Pennant Group, Inc.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
PNTG$36.36-9.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001766400-26-000054
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001766400-26-000065
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 171 current paragraphs.
128 unchanged; 20 reworded; 20 added; 10 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 23 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Recent Activities
Current report
Acquisitions. During the six months ended June 30, 2026, we expanded our operations with the addition of six senior living communities. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction.
Current report
Effective May 13, 2026, CMS announced a six-month, nationwide moratorium on new Medicare enrollment applications for hospice providers and home health agencies (“HHA”); this applies to all initial Medicare enrollment applications and to certain changes in majority ownership of existing enrolled providers. The moratorium does not affect currently enrolled providers. This moratorium was announced in coordination with the Anti-Fraud Task Force focusing on initiatives to combat fraud, waste, and abuse. Also, in connection with such moratorium, CMS announced certain enforcement activity against hospices and HHAs (e.g., suspension of Medicare payments to certain providers). Notably, CMS announced heightened scrutiny of newly enrolled providers in Arizona, California, Georgia, Nevada, Ohio, Oklahoma, and Texas. Following CMS’s announcement of this moratorium, certain states have followed suit: Ohio announced a Medicaid enrollment moratorium on May 14, 2026, through November 14, 2026; Arkansas announced it will no longer accept applications for hospices effective May 13, 2026; and, Nevada announced a temporary pause on the issuance of new state licenses for hospices and HHAs on June 5, 2026. All of these reflect alignment with the federal enrollment moratorium.
Current report
On July 1, 2026, CMS published the CY 2027 Home Health Prospective Payment System proposed rule (“HHA Payment Proposed Rule”). The HHA Payment Proposed Rule includes several changes that, if finalized, could materially impact our home health offerings. Under the HHA Payment Proposed Rule, CMS proposes increasing the aggregate net payments to home health agencies by 2.4%, resulting in an aggregate estimated increase across all home health providers of $420 million in payments compared to CY 2026. The payment update percentage includes a payment increase of 2.1% or $370 million, and a 0.3% update to the fixed dollar loss ratio for outlier payments, representing a $50 million increase in funding.
Current report
The HHA Payment Proposed Rule also proposes several specific Home Health Quality Reporting Program (“QRP”) proposals. First, CMS proposed to shorten the OASIS assessment data submission and correction deadline to the fifteenth day of the second month after the end of the calendar quarter, beginning with the CY 2027 QRP. Second, CMS proposed aligning the OASIS APU reporting period, which currently begins each July 1 and ends the following June 30, with the calendar year. Third, CMS proposed regulatory changes to transition the QRP noncompliance reconsideration process from letter-based communications to a digital process using communications through CMS’s data submission system to expedite this process
Current report
The HHA Payment Proposed Rule also set forth significant changes to Medicare provider and supplier enrollment processes. If adopted, these provisions would apply to any Medicare provider or supplier, consistent with HHS and CMS’s stated priorities of combatting fraud, waste, and abuse. First, CMS proposed to expand the false-or-misleading information basis for denying or revoking enrollment in Medicare so that this lower standard for denial or revocation of enrollment shall be applicable to any and all of CMS’s and Medicare’s provider-enrollment-related forms or documentation. Second, CMS proposed new and expanded grounds for denying enrollment in Medicare, including but not limited to, an applicant’s failure to abide by certain change in majority ownership rules for hospices and HHAs, if that applicant’s licensure or participation ins a state or federal program for the payment of healthcare services had been suspended or revoked. Third, CMS proposed to make all Medicare enrollment revocations retroactive to the date the event or circumstance giving rise to revocation began, rather than applying only prospectively and commencing 30 days after CMS or its contractor mails notice of revocation to the provider.
Current report
Fourth, the HHA Payment Proposed Rule expands the reapplication-bar authority so that CMS may prohibit a prospective provider or supplier from enrolling in Medicare for up to ten years if its prior application is denied for certain reasons defined by regulation, such as noncompliance with enrollment requirements, misconduct, or unpaid claims or debt owed to Medicare. The proposed rule, if adopted, would significantly expand the grounds on which providers or suppliers are barred from re-applying for enrollment in Medicare after a prior enrollment denial, which currently are limited to denials based on false or misleading information. Finally, a series of other enrollment-related changes were proposed including a new general signage requirement, documentation requirements, and clarification of procedures for appeals and rebuttals concerning CMS’s enrollment decisions.
