Quarterly Earnings Discussion Transcription for CaliberCos (CWD) in Q2 2025
In a recent financial update, CaliberCos has shared its Q2 2025 performance, highlighting signs of stabilization, strategic debt management, and exciting new projects.
Debt Management
CaliberCos currently holds 195 individual unsecured notes, totalling approximately $33 million. Notably, $26.1 million of this amount will mature within the next twelve months. The company has outlined three primary programs to manage its debt obligations: refinancing existing notes into a thirty-six-month unsecured note program, raising newly issued preferred stock, and executing an equity purchase agreement for up to $25 million common stock.
Stabilization and Revenue Growth
The Holiday Inn Newport News is showing meaningful signs of stabilization, with efforts at enhanced cost controls and more targeted revenue strategies driving monthly improvements. A high-impact group, the 138th Firewing, has finalized an agreement to stay at the Holiday Inn Newport News through October 1, aligning with peak season and materially supporting ADR and RevPAR through 2025.
New Projects and Partnerships
CaliberCos has secured a development agreement with Hyatt Hotels, granting exclusive rights to develop 15 Hyatt Studios hotels in five target states. Three new selling agreements were secured in the second quarter, representing strategic partners with strong long-term pipeline potential. A ten-year agreement has been concluded with a well-known food services company for the exclusive food and beverage provider for Pure, with the company agreeing to contribute $2 million towards the project's build-out.
Fundraising and Expenses
Caliber is focusing on fundraising for Q3 and Q4, with consistent momentum in wholesale fundraising. Total platform expenses in Q2 were $5.3 million, a decrease of 35% compared to last year's Q2 of $8.2 million, primarily due to a decrease in operating costs related to payroll and payroll editing expenses.
Financial Performance
The platform adjusted EBITDA loss narrowed significantly, from $2.5 million in Q2 2024 to $54,000 in Q2 2025. Managed capital increased 6% to $498 million from $470 million year-over-year for Q2 2025. The estimated performance allocations (carried interest) for CaliberCos as of Q2 2025 were $84.8 million (non-GAAP).
Looking Ahead
Caliber continues to target new acquisitions for CHT and plans on filing a shelf registration with an at-the-market offer or an ATM, but has no plans to offer shares at this time. The Metro Center Mall transformation, an $800 million redevelopment project, has completed its demolition phase.
In conclusion, CaliberCos' Q2 2025 financial update showcases the company's commitment to stabilization, strategic debt management, and the pursuit of new opportunities. The company's focus on cost-saving initiatives, fundraising, and partnerships positions it well for continued growth in the coming quarters.
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