Executive Summary

Q3 delivered record revenue ($229.0M, +26.8% YoY), Adjusted EBITDA ($17.3M, +14.5% YoY), and Adjusted EPS ($0.30, +15.4% YoY), alongside all‑time highs in senior living occupancy (80.9%), hospice ADC (4,044), and home health admissions (20,426) .
Results beat S&P Global consensus on revenue ($229.0M vs $222.1M*) and EPS ($0.30 vs $0.287*); Q2 and Q1 also exceeded revenue and EPS expectations, evidencing estimate momentum and execution consistency (see Estimates Context) .
Guidance raised again: FY25 revenue $911.4–$948.6M, Adjusted EBITDA $70.9–$73.8M, Adjusted EPS $1.14–$1.18, midpoint implies ~23% YoY EPS growth; incorporates the Oct 1 close of 54 UnitedHealth/Amedisys locations and higher interest expense .
Balance sheet flexibility enhanced via $100M term loan add‑on to credit facility (now $350M total), freeing revolver capacity to support integration and selective M&A; management flagged near‑term G&A elevation and NCI as margin headwinds, but reiterated longer‑term operating leverage and integration benefits .

What Went Well and What Went Wrong

What Went Well
- Record operational KPIs: home health admissions +36.2% YoY to 20,426; hospice ADC +17.4% to 4,044; senior living occupancy 80.9% with RevPOR $5,195 (+7.4% YoY) .
- Segment strength: Home Health & Hospice (HH&H) revenue $173.6M (+27.9% YoY) with segment Adj. EBITDA from ops $26.8M (+22.7% YoY); Senior Living revenue $55.5M (+23.2% YoY), segment Adj. EBITDA from ops $5.6M (+26.2% YoY) and margin to 10.3% (+50 bps YoY) .
- Strategic catalysts: closed the largest deal in company history (54 sites across TN/GA/AL) at an attractive multiple (T12M EBITDA purchase multiple within 4–7x) and expanded credit capacity by $100M to fund growth .
What Went Wrong
- GAAP EPS compressed to $0.17 (from $0.20 YoY) on higher G&A, acquisition‑related, and other non‑GAAP items despite revenue strength .
- Near‑term integration “lumpiness” expected; management anticipates light Q4 contribution from the UHG/Amedisys assets and lower 2026 margins (9.5%–11%) during rebranding/HCHB re‑implementation and TSA roll‑off, before improvement thereafter .
- EBITDA margin dynamics tempered by elevated G&A and growing NCI from JVs; CFO highlighted ~$2.4M NCI YTD through Q3 and ~$1.9M in Q4 expected, which weighs on consolidated margin optics .

Financial Results

Income statement highlights and per‑share metrics

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$209.8	$219.5	$229.0
GAAP Diluted EPS	n/a	$0.20	$0.17
Adjusted Diluted EPS	$0.27	$0.27	$0.30
Consolidated Adjusted EBITDA ($M)	$16.4	$16.4	$17.3

Segment performance

Segment	Q1 2025 Revenue ($M)	Q1 2025 Seg Adj. EBITDA from ops ($M)	Q2 2025 Revenue ($M)	Q2 2025 Seg Adj. EBITDA from ops ($M)	Q3 2025 Revenue ($M)	Q3 2025 Seg Adj. EBITDA from ops ($M)
Home Health & Hospice	$159.9	$25.1	$166.0	$25.5	$173.6	$26.8
Senior Living	$50.0	$4.9	$53.5	$5.1	$55.5	$5.6

KPIs (selected, Q3 2025 unless noted)

KPI	Value
Home health total admissions	20,426
Medicare home health admissions	8,221
Avg Medicare revenue per 60‑day episode	$3,793
Hospice admissions	3,483
Hospice average daily census	4,044
Hospice Medicare revenue per day	$189
Senior living occupancy	80.9%
Senior living average monthly RevPOR	$5,195
Senior Living Adj. EBITDA margin (Q3)	10.3% (+50 bps YoY)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$852.8M–$887.6M	$911.4M–$948.6M	Raised
Adjusted EBITDA	FY 2025	$69.1M–$72.7M	$70.9M–$73.8M	Raised
Adjusted EPS (diluted)	FY 2025	$1.09–$1.15	$1.14–$1.18	Raised
Modeling assumptions	FY 2025	~35.7M diluted shares; 26% tax	~35.7M diluted shares; 26% tax	Maintained
Qualifiers	FY 2025	Includes expenses tied to UHG/AMED; no unannounced M&A	Includes UHG/AMED revenue/expenses and higher interest; no unannounced M&A	Update for deal close/interest

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
UHG/Amedisys acquisition & integration	Anticipated close in Q4; 38–50 sites; 4–8x multiple; TSA in place; leadership bench built	Closed 10/1: 54 locations, T12M rev $189.3M; purchase price $146.5M; initial light Q4 contribution; integration through Q3’26; 2026 margin 9.5–11% then improve	From planning to execution; near‑term integration work with long‑term upside
Regulatory (Home Health 2026 rule)	Proposed net −6.4% cut criticized; diversified exposure; contingency planning	Final rule timing uncertain; company remains proactive; emphasizes diversified mix and local plans	Continued vigilance; unchanged stance
Hospice reimbursement	Final rule +2.6% tailwind beginning Oct 1	2.6% uplift affirmed from Oct 1, 2025	Positive tailwind now in effect
Senior Living trajectory	RevPOR strength; occupancy >80%; EBITDA margin improving; mid‑single digit RevPOR targeted	All‑store occupancy 80.9%; same‑store 81.8%; RevPOR $5,195; segment margin 10.3% with goal toward 15%	Improving occupancy and margin; continued pricing/marketing gains
Balance sheet & capital	Ample revolver for UHG/AMED; net debt/Adj. EBITDA ~0.83x (Q1) then 0.38x (Q2 commentary)	Added $100M term loan; facility to $350M; refinance revolver; dry powder for opportunistic growth	Increased flexibility to fund integration & M&A
Clinical/quality	HH star rating ~4.1; preventable hospitalizations well below national avg; hospice quality strong	Star rating 4.1; PPH 8.4% vs 9.9%; hospice composite 97% vs 92%	Sustained clinical outperformance supports growth

