The Ensign Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue for the quarter ended September 30, 2026, was $1.48 billion, a 14.5% increase year-over-year.
• GAAP diluted earnings per share (EPS) were $1.76, up 23.9% from the prior year quarter; adjusted diluted EPS were $2.03, up 23.8% year-over-year.
• GAAP net income was $104.3 million, a 24.4% increase year-over-year; adjusted net income was $120.5 million, a 24.9% increase year-over-year.
• Same Facilities skilled mix revenue increased 10.7% year-over-year; Transitioning Facilities skilled mix revenue increased 10.5%.
• Same Facilities Medicare revenue improved 11.1% year-over-year; Transitioning Facilities Medicare revenue improved 7.8%.
• Same Facilities managed care revenue improved 9.1% year-over-year; Transitioning Facilities managed care revenue improved 7.2%.
• Standard Bearer revenue was $47.7 million, a 46.3% increase year-over-year; Funds from Operations (FFO) were $27.3 million, a 41.3% increase year-over-year.
• Cash and cash equivalents at period end were $337.6 million; available capacity under the line of credit was $731.6 million.
• Operating cash flow for the nine months ended September 30, 2026, was $512.3 million, compared to $381.0 million in the prior year period.
• Investing activities used $690.9 million in the nine months ended September 30, 2026, compared to $389.2 million in the prior year period.

Guidance and Future Outlook:

• Annual 2026 earnings guidance raised to $7.94 to $8.02 per diluted share (previously $7.75 to $7.85).
• Annual 2026 revenue guidance raised to $5.89 billion to $5.92 billion.
• The midpoint of the new earnings guidance represents a 21.5% increase over 2025 and 45.5% growth over 2024.
• Guidance assumptions include diluted weighted average common shares outstanding of approximately 59.5 million and a 25.0% tax rate.
• Guidance assumes normalized insurance costs, acquisitions expected to close through Q4 2026, and current expectations regarding reimbursement rates.
• Management expects to maintain a healthy pace of growth and continue acquiring new operations with significant long-term upside.

Business Segments and Product Lines:

• The Company's portfolio consists of 418 healthcare operations across 18 states, including 34 senior living operations.
• Ensign owns 189 real estate assets, 150 of which are operated by an Ensign affiliate.
• Standard Bearer segment includes 183 owned properties: 146 leased to Ensign-affiliated operators and 38 leased to third-party operators.
• During the quarter and since, the Company added 22 new operations, including three real estate assets and 19 leased operations.
• Since 2024, the Company has sourced, underwritten, closed, and transitioned 122 new operations.
• 12% of eligible operations (40 buildings in 8 states) earned CMS High Performing designations under the new risk-based survey program.
• 43 Ensign-affiliated operations were recognized on Newsweek's America's Best Nursing Homes 2027 list.

Market and Competitive Landscape:

• Same Facilities achieved CMS Quality Measure ratings 21% better than industry peers in operating states.
• Same Facilities achieved CMS Cycle 1 survey inspection results 15% better than industry peers in operating states.
• Over 80% of skilled nursing operations earned a CMS Quality Measure rating of 4 or 5 stars.
• Short-stay residents achieved functional improvement rates 30% better than industry peers.
• Long-stay residents had antipsychotic medication rates 28% better than industry peers.
• Administrator turnover for Same Facilities was 45% lower than industry peers in operating states.
• Same Facilities occupancy was 84.1% (up 1.6% year-over-year); Transitioning Facilities occupancy was 86.1% (up 3.9% year-over-year).
• Total skilled nursing average daily revenue rates for the quarter were $430.17 for Same Facilities, $458.80 for Transitioning Facilities, and $415.17 for Recently Acquired Facilities.

Risks and Challenges:

• Potential risks include reduced prices and reimbursement rates for services.
• Challenges may arise from the ability to acquire, develop, manage, or improve operations.
• Borrowing costs may increase as the Company incurs additional indebtedness to fund acquisitions and development.
• Operating margins and profitability could suffer if the Company cannot effectively manage its increasing number of operations.
• Competition exists from other companies in the acquisition, development, and operation of facilities.
• The Company faces risks related to defending claims and lawsuits, including professional liability claims and regulatory-related claims.
• Application of existing or proposed government regulations could limit business operations or require significant expenditures.
• Unpredictable changes in the regulatory environment may impact financial results.

Management Commentary and Tone:

• CEO Barry Port described the quarter as "outstanding" and emphasized that culture is the foundation for sustainable clinical, operational, and financial performance.
• Management highlighted that occupancy and skilled mix growth validate that stakeholders value the clinical outcomes and experience delivered.
• CFO Suzanne Snapper noted that liquidity remains strong and the Company plans to continue its long history of paying dividends.
• Chief Investment Officer Chad Keetch stated the Company is actively looking for performing and underperforming operations in several states.
• Management expressed confidence in the fourth quarter, citing the strength of the third quarter.

Other Key Points:

• The Company paid a quarterly cash dividend of $0.065 per share of common stock.
• Standard Bearer acquired five real estate properties previously operated under third-party triple net leases, totaling 755 skilled nursing beds.
• Recent acquisitions include operations in Florida (e.g., Sarasota, Jacksonville, Dunedin), Colorado (e.g., Delta, Grand Junction, Littleton), and Washington (e.g., Burien, Seattle).
• The Company entered Florida as part of a strategic expansion into the Southeast, following entries into Tennessee, South Carolina, and Alabama.
• A conference call and webcast were scheduled for October 28, 2026, at 10:00 am PT.
• The Company's Form 10-Q for the quarter ended September 30, 2026, was filed with the SEC.