Brookdale Senior Living (BKD) Q3 2024 earnings summary

Executive summary

• Achieved 80 basis points sequential and 130 basis points year-over-year occupancy growth, outperforming industry averages despite continued weakness in paid third-party referral sources.

• Generated $14 million of adjusted free cash flow and $92.2 million adjusted EBITDA in Q3 2024, a 15% year-over-year increase, driven by higher occupancy and rates.

• Expanded HealthPlus program to over 130 communities, with third-party validation of superior clinical outcomes.

• Completed or entered agreements to acquire 41 leased communities for $610 million, funded by convertible notes, agency debt, and cash, with closings expected by year-end.

• Named to Newsweek's Most Loved Workplaces list.

Financial highlights

• Q3 2024 revenue grew 3.7% year-over-year to $784.2 million, with resident fees up 3.7% and facility operating expenses up 2.0%.

• Consolidated RevPAR increased 5.9% year-over-year to $4,869; same community RevPAR up 5.6%.

• Adjusted EBITDA margin and operating income margin improved year-over-year; same community adjusted operating income margin expanded by 100-140 basis points.

• Net loss for Q3 2024 was $50.7 million, unchanged from Q3 2023.

• Total liquidity at September 30, 2024, was $324.1 million, including $254.7 million in cash and $29.7 million in marketable securities.

Outlook and guidance

• Q4 2024 guidance: RevPAR growth of 5.0%-5.5% year-over-year and adjusted EBITDA of $93-$98 million.

• Expect sequential occupancy increase in Q4 and continued year-over-year growth in occupancy and adjusted EBITDA.

• Guidance includes $3 million in hurricane-related expenses and lower utilities expense as peak season ends.

• 2025 expected to deliver steady occupancy and adjusted EBITDA growth, and meaningful free cash flow improvement.

• Full-year 2024 non-development capital expenditures projected at approximately $180 million.