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]

Core Insights - The Pennant Group, Inc. reported quarterly earnings of $0.3 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, and showing an increase from $0.26 per share a year ago, resulting in an earnings surprise of +3.45% [1] - The company achieved revenues of $229.04 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.71% and up from $180.69 million year-over-year [2] - The stock has underperformed the market, losing about 4.7% since the beginning of the year compared to the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $273.5 million, and for the current fiscal year, it is $1.14 on revenues of $925.9 million [7] - The estimate revisions trend for The Pennant Group was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which The Pennant Group belongs, is currently in the top 18% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Operations and Growth - As of September 30, 2025, the company operates 141 home health and hospice agencies and 61 senior living communities across 13 states[137] - The company added nine home health agencies, four hospice agencies, and four senior living communities during the nine months ended September 30, 2025[139] - The number of home health and hospice agencies increased to 141, up from 122, representing a 15.6% growth[194] - The number of home health and hospice agencies increased by 19, reaching a total of 141 agencies by September 30, 2025, representing a 15.6% growth[207] Revenue Growth - Total revenue for Q3 2025 was $229,039,000, an increase from $180,688,000 in Q3 2024, representing a growth of 26.8%[163] - Home Health and Hospice Services generated $173,545,000 in revenue for Q3 2025, up from $135,672,000 in Q3 2024, reflecting a growth of 28%[165] - Senior Living Services reported revenue of $53,880,000 for Q3 2025, compared to $45,016,000 in Q3 2024, marking an increase of 19.5%[165] - For the nine months ended September 30, 2025, total revenue reached $658,382,000, up from $506,348,000 in the same period of 2024, a growth of 30%[165] - Total revenue increased by $48.4 million, or 26.8%, to $229.0 million for the three months ended September 30, 2025, compared to $180.7 million in the same period of 2024[192] - Home health and hospice revenue grew by $37.9 million, or 27.9%, driven by a 36.2% increase in total home health admissions and a 16.6% increase in total hospice admissions[194] - Senior living revenue increased by $10.5 million, or 23.2%, attributed to a 7.4% rise in average monthly revenue per occupied unit and improved occupancy rates[195] - Total revenue for the nine months ended September 30, 2025, increased by $152.0 million, or 30.0%, compared to the same period in 2024, reaching $658,382,000[205] - Home health and hospice services revenue grew by $122.0 million, or 32.3%, to $499,455,000, driven by a 30.5% increase in total home health admissions and a 25.6% increase in Medicare home health admissions[208] - Senior living services revenue increased by $30.0 million, or 23.3%, to $158,927,000, primarily due to an 8.9% rise in average monthly revenue per occupied unit[209] Expenses and Costs - Total expenses for Q3 2025 were $218,801,000, compared to $169,894,000 in Q3 2024, resulting in an increase of 28.7%[163] - The cost of services as a percentage of total revenue increased to 81.0% in Q3 2025 from 80.0% in Q3 2024[163] - Total cost of services rose by $41.0 million, or 28.4%, with costs as a percentage of revenue increasing from 80.0% to 81.0%[196] - Total cost of services rose by $125.7 million, or 31.0%, to $531,450,000, with costs as a percentage of revenue increasing to 80.8% from 80.1%[210] - General and administrative expenses increased by $6.3 million, or 48.2%, from $13.0 million to $19.3 million, with the percentage of revenue rising from 7.2% to 8.4%[200][201] - General and administrative expenses increased by $15.4 million, or 42.4%, totaling $51.7 million, attributed to higher payroll and professional