Current report
Gain on disposition of property and equipment, net. We recorded a gain of $1.0 million for insurance proceeds received in excess of the carrying values of related assets during the three months ended June 30, 2025.
Current report
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Current report
Revenue
Current report
Home health and hospice revenue increased $141.0 million, or 43.3%, during the six months ended June 30, 2026 compared to the same period in the prior year primarily due to an increase of 62.5% in home health admissions, inclusive of an increase in total Medicare home health admissions of 73.0%, an increase in hospice average daily census of 38.6%, and an increase of 32.5% in hospice admissions. Growth was also driven by the addition of thirty-eight home health and hospice operations between June 30, 2025 and June 30, 2026. Agencies acquired during calendar year 2025 and year-to-date June 30, 2026 drove an increase in revenue of $109.1 million, representing an increase of 33.5% compared to the same period in the prior year.
Current report
Senior living revenue increased $13.0 million, or 12.6%, for the six months ended June 30, 2026 compared to the same period in the prior year primarily due to an increase of 4.4% in average monthly revenue per occupied unit between June 30, 2025 and June 30, 2026. Growth was also driven by the addition of eight senior living communities between June 30, 2025 and June 30, 2026. Communities acquired during calendar year 2025 and year-to-date June 30, 2026 drove an increase in revenue of $6.0 million, representing an increase of 5.8% compared to the same period in the prior year.
Current report
Cost of Services
Current report
Consolidated cost of services increased $129.3 million, or 37.4%, during the six months ended June 30, 2026 compared to the same period in the prior year. Cost of services as a percentage of revenue for the six months ended June 30, 2026 increased by 90 basis points to 81.5% from 80.6% compared to the six months ended June 30, 2025.
Current report
Cost of services related to our Home Health and Hospice services segment increased $118.8 million, or 43.8%, compared to the same period in the prior year primarily due to the increased volume of services from the growth in admissions and average daily census. Cost of services as a percentage of revenue for the six months ended June 30, 2026 increased by 30 basis points compared to the six months ended June 30, 2025.
Current report
Cost of services related to our Senior Living services segment increased $10.5 million, or 14.0%, during the six months ended June 30, 2026 compared to the same period in the prior year primarily due to increased wages and benefits and acquisition activity. As a percentage of revenue, costs of service increased by 80 basis points during the six months ended June 30, 2026 when compared to the six months ended June 30, 2025 primarily due to higher cost patterns at newly acquired operations.
Current report
Rent—Cost of Services. Rent increased 12.2% from $23.6 million to $26.5 million during the six months ended June 30, 2026 compared to the same period in the prior year, primarily as a result of the new leases related to the acquired home health and hospice operations and senior living communities. As a percentage of revenue, rent—cost of services decreased 100 basis points when compared to the six months ended June 30, 2025.
Current report
General and Administrative Expense. Our general and administrative expense increased $8.9 million, or 27.3%, from $32.4 million to $41.3 million for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025. General and administrative expense as a percentage of revenue decreased 50 basis points from 7.6% to 7.1% during the period. The increase in general and administrative expense was due to an increase in payroll, incentive, and related benefits, along with increased professional services for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025.
Current report
Gain on disposition of property and equipment, net. We recorded a gain of $1.0 million for insurance proceeds received in excess of the carrying values of related assets during the six months ended June 30, 2025.
Current report
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Removed paragraphs (10)
Previous report
We experienced improvement in senior living revenue per occupied unit and occupancy during the three months ended March 31, 2026, compared to the same period in 2025. Despite year-over-year gains in revenue per occupied unit and occupancy, competition and inflation will continue to influence revenue growth in our senior living communities.
Previous report
On February 3, 2026, the Consolidated Appropriations Act of 2026 (“CAA 2026”) was passed, which further extended government funding through September 30, 2026. Of specific importance to our businesses are:
Previous report
•Telehealth Waivers: Since the COVID-19 pandemic, Congress has temporarily waived restrictions so Medicare beneficiaries can access telehealth services at home and outside of rural areas. Medicare recipients can now continue using telehealth under these relaxed rules, regardless of location. The waivers expired on September 30, 2025, but the CAA 2026 reinstated them retroactive to October 1, 2025, while extending them through December 31, 2027. Specifically, key waivers that were restored temporarily include:
Previous report
◦Lifting geographic limitations for medical telehealth services, allowing them to be provided nationwide, including in a person’s home such as an assisted living residence.
