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ARLINGTON, Va.--(BUSINESS WIRE)--AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three and six months ended June 30, 2026 and 2025 as detailed below.

Q2 2026

Q2 2025

% Change

EPS

$

1.11

$

1.88

(41.0

)%

FFO per share (1)

$

2.73

$

2.80

(2.5

)%

Core FFO per share (1)

$

2.86

$

2.82

1.4

%

YTD 2026

YTD 2025

% Change

EPS

$

3.43

$

3.54

(3.1

)%

FFO per share (1)

$

5.46

$

5.59

(2.3

)%

Core FFO per share (1)

$

5.69

$

5.65

0.7

%

(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Definitions and Reconciliations, table 4.

Commenting on the Company's results, Benjamin W. Schall, President and CEO of the Company, said, "Our second quarter was strong, exceeding expectations, and the results reflect the enduring qualities of our business — a high-quality portfolio in supply-constrained markets, a proven operating platform, and teams that execute with consistency and discipline.

"We are proud of AvalonBay’s over 30-year history as one of the leading public multi-family operators and developers. The proposed combination with Equity Residential now provides the opportunity to draw on the foundational strengths of two exceptional organizations to create the premier company in rental housing in the country. The scale, the talent, the portfolio, the operating capabilities and the investment opportunities all come together in ways that neither company could achieve alone. We’re extremely excited for our future and look forward to sharing more later this year."

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2026 to its results for the prior year period:

Q2 2026 Results Compared to Q2 2025

Per Share

EPS

FFO

Core FFO

Q2 2025 per share reported results

$

1.88

$

2.80

$

2.82

Same Store Residential NOI (1)

0.03

0.03

0.03

Development NOI

0.08

0.08

0.08

Overhead and other

(0.02

)

(0.02

)

(0.02

)

Capital markets and transaction activity

(0.07

)

(0.06

)

(0.05

)

Core FFO adjustments (2)

(0.10

)

(0.10

)

—

Real estate gains, net, depreciation expense and other

(0.69

)

—

—

Q2 2026 per share reported results

$

1.11

$

2.73

$

2.86

(1) Consists of increases of $0.07 in revenue and $0.04 in operating expenses.

(2) For detail of Core FFO adjustments, see Definitions and Reconciliations, table 4.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2026 to its April 2026 outlook:

Q2 2026 Results Compared to April 2026 Outlook

Per Share

EPS

FFO

Core FFO

Projected per share (1)

$

1.28

$

2.73

$

2.77

Same Store Residential NOI (2)

0.09

0.09

0.09

Development NOI

0.01

0.01

0.01

Overhead and other

(0.01

)

(0.01

)

(0.01

)

Core FFO adjustments (3)

(0.09

)

(0.09

)

—

Real estate gains, net, depreciation expense and other

(0.17

)

—

—

Q2 2026 per share reported results

$

1.11

$

2.73

$

2.86

(1) The mid-point of the Company's April 2026 outlook.

(2) Consists of favorable revenue of $0.03 and lower operating expenses of $0.06. Approximately $0.03 of the operating expenses benefit is related to timing and expected to be incurred in the second half of the year.

(3) For detail of Core FFO adjustments, see Definitions and Reconciliations, table 4.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the six months ended June 30, 2026 to its results for the prior year period:

YTD 2026 Results Compared to YTD 2025

Per Share

EPS

FFO

Core FFO

YTD 2025 per share reported results

$

3.54

$

5.59

$

5.65

Same Store Residential NOI (1)

0.04

0.04

0.04

Development NOI

0.15

0.15

0.15

Commercial NOI

(0.01

)

(0.01

)

(0.01

)

Overhead and other

(0.03

)

(0.03

)

(0.03

)

Capital markets and transaction activity

(0.13

)

(0.13

)

(0.11

)

Core FFO adjustments (2)

(0.15

)

(0.15

)

—

Real estate gains, net, depreciation expense and other

0.02

—

—

YTD 2026 per share reported results

$

3.43

$

5.46

$

5.69

(1) Consists of increases of $0.15 in revenue and $0.11 in operating expenses.

(2) For detail of non-core items, see Definitions and Reconciliations, table 4.

Same Store Operating Results for the Three Months Ended June 30, 2026 Compared to the Prior Year Period

Same Store Residential revenue increased $10,958,000, or 1.6%, to $709,586,000. Same Store Residential operating expenses increased $6,134,000, or 2.9%, to $221,034,000 and Same Store Residential NOI increased $4,824,000, or 1.0%, to $488,552,000.

Commenting on the Company's operating results, Sean J. Breslin, Chief Operating Officer, said, "A healthier demand environment, easing new supply, and disciplined execution by our teams delivered strong rent growth and lower operating expenses in the first half of the year, enabling us to increase Same Store NOI guidance for the full year. These factors set a strong foundation as we bring two organizations together and position the combined company to produce healthy results in the quarters ahead."

Same Store Operating Results for the Six Months Ended June 30, 2026 Compared to the Prior Year Period

Same Store Residential revenue increased $21,953,000, or 1.6%, to $1,412,006,000. Same Store Residential operating expenses increased $16,053,000, or 3.7%, to $444,551,000 and Same Store Residential NOI increased $5,900,000, or 0.6%, to $967,455,000.

Development Activity

During the three months ended June 30, 2026, the Company completed the development of Avalon Parsippany, located in Parsippany, NJ. Avalon Parsippany contains 410 apartment homes and was constructed for a Total Capital Cost of $145,000,000.

During the three months ended June 30, 2026, the Company started the construction of three apartment communities:

Avalon Townhome Collection Central Park, located in Denver, CO; Kanso Plymouth, located in Plymouth, MA; and Avalon Dulles Innovation, located in Herndon, VA. These communities are expected to contain an aggregate of 801 apartment homes and 5,000 square feet of commercial space for an estimated Total Capital Cost of $283,000,000. Avalon Townhome Collection Central Park is being developed through the Company's Developer Funding Program ("DFP").

During the six months ended June 30, 2026, the Company:

completed the development of two wholly-owned communities containing an aggregate of 755 apartment homes for a Total Capital Cost of $247,000,000; and started the construction of five apartment communities. These communities are expected to contain an aggregate of 1,247 apartment homes. Estimated Total Capital Cost for these communities is $471,000,000. At June 30, 2026, the Company had 27 wholly-owned Development communities under construction that are expected to contain 9,064 apartment homes and 74,000 square feet of commercial space. Estimated Total Capital Cost for these communities is $3,526,000,000.

Disposition Activity

During the six months ended June 30, 2026, the Company sold three wholly-owned communities containing an aggregate of 884 apartment homes. These communities were sold for $340,750,000, resulting in a gain in accordance with generally accepted accounting principles in the United States ("GAAP") of $179,688,000 and an Economic Gain of $35,836,000.

In July 2026, the Company sold eaves Tysons Corner, a wholly-owned community with 217 apartment homes, located in Vienna, VA for $68,050,000.

Structured Investment Program ("SIP") Activity

As previously disclosed, during the three months ended June 30, 2026, the Company entered into one new mezzanine loan commitment, agreeing to provide an investment of up to $15,000,000.

During the six months ended June 30, 2026, the Company received full repayment of $17,580,000 for one mezzanine loan, which includes principal and contractual accrued interest in accordance with the terms of the agreement.

Both the repayment and new commitment were for multifamily development projects in Metro NY/NJ.

Liquidity and Capital Markets

At June 30, 2026, the Company had $80,682,000 in unrestricted cash and cash equivalents.

Debt Activity

During the three months ended June 30, 2026, the Company repaid $475,000,000 principal amount of its 2.95% coupon unsecured notes at par upon maturity.

As of June 30, 2026, the Company did not have any borrowings outstanding under its Credit Facility and had outstanding borrowings of $915,786,000 under its unsecured commercial paper program.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the second quarter of 2026 was 4.6 times and Unencumbered NOI (as defined in this release) for the six months ended June 30, 2026 was 95%.

Equity Activity

During the three months ended June 30, 2026, the Company settled outstanding equity forward contracts entered into during 2024, issuing 2,760,000 shares of common stock at $220.08 per share for proceeds of $607,433,000.

In July 2026, the Company settled the remaining outstanding equity forward contracts, issuing 920,000 shares of common stock at $219.52 per share for proceeds of $201,958,000.

There were no repurchases of common stock during the three months ended June 30, 2026. During the six months ended June 30, 2026, the Company repurchased 1,130,336 shares of common stock at an average price of $175.59 per share, including fees, for a total of $198,480,000. There have been no repurchases subsequent to June 30, 2026.

Proposed Merger with Equity Residential

On May 21, 2026, Equity Residential (NYSE: EQR) and the Company announced a definitive agreement to combine in an all-stock merger of equals, creating one of the country's leading real estate companies with the differentiated scale, capabilities, and balance sheet strength to expand margins, accelerate growth, and redefine leadership in rental housing. The combined company will have a pro forma equity market capitalization of approximately $53 billion and a total enterprise value of approximately $71 billion, with more than 180,000 rental apartments (data as of July 17, 2026).

On June 8, 2026, the combined company announced the executive leadership team, led by Benjamin W. Schall, who will serve as the President and CEO of the combined company.

Under the terms of the merger agreement, the combined company's board will consist of 14 trustees, including seven members of the current Equity Residential board and seven members of the current AvalonBay board. The following members of the Equity Residential board will serve on the combined company board as of the closing of the merger: David J. Neithercut, Angela M. Aman, Chris Carr, Mary Kay Haben, Ann C. Hoff, Nina P. Jones and Stephen E. Sterrett. The following members of the AvalonBay board will serve on the combined company board as of the closing of the merger: Timothy J. Naughton, Benjamin W. Schall, Terry S. Brown, Conor C. Flynn, Christopher B. Howard, Charles E. Mueller Jr., and Susan Swanezy. Pursuant to the merger agreement, Mr. Sterrett will be appointed to serve as the Chairman of the combined company board.

