[Pennant Q2 2025 Earnings Release](index=1&type=section&id=Pennant%20Reports%20Second%20Quarter%202025%20Results) This report details Pennant's strong second quarter 2025 financial performance, operational highlights, and updated full-year guidance [Financial Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Pennant reported strong Q2 2025 results with significant year-over-year growth in revenue, net income, and adjusted EBITDA Q2 2025 Financial Performance | Metric | Q2 2025 | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $219.5M | 30.1% | | Net Income | $7.1M | 24.5% | | Adjusted Net Income | $9.4M | 28.2% | | Consolidated Adjusted EBITDA | $16.4M | 24.5% | | Home Health & Hospice Revenue | $166.0M | 32.5% | | Senior Living Services Revenue | $53.5M | 23.1% | - For the second quarter of 2025, Pennant reported GAAP diluted earnings per share of **$0.20** and adjusted diluted earnings per share of **$0.27**[1](index=1&type=chunk) [Management Commentary and Outlook](index=2&type=section&id=Operating%20Results%20and%20Guidance) Management highlighted robust operating momentum and raised full-year 2025 guidance for revenue and adjusted EPS [Operating Results](index=2&type=section&id=Operating%20Results) Management expressed satisfaction with strong operating momentum across home health, hospice, and senior living businesses - CEO Brent Guerisoli stated, "The second quarter represents a continuation of our robust operating momentum... We are pleased by the strength in our home health, hospice and senior living businesses, as each contributes meaningfully to our positive performance"[3](index=3&type=chunk) - COO John Gochnour noted strong results from local leaders and sees "significant untapped potential for organic improvement and exciting acquisition opportunities on the near horizon, including the announced transaction with UnitedHealth Group and Amedisys"[3](index=3&type=chunk) [2025 Full-Year Guidance](index=2&type=section&id=2025%20Guidance) The company provided updated full-year 2025 guidance, projecting significant growth in revenue, adjusted EPS, and adjusted EBITDA 2025 Full-Year Guidance Metrics | Metric | 2025 Full-Year Guidance | | :--- | :--- | | Total Revenue | $852.8M - $887.6M | | Adjusted EPS (Diluted) | $1.09 - $1.15 | | Adjusted EBITDA | $69.1M - $72.7M | - The adjusted EPS guidance midpoint of **$1.12** represents a **19.1% growth** over 2024 and a **53.4% growth** over 2023 results[5](index=5&type=chunk) - Guidance is based on approximately **35.7 million** diluted weighted average shares and a **26.0% effective tax rate**[5](index=5&type=chunk) It includes anticipated expenses related to the UnitedHealth Group and Amedisys transaction but no additional earnings from it due to uncertain timing[5](index=5&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents unaudited condensed consolidated statements of income, balance sheets, and cash flows for the period [Condensed Consolidated Statements of Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The statements detail revenue, income from operations, net income, and diluted EPS for the three and six months ended June 30 Condensed Consolidated Statements of Income (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $219,501 | $168,745 | $429,343 | $325,660 | | Income from operations | $11,528 | $9,562 | $24,178 | $18,086 | | Net income attributable to PNTG | $7,085 | $5,690 | $14,860 | $10,596 | | Diluted EPS | $0.20 | $0.18 | $0.42 | $0.35 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets provide a snapshot of assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $127,374 | $122,856 | | Total assets | $751,417 | $679,521 | | Total current liabilities | $104,941 | $101,700 | | Total liabilities | $417,790 | $367,556 | | Total equity | $333,627 | $311,965 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The cash flow statements summarize operating, investing, and financing activities for the six months ended June 30 Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $13,414 | $11,036 | | Net cash used in investing activities | ($60,355) | ($33,280) | | Net cash provided by financing activities | $37,080 | $19,228 | | Net decrease in cash | ($9,861) | ($3,016) | [Segment and Operational Performance](index=8&type=section&id=Segment%20and%20Operational%20Performance) This section details strong performance across Home Health, Hospice, and Senior Living segments, highlighting key operational indicators and payor mix [Revenue by Segment](index=8&type=section&id=REVENUE%20BY%20SEGMENT) Revenue distribution by segment shows Home Health and Hospice as the largest contributor with significant year-over-year growth Q2 2025 Revenue by Segment (in thousands) | Segment (Q2 2025 Revenue) | Revenue (in thousands) | % of Total | YoY Growth | | :--- | :--- | :--- | :--- | | Home health and hospice services | $166,020 | 75.6% | 32.5% | | Senior living services | $53,481 | 24.4% | 23.1% | | **Total Revenue** | **$219,501** | **100.0%** | **30.1%** | [Home Health and Hospice Performance Indicators](index=9&type=section&id=SELECT%20PERFORMANCE%20INDICATORS%20-%20Home%20Health%20and%20Hospice) Key indicators show significant year-over-year growth in home health admissions and hospice average daily census - In Q2 2025, total home health admissions grew **26.1% YoY** to **17,832**, and hospice average daily census increased **21.4% YoY** to **3,909**[23](index=23&type=chunk) - Same-agency results, which exclude newer acquisitions, showed strong organic growth with a **9.7% YoY increase** in revenue for Q2 2025[23](index=23&type=chunk)[25](index=25&type=chunk) [Senior Living Performance Indicators](index=10&type=section&id=SELECT%20PERFORMANCE%20INDICATORS%20-%20Senior%20Living) Senior living revenue grew, driven by increased average monthly revenue per unit, while occupancy remained stable - Total senior living revenue grew **23.1% YoY** in Q2 2025, driven by an **8.3% increase** in average monthly revenue per occupied unit to **$5,188**, while overall occupancy remained flat at **78.8%**[26](index=26&type=chunk) - Same-store senior living results showed a **9.0% revenue increase**, with occupancy improving by **0.9%** to **80.1%** in Q2 2025[27](index=27&type=chunk) [Revenue by Payor Source](index=12&type=section&id=REVENUE%20BY%20PAYOR%20SOURCE) Medicare remains the largest payor source, contributing nearly half of the total revenue in Q2 2025 Q2 2025 Revenue by Payor Source (in thousands) | Payor Source (Q2 2025) | Revenue (in thousands) | % of Total | | :--- | :--- | :--- | | Medicare | $103,821 | 47.3% | | Medicaid | $30,798 | 14.0% | | Managed Care | $30,619 | 13.9% | | Private and Other | $54,263 | 24.8% | | **Total Revenue** | **$219,501** | **100.0%** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=13&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION) This section provides detailed reconciliations of GAAP net income to non-GAAP measures, including Adjusted Net Income and Adjusted EBITDA Reconciliation of GAAP to Non-GAAP Net Income (Q2 2025, in thousands) | Reconciliation (Q2 2025, in thousands) | Amount | | :--- | :--- | | Net income attributable to PNTG (GAAP) | $7,085 | | Add: Share-based compensation expense | $2,212 | | Add: Acquisition related costs | $2,166 | | Other adjustments (net) | ($1,051) | | **Non-GAAP net income** | **$9,412** | Reconciliation of GAAP to Non-GAAP EBITDA (Q2 2025, in thousands) | Reconciliation (Q2 2025, in thousands) | Amount | | :--- | :--- | | Consolidated net income (GAAP) | $7,981 | | Adjustments (Taxes, Interest, D&A, etc.) | $5,130 | | **Consolidated EBITDA** | **$13,111** | | Non-GAAP Adjustments (Share comp, Acq. costs, etc.) | $3,264 | | **Consolidated Adjusted EBITDA** | **$16,375** | [About the Company and Forward-Looking Statements](index=3&type=section&id=About%20Pennant%20and%20Safe%20Harbor) This section provides company background, conference call details, a safe harbor statement, and definitions for non-GAAP financial measures - Pennant is a holding company for subsidiaries providing healthcare services through **137 home health and hospice agencies** and **61 senior living communities** across **13 states**[7](index=7&type=chunk) - The company provides a safe harbor statement warning that forward-looking statements regarding growth prospects and future performance are subject to risks and uncertainties and are not guarantees of future results[8](index=8&type=chunk)[9](index=9&type=chunk) - The report defines non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted EBITDAR, explaining their calculation and utility for investors to evaluate operating performance by excluding certain infrequent or variable expenses[50](index=50&type=chunk)

