Core Viewpoint - The Ensign Group, Inc. (ENSG) experienced an 8.9% increase in shares on July 25, driven by strong revenue growth in its Skilled Services segment, improved occupancy rates, and solid rental revenue growth, despite elevated expenses impacting overall profitability [1] Financial Performance - ENSG reported second-quarter 2025 adjusted EPS of $1.59, exceeding the Zacks Consensus Estimate by 3.3% and reflecting a 20.5% year-over-year improvement [2][8] - Operating revenues rose 18.5% year over year to $1.2 billion, surpassing the consensus mark by 1.8% [2][8] - Adjusted net income for the quarter was $93.3 million, a 22.1% increase year over year [3] Segment Performance - Skilled Services segment revenues reached $1.17 billion, growing 18.4% year over year, slightly above estimates [4] - Rental revenues increased by 34.7% year over year to $31.5 million, supported by buyouts [5] Expense and Cash Flow Analysis - Total expenses rose 18.3% year over year to $1.12 billion, exceeding estimates [3] - Cash and cash equivalents at the end of Q2 were $364 million, down 21.7% from the end of 2024 [6] - Net cash from operations for the first half of 2025 was $228 million, more than doubling year over year [7] Capital Deployment - The company repurchased shares worth $20 million and paid dividends totaling $7.2 million in the first half of 2025 [9] 2025 Outlook - Revenue guidance for 2025 has been raised to between $4.99 billion and $5.02 billion, indicating a 17.5% improvement from 2024 [10] - Adjusted EPS is now projected to be between $6.34 and $6.46 for 2025, reflecting a 16.4% growth from the previous year [10]

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Financial Data and Key Metrics Changes - GAAP diluted earnings per share increased by 18% to $1.44, while adjusted diluted earnings per share rose by 20.5% to $1.59 [29][30] - Consolidated GAAP revenue and adjusted revenue both reached $1.2 billion, marking an 18.5% increase [29][30] - GAAP net income was $84.4 million, up 18.9%, and adjusted net income increased by 22.1% to $93.3 million [29][30] - Cash and cash equivalents stood at $364 million, with cash flow from operations at $228 million [30] Business Line Data and Key Metrics Changes - Same store and transitioning occupancy increased by 24.6% to 82.184% year-over-year [8] - Skilled census for same store and transitioning operations rose by 7.4% and 13.5% respectively [8] - The company raised its annual 2025 earnings guidance to between $6.34 and $6.46 per diluted share, reflecting a 16.4% increase over 2024 results [10][31] Market Data and Key Metrics Changes - The skilled nursing population was excluded from provider tax reductions in a recent reconciliation bill, indicating positive regulatory support for the industry [9] - The company added eight new operations during the quarter, including three real estate assets, expanding its presence in key states [12][13] Company Strategy and Development Direction - The company is focused on organic growth through improved occupancy and skilled mix, alongside strategic acquisitions [11][18] - A decentralized transition model allows for scalable growth without typical corporate bottlenecks, enhancing operational efficiency [14][18] - The company aims to maintain disciplined growth by ensuring acquisitions are priced appropriately to support operational success [18][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the healthcare industry's future, citing strong occupancy trends and growth opportunities [33] - The company is confident in its ability to advocate for necessary funding for skilled nursing, emphasizing the importance of state-level relationships [50][52] - Management noted that the current environment allows for productive discussions regarding funding and reimbursement rates [50][76] Other Important Information - The company has a strong balance sheet with a lease-adjusted net debt to EBITDA ratio of 1.97x, indicating low leverage even during growth phases [30] - Standard Bear, the company's real estate investment trust, generated $31.5 million in rental revenue for the quarter, with a significant portion from Ensign-affiliated operations [19] Q&A Session Summary Question: Is there a strategy shift towards larger multistate portfolio deals? - Management clarified that there is no strategy shift but highlighted successful integration of larger portfolio deals, indicating a strong pipeline for such transactions [35][37][40] Question: How are valuations trending for acquisitions? - Management noted that valuations are moderately increasing post-COVID, but they remain disciplined in their approach to pricing based on local market fundamentals [53][56] Question: What is the impact of the California Workforce and Quality Incentive Program? - Management expects the program to continue through 2026 and is actively working with state officials to ensure adequate funding [62] Question: Are there any impacts from the recent legislation on market activity? - Management indicated that while there is ongoing regulatory change, the deal pipeline remains steady, allowing for selective opportunities [75][76]