services related to acquisitions[214] - Rent—cost of services for Q3 2025 was $12,063,000, compared to $10,906,000 in Q3 2024, reflecting a 10.6% increase[171] - Rent expense increased by 10.6% to $12.1 million, while rent as a percentage of total revenue decreased from 6.0% to 5.3%[199] - Depreciation and amortization expense increased by $0.6 million, or 38.2%, due to higher property and equipment balances from acquisition activities[202] Income and Profitability - Income from operations decreased to $10,238,000 in Q3 2025 from $10,794,000 in Q3 2024, a decline of 5.2%[163] - Net income attributable to the company for Q3 2025 was $6,200,000, down from $6,100,000 in Q3 2024, reflecting a slight decrease of 1.6%[163] - Consolidated net income for Q3 2025 was $6,886,000, compared to $6,657,000 in Q3 2024, indicating a 3.4% increase[171] - The company reported an adjusted EBITDAR from operations of $44,378,000 for Q3 2025, compared to $37,135,000 in Q3 2024, indicating a growth of 19.5%[165] - Segment Adjusted EBITDAR from Operations for Q3 2025 was $44,378,000, up from $37,135,000 in Q3 2024, representing a 35.5% increase[166] - Consolidated Adjusted EBITDA for the nine months ended September 30, 2025, was $50,095,000, compared to $39,523,000 for the same period in 2024, reflecting a 27% growth[170] - Consolidated Adjusted EBITDAR for the nine months ended September 30, 2025, was $85,600,000, compared to $77,423,000 in 2024, a rise of 10.5%[171] Medicare and Reimbursement - Average Medicare revenue per 60-day completed episode for home health services rose to $3,793 in 2025 from $3,687 in 2024, an increase of 2.9%[149] - The proposed Medicare reimbursement reduction of -6.4% in the 2026 Home Health Prospective Payment System could lead to a decrease of $1.135 billion across all home health providers[144] - The Hospice Payment Final Rule for 2026 includes a payment update percentage of 2.6%, resulting in an estimated increase of $750 million in payments across all hospice providers[145] - The company monitors Medicare reimbursement closely due to adjustments related to billing documentation and payment caps, impacting revenue recognition[156] - The average Medicare revenue per 60-day completed episode increased by 5.1% to $3,782[207] Cash Flow and Financing - Net cash provided by operating activities increased by $8.6 million to $27,336,000, driven by a $5.6 million increase in net income[225] - Cash at the end of the period decreased to $2,336,000 from $4,464,000, reflecting a net decrease in cash of $21,910,000[224] - Net cash provided by financing activities decreased by approximately $20.3 million for the nine months ended September 30, 2025, compared to the same period in 2024[227] - The company had $219.8 million of available borrowing capacity on its Amended Revolving Credit Facility as of September 30, 2025[221] - The company has a borrowing capacity of $250.0 million under the Amended Credit Agreement with a syndicate of banks[230] - A 1.0% interest rate change would result in an annual change of approximately $0.3 million in interest expense based on outstanding long-term debt as of September 30, 2025[230] - The company continues to make draws and payments on its Amended Revolving Credit Facility[228] - There have been no material changes to total obligations outside of normal business operations during the reporting period[229] - The company has right-of-use assets obtained in exchange for new operating lease obligations[228] Acquisition and Integration - The company anticipates lower and fluctuating consolidated and segment margins during years of acquisition growth due to the integration of newly acquired operations[141] - Acquisition-related costs for Q3 2025 amounted to $3,047,000, significantly higher than $494,000 in Q3 2024[171] Non-GAAP Financial Measures - The company emphasizes the use of Non-GAAP Financial Measures to provide a clearer view of operational performance, excluding interest, taxes, and depreciation[177]

