The Pennant Group (NasdaqGS:PNTG) Q4 2025 Earnings call February 26, 2026 12:00 PM ET Company ParticipantsBrent Guerisoli - CEOBrian Tanquilut - Equity Research analystJohn Gochnour - President and COOKirk Cheney - EVP, General Counsel and Corporate SecretaryLynette Walbom - CFOConference Call ParticipantsBen Hendrix - VP and Senior Equity AnalystDavid MacDonald - Managing Director and Senior Equity Research AnalystJared Haase - VP and Senior Equity AnalystRaj Kumar - Senior Research Associate and AnalystSt ...

The Pennant Group (NasdaqGS:PNTG) Q4 2025 Earnings call February 26, 2026 12:00 PM ET Company ParticipantsBrent Guerisoli - CEOBrian Tanquilut - Equity Research analystJohn Gochnour - President and COOKirk Cheney - EVP, General Counsel and Corporate SecretaryLynette Walbom - CFOConference Call ParticipantsBen Hendrix - VP and Senior Equity AnalystDavid MacDonald - Managing Director and Senior Equity Research AnalystJared Haase - VP and Senior Equity AnalystRaj Kumar - Senior Research Associate and AnalystSt ...

Financial Data and Key Metrics Changes - The company reported full-year consolidated revenue of $947.7 million, an increase of $252.5 million, or 36.3% year-over-year [6] - Adjusted EBITDA for the full year was $72.5 million, up $19.2 million, or 36% compared to the previous year [6] - Adjusted earnings per share for the full year reached $1.18, exceeding the midpoint of the updated annual guidance of $1.16 [5][6] Business Line Data and Key Metrics Changes - In the home health and hospice segment, Q4 revenue was $233.3 million, an increase of $91.3 million, or 64.3% year-over-year, with adjusted EBITDA of $33.7 million, up $12.4 million, or 58.2% [12] - Fourth quarter admissions surged 81.3%, with Medicare admissions growing 87.5% year-over-year [12] - The senior living segment saw full-year revenue improve to $215 million, an increase of $39.2 million, or 22.3% over the prior year [16] Market Data and Key Metrics Changes - The average daily census in hospice care grew to 5,060, a 46.9% increase over the prior year quarter [15] - Same-store Medicare admissions in home health grew 8.2%, with a 3.7% increase in Medicare revenue per episode [13] - All store occupancy in senior living rose 200 basis points to 80.6%, with same-store occupancy ending the year at 82.1% [17] Company Strategy and Development Direction - The company is focused on optimizing performance and driving operational excellence while remaining open to selective acquisitions [9] - Key focus areas include leadership development, clinical excellence, employee experience, margin improvement, and growth [8] - The company aims to continue the upward trajectory of its senior living business, with significant growth potential ahead [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying trajectory of the business despite reimbursement headwinds [15] - The company anticipates a full-year revenue guidance of $1.13 billion to $1.17 billion for 2026, reflecting a 22.4% increase at the midpoint [11] - Management highlighted the importance of local leadership in responding to community needs and driving organic growth [57] Other Important Information - The company completed significant acquisitions, including the purchase of over 50 locations from UnitedHealth and Amedisys, enhancing its reach in the Southeast [8] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 1.7 times, well under the covenant limit [23] - The company generated $21 million of cash flows from operations in Q4, bringing the year-to-date total to $48.3 million [23] Q&A Session Summary Question: Is the guidance conservative due to the integration of Amedisys and UnitedHealth? - Management confirmed that the guidance reflects a conservative approach due to expected initial noise during the transition of operations [30] Question: How do joint ventures perform compared to non-JV agencies? - Management stated that joint ventures are treated like any Pennant business, focusing on local leadership and collaboration with health system partners to achieve exceptional outcomes [32] Question: How does the Amedisys and UnitedHealth asset ramp-up compare to Signature? - Management noted similarities in leadership quality and operational strengths, expressing confidence in the transition process based on past experiences [39] Question: What is the expected same-store revenue growth for 2026? - Management indicated a projected 7% increase in home health and hospice revenue for 2026, despite anticipated rate decreases [51] Question: What is the competitive landscape in the hospice segment? - Management highlighted a normalization in growth rates post-pandemic, with strong organic growth driven by local community needs [78]

Core Viewpoint - The Pennant Group, Inc. is set to release its fourth quarter and fiscal year 2025 financial results on February 25, 2026, followed by a live webcast on February 26, 2026, where management will discuss these results [1][2]. Group 1: Financial Results Announcement - The Pennant Group, Inc. will issue its financial results for the fourth quarter and fiscal year 2025 on February 25, 2026 [1]. - A live webcast is scheduled for February 26, 2026, at 10:00 a.m. Mountain Time to discuss the financial results [2]. Group 2: Company Overview - The Pennant Group, Inc. operates as a holding company for independent subsidiaries providing healthcare services, including home health, hospice, and senior living in 17 states [4]. - Each subsidiary operates independently with its own management, employees, and assets, indicating a decentralized operational structure [4].

