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 Insights - Sienna Senior Living reported strong organic growth in Q4 2025, marking the 12th consecutive quarter of positive performance, with significant increases in same-property net operating income (NOI) across both retirement and long-term care segments [5][6] Financial Performance - Proportionate revenue for Q4 2025 increased by 14.2% year-over-year to CAD 278.4 million, driven by higher occupancy and rent growth in retirement, increased care revenue, and contributions from long-term care [7] - Same-property NOI rose by 10.1% to CAD 47.4 million in Q4, with retirement same-property NOI increasing by CAD 3.0 million and long-term care same-property NOI increasing by CAD 1.3 million [8] - Operating funds from operations (OFFO) increased by 24% to CAD 34.2 million in Q4, while adjusted funds from operations (AFFO) rose by 19.8% to CAD 27.9 million [9] - For the full year 2025, same-property NOI increased by 14.3% in retirement and 4.8% in long-term care, with OFFO and AFFO increasing by 27.1% and 25.7%, respectively [10] Growth Strategy - Sienna added over CAD 800 million in assets in 2025 through acquisitions and developments, expanding its workforce by about 2,000 team members [12] - In Q4, Sienna completed three acquisitions in Ontario, adding CAD 193 million in assets [12] - The company has a strong acquisition pipeline, having added CAD 79 million through acquisitions entering 2026, including a purchase agreement for a retirement residence in the Greater Toronto Area [13] Development Initiatives - Sienna began seeing contributions from two recently completed projects in Q4, including a redeveloped long-term care community and a campus of care [14] - The company announced its largest project to date, a redevelopment at its Glen Rouge site in Toronto, with an estimated cost of CAD 250 million and an expected yield of 7.5% to 8% [14] Balance Sheet and Liquidity - Sienna ended 2025 with over CAD 500 million in liquidity and CAD 1.5 billion in unencumbered assets, having issued CAD 250 million in unsecured debentures [16] - The company fully deployed its at-the-market program in Q4, issuing shares for gross proceeds of approximately CAD 101 million [16] 2026 Outlook - The company expects same-property NOI growth of more than 10% in retirement and low single digits in long-term care for 2026, with retirement rent growth assumptions remaining around 4% [17] - Management anticipates operating expense growth in 2026 to align with inflation, supported by prior efficiency improvements [18]

Financial Data and Key Metrics Changes - Brookdale achieved a RevPAR growth of 5.7% for 2025, finishing at the top end of the initial guidance of 4.75%-5.75% [7] - Adjusted EBITDA for 2025 was reported at $458 million, exceeding the midpoint of the guidance range of $430 million-$445 million [10][26] - Adjusted Free Cash Flow for 2025 was $23 million, marking the first positive cash flow since 2020, although it fell short of the guidance of $30 million-$50 million due to timing issues [11][26][38] Business Line Data and Key Metrics Changes - Consolidated fourth quarter occupancy reached a weighted average of 82.5%, a 310 basis point improvement year-over-year [8][30] - The percentage of communities with occupancy below 70% decreased from 23% in Q1 2025 to 15% in Q4 2025 [9] - Communities exceeding 90% occupancy increased from 25% in Q1 2025 to 34% in Q4 2025 [9] Market Data and Key Metrics Changes - The senior housing supply growth was reported at a historical low of 0.6% at the end of 2025, while the population of Americans aged 80 and above is expected to grow at a compounded annual rate of over 4% for the next decade [22] - The demand outlook for senior living is robust, particularly as the first baby boomers turn 80 in 2026, which is a critical age for Brookdale's move-ins [21][22] Company Strategy and Development Direction - Brookdale's strategic priorities include excelling operationally, optimizing the real estate portfolio, reinvesting capital, reducing leverage, and elevating quality for residents and associates [11][12] - The company plans to reduce its consolidated portfolio to 517 communities by mid-2026, focusing on communities with the strongest long-term value creation potential [14][15] - Capital investment for 2026 is projected to be between $175 million and $195 million, aimed at enhancing occupancy growth and community-level NOI [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the intrinsic value of the company, emphasizing the importance of specialized real estate and the ability to serve seniors effectively [24] - The outlook for 2026 includes projected RevPAR growth of 8%-9% and Adjusted EBITDA growth to between $502 million and $516 million, driven by occupancy and pricing improvements [40][41] - Management highlighted the importance of maintaining a stable labor cost environment and reducing leverage to below 6x by the end of 2028 [44] Other Important Information - The company has implemented a new regional operating structure with six distinct leadership teams to enhance operational efficiency [12] - The Net Promoter Score (NPS) has improved significantly, indicating better service delivery quality and resident satisfaction [18] Q&A Session Summary Question: Progress on transition to an operating company - Management discussed the establishment of a dedicated COO and regional teams to enhance operational focus and performance [49][50] Question: Expected progress on Health Plus - Health Plus was rolled out in 58 additional communities in 2025, with plans to fill market gaps and improve resident retention [55][57] Question: Centralized pricing strategy and rent increases - In-place rent increases for 2026 are expected to be in the high single digits, with favorable attrition rates observed [62][64] Question: CapEx plans and project details - Future capital expenditures will focus on high-impact projects, with ongoing reinvestment in real estate to maintain property value [66][68] Question: Occupancy bands and earnings potential - Management acknowledged the importance of improving occupancy in the 70%-80% band, with efforts focused on enhancing performance in that segment [75]

