.9% in Q4 2024, driven by lower operating expenses vs Q4 and steady rent and financing lease income .
  • Liquidity remained solid with $75.5M undrawn under the $425M revolver (matures 9/30/2028; two optional six‑month extensions), supporting ongoing portfolio initiatives .
  • Shareholder cash returns remained consistent; Q1 dividend of $0.735, followed by a June quarterly increase to $0.740 reflecting incremental confidence in distributable cash .

Management quote: “FFO…were $11.9 million, or $.86 per diluted share…The decrease…was due primarily to the…decrease in our net income during the first quarter of 2025, as compared to the first quarter of 2024.”

What Went Wrong

  • YoY net income fell $0.5M and diluted EPS declined to $0.34 from $0.38, primarily due to lower aggregate property-level income and higher interest expense from increased average borrowings and effective borrowing rate under the credit agreement .
  • Revenues declined modestly YoY and sequentially, with lease revenue from UHS facilities down vs Q1 2024 ($8.33M vs $8.66M) and non-related party lease revenue slightly lower ($14.33M vs $14.49M) .
  • Interest rate environment remains a headwind; management explicitly noted substantially increased borrowing costs and reduced ability to access capital markets on favorable terms, posing risks to future results .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$25.14 $24.49 $24.64 $24.55
Net Income ($USD Millions)$5.30 $4.00 $4.66 $4.78
Diluted EPS ($)$0.38 $0.29 $0.34 $0.34
Net Income Margin (%)21.1% (5.30/25.14) 16.3% (4.00/24.49) 18.9% (4.66/24.64) 19.5% (4.78/24.55)
FFO ($USD Millions)$12.41 $11.32 $11.76 $11.93
FFO per Diluted Share ($)$0.90 $0.82 $0.85 $0.86
Dividend per Share ($)$0.725 $0.730 $0.735 $0.735

Segment revenue breakdown (REIT revenue categories):

Revenue Category ($USD Millions)Q3 2024Q4 2024Q1 2025
Lease revenue – UHS facilities$8.25 $8.26 $8.33
Lease revenue – Non-related parties$14.34 $14.47 $14.33
Other revenue – UHS facilities$0.24 $0.22 $0.23
Other revenue – Non-related parties$0.31 $0.33 $0.31
Interest income on financing leases – UHS$1.36 $1.36 $1.35

Balance sheet and KPIs:

KPIQ3 2024Q4 2024Q1 2025
Line of Credit Borrowings ($USD Millions)$347.75 $348.90 $349.50
Available Revolver Capacity ($USD Millions)$77.2 $76.1 $75.5
Net Real Estate Investments + Financing Receivable ($USD Millions)$513.09 $508.73 $503.60
Cash and Cash Equivalents ($USD Millions)$6.37 $7.10 $6.97

Vs Wall Street estimates:

MetricQ1 2025 ConsensusActualResult
Revenue ($USD Millions)N/A*$24.55 —
Diluted EPS ($)N/A*$0.34 —
Target Price ($)$43.00*N/AN/A

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPS guidanceFY/Q1 2025Not providedNot providedMaintained (no guidance)
Dividend per shareQ1 2025$0.735 (declared Mar 11)Paid Mar 31 at $0.735Maintained
Dividend per shareQ2 2025$0.735$0.740 (declared Jun 11)Raised

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript for UHT could not be identified after searching IR and news sources; UHT press releases and 8-Ks provide qualitative context .

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Interest rates/borrowing costsHigher rates increased borrowing costs; extended revolver to 2028 “Increase in interest rates has substantially increased our borrowings costs…reduced our ability to access capital markets” Persistent headwind
Tenant labor/staffing shortagesOngoing nursing/clinical staff shortages impacting tenants Continued emphasis on staffing shortages for tenants Unchanged risk
Macroeconomic/payer mixPotential macro deterioration impacting volumes/payer mix Same risks highlighted (volumes, payer mix) Unchanged
Supply chain/tariffs/materialsPotential cost increases/disruptions from trade policies Reiterated risk around imports/tariffs Unchanged
Portfolio developments (MOB, vacant land)Sierra Medical Plaza I ~68% leased; continued marketing of vacant properties Portfolio status reiterated; no material Q1 additions disclosed Steady
Capital resourcesRevolver upsized to $425M; swaps initiated $75.5M capacity; option to extend revolver; swaps considered in effective rate Stable liquidity posture

Management Commentary

  • “Net income was $4.8 million, or $.34 per diluted share…The decrease…consisted of…(i) a decrease of $401,000…from an aggregate net decrease in the income generated at various properties, and; (ii) a decrease of $122,000…from an increase in interest expense due primarily to increases in our average outstanding borrowings and average effective borrowing rate…” .
  • “FFO were $11.9 million, or $.86 per diluted share…The decrease…was due primarily to the above-mentioned decrease in our net income…” .
  • “As of March 31, 2025…we had $75.5 million of available borrowing capacity, net of $349.5 million of borrowings…option to extend…for up to two additional six-month periods.” .
  • “The increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms.” .

Q&A Highlights

  • A Q1 2025 earnings call transcript for UHT was not available via company filings, IR site, or major transcript aggregators; analysis is based on the press release and 8‑K furnished materials .

Estimates Context

  • S&P Global consensus for Q1 2025 EPS and revenue was not available for UHT; coverage appears limited for this small-cap healthcare REIT*.
  • Consensus target price stood at $43.00 based on 1 estimate*, suggesting sparse analyst coverage and limited external estimate anchors.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue and EPS were steady sequentially with expanding net margin; FFO per share declined YoY but remained resilient, underscoring durable rent and financing lease cash flows .
  • Interest expense headwinds from higher average borrowings/effective rate are the primary earnings pressure point; revolver size/maturity and swap strategy partially mitigate rate exposure .
  • Dividend policy remains a key signal: stable payout in Q1 and a subsequent increase to $0.740 supports an income-focused thesis and may act as a near-term catalyst .
  • Limited Street coverage reduces estimate-driven volatility; trading likely reacts to dividend moves, liquidity metrics, and rate trajectory rather than quarterly “beats/misses”*.
  • Portfolio-level income variability (property occupancy/bonus rents) can drive quarter-to-quarter results; monitor lease-up at assets like Sierra Medical Plaza and progress on vacant properties .
  • Macro risks—tenant labor shortages, payer mix shifts, tariffs/materials costs—remain top-of-mind and are reiterated each quarter; watch tenant operating health, especially UHS-related facilities .
  • Liquidity appears adequate with $75.5M revolver capacity at quarter end; balance sheet flexibility supports ongoing investment needs amid higher rate costs .