Financial Data and Key Metrics Changes - The company reported GAAP diluted earnings per share of $1.44, an increase of 18% year-over-year, and adjusted diluted earnings per share of $1.59, an increase of 20.5% [31] - Consolidated GAAP revenue and adjusted revenue were both $1,200,000,000, reflecting an increase of 18.5% [31] - GAAP net income was $84,400,000, an increase of 18.9%, while adjusted net income was $93,300,000, an increase of 22.1% [31] - Cash and cash equivalents stood at $364,000,000, with cash flow from operations at $228,000,000 [31] - The company raised its annual 2025 earnings guidance to between $6.34 and $6.46 per diluted share, up from a previous range of $6.22 to $6.38 [10] Business Line Data and Key Metrics Changes - Same store and transitioning occupancy increased by 24.6% to 82.184% year-over-year [7] - Skilled census increased for both same store and transitioning operations by 7.4% and 13.5% respectively [8] - The company added eight new operations during the quarter, including three real estate assets, bringing the total number of operations acquired in 2024 to 52 [12] Market Data and Key Metrics Changes - The skilled nursing population was carved out of provider tax reduction in a recent reconciliation bill, which is seen as a positive development for the industry [9] - The company continues to see improvements in turnover and lower staffing agency labor despite increased occupancy [8] Company Strategy and Development Direction - The company is focused on organic growth stemming from stronger occupancy and skilled mix, with a commitment to maintaining disciplined growth [11] - The strategy includes a decentralized transition model that allows for growth without typical corporate bottlenecks, enabling the company to handle larger acquisitions effectively [14][19] - The company is also expanding its presence in established markets while exploring new states for growth opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong occupancy trends, labor trends, and growth opportunities [34] - The company is confident in its ability to advocate for proper funding for skilled nursing at the state level, especially in light of recent legislative developments [51] - Management noted that the current environment allows for productive conversations regarding funding for seniors, indicating a positive outlook for the industry [52] Other Important Information - The company has a lease adjusted net debt to EBITDA ratio of 1.97x, indicating low leverage even during significant growth [32] - Standard Bear, the company's real estate investment trust, generated rental revenue of $31,500,000 for the quarter, with an EBITDAR to rent coverage ratio of 2.5x [20] Q&A Session Summary Question: Changes in strategy regarding larger multistate portfolio deals - Management clarified that there has not been a strategy shift but highlighted the success of recent portfolio deals and the importance of local execution in managing larger acquisitions [37][39] Question: Impact of the "one big beautiful bill" on the skilled nursing industry - Management noted that skilled nursing was protected from direct impacts and emphasized the importance of maintaining relationships with state legislators to ensure funding for seniors [50][51] Question: Valuation trends for acquisitions - Management indicated that valuations are moderately increasing, particularly post-COVID, but emphasized a disciplined approach to acquisitions based on local market fundamentals [54][56] Question: Contribution from California's Workforce and Quality Incentive Program - Management expects the program to continue through 2026 and is actively working with the state to ensure adequate funding [62][63] Question: Engagement with payers around value-based care reimbursement models - Management confirmed ongoing discussions with managed care organizations to develop value-based care programs that benefit both the company and the payers [66]

Company Overview - The Ensign Group, Inc's independent subsidiaries have provided post-acute care since 1999[6] - The company operates 348 facilities across 17 states[18] - The company has 39,000+ beds/units across the care continuum[18] - The company has 52,000+ employees[18] Financial Performance and Growth - The company's 2025 revenue guidance is $5 billion[18] - The company's 2025 EPS guidance is $6.40[18] - The company's skilled nursing operations have been operated less than three full years is 29.9%[59] - The company's same store SNF occupancy is 82.1%[18, 71] - The company's same store skilled mix days is 32.4%[18, 74] - The company's net cash provided by operating activities for the six months ended June 30, 2025, was $228 million[123] - The company's consolidated adjusted net income for Q2 2025 was $93.3 million, an increase of 22.1% compared to Q2 2024[126] - The company's revenue for the six months ended June 30, 2025, was $2.4008 billion, an increase of 17.3% compared to 2024[130] - The company's consolidated adjusted net income for the six months ended June 30, 2025, was $182.3 million, an increase of 20.1% compared to 2024[130] Real Estate Portfolio (Standard Bearer REIT) - Standard Bearer REIT has 140 properties[98] - Standard Bearer REIT's real estate fair value is $1.6 billion[98] - Standard Bearer REIT has 14,272 operating beds/units[98] - Standard Bearer REIT's weighted average lease tenor is 14.6 years[98] - 84.6% of Standard Bearer REIT is Ensign Operated[98]

