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].

Operations and Expansion - As of June 30, 2025, the company operates 347 skilled nursing and senior living facilities, with a total of 35,545 operational skilled nursing beds and 3,292 senior living units[159][160]. - During the six months ended June 30, 2025, the company expanded operations by adding 17 stand-alone skilled nursing operations, two stand-alone senior living operations, and one campus operation, resulting in 1,955 new skilled nursing beds and 204 senior living units[164]. - The company expanded into Alabama, Alaska, and Oregon in Q1 2025, enhancing its national presence in attractive markets[166]. - The company’s facilities are located across 17 states, with Texas having the highest number of operational beds at 10,844[172]. - The company reported a total of 35,545 operational beds at the end of the period for skilled services, an increase from 31,813 in the previous year[181]. - The number of facilities increased to 303 at the end of June 2025, up from 272 in June 2024, representing an 11.4% growth[331]. Financial Performance - Total service revenue for the three months ended June 30, 2025, was $1,221.4 million, up from $1,030.6 million in 2024, representing a year-over-year increase of approximately 18.5%[184]. - For the six months ended June 30, 2025, total service revenue reached $2,388.5 million, compared to $2,035.1 million in 2024, marking an increase of approximately 17.4%[186]. - Total revenue for the three months ended June 30, 2025, increased by $191.5 million, or 18.5%, compared to the same period in 2024[302]. - Total revenue for the six months ended June 30, 2025, increased by $354.4 million, or 17.3%, to $2.4 billion, attributed to a 2.5% increase in occupancy in skilled services[355]. - Net income for the three months ended June 30, 2025, was $84.466 million, an increase of 18.6% from $71.181 million in the same period of 2024[326]. Revenue Sources - Medicaid revenue for skilled services increased to $473.9 million in the three months ended June 30, 2025, from $403.1 million in 2024, reflecting a growth of 17.5%[184]. - The skilled revenue from Medicare for the three months ended June 30, 2025, was $291.1 million, up from $258.9 million in 2024, indicating a growth of 12.4%[184]. - Recently Acquired Facilities generated $139.292 million in revenue, a significant increase of $110.903 million compared to $28.389 million in the same period of 2024[332]. - Revenue from Same Facilities increased by $51.8 million, or 6.5%, due to improved occupancy and revenue per patient day[337]. - Total skilled nursing revenue increased to $420.43 million, up from $396.63 million, representing a growth of 6.0% year-over-year[345]. Occupancy and Utilization - The occupancy percentage based on operational beds for skilled services was 81.3% for the three months ended June 30, 2025, compared to 80.1% in the same period of 2024[181]. - Same Facilities occupancy increased to 82.1%, a rise of 2.0% compared to the same period in 2024[302]. - Transitioning Facilities occupancy increased by 4.6% to 84.0% compared to the same period in 2024[302]. - Consolidated occupancy increased by 1.5% to 81.3% during the three months ended June 30, 2025, compared to 80.1% in 2024[336]. Cost and Expenses - Cost of services increased by $141.2 million, or 17.8%, to $932.8 million, while the cost of services as a percentage of revenue decreased to 79.5% from 79.9%[345]. - General and administrative expenses rose by $12.9 million, or 23.0%, to $69.1 million, driven by additional headcount and wage increases[350]. - Total expenses as a percentage of total revenue decreased to 91.5% for the three months ended June 30, 2025, from 91.7% in 2024[306]. Strategic Initiatives - The company’s acquisition strategy focuses on identifying underperforming operations that present strong return opportunities, despite potential regulatory and clinical challenges[162]. - The company has made progress on initiatives to increase occupancy and the acuity level of patients served[304]. - The operating model empowers each operator to form market-specific strategies to attract and retain healthcare professionals[305]. - The company continues to see positive trends in turnover and agency usage across its operations[305]. Regulatory and Policy Changes - For fiscal year 2026, CMS proposes to increase the SNF PPS rate by 2.8%, based on a 3.0% market basket adjustment, a 0.6% forecast error adjustment, and a negative 0.8% productivity adjustment[198]. - The OBBB establishes a limit of $1.0 million for home equity that can be exempted from calculating an individual's eligibility for Medicaid in seeking long-term care, effective January 1, 2028[194]. - The OBBB reduces the hold harmless threshold in expansion states beginning in fiscal year 2028, decreasing by 0.5% per year until reaching 3.5% in fiscal year 2032[191]. - The SNF PPS FY 2026 Proposed Rule includes updates to the PDPM, proposing revisions to ICD-10 code mappings to improve coding accuracy and better reflect patients' primary diagnoses[198]. - The OIG's increased scrutiny on nursing homes includes audits of reported nurse staffing hours, with a report expected in FY 2025[258].