Management Commentary

CEO: “In the third quarter we achieved record breaking performance in each of our segments… These results demonstrate the power of our model to drive strong same‑store improvement through periods of dynamic growth.”
COO on UHG/AMED: “This is the largest transaction we’ve completed… well‑positioned to effectively transition and unlock additional potential in these assets and further expansion in the region.”
CFO on balance sheet: “We… added a $100 million term loan to our credit facility… frees up additional capacity under our revolver and provides dry powder to deploy when appropriate.”
Guidance raise: “We anticipate full‑year revenue of $911.4–$948.6M… Adjusted EBITDA of $70.9–$73.8M, and adjusted EPS of $1.14–$1.18… midpoint… a 23.4% increase over 2024.”

Q&A Highlights

Integration priorities and 2026 contribution: focus on elevating local leaders (ED/CD), building shared services to replace legacy support, JV with Univ. of Tennessee; expect integration to complete by end of Q3’26 with light Q4’25 contribution; 2026 margins 9.5–11% during transition, improving thereafter .
Margin optics: year‑over‑year EBITDA margin progression influenced by elevated G&A and growing NCI; Q3 NCI ~$2.4M YTD and ~$1.9M expected in Q4 weigh on consolidated margins .
Hospice LOS: trending closer to pre‑pandemic, aided by small mix uptick in assisted living settings; supports ADC growth .
Senior living operating leverage: as occupancy rises, more revenue drops to the bottom line; ARPA roll‑off and labor pressures muted some margin expansion this year, but trajectory remains favorable .
Senior living M&A market: active pipeline; pricing “all over the map” but many in target range; operating reputation yields proprietary deal flow; expanding selective real estate ownership (~10% of buildings owned post recent deals) .

Estimates Context

Q3 2025: Beat on revenue and EPS; Revenue $229.0M vs $222.1M*; EPS $0.30 vs $0.2867* .
Q2 2025: Beat on revenue ($219.5M vs $210.6M*) and in‑line on EPS ($0.27 vs $0.27*) .
Q1 2025: Beat on revenue ($209.8M vs $201.5M*) and EPS ($0.27 vs $0.2375*) .

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Actual ($M)	$209.8	$219.5	$229.0
Revenue Consensus Mean ($M)	$201.5*	$210.6*	$222.1*
EPS Actual (Primary/Adjusted)	$0.27	$0.27	$0.30
Primary EPS Consensus Mean	$0.2375*	$0.27*	$0.2867*

Values with asterisks retrieved from S&P Global.

Where estimates may need to adjust: FY25 models should incorporate the raised guidance ranges, higher interest expense, NCI drag, modest near‑term margin dilution from UHG/AMED integration, and hospice rate tailwind starting October 1 .

Key Takeaways for Investors

Sustained execution: Three straight beats vs consensus through Q3 on both revenue and EPS support estimate momentum and near‑term confidence .
Integration arc is the 2026 story: Expect a transition year with diluted margins from UHG/AMED integration in 2026 (9.5–11%), then margin improvement as branding, HCHB, and TSA roll‑offs complete by Q3’26 .
Senior living operating leverage: Record occupancy (80.9%) with ongoing pricing power (RevPOR +7.4% YoY) and margin expansion toward a 15% target offers a secondary growth/margin engine .
Regulatory risk buffered: Diversified revenue mix and local adaptability mitigate home health rate uncertainty; hospice +2.6% tailwind in effect from Oct 1 .
Balance sheet funding in place: $100M term loan upsized facility to $350M—ample liquidity to support integration and selective M&A without stressing leverage .
Trading implication: Near‑term “beat/raise” plus largest‑ever acquisition and facility expansion are positive catalysts; watch for Q4 integration noise and model NCI and G&A appropriately .
Medium‑term thesis: Local‑leader model, clinical outperformance, and disciplined M&A should compound EBITDA post‑integration as Southeast platform scales and cross‑continuum opportunities (e.g., hospice adjacencies) are added .

Additional Q3 2025 Press Releases and Context

Credit facility expansion: Added $100M term loan (facility to $350M) to refinance part of revolver and provide growth capacity .
M&A updates: Senior living real estate purchases in ID and WI and home health acquisitions in CA (GrandCare; July 1) and WY (Healing Hearts; Sept 1/2 close) .
Earnings timing notice: Q3 release and webcast schedule (Oct 24 PR) .

Notes:

Non‑GAAP metrics and reconciliations provided in the Q3 8‑K; adjusted figures exclude startup costs, SBC, acquisition‑related costs, transitioning activities, unusual charges, and NCI (see reconciliation tables) .

Pennant Group, Inc. (PNTG)·Q3 2025 Earnings Summary