Brookdale Senior Living, Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Brookdale Senior Living reported second quarter 2026 adjusted EBITDA of $122.1 million, up 4.3% year over year, and consolidated revenue per available room (rev par) growth of 8.2%.
- Occupancy increased 230 basis points year over year to 82.4% on a consolidated basis and 110 basis points on a same community basis to 82.9%.
- Resident fees declined 8.7% year over year to $708 million, primarily due to a 15.7% reduction in consolidated average units from portfolio optimization, partially offset by rev par growth.
- Labor expense as a percentage of revenue improved to 45.2% from 46.1% year over year, reflecting operational focus and cost management.
- Brookdale completed the acquisition of the 244-unit Brookdale Galleria community in Houston for $23.4 million and announced the planned acquisition of 17 leased communities comprising 735 units for approximately $157 million, expected to close in Q4 2026.
- The company sold 13 owned communities totaling 1,108 units and exited two leased communities with 152 units through June 30, 2026, with 13 of 29 planned dispositions remaining.
- Balance sheet improvements included reducing annualized leverage to 8.4 times from 8.8 times and increasing liquidity to $566 million as of June 30, 2026.
- Adjusted free cash flow was positive $38.2 million for the quarter, with expectations to remain significantly positive for the full year.
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Transcript
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Hello, everyone. Thank you for joining us, and welcome to the Brookdale Senior Living second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Mike Grant, Brookdale's Vice President of Investor Relations. Mike, please go ahead. Thank you, operator.
Good morning, everyone, and welcome to Brookdale Senior Living's second quarter 2026 earnings call. Participating on today's call are Nick Stengle, Brookdale's Chief Executive Officer, Dawn Kussow, our Executive Vice President and Chief Financial Officer, and Chad White, our Executive Vice President, General Counsel, and Secretary. On today's call, we'll discuss second quarter 2026 results, as well as our financial guidance for the 2026 year. We'll also provide other general business updates. During today's call, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are made as of today's date, and we expressly disclaim any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements.
Certain other factors that could cause actual results to differ are detailed in the earnings release we issued after market yesterday, as well as in our Securities and Exchange Commission filings, including the risk factors described in our annual report on Form 10-K and quarterly reports on Form 10-Q. I direct you to the earnings release for the full Safe Harbor statement. Also, please note that during this call, management will discuss non-GAAP financial measures. For reconciliations of each non-GAAP measure to the most comparable GAAP measure, I direct you to the earnings release and to the company's quarterly supplemental financial information, which may be found at brookdaleinvestors.com and was furnished on an 8-K yesterday. With that, it is my pleasure to turn the call over to our CEO, Nick Stengle.
Thank you, Mike, and good morning, everyone. Thank you for joining us on this morning's call and for your interest in Brookdale Senior Living. The actions we have taken so far through the first half of 2026 and our second quarter results are aligned with our multi-year projection of, first, achieving annual mid-teen adjusted EBITDA growth over the next several years and, second, de-leveraging our balance sheet to a less than 6 times leverage ratio by the end of 2028. We also remain on track to deliver on our 2026 annual guidance of 8%-9% RevPAR growth and adjusted EBITDA in the range of $502 million to $516 million. Our results and recent actions also directly reflect and support the five-point strategy we have discussed in previous earnings calls and the investor day we hosted in late January 2026.
As a reminder, this five-point strategy is to, number one, improve operating performance, number two, optimize our real estate portfolio, number three, reinvest capital into our communities, number four, reduce leverage, and number five, elevate quality for residents and associates. I would like to take a moment and describe our recent progress on the first three points. On point number one, improve operating performance. Our consolidated RevPAR for the second quarter increased 8.2% over the prior year, which is in line with the anticipated quarterly pacing we discussed last quarter. This meets our 8%-9% full year 2026 RevPAR growth guidance, and we continue to expect an accelerated rate of growth for the second half of this year. Breaking apart the components of RevPAR, our second quarter RevPOR, revenue per occupied room, or pricing, remains strong. Our second quarter consolidated RevPOR increased 5.2% over last year.
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