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WELLTOWER INC. (WELL)·Q2 2025 Earnings Summary

Executive Summary

  • Solid beat with revenue at $2.55B vs S&P Global consensus $2.50B and diluted EPS $0.45 vs $0.44; EBITDA also beat ($984M vs $942M). Strength was driven by Seniors Housing Operating (SHOP) same-store revenue (+10.1% YoY), occupancy (+420 bps YoY), and margin expansion (+330 bps). The company raised FY25 normalized FFO/share guidance to $5.06–$5.14 and NI/share to $1.86–$1.94, and increased the quarterly dividend 10.4% to $0.74 . Estimates marked with * are from S&P Global.
  • SHOP delivered its 11th straight quarter of >20% SSNOI growth; Outpatient Medical remained stable (SSNOI +2.6% YoY; 94.4% occupancy). Net debt/Adj. EBITDA improved to 2.93x and adjusted fixed charge coverage to 6.33x; liquidity stood at $9.5B .
  • Key upside drivers: occupancy recovery, pricing power in >90% occupied assets, expense discipline (unit expense +0.2% YoY; utilities down 2.1% per occupied-day), and $9.2B YTD transaction pipeline including off-market deals .
  • Watch items: management called the 2021 Holiday by Atria deal a “failure so far” (not yet in same-store pool), normal seasonality still expected in 2H, and modest impairments/other expenses persisted; however, the company expects margin expansion to continue through WBS operating initiatives and further occupancy gains .

What Went Well and What Went Wrong

What Went Well

  • SHOP outperformance: SSNOI +23.4% YoY, with 10.1% revenue growth driven by +420 bps occupancy and +4.9% RevPOR; SSNOI margin +330 bps YoY to 30.7% . “11th consecutive quarter… same-store NOI growth well in excess of 20%” .
  • Operating leverage and cost control: expense per unit growth hit a historic low (+0.2% YoY) and utilities rose only 2.8% YoY (−2.1% per occupied-day), supporting margin expansion .
  • Balance sheet and returns: net debt/Adj. EBITDA fell to 2.93x, adjusted fixed charge coverage 6.33x, liquidity $9.5B; normalized FFO/share rose to $1.28 (+21.9% YoY) and dividend was raised 10.4% .

What Went Wrong

  • Legacy portfolio misstep: CEO called the 2021 Holiday by Atria deal “our biggest capital allocation mistake… a failure so far,” though early post-transition occupancy momentum is encouraging; these assets are not yet in same-store .
  • Seasonality and cadence: management reiterated normal seasonal softness into year-end; selective sequential metrics (e.g., wellness housing occupancy) were influenced by prior-year openings, not fundamental slowdown .
  • Non-cash and one-time items: Q2 included $19.9M of asset impairment and $16.6M of other expenses; normalizing items added ~$0.05 per share to FFO in the quarter .

Financial Results

Headline metrics vs prior periods and estimates

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$2.25 $2.42 $2.55
YoY Growth+28.7% vs $1.75B PY +30.3% vs $1.86B PY +39.6% vs $1.82B PY
QoQ Growth—+7.6% vs Q4 +5.2% vs Q1
Revenue Consensus ($B)*$2.19$2.43$2.50
Beat/(Miss) ($B)*+$0.06−$0.00+$0.05
Diluted EPS ($)$0.19 $0.40 $0.45
EPS Consensus ($)*$0.403$0.380$0.435
Beat/(Miss) ($)*(0.01)+0.02+0.02
Normalized FFO/share ($)$1.13 $1.20 $1.28
Total Portfolio SSNOI YoY12.8% 12.9% 13.8%
SHOP SSNOI Margin (%)28.2% 29.6% 30.7%

Estimates marked with * are from S&P Global.

Segment mix and same-store performance

  • In-Place NOI mix (annualized): SHOP $2.09B (58.9%), SH Triple-net $0.36B (10.1%), Outpatient Medical $0.57B (16.1%), Long-Term/Post-Acute $0.53B (14.9%) .
  • Same-store NOI YoY growth Q2: SHOP +23.4%, SH Triple-net +5.1%, Outpatient Medical +2.6%, LT/Post-Acute +2.7% .
SegmentAnnualized In-Place NOI ($USD B)% of Total
Seniors Housing Operating$2.090 58.9%
Seniors Housing Triple-net$0.358 10.1%
Outpatient Medical$0.570 16.1%
Long-Term/Post-Acute Care$0.529 14.9%

KPIs

KPIQ4 2024Q1 2025Q2 2025
SHOP Occupancy (SS, avg)87.5% 88.1% 88.8%
Occupancy YoY Change (bps)+310 +400 +420
SHOP RevPOR YoY+5.0% +5.9% +4.9%
SHOP SSNOI Margin YoY Δ (bps)+320 +290 +330
Outpatient Medical Occupancy94.3% 94.5% 94.4%
Net Debt / Adj. EBITDA3.49x 3.33x 2.93x
Adj. Fixed Charge Coverage5.60x (TTM) 6.33x 6.33x
Liquidity$8.7B $8.6B $9.5B
Dividend/Share$0.67 $0.67 $0.74

