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    EPR
    Earnings call· Dec 2025(Q4 FY25)

    EPR PROPERTIES Q4 FY25 earnings call EPR

    Feb 26, 2026 Source

    Executive summary

    EPR Properties Q4 FY25 — Strong Earnings Growth and Expanded Investment Pipeline

    EPR Properties capped a solid FY25 with strong FFO and AFFO per share growth, driven by resilient tenant performance and strategic capital recycling. The company is poised for accelerated growth in 2026, backed by a robust investment pipeline, a strong balance sheet, and increased investment spending guidance, focusing on experiential assets. Management expressed confidence in its ability to execute on larger opportunities and maintain a conservative payout ratio.

    Highlights

    5

    • FFO as adjusted per share increased 5.1% to $5.12 for the full year 2025, reaching the high end of guidance.

    • AFFO per share increased 6.2% to $5.14 for the full year 2025.

    • Net debt to annualized adjusted EBITDAre was 4.9x at year-end, below the lower end of the targeted range.

    • Monthly dividend increased by 5.1%, with an AFFO payout ratio of approximately 70% based on the midpoint of 2026 guidance.

    • Investment spending guidance for 2026 set at $400 million to $500 million, a material increase from $288.5 million in 2025.

    Concerns

    3

    • Q1 2026 results are expected to be lower than the full year average by about $0.11 per share due to timing of percentage rents and off-season operating properties.

    • Lower projected percentage rents in 2026 of $1.1 million are related to the Northern California ski property due to delayed snowfall.

    • Lower projected percentage rents of $0.4 million are related to certain properties having base rent increases in 2026, causing the breakpoint for percentage rents to increase.

    Guidance & targets

    8
    CategoryTargetConfidence
    FFO as adjusted per share
    $5.28 to $5.48
    high materiality
    High
    AFFO per share
    similar percentage increase as FFO per share
    high materiality
    High
    Investment spending
    $400 million to $500 million
    high materiality
    High
    Disposition proceeds
    $25 million to $75 million
    medium materiality
    High
    Percentage rent and participating interest
    $18.5 million to $22.5 million
    medium materiality
    High
    G&A expense
    $56 million to $59 million
    low materiality
    High
    Q1 2026 FFO/AFFO per share
    lower than full year average by about $0.11 per share
    medium materiality
    High
    AFFO per share payout ratio
    about 70%
    low materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Experiential Portfolio
    Comprises 94% of total investments.
    Properties: 278Operators: 54Total Investments: $6.6 billionLeased or Operated: 99%
    		————
    Education Portfolio
    Customers' trailing 12-month revenue for Q3 was essentially flat with EBITDARM down due to expense increases. Coverage remains strong.
    Properties: 55Operators: 5Leased: 100%
    		————

    Operational metrics

    43
    FFO as adjusted per share
    $1.30up 5.7% YoY
    Q4 FY25
    AFFO per share
    $1.30up 6.6% YoY
    Q4 FY25
    FFO as adjusted per share
    $5.12up 5.1% YoY
    FY25

    At the high end of guidance.

    AFFO per share
    $5.14up 6.2% YoY
    FY25
    Disposition proceeds
    $34.5 million
    Q4 FY25
    Gain on sale
    $5.3 million
    Q4 FY25

    Excluded from FFO adjusted and AFFO.

    Disposition proceeds
    $168.3 million
    FY25
    Gain on sale
    $39.5 million
    FY25

    Excluded from FFO adjusted and AFFO.

    Total revenue
    $183 millionvs $177.2 million prior year
    Q4 FY25
    Rental revenue increase
    $7.9 millionYoY
    Q4 FY25

    Mostly due to investment spending, rent/interest bumps, and higher percentage rents.

    Percentage rents and participating interest
    $7.8 millionvs $4.9 million prior year
    Q4 FY25

    Increase due primarily to higher percentage rent from attraction and cultural properties, and one early childhood education tenant, plus higher participating interest from Northeast Ski property.

    G&A expense
    $14.6 millionvs $12.2 million prior year
    Q4 FY25

    Due primarily to higher payroll and benefit expense, particularly incentive compensation.

    Equity and loss from joint ventures
    $2.4 millionvs $3.4 million prior year
    Q4 FY25

    Better performance due to exit from Breaux Bridge, Louisiana JV in late 2024 and improved results at two remaining RV Park JVs.