Core Insights - Ensign Group reported adjusted earnings per share (Non-GAAP) of $1.59, exceeding estimates of $1.55, and GAAP revenue of $1.23 billion, slightly above the $1.22 billion expectation, marking an 18.5% increase year-over-year [1][2] - The company raised its full-year earnings and revenue guidance, indicating strong growth driven by organic improvements and acquisitions [1][10] Financial Performance - Adjusted earnings per share (Non-GAAP) increased by 20.5% year-over-year from $1.32 to $1.59 [2] - Revenue rose by 18.3% from $1.04 billion in Q2 2024 to $1.23 billion in Q2 2025 [2] - Net income grew by 18.9% from $71.0 million in Q2 2024 to $84.4 million in Q2 2025 [2] - Adjusted EBITDA increased by 25.1% from $117.2 million to $146.6 million [2] - Funds from Operations (Standard Bearer) rose by 26.6% from $14.5 million to $18.4 million [2] Business Overview - Ensign Group operates over 300 healthcare facilities, including skilled nursing and senior living communities, focusing on post-acute care services across the U.S. [3] - The company employs a decentralized management approach, empowering local leaders while pursuing growth through selective acquisitions [4] Operational Highlights - Same-facility skilled services revenue increased by 6.5%, and revenue from transitioning facilities rose by 11.6% [5] - Total operational bed occupancy improved to 81.3%, up 1.2 percentage points year-over-year, while recently acquired facilities reached 74.3% occupancy [6] - Managed care revenue grew by 11.8% at same facilities and 27.8% at transitioning operations [6] Strategic Focus - The company relies heavily on government reimbursements, with Medicaid and Medicare accounting for 69.8% of service revenue [7] - Ensign Group is actively engaging with policymakers regarding reimbursement rates and regulatory issues [7] - The company raised its quarterly dividend to $0.0625 per share, marking the 22nd consecutive year of dividend increases [7][12] Future Guidance - Management raised guidance for adjusted (non-GAAP) earnings per share to a range of $6.34–$6.46 and revenue to $4.99–$5.02 billion, assuming continued integration of recent acquisitions [10] - The company anticipates a high pace of acquisition activity, with both lease and ownership opportunities in the pipeline [10]

Executive Summary & Highlights [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) The Ensign Group reported strong second quarter 2025 results, with significant year-over-year increases in GAAP and adjusted earnings per share, net income, and consolidated revenue. Operational metrics also showed robust growth, including higher occupancy rates and increased skilled services revenue across all facility types Second Quarter 2025 Key Financial & Operational Highlights (YoY Change) | Metric | Q2 2025 Value | YoY Change (%) | | :-------------------------------- | :---------------- | :------------- | | GAAP Diluted EPS | $1.44 | 18.0% | | Adjusted Diluted EPS | $1.59 | 20.5% | | GAAP Net Income | $84.4 million | 18.9% | | Adjusted Net Income | $93.3 million | 22.1% | | Same Facilities Occupancy | 82.1% | 2.0% | | Transitioning Facilities Occupancy | 84.0% | 4.6% | | Total Skilled Services Revenue | $1.17 billion | 18.4% | | Consolidated GAAP & Adjusted Revenue | $1.23 billion | 18.5% | | Standard Bearer Revenue | $31.5 million | 34.7% | | Standard Bearer FFO | $18.4 million | 26.6% | [Annual Guidance Update](index=2&type=section&id=Annual%20Guidance%20Update) Following a strong first half of 2025, The Ensign Group raised its annual earnings and revenue guidance for the year. The updated guidance reflects current quarter performance and anticipated acquisitions through the third quarter, with a new midpoint for earnings representing a significant increase over prior years Updated Annual 2025 Guidance | Metric | Previous Guidance | New Guidance | | :-------------------- | :------------------ | :------------- | | Diluted EPS | $6.22 to $6.38 | $6.34 to $6.46 | | Revenue | $4.89 billion to $4.94 billion | $4.99 billion to $5.02 billion | - The new midpoint of the increased 2025 earnings guidance represents an increase of more than **16% over 2024 results** and **34% higher than 2023 results**[5](index=5&type=chunk) - Guidance assumptions include diluted weighted average common shares outstanding of approximately **59.0 million**, a **25.0% tax rate**, normalized insurance costs, acquisitions expected to close through the third quarter, and current expectations regarding reimbursement rates. It excludes certain non-recurring charges, acquisition-related costs, and share-based compensation[6](index=6&type=chunk) Operational Review and Growth Strategy [Management Commentary](index=2&type=section&id=Operating%20Results) Management highlighted the outstanding performance of local teams, driving record second-quarter occupancy and skilled mix improvements. The company continues to pursue strategic acquisitions, adding 52 new operations since the beginning of 2024, many of which are exceeding expectations - Same store and transitioning occupancy increased to **82.1%** and **84.0%**, respectively, setting new second-quarter records[4](index=4&type=chunk) - Skilled daily census increased by **7.4%** for same store operations and **13.5%** for transitioning operations over the prior year quarter[4](index=4&type=chunk) - The company added **eight new operations**, including **three real estate assets**, during or since the quarter, bringing the total acquired operations since the beginning