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income/shareFY25$1.70–$1.84 $1.86–$1.94 Raised
Normalized FFO/shareFY25$4.90–$5.04 $5.06–$5.14 Raised
Total SSNOI GrowthFY2510.0%–13.25% 11.25%–13.25% Raised (midpoint)
SHOP SSNOI GrowthFY2516.5%–21.5% 18.5%–21.5% Raised (low end)
SH Triple-net SSNOIFY253.0%–4.0% 3.5%–4.5% Raised
Outpatient Medical SSNOIFY252.0%–3.0% 2.0%–3.0% Maintained
LT/Post-Acute SSNOIFY252.0%–3.0% 2.0%–3.0% Maintained
G&AFY25$240–$250M $243–$249M Narrowed
Stock-based compFY25~$51M excl. SPO/OPP ~$52M excl. SPO/OPP Slightly higher
Development fundingFY25$340M $212M Lower
Dispositions/LR proceedsNext 12 mos$166M at 4.8% yield $340M at 6.9% yield Higher
DividendQ2 2025$0.67 $0.74 Increased 10.4%

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
Operating momentum in SHOPSSNOI +23.9% YoY; margin +320 bps 10th straight >20% SSNOI; +400 bps occupancy; RevPOR ~6% 11th straight >20% SSNOI; +420 bps occupancy; margin +330 bps Strengthening
Technology/WBS—WBS rollout pace and margin runway WBS driving utilities and process gains; >8,000 site employees trained Scaling
Capital allocation pipelineRecord 2024 investments $6.2B YTD through April; Amica announced $9.2B YTD closed/under contract; off-market sourcing Expanding
Balance sheet/leverageNet debt/Adj. EBITDA 3.49x 3.33x; ratings upgrades 2.93x; liquidity $9.5B Improving
Macro/seasonality—Cautious macro; expect seasonality Seasonality persists in 2H; still strong demand Stable caution
Pricing power by occupancy——>90% occupancy assets show strong pricing power; <80% limited Positive mix

Management Commentary

  • “Another quarter of strong FFO per share growth of 22%... enabled us to once again raise the midpoint of our full-year FFO guidance, this time by $0.13 to $5.10 per share.” — CEO .
  • “Expense pressures remain subdued, with year-over-year growth in expense per unit reaching the lowest level in our reported history at just 0.2%... utilities actually declined 2.1% year-over-year on a per-occupied-day basis.” — CFO .
  • “Our net debt-to-adjusted EBITDA [fell] below three times and interest coverage over six times… lifted our total liquidity to $9.5 billion.” — CEO .
  • “Holiday… has turned out to be our biggest capital allocation mistake… [but] we’re encouraged by the early results,” with 560 bps occupancy improvement YTD (not yet same-store) — CEO .

Q&A Highlights

  • Growth runway post-scale: Management emphasized network effects from data/WBS and sees size as accretive to growth, not a constraint .
  • Non-same-store vs same-store dynamics: Non-same-store includes lease-ups/under-optimized assets; aggregate growth is similar to same-store over time .
  • Pricing power gradient: >90% occupied assets have meaningful pricing power; below 80% have limited pricing leverage .
  • Capital stack and leverage target: Ending 2025 around ~3.5x run-rate leverage driven by cash deployment; strong flexibility across debt, equity, asset sales, and retained cash flow .
  • Seasonality: Company still embeds typical seasonal slowdown late in the year despite higher absolute occupancy levels .

Estimates Context

  • Q2 2025 vs S&P Global consensus: Revenue $2.55B vs $2.50B*, EPS $0.45 vs $0.435*, EBITDA $984M vs $942M* — all beats. Q1 2025: revenue in line ($2.42B vs $2.43B*), EPS beat ($0.40 vs $0.38*), EBITDA beat ($913M vs $865M*) . Estimates marked with * are from S&P Global.
MetricQ4 2024Q1 2025Q2 2025
Revenue Estimate ($B)*2.1892.4252.500
Revenue Actual ($B)2.251 2.423 2.548
Primary EPS Estimate ($)*0.4030.3800.435
Primary EPS Actual ($)0.338 [GetEstimates]* / 0.19 diluted 0.40 diluted 0.45 diluted
EBITDA Estimate ($B)*0.8320.8650.942
EBITDA Actual ($B)0.797 [GetEstimates]*0.913 [GetEstimates]*0.984 [GetEstimates]*

Estimates marked with * are from S&P Global.

Where estimates may adjust: Street may lift 2H SHOP margins, SHOP revenue growth, and consolidated SSNOI midpoint assumptions given continued occupancy gains, improving pricing power at >90% occupancy, and cost discipline noted on the call .

Key Takeaways for Investors

  • SHOP engine remains robust with double-digit revenue growth, occupancy tailwinds, and structural margin expansion (WBS, scale) — a key driver of multi-quarter earnings momentum .
  • Guidance momentum is positive: FY25 NI and normalized FFO raised; SSNOI midpoint increased; dividend hiked 10.4% — supportive for both growth and income mandates .
  • Balance sheet is a differentiator: 2.93x net debt/Adj. EBITDA, 6.33x adjusted fixed charge coverage, and $9.5B liquidity enable opportunistic deployment and resilience .
  • Pipeline quality and sourcing edge: $9.2B YTD activity, largely off-market, underpins medium-term growth; closing cadence weighted to 4Q (e.g., Amica) .
  • Pricing power bifurcation: Assets >90% occupancy enjoy stronger rate power; as portfolio mix shifts, embedded revenue upside increases .
  • Watch execution on legacy transitions (e.g., Holiday by Atria) and seasonal patterns; management is proactively addressing underperformers and reiterated typical 2H seasonality .
  • Medium-term thesis: Industry demand-supply tightness + WBS-driven operating leverage + disciplined capital allocation should sustain above-peer SSNOI growth and compounding FFO/share .

Notes:

  • All financial and operational figures are sourced from the Q2 2025 8-K/press release, supplemental tables, and earnings calls as cited above.
  • Estimates marked with * are values retrieved from S&P Global.