Brookdale (BKD) Q2 Revenue Rises 4.6%

Key Points

• Revenue increased 4.6% year-over-year in Q2 2025, but fell short of analyst expectations by $4.7 million (GAAP).

• Average occupancy rose to 80.1%, marking a 200 basis point year-over-year improvement in weighted average occupancy.

• Adjusted EBITDA climbed 19.7% to $117.1 million (non-GAAP), while net loss (GAAP) widened to $43.0 million.

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Brookdale Senior Living (NYSE:BKD), the nationwide operator of senior living communities, released its results for Q2 2025 on August 6, 2025. The period saw a notable jump in occupancy and stronger cash flow, but both GAAP revenue and GAAP earnings per share missed Wall Street estimates. Revenue (GAAP) was $812.9 million compared to an expected $817.6 million, and earnings per share (GAAP) came in at $(0.18), trailing the $(0.13) consensus. Adjusted EBITDA (non-GAAP) improved 19.7% to $117.1 million, though the net loss (GAAP) widened from the prior year. Management raised full year 2025 guidance on several performance measures, but expense growth and a highly leveraged balance sheet remain key concerns as the company pursues ongoing operational improvements.

Source: Analyst estimates for the quarter provided by FactSet.

Brookdale Senior Living: Business Overview and Strategic Focus

Brookdale Senior Living operates hundreds of senior communities across the United States, serving roughly 58,000 residents. Its core business involves providing independent living, assisted living, and memory care services, along with integrated healthcare support.

In recent years, Brookdale has centered its strategy on several key areas: increasing occupancy rates, managing labor costs, ensuring regulatory compliance, innovating with wellness offerings, and carefully managing its asset portfolio. Strong occupancy and effective cost controls are fundamental to profitability, while the integration of health-related programs and portfolio adjustments are designed to drive future growth and resilience.

Quarterly Highlights and Performance Drivers

Consolidated weighted average occupancy rose to 80.1% in Q2 2025 from 78.1% in Q2 2024. June same community weighted average occupancy was 81.1%. Same-community occupancy, which excludes acquired or disposed locations, also climbed 190 basis points year-over-year.

Revenue per available room (RevPAR), a common industry measure that combines both occupancy and average rent, increased 5.1% to $5,080. Revenue per occupied room (RevPOR), which measures the average revenue generated from each occupied unit, also improved by 2.4% to $6,343. These advances, powered by both occupancy and annual rate increases, resulted in resident fee growth of 4.9% company-wide and 4.8% year-over-year for same communities.

On the expense side, facility operating expenses increased 4.6%, closely matching revenue growth but reflecting ongoing wage rate inflation and higher repair, maintenance, and advertising expenditures. Labor costs, which account for about two-thirds of operating expenses, remain a focal point for the company. General and administrative expense jumped 17.8% to $55.0 million (GAAP), with $10.4 million of that total tied to transaction, legal, and restructuring costs, including executive transitions and shareholder relations efforts.

Brookdale reduced its cash facility operating lease payments by 10.8% due to the acquisition of 36 communities previously under operating leases. This shift moved some expenses from leases to debt service. The company is also in the process of transitioning or selling 55 additional communities previously operated under non-renewed leases. No new regulatory fines or adverse events were disclosed in the quarter. Notably, the earnings release highlighted continued expansion of its Brookdale HealthPlus program, a healthcare and wellness initiative, though financial or operational impacts from this program were not quantified.

Outlook and What to Watch

Management raised guidance for FY2025 revenue per available room (RevPAR) growth (now 5.25% to 6.00%) and Adjusted EBITDA (non-GAAP; now $445 million to $455 million). Adjusted free cash flow guidance was reaffirmed at $30 million to $50 million. These updates reflect management’s confidence in occupancy and margin improvement. However, the unchanged Adjusted Free Cash Flow forecast for the full year, even with higher Adjusted EBITDA, suggests ongoing capital and expense pressures remain.

The company did not provide granular guidance for future quarters beyond these revised annual ranges. Key items to watch in coming quarters include the sustainability of improving occupancy, success in managing labor and general expenses, and progress on portfolio optimization efforts.

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

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