CareTrust REIT (CTRE) Q2 Revenue Up 63%

Key Points

• beating the analyst estimate by $32.1 million (GAAP).

• Normalized FFO per share was $0.43, exceeding expectations by $0.09 on a non-GAAP basis and up 19.4% from the prior-year quarter.

• CareTrust REIT completed its largest-ever acquisition, entering the U.K. market via Care REIT plc in May 2025.

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CareTrust REIT (NYSE:CTRE), a real estate investment trust focused on healthcare properties, released its latest earnings results on August 6, 2025, for Q2 FY2025. The company reported GAAP revenue of $112.469 million, significantly surpassing the analyst consensus of $80.4 million (GAAP) revenue. Normalized funds from operations (FFO) per share reached $0.43, well above the $0.34 non-GAAP estimate. These results reflect both substantial growth over the prior year and a sizable beat versus expectations, with non-GAAP EPS of $0.43 exceeding the analyst estimate of $0.34 and GAAP revenue of $112.469 million surpassing the analyst estimate of $80.395 million. CareTrust also completed the acquisition of Care REIT plc, marking its entry into the U.K. market. This quarter stood out for notable portfolio expansion, robust rent collections, and higher dividend payouts, though expense growth was also prominent.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

About CareTrust REIT: Business Overview and Recent Areas of Emphasis

CareTrust REIT operates as a healthcare-focused real estate investment trust. It primarily acquires and leases out skilled nursing facilities, senior living centers, and diversified healthcare properties. Most of its income comes from long-term triple-net leases, a structure where tenants pay rent and also cover nearly all property expenses including taxes, insurance, and maintenance.

In recent years, CareTrust has focused on growing its geographic footprint, deepening relationships with large operators, and maintaining a strong balance sheet. Its success depends on reliable rent collection, tenant financial health, effective capital deployment, and proactive management of regulatory and industry changes. Diversification, both by location and tenant mix, helps lessen risks tied to changes in healthcare policy or tenant-specific issues.

Quarter Highlights: Portfolio Expansion, Financial Results, and Key Developments

The acquisition of Care REIT plc, which brought approximately 134 care home properties in the U.K. into the portfolio, closed in Q2 2025. This added significant scale and marked CareTrust’s entry into a new geographic market. Management described the deal as a means to diversify operator relationships, payer sources, and property types. The UK deal reduced U.S. skilled nursing exposure to approximately 49% of properties and 63% of rental income, reducing concentration risk. The acquired assets are under long-term triple-net leases, with reported annual rent coverage above two times EBITDARM (earnings before interest, income taxes, depreciation, amortization, rent, and management fees) for the most recently reported period.

Financially, the company produced standout results across key metrics. Total revenue (GAAP) grew to $112.469 million, up 63.3% year over year, driven by high rental collections and an expanded property count. Net income per diluted share (GAAP) was $0.35, up from $0.07 in Q2 2024, supported by increased rental and interest income.

Expenses also saw a substantial increase from the same quarter in the prior year. General and administrative costs doubled compared to Q2 2024. Share count rose by 32.7% year over year, with $353.9 million raised via equity sales. While this enabled rapid expansion, it diluted per-share results relative to absolute dollar growth. The payout ratio on the dividend was roughly 78% of normalized FAD (funds available for distribution), in line with sector norms.

The quarter’s investment activity reached $1.1 billion, including all cash for the UK acquisition, closing at an estimated 8.4% yield. Additional investments were announced after quarter-end. The company maintains robust liquidity as of June 30, 2025, including a largely unused $1.2 billion credit revolver and $380.1 million remaining under an at-the-market (ATM) equity program. Rent collection remained exceptionally strong at 99.7% of contractual rent and interest, with improving coverage ratios among top tenants, based on management’s regular review of tenant-provided financial and operational information.

Product-wise, CareTrust specializes in triple-net leased healthcare real estate, which minimizes operating risk by transferring responsibilities to tenants. The new U.K. portfolio consists of care homes.

Looking Forward: Guidance and Investor Watchpoints

Management raised guidance for FY2025, reflecting the expanded portfolio. It now expects GAAP net income per share of $1.43 to $1.45, and normalized FFO and FAD between $1.77 and $1.79 per share. This outlook assumes rent increases indexed at 2.5%, excludes further acquisitions or financing, and is based on 195.3 million diluted shares.

Investors should monitor several areas in upcoming quarters. Rapid expansion has increased general and administrative costs, so expense discipline will be key. Equity dilution remains a factor if growth continues at this pace. The operational integration, performance, and regulatory environment of the new U.K. assets will warrant close attention. Finally, tenant financial health – particularly for large operators – and further portfolio diversification will be important for sustaining results amid evolving healthcare policy and demographic trends.

The quarterly dividend was raised 15.5%, from $0.29 in Q1 2024 to $0.335 per share in Q1 2025.

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

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