EPR PROPERTIES Q2 FY26 earnings call EPR

EPR Properties achieved a post-COVID high in investment activity during Q2 2026, deploying over $440 million at an average initial cash yield of approximately 8.5%. This included the acquisition of the Six Flags 7 property portfolio, Netflix House, and additional investments in golf and hot springs. These investments have further diversified the portfolio, reducing theater concentration from 36% to roughly one-third, and validating the company's role as a partner of choice for experiential real estate.

The portfolio maintained solid tenant performance with unit-level rent coverage steady at 2x. The box office is up approximately 10% year-to-date, driven by a mix of major studio releases and breakout films, with strong engagement from younger moviegoers (87% of Gen Zers and 82% of millennials saw at least one movie in the past 12 months). Fitness and wellness segments continue to be resilient, and attractions delivered strong performance, benefiting from the reversal of prior year's negative weather impact^🌐s.

The company established a new $1.6 billion credit agreement, extending maturities and reducing interest rates on its $1 billion revolving credit facility, and adding a new $600 million delayed draw term loan facility due 2032. At quarter-end, EPR had $16.2 million in cash on hand and $640 million available on its revolver. Additionally, $69.5 million in estimated net proceeds from unsettled forward sales agreements under its ATM program provide further liquidity, ensuring the current plan is fully funded.

Management increased both its 2026 investment spending guidance to $600 million-$700 million and its FFO as adjusted per share guidance to $5.41-$5.57. This upward revision reflects the velocity of investment activity, better-than-expected portfolio performance (including lower bad debt expense), and the ability to source attractive transactions. The midpoint of the updated FFO guidance represents a 7.2% increase over 2025, underscoring confidence in durable growth.

The company highlighted the enduring consumer impulse for shared, location-based experiences, citing the record-breaking FIFA World Cup as an example of people traveling and spending at high levels for moments that cannot be replicated at home. This fundamental demand for congregate entertainment reinforces the long-term relevance and stability of EPR Properties' experiential asset portfolio.

Positive trends are emerging at TopGolf following operational enhancements post-separation from Callaway. The new CEO has implemented initiatives such as headcount reduction for efficiency and better utilization of existing footprints. These steps, including dynamic pricing strategies, are leading to increased traffic and are expected to continue yielding positive results.