• Adjusted Net Income: $0.28 per share.

• Distributable Earnings: $0.40 per share.

• Recurring Service Revenues: $45.5 million, a decrease of approximately $1.8 million sequentially.

• Acquisition Fees: $700,000 from two residential joint ventures.

• Expected Recurring Service Revenues (Next Quarter): Between $44 million and $45 million.

• EBITDA from Chicago Shopping Center Acquisition: Approximately $350,000 per quarter in fiscal 2025.

• Recurring Cash Compensation: $42.1 million, a decline of approximately $500,000 sequentially.

• Expected Recurring Cash Compensation (Next Quarter): Approximately $39 million.

• Recurring G&A Expenses: $10.7 million, excluding $600,000 in annual director share grants.

• Expected Recurring G&A (Next Quarter): Closer to $10.5 million.

• Expected Adjusted Earnings Per Share (Next Quarter): Between $0.28 and $0.30 per share.

• Expected Adjusted EBITDA (Next Quarter): Between $19 million and $20 million.

• Expected Distributable Earnings (Next Quarter): Between $0.42 and $0.44 per share.

• Dividend Payout Ratio: Approximately 79%.

• Cash on Hand: $137 million.

• Warning! GuruFocus has detected 4 Warning Signs with RMR.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The RMR Group Inc (NASDAQ:RMR) closed two joint venture acquisitions of residential communities in South Florida with a transaction value of approximately $196 million, showcasing their ability to attract institutional investors.

• RMR's value-add retail strategy is leveraging their experienced retail team to establish a track record within the sector, with plans to acquire approximately $100 million in retail properties over the next 6 to 12 months.

• RMR's private capital assets under management have grown from $0 billion to over $12 billion in less than five years, indicating strong growth potential.

• DHC posted strong first-quarter results with revenue, normalized FFO per share, and adjusted EBITDA exceeding consensus estimates, driven by improvements in the SHOP segment.

• RMR maintains a strong financial position with $137 million of cash on hand and no corporate debt, allowing them to take advantage of strategic opportunities.

Negative Points

• The RMR Group Inc (NASDAQ:RMR) reported second-quarter results slightly below expectations, with adjusted net income at $0.28 per share and distributable earnings at $0.40 per share.

• Economic volatility and deleveraging activities have adversely impacted RMR's revenues, particularly due to lower capital expenditures by managed equity REITs.

• Recent market volatility has tempered investor enthusiasm, causing some to pause new allocations, impacting RMR's investment initiatives.

• Recurring service revenues decreased by approximately $1.8 million sequentially, driven by lower-than-expected capital spend and declines in the enterprise values of managed equity REITs.

• The current fundraising environment for private equity, especially real estate, is challenging, making it difficult to significantly increase AUM and fees in the short term.