Core Points - The Pennant Group, Inc. has increased its credit facility by $100 million, bringing the total to $350 million, supported by a lending consortium led by Truist Securities [1][2] - The CEO emphasized that the expansion strengthens the balance sheet and provides capacity for future growth, while maintaining disciplined use of the credit facility [2] - The CFO confirmed that the proceeds from the new term loan will be used to refinance a portion of the outstanding revolving loans [2] Company Overview - The Pennant Group, Inc. operates through 141 home health and hospice agencies and 61 senior living communities across multiple states including Arizona, California, and Texas [3] - Each agency and community operates as an independent subsidiary with its own management and assets, indicating a decentralized operational structure [3]

Revenue Performance - Total revenue for Q3 2025 was $229.0 million, an increase of $48.4 million or 26.8% year-over-year[2]. - Total revenue for the three months ended September 30, 2025, was $229,039 thousand, a 26.7% increase from $180,688 thousand in the same period of 2024[20]. - Home health and hospice revenue for the nine months ended September 30, 2025, reached $499,455 thousand, up 32.3% from $377,463 thousand in 2024[25]. - Total revenue for the nine months ended September 30, 2025, was $658,382,000, a 30.0% increase from $506,348,000 in the same period of 2024[31]. Segment Performance - Home Health and Hospice Services segment revenue for Q3 2025 was $173.6 million, an increase of $37.9 million or 27.9% year-over-year[2]. - Senior Living Services segment revenue for Q3 2025 was $55.5 million, an increase of $10.5 million or 23.2% year-over-year[2]. - Senior living revenue for the three months ended September 30, 2025, was $55,474 thousand, reflecting a 23.2% increase from $45,016 thousand in 2024[27]. - Home Health and Hospice segment revenue for Q3 2025 was $173,545, an increase of 28% from $135,672 in Q3 2024[41]. - Senior Living segment revenue for Q3 2025 was $53,880, up 20% from $45,016 in Q3 2024[41]. Admissions and Census - Total home health admissions for Q3 2025 were 20,426, an increase of 5,433 or 36.2% year-over-year[2]. - Hospice average daily census for Q3 2025 was 4,044, an increase of 600 or 17.4% year-over-year[2]. - Total home health admissions increased by 36.2% to 20,426 for the three months ended September 30, 2025, compared to 14,993 in 2024[24]. - The average daily census for hospice services increased by 17.4% to 4,044 for the three months ended September 30, 2025, compared to 3,444 in 2024[24]. Financial Guidance and Projections - Updated 2025 annual revenue guidance is anticipated to be between $911.4 million and $948.6 million[4]. - Full year 2025 adjusted earnings per diluted share is anticipated to be between $1.14 and $1.18, representing a growth of 23.4% from 2024[5]. - Full year 2025 adjusted EBITDA is anticipated to be between $70.9 million and $73.8 million[4]. Income and Earnings - Adjusted net income for Q3 2025 was $10.4 million, an increase of $2.3 million or 27.6% year-over-year[2]. - Non-GAAP net income for Q3 2025 was $10,421,000, compared to $8,167,000 in Q3 2024, representing a 27.5% increase[32]. - Adjusted diluted earnings per share for Q3 2025 was $0.30, up from $0.26 in Q3 2024[32]. - Consolidated Adjusted EBITDA for Q3 2025 was $17,347,000, compared to $15,149,000 in Q3 2024, indicating a 14.5% increase[36]. Assets and Liabilities - Total assets as of September 30, 2025, were $753,641 thousand, an increase from $679,521 thousand at December 31, 2024[16]. - Total current liabilities increased to $109,352 thousand as of September 30, 2025, from $101,700 thousand at December 31, 2024[16]. - Total equity as of September 30, 2025, was $343,043 thousand, up from $311,965 thousand at December 31, 2024[16]. Operational Metrics - Average Medicare revenue per 60-day completed episode for home health services was $3,793 for the three months ended September 30, 2025, a 2.9% increase from $3,687 in 2024[24]. - Occupancy rate improved to 81.8% in Q3 2025, up from 80.2% in Q3 2024, reflecting a 1.6% increase[28]. - Average monthly revenue per occupied unit rose to $5,136 in Q3 2025, a 7.2% increase from $4,790 in Q3 2024[28]. - Average monthly revenue per occupied unit for the nine months ended September 30, 2025, was $5,180, an 8.9% increase from $4,758 in the same period of 2024[28]. Acquisitions and Corporate Strategy - The company completed the acquisition of 54 home health, hospice, and home care operations from UnitedHealth Group and Amedisys on October 1, 2025[3]. - The company is focusing on transitioning operations and has incurred costs related to acquisitions and unusual charges, impacting overall financial performance[43].