of 2024 to **52**[6](index=6&type=chunk) - Liquidity remains strong with approximately **$364.0 million** of cash on hand and **$592.6 million** of available capacity under its line-of-credit[6](index=6&type=chunk) [Growth and Real Estate Activities](index=2&type=section&id=Growth%20and%20Real%20Estate%20Highlights) The company continues its acquisition strategy, expanding its presence in mature markets and deepening its commitment to healthcare communities. The overall portfolio now includes 348 healthcare operations across 17 states, with a balanced approach to leasing and acquiring real estate assets - Ensign's growing portfolio consists of **348 healthcare operations**, **31** of which also include senior living operations, across **17 states**[8](index=8&type=chunk) - Ensign now owns **146 real estate assets**, **110** of which are operated by an Ensign affiliate[8](index=8&type=chunk) - The company's strategy includes both leasing and acquiring real estate, actively seeking performing and underperforming operations in several states[8](index=8&type=chunk) [Recent Acquisitions Details](index=4&type=section&id=Recent%20Acquisitions%20Details) The Ensign Group recently acquired several leased operations and real estate assets, expanding its footprint in California, Idaho, Washington, and Texas, primarily focusing on skilled nursing and senior living facilities - Recent leased operations acquisitions include: * Alamitos West Health and Rehabilitation (**142-bed skilled nursing**, Los Alamitos, CA) * Katella Senior Living Community (**68-unit senior living**, Los Alamitos, CA) * Toluca Lake Transitional Care (**52-bed skilled nursing**, North Hollywood, CA) * Ironwood Rehabilitation and Care Center (**80-bed skilled nursing**, Coeur d'Alene, ID) * Lakeside Rehabilitation and Care Center (**100-bed skilled nursing**, Coeur d'Alene, ID)[8](index=8&type=chunk)[12](index=12&type=chunk) - Standard Bearer also acquired real estate assets operated by an Ensign-affiliate: * Pacific Haven Subacute and Healthcare Center (**99-bed skilled nursing**, Garden Grove, CA) * Marianwood Health and Rehabilitation (**117-bed skilled nursing**, Issaquah, WA) * Timber Springs Transitional Care (**120-bed skilled nursing**, Boise, ID)[8](index=8&type=chunk)[12](index=12&type=chunk) - Three real estate assets were acquired and are operated by third-parties under triple net leases: * Mother Joseph Care Center (**152-bed skilled nursing**, Olympia, WA) * Emilie Court Assisted Living (**60-unit senior living**, Spokane, WA) * Duncanville Healthcare and Rehabilitation Center (**107-bed skilled nursing**, Duncanville, TX)[8](index=8&type=chunk)[12](index=12&type=chunk) [Standard Bearer Segment Overview](index=4&type=section&id=Standard%20Bearer%20Segment%20Overview) The Standard Bearer segment comprises 140 owned properties, primarily leased under triple-net, long-term agreements to both Ensign-affiliated and third-party operators, generating significant rental revenue and FFO for the quarter - Standard Bearer is comprised of **140 owned properties**, with **106** leased to Ensign-affiliated operators and **35** leased to third-party operators[9](index=9&type=chunk) Standard Bearer Q2 2025 Performance | Metric | Value | | :---------------- | :------------ | | Rental Revenue | $31.5 million | | FFO | $18.4 million | [Dividend Policy](index=4&type=section&id=Dividend%20Policy) The company paid a quarterly cash dividend of $0.0625 per share and plans to continue its long history of dividend payments, having increased the dividend for the 22nd consecutive year in December 2024 - Paid a quarterly cash dividend of **$0.0625 per share** of Ensign common stock[10](index=10&type=chunk) - Plans to continue its long history of paying dividends, having increased the dividend for the **22nd consecutive year** in December 2024[10](index=10&type=chunk) Corporate Information [About The Ensign Group](index=5&type=section&id=About%20Ensign%E2%84%A2) The Ensign Group, Inc. operates through independent subsidiaries providing skilled nursing, senior living, and various rehabilitative and healthcare services across 17 states. The company also invests in healthcare real estate and offers other post-acute related services - Independent subsidiaries provide skilled nursing, senior living, physical, occupational, and speech therapies, and other rehabilitative and healthcare services at **348 facilities** in **17 states**[13](index=13&type=chunk) - Investment strategy includes acquiring, leasing, and owning healthcare real estate for the post-acute care continuum[13](index=13&type=chunk) - New business venture operating subsidiaries offer additional post-acute services such as mobile x-ray, transportation, long-term care pharmacy, and consulting services[13](index=13&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) The report contains forward-looking statements subject to various risks and uncertainties, including those related to reimbursement rates, acquisition capabilities, borrowing costs, competition, litigation, and regulatory changes, which could cause actual results to differ materially - Forward-looking statements are based on management's current expectations and are not guarantees of future results[14](index=14&type=chunk) - Risks and uncertainties include reduced prices and reimbursement rates, ability to acquire/manage