SBRA — Sabra Health Care REIT, Inc.

Summary of Sabra Health Care REIT, Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Normalized FFO per share: $0.38 (up 9% YoY).
• Normalized AFFO per share: $0.39 (up 5% YoY).
• Total Normalized FFO: $96.1 million; Total Normalized AFFO: $100.6 million.
• Cash NOI from managed senior housing portfolio: $39 million (up from $35.6 million last quarter).
• Net debt to adjusted EBITDA ratio: 5.04x, within target leverage.
• Quarterly cash dividend declared: $0.30 per share, representing a 77% payout of normalized AFFO.

2. Strategic Updates and Business Highlights:

• Investment Activity: Closed or awarded $400 million in investments year-to-date, with an additional $206 million in investments planned, targeting an estimated initial cash yield of 8%.
• Portfolio Growth: Year-over-year same-store SHOP NOI growth of 14.4%, with total managed senior housing revenue growth of 7.9%.
• Occupancy Rates: Overall occupancy in the same-store portfolio increased 280 basis points to 88.4% YoY; Canadian portfolio occupancy reached 93.4%.
• AI Initiatives: Ongoing efforts to implement AI and automation to enhance operational efficiency and decision-making processes.

3. Forward Guidance and Outlook:

• Earnings Guidance: Reaffirmed for 2026, with plans to revisit in Q2 based on ongoing trends. Management remains conservative in guidance due to typical Q1 caution.
• SHOP Growth Expectations: Anticipated low- to mid-teens same-store NOI growth for the SHOP portfolio, aligning with current performance.

4. Bad News, Challenges, or Points of Concern:

• Slight Occupancy Decline: SHOP occupancy dipped slightly, attributed mainly to Canadian properties, though overall performance remains strong.
• Competitive Market Pressures: Increased competition in the skilled nursing space, with private buyers often outbidding REITs, impacting acquisition strategies.
• Regulatory Environment: While stable, there are ongoing uncertainties regarding Medicare and Medicaid reimbursements, which could affect future revenues.

5. Notable Q&A Insights:

• Conservative Guidance Approach: Management emphasized their typical conservative stance in Q1, indicating a willingness to adjust guidance based on clearer trends in the upcoming quarters.
• Investment Pipeline: The majority of the current investment opportunities are in SHOP, with a significant focus on off-market deals, particularly in skilled nursing.
• Labor Market Stability: Unlike some peers, Sabra has not experienced significant labor challenges in their behavioral health segment.
• Value-Based Care Initiatives: Management is optimistic about the potential of value-based care programs to enhance referral rates and operational efficiency, although impacts are not yet fully realized.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and notable insights from the Q1 2026 earnings call for Sabra Health Care REIT, Inc.