Pennant Group Reports 33.7% Revenue Growth to $209.8 Million in Latest Quarter

The Pennant Group, Inc. reported significant financial growth in its latest quarterly results, with total revenue reaching $209.8 million for the three months ended March 31, 2025, a 33.7% increase from $156.9 million in the same period last year. The company's net income also rose to $8.5 million, or $0.23 per share, compared to $5.1 million, or $0.16 per share, in the prior year. This growth was primarily driven by increased operational performance in its Home Health and Hospice segment, which saw a revenue increase of $43.4 million, attributed to higher admissions and census, including contributions from newly acquired agencies.

In terms of operational metrics, the company reported a 28.9% increase in total home health admissions, reaching 18,878, and a 22.8% rise in total hospice admissions, totaling 3,783. The average Medicare revenue per completed 60-day home health episode increased by 9.3% to $3,801. The Senior Living Services segment also contributed to the revenue growth, with a 23.6% increase in revenue to $50.0 million, driven by an 11.3% rise in average monthly revenue per occupied unit and the addition of seven new senior living communities.

The company has been actively expanding its operations, acquiring five home health agencies, four hospice agencies, and three senior living communities during the first quarter of 2025. This expansion strategy is reflected in the increase in goodwill, which rose to $154.9 million from $129.1 million at the end of 2024. The total number of home health and hospice agencies operated by Pennant increased to 137, while the number of senior living communities remained at 60.

Despite the growth in revenue, total expenses also increased, rising to $197.2 million from $148.4 million year-over-year. The cost of services accounted for 80.4% of total revenue, slightly up from 80.3% in the previous year. The company reported a net cash used in operating activities of $21.2 million, primarily due to changes in working capital, while cash used in investing activities increased significantly to $50.3 million, reflecting the costs associated with acquisitions. The company ended the quarter with $5.2 million in cash and $193.3 million available under its revolving credit facility.

Looking ahead, Pennant Group anticipates continued growth driven by its acquisition strategy and operational improvements. The company remains focused on enhancing its service offerings and expanding its footprint in the healthcare sector, particularly in home health and senior living services. The management expressed confidence that existing cash reserves and access to credit will support its operational and growth initiatives over the next twelve months.