Core Insights - The Pennant Group, Inc. reported strong operating results for Q2 2025, with GAAP diluted earnings per share of $0.20 and adjusted diluted earnings per share of $0.27, reflecting robust growth across its home health, hospice, and senior living segments [1][4][6]. Financial Performance - Total revenue for Q2 2025 was $219.5 million, an increase of $50.8 million or 30.1% compared to the same quarter last year [4]. - Net income for Q2 2025 was $7.1 million, up $1.4 million or 24.5% year-over-year [4]. - Adjusted net income for Q2 2025 reached $9.4 million, an increase of $2.1 million or 28.2% from the prior year [4]. - Consolidated Adjusted EBITDAR for Q2 2025 was $28.2 million, a rise of $4.8 million or 20.3% year-over-year [4]. - Consolidated Adjusted EBITDA for Q2 2025 was $16.4 million, increasing by $3.2 million or 24.5% compared to the previous year [4]. Segment Performance - Home Health and Hospice Services segment revenue for Q2 2025 was $166.0 million, an increase of $40.7 million or 32.5% from the prior year [4]. - Senior Living Services segment revenue for Q2 2025 was $53.5 million, up $10.0 million or 23.1% year-over-year [4]. - Total home health admissions for Q2 2025 were 17,832, reflecting a 26.1% increase from the previous year [4]. - Hospice average daily census for Q2 2025 was 3,909, an increase of 21.4% compared to the prior year [4]. Guidance and Future Outlook - The company updated its 2025 annual guidance, anticipating total revenue between $852.8 million and $887.6 million, with adjusted earnings per diluted share expected to be between $1.09 and $1.15 [6][7]. - The midpoint of the earnings guidance represents a 19.1% growth over 2024 adjusted earnings per share and a 53.4% increase over 2023 results [7]. - Management sees significant untapped potential for organic improvement and acquisition opportunities, including a transaction with UnitedHealth Group and Amedisys [3][6].

