On Friday, Ensign Group (NASDAQ:ENSG) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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The full earnings call is available at https://events.q4inc.com/attendee/736338497
Summary
Ensign Group reported strong financial performance with a Q1 revenue increase of 18.4% and raised its annual 2026 earnings guidance to $7.48-$7.62 per diluted share.
The company highlighted record occupancy rates and growth in skilled nursing operations, with consistent demand despite concerns about managed care volumes.
Ensign Group has acquired 22 new operations, primarily in Texas, and expects continued growth supported by demographic trends and strategic acquisitions.
Operational excellence was demonstrated by improved clinical outcomes and low turnover rates, with 85% of operations achieving a four or five-star quality rating.
Management emphasized the company’s decentralized model and strong local leadership as key drivers of its success, with a focus on clinical excellence and community trust.
Full Transcript
OPERATOR
Our earnings press release yesterday and it is available on the Investor Relations section of our website at ensigngroup.net a replay of this call will also be available on our website until 5pm Pacific on May 29, 2026. We want to remind anyone that may be listening to a replay of this call that all the statements made are as of today May 1, 2026 and these statements have not been or will be updated subsequent to today’s call. Also, any forward looking statements made today are based on management’s current expectations, assumptions and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today’s call. Listeners should not place undue reliance on forward looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by Federal securities laws, Ensign and its independent subsidiaries do not undertake to publicly update or revise any forward looking statements where changes arise as a result of new information, future events, changing circumstances or for any other reason. In addition, the Ensign Group, Inc. Is a holding company with no direct operating assets, employees or revenues. Certain of our independent subsidiaries, collectively referred to as the Service center, provide accounting, payroll, human resources, information technology, legal risk management and other services to the other independent subsidiaries through contractual relationships. In addition, our Captive Insurance subsidiary, which we refer to as the Insurance Captive, provides certain claims made coverage to our operating companies for general and professional liability as well as for workers compensation insurance liabilities. Ensign also owns Standard Bearer Healthcare reit, which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Ensign, as well as third party tenants that are unaffiliated with the Ensign Group. The words Ensign, Co. We, our, and us refer to the Ensign Group, Inc. And its consolidated subsidiaries. All of our independent subsidiaries, the Service Center, Standard Bearer Healthcare REIT and the Insurance Captive are operated by separate, independent companies that have their own management, employees and assets. References herein to the consolidated company and its assets and activities, as well as the use of the words we, us, our and similar terms are not meant to imply, nor should it be construed as meaning, that the Ensign Group has direct operating assets, employees or revenue or that any of the subsidiaries are operated by the Ensign Group. Also, we supplement our GAAP reporting with non GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to Non-GAAP Reconciliation is available in yesterday’s press release and is available in our Form 10Q and with that I’ll turn the call over to Barry Bourke, our CEO.
Barry Bourke (Chief Executive Officer)
Barry, Our local leaders and their teams continue to be an example of excellence in healthcare services as they earn the trust of patients, families and their local healthcare communities through high quality outcomes. As each operation solidifies its reputation respective markets, they’re not only seeing more patients, but they’re also being entrusted to care for increasingly complex cases, including a larger share of Medicare managed care and other skilled patients. This is only possible because of the extraordinary clinical outcomes achieved by our dedicated and talented caregivers. As we’ve said many times, our consistent financial performance is a direct reflection of a relentless patient focused culture, one that empowers our frontline teams to deliver exceptional care in a family like environment where people genuinely care about one another. On the census front, our same store and transitioning occupancy reached new record highs during the quarter of 84.3% and 85.1% respectively. On the skilled mix front, our same store and transitioning operations, skilled revenue and days increased by 9.6% and 5.1% respectively over the prior year quarter and Medicare revenue increased by 9.8% and 9.2% respectively. We also wanted to comment on some of the recent noise around managed care volumes. What we are seeing in Ensign affiliated operations does not support the concern of a broad based slowdown in skilled nursing demand. While hospital and managed care volumes may ebb and flow as patients move through the system, that volatility tends to normalize for us, resulting in consistently strong occupancy and skilled mix trends as demonstrated by our current and recent quarter results. In fact, between Q4 and Q1 we saw growth across all skilled payers. Our same store and transitioning managed care and Medicare census increased sequentially by 6.2% and 8.3% respectively. The primary driver of these improvements continues to be the expanding trust from the communities we serve earned through consistent high quality outcomes. Likewise, regarding commentary around increased clinical reviews and heightened scrutiny of post acute utilization, this is not new. Our experience over many years is that this dynamic refines demand rather than reduces it. Our admission trends have remained consistently strong as patient acuity continues to rise and payers look to move patients efficiently to lower cost settings. We have not seen any meaningful system wide reduction in admissions or skilled mix. The patients who truly need skilled nursing are still coming we’re simply seeing a continued shift towards higher acuity admissions which plays directly into our strengths. We have built our model around being the provider of choice in our local markets through strong clinical capabilities, deep hospital relationships and the ability to care for more complex patient types. As payers become more disciplined, that does not reduce our volume. In fact, in many cases it shifts volumes, more specifically higher acuity volume towards operators who can deliver outcomes. It is also important to remember that Ensign’s model is highly diversified across many geographies, payers, referral