Pennant Group (PNTG 0.36%), a diversified provider of home health, hospice, and senior living services, reported its second quarter 2025 earnings on August 6, 2025. The most notable news was the sharp revenue beat: GAAP total revenue of $219.5 million exceeded the analyst consensus of $210.62 million by $8.88 million, up 30.1% from the prior year quarter. Adjusted earnings per share (EPS) came in at $0.27, matching analyst expectations exactly. Operating metrics in the company’s largest segment were strong, and Management provided updated full-year 2025 guidance for major metrics. Overall, the quarter demonstrated forward momentum in admissions and profitability, though pockets such as Senior Living occupancy remained flat.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.27 | $0.27 | $0.24 | 12.5% |
| Revenue | $219.5 million | $210.62 million | $168.7 million | 30.1% |
| Adjusted EBITDA | $16.4 million | N/A | N/A | |
| Net Income | $7.1 million | $5.7 million | 24.6% | |
| Home Health and Hospice Revenue | $166.0 million | $125.3 million | 32.5% |
Source: Analyst estimates for the quarter provided by FactSet.
Pennant Group’s Business and Strategy
Pennant Group is a healthcare services company operating in the home health, hospice, and senior living sectors across multiple states. Its main offerings include home health care (supporting patients at home after illness or surgery), hospice (end-of-life care), and senior living communities (residential facilities providing care and amenities for older adults). The company is known for a decentralized model, giving local leaders significant control over operations.
Recently, Pennant has focused on expanding through acquisitions and strengthening its leadership pipeline. It invests heavily in local manager development and peer accountability, aiming to increase responsiveness, improve care outcomes, and grow organically alongside new operations. Key success factors include the ability to integrate acquisitions quickly, recruit and retain skilled leaders, and manage regulatory changes.
Quarter in Review: Performance, Segments, and Operations
Overall revenue growth of 30.1% (GAAP) in Q2 2025 was led by the Home Health and Hospice Services segment. Segment revenue jumped 32.5%, driven by higher patient admissions and increased per-patient revenues. There were 17,832 total home health admissions, up 26.1%, and a 5.9% rise in average Medicare revenue per episode. Hospice average daily census reached 3,909, up 21.4%, pointing to both organic growth and contributions from newly acquired locations.
Segment profitability rose alongside volume gains. Home Health and Hospice achieved a 30.5% increase in adjusted EBITDAR. Pennant noted “significant untapped potential for organic improvement and exciting acquisition opportunities on the near horizon,” referencing a pending transaction with UnitedHealth Group and Amedisys that could bring further growth, as discussed by management.
In Senior Living Services, Senior Living Services revenue rose 23.1% to $53.5 million. Average monthly revenue per occupied unit increased 8.3% to $5,188, while average occupancy stayed flat at 78.8%. Most gains came from pricing rather than growth in residents, suggesting that further expansion may rely on boosting occupancy. Same-store senior living revenue grew 9.0%.
Overall profitability also improved. Net income (GAAP) rose 24.5%, as did adjusted EBITDA. However, General and administrative (G&A) costs (GAAP) grew 48.1% compared to Q2 2024. Cost of services as a share of revenue (GAAP) also nudged higher. Cash from operations (GAAP) for the first six months of 2025 stood at $13.4 million, while significant investing outflows of $60.4 million (GAAP, six months ended Q2 2025) evidenced active acquisition activity. The period ended Q2 2025 with $37.0 million in long-term debt on the balance sheet, up from no debt at year-end 2024.
Looking Ahead: Guidance and Key Themes
Pennant raised its full-year 2025 adjusted guidance following the quarter’s strong results. It now expects total revenue (GAAP) between $852.8 million and $887.6 million for full year 2025, up from the previous range of $800 million to $865 million. Adjusted EPS guidance moved to $1.09-$1.15 for full year 2025 (prior: $1.03-$1.11), and adjusted EBITDA is forecast in the $69.1–$72.7 million range for full year 2025 (previous: $63.1–$68.2 million). These updates signal management’s confidence in continued progress across its core segments and newly acquired businesses.
For upcoming quarters, investors should monitor the balance between rate-driven and occupancy-driven growth in Senior Living, and track the pace of acquisition integration. The inclusion of known transaction costs for the UnitedHealth Group/Amedisys deal, but not revenue benefits, sets a conservative tone for the full year 2025 outlook. Any material regulatory reimbursement change or integration difficulty could impact future results.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
