10-Q · May 11, 2026
PACS Group, Inc. reported strong revenue growth of 11.2%, reaching $1.42 billion, and a significant increase in diluted EPS to $0.45, a 184.2% rise compared to the same period last year. Operating income surged by…
Earnings analysis · 10-Q
PACS earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
PACS delivered strong Q2 growth, with revenue up 9.1% year over year to $1.428 billion, operating income up 35.8%, and diluted EPS up to $0.47 from $0.31. Performance was underpinned by 5.8% same-store skilled-nursing…
Read full summary
PACS delivered strong Q2 growth, with revenue up 9.1% year over year to $1.428 billion, operating income up 35.8%, and diluted EPS up to $0.47 from $0.31. Performance was underpinned by 5.8% same-store skilled-nursing revenue growth and a 150-basis-point occupancy gain, while six-month operating cash flow rose to $371.8 million. The principal offsets are a sequential operating-margin/EPS decline, substantial acquisition cash deployment, ongoing DOJ/SEC matters, and unremediated material weaknesses in financial-reporting controls.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.47
What stood out
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Revenue growth beat consensus
Q2 revenue rose $118.8 million, or 9.1% year over year, to $1.428 billion. This was also $6.9 million above the $1.421 billion consensus estimate supplied with the filing metadata.
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Year-over-year margin expansion
Operating income increased $28.8 million, or 35.8%, to $109.3 million, lifting operating margin to 7.7% from 6.1% a year ago. Gross margin expanded to 23.7% from 22.0%, although it declined from 24.4% in Q1 2026.
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EPS increased 52% year over year
Diluted EPS was $0.47, up $0.16 from $0.31 a year ago; adjusted EPS rose to $0.63 from $0.47. GAAP EPS declined $0.03 from Q1 2026's $0.50.
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Same-store occupancy and mix improved
Same-store skilled nursing revenue grew $74.0 million, or 5.8%, while same-store occupancy improved 150 basis points to 90.6%. Same-store skilled mix by patient days increased 50 basis points to 29.7%.
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Operating cash flow accelerated
Six-month operating cash flow increased $169.0 million to $371.8 million. Days sales outstanding improved by 5.0 days to 46.9 days, supporting working-capital conversion.
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Credit line repaid and buyback authorized
The company had $164.5 million of cash and no borrowings on its credit facility after $45.0 million of net line repayments in Q2. It also authorized $250.0 million for repurchases, all of which remained available at June 30.
What to watch
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Material weaknesses remain unremediated
Management concluded disclosure controls were not effective as of June 30, 2026 because material weaknesses remain in the control environment and revenue processes. The weaknesses previously resulted in restatements of the March 31, 2024 and June 30, 2024 interim financial statements.
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Regulatory and SEC investigations continue
Four DOJ matters and an SEC Enforcement investigation remain ongoing. The company cannot estimate a loss or range of loss; legal and other costs were $8.2 million in Q2 and $19.9 million in the first six months of 2026.
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Insurance and financing costs increased
Cost pressure persists: facility liability insurance expense increased $26.2 million year over year in Q2, while interest expense increased $1.7 million to $6.0 million. Inflation-driven reimbursement adjustments may not match future labor, supply, and capital-cost inflation.
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Acquisition spending consumed cash
Cash declined $55.1 million in the first six months to $176.9 million including restricted cash, as investing outflows reached $282.7 million. Real-estate acquisition spending was $190.8 million and property/equipment capex was $48.4 million.
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No formal risk-factor update; California concentrated
No material changes were reported to the risk factors in the February 27, 2026 10-K. However, California represents 140 of 324 facilities and 16,132 of 35,631 beds/units, creating material geographic concentration.
Management's outlook
The 10-Q provides no explicit quantitative revenue, EPS, or EBITDA outlook. Management states that current cash balances and operating cash flow are expected to cover operating needs for at least the next 12 months.
Earlier filings 4
10-K · February 27, 2026
PACS Group, Inc. has shown significant growth and improvement in financial performance, driven primarily by their robust acquisition strategy in the post-acute healthcare sector. Revenue for the year ended December 31,…
10-K · November 19, 2025
PACS Group, Inc. reported significant growth in revenue for the year ending December 31, 2024, with total patient and resident service revenue increasing by 31.4% to $4.1 billion, driven by a rise in patient occupancy…
10-Q · November 19, 2025
PACS Group, Inc. reported strong financial results for Q3 2025, with significant revenue growth driven by an increase in patient days and operational facilities. The company demonstrated healthy margins but experienced…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.