NHI — National Health Investors, Inc.

Summary of NHI Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Normalized FFO per Share: Increased by 8.9% year-over-year to $1.22; full-year growth of 10.6% to $4.91.
• Total FAD: Grew by 13.7% year-over-year to $232.1 million.
• Net Income per Share: Decreased by 15.8% to $0.80, impacted by prior-year gains from derivative accounting and real estate sales.
• SHOP NOI: Increased by 125% year-over-year to $7.3 million; same-store NOI grew 7.6% for the year.
• Cash Rental Income: Increased by approximately 7% year-over-year, primarily due to acquisitions.
• Debt Metrics: Net debt to adjusted EBITDA ratio at 3.8 times; liquidity of approximately $875 million.

2. Strategic Updates and Business Highlights

• NHI invested a total of $392 million in 2025, significantly exceeding initial guidance of $225 million, marking the most active year since 2016.
• The company is focusing on expanding its SHOP (Senior Housing Operating Portfolio) platform, which now constitutes 12% of total annualized NOI, up from 4.5% at the end of 2024.
• NHI has a robust acquisition pipeline of over $488 million, with $111 million under signed letters of intent.
• The company is targeting secondary suburban markets for SHOP investments, where they believe they can achieve better risk-adjusted returns.

3. Forward Guidance and Outlook

• For 2026, NHI expects normalized FFO per share growth of 1.2% at the midpoint, with an adjusted core growth rate estimated at 5-6%.
• Guidance includes approximately $230 million in new investments, with 70% allocated to SHOP.
• Anticipated same-store SHOP NOI growth of 7-8% in 2026, with expectations for high single-digit to low double-digit growth in the longer term.

4. Bad News, Challenges, or Points of Concern

• Net Income Decline: A significant drop in net income per share due to non-recurring gains in the prior year.
• Interest Income Decline: Interest income fell by 19% in Q4 due to loan payoffs.
• SHOP Portfolio Challenges: The legacy Holiday properties continue to face operational challenges, impacting same-store performance.
• NHC Lease Negotiations: Ongoing negotiations regarding the NHC lease are in a "quiet period," creating uncertainty around future asset repositioning.

5. Notable Q&A Insights

• Management emphasized a cautious approach to guidance, aiming for under-promise and over-deliver strategies, particularly regarding same-store SHOP performance.
• The company is optimistic about the SHOP pipeline and expects continued momentum into 2026.
• Discussions around the Bickford deferred rent repayment highlighted a focus on negotiating value rather than solely cash payments.
• The management team expressed confidence in their ability to navigate challenges in the SHOP segment, with a focus on improving margins and operational efficiency.

Overall, NHI's Q4 2025 results reflect a strong operational performance with significant growth in FFO and strategic investments, despite facing challenges in certain legacy assets and ongoing lease negotiations. The outlook for 2026 remains cautiously optimistic, with a focus on expanding the SHOP portfolio and improving operational metrics.