operations, increasing borrowing costs, access to capital, operating margins, competition, litigation, and government regulations[15](index=15&type=chunk) - Readers are encouraged to review the Company's periodic SEC filings for a more complete discussion of risks[15](index=15&type=chunk) Consolidated Financial Statements [Condensed Consolidated Statements of Income](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The condensed consolidated statements of income show significant revenue growth and increased net income for both the three and six months ended June 30, 2025, compared to the prior year, driven by higher service and rental revenues Condensed Consolidated Statements of Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $1,227,769 | $1,036,285 | $2,400,810 | $2,046,457 | | Net Income | $84,466 | $71,181 | $164,819 | $140,141 | | Net Income Attributable to The Ensign Group, Inc. | $84,396 | $71,007 | $164,673 | $139,842 | | Diluted EPS | $1.44 | $1.22 | $2.81 | $2.41 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, the company's total assets increased, primarily due to growth in property and equipment and right-of-use assets, while total equity also saw a substantial increase compared to December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total Current Assets | $1,067,195 | $1,157,632 | | Property and equipment, net | $1,535,185 | $1,291,354 | | Right-of-use assets | $1,930,662 | $1,861,071 | | Total Assets | $4,930,291 | $4,669,356 | | Total Current Liabilities | $755,545 | $743,428 | | Total Equity | $2,020,983 | $1,840,428 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, operating activities generated significant cash, but substantial investing activities, primarily for acquisitions, led to a net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in thousands) - Six Months Ended June 30 | Activity | 2025 | 2024 | | :-------------------------------- | :--------- | :--------- | | Net Cash Provided by Operating Activities | $227,950 | $112,249 | | Net Cash Used in Investing Activities | $(311,924) | $(144,564) | | Net Cash Used in Financing Activities | $(16,655) | $25 | | Net Decrease in Cash and Cash Equivalents | $(100,629) | $(32,290) | | Cash and Cash Equivalents at End of Period | $363,969 | $477,336 | Non-GAAP Financial Measures & Reconciliations [Reconciliation of GAAP to Non-GAAP Net Income and EPS](index=8&type=section&id=UNAUDITED%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION) The company provides reconciliations from GAAP net income and diluted EPS to adjusted non-GAAP figures, excluding items such as stock-based compensation, litigation, acquisition-related costs, and system implementation costs, to offer a clearer view of core operating performance Reconciliation of GAAP to Non-GAAP Net Income and EPS (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income Attributable to The Ensign Group, Inc. (GAAP) | $84,396 | $71,007 | $164,673 | $139,842 | | Non-GAAP Net Income | $93,320 | $76,409 | $182,292 | $151,793 | | Diluted Earnings Per Share (GAAP) | $1.44 | $1.22 | $2.81 | $2.41 | | Adjusted Diluted Earnings Per Share (Non-GAAP) | $1.59 | $1.32 | $3.11 | $2.62 | - Key non-GAAP adjustments include stock-based compensation expense, litigation, gain/loss on business interruption recoveries, acquisition related costs, costs incurred related to system implementations, and depreciation/amortization of patient base[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Reconciliation of GAAP to Non-GAAP EBITDA, EBITDAR, and EBT](index=9&type=section&id=UNAUDITED%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION) The report provides reconciliations for EBITDA, Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBT, which are non-GAAP measures used by management and investors to evaluate operating performance by excluding various non-cash and non-recurring items Reconciliation of GAAP to Non-GAAP EBITDA, Adjusted EBITDA, Adjusted EBITDAR (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EBITDA | $134,858 | $107,334 | $260,704 | $211,968 | | Adjusted EBITDA | $146,611 | $117,207 | $283,996 | $232,882 | | Adjusted EBITDAR | $203,806 | N/A | $398,267 | N/A | Reconciliation of GAAP to Non-GAAP Adjusted EBT (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income before provision for income taxes (GAAP) | $112,358 | $92,064 | $218,938 | $181,662 | | Adjusted EBT | $124,520 | $102,111 | $243,250 | $202,789 | [Segment-Specific Non-GAAP Reconciliations](index=15&type=section&id=UNAUDITED%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION%20BY%20SEGMENT) The company provides non-GAAP reconciliations for its key segments, Skilled Services and Standard Bearer, to offer detailed insights into their individual operational profitability and performance, including segment income, EBITDA, Adjusted EBITDA, and FFO [Skilled Services Segment](index=15&type=section&id=Skilled%20Services) The Skilled Services segment demonstrated strong performance with significant increases in segment income, EBITDA, and Adjusted EBITDA for both the three and six months ended June 30, 2025 Skilled Services Segment Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Segment Income | $150,004 | $122,185 | $293,935 | $248,994 | | EBITDA | $163,754 | $133,096 | $320,898 | $270,441 | | Adjusted EBITDA | $170,321 | $140,889 | $334,345 | $283,448 | [Standard Bearer