NHI Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income per Share: $0.82, up 10.8% year-over-year.

NAREIT FFO per Share: $1.23, an increase of 7.9% compared to Q1 2025.

Normalized FFO per Share: Increased by 7% year-over-year.

Funds Available for Distribution (FAD): $62.5 million, up 11.6% from the previous year.

Interest Expense: Increased by 4.9% due to higher average interest rates.

Cash General & Administrative Expenses: Increased by 31% to $5.6 million.

Debt Metrics: Net debt to adjusted EBITDA was 4x, within the target range of 3.5x to 4.5x.

2Strategic Updates and Business Highlights

NHI is focusing on capital recycling, highlighted by the pending sale of the NHC portfolio for $560 million, aimed at enhancing liquidity and reallocating capital towards higher growth opportunities.

The company is increasing its investment in the Senior Housing Operating Portfolio (SHOP), with total investments in 2026 exceeding $212 million.

A recent acquisition of 7 properties in Colorado for $107 million is expected to yield an initial NOI of approximately 8.3%.

The SHOP portfolio now represents about 24% of total assets and over 15% of annualized NOI.

NHI is actively reshaping its portfolio to increase exposure to private pay senior housing, targeting approximately 80% of annualized NOI post-NHC sale.

3Forward Guidance and Outlook

Updated Full-Year Guidance:

GAAP net income expected at $14.37 per share.

NAREIT FFO per share projected to be $4.77, reflecting a 2.6% increase.

FAD anticipated to grow by 4.1% to $242.2 million.

Same-store SHOP NOI growth revised to a range of 1% to 3%.

The company expects to invest an additional $180 million in 2026, with an average NOI yield of 7.8%.

4Bad News, Challenges, or Points of Concern

Legacy Holiday Properties: Performance continues to lag expectations, with same-store NOI declining 2.4% year-over-year. This underperformance is attributed to a few properties experiencing census loss and delays in capital expenditure projects.

Earnings Pressure: The timing of the NHC portfolio sale and the redeployment of capital may create near-term earnings pressure.

Market Competition: Increased competition in the senior housing market may impact future investment yields, with year-one yields currently averaging around 7%.

5Notable Q&A Insights

Management confirmed that the $560 million pipeline is primarily focused on senior housing, with an emphasis on SHOP investments.

The underperformance of the Holiday assets is isolated to a small portion of the portfolio, but management is actively evaluating strategic alternatives for these properties.

There is potential for a special dividend related to the NHC sale, but this will depend on various factors that will be clearer by year-end.

The company is focusing on acquiring newer assets with a mix of care services to enhance growth profiles, contrasting with the older Holiday properties. Overall, NHI's Q1 2026 results reflect a solid start to the year with strategic initiatives aimed at enhancing long-term growth, despite some challenges in legacy assets and market competition.