Previous report
◦Delaying the Medicare requirement for in-person visits for mental health services provided through telehealth or audio-only telecommunications technology.
Previous report
◦Permitting telehealth to be used for face-to-face encounters required for Hospice recertification purposes.
Previous report
•Extension of Funding for Quality Measure Endorsement, Input, and Selection: This extends such funding through September 30, 2026.
Previous report
•Extension of Funding for Medicare Hospice Surveys: This extends such funding through December 31, 2026.
Previous report
•Sequestration: This legislation prevents the triggering of statutory 4.0% Statutory Pay-As-You-Go Act of 2010 sequestration cuts to Medicare.
Previous report
CMS has issued guidance instructing Medicare Administrative Contractors to perform mass adjustments to any paid claims that are inconsistent with the above and instructing Practitioners to resubmit to CMS any returned claims that were previously determined not payable during the shutdown.
Reworded paragraphs (20)
Previous wording
•federal and state changes to, or delays receiving, reimbursement and other aspects of Medicaid and Medicare, including proposed Medicare reimbursement reductions in the Calendar Year 2026 Home Health Prospective Payment System Rate Update Final Rule and changes to Medicaid funding within the One Big Beautiful Bill Act;
Current wording
•federal and state changes to, or delays receiving, reimbursement and other aspects of Medicaid and Medicare, including proposed Medicare reimbursement reductions in the Calendar Year 2026 Home Health Prospective Payment System Rate Update Final Rule and changes to Medicaid funding and eligibility within the One Big Beautiful Bill Act;
Previous wording
We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. As of March 31, 2026, our home health and hospice business provided home health, hospice and home care services from 174 agencies operating across these 16 states, and our senior living business operated 63 senior living communities throughout seven states.
Current wording
We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. See Note 9, Equity Method Investments, for further details about our investment in these operations. As of June 30, 2026, our home health and hospice business provided home health, hospice and home care services from 175 agencies operating across these 16 states, and our senior living business operated 69 senior living communities throughout seven states.
Previous wording
On April 2, 2026, CMS issued the Calendar Year (“CY”) 2027 Hospice Wage Index and Payment Rate Update proposed rule (“Hospice Payment Proposed Rule”). The 2027 Hospice Payment Proposed Rule includes several changes that, if finalized, could materially impact reimbursement of hospice providers. The Hospice Payment Proposed Rule’s net payment update percentage is 2.4%, which is an estimated increase of $785 million in payments from fiscal year 2026 in the aggregate across all hospice providers. The payment update percentage is based on a 3.2% market basket percentage increase, reduced by a 0.8% productivity adjustment. In addition, the Hospice Payment Proposed Rule proposes to update the statutory aggregate cap of the total overall payments per patient that may be made to a hospice annually to $36,210.11 for fiscal year 2027, which is an increase of 2.4% from the 2026 fiscal year cap of $35,361.44.
Current wording
On July 30, 2026, CMS issued the Calendar Year (“CY”) 2027 Hospice Wage Index and Payment Rate Update proposed rule (“Hospice Payment Final Rule”). The Hospice Payment Final Rule’s net payment update percentage is 2.3%, which is an estimated increase of $755 million in payments from fiscal year 2026 in the aggregate across all hospice providers. The payment update percentage is based on a 3.2% market basket percentage increase, reduced by a 0.9% productivity adjustment. In addition, the Hospice Payment Final Rule updates the statutory aggregate cap of the total overall payments per patient that may be made to a hospice annually to $36,174.75 for fiscal year 2027, which is an increase of 2.3% from the 2026 fiscal year cap of $35,361.44.
Previous wording
The Hospice Payment Proposed Rule seeks to make a technical change extending hospice’s ability to use telehealth to conduct encounters that otherwise have to be conducted face-to-face through December 31, 2027, to align with the CAA 2026. Further, CMS is proposing to make the hospice election statement addendum, which was originally only provided to hospice patients upon request, mandatory for all hospice elections. In publishing the 2027 Hospice Payment Proposed Rule, CMS explained that this requirement will provide beneficiaries additional transparency regarding the items, services, and drugs not covered under Medicare’s hospice benefits, so that those beneficiaries can make appropriate treatment decisions. Finally, as part of the Hospice Quality Reporting Program, CMS is proposing to add an icon to the Medicare.gov Compare Tool that will identify hospices failing to submit any data or submitting less than the required quality data beginning in the 2028 fiscal year.
