Ventas, Inc. Q2 FY2025 earnings call

• 1-2-3 Strategy: Focus on driving organic growth in SHOP using platform advantages, making value-creating senior housing investments, and maximizing performance in the balance of the portfolio.
• SHOP Performance: U.S. SHOP communities saw strong same-store cash NOI and revenue growth, with occupancy improving and move-ins robust. Full-year normalized FFO guidance midpoint raised to $3.44 per share, and company-wide same-store cash NOI expected to grow 7% midpoint.
• Senior Housing Investments: Full-year 2025 senior housing investment volume guidance raised to $2 billion, with $1.1 billion closed year-to-date in senior housing investments.
• Balance Sheet: Net debt-to-EBITDA improved to 5.6x, liquidity at $4.7 billion as of June 30, with $500 million of senior notes raised in May.

Senior Housing Operating Portfolio (SHOP): In Q2, U.S. SHOP communities achieved 18% same-store cash NOI growth (adjusting for prior year tax refund), with revenue growing over 8%. Occupancy improved, with a 60 basis points sequential increase in average occupancy in June and strong move-ins. Outpatient Medical and Research Portfolio: Outpatient medical had 2.2% same-store cash NOI growth, occupancy at 90.1%, and 1 million sq ft of new/renewal leasing deals. The research portfolio, ~8% of NOI, was impacted by lower rents on certain innovation flex space tenants.

• Raised full-year normalized FFO guidance midpoint to $3.44 per share, representing 8% year-over-year growth at midpoint.
• Improved company-wide same-store year-over-year cash NOI growth expectations to 7% midpoint.
• Raised senior housing investment volume guidance to $2 billion.

• Competitive senior housing investment market may affect hit rate and pricing.
• Macro challenges impacting the research portfolio's pre-revenue tenancy.
• Uncertainty in timing and slope of SHOP key selling season affecting full-year occupancy.

Q: Michael Carroll asks about SHOP occupancy gains.

A: Justin Hutchens discusses strong move-in activity, OI platform, and momentum in investment activity.

Q: Jeff Spector asks about move-ins and turnover.

A: Justin Hutchens talks about OI platform, data analytics, and partnerships with operators.

Q: Jeff Spector asks about Big Beautiful Bill's impact.

A: Debra A. Cafaro discusses delayed implementation and outpatient medical's potential benefit.

Q: Jim Kammert asks about outpatient medical occupancy historical high.

A: Peter J. Bulgarelli mentions historical high around 93%-94% and 3% annual escalators.

Q: John Kilichowski asks about SHOP margin expansion.

A: Justin Hutchens explains operating leverage and RevPOR growth dynamics.

Q: Wes Golladay asks about RevPOR growth acceleration.

A: Justin Hutchens talks about price volume optimization and data analytics.

Q: Omotayo Okusanya asks about acquisition outlook not increasing high end of guidance.

A: Debra A. Cafaro and Robert F. Probst discuss first half vs second half FFO and modeling factors.

Q: Ronald Kamdem asks about cap rates and IRRs.

A: Justin Hutchens discusses unlevered IRRs and acquisition dynamics.

Q: Mike Mueller asks about IL vs AL RevPOR.

A: Justin Hutchens compares independent living and assisted living dynamics