Core Viewpoint - The Pennant Group, Inc. is set to release its second quarter 2025 financial results on August 6, 2025, followed by a live webcast on August 7, 2025, where management will discuss these results [1][2]. Company Overview - The Pennant Group, Inc. operates as a holding company for independent subsidiaries that provide healthcare services, including home health, hospice, and senior living services across multiple states in the U.S. [4]. - The company's subsidiaries are independently managed, each with its own management, employees, and assets [4]. Investor Engagement - Investors are invited to participate in a live webcast on August 7, 2025, at 10:00 a.m. Mountain Time, to discuss the second quarter results [2]. - The webcast will be available for replay on the company's website until August 6, 2026 [3]. Contact Information - For further inquiries, the company can be contacted at (208) 401-1400 or via email at ir@pennantservices.com [5].

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in the context of investments and trading activities [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information does not constitute any recommendation or advice for investment actions [1]. - Users are advised to perform their own research and consider their financial situation before making decisions [1]. Group 2 - The website includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - It encourages users to understand how these instruments work and the associated risks before investing [1].

Group 1 - The natural gas market is showing potential for a bullish breakout if it surpasses the recent high of $3,346, which would also place it above the 20-Day and 50-Day moving averages [1] - A bullish reversal for natural gas will only be confirmed with a rise above the recent lower swing high at $3,366 [1] - Gold is consolidating near the highs of a long-term uptrend, with a significant resistance level at $3,451, which needs to be broken for a reliable bullish signal [2] Group 2 - The pullback low of the pennant for gold at $2,121 found support around the 38.2% Fibonacci retracement level, indicating sustained buying strength [3] - A drop below the swing low of $3,243 would indicate weakness in gold and could lead to a retest of support around the 38.2% retracement level, potentially falling to the 50% retracement level at $3,041 [4]

