UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 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: 0-12015 HEALTHCARE SERVICES GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Key Points It crushed the average analyst estimate for net income in its latest quarter. Investors were impressed even though much of that profitability came from a payroll tax credit. 10 stocks we like better than Healthcare Services Group › Wednesday was a fine day to hold shares of Healthcare Services Group (NASDAQ: HCSG). That's because the company delivered a third-quarter earnings report that featured very convincing beats on both the top and bottom lines. As a result, its share price got an ...

Healthcare Services Group, Inc. (HCSG) shares surged 11.35 percent to $18.45, up $1.88 on Wednesday after reporting third-quarter earnings that topped expectations. The company posted a profit of $42.95 million, or $0.59 per share, compared with $14.03 million, or $0.19 per share, a year earlier. Revenue rose 8.5 percent to $464.34 million from $428.15 million, surpassing analysts' estimates of $0.20 per share.The stock traded between $18.14 and $20.00 during the session, after opening at $18.46 and closin ...

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Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $464.3 million, an 8.5% increase year-over-year [7] - Cost of services was reported at $367.9 million, or 79.2% of revenue, with a benefit of $34.2 million related to the ERC [7] - Net income was reported at $43.59 per share, including a $0.39 benefit from the ERC [9] - Cash flow from operations was reported at $71.3 million, adjusted to $87.1 million after accounting for a decrease in payroll accrual [9] Business Line Data and Key Metrics Changes - Environmental services revenue was reported at $211.8 million, while dietary services revenue was $252.5 million [7] - Segment margins for environmental services were reported at 10.7%, and for dietary services at 5.1% [8] Market Data and Key Metrics Changes - The company noted a strong labor market, with skilled nursing job gains significantly outpacing previous years, indicating a recovery towards pre-pandemic levels by mid-2026 [23] - The company identified over 23,000 potential facilities for their services, with less than 15% currently outsourcing environmental services and less than 8% for dietary services [31] Company Strategy and Development Direction - The top three strategic priorities include driving growth through management development, managing costs through operational execution, and optimizing cash flow [6] - The company is focusing on organic growth, strategic acquisitions, and opportunistic share repurchases, with a $50 million share repurchase plan valid through June 2026 [12] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, citing strong fundamentals in long-term and post-acute care markets, despite economic uncertainties [5] - The company is well-positioned to capitalize on opportunities due to robust fundamentals and a multi-decade demographic tailwind [39] Other Important Information - The company repurchased $27.3 million of common stock in Q3, bringing year-to-date buybacks to $42 million [12] - The company continues to evaluate M&A opportunities, with a focus on the education sector as a primary target [19] Q&A Session Summary Question: Pipeline of new client wins and future growth - Management noted that Q3 was the sixth consecutive sequential revenue increase, driven by new business wins and high client retention rates [14] Question: Update on education efforts and acquisitions - The company is expanding its focus to include campus-like environments beyond traditional education, with education as a top acquisition target [16][19] Question: Labor market conditions and hiring - The labor market is strong, with expectations to reach pre-pandemic job levels by mid-2026, which supports growth prospects [23][25] Question: Outsourcing trends in Environmental and Dietary Services - There is an increasing acceptance of outsourcing, with the company holding a significant share of the outsourced market [31][33] Question: Update on Genesis HealthCare and facility closures - The company continues to provide services to Genesis facilities without disruption, and the bankruptcy process is proceeding normally [34][36]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $464.3 million, an 8.5% increase year-over-year [7] - Cost of services was reported at $367.9 million, or 79.2% of revenue, including a benefit of $34.2 million related to the ERC [7] - Net income and diluted earnings per share were reported at $43.59 per share, including a $0.39 benefit related to the ERC [9] - Cash flow from operations was reported at $71.3 million, adjusted to $87.1 million after accounting for a decrease in payroll accrual [9] Business Line Data and Key Metrics Changes - Environmental services revenue was reported at $211.8 million, while dietary services revenue was $252.5 million [7] - Segment margins for environmental services were reported at 10.7%, and for dietary services at 5.1% [8] Market Data and Key Metrics Changes - The company noted a strong labor market, with skilled nursing job gains significantly outpacing previous years, indicating a recovery towards pre-pandemic levels by mid-2026 [24] - The company identified over 23,000 potential facilities for their services, with less than 15% currently outsourcing environmental services and less than 8% for dietary services [31] Company Strategy and Development Direction - The top three strategic priorities for Q4 include driving growth through management development, managing costs through operational execution, and optimizing cash flow [6] - The company is focusing on organic growth, strategic acquisitions, and opportunistic share repurchases, with education as the primary target for acquisitions [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, citing strong fundamentals in long-term and post-acute care markets, despite economic uncertainties [5] - The company is well-positioned to capitalize on opportunities due to robust fundamentals and a multi-decade demographic tailwind [39] Other Important Information - The company ended Q3 with cash and marketable securities of $207.5 million and an undrawn credit facility [10] - The company repurchased $27.3 million of common stock during Q3, with a total of $42 million year-to-date [12] Q&A Session Summary Question: Pipeline of new client wins and future growth - Management noted that Q3 was the sixth consecutive sequential revenue increase, driven by new business wins and high client retention rates, with Q4 revenue estimated between $460 to $470 million [14] Question: Education segment and acquisition targets - The company is focusing on a broader "campus" initiative for potential acquisitions, with education as the top target [16][19] Question: Labor market conditions - The labor market is strong, with significant job gains in skilled nursing, and the company is well-positioned to fill job openings [22][24] Question: Outsourcing trends - There is an increasing acceptance of outsourcing environmental and dietary services, with the company holding a significant share of the market [30][32] Question: Genesis Healthcare updates - The company continues to provide services to Genesis Healthcare facilities without disruption, and the bankruptcy process is proceeding normally [34][36]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $464.3 million, an 8.5% increase year-over-year [8] - Net income was reported at $43 million, with diluted earnings per share at $0.59, which includes a $0.39 benefit primarily related to the ERC [10] - Cash flow from operations was reported at $71.3 million, adjusted to $87.1 million after accounting for a decrease in payroll accrual [10] Business Line Data and Key Metrics Changes - Environmental Services segment revenue was reported at $211.8 million, while Dietary Services segment revenue was $252.5 million [8] - Cost of services was reported at $367.9 million, representing 79.2% of revenue, which includes a benefit of $34.2 million related to the ERC [8][9] - Segment margins for Environmental and Dietary Services were reported at 10.7% and 11.5%, respectively [9] Market Data and Key Metrics Changes - The company noted steady occupancy rates and increasing workforce availability in the long-term and post-acute care market [5] - The healthcare sector continues to lead in hiring, with expectations that the skilled nursing industry will return to pre-pandemic job levels by 2026 [27] Company Strategy and Development Direction - The company's top three strategic priorities include driving growth through management development, converting sales pipeline opportunities, and optimizing cash flow [6] - The company is focusing on organic growth, strategic acquisitions, and opportunistic share repurchases, with a $50 million share repurchase plan valid through June 2026 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the administration's focus on the healthcare sector and the potential for policy changes that align with operational realities [5] - The company is well-positioned to capitalize on long-term demographic trends and deliver shareholder value [42] Other Important Information - The company reported a strong balance sheet with cash and marketable securities of $207.5 million [11] - The company has incurred $2.1 million in incremental expenses related to ERC professional fees [12] Q&A Session Summary Question: Pipeline of new client wins and future growth - Management indicated that Q3 was marked by the highest growth rate since 2018, driven by new business wins and high client retention rates [16][17] Question: Update on education segment and acquisitions - The company is focusing on a broader "campus" initiative for potential acquisitions, with education as a top target [19][22] Question: Labor market conditions - The labor market remains strong, with expectations for the skilled nursing sector to return to pre-pandemic hiring levels by 2026 [25][27] Question: Outsourcing trends in environmental and dietary services - The company noted an increasing acceptance of outsourcing, with significant growth opportunities in both environmental and dietary services [34][36] Question: Update on Genesis Healthcare - The company continues to provide services to Genesis facilities without disruption, despite ongoing bankruptcy proceedings [38]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $464.3 million, an 8.5% increase year-over-year [7] - Net income and diluted earnings per share were reported at $43.59 per share, including a $0.39 benefit related to the ERC [10] - Cash flow from operations was reported at $71.3 million, adjusted to $87.1 million after accounting for a decrease in payroll accrual [10] Business Line Data and Key Metrics Changes - Environmental services revenue was reported at $211.8 million, while dietary services revenue was $252.5 million [7] - Segment margins for environmental and dietary services were reported at 10.7% and 5.1%, respectively [9] Market Data and Key Metrics Changes - The company noted a strong labor market, with skilled nursing job gains significantly outpacing 2024 levels, although still about 30,000 jobs short of pre-pandemic levels [25] - The company continues to see a positive trend in cash collection and a strong balance sheet, with cash and marketable securities of $207.5 million [11] Company Strategy and Development Direction - The top three strategic priorities for Q4 include driving growth through management development, managing costs through operational execution, and optimizing cash flow [6] - The company is focusing on organic growth, strategic acquisitions, and opportunistic share repurchases, with a $50 million share repurchase plan valid through June 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term care market, citing a multi-decade demographic tailwind and stable reimbursement environment [5] - The company is confident in its ability to capitalize on growth opportunities while delivering sustainable, profitable results [6] Other Important Information - The company repurchased $27.3 million of common stock in Q3, bringing year-to-date buybacks to $42 million [12] - The company continues to evaluate M&A opportunities, particularly in the education sector, which is a top target for acquisitions [19] Q&A Session Summary Question: Pipeline of new client wins and future growth - Management indicated that the majority of Q3 growth was driven by new business wins and high client retention rates, with an estimated revenue range of $460 to $470 million for Q4 [15][16] Question: Labor market and hiring capabilities - Management noted that the labor market is strong, with record application levels and sufficient staffing to support growth, despite some ongoing challenges in specific markets [25][26] Question: Outsourcing trends in Environmental and Dietary Services - Management observed an increasing acceptance of outsourcing in both environmental and dietary services, with significant growth potential in the market [32][35] Question: Update on Genesis Healthcare and facility transitions - Management confirmed that services to Genesis Healthcare facilities continue without disruption, and the company is monitoring the bankruptcy process closely [36][37]

Healthcare Services (HCSG) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +9.52%. A quarter ago, it was expected that this provider of housekeeping, laundry and dietary services to health care facilities would post earnings of $0.2 per share when it actually produced earnings of $0.2 ...

Exhibit 99.1 HCSG Reports Third Quarter Results Exceeds Revenue, Earnings and Cash Flow Expectations BENSALEM, PA--(BUSINESS WIRE)-- Healthcare Services Group, Inc. (NASDAQ:HCSG) today reported results for the three months ended September 30, 2025. Ted Wahl, Chief Executive Officer, stated, "We delivered strong third quarter results - marked by year-over-year and sequential increases in revenue, earnings, and cash flow - and we have carried that positive momentum into the fourth quarter. New client wins and ...