Sonida Senior Living, Inc. ((SNDA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Sonida Senior Living, Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company reported strong year-over-year growth in key financial metrics, successful capital allocation, and operational improvements, such as increased lead volumes and reduced employee turnover. However, they also faced a decline in occupancy in Q4 2024 and Medicaid-related issues in Indiana. Overall, the positive aspects significantly outweigh the negative, indicating a strong performance outlook for 2025.
Record Year-Over-Year Growth
Sonida Senior Living, Inc. achieved impressive year-over-year growth, with a 19% increase in same-store adjusted community NOI and a 27% rise in adjusted EBITDA from 2023. This growth underscores the company’s effective strategies and operational efficiency.
Occupancy and Revenue Per Occupied Room (RevPOR) Growth
The company reported a same-store improvement of 180 basis points in occupancy and nearly 6% growth in RevPOR year-over-year. These metrics highlight the company’s ability to enhance its revenue streams and optimize occupancy rates.
Successful Capital Allocation
Sonida executed six transactions totaling over $250 million, including three in the fourth quarter that involved 11 communities and 817 units. This strategic capital allocation drove an 11% sequential total NOI at share growth quarter over quarter, showcasing the company’s investment acumen.
Debt Restructuring Achievements
The company achieved a discounted payoff of $18.3 million on a $28.4 million loan balance, representing a 36% discount. Additionally, they extended maturities of 18 communities with Fannie Mae, totaling $220 million, by two years, reflecting their proactive financial management.
Lead and Tour Volume Increase
In Q4 2024, Sonida experienced a 15% year-over-year increase in lead volume and an 11% increase in tour volume in the same-store owned portfolio. This indicates growing interest and engagement from potential residents.
Employee Turnover Reduction
The company successfully reduced employee turnover by nearly 10% in 2024, marking the second consecutive year of reduction. This improvement is crucial for maintaining service quality and operational stability.
Occupancy Decline in Q4 2024
Q4 2024 marked the first quarter since the pandemic without occupancy growth from the previous quarter, with a weighted average occupancy falling 40 basis points from Q3. This decline highlights a potential area of concern for the company.
Medicaid-Related Challenges
Sonida faced temporary deterioration of Medicaid-related aging in Indiana, accounting for approximately $700,000 of increased bad debt versus 2023. Addressing these challenges will be essential for future financial stability.
Forward-Looking Guidance
Looking ahead to 2025, Sonida Senior Living, Inc. aims to achieve same-store NOI growth at the high end of their peer group, leveraging the value-add nature of their 2024 acquisitions. They plan to capitalize on demographic trends and a supply-demand imbalance in senior living, targeting pricing gains consistent with the prior year. The company also intends to enhance employee retention and continue pursuing acquisition opportunities in a favorable market environment.
In summary, Sonida Senior Living, Inc.’s earnings call conveyed a strong performance outlook for 2025, driven by robust growth metrics and strategic initiatives. While challenges such as occupancy decline and Medicaid-related issues exist, the company’s proactive approach and forward-looking guidance suggest a promising future.