The Ensign Group Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Ensign’s revenue rose 14.5% to $1.48 billion, while adjusted diluted EPS increased 23.8% to $2.03, driven by higher occupancy, skilled-nursing mix and acquisitions.
• 2026 outlook raised: The company lifted its adjusted EPS guidance to $7.94–$8.02 and increased the low end of its revenue forecast to $5.89 billion, citing continued operating momentum and acquisition progress.
• Expansion and acquisitions continue: Ensign added 22 operations, including nine in Florida, but cautioned that the newly acquired Florida facilities are turnaround assets that may take a year or more to materially contribute to earnings.

The Ensign Group NASDAQ: ENSG raised its 2026 earnings outlook after reporting third-quarter revenue and earnings growth, supported by higher occupancy, skilled-nursing mix and acquisitions. Management also highlighted its entry into Florida and said it continues to see a broad pipeline of acquisition opportunities.

For the third quarter, GAAP diluted earnings per share rose 23.9% from a year earlier to $1.76, while adjusted diluted EPS increased 23.8% to $2.03, CFO Suzanne Snapper said. Consolidated GAAP and adjusted revenue each increased 14.5% to $1.48 billion. GAAP net income rose 24.4% to $104.3 million, and adjusted net income increased 24.9% to $120.5 million.

“We’re thrilled to report another outstanding quarter,” CEO Barry Port said, attributing the performance to the company’s clinical operating model, local leadership structure and quality outcomes.

Occupancy and Skilled Mix Advance

Port said same-store occupancy reached 84.1% in the third quarter, while transitioning facilities had occupancy of 86.1%. Same-store skilled-mix revenue rose 10.7% year over year, and transitioning-facility skilled-mix revenue increased 10.5%. Skilled days rose 7.2% at same-store facilities and 7.9% at transitioning operations.

Medicare same-store days increased 7.6%, while transitioning-operation Medicare days rose 6.3%. Medicare revenue grew 11.1% at same-store facilities and 7.8% at transitioning facilities. Managed-care revenue increased 9.1% and 7.2%, respectively.

During the question-and-answer session, Port said the company’s skilled-mix gains reflected a combination of demographic demand and its clinical outcomes. He noted that performance was spread across payer categories rather than concentrated in a single payer group.

Management said Ensign’s same-store facilities had quality-measure ratings 21% above the average in the states where it operates, based on the most recently published Centers for Medicare & Medicaid Services data. More than 80% of its skilled-nursing operations held four- or five-star CMS quality-measure ratings at quarter-end, and 40 buildings in eight states earned CMS High Performing Facility designations.

Guidance Raised

The company increased its full-year 2026 adjusted earnings guidance to $7.94 to $8.02 per diluted share, from prior guidance of $7.75 to $7.85. It also raised the lower end of its annual revenue outlook to $5.89 billion while maintaining the upper end at $5.92 billion.

Snapper said the outlook reflects expectations for continued occupancy and skilled-mix strength, progress at recently acquired facilities, agency management and other operating initiatives. The guidance assumes approximately 59.5 million diluted weighted-average shares outstanding, a 25% tax rate and the inclusion of acquisitions completed or expected to close through the fourth quarter.

Port said the company expects its core operations to remain strong in the fourth quarter, citing same-store occupancy of 84% and elevated skilled mix entering the period. However, he said recently acquired turnaround facilities, particularly in Florida, will take time to contribute materially to revenue and earnings.

Florida Entry and Acquisition Activity

During the quarter and afterward, Ensign added 22 operations, including three real estate assets and 19 leased operations. The additions included nine facilities in Florida, seven in Colorado, four in Washington and two in Texas, adding 2,373 skilled-nursing beds and 113 independent-living beds.

The company has sourced, underwritten, closed and transitioned 122 operations since 2024. Its recently acquired group now represents 22% of the overall portfolio.

Keetch said the Florida facilities generally have below-average occupancy for their markets and face clinical, operational and physical-plant challenges. Port said Ensign had monitored Florida for years but had been cautious because of its litigation environment. He said the state’s environment is now more stable, with a favorable labor backdrop and a regulatory setting he described as “middle of the road.”

Management said an experienced company leader, Forrest Peterson, moved to Florida earlier in 2026 to establish local operations, recruit talent and identify the initial acquisition.

Port said Ensign’s relationships with major healthcare plans in Florida could help its facilities gain access to higher-acuity patients through letters of agreement and other arrangements while the company establishes its clinical track record in the state. Still, he characterized the Florida facilities as turnaround operations that may take a year or more to become contributors to overall financial performance.

Keetch said the company does not set fixed acquisition targets, but described annual acquisition activity of 50 to 60 operations, or more, as manageable if opportunities meet its underwriting and leadership criteria. He said Ensign continues to see opportunities from larger portfolios, real estate owners seeking new operators, nonprofit divestitures and individual transactions.

Liquidity, Real Estate and Technology

As of Sept. 30, Ensign had $337.6 million in cash and cash equivalents and $512.3 million in cash flow from operations. The company spent more than $675 million during the first nine months of 2026 on its growth plan, while lease-adjusted net debt to EBITDA stood at approximately 2 times.

Snapper said Ensign had more than $730 million of available capacity on its credit line, giving it more than $1 billion of available capital when combined with cash. The company owned 189 assets, including 165 held debt-free.

Standard Bearer Healthcare REIT, Ensign’s captive real estate investment trust, added eight assets during the quarter and afterward. It had 183 owned properties, with 146 leased to Ensign-affiliated operators and 38 leased to third parties. Standard Bearer generated $47.7 million in rental revenue during the quarter and reported $27.3 million in funds from operations.

On technology, Port said Ensign has deployed Microsoft Copilot and Cowork tools across much of its teams for reporting and administrative processes. The company is also pursuing projects involving clinical documentation, coding, compliance and artificial intelligence-based clinical decision support, including initiatives with its electronic medical record provider and internally developed tools.

Ensign paid a quarterly cash dividend of $0.065 per common share and said it has increased its annual dividend for 23 consecutive years.

About The Ensign Group (NASDAQ:ENSG)

The Ensign Group, Inc is a healthcare services company that provides skilled nursing, post-acute care and rehabilitation services. Its facilities serve patients recovering from illness, injury or surgery, as well as individuals requiring long-term nursing care and support with daily living.

Through its operating subsidiaries, Ensign also provides assisted living and other senior care services. Its portfolio includes skilled nursing facilities, senior living communities and related healthcare operations, with services such as physical, occupational and speech therapy, medically complex care and rehabilitation.

Founded in 1999 and headquartered in San Juan Capistrano, California, The Ensign Group operates healthcare facilities across multiple U.S.

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