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WELLTOWER INC. (WELL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong operational momentum: total revenues of $2.423B and diluted EPS of $0.40, with normalized FFO per diluted share up 18.8% YoY to $1.20 . Versus consensus, EPS modestly beat while revenue was essentially in line (see Estimates Context).*
  • Seniors Housing Operating (SHO) drove the quarter: total portfolio SSNOI rose 12.9% YoY, led by SHO SSNOI growth of 21.7%, 400 bps occupancy increase YoY, 5.9% SS RevPOR growth, and ~290 bps margin expansion .
  • Guidance was raised: FY25 net income per diluted share to $1.70–$1.84 (from $1.60–$1.76) and normalized FFO to $4.90–$5.04 (from $4.79–$4.95); blended SSNOI growth lifted to 10.00%–13.25% with SHO at 16.5%–21.5% .
  • Balance sheet strength and capital deployment are catalysts: net debt/Adjusted EBITDA improved to 3.33x; liquidity ≈$8.6B; YTD acquisitions ≈$6.2B including the CAD 4.6B Amica ultra‑luxury portfolio; dual credit upgrades to A‑/A3 .
  • Dividend maintained at $0.67 for the quarter; management emphasized a prudent macro stance (higher rates/credit spreads) but a favorable multiyear setup for need‑based private‑pay seniors housing driving continued margin expansion .

What Went Well and What Went Wrong

What Went Well

  • SHO performance: tenth consecutive quarter with YoY SSNOI growth >20%; Q1 SHO SSNOI +21.7%, with 400 bps occupancy increase and 5.9% SS RevPOR growth; margins expanded ~290 bps YoY . “We reported … same-store net operating income growth has exceeded 20%” .
  • Balance sheet and ratings: net debt/Adjusted EBITDA improved to 3.33x; liquidity ≈$8.6B; S&P and Moody’s upgraded the company to A‑/A3, citing robust tailwinds and strengthened balance sheet . “Our net debt to adjusted EBITDA further declined to just 3.3x… nearly $9 billion of balance sheet liquidity” .
  • Capital deployment and pipeline: ~$2.8B gross investments in Q1; year-to-date ≈$6.2B including Amica CAD 4.6B acquisition with mid‑90s occupancy and low‑mid 40s margins; majority off‑market and with repeat counterparties .

What Went Wrong

  • Dispositions outlook reduced: FY25 expected disposition proceeds lowered to ~$166M (from ~$516M), reflecting recalibrated capital recycling relative to robust acquisition opportunities .
  • G&A and stock comp higher: FY25 G&A increased to ~$240–$250M (from $235–$245M) and stock‑based comp to ~$51M (from ~$49M), modestly offsetting FFO gains .
  • Macro caution: management sees potential for persistent higher rates and wider credit spreads to pressure asset prices, tempering near‑term visibility ahead of the summer leasing season .

Financial Results

P&L and FFO trajectory vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD)$2,055,663,000 $2,250,830,000 $2,423,087,000
Diluted EPS ($)$0.73 $0.19 $0.40
Normalized FFO per Diluted Share ($)$1.11 $1.13 $1.20

Same-Store NOI growth and SHO contribution

MetricQ3 2024Q4 2024Q1 2025
Total SSNOI YoY Growth (%)12.6% 12.8% 12.9%
SHO SSNOI YoY Growth (%)23.0% 23.9% 21.7%

Segment SSNOI ($USD thousands)

SegmentQ3 2024Q4 2024Q1 2025
Seniors Housing Operating$278,849 $297,809 $364,299
Seniors Housing Triple-net$76,591 $77,199 $71,721
Outpatient Medical$127,766 $130,186 $133,083
Long-Term/Post-Acute Care$57,922 $69,665 $81,400
Total SSNOI$541,128 $574,859 $650,503

KPIs

KPIQ3 2024Q4 2024Q1 2025
SHO Same-Store Occupancy (%)86.0% 87.4% 88.0%
SHO SS RevPOR YoY Growth (%)4.9% 5.0% 5.9%
SHO SSNOI Margin Expansion (bps YoY)+300 bps +320 bps +290 bps

Q1 2025 Results vs Estimates

MetricActualConsensusSurprise
Total Revenues ($USD)$2,423,087,000 $2,425,315,370*−$2.23M (In line)
Diluted EPS ($)$0.40 $0.3800*+$0.0200 (Beat)

