The Ensign Group (NASDAQ:ENSG) used its fourth-quarter fiscal 2025 earnings call to highlight record full-year and quarterly results, continued occupancy and skilled-mix gains, and an active acquisition pipeline that management described as “healthy” but increasingly competitive on price. Executives also issued initial fiscal 2026 guidance and discussed labor trends, reimbursement considerations, and selective capital projects.
Clinical metrics and workforce trends
CEO Barry Port opened the call by emphasizing what he said were “extraordinary clinical outcomes” across the company’s same-store operations, citing the most recently published CMS data. Port said same-store Ensign-affiliated operations outperformed peers in annual survey results by 24% at the state level and 33% at the county level, and maintained a 19% advantage in the share of four- and five-star buildings versus peers. He also said the company’s same-store operations delivered five-star quality measure results that were 22% better nationally and 17% above the state level.
Occupancy and payer mix: record levels and higher acuity
On operating trends, Port said same-store and transitioning occupancy rose to 83.8% and 84.9% during the quarter, which he described as all-time highs. He also pointed to rising skilled volume and revenue across payers, which management attributed to stronger reputations in local markets and increasing trust from referral partners.
- Skilled days increased 8.5% for same-store and 10% for transitioning operations versus the prior-year quarter.
- Medicare revenue increased 15.7% for same-store and 11.3% for transitioning operations; same-store Medicare days rose 11% year over year.
- Managed care revenue increased 8.9% for same-store and 15% for transitioning operations.
Port said the company is beginning to see increased demand from demographic trends and argued that the current occupancy level still leaves “organic growth potential” even without acquisitions. He noted that some mature operations maintain occupancies in the “high to mid-90s,” and said several 2025 acquisitions were made in states with higher occupancy levels—including California, Alaska, Utah, and Washington—but that acquired facilities’ occupancies remained below what Ensign sees at mature campuses.
Acquisitions, capital projects, and Standard Bearer growth
Chief Investment Officer Chad Keetch said the company added 17 new operations during the quarter, including 12 real estate assets, spanning Utah, Texas, Arizona, Colorado, Alabama, Kansas, and Wisconsin. Keetch said the transactions added 1,371 skilled nursing beds across seven states and brought “recently acquired” operations to 21.7% of the overall portfolio.
Keetch described a pipeline that includes “larger portfolios,” landlords replacing tenants, nonprofits divesting post-acute assets, and a steady flow of smaller deals. He said Ensign’s building-by-building transition approach is designed to work across single facilities and multi-market portfolios. He also said the company may pay higher prices for newer, higher-quality assets in strategic situations, citing the Stonehenge acquisition in Utah as an example where the company paid a premium but saw performance “well ahead of schedule” just months after closing.
Management also highlighted two California construction projects:
- A 40-bed addition at Vista Knoll Specialized Healthcare in Vista, California, completed with Omega Healthcare REIT on vacant land at a leased property. Keetch said the addition strengthened specialty care capacity and reached 98.3% occupancy only a few months after opening.
- A replacement facility for Grossmont Post Acute in La Mesa, California. Keetch said the company built a new building across the street from an aging facility and added 15 beds to the original license, with plans to move patients and staff into the new building.
Keetch said the company has “dry powder” to fund growth and noted an all-time high for administrators-in-training (AITs) in the leadership pipeline, which management said supports growth without typical corporate bottlenecks.
Standard Bearer Healthcare REIT, Ensign’s captive REIT, also expanded. Keetch said Standard Bearer added 12 new assets during the quarter and “since,” bringing the portfolio to 154 owned properties. Of those, 120 are leased to Ensign-affiliated operators and 35 are leased to third-party operators. Standard Bearer generated rental revenue of $34.5 million in the quarter, including $29.3 million from Ensign-affiliated operations, and reported funds from operations (FFO) of $20.4 million. Keetch also cited an EBITDA-to-rent coverage ratio of 2.6x at quarter end.
Operational examples: specialty programs and performance
COO Spencer Burton provided two facility-level examples to illustrate Ensign’s approach to specialization and staff development.
Burton highlighted South Bay Post Acute near San Diego, a 98-bed facility affiliated since 2014. He said the facility developed specialized bariatric capabilities after learning from another Ensign affiliate, including remodeling rooms, investing in equipment, and expanding behavioral health support. Burton said the facility recently secured additional high-reimbursement contracts. Financially, he said fourth-quarter earnings before income tax rose 127% year over year, while occupancy increased from 96% to 97%. Burton attributed the improvement primarily to payer and acuity mix, noting skilled revenue mix increased 25%, Medicare days rose 86%, and managed care volume increased 22%.
He also discussed Shoreline Health and Rehabilitation in North Seattle, Washington, a 114-bed operation that moved from transitioning to same-store. Burton said Shoreline’s CMS nursing turnover rate in 2025 was 60% lower than the state average, with average frontline staff tenure of more than seven years. He said Shoreline operated with “zero registry staffing” for a second consecutive year. Burton described the facility’s work with regional health systems and said it became the only facility in North Seattle accepting TPN patients after implementing additional training and coordination with clinical partners. In the fourth quarter, Burton said Shoreline revenue increased 11% year over year and EBIT rose nearly 33%. While occupancy remained below 74%, he said skilled revenue mix reached 70%, Medicare days increased 24%, and managed care improved 103% versus the prior-year quarter.
Financial results and 2026 guidance
CFO Suzanne Snapper reviewed fiscal 2025 results, referencing details in the company’s press release and Form 10-K.
- Full year 2025: GAAP diluted EPS of $5.84 (up 14.1%); adjusted diluted EPS of $6.57 (up 19.5%); consolidated revenue of $5.1 billion (up 18.7%); GAAP net income of $344 million (up 15.4%); adjusted net income of $386.6 million (up 20.6%).
- Fourth quarter: GAAP diluted EPS of $1.61 (up 18.4%); adjusted diluted EPS of $1.82 (up 22.1%); consolidated revenue of $1.4 billion (up 20.2%); GAAP net income of $95.5 million (up 19.8%); adjusted net income of $107.8 million (up 23.2%).
Snapper said the company ended 2025 with $504 million in cash and cash equivalents and generated $564 million of cash flow from operations. She said Ensign spent more than $500 million during 2025 on strategic growth plans and finished with a “record low” lease-adjusted net debt to EBITDA ratio of 1.77x. She also said the company had more than $590 million available on its line of credit, and that combined with cash provides “over $1 billion” in available capital for future investments. Snapper noted the company owns 160 assets, 136 of which are debt free.
The company increased its dividend for the 23rd consecutive year and paid a quarterly dividend of $0.065 per share, Snapper said.
For fiscal 2026, management guided to diluted EPS of $7.41 to $7.61 and revenue of $5.77 billion to $5.84 billion. Snapper said assumptions include roughly 60 million diluted weighted average shares, a 25% tax rate, acquisitions closed and expected to close 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.
In the Q&A, executives said the M&A market is “seller-friendly,” with rising valuations bringing more properties to market, though management said its approach to underwriting has not materially changed. On labor, management reiterated that leadership stability—particularly lower DON turnover—helps reduce agency use and overtime. Executives also said they welcome reimbursement programs that emphasize quality, noting they track metrics with dashboards and have had time to prepare for changes signaled in advance by CMS.
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.