Financial Data and Key Metrics Changes - The company reported revenues of $229 million for Q3 2025, an increase of $48.4 million, or 26.8% year-over-year [5] - Adjusted EBITDA was $17.3 million, up $2.2 million, or 14.5% compared to the prior year quarter [5] - Adjusted EPS increased to $0.30, reflecting a $0.04 increase, or 15.4% year-over-year [5] - Full-year revenue guidance was raised to between $911.4 million and $948.6 million, with adjusted EBITDA expected between $70.9 million and $73.8 million [10][25] Business Line Data and Key Metrics Changes - Home Health and Hospice segment revenue reached $173.6 million, a 27.9% increase, with adjusted EBITDA of $26.8 million, up 22.7% [12] - Senior Living segment revenue was $55.5 million, up 23.2% year-over-year, with adjusted EBITDA increasing 26.2% [15] - Same-store occupancy in senior living reached 81.8%, with all-store occupancy at 80.9% [15] Market Data and Key Metrics Changes - The average CMS reported star rating for home health was 4.1, compared to the industry average of three stars [12] - Potentially preventable hospitalizations decreased to 8.4%, below the national average of 9.9% [12] - Hospice quality composite score improved to 97%, exceeding the national average of 92% [12] Company Strategy and Development Direction - The company is focused on integrating the recently acquired UnitedHealth Amedisys operations and enhancing local leadership [5][33] - There is a strong emphasis on empowering local clinical leaders to drive operational success and improve clinical outcomes [9][12] - The company plans to continue pursuing acquisition opportunities in senior living and home health, maintaining a disciplined approach [23][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term value of home health services despite current regulatory uncertainties [19] - The company anticipates some lumpiness in results due to integration efforts but expects significant long-term potential from recent acquisitions [6][10] - Management highlighted the importance of local leadership and community engagement in driving operational success [9][48] Other Important Information - The company closed on a $100 million term loan to enhance balance sheet capacity [24] - The acquisition of UnitedHealth Amedisys included 54 locations with trailing 12-month revenues of $189.3 million [21] - The company is actively advocating against proposed regulatory changes that could negatively impact the industry [9][18] Q&A Session Summary Question: What are the top priorities for integration after the Amedisys transaction? - The focus is on identifying and elevating leaders, ensuring exceptional support for agencies, and developing a joint venture with the University of Tennessee [33][34] Question: How should we think about margins in senior living going forward? - As occupancy increases, there is an expectation for improved margins, with a focus on operational efficiency and revenue quality [38] Question: What dynamics are affecting margin guidance? - NCI growth and elevated G&A expenses are impacting EBITDA margins, with adjustments made for these factors [40][41] Question: What is driving the increase in hospice length of stay? - The increase reflects a return to pre-pandemic levels and improved identification of appropriate patients for hospice services [42][43] Question: How is the internal reception of the Amedisys assets? - Employees have shown excitement and commitment, with minimal turnover and strong performance during the transition [46][49] Question: What is the competitive landscape for senior living acquisitions? - There is increased activity in the senior living space, with a mix of opportunities within the company's target range [60][62]

Core Insights - The Pennant Group, Inc. has announced two significant acquisitions aimed at strengthening its presence in key markets, specifically in Idaho and Wisconsin [1][4] Group 1: Acquisitions - Effective November 1, 2025, Pennant acquired a 55-bed assisted living community in Lewiston, Idaho, now named Twin Rivers Senior Living, enhancing its senior care services in the Mountain West region [2] - On November 4, 2025, Pennant completed the acquisition of real property for Honey Creek Heights Senior Living in West Allis, Wisconsin, adding 135 assisted living beds to its Midwest portfolio [3] Group 2: Strategic Commitment - The acquisitions reflect Pennant's disciplined growth strategy and commitment to delivering exceptional care, with a focus on leveraging favorable market conditions for real estate transactions [4] - The company aims to strengthen its local presence and operational expertise in Idaho and Wisconsin, aligning with its long-term strategy to create integrated continuums of care across the country [4]

