The RMR Group Inc. (RMR) Q4 2025 Earnings Call Transcript
Distributable Earnings $0.44 per share, no year-over-year change mentioned.
Adjusted Net Income $0.22 per share, no year-over-year change mentioned.
Adjusted EBITDA $20.5 million, no year-over-year change mentioned.
Consolidated SHOP NOI (DHC) $29.6 million, an 8% year-over-year increase due to a 210-basis point increase in occupancy to 81.5% and a 5.3% increase in average monthly rates.
SVC Hotel Sales 40 hotels sold for over $292 million during the quarter, part of a plan to sell 121 hotels in 2025 for $959 million, aimed at deleveraging the balance sheet.
SVC 0-Coupon Bond Offering Raised $490 million in net proceeds, used to repay revolving credit facility and retire 2026 debt maturities.
Seven Hills Loan Portfolio $642 million, fully performing, no year-over-year change mentioned.
Seven Hills Rights Offering $65 million in new equity raised, enabling over $200 million in gross new loan investments.
OPI Debtor in Possession Financing $125 million to support operations during Chapter 11 bankruptcy process.
Non-Residential Leasing (RMR) 1.4 million square feet leased in the quarter, 8 million square feet for the fiscal year, with rental rates approximately 14% higher than previous rents for the same space.
Recurring Service Revenues $45.5 million, a sequential quarter increase of $1.5 million due to increases in enterprise values at DHC, ILPT, and SVC, and higher construction supervision fees.
Recurring Cash Compensation $38.5 million, consistent with the prior quarter.
Recurring G&A Expenses $10.1 million, a modest sequential quarter increase due to private capital fundraising efforts.
Interest Expense $1.7 million, increased due to acquisitions of 2 leveraged residential properties.
Total Liquidity $162 million, including $62 million in cash and $100 million of capacity on an undrawn revolving credit facility.
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- Strong Financial Performance: RMR Group reported distributable earnings of $0.47 per share, adjusted net income of $0.20 per share, and adjusted EBITDA of $19.5 million for Q1 2026, all exceeding expectations and reflecting robust market performance and profitability.
- Strategic Actions Yield Results: RMR's strategic management of DHC and ILPT generated $23.6 million in incentive fees, with DHC and ILPT ranking as the #1 and #3 best-performing REITs in the U.S., further solidifying RMR's leadership position in the real estate investment trust sector.
- Asset Disposition and Debt Management: DHC sold 69 properties in 2025 for gross proceeds of $605 million, successfully repaying zero coupon senior secured notes due in 2026, ensuring no debt maturities until 2028 and enhancing financial flexibility.
- Future Outlook and Risks: Management anticipates recurring service revenues to decrease to approximately $41 million next quarter, primarily due to revenue pressures from asset sales and contract wind-downs, yet remains optimistic about the launch of the multifamily fund and capital raising efforts, demonstrating confidence in future growth.
- Earnings Beat: RMR Group reported a GAAP EPS of $0.71 for Q1, exceeding expectations by $0.47, indicating strong profitability despite challenges in revenue generation.
- Revenue Decline: The company's revenue of $180.42 million represents a 17.8% year-over-year decrease, missing estimates by $10.13 million, reflecting market challenges and potential impacts on investor confidence moving forward.
- Stock Price Increase: Despite missing revenue targets, RMR Group's shares rose by 2.11%, suggesting market recognition of its earnings strength and potentially attracting more investor interest in its long-term value.
- Incentive Management Fees: RMR Group earned $23.6 million in incentive business management fees in 2025, demonstrating its ongoing profitability and competitive position in asset management, which could lay the groundwork for future growth.
- International Expansion: RMR Group has appointed Peter Welch as Senior Vice President of International, focusing on expanding the company's international brand and relationships with global institutional capital partners, aiming to enhance its reputation and attract new capital sources.
- Capital Formation Strategy: Welch's role complements Mary Smendzuika's position as Head of Capital Formation, who primarily focuses on North American institutional partners, thereby enhancing RMR's competitiveness in the global capital markets.
- Extensive Industry Experience: Welch previously served as a Senior Advisor at Bain Capital Credit and was the CEO for Asia Pacific at Wells Fargo Securities, bringing valuable relationships with sovereign wealth funds, pension plans, and family offices, which are expected to create new investment opportunities for RMR.
- Asset Management Scale: RMR Group manages approximately $39 billion in assets with nearly 900 real estate professionals, and Welch's addition is anticipated to further drive the expansion of the company's global investor base and private capital assets under management.

- Dividend Overview: OPI announces a total dividend of $0.02 per share for 2025, which includes ordinary income and qualified dividends, reflecting the company's stable cash flow and shareholder return capacity.
- Tax Information Transparency: The dividend tax characterization provided by the company will assist shareholders in accurate tax reporting, ensuring compliance and enhancing investor confidence.
- Asset Management Background: Managed by RMR Group, which oversees approximately $39 billion in assets, indicating OPI's strong management capabilities and market position in commercial real estate.
- Property Portfolio Scale: OPI owns 122 properties across the U.S., with approximately 17.1 million rentable square feet, showcasing its extensive footprint and influence in the office property market.
- Dividend Overview: Diversified Healthcare Trust (DHC) announced a total dividend allocation of $0.04 per share for 2025, covering four payment dates, indicating the company's ongoing cash flow stability.
- Tax Information Reminder: DHC advises shareholders to refer to IRS Form 1099-DIV for tax reporting, ensuring shareholders are aware of the tax implications of dividends, thereby enhancing transparency.
- Portfolio Scale: As of September 30, 2025, DHC's portfolio is valued at approximately $6.7 billion, encompassing 335 properties, showcasing its extensive footprint in the healthcare real estate sector.
- Management Company Background: DHC is managed by RMR Group, which oversees approximately $39 billion in assets and has over 35 years of experience in commercial real estate operations, bolstering DHC's credibility in the market.
- Quarterly Dividend Announcement: RMR Group declared a quarterly dividend of $0.45 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy, which is likely to attract more investor interest.
- High Yield Appeal: The forward yield of 11.11% not only reflects the deep value of the company in asset management but may also enhance market demand for its stock, potentially boosting share price performance.
- Future Earnings Outlook: RMR Group anticipates adjusted EBITDA between $18 million and $20 million for Q1 2025, indicating positive performance in advancing private capital initiatives, which could further bolster investor confidence.
- Incentive Management Fee Growth: The company earned $23.6 million in incentive business management fees in 2025, showcasing its profitability and growth potential in asset management, which may support future shareholder returns.