On August 12, 2026, the Company will hold its special meeting of stockholders and Equity Residential will hold its special meeting of shareholders related to the proposed merger. For further information, please refer to the definitive joint proxy statement/prospectus filed by each of the Company and Equity Residential with the Securities and Exchange Commission (the "SEC") on July 13, 2026.

Same Store Full Year 2026 Financial Outlook

For its Same Store portfolio full year 2026 financial outlook, the Company expects the following:

Full Year Same Store Projected Revenue, Projected Operating Expenses and Projected NOI Outlook (1)

Original

Updated

Low

High

Low

High

Projected revenue change

0.4 %

2.4 %

1.1 %

2.1 %

Projected Opex change

2.7 %

4.9 %

3.0 %

4.0 %

Projected NOI change

(0.7) %

1.3 %

— %

1.4 %

(1) Represents projections of the standalone Company compared to full year 2025 and excludes the impact of the proposed merger.

Other Matters

In light of the Company’s proposed merger of equals with Equity Residential, the Company will not hold a conference call to discuss its second quarter 2026 financial results.

The Company produces Earnings Release Attachments (the "Attachments") that provide more detailed information regarding financial information and operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at https://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through https://investors.avalonbay.com/news-events/email-alerts.

In addition to the Attachments, the Company is providing an investor presentation in connection with this release that will be available on the Company's website at https://investors.avalonbay.com after the market close on July 22, 2026.

About AvalonBay Communities, Inc.

AvalonBay Communities, Inc., a member of the S&P 500, is an equity REIT that develops, redevelops, acquires and manages apartment communities in leading metropolitan areas in Boston, Massachusetts, the New York/New Jersey Metro area, the Mid-Atlantic, Seattle, Washington, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. As of June 30, 2026, the Company owned or held a direct or indirect ownership interest in 322 apartment communities containing 99,072 apartment homes in 11 states and the District of Columbia, of which 27 communities were under development and one community was under redevelopment. More information may be found on the Company’s website at https://www.avalonbay.com. For additional information, please contact Matthew Grover, Senior Director of Investor Relations, at 703-317-4524.

Forward-Looking Statements

This release, including its Attachments, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company's forward-looking statements generally use the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “project,” “plan,” “may,” “shall,” “will,” “pursue,” “outlook” and other similar expressions that indicate future events and trends and do not report historical matters. These statements, among other things, address or reflect the Company’s intent, belief, forecasts, assumptions or expectations with respect to: development, redevelopment, acquisition or disposition of communities; the timing and cost of completion of communities under development or redevelopment; the timing of lease-up, occupancy and stabilization of communities; pursuit of land for future development; the anticipated operating performance of communities; cost, yield, revenue, NOI and earnings estimates; the impact of landlord-tenant laws and rent regulations, including rent caps; the Company’s expansion into new regions; declaration or payment of dividends; joint venture activities; the Company’s policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters; the Company’s qualification as a REIT under the Internal Revenue Code of 1986, as amended; the real estate markets in regions where the Company operates and in general; the availability of debt and equity financing; interest rates, inflation, tariffs and other economic conditions and their potential impacts; trends affecting the Company’s financial condition or results of operations; legal and regulatory changes; the impact of legal proceedings; the proposed transaction between the Company and Equity Residential; the expected timing and completion of the proposed transaction; and the anticipated benefits of the proposed transaction.

The Company cannot assure the future results or outcome of the matters described in these statements; rather these statements reflect the Company’s current expectations of the outcomes of the matters discussed. The Company does not undertake a duty to update these forward-looking statements, and therefore they may not represent the Company’s estimates and assumptions after the date of this release. You should not rely on forward-looking statements because they involve risks and uncertainties and other factors, some of which are beyond the Company’s control. These risks, uncertainties and other factors may cause the Company’s actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by these forward-looking statements. You should carefully review the discussion under Part I, Item 1A. “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2025 and Part II, Item 1A. “Risk Factors” in subsequent quarterly reports on Form 10-Q, as well as the risks described in the Definitive Joint Proxy Statement/Prospectus (as defined below) that has been filed with the SEC in connection with the proposed transaction and is available from the sources indicated below, for further discussion of risks associated with forward-looking statements.

Some of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the Company may fail to secure development opportunities due to an inability to reach agreements with third parties to obtain land at attractive prices or to obtain desired zoning and other local approvals; the Company may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; construction costs of a community may exceed original estimates; the Company may be unable to complete planned dispositions, or may complete such transactions on different timing or terms than expected; the Company may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in expected rental revenues; occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond the Company’s control; the Company’s cash flows from operations and access to cost-effective capital may be insufficient for the development of the Company’s pipeline, which could limit the Company’s pursuit of opportunities; an outbreak of disease or other public health event may affect the multifamily industry and general economy; the Company’s cash flows may be insufficient to meet required payments of principal and interest, and the Company may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness; the Company may be unsuccessful in its management of joint ventures and the REIT vehicles that are used with certain joint ventures; the Company may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting the Company’s ability to increase rents, charge non-rent fees or evict tenants, may impact its revenue or increase costs; the Company’s expectations, estimates and assumptions as of the date of this filing regarding legal proceedings may change; the Company’s assumptions and expectations in its financial outlook may prove to be too optimistic; the Company may choose to pay dividends in its stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any; investments made under the SIP may not be repaid as expected or the development may not be completed on schedule, which could require the Company to engage in litigation, foreclosure actions, and/or first party project completion to recover its investment, which may not be recovered in full or at all in such event; the Company may be unable to complete the proposed transaction with Equity Residential on the proposed terms or on the anticipated timeline, or at all, including as a result of the failure to obtain the required respective stockholder or shareholder, as applicable, approval; the Company may not realize the anticipated benefits of the proposed transaction due to delay in completing the proposed transaction; the Company may face significant transaction costs and/or unknown or inestimable liabilities relating to the proposed transaction; the Company may face disruptions resulting from the proposed transaction, including the diversion of management’s attention from ongoing business operations, which may harm the Company’s business during the pendency of the proposed transaction or otherwise; the Company may face certain restrictions during the pendency of the business combination that may impact its ability to pursue certain business opportunities or strategic transactions; the possibility that the business combination may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the occurrence of certain events that may result in the termination of the merger agreement; and the Company’s financial performance may be affected by potential business uncertainty during the pendency of the business combination.

No Offer or Solicitation

This press release is for informational purposes only and is not intended to, and shall not, constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Important Additional Information and Where to Find It

In connection with the proposed transaction between the Company and Equity Residential, Equity Residential has filed with the SEC a registration statement on Form S-4 (File No. 333-297128) (the “Registration Statement”) which includes the joint proxy statement of the Company and Equity Residential that also constitutes a prospectus of Equity Residential. The Registration Statement was declared effective on July 13, 2026, and each of the Company and Equity Residential commenced mailing of the definitive joint proxy statement of the Company and Equity Residential that also constitutes a prospectus of Equity Residential (the “Definitive Joint Proxy Statement/Prospectus”) to their respective stockholders or shareholders, as applicable, on or about July 13, 2026. Each of the Company and Equity Residential may also file other relevant documents with the SEC regarding the proposed transaction. This press release is not a substitute for the Registration Statement, Definitive Joint Proxy Statement/Prospectus or any other document that the Company or Equity Residential (as applicable) have filed or may file with the SEC in connection with the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF AVALONBAY AND EQUITY RESIDENTIAL ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE REGISTRATION STATEMENT, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS WHEN THEY BECOME AVAILABLE WITH THE SEC BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the Registration Statement, the Definitive Joint Proxy Statement/Prospectus and other documents filed with the SEC by the Company and Equity Residential, which contain important information, through the website maintained by the SEC at www.sec.gov. The documents filed by the Company with the SEC may be obtained free of charge by accessing the “Investor” section of the Company’s website at www.avalonbay.com or by writing to AvalonBay, 4040 Wilson Blvd., Suite 1000, Arlington, Virginia 22203, Attention: Corporate Secretary (Legal Department) or by email at [email protected]. The documents filed by Equity Residential with the SEC may be obtained free of charge by accessing “Filings – SEC Filings” in the “Investor” section of Equity Residential’s website at www.equityapartments.com, by writing to Equity Residential – Investor Relations, Two North Riverside Plaza, Suite 500, Chicago, Illinois 60606, by telephone at 1-888-879-6356 or by email at [email protected].

Participants in the Solicitation

The Company, Equity Residential, and certain of their respective trustees, directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s and Equity Residential’s stockholders or shareholders, as applicable, in respect of the proposed transaction. Information about the directors and executive officers of the Company, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in the Company’s proxy statement for its 2026 Annual Meeting of Stockholders under the headings “Director Nominees,” “Transactions with Related Persons, Promoters and Certain Control Persons,” “Director Compensation,” “Director Compensation Table,” “Compensation Discussion and Analysis,” “Executive Compensation Tables” and “Officers, Stock Ownership and Other Information,” which was filed with the SEC on April 6, 2026, and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 27, 2026. Information about the trustees and executive officers of Equity Residential, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in Equity Residential’s proxy statement for its 2026 Annual Meeting of Shareholders under the headings “Biographical Information and Qualifications of Trustees,” “Biographical Information of Executives,” “Common Share Ownership of Trustees and Executives,” “Compensation Discussion and Analysis,” “Executive Compensation” and “Trustee Compensation,” which was filed with the SEC on April 14, 2026, and in Equity Residential’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 13, 2026. To the extent holdings of the Company’s securities by its directors and executive officers have changed since the amounts set forth in the Company’s definitive proxy statement for its 2026 Annual meeting of Stockholders or the holdings of Equity Residential’s securities by its trustees or executive officers have changed since the amounts set forth in Equity Residential’s definitive proxy statement for its 2026 Annual Meeting of Shareholders, such changes have been or will be reflected on an Initial Statement of Beneficial Ownership of Securities on Form 3, Statement of Changes in Beneficial Ownership on Form 4, or Annual Statement of Changes in Beneficial Ownership on Form 5, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the Registration Statement, the Definitive Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors and security holders should read the Registration Statement and the Definitive Joint Proxy Statement/Prospectus carefully before making any voting or investment decisions. Investors may obtain free copies of these documents from the Company or Equity Residential using the sources indicated above.

Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined, reconciled and further explained on Attachment 11, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 11 is included in the full earnings release available at the Company’s website at https://investors.avalonbay.com. This wire distribution includes only the following definitions and reconciliations.

Average Monthly Revenue per Occupied Home is calculated by the Company as Residential revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.

Capitalized Community Expenditures includes Asset Preservation Capex and NOI Enhancing Capex.

Asset Preservation Capex represents capital expenditures that the Company does not expect will directly result in increased revenue or expense savings. NOI Enhancing Capex represents capital expenditures that the Company expects will directly result in increased revenue or expense savings, and excludes any capital expenditures for redevelopment activities. Both Asset Preservation Capex and NOI Enhancing Capex exclude costs associated with our Development communities under construction, including post-construction close out costs, as well as capital expenditures associated with newly acquired communities that were contemplated as part of the initial investment in the community. The Company’s Residential Capitalized Community Expenditures for Same Store and Non-Same Store operating portfolios during the six months ended June 30, 2026 are as follows (dollars in thousands):

TABLE 1

Apartment Homes

Asset Preservation

NOI Enhancing

YTD 2026

Per Home

YTD 2026

Per Home

Same Store

79,473

$

98,066

$

1,234

$

62,268

$

784

Non-Same Store

6,266

8,384

1,338

1,446

231

Total

85,739

$

106,450

$

1,242

$

63,714

$

743

Commercial represents results attributable to the non-apartment components of the Company's mixed-use communities and other non-residential operations.

Development is composed of consolidated communities that are either currently under construction, or were under construction and were completed during the current year. These communities may be partially or fully complete and operating.

DownREIT Units means units representing limited partnership interests in the "downREIT" partnership that acquired the Dallas-Fort Worth portfolio of six communities in April 2025. Each DownREIT Unit is entitled to receive quarterly distributions at the same rate as quarterly dividends on a share of the Company’s common stock (pro rated for the time outstanding during the first quarter of issuance). Following the one-year anniversary of the closing date, each holder of a DownREIT Unit will have the right to initiate a transaction in which each DownREIT Unit may be redeemed for a cash amount related to the then-current trading price of one share of the Company’s common stock or, at the Company’s election, one share of the Company’s common stock.

EBITDA, EBITDAre and Core EBITDAre are considered by management to be supplemental measures of our financial performance. EBITDA is defined by the Company as net income or loss computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization. EBITDAre is calculated by the Company in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), as EBITDA plus or minus losses and gains on the disposition of depreciated property, plus casualty loss and impairment write-downs of depreciated property, with adjustments to reflect the Company's share of EBITDAre of unconsolidated entities. Core EBITDAre is the Company’s EBITDAre as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered part of the Company’s core business operations, Core EBITDAre can help one compare the core operating and financial performance of the Company between periods. A reconciliation of EBITDA, EBITDAre and Core EBITDAre to net income is as follows (dollars in thousands):

TABLE 2

Q2

2026

Net income

$

156,893

Interest expense and loss on extinguishment of debt

72,208

Income tax expense

70

Depreciation expense

232,975

EBITDA

$

462,146

Loss on sale of communities

338

Unconsolidated entity EBITDAre adjustments (1)

3,361

EBITDAre

$

465,845

Unconsolidated entity activity

(7,464

)

Structured Investment Program loan reserve

102

Advocacy contributions

525

Severance related costs

74

Expensed transaction, development and other pursuit costs, net of recoveries

19,085

Other real estate activity

(223

)

Legal settlements and costs

6,317

Core EBITDAre

$

484,261

(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income.

Economic Gain is calculated by the Company as the gain on sale in accordance with GAAP, less accumulated depreciation through the date of sale and any other adjustments that may be required under GAAP accounting. Management generally considers Economic Gain to be an appropriate supplemental measure to gain on sale in accordance with GAAP because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold community. The Economic Gain for disposed communities is based on their respective final settlement statements. A reconciliation of the aggregate Economic Gain to the aggregate gain on sale in accordance with GAAP for the wholly-owned communities disposed of during the six months ended June 30, 2026 is as follows (dollars in thousands):

TABLE 3

YTD 2026

Net Gain on sale in accordance with GAAP

$

179,688

Accumulated Depreciation and Other

(143,852

)

Economic Gain

$

35,836

Economic Occupancy is defined as total possible Residential revenue less vacancy loss as a percentage of total possible Residential revenue. Total possible Residential revenue (also known as “gross potential”) is determined by valuing occupied units at contract rates and vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant apartments at their Market Rents, Economic Occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community’s gross revenue.

FFO and Core FFO are generally considered by management to be appropriate supplemental measures of our operating and financial performance. FFO is calculated by the Company in accordance with the definition adopted by Nareit. FFO is calculated by the Company as Net income or loss attributable to common stockholders computed in accordance with GAAP, adjusted for gains or losses on sales of previously depreciated operating communities, cumulative effect of a change in accounting principle, impairment write-downs of depreciable real estate assets, write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates and depreciation of real estate assets, including similar adjustments for unconsolidated partnerships and joint ventures, including those from a change in control. FFO can help one compare the operating and financial performance of a real estate company between periods or as compared to different companies because adjustments such as (i) gains or losses on sales of previously depreciated property or (ii) real estate depreciation may impact comparability between companies as the amount and timing of these or similar items can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates. Core FFO is the Company's FFO as adjusted for non-core items outlined in the table below. By further adjusting for items that we do not consider to be part of our core business operations, Core FFO can help with the comparison of core operating performance of the Company between periods. A reconciliation of Net income attributable to common stockholders to FFO and to Core FFO is as follows (dollars in thousands):

TABLE 4

Q2

Q2

YTD

YTD

2026

2025

2026

2025

Net income attributable to common stockholders

$

155,720

$

268,665

$

481,450

$

505,262

Depreciation - real estate assets, including joint venture adjustments

230,319

230,264

460,921

446,891

Income attributable to noncontrolling interests

1,173

1,190

3,733

1,190

Loss (gain) on sale of previously depreciated real estate

338

(99,457

)

(179,574

)

(155,926

)

Casualty loss on real estate

—

858

4,619

858

FFO

387,550

401,520

771,149

798,275

Adjusting items:

Unconsolidated entity activity (1)

(7,464

)

1,223

(348

)

2,465

Structured Investment Program loan reserve (2)

102

(247

)

(162

)

(230

)

Hedge accounting activity

—

3

12

22

Advocacy contributions

525

87

2,659

87

Severance related costs

74

26

1,187

202

Expensed transaction, development and other pursuit costs, net of recoveries (3)

19,085

1,407

21,666

5,295

Other real estate activity (4)

(223

)

(3,614

)

(307

)

(3,747

)

Legal settlements and costs

6,317

4,098

9,091

5,576

Income tax expense (benefit)

70

(531

)

(224

)

(647

)

Core FFO

$

406,036

$

403,972

$

804,723

$

807,298

Weighted average common shares outstanding - diluted

141,834,769

143,292,306

141,323,779

142,889,432

Earnings per common share - diluted

$

1.11

$

1.88

$

3.43

$

3.54

FFO per common share - diluted

$

2.73

$

2.80

$

5.46

$

5.59

Core FFO per common share - diluted

$

2.86

$

2.82

$

5.69

$

5.65

(1) Amounts for Q2 and YTD 2026 consist primarily of unrealized gains on property technology and sustainability fund investments, as well as distributions from an unconsolidated real estate venture. Amounts for Q2 and YTD 2025 consist primarily of net unrealized losses on property technology and sustainability fund investments.

(2) Represents changes to the loan loss reserve associated with the Company's lending commitments primarily under its SIP. The timing and amount of any actual losses that will be incurred, if any, is to be determined.

(3) Amount for Q2 and YTD 2026 includes costs related to the proposed merger with Equity Residential of $12,367 and a write-off of $4,545 for one development opportunity that the Company determined is no longer probable. Amount for YTD 2025 includes a write-off of $3,668 for one development opportunity that the Company determined is no longer probable.

(4) Amounts for Q2 and YTD 2026 include gains on sale of non-operating real estate. Amounts for Q2 and YTD 2025 consist primarily of the gain on the sale of a development right.

Interest Coverage is calculated by the Company as Core EBITDAre divided by interest expense. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our ability to service debt obligations to that of other companies. A calculation of Interest Coverage for the three months ended June 30, 2026 is as follows (dollars in thousands):

TABLE 5

Core EBITDAre (1)

$

484,261

Interest expense (2)

$

72,208

Interest Coverage

6.7 times

(1) For additional detail, see Definitions and Reconciliations, table 2.

(2) Excludes the impact of non-core hedge accounting activity.

Market Cap Rate is defined by the Company as Projected NOI of a single community for the first 12 months of operations (assuming no repositioning), less an estimate of typical capital expenditure allowance per apartment home, divided by the gross sales price for the community. Projected NOI, as referred to above, represents management’s estimate of projected rental revenue minus projected operating expenses before interest, income taxes (if any), depreciation and amortization. For this purpose, management’s projection of operating expenses for the community includes a management fee of 2.5% and an estimate of typical market costs for insurance, payroll and other operating expenses for which the Company may have proprietary advantages not available to a typical buyer. The Market Cap Rate, which may be determined in a different manner by others, is a measure frequently used in the real estate industry when determining the appropriate purchase price for a property or estimating the value for a property. Buyers may assign different Market Cap Rates to different communities when determining the appropriate value because they (i) may project different rates of change in operating expenses and capital expenditure estimates and (ii) may project different rates of change in future rental revenue due to different estimates for changes in rent and occupancy levels. The weighted average Market Cap Rate is weighted based on the gross sales price of each community.

