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Welltower reported Q2 FY2026 revenue of $3.5 billion, compared with the consensus of $3.4 billion, while adjusted EPS of $1.60 compared with the consensus of $1.55.
The company reported revenue of $3.5 billion in Q2 FY2026, versus $2.5 billion in Q2 FY2025, a 39.1% increase. It reported diluted EPS of $0.61, compared with $0.45 a year earlier, a 35.6% increase. Shankh said organic revenue growth of 9.2% reflected occupancy gains and pricing at senior-housing communities.
Welltower reported a gross margin of 39.3%, down from 40.6%, and an operating margin of 15.0%, down from 18.0%. The company reported free cash flow of $1.3 billion, compared with $517.9 million in the prior-year quarter, a 142.9% increase.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $3.5 billion | $2.5 billion | 39.1% |
| Diluted EPS | $0.61 | $0.45 | 35.6% |
| Gross margin | 39.3% | 40.6% | −1.3 percentage points |
| Operating margin | 15.0% | 18.0% | −3.1 percentage points |
| Free cash flow | $1.3 billion | $517.9 million | 142.9% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.60 | $1.55 | Beat by 3.23% |
| Revenue | $3.5 billion | $3.4 billion | Beat by 3.41% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Shankh said demand for needs-based senior housing remained resilient despite macroeconomic and geopolitical uncertainty. He said same-store occupancy increased 330 basis points from a year earlier and sequential spot occupancy rose 100 basis points during the quarter. Shankh also said revenue per occupied room increased 5.2%, and he attributed pricing power to constrained capacity and demand from older customers seeking amenities and services.
On operating costs and margins, Shankh said revenue per occupied room growth continued to outpace expense growth. He said the company sees further margin potential from the fixed-cost nature of its senior-housing operations and from the Welltower Business System, while adding that some gains from systematizing work could be reinvested in resident experience. When analysts asked about labor availability, Shankh said the company focused on product, price points and service levels where it believed pricing could offset longer-term labor-cost inflation.
Nikhil said approximately 96% of the company’s transactions were off-market and described a process of identifying assets using data before pursuing owners directly. Shankh said the company had passed on tens of billions of dollars of transactions that did not meet its criteria for quality, price, future growth or contract structure. He said investment activity had picked up and that investment teams expected to remain busy through the fall and year end.
When analysts asked about recently acquired communities, Shankh said nearly $6 billion of senior-living assets purchased had 75% occupancy and would enter the same-store portfolio after five quarters. Tim Johnson said the same-store portfolio was approaching 89.5% occupancy, while the non-same-store portfolio was about 550 basis points lower. In response to a question on margins, Shankh said Welltower had not set an overall portfolio-margin target.
Guidance
Welltower’s October results release raised FY2026 GAAP EPS guidance to $3.31–$3.37 from $3.11–$3.19 and normalized FFO guidance to $6.47–$6.53 from $6.36–$6.44. The release raised average blended same-store NOI growth guidance to 15.0%–16.3% from 13.8%–16.0%. It also increased expected general and administrative expenses to $267.0 million–$272.0 million from $265.0 million–$270.0 million.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating expenses, General and Administrative | FY2026 | $267.0 million–$272.0 million | $265.0 million–$270.0 million | Raised |
| Operating income growth, Same Store | FY2026 | 15.0%–16.3% | — | New |
| EPS, non-GAAP | FY2026 | $6.47–$6.53 | — | New |
| EPS, GAAP | FY2026 | $3.31–$3.37 | $3.11–$3.19 | Raised |
| Operating income growth, Senior Housing Triple Net Same Store | FY2026 | 3.50%–4.50% | — | New |
| Operating expenses growth, Senior Housing Operating | FY2026 | 5.00% | — | New |
| Revenue growth, Senior Housing Operating | FY2026 | 9.30% | — | New |
| Operating income growth, Total Portfolio Same Store | FY2026 | 13.8%–16.0% | — | New |
| EPS, Common Stockholders | FY2026 | $3.11–$3.19 | — | New |
| EPS, Normalized Ffo | FY2026 | $6.36–$6.44 | $6.21–$6.35 | Raised |
| Operating expenses, Stock Based Compensation | FY2026 | $60.0 million | — | New |
| Operating income growth, Same Store Noi | FY2026 | 13.8%–16.0% | — | New |
| EPS, Non Gaap Normalized Ffo | FY2026 | $6.36–$6.44 | — | New |
| Debt, Net Debt To Adjusted Ebitda | FY2026 | 3.0× | — | — |
| EPS, Net Income Attributable To Common Stockholders | FY2026 | $3.24–$3.38 | — | New |