CareTrust REIT, Inc. Q4 FY2025 earnings call

• 2025 was transformational: doubled team, acquired Care REIT and SHOP deal, total investments $1.8B, market cap grew 61% to $8.2B.
• Fourth quarter investments: ~$562 million, including first SHOP deal, $84 million loans, $27 million senior housing acquisitions, and 14 skilled nursing facilities. Pipeline at ~$500 million, balanced mix of UK care homes, skilled nursing, SHOP, loans, etc.
• Liquidity strong: ~$100 million cash on hand, $1.2 billion revolver, low leverage with net debt to EBITDA of 0.7 times, etc.

For the fourth quarter, normalized FFO increased 42.7% over the prior quarter to $104.1 million, and normalized FAD increased 38.7% to $103 million. On a per-share basis, normalized FFO increased $0.07, or 17.5%, to $0.47 per share, and normalized FAD increased $0.05, or 12.2%, to $0.46 per share. For the full year, normalized FFO per share increased $0.26, or 17.3%, to $1.76 per share and normalized FAD increased $0.22, or 14.3%, to $1.76 per share. The portfolio includes triple-net leased skilled nursing facilities, net-lease senior housing assets, and a loan book, with diversification across geography, asset type, etc.

• Fiscal year 2026 normalized FFO per share guidance: $1.90 to $1.95, midpoints represent 9.4% year-over-year increase.
• Guidance does not assume new investments, dispositions, etc., beyond announced; equity forward contracts assumed to settle at year end.
• Liquidity remains strong with cash and revolver capacity available.

• Forward-looking statements subject to risks in CareTrust REIT, Inc.’s most recent 10-K filing with the SEC.
• Competition in SHOP leading to compressing cap rates, which may impact returns.

Q: Farrell Granath asked about the pipeline going forward, specifically on larger portfolios in SHOP and sustainability of SNF coverage.

A: James B. Callister and David M. Sedgwick responded that inbounds are consistent, SHOP deals are heavily marketed, and skilled nursing environment is good with operators eager to grow.

Q: Wesley Golladay asked about data analytics hires.

A: David M. Sedgwick said the data science team is prioritized on building SHOP capabilities and will impact the whole organization.

Q: Michael Albert Carroll asked about pipeline segments and competition.

A: James B. Callister said pipeline is ~half UK care homes, ~a third skilled nursing, rest SHOP, triple-net seniors, etc., and SHOP is most competitive but there are still exciting deals.

Q: Juan Sanabria asked about UK SHOP and development.

A: David M. Sedgwick and Derek J. Bunker responded that there may be opportunities to apply SHOP platform to UK, and development in US generally doesn't pencil but may be considered for right operator and location.

Q: Michael Stroyak asked about SHOP underwriting criteria.

A: James B. Callister and Derek J. Bunker said they still look for low double-digit IRR, consider deal path to get there despite cap rate compression.

Q: Austin Todd Wurschmidt asked about loan book and prepayments.

A: David M. Sedgwick and Derek J. Bunker said loan strategy has exceeded expectations, relationships are active, and loans can fuel growth if paid back