Core Insights - The Zacks Medical - Outpatient and Home Healthcare industry is experiencing a significant shift towards digital healthcare, driven by rising demand for telemedicine and AI-powered services, particularly due to an aging global population and increasing healthcare costs [1][4][9]. Industry Overview - The industry includes companies providing outpatient care and home healthcare services, utilizing advanced medical technologies for diagnosis and treatment. The sector has shown steady growth post-pandemic, supported by innovation and the shift towards value-based care models [3][6]. - The global home healthcare market was valued at $390.24 billion in 2023, with an expected CAGR of approximately 7.9% from 2024 to 2030 [1]. Major Trends - **Aging Population**: The growing elderly population is a primary driver for home healthcare services, increasing the demand for chronic disease management and rehabilitation [4]. - **Cost Effectiveness**: Outpatient clinics offer cost-effective care, supported by financial incentives from health plans and government programs [5]. - **AI Integration**: AI is enhancing healthcare delivery, with outpatient companies utilizing automated systems for better patient outcomes and efficiency [7]. - **Technological Advancements**: Virtual assistants and chatbots are becoming integral in patient care, aiding in appointment scheduling and medication compliance [8]. Challenges - **Staffing Shortages**: The U.S. healthcare sector faces significant staffing shortages, particularly among home health aides, exacerbated by high burnout rates [10]. - **Tariff Impact**: New U.S. tariffs have increased costs for imported medical supplies, straining home healthcare providers and leading to operational challenges [11]. Market Performance - The industry has outperformed its sector but underperformed compared to the S&P 500, gaining 6.8% over the past year versus the S&P 500's 12.1% gain [14]. - The industry is currently trading at a forward P/E of 19.8X, lower than the S&P 500's 22.3X [18]. Notable Companies - **Quest Diagnostics**: Expected revenue growth of 9.2% for 2025, with a strong return on equity (ROE) of 15.1% [22][23]. - **Encompass Health**: Anticipated revenue growth of 9.5% for 2025, with an ROE of 17.6% [25][26]. - **The Pennant Group**: Projected revenue growth of 23.3% for 2025, with an ROE of 10.7% [29][30]. - **DaVita**: Expected revenue growth of 5.2% for 2025, with a notably high ROE of 176.1% [33][34].

Core Insights - The Pennant Group, Inc. has acquired GrandCare Health Services, expanding its home health services in California [1][2] - The acquisition aims to enhance patient care through increased resources and expertise while maintaining continuity in service delivery [2][3] Company Overview - The Pennant Group operates independent subsidiaries providing healthcare services through home health and hospice agencies and senior living communities across multiple states [4] - GrandCare Health Services is a 5-star rated provider with over 20 years of experience, serving more than 6,000 patients annually, specializing in post-surgical rehabilitation and chronic disease management [5] Strategic Importance - The acquisition strengthens Pennant's presence in key California markets where it already has a significant senior living footprint [2][3] - The partnership is expected to build a continuum of care, enhancing the quality of home health services delivered to patients in Southern California [3] Leadership Statements - Pennant's CEO expressed enthusiasm about the acquisition, emphasizing the commitment to quality care and the integration of GrandCare's legacy with Pennant's resources [2][3] - GrandCare's leadership highlighted the alignment of values between the two organizations, focusing on empowering local teams and delivering high-quality clinical care [3] Transaction Support - Montauk AI acted as the placement agent for the acquisition, facilitating the transaction for GrandCare [3]

Core Viewpoint - The Pennant Group, Inc. has appointed Suzanne D. Snapper to its board of directors, enhancing its leadership with her extensive experience in financial management and healthcare services [1][2][3]. Company Overview - The Pennant Group, Inc. operates as a holding company for independent subsidiaries providing healthcare services through 137 home health and hospice agencies and 60 senior living communities across various states in the U.S. [5]. Leadership Changes - Suzanne D. Snapper, currently the Chief Financial Officer of Ensign Group, Inc., has been elected to the board following the resignation of JoAnne Stringfield, who served from 2019 to 2025 [1][3][4]. - Snapper's appointment is effective as of May 16, 2025, and she will serve as a Class III director, eligible for reelection in 2028 [4]. Experience and Qualifications - Ms. Snapper has been with Ensign since 2009, overseeing multiple financial functions and has prior experience at KPMG from 1996 to 2007 [2]. - Her expertise is expected to bring significant value to Pennant, particularly in financial matters and investor relations [3].

