The Pennant (PNTG) - 2025 Q2 - Quarterly Results

Pennant Q2 2025 Earnings Release This report details Pennant's strong second quarter 2025 financial performance, operational highlights, and updated full-year guidance Financial Highlights 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] Management Commentary and Outlook Management highlighted robust operating momentum and raised full-year 2025 guidance for revenue and adjusted EPS Operating Results 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] - 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] 2025 Full-Year Guidance 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] - Guidance is based on approximately 35.7 million diluted weighted average shares and a 26.0% effective tax rate[5] It includes anticipated expenses related to the UnitedHealth Group and Amedisys transaction but no additional earnings from it due to uncertain timing[5] Financial Statements This section presents unaudited condensed consolidated statements of income, balance sheets, and cash flows for the period Condensed Consolidated Statements of Income 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 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 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 This section details strong performance across Home Health, Hospice, and Senior Living segments, highlighting key operational indicators and payor mix Revenue by Segment 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 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] - Same-agency results, which exclude newer acquisitions, showed strong organic growth with a 9.7% YoY increase in revenue for Q2 2025[23][25] Senior Living Performance Indicators 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] - Same-store senior living results showed a 9.0% revenue increase, with occupancy improving by 0.9% to 80.1% in Q2 2025[27] Revenue by Payor Source 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 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 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] - 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][9] - 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]