National Health Investors, Inc. (NHI) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Normalized FFO per Share: Increased by 8.9% year-over-year to $1.22 for Q4 and 10.6% for the full year to $4.91.

Total FAD: Grew by 11.1% in Q4 and 13.7% for the year, reaching $57.9 million and $232.1 million, respectively.

Net Income per Share: Decreased by 15.8% to $0.80 in Q4, and from $3.13 to $3.02 for the full year, impacted by prior-year gains from derivative accounting and real estate sales.

NOI from SHOP Segment: Increased by 124.9% year-over-year to $7.3 million in Q4, with same-store NOI declining slightly by 0.9%.

Cash Rental Revenue: Increased by approximately 7% year-over-year, driven by acquisitions and successful property transitions.

2Strategic Updates and Business Highlights

Investment Activity: NHI invested $392 million in 2025, exceeding initial guidance of $225 million, marking the highest investment level since 2016.

SHOP Platform Growth: The company is focusing on expanding its SHOP investments, which now represent 12% of total NOI, up from 4.5% at the end of 2024. NHI has a robust pipeline of over $488 million in potential investments.

New Board Member: Lily Donahue, former CEO of Holiday Retirement, has joined the board, enhancing NHI's expertise in senior living operations.

3Forward Guidance and Outlook

2026 Guidance: NHI expects normalized FFO per share growth of 1.2% at the midpoint, with a more realistic growth estimate of 5-6% when adjusting for non-recurring items. Total FAD is projected to grow by 7.8% to $250.2 million.

SHOP NOI Expectations: The company anticipates a 7-8% increase in same-store SHOP NOI, with significant growth expected from new acquisitions and transitions.

Leverage Policy: NHI has revised its leverage policy to a range of 3.5 to 4.5 times net debt to adjusted EBITDA to maintain its investment-grade rating.

4Bad News, Challenges, or Points of Concern

Declining Net Income: The decrease in net income per share raises concerns about profitability despite growth in normalized metrics.

Bickford Rent Repayment: While collections have improved, there remains a $7.6 million outstanding balance, with uncertainty around the timing of full repayment.

Same-Store Performance: The legacy Holiday properties continue to face challenges, with same-store NOI showing only marginal growth and transitional impacts affecting performance.

5Notable Q&A Insights

SHOP Guidance: Management expressed confidence in achieving higher growth rates in the second half of 2026 as occupancy recovers and new units come online.

NHC Lease Negotiations: Ongoing discussions regarding the NHC lease are in a sensitive phase, with management cautious about providing details.

Market Dynamics: The company is focusing on secondary suburban markets, where they see favorable growth potential, although labor market conditions vary by region.

Pricing Power: NHI believes it can achieve rate increases of 5% annually while keeping expenses in check, which would support overall growth. Overall, NHI demonstrated strong operational performance and strategic growth in its SHOP segment, but faces challenges in net income and the management of transitional properties. The outlook for 2026 remains cautiously optimistic, with a focus on maintaining financial strength and capitalizing on favorable market conditions.