WELLTOWER INC. (WELL)·Q4 2024 Earnings Summary

Executive Summary

• Welltower delivered a strong Q4: total revenues $2.25B, diluted EPS $0.19, and normalized FFO/share $1.13, with total portfolio SSNOI growth of 12.8% and SHO SSNOI up 23.9% .
• Management introduced FY2025 guidance above 2024 actuals: GAAP EPS $1.60–$1.76 and normalized FFO/share $4.79–$4.95, with blended SSNOI growth 9.25%–13% and SHO SSNOI 15%–21% .
• SHO operational momentum accelerated despite seasonality: sequential occupancy +120bps, YoY +310bps; RevPOR–ExpPOR spread reached a record 460bps driving 320bps margin expansion .
• Balance sheet strengthened materially: net debt/Adjusted EBITDA improved to 3.49x and net debt to enterprise value to 12.9%; liquidity stood at ~$8.7B at year-end .

What Went Well and What Went Wrong

What Went Well

• Exceptional SHO performance: same-store NOI +23.9% YoY; occupancy +310bps YoY; sequential occupancy +120bps “defying typical seasonal trends” .
• Pricing power and margin expansion: RevPOR–ExpPOR spread peaked at 460bps; SHO SSNOI margins expanded 320bps YoY; management expects sustained improvement .
• Capital deployment and strategic densification: $2.4B Q4 investments (8.2% acquisitions yield); focus on off-market bolt-ons and regional density; $2B already closed/under contract within ~45 days of 2025 .

Quote: “We ended 2024 on a high note… This robust performance… during a period when moving activity usually moderates stands out as perhaps the quarter’s most significant highlight” – Shankh Mitra .

What Went Wrong

• UK cost pressures: higher OpEx growth from UK employment taxes and insurance, partially offset by top-line growth .
• Continued capital intensity: elevated near-term CapEx as Welltower’s internal capital team compresses lifecycle costs and accelerates unit turnarounds; run-rate expected to normalize toward multifamily-like levels over time .
• Estimates comparison unavailable: S&P Global consensus retrieval failed; we cannot assess beat/miss vs Street (S&P Global daily limit exceeded)*.

Financial Results

Segment SSNOI ($USD Thousands, Pro Rata)

KPIs

Note: Estimates were unavailable due to S&P Global request limit exceeded*.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We expect 2025 to be another year of exceptional net operating income growth… occupancy growth acceleration in ’25 over ’24… spread between RevPOR and ExpPOR reached 460 basis points… another 320bps of operating margin expansion” – Shankh Mitra (CEO) .
• “Outpatient medical… increasingly stable… backed by top credit tenants with long-term leases… occupancy… 94.3% and tenant retention 93.6%” – John Burkart (Vice Chairman & COO) .
• “Compensation per occupied room increased just 1.2% year-over-year, one of the lowest levels of growth in our reported history… benefit of operating leverage” – John Burkart .
• “In less than 45 days, we have… $2B of acquisitions… ~85% negotiated off-market” – Nikhil Chaudhri (Co-President & CIO) .
• “Normalized FFO… $1.13 per diluted share, representing 17.7% year-over-year growth… we intend to use cash on hand to fund… $1.25B unsecured debt maturing in June” – Tim McHugh (Co-President & CFO) .

Q&A Highlights

• Pricing power by occupancy bands: 90%+ occupancy driving RevPOR “well into the sixes,” while <70% roughly flat; portfolio still sub-80% occupied as of year-end, implying room to improve .
• Tech rollout timing: Multi-year phased deployment; focus on seamless site experience and delivering real-time data; duplicative legacy costs fade over time .
• CapEx run-rate: Internal capital team reducing lifecycle costs 20–50%; long-run CapEx expected to normalize toward multifamily levels; value-add spend based on unlevered IRR .
• Private funds business: Details withheld pending process completion; expands TAM, focuses Welltower balance sheet on growth assets .
• Rate trajectory: Potential for better RevPOR environment post summer 2026 as occupancy approaches frictional vacancy; continued focus on positioning vs predicting .

Estimates Context

• S&P Global consensus estimates were unavailable due to request limits; thus, we cannot assess Q4 beats/misses vs Wall Street consensus at this time (S&P Global daily limit exceeded)*.
• Management’s FY2025 guidance (normalized FFO/share $4.79–$4.95) represents a material step-up from 2024 actual $4.32, implying Street models may need upward revisions to reflect stronger SHO growth and margin expansion .

*Values and availability note: S&P Global consensus retrieval was attempted but unavailable due to daily request limit.

Key Takeaways for Investors

• SHO momentum and pricing power remain the primary earnings drivers; sequential occupancy strength amid seasonality and expanding margins support FY2025 growth targets .
• Balance sheet optionality (3.49x net debt/Adj EBITDA; 12.9% net debt/TEV) positions Welltower to fund accretive growth while addressing near-term maturities from cash on hand .
• Robust off-market pipeline and regional densification strategy increase execution confidence; early 2025 $2B under contract underscores durability of external growth .
• Tech platform and internal capital capabilities are meaningful structural catalysts for margin and cash flow—watch rollout cadence and site-level KPIs over 2025–2026 .
• UK cost inflation is a watch item; management expects top-line growth to offset higher OpEx; FX remains a modest drag per guidance .
• Near-term trading: Positive bias given strong Q4 print, raised trajectory into FY2025, and deleveraging; monitor disposition execution and SHO occupancy trajectory through spring/summer leasing .
• Medium-term thesis: Demographic tailwinds, muted new supply, platform-driven alpha and capital-light funds business can sustain above-peer growth across cycles .