NexPoint Residential Trust, Inc.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the NextPoint Residential Trust Q4 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star ending number one on your telephone keypad. I would now like to turn the call over to Kristen Griffith, Investor Relations. Kristen, please go ahead.

Thank you. Good day, everyone, and welcome to Next Point Residential Trust conference call to review the company's results for the fourth quarter in the December 31st, 2025. On the call today are Paul Richards, Executive Vice President and Chief Financial Officer, Matt McGrainer, Executive Vice President and Chief Investment Author, Officer, and Abana McDermott, Vice President, Asset and Investment Management. As a reminder, this call is being webcast through the company's website at nsrt.nextpoint.com. Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995 that are based on management's current expectations, assumptions, and beliefs. Listeners should not place a new reliance on any forward-looking statements and are encouraged to review the company's most recent annual report on Form 10-K and the company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statements. The statements made during this conference call speak only as of today's date and except as required by law, NXOT does not undertake any obligation to publicly update or revise any forward-looking statements. This conference call also includes an analysis of non-GAAP financial measures. For a more complete discussion of these non-GAAP financial measures, see the company's earnings release that was filed earlier today. All right, now let's turn the call over to Paul Richards. Please go ahead, Paul.

Thanks, Kristen, and welcome everyone joining us this morning. We appreciate your time. I'll kick off the call and cover our Q4 and full year results and highlights, update our NAAP calculation, and then provide initial 2026 guidance. I'll then turn it over to Matt to discuss specifics on the leasing environment and metrics driving our performance and guidance and details on the portfolio. Results for Q4 are as follows. Net loss for the fourth quarter was a loss of $10.3 million or $0.41 per diluted share on total revenue of $62.1 million as compared to a net loss of $26.9 million or $1.06 per diluted share in the same period in 2024 on total revenue of $63.8 million. For the fourth quarter, NOI was $37.1 million on 35 properties compared to $38.9 million on 35 properties for the fourth quarter of 2024, a 4.7% decrease in NOI. For the fourth quarter, same-store rental income decreased 2.8% and same-store occupancy closed at 92.7%. This coupled with an increase in same-store expenses of 1.1% led to a decrease in same-store NOI of 4.8% as compared to Q4 2024. We reported Q4 core FFO of $16.5 million, or $0.65 per diluted share, compared to $0.68 per diluted share in Q4-24. During 2025, NSRT repurchased 223,109 shares for a weighted average price of $34.29 per share, which is approximately a 29% discount to the midpoint of our Q4-25 NAV to be discussed here shortly. We continue to execute our value-add business plan by completing 388 full and partial renovations during the quarter and leased 275 renovated units, achieving an average monthly rent premium of $74 and a 22.2% ROI. Since inception, NXRT has completed installation of 9,866 full and partial upgrades, 4,979 kitchen and laundry appliances, and 11,199 tech packages, resulting in $158, $50, and $43 average monthly rental increases per unit and 20.8%, 63.7%, and 37.2% ROI, respectively. Results for the full year 2025 are as follows. Net loss for the year ended December 31st was $32 million, or a loss of $1.26 per diluted share, which included a $95.8 million of depreciation amortization expense. This compared to net income of $1.1 million, or income of $0.04 per diluted share for the full year of 2024, which included a gain on sale of real estate of $54.2 million and a $97.8 million of depreciation and amortization expense. As a quick reminder, the company sold our two remaining Houston assets as well as Radbourne Lake in Charlotte in 24. For the year, NOI was $151.7 million on 35 properties as compared to $157 million on 35 properties for the same period in 2024, or a decrease of 3.4%. For the year, same-store rental income decreased 1.3%. and same-store occupancy closed at 92.7%. This, coupled with a slight increase in same-store expenses of 0.1%, led to a decrease in same-store NOI of 1.6% as compared to the full year in 24. We reported core FFO in 2025 of $71.3 million, or $2.79 per diluted share, compared to $2.79 per diluted share for 2024. Since inception of the business in 2015, NSRT has generated 8.54% compounded annual growth rate in our core FFO. Moving to the NAV for share. Based on our current estimate of cap rates in our markets unchanged at 5.25% to 5.75% and our 2026 NOI guidance, we are reporting a NAV for share range as follows. $41.43 on the low end, $55.72 on the high end, with a $48.57 $48.57 at the midpoint. Next, our dividend update. For the fourth quarter, we paid a dividend of 53 cents per share on December 31st. Since inception, we have increased our dividend 157.3%. For 2025, our dividend was 1.35 times covered by core FFO with a payout ratio of 73.8% of core FFO. Now our capital markets balance sheet leverage and liquidity. On July 11, 2025, the company entered into a $200 million revolving credit facility with JPMorgan Chase Bank and the lenders partied thereto from time to time. The credit facility may be increased by up to an additional $200 million if the lenders agree to increase their commitments. The new facility improves pricing by 15 basis points across all leveraged years to term SOFR plus 150 to 225 basis points. The credit facility will mature on July 30, 2028, unless the company exercises its option to extend for a one-year term. NXRT has $13.7 million of unrestricted cash and $108 million of available undrawn capacity on our unsecured corporate credit facility, giving the company $121.7 million of available liquidity as we head into 2026. We have no scheduled debt maturities until 2028. Over time, we will look to reduce leverage, credit facility leverage in particular, through a disposition and recycling of long-held, lower-growth assets where we have the ability to harvest gains and put capital back into work into more productive strategies and investments. As of December 31, 2025, we had total undeadness of $1.6 billion at an adjusted weighted average interest rate at 3.28%. Interest rate swap agreements effectively fixed the interest rate on 0.9 billion or 62% of our 1.5 billion of floating rate mortgage debt outstanding. As we have done historically, we will continue to evaluate the credit markets for opportunities to hedge or restructure our debt to best positions our assets and the portfolio for future growth while maintaining the highly liquid low friction optionality afforded to us through the use of floating rate agency mortgage financing arrangements. Full year 2026 guidance. For 2026, we are issuing the guidance as follows. Rental income, on the low end, 0%, with a midpoint of 0.9% and a high end of 1.9%. Total revenue, low end of 0.1%, with a midpoint of 1.1%, and a high end of 2%. Total expenses, low end of 4.2%, midpoint 3.5%, high end 2.8%. Same store NOI, low end, negative 2.5%, midpoint, negative 0.5%, and the high end of 1.5%. Earnings per diluted share, low end, negative $1.54, midpoint, negative $1.40, and the high end, negative $1.26. And lastly, core FFO per diluted share, low end, $2.42, midpoint, $2.57, and at high end, $2.71. Matt will go into detail on our same-store operating assumptions with his prepared remarks and the largest driver from our 25 actuals to 26 midpoint guidance is interest expense. And again, Matt will provide details on our thoughts regarding upside on the operational front and our same-store operating assumptions. And with that, I'll turn it over to Matt for commentary on the portfolio. Thank you, Paul.