Market Rents as reported by the Company are based on the current market rates set by the Company based on its experience in renting apartments and publicly available market data. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Net Debt-to-Core EBITDAre is calculated by the Company as total debt (secured and unsecured debt, and the Company's Credit Facility and commercial paper program) that is consolidated for financial reporting purposes, less consolidated cash and restricted cash, divided by annualized second quarter 2026 Core EBITDAre. A calculation of Net Debt-to-Core EBITDAre is as follows (dollars in thousands):

TABLE 6

Total debt principal (1)

$

9,079,099

Cash and cash equivalents and restricted cash

(209,288

)

Net debt

$

8,869,811

Core EBITDAre (2)

$

484,261

Core EBITDAre, annualized

$

1,937,044

Net Debt-to-Core EBITDAre

4.6 times

(1) Balance at June 30, 2026 excludes $41,604 of debt discount and deferred financing costs as reflected in unsecured debt, net, $12,400 of debt discount and deferred financing costs as reflected in notes payable, net, and $314 of commercial paper discount as reflected in unsecured credit facility and commercial paper, net on the Condensed Consolidated Balance Sheets.

(2) For additional detail, see Definitions and Reconciliations, table 2.

NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), property management and other indirect operating expenses, net of corporate income, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss on extinguishment of debt, net, general and administrative expense, (income) loss from unconsolidated investments, SIP interest income, depreciation expense, income tax (benefit) expense, casualty loss, (gain) loss on sale of communities, other real estate activity and net operating income from real estate assets sold or held for sale. The Company considers NOI to be an important and appropriate supplemental performance measure to net income because it helps both investors and management to understand the core operations of a community or communities prior to the allocation of any corporate-level property management overhead or financing-related costs. NOI reflects the operating performance of a community and allows for an easier comparison of the operating performance of individual assets or groups of assets. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impact to overhead as a result of acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets.

Residential NOI represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue. Reconciliations of NOI and Residential NOI to net income, as well as a breakdown of Residential NOI by operating segment, are as follows (dollars in thousands):

TABLE 7

Q2

Q2

Q1

Q4

YTD

YTD

2026

2025

2026

2025

2026

2025

Net income

$

156,893

$

269,855

$

328,290

$

165,985

$

485,183

$

506,452

Property management and other indirect operating expenses, net of corporate income

38,483

38,153

38,100

36,101

76,583

74,254

Expensed transaction, development and other pursuit costs, net of recoveries

19,976

2,493

3,416

2,217

23,392

7,237

Interest expense, net

70,070

64,801

71,489

69,106

141,559

124,665

General and administrative expense

27,137

22,997

22,077

21,874

49,214

42,777

(Income) loss from unconsolidated investments

(7,647

)

1,052

6,527

745

(1,120

)

2,051

SIP interest income

(7,704

)

(6,937

)

(7,481

)

(7,594

)

(15,185

)

(13,050

)

Depreciation expense

232,975

231,730

233,104

233,387

466,079

449,618

Income tax expense (benefit)

70

(531

)

(294

)

(295

)

(224

)

(647

)

Casualty loss

—

858

4,619

418

4,619

858

Loss (gain) on sale of communities, net

338

(99,457

)

(179,912

)

368

(179,574

)

(155,926

)

Other real estate activity

(223

)

(3,637

)

(84

)

(212

)

(307

)

(3,792

)

NOI from real estate assets sold or held for sale

(1,124

)

(15,631

)

(3,392

)

(6,680

)

(4,516

)

(33,379

)

NOI

529,244

505,746

516,459

515,420

1,045,703

1,001,118

Commercial NOI

(7,572

)

(7,180

)

(8,317

)

(7,428

)

(15,889

)

(17,072

)

Residential NOI

$

521,672

$

498,566

$

508,142

$

507,992

$

1,029,814

$

984,046

Residential NOI

Same Store:

Boston, MA

$

65,321

$

65,497

$

62,913

$

63,834

$

128,234

$

129,061

Metro NY/NJ

96,972

97,839

94,127

95,680

191,099

193,053

Mid-Atlantic

63,969

65,631

63,245

63,876

127,214

130,627

Southeast FL

17,073

16,965

17,881

18,271

34,954

35,895

Denver, CO

9,168

9,125

9,644

9,190

18,812

18,735

Seattle, WA

33,776

34,646

33,602

34,026

67,378

68,978

N. California

84,055

77,070

80,051

77,866

164,106

154,552

S. California

108,166

106,725

106,866

108,531

215,032

210,639

Other Expansion Regions

10,052

10,230

10,574

10,194

20,626

20,015

Total Same Store

488,552

483,728

478,903

481,468

967,455

961,555

Other Stabilized

19,549

10,274

19,014

18,964

38,563

13,575

Development/Redevelopment

13,571

4,564

10,225

7,560

23,796

8,916

Residential NOI

$

521,672

$

498,566

$

508,142

$

507,992

$

1,029,814

$

984,046

NOI as reported by the Company does not include the operating results from assets sold or classified as held for sale. A reconciliation of NOI from communities sold or classified as held for sale is as follows (dollars in thousands):

TABLE 8

Q2

Q2

Q1

Q4

YTD

YTD

2026

2025

2026

2025

2026

2025

Revenue from real estate assets sold or held for sale

$

1,570

$

23,665

$

5,955

$

10,174

$

7,525

$

50,407

Operating expenses from real estate assets sold or held for sale

(446

)

(8,034

)

(2,563

)

(3,494

)

(3,009

)

(17,028

)

NOI from real estate assets sold or held for sale

$

1,124

$

15,631

$

3,392

$

6,680

$

4,516

$

33,379

Commercial NOI is composed of the following components (dollars in thousands):

TABLE 9

Q2

Q2

Q1

Q4

YTD

YTD

2026

2025

2026

2025

2026

2025

Commercial Revenue

$

10,061

$

9,163

$

10,861

$

9,954

$

20,922

$

20,770

Commercial Operating Expenses

(2,489

)

(1,983

)

(2,544

)

(2,526

)

(5,033

)

(3,698

)

Commercial NOI

$

7,572

$

7,180

$

8,317

$

7,428

$

15,889

$

17,072

Other Stabilized is composed of completed consolidated communities that the Company owns, which have Stabilized Operations as of January 1, 2026, or which were acquired subsequent to January 1, 2025. Other Stabilized excludes communities that are conducting or are probable to conduct substantial redevelopment activities.

Projected NOI, as used within this release for certain Development communities and in calculating the Market Cap Rate for dispositions, represents management’s estimate, as of the date of this release (or as of the date of the buyer’s valuation in the case of dispositions), of projected stabilized rental revenue minus projected stabilized operating expenses. For Development communities, Projected NOI is calculated based on the first twelve months of Stabilized Operations following the completion of construction. In calculating the Market Cap Rate, Projected NOI for dispositions is calculated for the first twelve months following the date of the buyer’s valuation. Projected stabilized rental revenue represents management’s estimate of projected gross potential minus projected stabilized economic vacancy and adjusted for projected stabilized concessions plus projected stabilized other rental revenue. Projected stabilized operating expenses do not include interest, income taxes (if any), depreciation or amortization, or any allocation of corporate-level property management overhead or general and administrative costs. In addition, projected stabilized operating expenses for Development communities do not include property management fee expense. Projected gross potential for Development communities and dispositions is generally based on leased rents for occupied homes and management’s best estimate of rental levels for homes which are currently unleased, as well as those homes which will become available for lease during the twelve-month forward period used to develop Projected NOI. The weighted average Projected NOI as a percentage of Total Capital Cost is weighted based on the Company’s share of the Total Capital Cost of each community, based on its percentage ownership.

Management believes that Projected NOI of the Development communities, on an aggregated weighted average basis, assists investors in understanding management's estimate of the likely impact on operations of the Development communities when the assets are complete and achieve stabilized occupancy (before allocation of any corporate-level property management overhead, general and administrative costs or interest expense). However, in this release the Company has not given a projection of NOI on a company-wide basis. Given the different dates and fiscal years for which NOI is projected for these communities, the projected allocation of corporate-level property management overhead, general and administrative costs and interest expense to communities under development is complex, impractical to develop, and may not be meaningful. Projected NOI of these communities is not a projection of the Company's overall financial performance or cash flow. There can be no assurance that the communities under development will achieve the Projected NOI as described in this release.

Redevelopment is composed of consolidated communities where substantial redevelopment is in progress or is probable to begin during the current year. Redevelopment is considered substantial when (i) capital invested during the reconstruction effort is expected to exceed the lesser of $5,000,000 or 10% of the community’s pre-redevelopment basis and (ii) physical occupancy is below or is expected to be below 90% during or as a result of the redevelopment activity.

Residential represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue.

Residential Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to Residential revenue in conformity with GAAP to help investors evaluate the impact of both current and historical concessions on GAAP-based Residential revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, Residential Revenue with Concessions on a Cash Basis allows an investor to understand the historical trend in cash concessions.

A reconciliation of Same Store Residential revenue in conformity with GAAP to Residential Revenue with Concessions on a Cash Basis is as follows (dollars in thousands):

TABLE 10

Q2

Q2

Q1

YTD

YTD

2026

2025

2026

2026

2025

Residential revenue (GAAP basis)

$

709,586

$

698,628

$

702,420

$

1,412,006

$

1,390,053

Residential concessions amortized

7,066

5,698

6,893

13,959

11,303

Residential concessions granted

(4,482

)

(4,364

)

(5,572

)

(10,054

)

(9,351

)

Residential Revenue with Concessions on a Cash Basis

$

712,170

$

699,962

$

703,741

$

1,415,911

$

1,392,005

Q2 2026
vs. Q2 2025

Q2 2026
vs. Q1 2026

YTD 2026
vs.
YTD 2025

% change -- GAAP revenue

1.6

%

1.0

%

1.6

%

% change -- cash revenue

1.7

%

1.2

%

1.7

%

Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had Stabilized Operations, as defined below, as of the beginning of the respective prior year period. Therefore, for 2026 operating results, Same Store is composed of consolidated communities that have Stabilized Operations as of January 1, 2025, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale or probable for disposition within the current year.