Core Insights - The session is part of a virtual home care conference hosted by BofA Securities, featuring Enhabit, a major player in the home health and hospice sector in the U.S. [2] Company Overview - Enhabit is recognized as one of the largest home health and hospice providers in the United States [2]. Leadership - The session includes insights from Barb Jacobsmeyer, the President and CEO of Enhabit, and Ryan Solomon, the CFO [2]. Audience Engagement - The audience is encouraged to participate by submitting questions through a designated window during the Q&A session [3].

Summary of The Pennant Group FY Conference Call Company Overview - **Company**: The Pennant Group (NasdaqGS:PNTG) - **Industry**: Home health and hospice services, senior living facilities Key Points and Arguments 1. Growth and Acquisitions - The Pennant Group had a productive year in 2025, starting with the second tranche of the Signature acquisition and culminating in the purchase of a large portfolio from UnitedHealth and Amedisys [25][26] - The company emphasizes investment in leadership, which has led to organic growth in operations, surpassing previous performance levels [27][28] 2. Integration Process - The integration of new acquisitions involves a structured approach focusing on leadership readiness, operational health, and the opportunity presented by the acquisition [31][32] - A typical optimization process post-acquisition spans about nine quarters, involving technology integration and rebranding efforts [33][34] 3. Financial Management - The company expects G&A costs to normalize from approximately 6.7% to 6.5% by the end of 2026, despite initial increases due to acquisitions [36][37] - Current leverage is around two times net debt to adjusted EBITDA, with a comfortable range of two to two and a half times for future acquisitions [39][40] 4. Referral Dynamics and Partnerships - The partnership with Ensign has provided operational benefits, including shared expertise and clinical collaboration, although referrals from Ensign's skilled nursing operations remain low [46][47] - The company is exploring joint venture opportunities with health systems to enhance care delivery and improve clinical outcomes [66][67] 5. Reimbursement and Quality Measures - The Pennant Group has achieved a 4.1 CMS Star Rating, which has helped reduce the differential between Medicare Advantage (MA) rates and fee-for-service rates to 20-25% [58][59] - The company is focused on driving down costs while maintaining quality, which is crucial for negotiations with payers [61][62] 6. Hospice Operations - The company sees potential for growth in hospice length of stay, currently just under 100 days, with a target to improve without exceeding caps [76][77] - The hospice segment is expected to grow in the mid to high single digits, with a focus on maintaining quality care [78][79] 7. Senior Living Performance - The senior living segment has seen high occupancy rates and successful rate increases, attributed to capital investments and improved service offerings [88][89] - The company aims to increase the proportion of healthcare services provided, currently at 20-25%, with a long-term goal of 25-33% [91][92] 8. Labor and Staffing - The company has made significant improvements in caregiver onboarding and retention, leading to decreased turnover and enhanced employee experience [94] - Current staffing levels are sufficient to support increased occupancy, with ongoing efforts to scale as demand grows [94] 9. Future Outlook - The Pennant Group is targeting a 15% margin in senior living, with expectations that increased occupancy and operational efficiencies will contribute to this goal [96][97] Additional Important Insights - The company is actively involved in discussions with CMS regarding reimbursement methodologies, emphasizing the importance of home health services in the continuum of care [71][72] - The focus on leadership development and creating opportunities for local leaders is a core part of the company's strategy, differentiating it in a fragmented market [50][54]

Core Insights - The company has seen success in its strategies implemented over the past few years, particularly in hospice care, which continues to outperform expectations [1] - The payer strategy in home health is beginning to yield positive results, especially in negotiations with various payers [1] - The company has focused on reducing leverage, which has contributed to improved free cash flow [1] - Overall performance for 2025 is viewed positively, with a strong start to the fourth quarter [1]

Group 1 - The Pennant Group, Inc. will participate in the 2025 Stephens Annual Investment Conference on November 19, 2025 [1] - Key executives including the CFO, COO, and President of the Senior Living segment will engage in a fireside chat during the conference [2] - A live webcast of the event will be available for interested parties [2] Group 2 - The Pennant Group operates 141 home health and hospice agencies and 61 senior living communities across multiple states in the U.S. [3] - Each operating subsidiary within the Pennant Group functions independently with its own management and assets [3] - The company emphasizes that it does not directly operate the individual businesses under its umbrella [3]

Group 1 - Enhabit, Inc. is a leading national home health and hospice provider [1] - The company will participate in the Jefferies 2025 Healthcare Services Conference [1] - Enhabit's President and CEO Barb Jacobsmeyer and CFO Ryan Solomon will engage in a fireside chat on September 30 at 10:55 a.m. CT [1] Group 2 - The fireside chat will be webcast live and available for replay on Enhabit's investor website [1]

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].