Healthcare Services Group (HCSG) investor relations material

Executive summary

• Q3 revenue rose 3.3% YoY to $479.6 million; net income declined 42.1% to $24.9 million, reflecting prior-year ERC benefits and lower investment income.

• New client wins, retention and operational execution supported a ninth sequential revenue increase in the past 10 quarters.

• NEXDINE expands senior living and hospitality capabilities; management expects >$150 million in annual revenue at comparable margins and immediate EPS accretion.

Financial highlights

• Q3 diluted EPS was $0.36 vs. $0.59; operating income was $31.9 million vs. $45.9 million.

• Q3 costs of services were $399.2 million, or 83.2% of revenue; SG&A was $48.5 million reported and $49.1 million adjusted for deferred compensation, or 10.2% of revenue.

• Nine-month revenue increased to $1.413 billion from $1.370 billion; net income was $73.6 million vs. $27.8 million and diluted EPS was $1.05 vs. $0.38.

• Q3 operating cash flow was $30.2 million; excluding a $9.5 million payroll-accrual change, it was $20.7 million.

Outlook and guidance

• Q4 revenue guidance is $535 million-$545 million; 2027 revenue growth guidance rose from mid-single digits to low double digits, including mid-single-digit organic growth and NEXDINE.

• Full-year 2026 effective tax rate is expected to be ~25%.

• 2026 capital expenditures were estimated at $5.0 million-$7.0 million; $5.1 million had been spent through September 30.

• Growth priorities include customer wins and retention, contractual price increases, cost efficiencies and developing managerial talent.