American Healthcare REIT (AHR) Q2 2024 earnings summary

Executive summary

• Achieved GAAP net income of $2.9 million for Q2 2024, reversing a net loss of $11.9 million in Q2 2023, with revenue rising to $504.6 million, driven by strong demand in healthcare real estate and outperforming original estimates.

• Portfolio expanded to 318 properties across four main segments, with significant acquisitions in senior housing and integrated health campuses, and pro-rata annualized cash NOI of $332.5 million as of Q2 2024.

• SHOP and Integrated Senior Health Campuses (ISHC) segments delivered sector-leading performance, with SHOP same-store NOI up 49.1% and ISHC up 24.1% year-over-year, and occupancy at or above pre-COVID levels.

• Maintained quarterly cash distributions of $0.25 per share, fully covered by operating cash flows.

• Completed a $772.8 million public offering in February 2024, with proceeds used to repay debt and strengthen the balance sheet.

Financial highlights

• Q2 2024 normalized FFO was $0.33 per share, NAREIT FFO per diluted share was $0.32, and adjusted EBITDA was $82.5 million.

• Q2 2024 NOI was $88.7 million, up from $80.4 million in Q2 2023; cash NOI was $83.1 million, up from $72.7 million.

• Q2 2024 net income was $2.9 million, compared to a net loss of $11.9 million in Q2 2023.

• NAREIT FFO attributable to controlling interest was $41.7 million in Q2 2024, up from $27.6 million in Q2 2023; NFFO was $43.7 million, up from $24.1 million.

• Net debt as of June 30, 2024, was $1.94 billion, with a net debt/annualized adjusted EBITDA ratio of 5.9x.

Outlook and guidance

• Raised 2024 guidance for same-store NOI growth to 12%-14% and normalized FFO to $1.23-$1.27 per share.

• Segment-level 2024 same-store NOI growth guidance: ISHC 18%-20%, SHOP 45%-50%, Outpatient Medical (0.5)%–0%, Triple-Net 1%-3%.

• FY 2024 NAREIT FFO guidance: $1.17–$1.22 per diluted share.

• Management expects continued improvement in operating performance from higher occupancy and rate increases in senior health campuses and SHOP.

• Quarterly distributions of $0.25/share are expected to continue.