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].

Core Insights - The Ensign Group, Inc. has acquired the real estate and operations of a skilled nursing facility in Boise, ID, and another facility in Duncanville, TX, enhancing its healthcare portfolio [1][2][10] Group 1: Acquisitions - The Boise facility has 120 beds and will be operated by a tenant entity affiliated with Ensign [1] - The Duncanville facility has 124 beds and will be operated under a long-term triple net lease arrangement [2] - Both acquisitions became effective at the beginning of July 2025 [2] Group 2: Portfolio Expansion - Following these acquisitions, Ensign Group's portfolio now includes 348 healthcare operations across 17 states, with 44 locations offering senior living services [4] - The company owns 146 real estate assets through its subsidiaries, including Standard Bearer [4] Group 3: Strategic Motives - The company aims to expand into various U.S. communities, addressing gaps in care availability and supporting underserved populations [5] - Management is focused on opportunistic real estate buyouts and leasing struggling healthcare businesses [6] Group 4: Revenue Growth Potential - The increase in skilled nursing facilities allows Ensign to serve a broader patient population, potentially driving revenue growth in its Skilled Services segment, which accounted for 97.5% of total revenues in Q1 2025 [7] - The Texas acquisition is expected to enhance rental income through triple-net lease agreements, shifting property-related expenses to tenants [8] Group 5: Market Performance - Ensign Group's shares have increased by 17.8% over the past year, outperforming the industry growth of 12.5% [9]

Core Insights - The Ensign Group, Inc. has acquired two skilled nursing facilities, expanding its portfolio in the healthcare sector [1][3] - The acquisitions include Duncanville Healthcare and Rehabilitation Center in Texas and Timber Springs Transitional Care in Idaho, increasing the total number of healthcare operations to 348 across 17 states [4] Group 1: Acquisitions - Ensign acquired the real estate of Duncanville Healthcare and Rehabilitation Center, a 124-bed facility, which will be operated by a third-party under a long-term triple net lease [1] - The company also acquired Timber Springs Transitional Care, a 120-bed facility in Boise, Idaho, which will be operated by an Ensign-affiliated tenant [3] Group 2: Portfolio Expansion - Following these acquisitions, Ensign's portfolio now includes 348 healthcare operations, comprising 44 senior living operations [4] - Ensign subsidiaries, including Standard Bearer, own a total of 146 real estate assets [4] Group 3: Strategic Focus - The company is actively seeking further opportunities to acquire real estate and lease both well-performing and struggling skilled nursing and senior living facilities across the United States [4]

Core Insights - The Ensign Group, Inc. has acquired Timber Springs Transitional Care, a 120-bed skilled nursing facility in Boise, Idaho, through its subsidiary Standard Bearer Healthcare REIT, Inc. [1] - The acquisition is part of Ensign's strategy to expand its operations and real estate presence in the northwest region of the United States [2] - In a separate transaction, Standard Bearer also acquired the real estate of Duncanville Healthcare and Rehabilitation Center, a 124-bed skilled nursing facility in Duncanville, Texas, which will be operated by a third-party under a long-term triple-net lease [3] Company Growth - As of July 1, 2025, Ensign's portfolio has grown to 348 healthcare operations, including 44 senior living operations across 17 states [4] - Ensign subsidiaries, including Standard Bearer, own a total of 146 real estate assets [4] - The company is actively seeking further acquisition opportunities in skilled nursing, senior living, and other healthcare-related businesses throughout the United States [4] Operational Strategy - The CEO of Ensign emphasized the importance of these acquisitions in enhancing the company's operational capabilities and real estate footprint [2] - The President of Pennant Healthcare LLC expressed confidence in the local leadership's ability to provide exceptional service at the newly acquired facility [3] - The acquisitions reflect Ensign's ongoing growth strategy and commitment to expanding its healthcare services [4]

