Janus Living, Inc. (JAN) Earnings

Management highlights

- Company Strategy & Positioning * Janus Living is a differentiated senior housing REIT with a 100% senior housing (SHOP) concentrated portfolio of properties in high-growth, low-tax, business-friendly U.S. states, with a clean balance sheet holding zero debt as of the quarter end, and a size that enables agile acquisition execution. * The company is outperforming its original 2025 business plan on both speed and scale, and is on track to double portfolio size in 2026 while maintaining asset quality and return targets. * Healthpeak retains a $6 billion+ equity stake in Janus Living, creating strong alignment of interest, and contributes valuable sector expertise and existing relationships. - Acquisition & Operational Growth * Year-to-date through August 3, 2026, the company has closed $1.8 billion in acquisitions, with an additional $59 million under purchase agreement and a robust remaining pipeline. * All acquisitions are directly sourced from target operating partners, with a year 1 going-in yield in the low 6%, expected to improve to 7.5% or higher by year 3, and are accretive to the company's cost of capital with a purchase basis well below replacement cost. * In the four months since going public, the company expanded its network of operating partners from 2 to 10 handpicked operators with proven track records, strong cultures, and long-standing sector experience. * Total portfolio occupancy is currently in the mid-80% range, up 200+ bps YoY, with continued sequential occupancy improvement. The portfolio benefits from favorable industry supply-demand dynamics, with annual demand growth of 4-5% and current new supply growth below 1%. - Balance Sheet & Capital Allocation * A follow-on Class A-1 common stock offering completed in June 2026 generated $690 million in net proceeds for future acquisitions. * In Q2 2026, the company acquired 2 communities for $105 million and sold 1 non-performing community for $23 million in gross proceeds. * As of August 3, 2026, the company held $558 million in unrestricted cash with no outstanding debt, totaling $1.2 billion in available liquidity, and has undrawn capacity of $500 million on a revolver (upsizable to $1.5 billion via accordion) plus a $100 million undrawn delayed draw term loan.

Guidance

- Management upwardly revised 2026 adjusted FFO per share guidance to a range of $0.95 to $0.98, up from the prior range of $0.93 to $0.97. - Same-store adjusted NOI growth guidance was increased 200 bps to a range of 13% to 17%—this new range is 500 bps higher than the initial guidance for the same portfolio released in February 2026, driven by broad operational outperformance across RevPOR growth, occupancy gains, and lower-than-expected expenses. - The guidance incorporates $1.6 billion in total net capital from the IPO and follow-on offering, which the company expects to fully deploy into acquisitions by the end of 2026, and includes a temporary earnings drag from uninvested cash on the balance sheet. - Management expects total portfolio stabilized occupancy to reach the low 90% range over the next 2-3 years, with underwriting based on a 93% stabilized occupancy target. As occupancy grows past 90%, incremental flow-through margin is expected to improve further due to the portfolio's IL focus, which has lower labor intensity than other senior housing segments. - For transition communities undergoing operator changes, management expects 50%+ NOI growth potential over the next 2-3 years, following the same successful trajectory of prior portfolio transitions.

Segment performance

Janus Living is a senior housing REIT focused on Life Plan communities with an independent living (IL) focus; full segment breakdown by individual product line was not provided. Consolidated revenues increased 45% year-over-year (YoY), adjusted EBITDA increased 34%, and adjusted FFO per share increased 40%, driven by organic growth and accretion from $800 million in acquisitions closed in 1H 2026. Same-store metrics: same-store revenues increased 8.4% YoY, same-store occupancy increased 10 basis points (bps) sequentially and 260 bps YoY, with IL occupancy up 350 bps YoY. RevPOR (revenue per occupied room) increased 5.1% YoY. Same-store expenses increased 4.8% YoY, and ExPOR (expense per occupied unit) increased 1.7% YoY. Same-store NOI increased 19.2% YoY, and same-store NOI margin expanded 250 bps YoY. Non-same-store (transition) portfolio occupancy was 80.5%, reflecting temporary headwinds from 18 communities undergoing operator transitions. Approximately 70% of total portfolio units are independent living, with 60% of 2026 year-to-date acquisitions by value allocated to independent living.

Risks & headwinds

- Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from management expectations, as detailed in the company's SEC filings and press release. - The company faces temporary occupancy and expense headwinds from ongoing operator transitions in 18 communities, as part of normal course business disruption. - New supply of senior housing will eventually increase as occupancy and rents rise, but management estimates meaningful new supply delivery is still several years away due to long development timelines, permitting delays, and challenges securing development capital. - Intense competition for acquisition targets exists in the current market environment, though the company's deep network of operator relationships has supported consistent deal sourcing to date. - Operational performance of individual communities can be volatile quarter-to-quarter due to seasonal trends and inherent operational intensity of the senior housing business.

Analyst Q&A

• Q: Asked how Janus plans to scale and manage its growing network of operating partners after expanding from just 2 partners at IPO to 10 currently. /

  A: Management said expanding the partner network was a core part of the original business plan to maximize proprietary deal flow, as operators control most senior housing transaction opportunities. They started with 2 partners (led by LCS, which continues to perform extremely well on resident satisfaction and revenue growth) and have added 8 new high-quality, proven operators to diversify deal access. All acquisitions are evaluated asset-by-asset, and the company does not plan to expand to 50+ operators given its current scale, as 10 partners already deliver a robust opportunity set. This mutually aligned model lets both operators and Janus grow together, with partners expected to bring future deal opportunities to Janus first.

• Q: Asked what is driving the sequential quarter-over-quarter step down in total portfolio NOI margins, and how the Brookdale transition portfolio will progress going forward. /

  A: Management explained that the 40 bps sequential compression in same-store NOI margin is due to typical seasonality: timing of annual labor increases in April, seasonal declines in skilled nursing occupancy (driven by lower summer hospital census), and fewer selling days. This seasonal trend is actually better than last year's performance. For the Brookdale transition portfolio (completed April 1), new operators are already making strong progress, and the company expects the same NOI growth trajectory it saw when LCS took over its legacy Life Plan portfolio, which delivered 50%+ NOI growth over several years. Seasonally, Janus expects strong same-store occupancy growth in 4Q 2026 and 1Q 2027, which aligns with historical Life Plan community trends.

• Q: Asked if Janus will accelerate acquisition pace or use debt capacity to fund more deals, given it has ample liquidity and a strong pipeline today. /

  A: Management noted it has already deployed the majority of IPO and follow-on capital into accretive acquisitions in just four months, and the pipeline remains very healthy. The company currently prioritizes deploying its existing cash (which has a low cost of capital) into deals with 6%+ going-in yields before accessing debt capacity, and maintains substantial undrawn credit capacity for future use. Management emphasized that it will remain highly disciplined on deal quality, stating it prefers $1 billion of high-quality acquisitions over $5 billion of marginal deals, and the company's smaller size lets it be selective while still delivering meaningful growth for shareholders.

• Q: Asked if Janus' investment strategy has changed post-IPO, following an improvement in the company's cost of capital. /

  A: Management responded that the core investment strategy has not changed at all. The company still targets the same operator profiles, geographies, product types (primarily larger Life Plan communities with a continuum of care, majority independent living), return targets, and discount-to-replacement-cost purchase requirements as outlined at IPO. The improved cost of capital simply increases the profitability of each transaction, rather than changing what types of assets the company pursues.