Current wording
The Hospice Payment Final Rule makes a technical change extending a hospice’s ability to use telehealth to conduct encounters that otherwise have to be conducted face-to-face through December 31, 2027, to align with the Consolidated Appropriations Act of 2026. Further, CMS has made the hospice election statement addendum, which was originally only provided to hospice patients upon request, mandatory for all hospice elections. In publishing the Hospice Payment Final Rule, CMS explained that this requirement will provide beneficiaries additional transparency regarding the items, services, and drugs not covered under Medicare’s hospice benefits, so that those beneficiaries can make appropriate treatment decisions. Finally, as part of the Hospice Quality Reporting Program, CMS will add an icon to the Medicare.gov Compare Tool that will identify hospices failing to submit any data or submitting less than the required quality data beginning in the 2028 fiscal year.
Previous wording
Home Health. We derive the majority of our home health revenue from Medicare and managed care. The Medicare payment is adjusted for differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation or authorizations acceptable to the payor, and other reasons unrelated to credit risk. Net service revenue is recognized in accordance with PDGM methodology. Under PDGM, Medicare provides agencies with payments for each 30-day period of care provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The PDGM payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of episodes; (e) changes to the acuity of the patient during the previous 30-day period of care; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. These variables are subject to periodic adjustments set by CMS regulations. For further detail regarding PDGM see the Government Regulation section of our 2025 Annual Report.
Current wording
Home Health. We derive the majority of our home health revenue from Medicare and managed care. The Medicare payment is adjusted for differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation or authorizations acceptable to the payor, and other reasons unrelated to credit risk. Net service revenue is recognized in accordance with PDGM methodology. Under PDGM, Medicare provides agencies with payments for each 30-day period of care provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The PDGM payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of payment periods; (e) changes to the acuity of the patient during the previous 30-day period of care; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. These variables are subject to periodic adjustments set by CMS regulations. For further detail regarding PDGM see the Government Regulation section of our 2025 Annual Report.
Previous wording
The following table presents our consolidated GAAP Financial measures for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents our consolidated GAAP Financial measures for the three and six months ended June 30, 2026 and 2025:
Previous wording
Our total revenue increased $75.5 million, or 36.0%, during the three months ended March 31, 2026. We experienced growth of $69.2 million from increased operational performance in our Home Health and Hospice segment from increased admissions and census, primarily driven by newly acquired agencies when compared to the three months ended March 31, 2025. The growth in our Senior Living segment resulted in an increase in revenue of $6.3 million driven by acquired senior living communities and an improved average rate per occupied room and improved occupancy.
Current wording
Our total revenue increased $78.5 million, or 35.8%, during the three months ended June 30, 2026. We experienced growth of $71.8 million from increased operational performance in our Home Health and Hospice segment from increased admissions and census, primarily driven by newly acquired agencies when compared to the three months ended June 30, 2025. The growth in our Senior Living segment resulted in an increase in revenue of $6.7 million driven by acquired senior living communities and an improved average rate per occupied room and improved occupancy.
Previous wording
Home health and hospice revenue increased $69.2 million, or 43.3%, for the three months ended March 31, 2026 compared to the prior year quarter. Revenue grew due to an increase in certain key performance indicators, including an increase of 62.7% in total home health admissions, an increase in total hospice admissions of 27.0%, and an increase in average daily hospice census of 37.0% during the three months ended March 31, 2026 compared to the prior year quarter. Growth was also driven by the addition of thirty-seven home health and hospice operations between March 31, 2025 and March 31, 2026. Agencies acquired during calendar year 2025 and year-to-date March 31, 2026 drove an increase in revenue of $53.3 million, representing a 33.3% increase compared to the prior year quarter.
