Sabra Health Care REIT (SBRA 0.66%), an owner and investor in skilled nursing and senior housing properties, reported its results on August 4, 2025. The most notable news was a substantial outperformance versus market expectations on both non-GAAP earnings per share and revenue. Sabra posted normalized FFO (funds from operations, a common real estate investment trust performance metric) per diluted share of $0.37, far exceeding the analyst forecast of $0.17 (non-GAAP). Revenue (GAAP) totaled $189.15 million, also beating GAAP estimates of $180.97 million. Compared to Q2 2024, revenue (GAAP) rose 7.4%. Overall, Sabra delivered strong operational momentum in its growing senior housing portfolio and made visible balance sheet progress.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Normalized FFO per diluted common share, Non-GAAP) | $0.37 | $0.17 | $0.35 | 5.7% |
| Revenue (GAAP) | $189.2 million | N/A | $176.1 million | 7.4% |
| FFO per diluted common share (Non-GAAP) | $0.44 | $0.35 | 25.7% | |
| AFFO per diluted common share (Non-GAAP) | $0.37 | $0.36 | 2.8% | |
| Net Income per diluted common share (GAAP) | $0.27 | $0.10 | 170.0% |
Source: Analyst estimates for the quarter provided by FactSet.
Sabra Health Care REIT: What It Does and Where It’s Focused
Sabra Health Care REIT invests in and owns a diverse portfolio of healthcare properties, with a primary concentration in skilled nursing facilities and senior housing. It generates revenue mainly from leasing these properties to healthcare operators and from managing certain senior housing communities itself.
Recently, Sabra has been shifting its focus toward managed senior housing. It has set out to increase managed senior housing’s share of the portfolio from 20% to 30%, as stated by management in the Q2 2025 earnings release. The company’s main success factors are the ability to source attractive investment opportunities, cultivate and manage operator relationships, and keep its balance sheet strong enough to fund deals and weather regulatory or market uncertainty.
Key Developments in the Quarter: Operations, Investments, and Financials
Managed senior housing drove Sabra’s outperformance this period. The portfolio posted a notable 17.1% year-over-year increase in same-store managed senior housing Cash NOI in Q2 2025. Sabra closed $122.3 million in new senior housing investments year to date as of Q2 2025, with approximately $220 million in additional awarded deals that may be funded in the future, all focused on senior housing properties. Management reports that operational disruption from shifting 21 senior housing properties to new operators has been minimal, suggesting smooth execution on the transition.
Sabra’s triple-net portfolio, which includes skilled nursing facilities, leased senior housing, behavioral health, and specialty hospitals, showed stable results. Key solvency metrics, such as EBITDARM coverage ratios (a non-GAAP real estate industry measure of operators' ability to pay rent and other expenses), improved or remained strong across all segments. Specifically, skilled nursing reached 2.27x EBITDARM coverage, up from 2.19x in Q1 2025.
Investment activity picked up in the senior housing space. With $122.3 million in deals closed and $220 million more pending as of Q2 2025, expected cash yields on these new investments are in the high-7% range. Sabra had approximately $1.2 billion in liquidity as of June 30, 2025—a combination of unrestricted cash, credit revolver, and proceeds from forward equity sales.
On the financial management front, Sabra refinanced $500.0 million in unsecured notes, replacing them with a five-year unsecured term loan at a lower fixed rate in July 2025. This move is expected to reduce future interest expenses. Net debt to adjusted EBITDA (non-GAAP), a commonly followed leverage measure, improved to 5.00x as of June 30, 2025, from 5.19x as of March 31, 2025. The quarterly dividend was maintained at $0.30 per share.
Understanding Key Metrics and Product Lines
Sabra’s managed senior housing platform consists of properties operated by third-party property managers under property management agreements, earning income from resident fees and services. The triple-net portfolio includes properties leased on long-term agreements, with tenants responsible for property expenses, offering predictable rental income. EBITDARM coverage—earnings before interest, taxes, depreciation, amortization, rent, and management fees—signals whether tenants can meet rent obligations.
Product and property types span skilled nursing centers, assisted living (which provides housing plus daily living help), memory care facilities, behavioral health facilities, and specialty hospitals. Ongoing increases in senior housing occupancy and resident fees have leveraged both revenue and net operating income. Meanwhile, the company continues reshaping its exposure through property acquisitions and operator transitions, seeking a balanced portfolio that can better withstand changes in reimbursement or market demand.
Sabra’s Outlook and What to Monitor Going Forward
Management provided updated per-share guidance for FY2025: net income between $0.77 and $0.79, FFO between $1.52 and $1.54, normalized FFO between $1.45 and $1.47, AFFO between $1.47 and $1.49, and normalized AFFO between $1.49 and $1.51. These figures reflect expectations for low single-digit growth in triple-net cash net operating income and low- to mid-teens growth in managed senior housing cash NOI for 2025. The 2025 guidance assumes $50 million in general and administrative expenses, including $11 million in stock-based compensation, and $102 million in cash interest expense. Importantly, management's 2025 outlook does not factor in pipeline acquisitions until they close, so actual results could be higher if deals are completed as expected.
The company’s forward focus includes executing and integrating the more than $350 million in senior housing investments, tracking EBITDARM coverage in skilled nursing as new Medicare and Medicaid rates take effect in 2025, and monitoring rental revenue trends in the triple-net portfolio. Also noteworthy is the impact of future equity issuances on shareholder dilution, as well as Sabra’s continued efforts to limit risks from regulatory policy shifts. The quarterly dividend was maintained at $0.30 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
