PACS Group (PACS) investor relations material

Executive summary

• Revenue for Q1 2026 rose 11.2% year-over-year to $1.42 billion, with net income up 184% to $80.7 million and adjusted EBITDA up 75% to $170.4 million, reflecting strong operational consistency, higher occupancy, and facility expansion.

• Operates 323–324 facilities across 17 states, serving about 31,900 patients daily, with mature facilities maintaining high occupancy and clinical consistency.

• Leadership transition announced: Carey Hendrickson appointed CFO, succeeding retiring co-founder Mark Hancock, with enhancements to compliance and internal audit functions.

• Ongoing government and regulatory investigations, material weaknesses in internal controls, and litigation risks are being addressed, with remediation and compliance efforts underway.

• $250 million share repurchase authorization approved, providing flexibility for opportunistic buybacks.

Financial highlights

• Q1 2026 revenue was $1.42 billion, up 11.2% year-over-year; net income was $80.7 million, up from $28.4 million; adjusted EBITDA reached $170.4 million, up from $97.6 million.

• Diluted EPS was $0.50, up from $0.17 year-over-year; basic EPS was $0.51.

• Adjusted EBITDA included a $16.3 million benefit from California's WQIP; excluding this, adjusted EBITDA still increased significantly year-over-year.

• Same-store revenue grew 8% year-over-year, driven by occupancy improvement and skilled mix gains.

• Cash flow from operations in Q1 was $236.3 million, with available liquidity at $795.1 million, including $248 million in cash.

Outlook and guidance

• Raised full-year 2026 adjusted EBITDA guidance to $605–$625 million, a $50 million increase, representing ~22% growth over 2025.

• Reaffirmed revenue guidance of $5.65–$5.75 billion, now excluding future acquisitions from guidance.

• Future quality incentive payments (e.g., WQIP) are excluded from guidance due to timing and amount uncertainty.