Executive Summary

Q1 2025 delivered strong top-line growth and margin expansion: net operating revenues rose 25.7% to $373.7M, GAAP EPS was $2.07, and adjusted EPS increased 60.6% YoY to $1.59, driven by higher census, per-diem increases, lower agency staffing expense, and accretion from the White Oak acquisition .
Labor normalization was a key positive: agency nurse staffing expense fell to $1.5M vs $5.3M a year ago, while SNF occupancy improved to 89.3% from 88.5% .
Reimbursement backdrop remained supportive (Medicare SNF FY25 +4.2%; FY26 proposed +2.8%; state Medicaid increases and supplemental payments), bolstering rate growth and mix .
Capital returns accelerated via a 4.9% dividend hike to $0.64 per share for the next quarterly payment; liquidity remains solid with $243.2M in cash, cash equivalents and marketable securities, and $134.0M of debt at quarter-end .

What Went Well and What Went Wrong

What Went Well
- Margin expansion on operational execution: operating margin improved to 8.2% (from 5.4% in Q1’24) as census rose, per-diems increased, and agency staffing expense was reduced; management cited White Oak as accretive to earnings . Quote: “The increase in non-GAAP earnings…was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases…continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.”
- Robust volume and rate: total SNF patient days grew to 718,136 (from 585,851) and average SNF per diem rose to $360.14 (from $343.48) .
- Capital returns: quarterly dividend increased 4.9% to $0.64 from $0.61, signaling confidence in cash flow durability .
What Went Wrong
- Lower non-operating contribution YoY: non-operating income declined by $1.6M YoY due to lapping a prior period gain on sale and lower interest income/dividends .
- Medicaid supplemental tailwind moderated: supplemental Medicaid recognized in revenue was $1.9M vs $3.5M in Q1’24, though broader reimbursement dynamics remain supportive .
- Concentration risk in securities portfolio: NHI equity comprised ~69% of the $174.5M equity securities portfolio, increasing equity price concentration risk .

Financial Results

Headline financials

Metric	Q3 2024	Q4 2024	Q1 2025
Net operating revenues ($USD Millions)	$340.2	$369.4	$373.7
GAAP diluted EPS ($)	$2.73	$0.39	$2.07
Adjusted diluted EPS ($)	$1.27	$1.66	$1.59
Income from operations ($USD Millions)	$21.0	$26.6	$30.8
Operating margin %	6.2% (calc. from )	7.2% (calc. from )	8.2%

Note: Q3/Q4 operating margins are computed from reported income from operations and net operating revenues.

Segment breakdown (net operating revenues and operating income)

Segment	Q1 2024 Net Op Rev ($MM)	Q1 2025 Net Op Rev ($MM)	Q1 2024 Op Inc ($MM)	Q1 2025 Op Inc ($MM)
Inpatient Services	$252.3	$325.9	$15.0	$32.6
Homecare & Hospice	$33.6	$36.1	$5.8	$5.7
All Other	$11.3	$11.7	($5.1)	($7.6)

KPIs and operating metrics

KPI	Q1 2024	Q1 2025
SNF occupancy (owned & leased)	88.5%	89.3%
Average SNF per diem ($)	$343.48	$360.14
Per diem ($): Medicare	$581.75	$612.13
Per diem ($): Medicaid	$265.27	$281.67
Per diem ($): Managed Care	$470.56	$492.40
Per diem ($): Private Pay & Other	$307.84	$337.04
Total SNF patient days	585,851	718,136
Agency nurse staffing expense ($M)	$5.286	$1.487
Payor mix (% of net patient revenue): Medicare	34%	31%
Payor mix (%): Medicaid	28%	31%
Payor mix (%): Managed Care	10%	11%
Payor mix (%): Private Pay & Other	28%	27%
Supplemental Medicaid in revenue ($M)	$3.462	$1.872
Cash, cash equivalents & marketable securities ($M)	$216.2 (12/31/24)	$243.2 (3/31/25)
Current + long-term debt ($M)	$137.0 (12/31/24)	$134.0 (3/31/25)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular quarterly dividend (per share)	Next payable Aug 1, 2025	$0.61 (prior quarter)	$0.64	Raised 4.9%

Note: The company did not issue formal financial guidance (revenue, margins, OpEx, OI&E, tax rate, or segment-specific) in the Q1 2025 press release or 10-Q .

