Brookdale Senior Living Q4 CY2024 Earnings: Solid Revenue, Mixed Earnings

Key Highlights

* Revenue: $780.9 million, in line with analyst estimates ($781.8 million)
* EPS (GAAP): -$0.37, below analyst expectations (-$0.21)
* Adjusted EBITDA: $98.53 million, exceeding analyst estimates ($95.81 million)
* EBITDA guidance for FY2025: $437.5 million (midpoint), above analyst estimates ($428.6 million)

Financial Performance

Brookdale Senior Living (NYSE:BKD) reported Q4 revenue growth of 3.5% year-over-year, meeting Wall Street expectations. However, its GAAP loss of $0.37 per share significantly missed analyst consensus.

Adjusted EBITDA surpassed estimates, driven by improved occupancy and expense management. The company's operating margin remains negative at -0.3%. Free cash flow improved to -$5.11 million, compared to -$29.21 million in the prior year quarter.

Outlook

Brookdale anticipates generating meaningful adjusted free cash flow in 2025 through continued focus on profitable occupancy growth, strategic acquisitions, and lease amendments. The company's EBITDA guidance for FY2025 is above analyst expectations.

Industry Landscape

The senior health and care industry faces challenges such as rising labor costs and staffing shortages. However, an aging population, increasing chronic disease prevalence, and growing preference for in-home care drive tailwinds for the industry. Advancements in remote monitoring and telehealth promise enhanced efficiency and care delivery.

Long-Term Prospects

Brookdale's long-term revenue growth rate of 5.2% over the last two years exceeds its five-year trend. Its recent quarterly performance, including the revenue beat and EBITDA margin expansion, suggests improvement in operational execution.

However, the company's negative operating margin and EPS raise concerns about long-term profitability. Analysts forecast a reduction in EPS losses over the next 12 months.

Overall

Brookdale's Q4 results were mixed, with strong revenue growth and EBITDA margin improvement offset by a wider-than-expected loss per share. The company's outlook and industry tailwinds provide some optimism. However, investors should carefully consider the company's long-term profitability challenges and its valuation relative to peers before making investment decisions.