Stabilized Operations is defined as operations of a community that occur after the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment community, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees and a contingency estimate, offset by proceeds from the sale of any associated land or improvements, all as determined in accordance with GAAP. Total Capital Cost also includes costs incurred related to first generation commercial tenants, such as tenant improvements and leasing commissions. For Redevelopment communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior period or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate cost.

Unconsolidated Development is composed of communities that are either currently under construction, or were under construction and were completed during the current year, in which we have an indirect ownership interest through our investment interest in an unconsolidated joint venture. These communities may be partially or fully complete and operating.

Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured notes payable as of June 30, 2026 as a percentage of total NOI generated by real estate assets. The Company believes that current and prospective unsecured creditors of the Company view Unencumbered NOI as one indication of the borrowing capacity of the Company. Therefore, when reviewed together with the Company’s Interest Coverage, EBITDA and cash flow from operations, the Company believes that investors and creditors view Unencumbered NOI as a useful supplemental measure for determining the financial flexibility of an entity. A calculation of Unencumbered NOI for the six months ended June 30, 2026 is as follows (dollars in thousands):

TABLE 11

YTD 2026

NOI

Residential NOI:

Same Store

$

967,455

Other Stabilized

38,563

Development/Redevelopment

23,796

Total Residential NOI

1,029,814

Commercial NOI

15,889

NOI from real estate assets sold or held for sale

4,516

Total NOI generated by real estate assets

1,050,219

Less NOI on encumbered assets

(52,002

)

NOI on unencumbered assets

$

998,217

Unencumbered NOI

95

%

Copyright © 2026 AvalonBay Communities, Inc. All Rights Reserved

More News From AvalonBay Communities, Inc.

Annaly Capital Management, Inc. (NLY) Q2 2026 Earnings Call July 22, 2026 9:00 AM EDT

Company Participants

Sean Kensil
David Finkelstein - CEO, Co-Chief investment Officer & Director
Serena Wolfe - Chief Financial Officer
Michael Fania - Co-Chief Investment Officer & Head of Residential Credit
Ken Adler - Head of Mortgage Servicing Rights & Portfolio Analytics

Conference Call Participants

Bose George - Keefe, Bruyette, & Woods, Inc., Research Division
Crispin Love - Piper Sandler & Co., Research Division
Ameeta Lobo Nelson - UBS Investment Bank, Research Division
Douglas Harter - BTIG, LLC, Research Division
Harsh Hemnani - Green Street Advisors, LLC, Research Division
Jason Stewart - Compass Point Research & Trading, LLC, Research Division
Hong Zhang - JPMorgan Chase & Co, Research Division
Trevor Cranston - Citizens JMP Securities, LLC, Research Division
Kenneth Lee - RBC Capital Markets, Research Division

Presentation

Operator

Thank you for standing by, and welcome, everyone, to the Annaly Capital Management, Second Quarter 2026 Earnings Conference Call.

[Operator Instructions]

At this time, I would like to turn the conference over to Sean Kensil, Director of Investor Relations. Please go ahead.

Sean Kensil

Good morning, and welcome to the Second Quarter 2026 Earnings Call for Annaly Capital Management. Please note that this call is being recorded. As a reminder, materials for today's call are available on our website at www.annaly.com. Today's call may include forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially and refer to certain non-GAAP measures. Please see the notices in our earnings release for important information regarding forward-looking statements and non-GAAP measures.

Participants on this morning's call include David Finkelstein, Chief Executive Officer and Co-Chief Investment Officer; Serena Wolfe, Chief Financial Officer; Mike Fania, Co-Chief Investment Officer and Head of Residential Credit; V.S. Srinivasan, Head of Agency; and Ken Adler, Head of Mortgage Servicing Rights.

3 Multi-Metal Stocks for Income and Long-Term GrowthSouthern Copper NYSE: SCCO reported record quarterly sales, adjusted EBITDA and net income for the second quarter of 2026, as sharply higher metals prices offset lower copper production in Peru, Chief Financial Officer Raúl Jacob Ruisánchez told investors on the company’s earnings call.

Jacob, Southern Copper’s vice president of finance, treasurer and CFO, said the company’s results reflected “operating excellence” amid sustained demand for copper and its by-products. He was joined on the call by Leonardo Contreras, Southern Copper’s CEO and board member.

Get Southern Copper alerts:

Copper Cools After Record January—But This ETF Is a Buy-the-Dip OpportunitySales for the quarter rose 41% year over year to $4.3 billion, an increase of $1.2 billion from the second quarter of 2025. Adjusted EBITDA reached a record $2.96 billion, up 60% from $1.79 billion a year earlier, while adjusted EBITDA margin expanded to 67% from 59%. Net income rose 72% to a record $1.67 billion, compared with $973 million in the prior-year quarter. Net income margin increased to 39% from 32%.

For the first six months of 2026, adjusted EBITDA rose 58% to $5.57 billion, while net income was 69% higher than in the same period of 2025. Cash flow from operating activities totaled $3.68 billion in the first half, up 117% year over year, which Jacob attributed to stronger operating cash generation from higher sales and a $719 million decrease in operating asset and liability requirements.

Higher Metals Prices Drive Revenue Growth The Copper Barbell: How to Profit From the Shortage—and Avoid the Dilution TrapJacob said the London Metal Exchange copper price averaged $6.04 per pound in the second quarter, up 30% from $4.32 per pound in the same quarter of 2025. COMEX copper averaged $6.16 per pound, up 31% year over year. Based on current supply and demand dynamics, Southern Copper estimates a slight copper market deficit for 2026.

Global copper inventories across London Metal Exchange, COMEX, Shanghai and London warehouses totaled 1.123 million tons as of July 21, which Jacob said represented roughly 15 days of global demand.

Copper represented 73% of Southern Copper’s sales in the quarter. Copper sales increased 38% despite a 1.5% decline in volume, reflecting the higher pricing environment. Among by-products, molybdenum sales rose 34%, zinc sales increased 24% and silver sales climbed 86%, with all three benefiting from higher prices that were partially offset by lower volumes.

Molybdenum prices averaged $29.44 per pound, up 43% from the prior-year quarter, while silver prices averaged $73.49 per ounce, up 118%. Zinc averaged $1.57 per pound, a 31% increase from the second quarter of 2025.

Production Falls in Peru, Rises in Mexico Southern Copper produced 230,662 tons of copper in the second quarter, down 3.5% from the same period last year. Jacob said the decline reflected a 12% drop in production in Peru, mainly due to lower ore grades and recoveries at Toquepala and Cuajone. That was partially offset by a 3.2% increase in Mexican operations, driven by higher production at Buenavista, La Caridad and Inca.

In response to a question from Barclays analyst Richard Garchitorena, Jacob said the lower production was mainly tied to ore grades at Cuajone, which translated into about 35,000 tons of lower copper production, with the remaining decline coming from Toquepala. He said Southern Copper now expects to produce 917,000 tons of copper in 2026, above its initial plan of about 910,000 tons.

Molybdenum production fell 11% year over year due to lower ore grades at all mines, though the company now expects to produce 27,900 tons in 2026, 7% above its initial plan. Silver production declined 4% in the quarter, despite higher output at La Caridad and Inca, because of lower production at Toquepala, Cuajone and Buenavista. Southern Copper expects to meet its plan to produce 24 million ounces of silver this year. Mine zinc production fell 14% to 39,250 tons, and the company expects 2026 zinc production of 163,900 tons.

Jacob said he expects sales volumes to improve somewhat in the second half of the year as material processed in the first half becomes available for sale.

Costs Rise, but Margins Improve Total operating costs and expenses increased $202 million, or 14%, from the second quarter of 2025. Jacob cited higher operating materials, purchased copper, diesel and fuel, workers’ participation, translation differences and other factors. These were partly offset by lower repair materials and inventory consumption.

Southern Copper reported operating cash costs before by-product credits of $2.29 in the second quarter, down $0.02 from the first quarter. Including by-product credits, operating cash costs were $0.05, compared with negative $0.11 in the first quarter. Jacob said the company still considered that “an excellent mark.”

By-product credits totaled $1.11 billion, or $2.24, in the second quarter, down 7% from the first quarter. Credits increased for molybdenum and zinc but declined for silver and sulfuric acid.

Capital Projects Advance in Peru and Mexico Southern Copper’s capital investment program for the decade exceeds $20.5 billion, including projects in Peru and Mexico. The company spent $423 million on capital investments in the second quarter, up 79% year over year, and $865 million in the first half, up 56% from the prior-year period.

In Peru, Jacob said the company remains committed to advancing Tia Maria, Los Chancas and Michiquillay, which together represent about $10.3 billion of investment. At Tia Maria in Arequipa, the project was 42% complete at the end of June, with 5,817 new jobs created, including 1,254 filled by local applicants. Jacob said mass earthworks were in their final stage and civil works and steel structure assembly had begun in key facilities.

Goldman Sachs analyst Emerson Vieira asked about the desalination plant for Tia Maria and potential delays. Jacob said purchase orders and contracts were being placed for major equipment, including the desalination plant, and that the company did not currently expect a delay.

At Los Chancas in Apurímac, Jacob said illegal miners remain in the project area despite enforcement efforts, hindering progress. At Michiquillay in Cajamarca, reserve estimation, mine planning, hydrologic and hydrogeological assessments, and technical research are underway.

In Mexico, Jacob said El Pilar in Sonora has received the necessary environmental permits and will begin early site preparation work in September. Construction is expected to start in the first quarter of 2027, with production projected for the second half of 2029. The $551 million open-pit project is expected to produce 36,000 tons of copper cathode annually over an 18-year mine life.

Debt Issuance and Dividend Southern Copper issued $1.25 billion of 10-year fixed-rate senior unsecured notes on June 24, due in 2036 with a 5.35% annual interest rate. Jacob said demand totaled $4 billion, or 3.2 times the amount issued. Proceeds will be used by Southern Peru Copper Corporation to develop Tia Maria, finance its capital expenditure program and for general corporate purposes.

The company announced a quarterly cash dividend of $1.10 per share and a stock dividend of 0.012 shares per common share, payable Aug. 27 to shareholders of record as of Aug. 11. Jacob said the total estimated dividend payment, including the cash dividend and equivalent value of the stock dividend, was $3.23 per share.