Current wording
Home health and hospice revenue increased $71.8 million, or 43.2%, for the three months ended June 30, 2026 compared to the prior year quarter. Revenue grew due to an increase in certain key performance indicators, including an increase of 62.3% in total home health admissions, an increase in total hospice admissions of 38.4%, and an increase in average daily hospice census of 40.1% during the three months ended June 30, 2026 compared to the prior year quarter. Growth was also driven by the addition of thirty-eight home health and hospice operations between June 30, 2025 and June 30, 2026. Agencies acquired during calendar year 2025 and year-to-date June 30, 2026 drove an increase in revenue of $55.8 million, representing an increase of 33.6% compared to the prior year quarter.
Previous wording
Senior living revenue increased $6.3 million, or 12.6%, for the three months ended March 31, 2026 compared to the prior year quarter. Revenue grew due to a 3.8% increase in average monthly revenue per occupied unit and an increase of 10 basis points in occupancy between March 31, 2025 and March 31, 2026. Growth was also driven by the addition of three senior living communities between March 31, 2025 and March 31, 2026. Communities acquired during calendar year 2025 and year-to-date March 31, 2026 drove an increase in revenue of $2.7 million, representing a 5.4% increase compared to the prior year quarter.
Current wording
Senior living revenue increased $6.7 million, or 12.6%, for the three months ended June 30, 2026 compared to the prior year quarter. Revenue grew due to an increase of 3.9% in average monthly revenue per occupied unit and an increase of 10 basis points in occupancy between June 30, 2025 and June 30, 2026. Growth was also driven by the addition of eight senior living communities between June 30, 2025 and June 30, 2026. Communities acquired during calendar year 2025 and year-to-date June 30, 2026 drove an increase in revenue of $3.2 million, representing an increase of 6.0% compared to the prior year quarter.
Previous wording
Total consolidated cost of services increased $63.9 million, or 37.9%, for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. Cost of services as a percentage of revenue increased by 110 basis points from 80.4% to 81.5% for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025.
Current wording
Total consolidated cost of services increased $65.4 million, or 36.9%, for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025. Cost of services as a percentage of revenue increased by 60 basis points from 80.8% to 81.4% for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025.
Previous wording
Cost of services related to our Home Health and Hospice Services segment increased $59.3 million, or 44.6%, for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, primarily due to increased volume of services provided and transition costs related to acquisitions. Cost of services as a percentage of revenue for the three months ended March 31, 2026 increased 80 basis points when compared to the three months ended March 31, 2025.
Current wording
Cost of services related to our Home Health and Hospice Services segment increased $59.5 million, or 43.1%, for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025, primarily due to increased volume of services provided and transition costs related to acquisitions. Cost of services as a percentage of revenue for the three months ended June 30, 2026 decreased 10 basis points when compared to the three months ended June 30, 2025.
Previous wording
Cost of services related to our Senior Living Services segment increased $4.7 million, or 13.0%, for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, primarily due to increased wages and benefits and acquisition activity. As a percentage of revenue, costs of service increased by 20 basis points for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 primarily due to decreases in state relief funding.
Current wording
Cost of services related to our Senior Living Services segment increased $5.8 million, or 14.9%, for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025, primarily due to increased wages and benefits and acquisition activity. As a percentage of revenue, costs of service increased by 150 basis points for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025, primarily due to higher cost patterns at newly acquired operations.
Previous wording
Rent—Cost of Services. Rent expense increased 11.8% from $11.7 million to $13.1 million in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, primarily as a result of the new leases related to the acquired home health and hospice operations and senior living communities. Rent as a percentage of total revenue decreased 100 basis points from 5.6% for the three months ended March 31, 2025, compared to 4.6% for the three months ended March 31, 2026.
Current wording
Rent—Cost of Services. Rent expense increased 12.6% from $11.9 million to $13.4 million in the three months ended June 30, 2026 when compared to the three months ended June 30, 2025, primarily as a result of the new leases related to the acquired home health and hospice operations and senior living communities. Rent as a percentage of total revenue decreased 90 basis points from 5.4% for the three months ended June 30, 2025, compared to 4.5% for the three months ended June 30, 2026.
Previous wording
General and Administrative Expense. Our general and administrative expense increased $4.8 million, or 32.7%, from $14.8 million to $19.7 million for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. General and administrative expense as a percentage of revenue decreased 20 basis points from 7.1% to 6.9% during the period. The primary driver of the increase in general and administrative expense was due to an increase in payroll and related benefits and an increase in professional services related to acquisition activities for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025.
