Diversified Healthcare Trust (DHC) Q1 2025 earnings summary

Executive summary

• First quarter 2025 revenues reached $386.9 million, up 4.3% year-over-year, with normalized FFO of $14.3 million ($0.06 per share) and adjusted EBITDA RE of $75.1 million, both exceeding analyst consensus.

• Net loss narrowed to $9.0 million for Q1 2025, a significant improvement from $86.3 million in Q1 2024, driven by gains on property sales and improved SHOP segment performance.

• SHOP segment NOI surged 49% year-over-year to $36.8 million, with occupancy up to 80.2% and average monthly rates rising 4.8%.

• Significant progress on deleveraging with $332 million in asset sales, $249 million in new financings, and $306.7 million in cash at quarter-end.

• Portfolio spans 343 properties in 34 states, valued at $6.8 billion, managed by The RMR Group.

Financial highlights

• Same property cash basis NOI was $71.5 million, up 20.7% year-over-year, with SHOP segment revenue up 6.5% and NOI margin expanding 320 basis points.

• Net loss of $9.0 million ($0.04 per share) for Q1 2025, compared to $86.3 million loss in Q1 2024.

• Normalized FFO was $14.3 million ($0.06 per share), up 306% year-over-year.

• Adjusted EBITDAre increased 17.2% year-over-year to $75.1 million.

• Gain on property sales of $110.1 million and impairment charges of $38.5 million recorded in Q1 2025.

Outlook and guidance

• 2025 SHOP NOI guidance reaffirmed at $120 million–$135 million, with potential for upward revision pending Q2 trends.

• 2025 CapEx guidance reaffirmed at $150 million–$170 million.

• Confident in addressing all 2025 and 2026 debt maturities through additional financings and asset sales.

• Ongoing focus on SHOP community upgrades and capital deployment to drive further NOI growth.

• Monitoring economic headwinds, including inflation, interest rates, and labor market conditions, with a focus on maintaining liquidity.