Brookdale Senior Living (BKD) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA grew 20% year-over-year in Q2 2024, with Adjusted Free Cash Flow up 26% and continued operational improvements, including leadership retention and lower associate turnover.

• Q2 2024 revenue increased 4.2% year-over-year to $777.5 million, driven by higher resident fees and improved occupancy, but net loss widened to $37.7 million due to the absence of prior year asset sale gains and higher expenses.

• Brookdale HealthPlus program expanded, targeting 130 communities by year-end, enhancing resident outcomes and satisfaction.

• Brookdale serves approximately 59,000 residents across 649 communities in 41 states, with 94% of resident fees from private pay sources.

Financial highlights

• Q2 2024 resident fee revenue increased 4.2% year-over-year to $739.7 million; consolidated RevPAR grew 6.4% and same-community RevPAR rose 5.9%.

• Same-community adjusted operating income rose 13%, with margin expanding 160 basis points to 27.4%.

• Adjusted EBITDA for Q2 2024 was $97.8 million, up 20% year-over-year; annualized first half Adjusted EBITDA is within 3% of 2019 levels.

• Adjusted Free Cash Flow improved 26% to -$6 million; liquidity at $346 million as of June 30, 2024.

• Net loss for Q2 2024 was $37.7 million, compared to $4.5 million in Q2 2023, mainly due to the absence of a $36.3 million gain on sale of communities in the prior year.

Outlook and guidance

• Q3 2024 guidance: RevPAR growth of 6.25%-6.75% year-over-year; Adjusted EBITDA expected between $90 million and $95 million.

• Expects approximately $180 million in net non-development CapEx for 2024, with lower cash usage in the second half.

• Guidance reflects favorable occupancy and pricing trends, improved retention, and continued expense management, offset by higher seasonal expenses and incremental marketing spend.

• Management expects existing liquidity and cash flows to be sufficient to fund operations and obligations for at least the next 12 months.