Welltower (WELL) Q4 FY25 earnings call: guidance and Q&A

How should we quantitatively think about the compounding aspect of growth, especially with the portfolio at 90% same-store occupancy, and the impact of WBS?

Management stated their North Star is per share earnings and cash flow growth, driven by mix shift and free cash flow generation, not solely same-store NOI. They highlighted the significant mix shift to SHOP (from 35% to ~70% of portfolio) and the potential for long-term margin expansion, but declined to provide specific future numbers.

“The goal is to create value on a per share basis for existing investors and not do transactions, right?”

asked by Vikram Malhotra · answered by Shankh Mitra

Given the progress with WBS and data science, what challenges remain in senior housing, and is the technology platform eventually monetizable?

Management views their data science platform as mature and already monetized through the fund business's economics. However, the operational technology side is considered 'mediocre minus' with a long journey ahead. They explicitly stated they would never sell their operating software to third parties to avoid creating competitors.

“Our operating capabilities of our core investment cycle will always remain within the bounds of this company. ... we will never see us sell our operating software to someone else so that they can compete with us. We'll never do that.”

asked by William John Kilichowski · answered by Shankh Mitra

Does the successful Integra disposition frame the entire Skilled Nursing Portfolio (SNP) as a future source of funds for acquisitions?

Management clarified that their skilled nursing strategy is to acquire assets with operational turnaround potential, stabilize them with strong regional operators, and then exit. They view these as structured credit investments, relatively short-dated, and will redeploy proceeds based on opportunity, not a fixed allocation.

“our skilled nursing strategy is to acquire assets that are -- that have an operational turnaround story behind them, bring in really sharp regional operators and then turn the performance around harvest value.”

asked by Farrell Granath · answered by Nikhil Chaudhri

How long can Welltower continue to acquire unstabilized SHOP assets (75%-85% occupied), and does this pose a problem given the new fund vehicle buys more stabilized assets?

Management stated the duration of acquisition opportunities is market-dependent, emphasizing value creation over transaction volume. They noted that the company's mix shift means they don't *need* to buy more assets for per-share growth. They also highlighted that value creation in senior housing isn't just about occupancy, but also operational improvements via WBS, even in highly occupied buildings.

“The mix shift of this company is at a place and continue at a place that we'll never have to buy another asset.”

asked by Michael Goldsmith · answered by Shankh Mitra

How does the SHOP occupancy and RevPOR growth guidance for 2026 compare to last year, especially with higher current occupancy and the balance between the two?

Management explained that the 2026 RevPOR guidance is impacted by a 'pool change' in Q4, where many 90-plus assets entered the portfolio during a holiday period, still on an occupancy journey rather than a substantial rate journey. They reiterated that the ultimate goal is per-share growth, and the initial FFO guidance reflects strong underlying cash flow growth.

“Just that change, pool sale alone was a 30 basis point drag on fourth quarter RevPOR. That obviously is carrying through 2026 guidance numbers.”

asked by Austin Wurschmidt · answered by Shankh Mitra

How should we think about CapEx for senior housing, both recurring and other, given its significance, and what is the capital largely going to?

Management explained that current acquisitions are of younger, high-quality assets, but some require capital to meet appropriate standards due to previous owners holding back. They are reinventing how CapEx is viewed, focusing on life cycle costs to provide a great customer experience and lower run rates over time. They also noted anomalies from the Holiday and HC-One portfolio investments impacting historic and forward CapEx.

“what is the life cycle cost, how do we provide a great customer experience and manage things throughout the entire life cycle.”

asked by Juan Sanabria · answered by John Burkart

Does Welltower detect a preference for larger residential units among today's independent living and AL customers, and how is the portfolio positioned for this shifting taste?

Management confirmed the importance of product optimization (unit size, services) alongside location, price point, and operating overlay. They noted that many developers built too many studios, leading to functionally obsolete buildings. Welltower focuses on an optimization of all four factors, not just unit size, to address evolving customer preferences.

“I have seen many, many buildings that I consider functionally obsolete that has 60 units a studio. Recently, I saw one that has 6 units of studio out of 98, right?”

asked by James Kammert · answered by Shankh Mitra