The Ensign Group (ENSG) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 21.1% YoY to $980.4M and adjusted net income increased 17.5% to $73.7M; FY23 revenue grew 23.3% to $3.73B and adjusted net income rose 16.0% to $273.5M.

• FY23 adjusted diluted EPS rose 15.2% to $4.77; Q4 adjusted diluted EPS was $1.28, up 16.4% YoY.

• Occupancy gains, managed-care growth and acquisitions supported momentum; FY24 guidance targets $4.13B–$4.17B revenue and $5.29–$5.47 diluted EPS.

Financial highlights

• FY23 GAAP net income was $209.4M and diluted EPS was $3.65, versus $224.7M and $3.95 in FY22; Q4 GAAP net income was $21.7M and diluted EPS was $0.38.

• Adjusted EBITDAR was $159.5M in Q4 and $616.9M for FY23, versus $133.2M and $536.6M in the prior-year periods.

• Skilled Services revenue was $3.58B for FY23, up 23.1%, and $940.8M for Q4, up 21.0% YoY.

• FY23 operating cash flow was $376.7M; investing and financing cash flow were $(182.7)M and $(0.6)M. Cash rose to $509.6M from $316.3M.

Outlook and guidance

• FY24 revenue guidance is $4.13B–$4.17B and diluted adjusted EPS guidance is $5.29–$5.47; midpoint EPS implies 13% growth over FY23 and 30% over FY22.

• Guidance assumes ~58.5M diluted weighted-average shares, a 25.0% tax rate, normalized health insurance costs and current reimbursement-rate expectations.

• Guidance excludes one-time charges, including certain litigation expenses, acquisition costs, acquired-intangible amortization and share-based compensation.