Core Insights - Discovery Senior Living has entered into management agreements with Diversified Healthcare Trust to operate a portfolio of 42 senior living communities, enhancing its leadership position in the industry [1][3][13] Company Overview - Discovery Senior Living is the largest privately held senior housing operator in the U.S., managing approximately 47,000 units across around 420 communities in 40 states [13][15] - The company employs over 20,000 team members and is recognized for its performance, innovation, and customized lifestyle experiences [15] Transaction Details - The new portfolio spans key states including Texas, South Carolina, Pennsylvania, North Carolina, Missouri, Maryland, and Georgia, creating operational synergies and strengthening regional expertise [2][12] - The addition of the DHC portfolio reinforces Discovery's status as a trusted partner for REITs and institutional owners managing complex, multi-market portfolios [13] Operational Strategy - Discovery's model is designed for institutional owners, combining local market leadership with centralized expertise to meet the increasing complexity and performance expectations of healthcare REITs [5][10] - The company employs a rigorous internal stress-testing process to ensure that existing portfolios perform at or above expectations while supporting new management assignments [6][12] Integration and Execution - Discovery's Business Assimilation Team (BAT) facilitates the seamless integration of newly acquired portfolios, focusing on talent ramp-up, sales acceleration, and operational opportunities [9][12] - The 42 DHC communities will be distributed across several of Discovery's management companies to maximize local market insight while leveraging centralized expertise [11][12]

Core Viewpoint - Sienna Senior Living Inc. has announced a $175 million offering of series E senior unsecured debentures to strengthen its financial position and support growth initiatives, coinciding with the completion of a significant acquisition [1][4]. Group 1: Debenture Offering - The company will issue $175 million in series E senior unsecured debentures at an interest rate of 4.112% per annum, maturing on August 21, 2030 [1]. - The offering is being conducted on a best efforts agency basis by a syndicate of agents, with the closing expected around August 21, 2025, subject to customary conditions [1]. - The debentures must be rated at least "BBB" with a "Stable" trend by Morningstar DBRS to close [1]. Group 2: Use of Proceeds - The net proceeds from the debenture offering will be used to repay existing debt, finance acquisitions, fund developments, and for general corporate purposes [2]. Group 3: Recent Acquisition - Sienna has completed the acquisition of Credit River Retirement Residence for $60.2 million, which includes 133 suites located in Streetsville, Ontario [3]. - The acquisition is expected to yield an initial investment return of 5.75% and was completed at a discount to replacement cost [3]. - The company anticipates achieving a stabilized occupancy rate of 95% within the first year and expects the acquisition to be immediately accretive to its AFFO per share [3]. Group 4: Market Context - The CEO highlighted that the debenture offering and acquisition align with the company's growth strategy, particularly in light of Canada's aging population and limited new construction in senior living residences, which is expected to sustain demand [4].

Core Insights - Maplewood Senior Living and its luxury brand Inspīr have achieved national recognition with three executive chefs winning awards at the 2025 DISHED Senior Living Dining Innovation Awards [1][6] - The return of Jason Wallin as Corporate Director of Culinary Services marks a new chapter in enhancing wellness-driven dining experiences [2][5] - The awards highlight the exceptional talent and creativity of the culinary teams, emphasizing a commitment to innovation in senior living dining [3][6] Culinary Innovation Recognition - The DISHED Culinary Canvas Award was given to Picasso Petion, Executive Chef at Maplewood at Strawberry Hill, for his ability to blend artistry with comfort in menu design [4] - Richard McCreadie, Executive Chef for Inspīr Embassy Row, focuses on crafting menus that reflect residents' stories while prioritizing local and seasonal ingredients [8] - Steven Weintraub, Executive Chef at Inspīr Carnegie Hill, is recognized for his innovative approach to wellness, particularly in memory care programs [8] Leadership and Vision - Jason Wallin brings over 20 years of culinary leadership back to Maplewood, enhancing the company's commitment to exceptional dining experiences [5][6] - Eileen Duggan, SVP of Operations, emphasizes Wallin's alignment with the company's mission to deliver outstanding experiences to residents [6] - The combination of award-winning chefs and visionary leadership is set to elevate the dining experience in senior living [3][6] Company Overview - Maplewood Senior Living operates 16 upscale senior living communities across several states, including Connecticut, Massachusetts, New Jersey, New York, and Ohio [7] - The Inspīr brand redefines urban senior living, offering luxury accommodations and a focus on whole-person wellness [10] - The flagship residence, Inspīr Carnegie Hill, is located in New York City, with a new location, Inspīr Embassy Row, recently opened in Washington D.C. [10]