WELL — Q2 2026 Financial Report Analysis

Senior housing occupancy and pricing lifted per-share cash earnings 25%, even with 10% more shares

Welltower, the largest US healthcare real estate investment trust (REIT), grew normalized funds from operations (FFO) per share by 25.0% in the second quarter of 2026, to $1.60 from $1.28. Nearly all of that came from its Seniors Housing Operating (SHO) portfolio. These are senior living communities where Welltower keeps the operating profit, not just a fixed rent. At communities it owned in both years, SHO net operating income rose 20.5%: occupancy climbed 3.3 percentage points and average monthly revenue per occupied room rose 5.2%, while costs grew only 4.5%. Total revenue jumped 39.1% to $3.54 billion, but most of that jump came from acquisitions, mainly the C$4.1 billion Amica deal in Canada that closed on April 1 and the UK operators HC-One and Barchester. Management raised full-year normalized FFO guidance to $6.36–$6.44 per share from $6.21–$6.35, and the board raised the quarterly dividend 15% to $0.85.

At a glance

• +20.5% same-store SHO NOI. At the 980 senior housing communities Welltower owned in both periods, property-level profit rose by a fifth. Revenue grew 9.2% and operating costs grew 4.5%, so the profit margin widened from 29.1% to 32.1%.
• 89.4% same-store SHO occupancy, up from 86.1%. Filling empty units is the cheapest kind of growth: staffing and building costs are mostly fixed, so most of the rent from an added resident becomes profit.
• $1.60 normalized FFO per share, +25.0%. Normalized FFO in dollars rose 37.7%, but average diluted shares rose 10.4% because Welltower keeps selling new stock to pay for acquisitions. The per-share figure is the one that matters to an existing shareholder, and it still grew 25%.

Why FFO, not net income, is the number to watch

A REIT's GAAP net income is reduced by depreciation, the accounting charge that spreads a building's cost over its assumed useful life. Well-kept real estate usually does not lose value on that schedule, so for property owners the charge mostly reflects past purchase prices rather than current business performance. Welltower booked $737.8 million of depreciation and amortization this quarter against $445.0 million of net income to common shareholders. Depreciation rose 49% year on year, mostly because the company bought so many properties.

Funds from operations (FFO) is the industry-standard fix. It starts from net income, adds back real estate depreciation, and removes gains and losses from selling property. also strips out items Welltower treats as non-recurring, such as deal costs, debt-repayment charges and one-time tax items. REIT investors value these companies mainly on normalized FFO per share.