American Healthcare REIT narrows 2025 NFFO guidance to $1.69–$1.72 per share while expanding RIDEA portfolio

Earnings Call Insights: American Healthcare REIT, Inc. (AHR) Q3 2025

MANAGEMENT VIEW

* Danny Prosky, President and CEO, highlighted "same-store NOI growth of 16.4% across the total portfolio, marking our seventh consecutive quarter of double-digit same-store NOI growth portfolio-wide." He emphasized the company's strategy of leveraging its platform, expanding operator relationships, and maintaining a strong acquisition pace, stating, "we have closed on over $575 million of acquisitions year-to-date, all of which is within our RIDEA segments." Prosky noted that the acquisition of new operators enhances geographic diversification and earnings accretion.
* Prosky reported, "Trilogy and SHOP same-store occupancies are currently above 90% and continue to trend in a positive direction." The company is "on track to grow normalized FFO per fully diluted share by 20% over last year, while also continuing to improve our balance sheet metrics and leverage profile."
* Gabriel Willhite, COO, described the quarter as "another strong quarter for us with outstanding results across the business," citing Trilogy's same-store NOI growth of 21.7% year-over-year, occupancy averaging 90.2% in Q3, and an average daily rate increase of roughly 7%.
* Stefan K. Oh, Chief Investment Officer, announced "we completed approximately $211 million of acquisitions and closed approximately $286 million of new investments subsequent to quarter end, bringing our year-to-date closed acquisitions to over $575 million." He highlighted the new partnership with WellQuest Living and a development pipeline with "total expected cost of roughly $177 million."
* Brian Peay, CFO, stated, "We achieved normalized funds from operations of $0.44 per fully diluted share in Q3, reflecting a 22% increase year-over-year." Peay added, "we are increasing and narrowing our full year 2025 NFFO guidance to a range of $1.69 to $1.72 from $1.64 to $1.68 per fully diluted share, implying growth in excess of 20% year-over-year at the midpoint."

OUTLOOK

* The company raised its full year 2025 normalized FFO guidance to $1.69–$1.72 per fully diluted share, up from the prior range of $1.64–$1.68, citing increased organic growth expectations and continued occupancy gains.
* Total portfolio same-store NOI growth guidance was increased to 13%–15% (from 11%–14%). Integrated Senior Health campuses guidance moved to 17%–20%, SHOP to 24%–26%, outpatient medical to 2%–2.4%, and triple-net leased properties to negative 25 basis points to positive 25 basis points. Management stated these updates reflect "continued strength at Trilogy" and "solid occupancy momentum."

FINANCIAL RESULTS

* Normalized funds from operations for the quarter were $0.44 per fully diluted share, a 22% year-over-year increase.
* Net debt to EBITDA ended the quarter at 3.5x, improving from 3.7x the previous quarter and 1.6x better than Q3 2024.
* The company sold approximately 2.9 million shares through its ATM program for $116 million in gross proceeds and settled another 3.6 million shares under a forward sale for $128 million, adding $275 million in new forward agreements for further flexibility.

Q&A

* Ronald Kamdem, Morgan Stanley, asked about occupancy upside and pricing strategy beyond the 90% mark. Prosky responded, "the maximum upside from 90% to 100% is 10%." He noted, "I expect us to continue to be able to price at a rate higher than inflation... I think if you're seeing 3% inflation, I think we should be able to price at a 5% increase or better."
* Kamdem also inquired about the competitive environment for acquisitions. Prosky commented, "I think that you've seen maybe a little bit more people buying, but I also think... you've seen more opportunities as results improve across the industry."
* Austin Wurschmidt, KeyBanc, questioned the step down in ADR growth within Trilogy. Willhite explained, "Medicare is not growing as fast as it was last year... last year's rate increase for Medicare was over 6%. This year, the national rate is going to be 3.2%." Gains in Medicare Advantage are expected to partially offset this.
* Michael Carroll, RBC, asked about leveraging Trilogy’s revenue management system. Willhite replied, "I don't think the numbers today are fully reflective of the benefit of that Trilogy platform. We're still in pilot phases... I think what you'll see is over the next year and 24 months, probably an outsized input from Trilogy's platform."
* Farrell Granath, BofA, asked about the acquisitions pipeline and MOB portfolio. Oh noted the pipeline now exceeds $450 million and Prosky said, "we're divesting MOBs... we're growing our RIDEA side of the business, both Trilogy and SHOP at a much faster clip."

SENTIMENT ANALYSIS

* Analysts expressed cautious optimism, pressing for details on occupancy upside, pricing power, and acquisition competitiveness, with recurring focus on sustainability of margins and growth drivers.
* Management maintained a confident and constructive tone in both prepared remarks and Q&A. Prosky used phrases such as "I expect the trend will continue" and "we are increasing and narrowing our full year 2025 NFFO guidance" to reinforce confidence.
* Compared to the previous quarter, management appeared more assertive about growth prospects, while analysts’ tone remained inquisitive but slightly more focused on long-term sustainability than short-term volatility.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for normalized FFO per share increased and was narrowed to a higher range than in Q2.
* Portfolio same-store NOI growth guidance was raised, with higher targets for Integrated Senior Health campuses, SHOP, and outpatient medical segments.
* Acquisition activity accelerated, with year-to-date closed acquisitions at $575 million versus $255 million in Q2, and a larger pipeline reported.
* Management’s tone shifted from cautious optimism in Q2 to greater confidence, while analysts’ focus moved towards questioning the limits of the current growth trajectory and operational leverage.

RISKS AND CONCERNS

* Management acknowledged that Medicare’s lower rate growth presents a "little bit of a growth headwind for Q4," though they expect Medicare Advantage gains to partially offset this.
* Seasonal occupancy fluctuations, especially around holidays and winter months, were cited as potential short-term risks.
* Analysts raised questions on competition for acquisitions, sustainability of margins, and the challenges of scaling best practices across diverse operator partners. Management indicated ongoing pilot phases and a measured approach to operator collaboration.

FINAL TAKEAWAY

American Healthcare REIT, Inc. delivered another quarter of strong organic and external growth, highlighted by increased guidance for both normalized FFO and same-store NOI growth. The company’s disciplined acquisition strategy, operational improvements in RIDEA segments, and proactive capital markets activity underpin management’s expectation of continued durable long-term growth. Expanding operator relationships and leveraging technology across the portfolio remain central to AHR’s plan for sustained financial performance into 2026 and beyond.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ahr/earnings/transcripts]

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