Looking ahead, Jacob said Southern Copper expects 2027 copper production to be roughly in line with 2026, with some contribution from Tia Maria late in the year. He said production is expected to rise to about 970,000 tons in 2028 and exceed 1 million tons in 2029, supported by Tia Maria, El Pilar and improved ore grades. The company’s longer-term goal remains more than 1.6 million tons of copper by 2033 or 2034 through organic growth.

About Southern Copper (NYSE:SCCO)Southern Copper Corporation NYSE: SCCO is a large, integrated copper producer whose operations span the full value chain from exploration and mining to smelting, refining and the sale of copper and other metal products. The company produces a range of copper products including copper concentrate and refined cathodes, and recovers valuable byproducts such as molybdenum, silver and zinc. Southern Copper concentrates on high-volume, long-life assets designed to support steady production and processing capabilities.

Southern Copper's operations are concentrated in Peru and Mexico, where it owns and operates multiple large-scale mining and processing facilities.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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CrowdStrike (CRWD) entered a partnership with AI chipmaker Cerebras Systems (CBRS) to enhance the speed of AI-powered cybersecurity.Cerebras shares climbed abou

WILMINGTON, Del., July 22, 2026 (GLOBE NEWSWIRE) -- Clover Health Investments, Corp. (Nasdaq: CLOV) (“Clover,” “Clover Health” or the “Company”), today announced that its Interim Chief Financial Officer, Clay Thornton, will present at the 2026 Canaccord Genuity 46th Annual Growth Conference on Tuesday, August 11, 2026, at 8:30 a.m. Eastern Time.

A live webcast and replay of the presentation and Q&A session will be accessible on Clover Health's investor relations website at https://investors.cloverhealth.com/.

About Clover Health:
Clover Health (Nasdaq: CLOV) is a physician enablement technology company committed to bringing access to great healthcare to everyone on Medicare. This includes a focus on seniors who have historically lacked access to affordable, high-quality healthcare. Our strategy is powered by our software platform, Clover Assistant, which is designed to aggregate patient data from across the healthcare ecosystem to support clinical decision-making and improve health outcomes through the early identification and management of chronic disease. For our members, we provide PPO and HMO Medicare Advantage plans in several states, with a differentiated focus on our flagship wide-network, high-choice PPO plans. For healthcare providers outside Clover Health's Medicare Advantage plan, we extend the benefits of our data-driven technology platform to a wider audience via our subsidiary, Counterpart Health, and aim to enable enhanced patient outcomes and reduced healthcare costs on a nationwide scale. Clover Health has published data demonstrating the technology’s impact on Medication Adherence, Congestive Heart Failure, Chronic Obstructive Pulmonary Disease, and in Underserved Populations as well as the earlier identification and management of Diabetes and Chronic Kidney Disease.

Investor Relations:
Ryan Schmidt
[email protected]

Press Inquiries:
[email protected]

Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- SiriusXM (NASDAQ: SIRI) today announced that its Board of Directors declared a quarterly cash dividend of $0.27 per share of common stock. This regular quarterly dividend is payable in cash on August 26, 2026, to stockholders of record at the close of business on August 10, 2026.

About Sirius XM Holdings Inc.
SiriusXM is the leading audio entertainment company in North America with a portfolio of audio businesses including its flagship subscription entertainment service SiriusXM; the ad-supported and premium music streaming services of Pandora; an expansive podcast network; and a suite of business and advertising solutions. Together, SiriusXM reaches a combined monthly audience of approximately 255 million listeners. SiriusXM offers a broad range of content for listeners everywhere they tune in with a diverse mix of live, on-demand, and curated programming across music, talk, news, and sports. For more about SiriusXM, please go to: www.siriusxm.com.

Source: SiriusXM

Investor contacts:
Jennifer DiGrazia
[email protected] 

SOURCE Sirius XM Holdings Inc.

Also from this source

Southwest Airlines reported a more than 9% increase in second-quarter profit from last year as higher fares are increasingly helping the airline cover its fuel tab, but its outlook for the summer fell below Wall Street forecasts.

The airline forecast third-quarter adjusted earnings of between 50 cents and 75 cents, below the 82 cents analysts expected, even though it projected an increase in sales between 17.5% to 19.5% from a year earlier. The Dallas airline said it plans to contract capacity 1% at most or keep it flat compared with the third quarter of 2025.

In the second quarter, Southwest's revenue increased 16.4% to $8.4 billion. Average passenger fares were up almost 21% to $225.61 from $186.65 a year earlier. But Southwest's costs spiked, with a 67% increase in its fuel bill to $2.22 billion in the second quarter from a year before.

Net income rose 9.4% to $233 million, or 47 cents a share, compared with $213 million or 39 cents a share a year earlier.

Here's what Southwest reported for second quarter compared with Wall Street expectations, according to consensus estimates from LSEG:

Earnings per share: 94 cents adjusted. It was not immediately clear if that was comparable to expectations for 51 centsRevenue: $8.43 billion vs. $8.58 billion expectedExcluding one-time items, Southwest reported an adjusted 94 cents per share, including an adjustment for customers that redeemed flight credits in higher numbers than projected. Southwest changed its old policy and put expiration dates on flight credits, starting with many ticket classes sold starting in mid-2025.

Read more CNBC airline newsDelta launches ‘basic business’ fares without lounge access, seat selectionRecord heat, crowds drive offseason boom in international travelDelta expects higher airfare to last, bringing 2026 profit goal in reach'Bring 'em on': Delta wants United's crown over the Pacific, tooSpirit's collapse, high fuel prices test limits of summer vacation spendingMeet the pilots flying Spirit Airlines' yellow jets to the desert

A CSX freight train travels in Washington, U.S., December 14, 2024. REUTERS/Benoit Tessier Purchase Licensing Rights, opens new tab

July 22 (Reuters) - U.S. railroad operator CSX (CSX.O), opens new tab on Wednesday reported a rise in second-quarter ​profit and revenue, as strong intermodal ‌shipments and higher pricing helped offset a challenging freight environment.

Shares of the company were ​up 3% after the bell.

Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here.

The ​rail industry has benefited from resilient ⁠intermodal demand linked to consumer spending, ​allowing operators such as CSX to weather ​a prolonged downturn in coal traffic and weakness across parts of the industrial economy.

Intermodal volume ​is the amount of freight ​moved using multiple modes of transportation, such as ‌rail, ⁠truck, and ship, without handling the cargo itself when switching modes.

Total fuel expenses rose to $446 million during the reported ​quarter from $269 ​million ⁠a year ago.

The Jacksonville, Florida-based company's second-quarter revenue rose 10% ​to $3.94 billion from a year ​earlier.

It ⁠reported a quarterly net income of about $1 billion, or 54 cents per share, ⁠compared ​with $829 million, or 44 ​cents per share, a year earlier.

Reporting by Apratim ​Sarkar in Bengaluru; Editing by Shailesh Kuber

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BLOOMFIELD, Conn., July 22, 2026 /PRNewswire/ -- The Board of Directors of The Cigna Group (NYSE: CI) today declared a cash dividend of $1.56 per share of its common stock, payable on September 23, 2026, to shareholders of record as of the close of business on September 8, 2026.

About The Cigna Group

The Cigna Group (NYSE:CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Cigna Healthcare, Evernorth Health Services or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 markets and jurisdictions, and has over 180 million customer relationships around the world. Learn more at thecignagroup.com

Investor Relations Contact
Ralph Giacobbe
1 (860) 787-7968
[email protected]

Media Contact
Justine Sessions
1 (860) 810-6523
[email protected]

SOURCE The Cigna Group

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EUROPEAN COMMISSION APPROVES PARAMOUNT SKYDANCE CORPORATION ACQUISITION OF WARNER BROS. DISCOVERY MARKING MAJOR MILESTONE TOWARDS COMPLETION

European Union regulators on Wednesday approved Paramount’s $110 billion acquisition of Warner Bros. Discovery – delivering the mega media merger another greenlight even as it faces challenges at home.

The European Commission said the approval was conditional “upon full compliance with the commitments offered by Paramount,” after the David Ellison-led firm offered several concessions to get the deal rubber-stamped.

Paramount pledged to terminate its stake in United International Pictures, its film distribution venture with Universal Pictures, in the European Economic Area within 13 months of the deal’s closing, which is expected to finish this fall.

European Union regulators on Wednesday approved Paramount’s $110 billion acquisition of Warner Bros. Discovery. REUTERS The tie-up also vowed not to enter any deal for 10 years with NBCUniversal, which owns Universal Pictures, to jointly co-distribute films throughout the same area, which includes EU member states and three other European countries.

In its decision, the EU said there are enough studios in the region to give it confidence the deal will not crush competition – adding its main concerns were film distribution, but those have been solved by Paramount’s agreements.

Meanwhile, while the deal has clinched regulatory approval from the Trump administration’s Department of Justice, it is still facing significant hurdles to closing.

On Monday, a federal judge slapped the acquisition with a temporary restraining order after a group of 12 Democratic state attorneys general, led by California, sued to block the deal on antitrust concerns.

US District Judge Araceli Martínez-Olguín of the Northern District of California, a Biden appointee, barred Paramount from closing the deal for 14 days and scheduled an Aug. 3 hearing for the states’ motion for a preliminary injunction.

Executives at Paramount and Warner Bros. had reportedly been expecting the judge to freeze the deal – but the real concern is getting the merger wrapped up by a critical September deadline.

If the deal is not completed by Oct. 1, a costly “ticking fee” kicks in, adding 25 cents per share to the cost of the acquisition for each quarter it is not completed – coming to a painful $7 million per day. 

The European Commission said the approval was conditional “upon full compliance with the commitments offered by Paramount.” REUTERS The deal would combine HBO Max, Paramount+, HBO, CBS, CNN and thousands of movie titles under one company, led by David Ellison, the son of Oracle billionaire and close Trump ally Larry Ellison. 

Critics, including many in the film industry, like the SAG-AFTRA union, have argued the merger could reduce competition and raise prices for customers.