Segment](index=15&type=section&id=Standard%20Bearer) The Standard Bearer segment reported increased rental revenue and Funds From Operations (FFO) for the three and six months ended June 30, 2025, reflecting growth in both third-party and Ensign-affiliated leases Standard Bearer Segment Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental revenue generated from third-party tenants | $4,712 | $4,198 | $9,209 | $8,393 | | Rental revenue generated from Ensign's independent subsidiaries | $26,756 | $19,156 | $50,660 | $37,162 | | Total Rental Revenue | $31,468 | $23,354 | $59,869 | $45,555 | | Segment Income | $9,126 | $7,360 | $17,709 | $14,618 | | FFO | $18,391 | $14,526 | $35,450 | $28,613 | [Discussion of Non-GAAP Financial Measures](index=16&type=section&id=Discussion%20of%20Non-GAAP%20Financial%20Measures) The company defines and explains its non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDAR, and FFO, emphasizing their utility for evaluating operating performance by excluding infrequent or variable revenues and expenses, while also acknowledging their limitations compared to GAAP measures - EBITDA: Net income before interest income, provision for income taxes, depreciation and amortization, and interest expense[55](index=55&type=chunk) - Adjusted EBITDA: EBITDA adjusted for stock-based compensation, acquisition related costs, system implementation costs, litigation, and gain/loss on business interruption recoveries and long-lived assets[55](index=55&type=chunk) - Adjusted EBITDAR: Adjusted EBITDA further adjusted by adding back rent-cost of services[55](index=55&type=chunk) - FFO (Standard Bearer): Segment income, excluding real estate-related depreciation/amortization, gains/losses from real estate sales, insurance recoveries, and impairment of long-lived assets[55](index=55&type=chunk) - These non-GAAP measures provide supplemental information to evaluate operating performance, as excluded items are infrequent, variable, or do not represent current revenues/cash expenditures. However, they may not be comparable to other companies' calculations and should not replace GAAP measures[55](index=55&type=chunk) Operational Performance and Revenue Analysis [Select Performance Indicators - Skilled Services](index=10&type=section&id=UNAUDITED%20SELECT%20PERFORMANCE%20INDICATORS) The skilled services segment demonstrated strong operational growth across all facility categories (Total, Same, Transitioning, Recently Acquired) for Q2 and YTD 2025, with notable increases in skilled services revenue, patient days, and occupancy percentages [Total Facility Results](index=10&type=section&id=TOTAL%20FACILITY%20RESULTS%3A) Overall, the total facility results for skilled services show robust growth in revenue, patient days, and occupancy, indicating strong demand and operational efficiency Total Facility Results - Skilled Services Segment (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $1,173,576 | $991,285 | $182,291 | 18.4% | | Number of facilities at period end | 303 | 272 | 31 | 11.4% | | Actual patient days | 2,615,490 | 2,299,068 | 316,422 | 13.8% | | Occupancy percentage — Operational beds | 81.3% | 80.1% | 1.2% | 1.5% | | Skilled mix by nursing days | 30.8% | 29.9% | 0.9% | 3.0% | | Skilled mix by nursing revenue | 49.2% | 48.2% | 1.0% | 2.1% | Total Facility Results - Skilled Services Segment (in thousands) (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $2,297,130 | $1,960,887 | $336,243 | 17.1% | | Number of facilities at period end | 303 | 272 | 31 | 11.4% | | Actual patient days | 5,153,626 | 4,554,599 | 599,027 | 13.2% | | Occupancy percentage — Operational beds | 81.6% | 80.1% | 1.5% | 1.9% | | Skilled mix by nursing days | 31.1% | 30.4% | 0.7% | 2.3% | | Skilled mix by nursing revenue | 49.7% | 49.0% | 0.7% | 1.4% | [Same Facility Results](index=10&type=section&id=SAME%20FACILITY%20RESULTS%3A) Facilities acquired prior to January 1, 2022, demonstrated consistent growth, with increases in skilled services revenue, patient days, and occupancy, alongside an improved skilled mix Same Facility Results - Skilled Services Segment (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $845,409 | $793,594 | $51,815 | 6.5% | | Actual patient days | 1,867,924 | 1,824,753 | 43,171 | 2.4% | | Occupancy percentage — Operational beds | 82.1% | 80.5% | 1.6% | 2.0% | | Skilled mix by nursing days | 32.4% | 30.9% | 1.5% | 4.9% | | Skilled mix by nursing revenue | 51.2% | 48.8% | 2.4% | 4.9% | Same Facility Results - Skilled Services Segment (in thousands) (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $1,680,197 | $1,584,400 | $95,797 | 6.0% | | Actual patient days | 3,726,732 | 3,651,915 | 74,817 | 2.0% | | Occupancy percentage — Operational beds | 82.4% | 80.4% | 2.0% | 2.5% | | Skilled mix by nursing days | 32.8% | 31.3% | 1.5% | 4.8% | | Skilled mix by nursing revenue | 51.6% | 49.5% | 2.1% | 4.2% | [Transitioning Facility Results](index=10&type=section&id=TRANSITIONING%20FACILITY%20RESULTS%3A) Transitioning facilities (acquired between Jan 1, 2022, and Dec 31, 2023) showed strong improvements, with double-digit growth in skilled services revenue and significant increases in occupancy and skilled mix Transitioning Facility Results - Skilled Services Segment (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $188,875 | $169,268 | $19,607 | 11.6% | | Actual patient days | 423,514 | 404,652 | 