    Fixed charge coverage
    3.4x
    Q4 FY25
    Interest coverage
    4x
    Q4 FY25
    Debt service coverage
    4x
    Q4 FY25
    Net debt to annualized adjusted EBITDAre
    4.9x
    year-end FY25

    Below the lower end of the targeted range.

    Net debt to gross assets
    39%
    year-end FY25
    AFFO payout ratio
    68%
    Q4 FY25 and FY25

    Common dividend is well covered.

    Consolidated debt
    $2.9 billion
    year-end FY25
    Blended coupon
    4.4%
    year-end FY25
    Cash on hand
    $90.6 million
    year-end FY25
    Revolver balance drawn
    $0
    year-end FY25
    Investment spending
    $147.7 million
    Q4 FY25
    Investment spending
    $288.5 million
    FY25

    Includes funding for projects closed but not yet open.

    Investment in fitness and wellness vertical
    $150 million
    since 2024
    Acquisition of golf courses
    $90.7 million
    Q4 FY25
    Acquisition of Ocean Breeze Water Park
    $23.2 million
    Q4 FY25
    Acquisition of Vital Climbing Lower East Side
    $34 million
    Q1 FY26

    Kicked off investment spending for 2026.

    Cost of capital (equity)
    low to mid-7s
    current

    Management's estimate of current cost of capital.

    Investment cap rates
    initial 8 handle
    current

    Most current opportunities are in this range.

    Investment mix
    70-30
    early FY26
    Out-of-period percentage rents and participating interest
    $3.5 million
    FY25

    Recognized in 2025 that does not repeat in 2026, impacting 2026 percentage rent guidance.

    Spending outlined on Page 19 of supplemental
    $63 million
    year-end FY25

    Related to projects that have been started at the end of the year.

    Midpoint of investment guidance
    $450 million
    FY26

    The amount the company aims to reach for investment spending in 2026.

    North American box office
    $8.7 billionup 1% YoY
    FY25
    Q4 box office
    $2.2 billionvs $2.4 billion in Q4 2024
    Q4 FY25
    Zootopia 2 gross
    $337 million
    Q4 FY25

    Strong results in Q4.

    Zootopia 2 gross to date
    $420 million
    to date
    Wicked: For Good gross
    $335 million
    Q4 FY25
    Avatar: Fire and Ash gross
    $250 million
    Q4 FY25

    Picked up an additional $147 million after the first of the year.

    Overall portfolio coverage
    2x
    December trailing 12-month
    Regal percentage rent box office assumption
    up 2%YoY
    lease year ending July 2026

    Consistent with analysts' expectations.

    Orderbook & backlog

    1
    Committed experiential development and redevelopment projects$85 millionQ4 FY25

    Expected to be funded in 2026.

    Deals & partnerships

    4
    Advance Golf PartnersAcquisition of a 5-property portfolio of championship golf courses in the Dallas Metroplex.$90.7 million

    The properties will be leased and operated by Advance Golf Partners.

    Premier ParksAcquisition of Ocean Breeze Water Park in Virginia Beach, Virginia.$23.2 million

    Sale-leaseback transaction. Ocean Breeze will be leased and operated by an affiliate of Premier Parks.

    Vital ClimbingAcquisition of Vital Climbing Lower East Side in Essex Crossing, Manhattan.$34 million

    Adds a high-quality Manhattan location to existing Vital Climbing location in Williamsburg, Brooklyn. Kicked off investment spending for 2026.

    Leonard Green PartnersTopgolf Callaway announced the completion of its sale of a 60% interest in Topgolf.$1.1 billion (valuation of Topgolf)

    EPR views this positively as Topgolf now has a focused private equity majority owner. Management has had multiple conversations with Leonard Green, who are aligned with slowing growth to 3-5 units per year and focusing on F&B/promotional opportunities.

    Capital programs

    2
    Public Debt Offeringclosed$550 million

    Closed in November 2025, consisting of new 5-year senior unsecured notes at a coupon of 4.75%.

    At-the-Market (ATM) Equity Programfinalized$400 million

    Finalized in December 2025, providing an additional tool to issue equity opportunistically, including forward sales.

    Risks & headwinds

    5
    Q1 2026 earnings seasonalityQ1 FY26

    Q1 2026 results expected to be lower than full year average by about $0.11 per share.