The states’ July 13 lawsuit noted the new conglomerate would control nearly one-third of the US theatrical film distribution market and almost one-third of the nation’s basic cable programming. 

Paramount has repeatedly defended the merger and stuck by its initial goal to close by September.

In its decision, the EU said there are enough studios in the region to give it confidence the deal will not crush competition. Getty Images Meanwhile, in the UK, Culture Secretary Lisa Nandy wrote to the companies in June warning that she is “minded to intervene” in the deal.

David and Larry Ellison are also facing a lawsuit from a Paramount shareholder alleging they cut a backdoor deal with President Trump to secure regulatory approvals.

The acquisition would give control of CNN to the Ellisons, after Trump has repeatedly railed against the network and accused it of being biased toward Dems.

CNN’s top anchors have reportedly grown panicked over the network’s future independence after David Ellison installed Bari Weiss to run CBS News following his acquisition of Paramount.

As far as young U.S. electric vehicle (EV) makers go, Lucid Group (LCID -7.72%) and Rivian Automotive (RIVN -3.27%) have managed to separate themselves from the smaller niche players, or worse, the few that have already closed their doors. One could easily argue that Rivian has even separated itself from Lucid in a positive manner.

But there's another stock, Nio (NIO -2.50%), that often flies under the radar because it was born in China, and in one crucial way it has been crushing Lucid and Rivian recently.

The bumpy road It's not an easy life for young EV automakers, which face costly technology such as batteries, largely unprofitable early-stage scaling, and a volatile EV industry that has been impacted by changes in demand due to untimely policy, reduced tax incentives, and even unexpected tariffs.

Despite all of those headwinds, Rivian has taken a large step forward to separate itself in a positive way from rival Lucid in its ability to generate gross profits. These young EV makers being able to generate gross profits, and more importantly, sustainable gross profitability, is a crucial step to proving to investors they can become a viable long-term investment that can one day reward investors.

LCID Gross Profit (Quarterly) data by YCharts

As you can see, despite starting from a worse position than its rival, Rivian has made consistent progress on gross profitability since the beginning of 2023, while Lucid's gross profitability has languished due to multiple speed bumps.

There are two primary driving forces for Rivian's consistent improvement. One is drastically improved unit economics as the young EV maker has intensely reduced costs, expensive wiring, and the number of parts and sensors, among many other changes. That's expected to continue with the R2, which is targeting about half the costs of the R1.

Image source: Rivian.

A second driving force was Rivian's joint venture with Volkswagen, which gave the company the ability to draw non-dilutive capital, split development costs, and sell/license its valuable software stack to its German partner, which has essentially given up on its in-house software division. These software margins are much higher than those for Rivian's hardware manufacturing and helped offset early-stage, less-profitable scaling.

Rivian's improvement has been impressive and consistent, but many investors overlook another EV stock that has taken a leap ahead of even Rivian.

Nio has witnessed an uptick in its gross profitability, driven by multiple factors, including vehicle deliveries nearly doubling in the first quarter compared to the prior year. Investors have Nio sub-brands Onvo and Firefly to thank for this, as they continue to gain traction.

Today's Change

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-2.50

%) $

-0.12

Current Price

$

4.67

Going hand in hand with Nio's rise in deliveries are its vehicle and gross margins. During the first quarter, Nio's gross profit topped $700 million, representing a staggering 428.4% increase from the prior year. First-quarter gross margin checked in at 19%, compared to 7.6% during the prior year. Vehicle margin also made a similar jump to 18.8% during the first quarter, compared to 10.2% a year ago.

LCID Gross Profit (Quarterly) data by YCharts

What it all means While Rivian has made substantial improvements to boost its gross profitability, it still lacks the growing scale and sales volume that Nio is enjoying. That's the next step for Rivian, and a step it is expected to take with the R2 opening the door to mass-market consumers.

It's natural for U.S.-based retail investors to gravitate toward companies that were founded and operate in the U.S. market, and that's why Rivian and Lucid are more well known than Nio. However, amid the many young EV companies that are struggling globally through many different headwinds and regional speed bumps, Nio has consistently impressed with its ability to navigate a challenging domestic market and a brutal price war, expand its sales and scale, and improve margins and gross profitability.

Rivian has achieved some impressive feats over the past year or two, but when it comes to gross profitability and proving to investors it can be a viable long-term investment, Nio is crushing it -- and investors should take note.

monday.com Ltd. could become a key governance layer for enterprises managing people, workflows, automations, and AI agents within a single operating environment. The enterprise business is already stronger than the headline figures suggest: NRR among customers above $50,000 in ARR stands at 116%, while this cohort now represents 42% of total ARR. monday.com is gradually moving beyond a purely seat-based model by adding usage-based AI credits, allowing revenue growth to depend increasingly on digital activity rather than employee count alone.

-

Webcast presentation by executives to follow earnings release

CHICAGO--(BUSINESS WIRE)--Motorola Solutions, Inc. (NYSE: MSI) will issue its second-quarter 2026 earnings results after the close of the market on Wednesday, August 5.

Motorola Solutions will host its quarterly conference call with financial analysts at 4 p.m. Central (5 p.m. Eastern) on August 5. The conference call will be webcast live at www.motorolasolutions.com/investors.

About Motorola Solutions | Solving for safer
Safety and security are at the heart of everything we do at Motorola Solutions. We build and connect technologies to help protect people, property and places. Our solutions foster the collaboration that’s critical for safer communities, safer schools, safer hospitals, safer businesses, and ultimately, safer nations. Learn more about our commitment to innovating for a safer future for us all at www.motorolasolutions.com.

More News From Motorola Solutions, Inc.

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Travel + Leisure Co. (TNL) Q2 2026 Earnings Call Transcript

LONG BEACH, Calif.--(BUSINESS WIRE)--Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported second quarter 2026 GAAP income per diluted share of $1.19 and adjusted income per diluted share of $1.51. Financial results are summarized below:

  Three months ended

Six months ended

  June 30,

June 30,

  2026

2025

2026

2025

  (In millions, except per-share results)

Premium Revenue

  $10,244

$10,868

$20,416

$21,496

Total Revenue

  $10,874

$11,427

$21,670

$22,574

  GAAP:

  Net Income

  $60

$255

$74

$553

EPS – Diluted

  $1.19

$4.75

$1.46

$10.19

Medical Care Ratio (MCR)

  92.2%

90.4%

91.6%

89.8%

G&A Ratio

  6.7%

6.2%

6.9%

6.6%

Pre-tax Margin

  0.8%

2.8%

0.6%

3.2%

  Adjusted:

  Net Income

  $77

$294

$197

$627

EPS – Diluted

  $1.51

$5.48

$3.86

$11.56

G&A Ratio

  6.5%

6.1%

6.7%

6.4%

Pre-tax Margin

  1.0%

3.3%

1.3%

3.6%

  See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release.

Quarter Highlights

As of June 30, 2026, the Company served approximately 4.9 million members. Premium revenue was approximately $10.2 billion for the second quarter of 2026. Second quarter 2026 GAAP income per diluted share was $1.19 and adjusted income per diluted share was $1.51. The Company increased its full year 2026 adjusted earnings guidance by $0.25 to at least $5.25 per diluted share. “Our second quarter results and full year guidance reflect solid performance in our Medicaid and Medicare segments,” said Joseph Zubretsky, President and Chief Executive Officer. “The imbalance between Medicaid rates and medical cost trend appears to have stabilized and is well positioned to be corrected with future rate increases. This reinforces our belief that 2026 is the trough year for Medicaid pretax margins. We remain confident in our disciplined approach to medical cost management and believe the premium and EPS building blocks position us well for profitable growth in 2027.”

Premium Revenue

Premium revenue was approximately $10.2 billion for the second quarter of 2026, a decrease of 6% year over year. The lower premium revenue reflects the impact of lower membership, partially offset by rate updates.

Net Income

GAAP net income for the second quarter of 2026 was $60 million, or $1.19 per diluted share, a decrease of 76% year over year. Adjusted net income for the second quarter of 2026 was $77 million, or $1.51 per diluted share, a decrease of 74% year over year. The decrease is attributed mainly to the lower premium revenues and increase in MCR.

Medical Care Ratio (MCR)

The consolidated MCR for the second quarter of 2026 was 92.2%. The Medicaid MCR for the second quarter of 2026 was 92.7% and in line with the Company’s expectation, reflecting rate updates and stable medical cost trend. The Medicare MCR for the second quarter of 2026 was 90.7% and better than the Company’s expectation, reflecting lower medical cost trend and pricing implemented for 2026. The Marketplace MCR for the second quarter of 2026 was 88.9% and higher than the Company’s expectations, reflecting prior year risk adjustment and program integrity initiatives and the impact of current year unfavorable member acuity mix. General and Administrative Expense Ratio

The G&A ratio and the adjusted G&A ratio for the second quarter of 2026 were 6.7% and 6.5%, respectively, reflecting continued operating discipline.

Balance Sheet

Cash and investments at the parent company were approximately $290 million as of June 30, 2026, compared to $223 million as of December 31, 2025.

Days in claims payable at June 30, 2026, was 44.

Cash Flow

Operating cash flow for the six months ended June 30, 2026, was $788 million, compared to an outflow of $112 million for the six months ended June 30, 2025. The increase compared to the prior year was driven mainly by the timing of government receivables and payables.

2026 Guidance

Premium revenue guidance for the full year is unchanged at approximately $42 billion.

The Company increased its full year 2026 GAAP earnings to at least $2.15 per diluted share and its full year 2026 adjusted earnings to at least $5.25 per diluted share. The increase to earnings guidance reflects first half performance in Medicaid. Based on developing medical cost trends, a $1.50 increase in earnings per share in Medicare is offset by a $1.50 decrease related to Marketplace. Excluding the downward revision in the Marketplace guidance, the full year guidance would have increased to $6.75 per share.

Full year guidance includes a loss of $1.50 per share due to the implementation of the new Florida Medicaid contract in the fourth quarter of 2026 and a loss of $1.00 per share due to performance of the traditional MAPD product, which the Company previously announced it will exit for 2027.

