10-Q · May 4, 2026
In Q1 2026, Diversified Healthcare Trust reported revenues of $366.5 million, a decrease of 5.1% from $386.9 million in Q1 2025. EPS improved to $0.14 from a loss of $0.04 in the previous year, with operating cash flow…
Earnings analysis · 10-Q
DHC earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
Diversified Healthcare Trust delivered a materially improved Q2 operating result: GAAP loss per share narrowed to $0.16 from $0.38, Normalized FFO rose to $0.16 per share from $0.08, and consolidated NOI grew 20.4% to…
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Diversified Healthcare Trust delivered a materially improved Q2 operating result: GAAP loss per share narrowed to $0.16 from $0.38, Normalized FFO rose to $0.16 per share from $0.08, and consolidated NOI grew 20.4% to $84.443 million. The improvement was driven by the SHOP recovery, where comparable occupancy reached 83.1% and average monthly rates reached $5,715, but reported revenue declined 4.5% to $365.387 million because of asset dispositions. Liquidity is adequate with $116.793 million of cash, no revolver borrowings and $150.000 million of revolver capacity, although sizable debt, medical-office NOI pressure and upcoming lease expirations remain material constraints.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.16
What stood out
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GAAP loss narrowed sharply year over year
GAAP net loss narrowed to $37.419 million, or $0.16 per share, from a $91.639 million loss, or $0.38 per share, a year earlier. Sequentially, the loss per share improved from $0.18 in Q1 2026 to $0.16.
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Normalized FFO doubled
Normalized FFO doubled to $38.896 million ($0.16 per share) from $18.572 million ($0.08 per share) in Q2 2025. FFO increased to $25.817 million from $13.577 million.
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SHOP operating recovery lifted NOI
Consolidated NOI rose $14.311 million, or 20.4%, to $84.443 million. SHOP NOI increased $16.880 million, or 46.1%, to $53.495 million, led by comparable-property occupancy of 83.1% versus 81.5% and average monthly rates of $5,715 versus $5,380.
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Interest expense declined 27.2%
Interest expense fell $13.843 million, or 27.2%, to $37.083 million, principally reflecting prior redemptions of higher-cost debt and lower discount accretion.
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Liquidity and credit profile improved
Liquidity remained available: cash and cash equivalents were $116.793 million at June 30, 2026, with no revolver borrowings and $150.000 million available. Moody's upgraded the issuer rating to B3 from Caa1 in April 2026 and assigned a positive outlook.
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Medical-office leasing spreads positive
Medical-office leasing was constructive, with 477,000 square feet leased during Q2 at a weighted-average rental-rate increase of 6.7% and a 7.1-year weighted-average lease term.
What to watch
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Revenue declined on dispositions
Total revenue declined $17.325 million, or 4.5%, year over year to $365.387 million, and was modestly below Q1 2026 revenue of $365.9 million. Dispositions reduced SHOP revenue by $28.349 million and Medical Office/Life Science revenue by $7.976 million versus comparable-property growth.
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Medical-office NOI contracted
Medical Office and Life Science NOI declined $2.778 million, or 10.5%, to $23.709 million despite comparable-property NOI being nearly flat. The segment's consolidated occupancy was 92.2%, though comparable occupancy was 95.8%.
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Management fees and transition costs rose
G&A rose $8.156 million, or 73.0%, to $19.333 million, including $9.993 million of estimated incentive management fees. The company also incurred $3.086 million of transaction costs related to transitioning 116 communities.
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Medical-office lease rollover and vacancies
Near-term medical-office rollover remains meaningful: leases representing $11.566 million of annualized rental income, or 7.1% of segment annualized rental income, expire in 2026; this includes two tenants that vacated on June 30 with $6.885 million of annualized rental income.
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Leverage and refinancing-rate exposure
Debt remains substantial, comprising $1.600 billion of senior unsecured notes, $375.000 million of senior secured notes, $327.190 million of fixed-rate mortgages and a $140.000 million floating-rate mortgage. At a fully drawn revolver, a 1-percentage-point rate increase would raise annual floating-rate interest expense to $20.994 million and reduce annual EPS by $0.09.
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No formal risk-factor update; cost pressure remains
Item 1A states there were no material risk-factor changes from the Annual Report. Nevertheless, management flags continued variability in labor, insurance and food costs, while committing approximately $10.844 million of leasing spending over the next 12 months.
Management's outlook
The 10-Q provides no explicit quantitative earnings or revenue guidance. Management expects favorable senior-living supply/demand to support SHOP occupancy and performance, and expects labor, insurance and food-cost increases to moderate; it also says approximately $10.844 million of $11.022 million of leasing obligations is expected to be spent over the next 12 months.
Earlier filings 4
10-K · February 24, 2026
Diversified Healthcare Trust (DHC) positions itself as a healthcare-focused REIT with 298 properties (13 held for sale) across 33 states and D.C., emphasizing demographic tailwinds (age 65+ >20% by 2030 and age 75+…
10-Q · May 5, 2025
Diversified Healthcare Trust reported total revenues of $386,864,000 for the quarter ended March 31, 2025, up $16,088,000 (+4.3%) versus $370,776,000 in Q1 2024. The company recorded a net loss of $8,986,000 (‑$0.04 per…
10-K · March 1, 2023
Diversified Healthcare Trust positions itself as a healthcare-focused REIT with 379 wholly owned properties and a gross book value of real estate assets of $7.1 billion as of December 31, 2022, and emphasizes…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.