Financial Data and Key Metrics Changes - The company reported revenue of $209.8 million, an increase of $52.9 million or 33.7% compared to the prior year quarter [8] - Consolidated adjusted EBITDA reached $16.4 million, up $5.1 million or 45.9% year-over-year [9] - Adjusted diluted earnings per share increased to $0.27, a rise of $0.07 or 35% from the previous year [9] Business Line Data and Key Metrics Changes - Home Health and Hospice segment revenue was $159.9 million, an increase of $43.4 million or 37.2% year-over-year, with adjusted EBITDA rising to $25.1 million, up $7.3 million or 40.6% [13] - Senior Living segment revenue increased to $50 million, up $9.5 million or 23.6%, with adjusted EBITDA of $4.9 million, a rise of $1.4 million or 40.8% [18] Market Data and Key Metrics Changes - Hospice admissions rose to 3,783, an increase of 22.8%, and average daily census climbed to 3,794, up 28.1% year-over-year [14] - Total home health admissions grew to 18,878, an increase of 4,229 or 28.9%, with Medicare admissions rising by 19.7% [17] Company Strategy and Development Direction - The company focuses on five key initiatives: leadership development, clinical excellence, employee experience, margin improvement, and growth [9] - The company is committed to a locally driven operating model, emphasizing leadership and culture in its acquisitions [11] - Recent acquisitions, including Signature Healthcare, have been integrated successfully, demonstrating the effectiveness of the company's operating model [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the upper end of the 2025 guidance range due to strong performance and early progress in recent acquisitions [12] - The company is monitoring economic uncertainties and will revise guidance as necessary [12] - Management highlighted strong hiring and retention trends, with over 200 net nurses added year-over-year [55] Other Important Information - The company has a strong pipeline of acquisition opportunities and is focused on disciplined growth [21] - Cash flows from operations are expected to be between $35 million and $45 million for 2025 [24] - The company reported a net debt to adjusted EBITDA ratio of 0.83 times [23] Q&A Session Summary Question: What drove the reacceleration of same-store growth in home health and hospice? - Management noted that seasonal changes typically affect growth, with a strong recovery in the first quarter following a decline in the fourth quarter [32] Question: Can you elaborate on guidance expectations and segment contributions? - Management indicated that both segments performed well, with strong revenue quality and margin improvements contributing to the guidance [35] Question: What is the company's perspective on the Optum transaction? - Management expressed excitement about the partnership and emphasized the importance of having strong leaders in place for successful integration [44][45] Question: How does the company view economic sensitivity in senior living? - Management acknowledged sensitivity to macroeconomic conditions but highlighted efforts to improve revenue quality, which has led to robust growth [49] Question: What is the current hiring environment? - Management reported strong hiring and retention trends, with positive growth in staffing levels across both segments [55]

Financial Data and Key Metrics Changes - The company reported revenue of $209.8 million, an increase of $52.9 million or 33.7% compared to the prior year quarter [7] - Consolidated adjusted EBITDA reached $16.4 million, up $5.1 million or 45.9% year-over-year [8] - Adjusted diluted earnings per share were $0.27, an increase of $0.07 or 35% over the prior year quarter [8] Business Line Data and Key Metrics Changes - Home Health and Hospice segment revenue was $159.9 million, an increase of $43.4 million or 37.2% year-over-year, with adjusted EBITDA rising to $25.1 million, up $7.3 million or 40.6% [13] - Senior Living segment revenue increased to $50 million, up $9.5 million or 23.6%, with adjusted EBITDA of $4.9 million, an increase of $1.4 million or 40.8% [18] Market Data and Key Metrics Changes - Hospice admissions rose to 3,783, an increase of 22.8%, and average daily census climbed to 3,794, up 28.1% year-over-year [14] - Total home health admissions grew to 18,878, an increase of 4,229 or 28.9%, with Medicare admissions rising by 19.7% [17] Company Strategy and Development Direction - The company focuses on five key initiatives: leadership development, clinical excellence, employee experience, margin improvement, and growth [8] - The company is committed to a locally driven operating model, emphasizing leadership and culture in its acquisitions [11] - Recent acquisitions, including Signature Health Care, are expected to enhance operational performance and integration [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving the upper end of the 2025 guidance range due to strong Q1 performance and early progress in recent acquisitions [12] - The company is monitoring economic uncertainties and will revise guidance as necessary [12] Other Important Information - The company has a strong pipeline of acquisition opportunities and is focused on disciplined growth [21] - Cash flows used in operations were $21.2 million, impacted by significant acquisitions and timing of incentive payouts [22] Q&A Session Summary Question: What drove the reacceleration of same-store growth in home health and hospice? - Management attributed the growth to seasonal changes and consistent double-digit growth year-over-year in admissions [31] Question: Can you elaborate on guidance expectations and segment contributions? - Management indicated strong performance across both segments, with a focus on revenue quality and margin improvement [34] Question: What is the company's perspective on the Optum transaction? - Management expressed excitement about the partnership and emphasized the importance of having strong leaders in place for successful integration [44] Question: How does the company view economic sensitivity in senior living? - Management acknowledged sensitivity to macroeconomic conditions but highlighted efforts to improve revenue quality and maintain occupancy [48] Question: What is the current hiring environment? - Management reported strong trends in hiring and retention, with over 200 net nurses added year-over-year [54]