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income per Diluted ShareFY 2025$1.60–$1.76 $1.70–$1.84 Raised
Normalized FFO per Diluted ShareFY 2025$4.79–$4.95 $4.90–$5.04 Raised
Blended SSNOI Growth (%)FY 20259.25%–13.00% 10.00%–13.25% Raised
SHO SSNOI Growth (%)FY 202515.0%–21.0% 16.5%–21.5% Raised
Seniors Housing Triple-net SSNOI (%)FY 20253.0%–4.0% 3.0%–4.0% Maintained
Outpatient Medical SSNOI (%)FY 20252.0%–3.0% 2.0%–3.0% Maintained
Long-Term/Post-Acute Care SSNOI (%)FY 20252.0%–3.0% 2.0%–3.0% Maintained
G&A Expense ($MM)FY 2025$235–$245 $240–$250 Raised
Stock-Based Compensation ($MM)FY 2025~$49 ~$51 Raised
Development Funding ($MM)FY 2025~$461 ~$340 Lowered
Disposition Proceeds ($MM)Next 12 Months~$516 ~$166 Lowered
Quarterly Dividend ($/share)Q4 2024 vs Q1 2025$0.67 $0.67 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
SHO performance and marginsQ3/Q4 SSNOI growth 23.0%/23.9% with RevPOR +4.9%/+5.0% and margin expansion +300/+320 bps Tenth consecutive >20% SHO SSNOI; occupancy +400 bps YoY; SS RevPOR +5.9%; margin expansion ~290 bps Sustained strength
Private fund managementAnnounced in Jan 2025 to source up to $2B Reinforced alongside operating platform progress Scaling
Technology platform (Welltower Business System)Limited explicit disclosure in prior press releasesPlatform rollout across operators; site-level tools driving efficiency and margins Expanding deployment
Macro/interest rate viewNot prominent in Q3/Q4 releasesCautious: higher rates/wider spreads could pressure asset prices; focus on positioning over predicting More cautious tone
Capital deploymentQ3: $2.4B; Q4: $2.4B; YTD agreements $6.1B YTD ~$6.2B; CAD 4.6B Amica deal; mostly off market, repeat counterparties Accelerating
Regional trendsQ3/Q4 disclosures focused on aggregate metricsSHO revenue growth broadly: U.S. +9.8%, U.K. +9.3%, Canada +8.3% Broad-based
Development/tariffsNot highlighted previouslyCanada: evaluate de novo starts as tariff/cost certainty improves; expect expansion starts next year Selective, expansion-led

Management Commentary

  • “We began the year on a positive note, delivering approximately 19% growth in FFO per share… and raised the midpoint of our full year FFO guidance by $0.10 per share to $4.97.”
  • “Tenth consecutive quarter in which year‑over‑year same‑store NOI growth has exceeded 20%… despite seasonal headwinds, sequential average occupancy growth of 60 bps was the strongest we have reported in the first quarter of any year.”
  • “Our net debt to adjusted EBITDA further declined to just 3.3x… with nearly $9 billion of balance sheet liquidity.”
  • “We appear to be entering a potentially long period of higher inflation and higher interest rate… we believe capital allocation is all about positioning, not predicting.”
  • On operating platform: “Provide site‑level employees with real‑time actionable business insights and free up valuable time to provide a real human touch… long runway of margin expansion.”

Q&A Highlights

  • Business system and margins: Management expects sustained margin expansion as revenue outpaces unit expense; platform rollout is collaborative with operators and well‑received .
  • Leverage target: End‑2025 net debt/Adj. EBITDA guided to ~3.5x, driven by putting balance sheet cash to work; no assumption of incremental debt issuance beyond planned repayments .
  • Occupancy trajectory: Long runway for higher occupancy as portfolio densifies with fewer, deeper operating partners; raised assumptions for FY25 occupancy and rate based on strong early trends .
  • Skilled nursing investment: ~$1.2B credit‑underwritten transaction with Aspire; in‑place cash flow covers rent; material price improvement captured in a broken deal with added guarantees .
  • Canada development: Nine parcels with long‑dated entitlements in Amica deal; expect expansion project starts next year; de novo timing tied to tariffs/cost certainty .

Estimates Context

  • Q1 2025 revenue essentially matched consensus: $2.423B actual vs $2.425B*, a marginal miss of $2.23M; EPS of $0.40 beat $0.3800* by ~$0.02 per share. Values retrieved from S&P Global. *
  • Current consensus target price averages $200.38*; continued SHO outperformance and raised guidance likely to drive estimate revisions toward the upper end of the new ranges.*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • SHO engine remains robust: occupancy and pricing power delivered >20% SSNOI growth and ~290 bps margin expansion, supporting above‑trend FFO growth .
  • Guidance raised across net income, normalized FFO, and blended/SHO SSNOI, indicating confidence heading into peak leasing season despite macro caution .
  • Balance sheet optionality: net debt/Adj. EBITDA 3.33x and ~$8.6B liquidity provide flexibility to fund accretive deals and absorb volatility; dual upgrades to A‑/A3 reduce funding costs .
  • Capital deployment as a catalyst: ~$6.2B YTD and the CAD 4.6B Amica portfolio (mid‑90s occupancy, low‑mid 40s margins) enhance long‑duration growth and geographic mix .
  • Dividend stability: $0.67 declared, with a low payout ratio on rising normalized FFO per share, supports total return .
  • Macro positioning: management expects higher rates/wider spreads; prioritizes operating excellence and disciplined allocation—less beta, more compounding .
  • Near‑term trading lens: Any incremental occupancy/RevPOR upside in summer leasing or faster platform rollout could catalyze estimate upgrades; conversely, macro‑related sentiment shifts may temper multiples despite improving fundamentals .
Additional Q1 2025 materials: 
- Earnings press release: Welltower Reports First Quarter 2025 Results **[766704_20250428CL74597:0]**–**[766704_20250428CL74597:16]** 
- 8‑K Item 2.02 and Supplemental Package (financial exhibits, SSNOI reconciliation, segment KPIs) **[766704_0000766704-25-000018_a1q25earningsrelease991.htm:0]**–**[766704_0000766704-25-000018_well-20250428.htm:2]** 
- Business Update press release (link to update) **[766704_20250428CL74909:0]** 
- Prior quarters’ press releases for trend analysis: Q4 2024 **[766704_20250211CL17017:0]**–**[766704_20250211CL17017:14]**; Q3 2024 **[766704_20241028CL41953:0]**–**[766704_20241028CL41953:14]**