The Ensign Group (NASDAQ:ENSG) used its fourth quarter fiscal 2025 earnings call to highlight record operating and financial results, pointing to higher occupancy, improved skilled mix, and continued acquisition activity as key drivers heading into 2026.
Clinical performance and labor trends
CEO Barry Port opened the call by emphasizing clinical outcomes and staffing stability as the foundation of the company’s financial performance. Citing the most recently published CMS data, Port said Ensign’s same-store affiliated operations outperformed peers in annual survey results “by an impressive 24% at the state level and 33% at the county level.” He also said Ensign operations maintained “a 19% advantage in overall 4 and 5-star rated buildings” versus peers, noting that many facilities were “1 and 2-star facilities at the time of acquisition.”
Occupancy and payer mix reach new highs
Port said both same-store and transitioning occupancy rose to all-time highs during the quarter, reaching 83.8% and 84.9%, respectively. He added that skilled days increased 8.5% for same-store operations and 10% for transitioning operations compared to the prior-year quarter.
On payer mix, Port reported Medicare revenue increases of 15.7% for same-store operations and 11.3% for transitioning operations, alongside an 11% increase in same-store Medicare days. Managed care revenue increased 8.9% for same-store operations and 15% for transitioning operations.
Port attributed the momentum to growing trust from referral sources based on outcomes, saying operations are being “entrusted to care for more and more medically complex patients.” He also said the company believes it is beginning to see increased demand tied to demographic trends.
Despite record occupancy, Port said the company still sees significant organic upside, arguing that an 83% same-store level leaves room for continued growth even without acquisitions. He said it is not uncommon for mature operations to maintain occupancy “in the high to mid-nineties.”
Acquisitions and development projects
Chief Investment Officer Chad Keetch said the company added 17 new operations, including 12 real estate assets, “during the quarter and since,” totaling 1,371 skilled nursing beds across seven states. Keetch listed deals including a seven-building portfolio in Utah, three buildings in Texas, two each in Arizona and Colorado, and one each in Alabama, Kansas, and Wisconsin.
Keetch said the company’s “building-by-building approach to transition works for single operations, small portfolios, and larger portfolios,” and he discussed the company’s willingness in certain cases to pay higher prices for newer or higher-quality assets. He pointed to the company’s “Stonehenge acquisition” in Utah as a transaction completed at a premium to historical pricing in the state, which he said was justified by asset quality, performance, and footprint synergies. Keetch said those operations were “performing well ahead of schedule.”
Keetch also described a “seller-friendly” environment during the Q&A, telling Truist Securities analyst Clarke Murphy that “values have risen” and that “pricing has definitely gone up.” He said Ensign’s evaluation process has not changed, but reiterated that newer assets can reduce long-term capital expenditure needs versus older buildings that require heavier ongoing investment.
Separately, Keetch detailed two California construction efforts. He said Ensign, working with Omega Healthcare REIT, completed a 40-bed addition at Vista Knoll Specialized Care in Vista, California, and that the new wing had reached 98.3% occupancy “only a few months after opening.” He also said Ensign completed construction and obtained a license for a replacement facility for Grossmont Post Acute Care in La Mesa, California, adding 15 beds to the original license while relocating patients and staff to a new building.
In response to a question from Stephens analyst Raj Kumar, Keetch said the company had “beefed up” internal construction capabilities and was evaluating “a handful of projects” that are “the lowest hanging fruit,” particularly in mature markets. He added that these projects would not compare in scale to the broader acquisition strategy, but represent another capital deployment tool.
Operational examples: specialty care driving financial performance
President and COO Spencer Burton highlighted two facilities as examples of how clinical capabilities and staff development can translate into improved financial results.
- South Bay Post Acute Care (San Diego area): Burton said the 98-bed facility developed bariatric patient capabilities, including room remodeling, specialized equipment purchases, staff training, and expanded behavioral health support. He said the facility was awarded additional high reimbursement contracts and that fourth quarter EBIT increased 127% year over year. Burton said Medicare days rose 86% and managed care volume grew 22%, while occupancy increased from 96% to 97%.
- Shoreline Health and Rehabilitation (North Seattle): Burton said the 114-bed facility achieved record financial performance for four consecutive quarters and reported Q4 revenue growth of 11% and EBIT growth of nearly 33% year over year. He highlighted workforce stability, saying the facility’s CMS nursing turnover rate in 2025 was 60% lower than the state average and that it operated with “zero registry staffing for the second consecutive year.” Burton also described clinical capability expansion, including becoming “the only facility in the North Seattle area accepting TPN patients.” He said Medicare days increased 24% and managed care improved 103% year over year, with skilled revenue mix reaching 70% despite occupancy remaining below 74%.
Financial results, balance sheet, and 2026 guidance
CFO Suzanne Snapper reviewed full-year and quarterly financial results. For fiscal 2025, the company reported GAAP diluted EPS of $5.84 (up 14.1%) and adjusted diluted EPS of $6.57 (up 19.5%). Consolidated revenue rose 18.7% to $5.1 billion. GAAP net income increased 15.4% to $344 million, while adjusted net income increased 20.6% to $386.6 million.
For the fourth quarter, Snapper reported GAAP diluted EPS of $1.61 (up 18.4%) and adjusted diluted EPS of $1.82 (up 22.1%). Consolidated revenue increased 20.2% to $1.4 billion. GAAP net income was $95.5 million (up 19.8%) and adjusted net income was $107.8 million (up 23.2%).
Snapper said that as of Dec. 31, 2025, the company had $504 million in cash and cash equivalents and $564 million of cash flow from operations. She said Ensign spent more than $500 million in 2025 to execute its growth plans and ended the year with a “record low lease-adjusted net debt-to-EBITDA ratio of 1.77 times.” Snapper also said the company had more than $590 million available on its credit line, giving it “over $1 billion in dry powder” when combined with cash.
The company also increased its dividend for the 23rd consecutive year and paid a quarterly cash dividend of $0.065 per share, Snapper said.
For 2026, management issued guidance for diluted EPS of $7.41 to $7.61 and revenue of $5.77 billion to $5.84 billion. Port said the EPS midpoint implies 14.3% growth over 2025. Snapper said the outlook assumes roughly 60 million diluted weighted average shares outstanding, a 25% tax rate, acquisitions closed and expected in the first quarter of 2026, and management’s expectations for reimbursement rates, with primary exclusions including stock-based compensation and amortization of system implementation costs.
During Q&A, management said it expects 2026 to “mirror what we saw in 2025” in many ways, while cautioning that seasonality remains somewhat unpredictable and that skilled mix typically declines in the middle of the year.
Management also discussed investing in technology initiatives, saying it is evaluating ways to leverage AI through existing enterprise partners and other off-the-shelf solutions to reduce administrative burden and, longer term, to better use patient data to support clinical decision-making.
About The Ensign Group (NASDAQ:ENSG)
The Ensign Group, Inc is a diversified provider of post-acute healthcare services in the United States, operating a network of skilled nursing, assisted living, independent living, home health and hospice care centers. The company’s model emphasizes integrated care by employing multidisciplinary teams—including nursing staff, therapists and physicians—to deliver personalized rehabilitation and long-term care services for seniors and other patients recovering from injury, illness or surgery.
Through its owned and managed centers, The Ensign Group offers a broad spectrum of rehabilitation services such as physical, occupational and speech therapy.