Conference Call

Management will host a conference call and webcast to discuss Molina Healthcare’s second quarter ended June 30, 2026 results, at 8:00 a.m. Eastern Time on Thursday, July 23, 2026. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 8631129. A telephonic replay of the conference call will be available through Thursday, July 30, 2026, by dialing (855) 669-9658 and entering confirmation number 6469068. A live audio broadcast of this conference call will be available on Molina Healthcare’s investor relations website, investors.molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast.

About Molina Healthcare

Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. For more information about Molina Healthcare, please visit molinahealthcare.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This earnings release and the Company’s accompanying oral remarks contain forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this earnings release and the Company’s accompanying oral remarks may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as “guidance,” “future,” “anticipates,” “assumes,” “believes,” “embedded,” “estimates,” “expects,” “growth,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this earnings release include, but are not limited to, statements regarding the Company’s 2026 guidance and long-term performance outlook, trends with respect to rates, pretax margins, utilization, and medical costs, including the timing thereof and the anticipated impact on the Company’s business, and our management’s plans and objectives for future operations and business strategy.

Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings “Forward-Looking Statements,” and “Risk Factors,” in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission (the “SEC”), and in the Company’s other filings with the SEC, including its Quarterly Report on Form 10-Q for the period ended March 31, 2026 filed with the SEC and Quarterly Report on Form 10-Q for the period ended June 30, 2026, to be filed with the SEC.

These reports can be accessed under the investor relations tab of the Company’s website or on the SEC’s website at sec.gov. Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or developments projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company’s judgment as of July 22, 2026, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations.

MOLINA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

  Three Months Ended

Six Months Ended

June 30,

June 30,

2026

2025

2026

2025

(In millions, except per-share amounts)

Revenue:

Premium revenue

$

10,244

$

10,868

$

20,416

$

21,496

Premium tax revenue

505

431

1,009

819

Investment income

101

106

199

214

Other revenue

24

22

46

45

Total revenue

10,874

11,427

21,670

22,574

Operating expenses:

Medical care costs

9,440

9,829

18,710

19,308

General and administrative expenses

724

711

1,503

1,485

Premium tax expenses

505

431

1,009

819

Depreciation and amortization

40

58

79

106

Impairment

—

—

93

—

Other

20

25

48

50

Total operating expenses

10,729

11,054

21,442

21,768

Operating income

145

373

228

806

Interest expense

54

48

108

91

Income before income tax expense

91

325

120

715

Income tax expense

31

70

46

162

Net income

$

60

$

255

$

74

$

553

Net income per share – Diluted

$

1.19

$

4.75

$

1.46

$

10.19

Diluted weighted average shares outstanding

51.3

53.7

51.2

54.3

  MOLINA HEALTHCARE, INC.

CONSOLIDATED BALANCE SHEETS

  June 30,

December 31,

2026

2025

Unaudited

(Dollars in millions,

except per-share amounts)

ASSETS

Current assets:

Cash and cash equivalents

$

4,985

$

4,248

Investments

3,930

4,008

Receivables

3,485

3,533

Prepaid expenses and other current assets

528

655

Total current assets

12,928

12,444

Property, equipment, and capitalized software, net

311

301

Goodwill and intangible assets, net

2,082

2,195

Restricted investments

313

299

Deferred income taxes, net

229

178

Other assets

140

147

Total assets

$

16,003

$

15,564

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Medical claims and benefits payable

$

4,841

$

4,887

Amounts due government agencies

1,651

1,326

Accounts payable, accrued liabilities and other

1,139

1,093

Deferred revenue

69

66

Total current liabilities

7,700

7,372

Long-term debt

3,769

3,766

Finance lease liabilities

184

184

Other long-term liabilities

179

173

Total liabilities

11,832

11,495

Stockholders’ equity:

Common stock, $0.001 par value, 150 million shares authorized; outstanding: 52 million shares at June 30, 2026, and 51 million at December 31, 2025

—

—

Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding

—

—

Additional paid-in capital

511

452

Accumulated other comprehensive (loss) income

(16

)

15

Retained earnings

3,676

3,602

Total stockholders’ equity

4,171

4,069

Total liabilities and stockholders’ equity

$

16,003

$

15,564

  MOLINA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

  Six Months Ended

June 30,

2026

2025

(In millions)

Operating activities:

Net income

$

74

$

553

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

79

106

Deferred income taxes

(41

)

22

Share-based compensation

59

30

Impairment

93

—

Other, net

(2

)

—

Changes in operating assets and liabilities:

Receivables

48

(466

)

Prepaid expenses and other current assets

9

10

Medical claims and benefits payable

(46

)

(50

)

Amounts due government agencies

325

(81

)

Accounts payable, accrued liabilities and other

66

(301

)

Deferred revenue

3

(59

)

Income taxes

121

124

Net cash provided by (used in) operating activities

788

(112

)

Investing activities:

Purchases of investments

(626

)

(421

)

Proceeds from sales and maturities of investments

672

717

Purchases of property, equipment, and capitalized software

(57

)

(64

)

Net cash paid in business combinations

—

(245

)

Other, net

(8

)

18

Net cash (used in) provided by investing activities

(19

)

5

Financing activities:

Proceeds from borrowings under credit facility and term loans

—

650

Common stock purchases

—

(500

)

Repayment of credit facility and term loans

—

(200

)

Common stock withheld to settle employee tax obligations

(14

)

(36

)

Other, net

(10

)

44

Net cash used in financing activities

(24

)

(42

)

Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents

745

(149

)

Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period

4,348

4,741

Cash, cash equivalents, and restricted cash and cash equivalents at end of period

$

5,093

$

4,592

  MOLINA HEALTHCARE, INC.

UNAUDITED SEGMENT DATA

(Dollars in millions)

  June 30,

December 31,

June 30,

2026

2025

2025

Ending Membership by Segment:

Medicaid

4,418,000

4,568,000

4,774,000

Medicare

224,000

262,000

267,000

Marketplace

283,000

655,000

690,000

Other

1,000

6,000

15,000

Total

4,926,000

5,491,000

5,746,000

Three Months Ended June 30,

2026

2025

Premium Revenue

Medical

Margin

MCR (1)

Premium Revenue

Medical

Margin

MCR (1)

Medicaid

$

8,049

$

585

92.7

%

$

8,029

$

697

91.3

%

Medicare

1,565

146

90.7

1,608

161

90.0

Marketplace

628

69

88.9

1,200

175

85.4

Other (2)

2

4

NM

31

6

NM

Consolidated

$

10,244

$

804

92.2

%

$

10,868

$

1,039

90.4

%

Six Months Ended June 30,

2026

2025

Premium Revenue

Medical

Margin

MCR (1)

Premium Revenue

Medical

Margin

MCR (1)

Medicaid

$

15,976

$

1,216

92.4

%

$

16,159

$

1,488

90.8

%

Medicare

3,082

300

90.3

3,076

333

89.2

Marketplace

1,352

185

86.3

2,204

358

83.7

Other (2)

6

5

NM

57

9

NM

Consolidated

$

20,416

$

1,706

91.6

%

$

21,496

$

2,188

89.8

%

(1) The MCR represents medical costs as a percentage of premium revenue.

(2) The Other MCRs are not meaningful.

MOLINA HEALTHCARE, INC.
CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars in millions)

The Company’s claims liabilities include additional reserves to account for moderately adverse conditions based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior year” represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were first reported. The following table presents the components of the change in medical claims and benefits payable for the periods indicated:

Six Months Ended

June 30,

2026

2025

Unaudited

Medical claims and benefits payable, beginning balance

$

4,887

$

4,640

Components of medical care costs related to:

Current year

18,995

19,509

Prior year

(285

)

(201

)

Total medical care costs

18,710

19,308

Payments for medical care costs related to:

Current year

15,062

15,700

Prior year

3,918

3,918

Total paid

18,980

19,618

Acquired balances, net of post-acquisition adjustments

—

295

Change in non-risk and other payables

224

260

Medical claims and benefits payable, ending balance

$

4,841

$

4,885

Days in Claims Payable (1)

44

43

__________________

MOLINA HEALTHCARE, INC.
RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES
(In millions, except per diluted share amounts)

The Company believes that certain non-GAAP (generally accepted accounting principles) financial measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. The non-GAAP financial measures are also used internally to enable management to assess the Company’s performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures.

Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, impairments, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations.

Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments.

Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company’s financial performance.

Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.

Adjusted pre-tax margin represents adjusted income before income tax expense, divided by total revenue.

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

GAAP Net income

$

60

$

1.19

$

255

$

4.75

$

74

$

1.46

$

553

$

10.19

Adjustments:

Amortization of intangible assets

$

9

$

0.18

$

32

$

0.60

$

19

$

0.38

$

53

$

0.99

Acquisition-related expenses (1)

12

0.23

19

0.37

33

0.64

42

0.78

Impairment (2)

—

—

—

—

93

1.82

—

—

Other (3)

—

—

—

—

21

0.41

2

0.03

Subtotal, adjustments

21

0.41

51

0.97

166

3.25

97

1.80

Income tax effect

(4

)

(0.09

)

(12

)

(0.24

)

(43

)

(0.85

)

(23

)

(0.43

)

Adjustments, net of tax

17

0.32

39

0.73

123

2.40

74

1.37

Adjusted net income

$

77

$

1.51

$

294

$

5.48

$

197

$

3.86

$

627

$

11.56

__________________ 

MOLINA HEALTHCARE, INC.

RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED)

2026 GUIDANCE

  Amount

Per Diluted Share (2)

GAAP Net income

$

110

$

2.15

Adjustments:

Acquisition-related expenses

64

1.24

Amortization of intangible assets

36

0.71

Impairment

93

1.83

Other

21

0.41

Subtotal, adjustments

214

4.19

Income tax effect (1)

(56

)

(1.09

)

Adjustments, net of tax

158

3.10

Adjusted net income

$

268

$

5.25

__________________

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