18,862 | 4.7% | | Occupancy percentage — Operational beds | 84.0% | 80.3% | 3.7% | 4.6% | | Skilled mix by nursing days | 29.5% | 27.2% | 2.3% | 8.5% | | Skilled mix by nursing revenue | 50.4% | 47.8% | 2.6% | 5.4% | Transitioning Facility Results - Skilled Services Segment (in thousands) (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $373,055 | $338,622 | $34,433 | 10.2% | | Actual patient days | 840,252 | 805,595 | 34,657 | 4.3% | | Occupancy percentage — Operational beds | 83.8% | 79.9% | 3.9% | 4.9% | | Skilled mix by nursing days | 29.8% | 28.0% | 1.8% | 6.4% | | Skilled mix by nursing revenue | 50.9% | 48.8% | 2.1% | 4.3% | [Recently Acquired Facility Results](index=10&type=section&id=RECENTLY%20ACQUIRED%20FACILITY%20RESULTS%3A) Recently acquired facilities (on or after Jan 1, 2024) significantly expanded the company's portfolio and contributed substantially to skilled services revenue and patient days, demonstrating strong initial performance Recently Acquired Facility Results - Skilled Services Segment (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $139,292 | $28,389 | $110,903 | NM | | Number of facilities at period end | 45 | 13 | 32 | NM | | Actual patient days | 324,052 | 69,663 | 254,389 | NM | | Occupancy percentage — Operational beds | 74.3% | 70.8% | NM | NM | | Skilled mix by nursing days | 22.9% | 18.1% | NM | NM | | Skilled mix by nursing revenue | 35.6% | 30.4% | NM | NM | Recently Acquired Facility Results - Skilled Services Segment (in thousands) (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :------- | :--------- | | Skilled services revenue | $243,878 | $37,291 | $206,587 | NM | | Number of facilities at period end | 45 | 13 | 32 | NM | | Actual patient days | 586,642 | 95,007 | 491,635 | NM | | Occupancy percentage — Operational beds | 74.4% | 72.4% | NM | NM | | Skilled mix by nursing days | 22.0% | 17.8% | NM | NM | | Skilled mix by nursing revenue | 34.3% | 29.9% | NM | NM | [Skilled Nursing Average Daily Revenue Rates by Payor](index=12&type=section&id=UNAUDITED%20SKILLED%20NURSING%20AVERAGE%20DAILY%20REVENUE%20RATES%20AND%20PERCENT%20OF%20SKILLED%20NURSING%20REVENUE%20AND%20DAYS%20BY%20PAYOR) Average daily revenue rates for skilled nursing services increased across all payor sources (Medicare, Managed Care, Other Skilled, Medicaid, Private) for Q2 and YTD 2025, with notable growth in Managed Care and Other Skilled categories, particularly in transitioning and recently acquired facilities Skilled Nursing Average Daily Revenue Rates (per day) (Q2 2025 vs. Q2 2024) | Payor | Same Facility 2025 | Same Facility 2024 | Transitioning 2025 | Transitioning 2024 | Acquisitions 2025 | Acquisitions 2024 | Total 2025 | Total 2024 | | :-------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :---------------- | :---------------- | :--------- | :--------- | | Medicare | $786.82 | $748.36 | $850.63 | $819.42 | $686.08 | $615.16 | $789.43 | $760.63 | | Managed care | $578.99 | $548.81 | $603.30 | $556.52 | $533.47 | $456.07 | $578.40 | $548.28 | | Other skilled | $653.62 | $615.93 | $613.34 | $528.41 | $721.87 | $745.59 | $655.04 | $607.13 | | Total skilled revenue | $666.96 | $632.40 | $721.91 | $682.66 | $630.24 | $572.21 | $672.15 | $639.39 | | Medicaid | $306.87 | $299.94 | $296.03 | $277.59 | $336.14 | $296.25 | $308.87 | $295.73 | | Private and other payors | $292.90 | $277.47 | $310.80 | $285.25 | $353.84 | $266.30 | $305.96 | $278.32 | | Total skilled nursing revenue | $422.26 | $400.43 | $423.15 | $388.68 | $406.13 | $341.31 | $420.43 | $396.63 | [Percentage of Skilled Nursing Revenue and Days by Payor](index=12&type=section&id=PERCENTAGE%20OF%20SKILLED%20NURSING%20REVENUE%20AND%20DAYS%20BY%20PAYOR) The percentage of skilled nursing revenue and days by payor source shows a slight shift towards Medicare and Managed Care, and away from Medicaid, across all facility types for Q2 and YTD 2025, indicating a favorable payor mix trend Percentage of Skilled Nursing Revenue by Payor (Q2 2025 vs. Q2 2024) | Payor | Same Facility 2025 (%) | Same Facility 2024 (%) | Transitioning 2025 (%) | Transitioning 2024 (%) | Acquisitions 2025 (%) | Acquisitions 2024 (%) | Total 2025 (%) | Total 2024 (%) | | :-------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :---------------- | :---------------- | :--------- | :--------- | | Medicare | 21.5% | 20.7% | 28.1% | 28.4% | 15.6% | 13.3% | 21.9% | 21.8% | | Managed care | 20.3% | 19.5% | 16.1% | 14.3% | 12.3% | 10.1% | 18.6% | 18.4% | | Other skilled | 9.4% | 8.6% | 6.2% | 5.1% | 7.7% | 7.0% | 8.7% | 8.0% | | Skilled mix | 51.2% | 48.8% | 50.4% | 47.8% | 35.6% | 30.4% | 49.2% | 48.2% | | Private and other payors | 6.8% | 7.2% | 6.8% | 7.8% | 12.4% | 13.0% | 7.5% | 7.4% | | Medicaid | 42.0% | 44.0% | 42.8% | 44.4% | 52.0% | 56.6% | 43.3% | 44.4% | | TOTAL SKILLED NURSING | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | Percentage of Skilled Nursing Days by Payor (Q2 2025 vs. Q2 2024) | Payor | Same Facility 2025 (%) | Same Facility 2024 (%) | Transitioning 2025 (%) | Transitioning 2024 (%) | Acquisitions 2025 (%) | Acquisitions 2024 (%) | Total 2025 (%) | Total 2024 (%) | | :-------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :---------------- | :---------------- | :--------- | :--------- | | Medicare | 11.5% | 11.1% | 14.0% | 13.5% | 9.3% | 7.4% | 11.6% | 11.4% | | Managed care | 14.8% | 14.3% | 11.3% | 