    Mitigation: Management has provided explicit guidance for this expected seasonality, attributing it to timing of percentage rents and off-season operating properties.

    Lower percentage rents from Northern California ski propertyFY26

    $1.1 million lower projected percentage rents in 2026.

    Mitigation: Due to delayed snowfall for the season. This is factored into 2026 percentage rent guidance.

    Increased breakpoint for percentage rentsFY26

    $0.4 million lower projected percentage rents in 2026.

    Mitigation: Related to certain properties having base rent increases in 2026, causing the breakpoint for percentage rents to increase. This is factored into 2026 percentage rent guidance.

    SAG-AFTRA negotiations and potential strike impactMay (writers) and June (actors) contract expirations

    Potential negative impact on content production and box office if negotiations are not resolved smoothly.

    Mitigation: Management believes it's early but a framework exists for AI issues, and all parties recognize the negative market impact of strikes, aiming to avoid them.

    Out-of-period percentage rents not repeatingFY26

    $3.5 million of out-of-period percentage rents and participating interest recognized in 2025 will not repeat in 2026.

    Mitigation: This is a known headwind factored into the 2026 percentage rent guidance.

    What to watch in Q1 FY26

    5

    Investment spending progress

    next quarter
    Current$119 million spoken for (as of Q1 FY26)
    TargetProgress towards $400 million - $500 million guidance midpoint of $450 million

    Why it matters

    Increased investment spending is a key driver for accelerated earnings growth in 2026, and early execution is front-half weighted.

    We are announcing investment spending guidance for funds to be deployed in 2026 in the range of $400 million to $500 million.

    Q&A highlights

    10

    Can you elaborate on the confidence level for hitting the $400 million to $500 million investment spending guidance for 2026, given it represents an acceleration?

    Management expressed high confidence, stating they wouldn't issue the guidance without it and have historically been successful in hitting or raising numbers. They noted the pipeline has been a multi-year process and they are looking at opportunities across most sectors.

    “We wouldn't put it out there if we didn't have great confidence in it. Again, if you look historically, we've been successful in not only hitting our numbers, but raising those throughout the year.”

    asked by Michael Goldsmith · answered by Gregory Silvers

    2 min read5 chapters

    Detailed Narrative

    01

    Portfolio Performance and Diversification

    The company's total investments reached approximately $7 billion, comprising 333 properties that are 99% leased or operated. The experiential portfolio, accounting for 94% of total investments or $6.6 billion, demonstrated broad stability with overall portfolio coverage remaining strong at 2x. This diversification across experiential sectors, including golf, fitness, and hot springs, helps offset periodic softness in others, reinforcing overall portfolio resilience.

    02

    Capital Recycling Strategy

    EPR continued its disciplined capital recycling program in 2025, executing targeted dispositions totaling $168.3 million, including the sale of 33 theaters over the past five years. This strategy strengthens portfolio quality, reduces concentration, and unlocks capital to deploy into higher-returning experiential investments. The company announced 2026 disposition guidance in the range of $25 million to $75 million, continuing this opportunistic approach.

    03

    Capital Markets and Balance Sheet Strength

    The company bolstered its financial flexibility during Q4 FY25 by closing a $550 million public debt offering of 5-year senior unsecured notes at a 4.75% coupon and establishing a $400 million at-the-market (ATM) equity program. The balance sheet remains strong with consolidated debt of $2.9 billion, a blended coupon of 4.4%, and net debt to annualized adjusted EBITDAre of 4.9x, which is below the targeted range.

    04

    Investment Focus and Pipeline

    EPR is bullish on the fitness and wellness space, having invested approximately $150 million in this vertical since 2024, including golf, fitness, and hot springs. The company is actively pursuing opportunities across multiple target property types, with a flexible approach to both portfolio-scale acquisitions and smaller strategic transactions. Management expressed high confidence in achieving its 2026 investment spending guidance of $400 million to $500 million, primarily through acquisitions in the first half of the year.

    05

    Box Office and Tenant Trends

    North American box office grew 1% in 2025 to $8.7 billion, with further growth anticipated in 2026 due to an increased number of wide release titles. Management noted that higher-margin F&B spending increasingly constitutes a larger percentage of exhibitor revenue, reducing reliance on pre-pandemic box office levels for comparable coverage. The company will no longer provide annual box office estimates due to business stabilization.

    AI-generated summary of the company’s earnings call. Not investment advice.