Group 1 - Ensign Group (ENSG) is currently outperforming the Medical sector, with a year-to-date return of 14.5% compared to the sector's average return of -5.1% [4] - The Zacks Rank for Ensign Group is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - Over the past 90 days, the consensus estimate for Ensign Group's full-year earnings has increased by 0.2%, reflecting improved analyst sentiment [3] Group 2 - Ensign Group belongs to the Medical - Nursing Homes industry, which has seen an average gain of 17.1% year-to-date, indicating that ENSG is slightly underperforming its industry [5] - The Medical group, which includes 997 companies, is currently ranked 7 within the Zacks Sector Rank [2] - Boston Scientific (BSX), another stock in the Medical sector, has also outperformed the sector with a year-to-date return of 14.6% [4]

Company Overview - The Ensign Group operates 344 facilities [15], employing over 50,500 individuals [5] across 17 states [15, 27], with a focus on post-acute care [5] - The company has experienced significant growth, with a 15% annual revenue growth rate and a 16% annual EBITDAR growth rate since 2014 [15] - The Ensign Group's real estate portfolio includes 144 owned properties [15] - The company's mission is to support operations in dignifying post-acute care [14] Financial Performance and Guidance - The company's 2025 revenue guidance is $4.91 billion [15], with EPS guidance of $6.30 [15] - The company forecasts annual revenue between $4.89 billion and $4.94 billion, and diluted adjusted EPS between $6.22 and $6.38 for 2025 [85] - Q1 2025 revenue increased by 16.1% to $1.173 billion compared to $1.0102 billion in Q1 2024 [82] - Q1 2025 consolidated adjusted net income increased by 18% to $89 million compared to $75.4 million in Q1 2024 [82] Operational Strategy and Growth - The company focuses on a local leadership strategy in fragmented markets [20], with an emphasis on high-quality healthcare outcomes [20] - The company's skilled nursing operations have improved significantly within five quarters, including a 454 bps increase in occupancy, a 324 bps increase in EBITDAR margin, and a 311 bps increase in skilled mix revenue [43] - 28.8% of the company's skilled nursing operations have been operated for less than three full years [42] - The company operates a Captive REIT, Standard Bearer Healthcare REIT, Inc [17]

Core Viewpoint - The Ensign Group, Inc. is undergoing a leadership transition with the retirement of Executive Chairman Christopher Christensen and the appointment of Barry R. Port as Chair of the Board, effective September 1, 2025, while Marivic Uychiat joins the Board of Directors [1][2][3]. Leadership Changes - Christopher Christensen will retire from his roles as Executive Chairman and board member on September 1, 2025 [1]. - Barry R. Port, currently the Chief Executive Officer since May 30, 2019, will take over as Chair of the Board of Directors on the same date [2]. - Marivic Uychiat has been appointed to the Board of Directors, filling the vacancy left by Christensen's retirement, effective September 1, 2025 [3]. Executive Backgrounds - Barry R. Port has over 21 years of experience with Ensign, including five years as Chief Operating Officer [2]. - Marivic Uychiat has been with the organization for over 22 years and has served as Executive Vice President of Clinical Services since 2016, with a strong background in skilled healthcare management and clinical program development [3][4]. Organizational Commitment - Christensen expressed confidence in the leadership team, emphasizing their long tenure and commitment to the company's cultural values and operational model [5]. - The organization has consistently achieved strong clinical and financial performance due to the dedication of local leaders and caregivers [5]. Company Overview - The Ensign Group operates 347 healthcare facilities across multiple states, providing a range of services including skilled nursing, senior living, and rehabilitative therapies [6].