10.0% | 9.4% | 7.5% | 13.5% | 13.3% | | Other skilled | 6.1% | 5.5% | 4.2% | 3.7% | 4.2% | 3.2% | 5.7% | 5.2% | | Skilled mix | 32.4% | 30.9% | 29.5% | 27.2% | 22.9% | 18.1% | 30.8% | 29.9% | | Private and other payors | 9.8% | 10.3% | 9.4% | 10.6% | 14.3% | 16.7% | 10.2% | 10.5% | | Medicaid | 57.8% | 58.8% | 61.1% | 62.2% | 62.8% | 65.2% | 59.0% | 59.6% | | TOTAL SKILLED NURSING | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | [Total Service Revenue by Payor Source](index=14&type=section&id=UNAUDITED%20REVENUE%20BY%20PAYOR%20SOURCE) Total service revenue increased significantly for Q2 and YTD 2025, with Managed Care and Private and other payors showing increased contributions to the overall revenue mix, while Medicaid and Medicare percentages remained relatively stable or slightly decreased Service Revenue by Payor Source (Three Months Ended June 30) | Payor | 2025 Revenue (in thousands) | 2025 % of Revenue | 2024 Revenue (in thousands) | 2024 % of Revenue | | :-------------------- | :-------------------------- | :---------------- | :-------------------------- | :---------------- | | Medicaid | $485,848 | 39.8% | $411,760 | 40.0% | | Medicare | $291,117 | 23.8% | $258,869 | 25.1% | | Medicaid — skilled | $75,207 | 6.2% | $62,969 | 6.1% | | Total Medicaid and Medicare | $852,172 | 69.8% | $733,598 | 71.2% | | Managed care | $229,495 | 18.8% | $191,022 | 18.5% | | Private and other | $139,747 | 11.4% | $105,954 | 10.3% | | SERVICE REVENUE | $1,221,414 | 100.0% | $1,030,574 | 100.0% | Service Revenue by Payor Source (Six Months Ended June 30) | Payor | 2025 Revenue (in thousands) | 2025 % of Revenue | 2024 Revenue (in thousands) | 2024 % of Revenue | | :-------------------- | :-------------------------- | :---------------- | :-------------------------- | :---------------- | | Medicaid | $939,688 | 39.3% | $801,923 | 39.4% | | Medicare | $578,868 | 24.2% | $524,452 | 25.8% | | Medicaid — skilled | $144,758 | 6.1% | $126,278 | 6.2% | | Total Medicaid and Medicare | $1,663,314 | 69.6% | $1,452,653 | 71.4% | | Managed care | $456,712 | 19.1% | $379,126 | 18.6% | | Private and other | $268,428 | 11.3% | $203,280 | 10.0% | | SERVICE REVENUE | $2,388,454 | 100.0% | $2,035,059 | 100.0% |

Core Insights - The Ensign Group, Inc. reported strong operating results for Q2 2025, with GAAP diluted earnings per share of $1.44, an 18.0% increase year-over-year, and adjusted earnings per share of $1.59, a 20.5% increase year-over-year [1][5][6]. Operating Results - The company achieved record occupancy rates of 82.1% for same facilities and 84.0% for transitioning facilities, reflecting increases of 2.0% and 4.6% respectively compared to the prior year [4][5]. - Skilled daily census increased by 7.4% for same facilities and 13.5% for transitioning facilities compared to the prior year [4][5]. - Total skilled services revenue reached $1.17 billion, marking an 18.4% increase year-over-year [5][38]. Financial Performance - GAAP net income for the quarter was $84.4 million, an 18.9% increase from the prior year, while adjusted net income was $93.3 million, a 22.1% increase [5][6]. - Consolidated revenue for the quarter was $1.23 billion, up 18.5% from the previous year [5][6]. - The company raised its annual earnings guidance for 2025 to between $6.34 and $6.46 per diluted share, reflecting a more than 16% increase over 2024 results [6][7]. Growth and Acquisitions - The company added 52 new operations since the beginning of 2024, with eight new operations added in the latest quarter [7][8]. - Ensign's portfolio now consists of 348 healthcare operations across 17 states, with 146 real estate assets owned [10][11]. - Recent acquisitions include several skilled nursing and senior living facilities in California and Idaho [9][15]. Dividend and Liquidity - The company declared a quarterly cash dividend of $0.0625 per share, continuing its long history of dividend payments [12]. - Ensign maintains strong liquidity with approximately $364.0 million in cash and $592.6 million available under its line of credit [7][12].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________ FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2025. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to . Commission file number: 001-33757 _____________________________ THE ENSIGN GROUP, INC. (Exact Name of Registrant as Specified in Its ...

Core Viewpoint - The Ensign Group, Inc. is set to release its second quarter 2025 financial results on July 24, 2025, and will hold a conference call on July 25, 2025, to discuss its performance [1][2]. Company Overview - The Ensign Group, Inc. operates independent subsidiaries that provide a wide range of skilled nursing and senior living services, as well as physical, occupational, and speech therapies across 348 healthcare facilities in multiple states [4]. - The company is involved in investing in and providing rehabilitative and healthcare services, along with real estate [1]. Conference Call Details - A live webcast for investors will take place on July 25, 2025, at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) to discuss the second quarter performance [2]. - The webcast will be available for replay on the company's website until August 29, 2025 [3]. Contact Information - For further inquiries, the Ensign Group can be contacted at (949) 487-9500 or via email at ir@ensigngroup.net [5].