Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenue of $1.3 billion, a 31% increase year-over-year [22] - Year-to-date revenue for the first nine months of 2025 reached $3.9 billion, representing a 36% increase compared to the same period in 2024 [22] - Adjusted EBITDA for Q3 was $226.6 million, while year-to-date adjusted EBITDA was $646.2 million [22] - Net income for Q3 was $52.3 million, with diluted earnings per share of $0.32 [22] - Total occupancy across the portfolio was 89%, with mature facilities achieving 95% occupancy, up from 94% the previous year [23] Business Line Data and Key Metrics Changes - The company operates 320 facilities across the country, providing care to over 30,000 residents daily [8] - The skilled mix in mature facilities increased from 32% to 34% in 2025 [23] - New facilities ended Q3 2025 with 81% occupancy, down from 83% in 2024, while skilled mix improved to 25% from 22% [24] Market Data and Key Metrics Changes - The skilled nursing industry is projected to grow, with total expenditures expected to reach $337.4 billion by 2032 [10] - The demographic shift indicates that nearly 20% of the U.S. population will be aged 65 or older by 2030, increasing demand for post-acute care services [10] Company Strategy and Development Direction - The company aims to be the leading provider of post-acute clinical care, focusing on high-quality skilled nursing care [8] - The operational model is locally led and centrally supported, allowing local leaders to make decisions while maintaining compliance and oversight [9] - The company plans to continue executing its growth strategy through both organic growth and acquisitions, having completed 106 acquisitions in 2024 [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver exceptional value and improve clinical outcomes, emphasizing a renewed commitment to transparency and governance [6][11] - The company expects record revenue and adjusted EBITDA for the full year 2025, with guidance indicating annual revenue between $5.25 billion and $5.35 billion [26] Other Important Information - The company has strengthened its compliance and internal controls following an independent investigation, enhancing its operational framework [6][21] - The company has invested in leadership development through its Administrator in Training program, with a retention rate of approximately 78% [19] Q&A Session Summary Question: Can you discuss the momentum in the business regarding occupancy and skilled mix? - Management noted strong occupancy in mature facilities and expressed confidence in improving occupancy and skilled mix in new and ramping facilities as they integrate into the company's operational model [31][32] Question: What are the most impactful changes made regarding controls? - The focus has been on strengthening compliance within the organization, which supports the locally led and centrally supported model [34][35] Question: Can you provide insights on cash flow generation and M&A activity? - Cash provided by operations for the first nine months was $407 million, with a significant increase in cash and cash equivalents compared to the previous year [38] - The company plans to continue being selective in M&A, focusing on supporting and integrating newly acquired facilities [40][41] Question: How should long-term growth be viewed in light of recent changes? - Management indicated that the previous growth models remain applicable, with expectations of continued strong performance and opportunistic acquisitions [45][46] Question: What is the current embedded EBITDA opportunity across new and ramping cohorts? - New facilities typically operate at a 2-3% margin, which can increase to low double digits as they mature [48][49] Question: How is the company modeling growth for Medicaid rates? - The company closely evaluates state Medicaid programs during acquisitions, targeting states with favorable reimbursement structures for higher acuity patients [50][51]