Ventas, Inc. (VTR) Q4 2024 Earnings Summary

Executive Summary

• Ventas delivered a strong Q4 with revenue of $1.29B and diluted EPS of $0.13; Normalized FFO per share was $0.81 and Nareit FFO per share was $0.85, both up year over year .
• SHOP continued to outperform: Q4 same-store cash NOI grew 16.9% in SHOP, 8.4% for the total company; U.S. SHOP occupancy grew 370 bps in Q4 per the call, and full-year SHOP occupancy rose 300 bps .
• 2025 guidance introduces 7% YoY Normalized FFO per share growth at the midpoint ($3.41 vs. $3.19 FY24), supported by SHOP NOI growth and accretive senior housing investments; dividend was raised 7% to $0.48 per share .
• Balance sheet improved: net debt-to-Further Adjusted EBITDA fell to 6.0x by Q4; liquidity was $3.8B at year-end, supporting $1B of planned 2025 investments primarily equity-funded .
• Potential stock catalysts: dividend hike, multi-year senior housing demand tailwinds, and planned Brookdale master lease-to-SHOP conversion beginning late 2025 (more a 2026 earnings story) .

What Went Well and What Went Wrong

What Went Well

• Third consecutive year of double-digit SHOP same-store cash NOI growth; Q4 outperformed typical seasonality with 310 bps YoY occupancy gains and 16.9% Q4 SHOP same-store cash NOI growth .
• Management raised the quarterly dividend by 7% to $0.48 and guided to 7% Normalized FFO per share growth in 2025, citing strong SHOP demand, muted supply, and accretive investments: “We are optimistic about 2025 and beyond... We are in it to win it” .
• External growth execution: ~$2B of 2024 senior housing investments (78% year-one NOI yields, low-to-mid-teens unlevered IRRs), with line-of-sight to ~$1B in 2025; pipeline broader vs. last year .

What Went Wrong

• OM&R (medical office & research) saw near-term occupancy softness; growth in 2025 is expected to be driven by leasing already underway (34% of annual plan completed by mid-February), but Q4 reflected declines .
• Higher net interest expense and FX headwinds were cited as offsets to 2025 FFO growth; midpoint assumes ~$32M YoY net interest expense increase (interest expense ~$618M, interest & other income ~$11M) .
• Consensus estimates could not be retrieved (S&P Global data unavailable), limiting external beat/miss context; we anchor on company-reported results and guidance [GetEstimates error].

Financial Results

Quarterly Results (vs prior quarters)

Q4 2024 Same-Store Cash NOI by Segment

KPIs and Balance Sheet

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Ventas delivered strong financial performance and growth in the fourth quarter and full year 2024… third consecutive year of double-digit growth in our senior housing operating portfolio (SHOP)… over two billion dollars of accretive investments” — Debra A. Cafaro, CEO .
• “Our 2025 guidance anticipates normalized FFO per share growth of 7% at the midpoint led by SHOP… top-tier 2025 FFO per share growth… and a 7% increase in our quarterly dividend” — Debra A. Cafaro .
• “Same-store SHOP is expected to grow NOI 11% to 16% [in 2025]… driven by ~8% revenue growth, ~270 bps occupancy growth, and RevPOR ~4.5%; operating expense growth ~5%” — J. Justin Hutchens .
• “These acquisitions are accretive from the get-go, all equity funded… 78% yields… part of the 7% YoY growth in normalized FFO per share” — Robert Probst .

Q&A Highlights

• OM&R trajectory: Despite Q4 occupancy declines, leasing activity is strong; 15% more leasing in 2024 vs prior year, with 34% of 2025 plan done by mid-February, supporting expected occupancy and NOI gains .
• Acquisition returns: Focus on high-performing assets at ~90% occupancy with additional upside; targeted 7–8% initial yields and low-to-mid-teens unlevered IRRs, growth-driven .
• Brookdale conversion: Vast majority of 2025 remains triple-net; transitions begin late 2025 with CapEx impact; primary earnings benefit is a 2026 story .
• CapEx outlook: FAD CapEx guided up to ~$285M (vs. ~$250M FY24), driven by more units from investments/conversions and inflation .
• Labor & expenses: SHOP expense forecast assumes ~5% growth; hiring/retention trends are favorable, supporting NOI flow-through .
• R&I portfolio risk: NIH grant changes presently halted; NIH comprises a minority of large university research budgets; long-term prospects remain positive .

Estimates Context

• S&P Global consensus EPS/revenue estimates for Q4 2024 were unavailable due to data access limits at the time of this analysis. We therefore benchmarked performance against company-reported results and 2025 guidance. Values retrieved from S&P Global were not available for citation.

Key Takeaways for Investors

• SHOP remains the core growth engine: occupancy-led revenue and NOI growth, with Q4 outperformance versus typical seasonality; management targets double-digit 2025 SHOP same-store NOI growth, a positive near- to medium-term driver .
• Accretive external growth continues: 7–8% initial yields and low-to-mid-teens IRRs on senior housing acquisitions provide embedded FFO accretion; ~$1B pipeline likely front-half weighted in 2025 .
• Balance sheet improvement offers downside protection: net debt/Further Adjusted EBITDA down to 6.0x; ample liquidity supports investments and capital recycling as rates remain elevated .
• Dividend increase underscores confidence: the 7% raise to $0.48 per quarter signals durable cash flow growth and management’s constructive outlook; potential support for income-oriented demand .
• OM&R is a watch item: near-term occupancy softness mitigated by strong leasing execution; expect improving contribution in 2025 with leasing already ahead of plan .
• Brookdale transition optionality: late-2025 SHOP conversion should set up 2026 earnings impact; execution on the Ventas OI playbook and operator selection is key to realizing targeted NOI doubling .
• Trading lens: near term, focus on dividend and SHOP momentum through key selling season; medium term, monitor 2025 investment closes, OM&R leasing, and Brookdale transition milestones to gauge trajectory to the guided 7% FFO/share growth .