Current wording
General and Administrative Expense. Our general and administrative expense increased $4.0 million, or 22.8%, from $17.6 million to $21.6 million for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025. General and administrative expense as a percentage of revenue decreased 70 basis points from 8.0% to 7.3% during the period. The primary driver of the increase in general and administrative expense was due to an increase in payroll, incentives, and related benefits for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025.
Previous wording
Depreciation and Amortization. Depreciation and amortization expense increased $0.7 million, or 38.3%, from $1.9 million to $2.6 million for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The increase in depreciation and amortization was due to the increase in overall property and equipment, net balances driven in part by acquisition activity.
Current wording
Depreciation and Amortization. Depreciation and amortization expense increased $0.9 million, or 39.9%, from $2.2 million to $3.1 million for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025. The increase in depreciation and amortization was due to the increase in overall property and equipment, net balances driven in part by acquisition activity.
Previous wording
Provision for Income Taxes. We recorded income tax expense of $3.8 million and $2.9 million, or 26.9% and 25.1% of earnings before income taxes, for the three months ended March 31, 2026 and 2025, respectively. The increase in the effective tax rate is primarily attributable to higher state income taxes driven by changes in the geographic mix of earnings, net of the related federal tax benefit.
Current wording
Provision for Income Taxes. We recorded income tax expense of $3.9 million and $2.6 million, or 26.5% and 24.6% of earnings before income taxes, for the three months ended June 30, 2026 and 2025, respectively. The increase in the effective tax rate is primarily attributable to higher state income taxes driven by changes in the geographic mix of earnings, net of the associated federal tax benefit.
Previous wording
As of March 31, 2026, we had $4.9 million of cash and $174.6 million of available borrowing capacity on our Amended Revolving Credit Facility.
Current wording
As of June 30, 2026, we had $15.3 million of cash and $145.6 million of available borrowing capacity on our Amended Revolving Credit Facility.
Previous wording
Our net cash used in operating activities for the three months ended March 31, 2026 decreased by $17.8 million when compared to the three months ended March 31, 2025. The primary driver of this difference was an increase in net income of $1.8 million, an increase of $2.0 million in non-cash expenses, and an increase in cash flows from the change in operating assets and liabilities of $14.1 million, net.
Current wording
Our net cash provided by operating activities for the six months ended June 30, 2026 increased by $5.0 million when compared to the six months ended June 30, 2025. The primary driver of this difference was an increase in net income of $4.7 million, an increase of $6.0 million in non-cash adjustments, and a decrease in cash flows from the change in operating assets and liabilities of $5.7 million, net.
Previous wording
Our net cash used in investing activities for the three months ended March 31, 2026 decreased by $44.9 million compared to the three months ended March 31, 2025, primarily driven by a decrease in business acquisitions.
Current wording
Our net cash used in investing activities for the six months ended June 30, 2026 decreased by $15.1 million compared to the six months ended June 30, 2025, primarily driven by a decrease in business acquisitions.
Previous wording
Our net cash used in financing activities decreased by approximately $55.8 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily due to a net decrease in the balance on our line of credit during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The three months ended March 31, 2025 included a large draw on our Amended Revolving Credit Facility related to acquisition activity.
Current wording
Our net cash provided by financing activities decreased by approximately $12.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to a decrease in the net amount drawn on our line of credit used primarily to fund acquisition activity during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Our total revenue increased $154.0 million, or 35.9%, during the six months ended June 30, 2026. We experienced growth of $141.0 million from increased operational performance in our Home Health and Hospice segment from increased admissions and census, in part driven by newly acquired agencies when compared to the six months ended June 30, 2025. The growth in our Senior Living segment resulted in an increase in revenue of $13.0 million driven by acquired senior living communities and an improved average rate per occupied room.
Current report — wording carried from elsewhere
Depreciation and Amortization. Depreciation and amortization expense increased $1.6 million, or 39.2%, from $4.1 million to $5.7 million for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025. The increase in depreciation and amortization was due to the increase in overall property and equipment, net balances driven in part by acquisition activity.
Current report — wording carried from elsewhere
Provision for Income Taxes. We recorded income tax expense of $7.7 million and $5.5 million, or 26.7% and 24.8% of earnings before income taxes, for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective tax rate is primarily attributable to higher state income taxes driven by changes in the geographic mix of earnings, net of the associated federal tax benefit.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025