sources and local community partners. We are not dependent on any single payer region or utilization trend. Even when one plan tightens in a specific market, we have consistently offset that through other market share gains, stronger referral relationships, higher acuity admissions, and growth across other channels. Our clinical leaders also continue to drive outstanding outcomes, which is particularly impressive given our growth over the past several years. According to the most recently published CMS data, same store affiliated facilities outperformed their peers in annual survey results by 22% at the state level and 31% at the county level. This is especially notable given that many of these facilities were one or two star at acquisition. Additionally, our same store operations outperformed industry peers in five star quality measures by 24% nationally and 20% at a state level. In fact, we ended the quarter with 85% of all of our operations at four or five star quality measures. These results reinforce our position as the provider of choice in our markets and demonstrate our ability to create long term value through sustained clinical excellence. This clinical strength depends on attracting and retaining exceptional talent. We are encouraged by the depth of talent continuing to join our organization. On the retention side, we’re seeing improvements in turnover, stable wage growth and reduced reliance on agency staffing. Even with increased occupancy, we are especially proud of the exceptionally low turnover among our directors of nursing which has declined by 32% over the past two years. This level of leadership stability is a key driver of consistent high quality care. In addition, we continue to acquire new operations with significant long term upside and expect to maintain a healthy pace of growth. Since 2024, we have successfully sourced, underwritten and closed and transitioned 99 new operations across several markets, many of which are already performing at or above expectations. We also continue to benefit from powerful demographic tailwinds which we expect to further support census momentum that we are seeing across our portfolio. While we’re pleased with our current record same store occupancy, we are equally excited about the remaining organic growth opportunity at 84% occupancy we still have meaningful Runway with many of our most mature operations consistently achieving occupancy rates in the mid 90% range. This embedded growth remains one of the most compelling drivers of our long term performance. Due to the strength of the first quarter and the acquisitions we announced yesterday, we are increasing our annual 2026 earnings guidance to $7.48 to $7.62 per diluted share, up from our original guidance of $7.41 to $7.61. We are also increasing our annual revenue guidance to 5.81 billion to to 5.86 billion, up from 5.77 billion to 5.84 billion. The midpoint of our earnings guidance represents a 15% increase over 2025 and 37% growth over 2024. We remain highly confident in 2026 and expect our local teams to continue executing, innovating and integrating new operations while delivering strong results. Next, I’ll ask Chad to add some additional insights regarding our recent growth.
Chad
Chad thank you Barry. During the quarter and since, we accelerated our growth by adding 22 new operations including 21 real estate assets, bringing the number of operations acquired during 2025 and since to 71. These recent additions include 20 in Texas, one in Arizona and one in Wisconsin. In total, we added 2,662 new skilled nursing beds, 100 senior living units and 55 independent living units across three states. This growth brings the number of operations in our recently acquired group of operations to 17.4% of our entire portfolio. We were thrilled to complete these acquisitions and to expand our presence in some key markets in each of these states, particularly in Texas. Like in the recent Stonehenge acquisition we closed in Utah. This Texas portfolio is made up of very new, high quality construction and populated and growing metro areas. As we’ve discussed in our recent past, in certain strategic situations paying higher prices can be justified for performing assets that have newer physical plants. And while some of those deals may take a bit longer to generate the returns we expect, we’ve seen these deals pay off over time as our leaders implement the proper adjustments to key clinical and financial systems. Along with establishing a culture of ownership and accountability, we continue to learn from and improve our transition process and believe that those lessons are showing through in the performance of our recently acquired acquisitions. In particular, as we continue to scale, we have leadership spread across many mature markets enhancing ability to to make larger deals smaller by breaking them into bite sized pieces, transitioning in the traditional ensign way but with a local cluster driven plan that gives each operation the time and attention they deserve. The performance of our newly acquired operations, particularly in the last few years, shows that our building by building approach to transitions works for single operations, small portfolios and larger portfolios, particularly when the larger deal spans several markets and geographies. While we will certainly continue to evaluate consider any deal that’s out there, we are also very comfortable growing the way we’ve grown over the last few quarters with lots of transactions across many states, including small deals to larger portfolios and where it makes sense, higher priced strategic assets. As we look at the current pipeline, we continue to see opportunities that include everything from larger portfolios, landlords looking to replace current tenants, nonprofits looking to divest of their post acute assets and a steady flow of traditional onesie twosies. We have several new additions lining up for Q2 and Q3 of 2026 as our local leadership teams and their partners at the Service center work together to source, underwrite and carefully select the right opportunities. We continue to have a lot of success in closing deals with sellers who are not just interested in receiving top dollar. They care deeply about the quality and reputation of the company they select to inherit their legacy and they choose us because they believe in our mission to Dignify post acute Care during the quarter we were pleased to complete the construction of a replacement facility of one of our high performing skilled nursing operations in San Diego County, Grossmont Post Acute in La Mesa, California, which is located next to Sharp Grossmont Hospital, which was housed in an aging building that the landlord decided to replace with a new medical office space. After several years on lots of hard work, we successfully completed the construction and have moved all the patients and staff to a brand new state of the art building while also …
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