American Healthcare REIT, Inc. Q1 FY2026 earnings call

• Jeff Hansen provided an update on Dan Proskey's health, noting he's recovering and engaged virtually. AHR is advancing with momentum, and Q1 was a strong quarter with double-digit same-store NOI growth for the ninth consecutive quarter, efficient capital formation, accretive deployment, strengthened balance sheet, and raised full-year guidance. - Gabe Wilhite discussed Q1 operating portfolio performance: total portfolio same-store NOI growth 12.1%, ISHC segment same-store NOI growth 14.5% with occupancy and revenue improvements, quality mix shift, and margins surpassing 20% since COVID; Shop segment same-store NOI up 19.7% with occupancy and margin expansion, focusing on bottom line optimization through revenue and expense management. - Stephon Oh talked about the investments team: year-to-date closed $249.2 million in new acquisitions in shop segment, pipeline of over $650 million of awarded deals, in-process development pipeline ~$173.9 million with ~$52.4 million funded, operator-first approach and deliberate underwriting process. - Brian Pei reported strong financial performance: normalized funds from operation (NFFO) $0.50 per diluted share in Q1 2026, 31.6% growth YOY; raised full-year same store NOI growth guidance to 9 - 12% range, segment-level guidance provided; net debt to annualized EBITDA improved to 3.0 times; entered forward sale agreements under ATM program, increased unsecured revolving credit facility capacity to 800 million, extended maturity to April 2030; increased full year 2026 NFFO per share guidance to $2.03 to $2.09 per share.

Total portfolio same-store NOI growth was 12.1% in Q1 2026. ISHC (Trilogy) segment: same-store NOI growth 14.5%, same-store occupancy averaged 91.2%, up ~220 basis points YOY, same-store revenue growth 6.9% driven by rate and occupancy improvements, quality mix at 75.5% same-store basis (up ~60 basis points YOY, 200 basis points total portfolio basis), and same-store NOI margins eclipsed 20% for the first time since COVID. Shop segment: same-store NOI increased 19.7%, same-store occupancy averaged 88.6%, up ~255 basis points YOY, same-store NOI margin expanded ~215 basis points to 20.6%. Outpatient medical: 0% to 2% growth guidance. Triple net lease property segment: 2% to 3% growth guidance.

• Raised full-year 2026 same store NOI growth guidance to a range of 9 to 12%. At the segment level, 11 to 15% growth at Trilogy, 15% to 19% growth in shop, 0% to 2% growth in outpatient medical, and 2% to 3% growth in triple net lease property segment. - Increased full year 2026 NFFO per share guidance to a range of $2.03 to $2.09 per share, up 4 cents at the midpoint, reflecting 20% growth in NFFO per share over 2025. - Entered forward sale agreements under ATM program to sell approximately 8.1 million shares for $412.7 million in gross proceeds, with unsettled forward agreements representing approximately $527.4 million in gross proceeds assuming full physical settlement. - Increased unsecured revolving credit facility capacity from 600 million to 800 million, extended maturity to April 2030, with zero amounts outstanding on the revolver.

• Q: In regards to the same store and wide growth guidance within your segments, especially Trilogy's strong quarter and Shop's situation.

A: Trilogy had strong quarter so raised guidance, Shop still has conviction in their ability to perform with sequential uptick from Q1 2025 to Q2 2025 in NOI on same store pool. - Q: Sources of capital and use when thinking about acquisition pipeline.

A: Cheapest form of equity is retained earnings from dividend policy, also selling smaller, less strategic, lower growth assets for funds, using ATM program based on stock price, and having 800 million unsecured revolving credit facility capacity, committed to running with investment credit-rated ratios. - Q: Trilogy portfolio sequential strength and momentum into spring and summer, and longer-term/mid-term opportunity to drive margins.

A: 2025 had some one-time factors, counterbalanced by higher occupancy in 2026, Medicare growth rate decelerating a bit, but development pipeline skewing towards IL and senior housing with higher margins will help margin expansion. - Q: Trilogy's expansion plans in Wisconsin, whether growth will be via development.

A: Base case is via development, looking for regional presence with Trilogy prototypes, some opportunities like portage campus where they bought a defunct building and added skilled nursing component, evaluating 30 markets deep within current footprint, committed to 3 - 4 new campuses a year. - Q: 650 million pipeline, geographically, with existing operators, and yields underwriting.

A: Pipeline mostly in shop segment, ~80% with existing operators, ~20% new, half of deals off-market, buying below replacement cost, seeing stabilized yields in the sevens through disciplined underwriting. - Q: Shop report growth deceleration, seasonality impact, and trending for balance of year.

A: Deceleration due to changing same store universe, shifting non-stabilized assets into same store, need to consider NOI growth context with expense side, reducing referral fees by over 20% year over year. - Q: Outpatient medical portfolio, selling assets, joint ventures.

A: Outpatient medical segment is shrinking, sold over a third of assets, continuing to expose remaining assets to market, committed to diversified healthcare strategy but buying mostly shop and selling more outpatient medical. - Q: Development strategy, who drives identifying projects in Trilogy.

A: Collaborative, Trilogy team identifies opportunities and brings to HR for collaboration, development pipeline 30 markets deep within current footprint, decision on which opportunities to pursue based on land availability, bed licenses, etc. - Q: Appetite for development funding with other operators, holdup.

A: Looking at existing portfolio expansion first, using Trilogy's development capabilities, holdup is buying things below replacement cost, but demographics and demand strong. - Q: Trilogy export growth deceleration in 1Q, expense management.

A: More of a broad focus on expense management in response to DCEL and Medicare reimbursement, no one-timers, expecting expense management to help expand margin further. - Q: SNF occupancy, certificate of needs rules, supply growth.

A: Trilogy has durable competitive moat as SNF development beds added is negative, supply side not a problem, hard to develop SNF as most are Medicaid focused. - Q: Non-same store pools growth relative to same store, timing of $650 million pipeline, cap-grade compression.

A: Non-same store likely to grow faster, majority of $650 million pipeline to close by end of current quarter and remainder in third quarter, cap rates have moved 25 - 50 bps over last year, deal specific. - Q: Driver of G&A guidance increase.

A: Increase due to stock-based compensation, including grants for operator outperformance incentive and higher stock price leading to more stock-based comp.