Welltower Inc. Q1 FY2026 earnings call

• Business started strong with total revenue up 38% y/y, adjusted EBITDA up 36%, FFO per share up 23%. Raised midpoint of full year FFO per share guidance by 11 cents to $6.28. • Portfolio mix shift led to 16.4% total portfolio same store net operating income growth, highest in history. Senior housing operating portfolio had 14th consecutive quarter same-store NOI growth over 20%. • U.S. had nearly 400 basis points year-over-year occupancy growth, Canada had ~300 basis points occupancy growth with 6% report growth. Revenue growth consistent across regions. • Expenses: labor comp per occupied room increased 20 basis points y/y, expense per occupied room up 40 basis points. Flow-through margin 64%, same-store NOI margin up 320 basis points to 30.9%. • Excited about role of technology, data, innovation in business to improve customer and site-level employee experience. Structural change from Welltower business system impacting revenue and expense lines. • Investment activity: completed $3.2 billion of investments during quarter, closed or under contract to close $7.3 billion of investments. Disposition activity totaled nearly $3 billion in quarter, $11 billion of dispositions since beginning of 2025. • U.S. senior housing equity fund: final LP close in fourth quarter of 2025, $2.5 billion fund capital fully committed. • Data science and machine learning platform: first external partnership with public storage and leading global private equity firm, licensing models to accelerate capital allocation decisions. • Talent density: attracting high caliber technology and data science professionals, leveraging saspocalypse talent pool.

Total revenue for the quarter increased 38% year-over-year, adjusted EBITDA was up 36%, FFO per share increased 23%. Senior housing operating portfolio now comprises 74% of same store NOI, up from 57% in first quarter of last year. First quarter U.S. had nearly 400 basis points year-over-year occupancy growth, Canada had ~300 basis points occupancy growth with 6% report growth. Quarter had nearly 10% organic revenue growth, same-store NOI growth 22% (14th consecutive quarter over 20%). Repor unit revenue exceeded unit expenses by wide margin, operating margin expanded 320 basis points. Communities with 95%+ occupancy had circa 20% NOI growth. Seniors housing portfolio occupancy at 87% with capacity for occupancy gains and pricing opportunities. Triple net properties: seniors housing triple net same-store NOI up 3.9% y/y, trailing 12-month EBITDA coverage 1.23x; long-term post-acute same-store NOI up 2.6% y/y, trailing 12-month EBITDA coverage 1.32x. Revenue contribution: senior housing operating portfolio now 74% of same store NOI, organic revenue growth nearly 10% in quarter.

• Updated full year 2026 outlook for net income attributable to common stockholders $3.24 to $3.38 per diluted share, normalized FFO $6.21 to $6.35 per diluted share ($6.28 at midpoint). • Normalized FFO guidance midpoint increased 11 cents from prior range, composed of 3-cent increase from senior housing operating NOI, 7-cent increase from investment and financing activity, 1-cent increase from better-than-expected income tax and other, offset by higher G&A expectations. • Underlying FFO guidance: estimated total portfolio year-over-year same-store NOI growth 12.25% to 16%, driven by outpatient medical 2% to 3%, long-term post-acute 2% to 3%, senior housing triple net 3% to 4%, senior housing operating 16.5% to 21.5%. Revenue growth 9.2% (5% Rev4 growth, 350 basis points occupancy growth), expense growth 5.3% (export growth just below 1.3%).

• Macroeconomic and geopolitical volatility posing risks to business operations and financial performance. • Capital markets volatility leading to deal retrading, tourist capital behavior affecting investment activity. • Operational challenges in senior housing business with persistent issues, need to maintain operational excellence to avoid negative impacts. • Competition in real estate market could impact ability to allocate capital and grow business. • Balance sheet risks related to net debt to adjusted EBITDA ratio and ability to fund investment activity as expected.

Q: Double click on 95% occupied portfolio and growing 20%, color on REF4, X4, margins, mix.

A: 95% plus occupied portfolio had significant NOI growth, capacity coming down and pricing power contributing, in-place customer rate increases could be higher than comfortable, ancillary income opportunities also play a role.

Q: Talk more about talent density and data science platform, medium term earnings contribution.

A: Built data science capability over 10+ years, first partnership announced, phones ringing with interest, talent density increasing with data scientists and software engineers from top quant funds, data science scalable across geographies and product types.

Q: Evaluate Rebel portfolio, accelerating capital allocation.

A: Didn't comment on Rebel portfolio, not a deal shop, allocate capital in niche where can add value, not compete on cost of capital, sell $12 billion of assets last 12 months, net sellers, goal is to grow value for existing investors.

Q: Example of steering clear from big transaction.

A: Walked away from Barchester deal twice pre-COVID, walk away from transactions, tell counterparties why, respectful to marketplace, direct.

Q: Benefit of partnerships with PSA and others to take WBS to next level.

A: Collaborations on data science side, not operational side, data science platform changed real estate investing latency from months to days, people coming to us with various problems.

Q: Leverage data science into other geographies.

A: Yes, having conversation with investor in Japan, model built to show application in Japan, scalable across geographies and product types.

Q: Aspirations beyond senior housing.

A: Not trying to go to other real estate asset classes, focusing balance sheet capital on senior housing, data business could be more than internal application, believe in concentration, not diversification.

Q: Monitor reduced capex levels in senior housing, supply demand.

A: CapEx improving due to scaling effort and 200 people team working with operators, supply will chase demand due to demand growth and constraint of quality operators.

Q: Best operational advice from heroes, applying to portfolio.

A: First principle approach, operations about people, filtering mechanism to understand expertise, well-run companies like Glenair have focus on people.

Q: Street rate increases vs in-place customers in 95% plus assets, ancillary income.

A: In-place customer rate increases could be higher than comfortable, street rate goes up when everyone else is full, impact report, ancillary opportunities play a role.

Q: Market share and consolidation opportunity.

A: 10% of people who can use product use it, 7% of industry, very focused on highest price point assets, team doing good job of picking where can add value, goal not asset aggregation.

Q: Investment side, loan funding approach and yield, $7.2 billion investments in April.

A: Cane transaction had participating pref, rest is refill of loans, $4.2 billion closed in second quarter mostly asset acquisitions, pipeline primarily asset acquisitions.

Q: Transaction market, competition, speed.

A: 90-95% of transactions off market, if say no, others may buy, speed: visit every asset, parallel path diligence, takes 30 days from first see to close, vs broader market 6 months process with lot of uncertainty.

Q: Bring more operators into fold, incentive for current operators.

A: Doubling down with existing operating partners, building collaborative trust, some new operators respected but goal is to do more with existing partners, cultural alignment most important.