Equity LifeStyle Properties Q2 2025 Earnings Call Recap: Stable MH Occupancy, RV Growth, and $3.06 FFO Guidance

Equity LifeStyle Properties maintains its 2025 FFO guidance at $3.06 per share, despite a 5% increase in NOI compared to last year. CEO Marguerite M. Nader highlighted stable manufactured housing (MH) occupancy and growth in recreational vehicles (RVs). The company's normalized per-share FFO growth year-to-date is 5.7%.

Title: Equity Lifestyle Properties Maintains 2025 FFO Guidance Despite NOI Increase

Equity Lifestyle Properties (ELS) reported its second-quarter 2025 earnings, maintaining its full-year 2025 Funds from Operations (FFO) guidance of $3.06 per share. This comes despite a 5% increase in Net Operating Income (NOI) compared to the same period last year. The company's CEO, Marguerite M. Nader, highlighted stable manufactured housing (MH) occupancy and growth in recreational vehicles (RVs), contributing to a year-to-date normalized per-share FFO growth of 5.7%.

The company's quarterly FFO of $0.69 per share matched the midpoint of its guidance range, aligning with the Zacks Consensus Estimate [1]. This figure represents a 5.7% increase in normalized FFO year-to-date. The company's core portfolio operating income grew by 6.4% in the quarter, driven by a 5.5% increase in core community-based rental income.

Nader emphasized the stability of the MH portfolio, with 70% of its residents catering to seniors and 97% being homeowners. This contributes to reduced turnover and stable cash flows. The company also reported that 55 RV resorts and campgrounds received the 2025 TripAdvisor Travelers' Choice Award.

Patrick Waite, President and COO, noted that the core MH portfolio continues to see high occupancy and generated revenue growth of 5.5% in the quarter. The company is actively adding new home inventory in key markets, with 700 new development sites added in Arizona over five years.

Paul Seavey, Executive VP & CFO, confirmed that the company is maintaining its full-year 2025 normalized FFO guidance of $3.06 per share at the midpoint of its range of $3.01-$3.11 per share. This represents an estimated 4.9% growth rate compared to 2024. The third-quarter normalized FFO per share is expected in the range of $0.72 to $0.78.

The company's RV and marina annual base rental income increased by 3.7% in Q2 and 3.9% year-to-date. Core portfolio NOI growth for Q2 was 6.4%. The net contribution from the membership business was $16 million for Q2 and $31.4 million year-to-date. Core utility and other income increased by 4.4% year-to-date, with utility income recovery at 48.2%.

Second-quarter core operating expenses were flat year-over-year, and expense growth was 190 basis points lower than guidance. Property operating revenues increased by 3.5% in Q2, while core property operating expenses were flat, yielding 6.4% growth in core NOI before property management.

The company's outlook for the industry can have a material impact on the performance of the stock. In terms of the Zacks Industry Rank, REIT and Equity Trust - Residential is currently in the top 28% of the 250 plus Zacks industries [2].

# References:
[1] https://finance.yahoo.com/news/equity-lifestyle-properties-els-q2-213002071.html
[2] https://seekingalpha.com/news/4470190-equity-lifestyle-properties-maintains-3_06-ffo-guidance-for-2025-while-highlighting-stable-mh