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- **Q4 Financials Stable**: Distributable earnings $0.44, EBITDA $20.5M, in line with expectations despite AlerisLife sale headwinds.
- **Managed REITs Perform**: DHC SHOP NOI +8%, SVC on track for $959M hotel sales, Seven Hills rights offering to deploy $200M loans.
- **Strategic Initiatives**: RMR Residential targeting $250M, OPI restructuring with $14M annual fee, Seven Hills backstop potential.
- **Q1 Outlook Caution**: $1M fee loss from AlerisLife, but cost savings offsetting to maintain margin stability.

**【CEO Summary Section】**
- Reported Q4 distributable earnings of $0.44 per share, adjusted net income of $0.22 per share, and adjusted EBITDA of $20.5 million, all in line with expectations.
- Managed equity REITs achieved $2 billion in accretive debt financings and $300 million in asset sales, driving share price improvements at DHC and ILPT, with potential 2025 incentive fees of $22 million.
- DHC's SHOP NOI increased 8% YoY to $29.6 million, driven by 210-basis-point occupancy growth and 5.3% rate increases. Transition of 116 AlerisLife communities to new operators is expected by year-end 2025.
- SVC completed $292 million in hotel sales, on track for $959 million in 2025, and executed a 0-coupon bond offering to deleverage.
- Seven Hills announced a $6 million rights offering to raise $200 million in new loans, with RMR backstopping unexercised rights.
- OPI entered a restructuring support agreement for Chapter 11 bankruptcy, with RMR to manage for 5 years at $14 million annual fee for the first 2 years.

**【CFO Commentary】**
- Recurring service revenues of $45.5 million, up $1.5 million QoQ, driven by higher enterprise values at DHC, ILPT, and SVC.
- Q1 2026 guidance: adjusted EBITDA $18-20 million (down $2.5 million YoY), distributable earnings $0.42-0.44, and adjusted net income $0.16-0.18, due to $1 million loss from AlerisLife sale.
- Recurring cash compensation expected to decline to $37 million QoQ, with G&A stable at $10.1 million.
- Interest expense to rise to $2.6 million QoQ due to new residential mortgages.
- Tax rate expected to decline to 15% in Q1, reflecting potential 2025 incentive fees.

**【Q&A Highlights】**
- OPI restructuring: $14 million annual fee for first 2 years, with potential promote for RMR post-bankruptcy emergence.
- Private capital strategy: $250 million target for RMR Residential enhanced growth venture, with $143.4 million in Q4 acquisitions near Raleigh and Orlando.
- Seven Hills rights offering: RMR may backstop up to 50% of unexercised rights, with $65 million equity to deploy $200 million in loans.
- Cash flow: $162 million liquidity, with no revolver draw expected despite $3.2 million NOI from owned residential assets.
- Risk: Uncertainty in OPI restructuring timeline and Seven Hills rights offering participation.

The RMR Group Inc. (RMR) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

RMR

RMR fundamentals

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