Core Insights - The Pennant Group, Inc. reported a GAAP diluted earnings per share of $0.17 and an adjusted diluted earnings per share of $0.30 for Q3 2025, reflecting strong operational performance across its segments [1][4][6]. Financial Performance - Total revenue for Q3 2025 was $229.0 million, a 26.8% increase from the prior year [4]. - Net income for Q3 2025 was $6.1 million, a slight decrease of 2.0% compared to the previous year [4]. - Adjusted net income for Q3 2025 was $10.4 million, up 27.6% year-over-year [4]. - Consolidated Adjusted EBITDAR for Q3 2025 was $29.3 million, a 12.8% increase from the prior year [4]. - Consolidated Adjusted EBITDA for Q3 2025 was $17.3 million, reflecting a 14.5% increase year-over-year [4]. Segment Performance - Home Health and Hospice Services segment revenue was $173.6 million, a 27.9% increase from the prior year [4]. - Senior Living Services segment revenue was $55.5 million, up 23.2% year-over-year [4]. - Total home health admissions increased by 36.2% to 20,426 in Q3 2025 [4]. - Hospice average daily census rose by 17.4% to 4,044 [4]. - Senior Living average occupancy increased by 180 basis points to 80.9% [4]. Acquisition and Expansion - The company completed the acquisition of 54 home health, hospice, and home care operations from UnitedHealth Group and Amedisys on October 1, 2025, marking the largest transaction in its history [5]. - This acquisition is expected to enhance the company's operational capabilities and expand its market presence in the Southeast [5]. Guidance and Expectations - The company updated its 2025 annual guidance, projecting total revenue between $911.4 million and $948.6 million [6]. - Full-year adjusted earnings per diluted share is anticipated to be between $1.14 and $1.18, representing a growth of 23.4% from 2024 [7]. - The guidance reflects strong operational performance and the impact of the recent acquisition [8].

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 Points - The Pennant Group, Inc. will release its third quarter 2025 financial results on November 5, 2025 [1] - A live webcast for discussing the third quarter results is scheduled for November 6, 2025, at 10:00 a.m. Mountain Time [2] - The webcast will be available for replay until November 6, 2026 [3] Company Overview - The Pennant Group, Inc. operates as a holding company for independent subsidiaries providing healthcare services, including home health, hospice, and senior living [4] - The company's services are available across multiple states, including Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin, and Wyoming [4]

Core Insights - The Pennant Group, Inc. has acquired certain operations from UnitedHealth Group for $146.5 million, which includes home health, hospice, and personal care services in Tennessee, Georgia, and Alabama [1][2]. Acquisition Details - The acquisition involves 54 locations with combined revenues of $189.3 million over the trailing twelve months [2]. - Approximately two-thirds of the revenue from the acquired agencies is related to home health services, while one-third is from hospice services [3]. Strategic Importance - This acquisition marks a strategic expansion for Pennant into the Southeast region, enhancing its operational footprint and growth potential [4]. - The company has established a transition services agreement with UnitedHealth to ensure a smooth integration process [3]. Leadership Perspective - Pennant's CEO, Brent Guerisoli, emphasized the strategic nature of this move and the company's commitment to operational excellence and leadership in the industry [4]. - COO John Gochnour highlighted the quality of the acquired teams and their local ties, which will contribute to the success of the integration [4]. Future Growth Plans - The company intends to continue pursuing growth opportunities in the home health, hospice, and senior living sectors, focusing on strategic and underperforming operations [4].

Core Insights - The Pennant Group, Inc. has acquired certain operations from UnitedHealth Group for a total purchase price of $146.5 million, which includes 54 locations primarily in Tennessee, Georgia, and Alabama [1][2][3] Group 1: Acquisition Details - The acquisition involves divested home health, hospice, and personal care services as part of an antitrust settlement between UnitedHealth and Amedisys with the U.S. Justice Department [1][2] - Approximately two-thirds of the revenue from the acquired agencies is related to home health services, while one-third is associated with hospice services [3] Group 2: Strategic Importance - This acquisition is viewed as a strategic move for Pennant, marking a new chapter in its growth journey and expanding its presence in the Southeast region [4] - The company aims to leverage proven leadership and operational excellence to integrate the new agencies into its existing platform [4] Group 3: Transition and Future Plans - A transition services agreement is in place to ensure a smooth integration process for the acquired operations [3] - The company plans to continue pursuing growth opportunities in the home health, hospice, and senior living sectors, focusing on strategic and underperforming operations [4]