Sonida Revenue Jumps 33 Percent in Q2

Sonida Senior Living (NYSE:SNDA), a senior housing owner and operator, reported second quarter results on August 11, 2025. The highlight was a sharply narrower GAAP net loss per share of $(0.16), beating the estimated $(0.78) loss, thanks in part to an $8.8 million nonrecurring employee retention credit. As the company expanded its portfolio and saw improved occupancy, the period showed robust topline growth and good progress on acquisitions and integration. However, same-store community net operating income margin (non-GAAP) softened to 28.0% from 29.0% in Q2 2024 as expenses, especially labor, grew faster than revenue, raising questions about margin improvement as the company continues to scale up.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Strategy

Sonida operates senior living communities across the United States, providing housing and care options that cover independent living, assisted living, and memory care for older adults. Its flexible care model allows residents to stay within the same community as their needs change, a concept known in the industry as a “continuum of care.” This approach aims to enhance resident satisfaction and encourages longer stays, which in turn supports higher occupancy and stable revenue.

Recently, Sonida has focused on growing its portfolio through acquisitions, adding 18 new communities over 2024 and 2025.—and optimizing the operations and services across its locations. Key success factors for Sonida include maintaining high occupancy, offering a range of care services, managing costs, and ensuring compliance with regulations that affect senior care. Solid execution on these priorities can influence both near- and long-term performance.

Quarterly Developments: Financial, Operational, and Market Moves

The period delivered standout GAAP revenue growth as Sonida expanded its resident base and acquired new communities. The company reported resident revenue growth of 29.7% compared to Q2 2024 (GAAP), most of which came from recent acquisitions plus improvements in occupancy and rental rates at existing sites. Adjusted EBITDA, a non-GAAP measure, improved by 23.7% to $14.1 million from the prior year. While these gains reflect a business expanding both in size and operating scale, much of the bottom-line boost came from a one-off $8.8 million employee retention credit, a nonrecurring benefit linked to COVID-19 relief programs. Without this, losses would have been deeper.

Looking at core operations, the same-store portfolio—that is, properties held for both periods under comparison—demonstrated healthy but modest gains. Same-store community net operating income (NOI), a non-GAAP measure of profit from ongoing property operations before interest, taxes, depreciation, and amortization, was up 1.8% year-over-year. The corresponding margin, calculated as operating income divided by revenue for these communities, slipped by 1.0 percentage point to 28.0% (non-GAAP). Labor costs alone increased by $2.2 million, as more staff were added to support growth and higher wage rates took effect. General and administrative expenses (GAAP) also grew, and interest expense ticked up to support expanded borrowing for acquisitions.

On the operating side, occupancy trends were positive. Weighted average occupancy for the same-store communities rose to 86.5%, up 0.4 percentage points from the prior year, and further improved to 88.2% spot occupancy for the same-store communities in July 2025. Rental pricing remained a lever for growth, as average revenue per occupied room (RevPOR) climbed 4.4%. and revenue per available room (RevPAR) increased 5.0% in the same-store group vs. Q2 2024. These gains show that Sonida can push rates while simultaneously attracting more residents.

The quarter also saw continued portfolio expansion, with the acquisition of two new senior living communities (Georgia and Florida) totaling 152 units. By the end of the period, Sonida’s owned, managed, or invested portfolio totaled 96 communities in 20 states, with capacity for approximately 10,150 residents. Notably, integration of new communities tends to dilute company-wide margins—recent additions often operate less efficiently at first, requiring time and investment to bring them up to the company’s standards.

Though the company remains focused on responding to changing government reimbursement standards. Sonida has removed several properties from participation in the Medicaid program in states like Indiana, following changes to the Indiana Medicaid program in late 2024, preferring to operate with a private-pay model where prospects and returns are more predictable. This shift required temporary occupancy disruptions and investment to reposition these communities but aims to support long-term profitability as industry landscapes and regulations evolve.

Acquisitions and ongoing investments were supported by favorable financing, including a new $137.0 million loan facility added just after the quarter, which bolsters liquidity and provides firepower for future deals or operational upgrades. As for industry trends, Sonida continues to benefit from demographic tailwinds as the population of seniors aged 75 and older rises, especially in high-growth regions like the Sunbelt, where its recent acquisitions are concentrated.

Looking Ahead

Management pointed to continued optimism for the rest of fiscal 2025, highlighting expectations for growth as new communities stabilize and as more of its portfolio moves to private-pay models. Portfolio additions and ongoing operational improvements are expected to drive further gains in occupancy and operating profitability. Sonida’s recent financing—the $137.0 million Ally Bank term loan closed in August 2025—bolsters its ability to make targeted new investments and maintain operational flexibility. The imminent purchase of a Texas community for $15.6 million is also in the works, pending closing conditions.

Management highlighted intentions to build on momentum and capitalize on demographic growth drivers. Investors are likely to watch for how effectively Sonida converts revenue growth into durable profit, especially as nonrecurring credits fade and labor costs remain high.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.