Earnings Call Themes & Trends

Note: An earnings call transcript for Q1 2025 was not available in our source set; themes reflect management communications in the Q1 2025 10-Q and press releases.

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Labor/agency staffing	Not explicitly discussed in Q3/Q4 press releases	Agency nurse staffing expense reduced to $1.5M from $5.3M YoY; continued focus on eliminating agency usage	Improving
Reimbursement backdrop	Q3 revenue growth tied to White Oak; no detailed reimbursement commentary	Medicare SNF FY25 +4.2%; FY26 proposed +2.8%; state Medicaid increases (TN, MO) and supplemental payments	Supportive
White Oak acquisition	Primary driver of Q3 revenue growth	Accretive to earnings in Q1; $56.7M net patient revenue contribution YoY	Accretive, integrating
Occupancy	Not quantified in Q3/Q4 press releases	SNF occupancy 89.3% vs 88.5% YoY	Improving
Regulatory (CMS staffing rule)	Not previously discussed in releases	CMS final minimum staffing rule (3.48 HPRD; 24/7 RN) with phased implementation	Heightened compliance requirements
Litigation/insurance reserves	Not highlighted in prior releases	Accrued risk reserves $108.2M; ongoing self-insurance exposure	Elevated but managed
Capital allocation	Regular dividend maintained ($0.61) in prior quarters	Dividend increased 4.9% to $0.64	More shareholder-friendly

Management Commentary

“The increase in non-GAAP earnings for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.”
“For the first three months of 2025, our average Medicare per diem rate for skilled nursing facilities increased 5.2% as compared to the same period in 2024.”
“The overall census in owned and leased skilled nursing facilities for the three months ending March 31, 2025 was 89.3% compared to 88.5% for the same period a year ago.”
CMS final rule: “CMS is finalizing a total nurse staffing standard of 3.48 hours per resident day… and a requirement to have an RN onsite 24 hours a day, seven days a week (‘24/7’).”

Q&A Highlights

An earnings call transcript for Q1 2025 was not available in our document set, so Q&A highlights and any clarifications provided on the call cannot be summarized [ListDocuments returned no earnings-call-transcript for the period].

Estimates Context

Wall Street consensus (S&P Global) for Q1 2025 was not available for EPS or revenue; therefore, a beat/miss vs consensus cannot be determined for this quarter. Values retrieved from S&P Global.*

Metric	Q1 2025 Consensus (S&P Global)	Q1 2025 Actual
Revenue ($)	n/a*	$373,697,000
GAAP EPS ($)	n/a*	$2.07
Adjusted EPS ($)	n/a*	$1.59

*Values retrieved from S&P Global.

Key Takeaways for Investors

Earnings quality improved: operating margin expanded to 8.2% and adjusted EPS rose 60.6% YoY on higher census, pricing, and lower agency usage; these drivers appear sustainable near term given reimbursement trends and integration benefits from White Oak .
Volume and pricing momentum: SNF patient days and per diems rose across payors; occupancy ticked up to 89.3%, supporting near-term revenue visibility .
Reimbursement tailwinds: Medicare SNF FY25 +4.2% in effect and FY26 proposed +2.8%, plus state Medicaid increases and supplemental payments in TN/MO, provide rate support against inflationary pressures .
Capital return signal: the 4.9% dividend increase to $0.64 indicates management confidence in cash generation and balance sheet capacity .
Watch regulatory risk: CMS minimum staffing standards (3.48 HPRD; 24/7 RN) raise long-term cost compliance needs; NHC’s labor normalization is a positive offset, but ongoing monitoring is required .
Portfolio risk: large concentration in NHI equity (~69% of equity securities) introduces market risk to non-operating results; equity market volatility could sway reported GAAP earnings via unrealized gains/losses .
Liquidity and leverage are comfortable: $243.2M in cash, cash equivalents and marketable securities and $134.0M in debt provide flexibility for operations and capital returns .

Appendix: Source Documents Read

Q1 2025 8-K and press release, including full financial tables and non-GAAP reconciliations .
Q1 2025 Business Wire press release (duplicate core content) .
Q1 2025 10-Q including MD&A, segment data, payor mix, regulatory updates, liquidity and risk disclosures .
Dividend increase press release and 8-K (4.9% increase to $0.64) .
Prior quarter press releases for trend context (Q3 2024 and Q4 2024) .

NATIONAL HEALTHCARE CORP (NHC)·Q1 2025 Earnings Summary