The EnsignENSG

Key highlights

• Full year guidance raised: Management increased its 2026 revenue outlook to a range of $5.87 billion to $5.92 billion and its adjusted profit forecast to $7.75 to $7.85 per share. The new profit midpoint is 18.7% higher than last year, showing strong confidence in the company's ability to integrate new facilities while growing its existing ones.
• Aggressive acquisition pace: The company added 20 new operations this quarter, all of which included the purchase of the underlying real estate. This brings the total number of owned real estate assets to 183, up from 155 a year ago, as the company continues to favor owning its buildings to control costs and build long-term equity.
• Occupancy rates climbing: For facilities owned for more than three years, occupancy reached 84.1%, which is an increase of 2.7% over the same period last year. Higher occupancy is a key driver of profit because the company can spread its fixed costs, like staff and utilities, across a larger number of residents.
• Skilled mix improving: The portion of revenue coming from higher-need patients, known as skilled mix, rose 10.1% in older facilities. This shift toward specialized care led to a 5% increase in Medicare days, which pays better rates than standard long-term care and helps boost overall margins.
• Staffing stability gains: Turnover for facility administrators was 46% lower than the industry average in the states where the company operates. Keeping leaders in place is vital for long-term owners because it leads to better clinical results and more consistent financial performance across the 398 total facilities.

Our take: This was an excellent quarter that combined disciplined expansion with better performance at existing locations. Raising full year guidance so significantly while successfully absorbing 20 new properties shows the company is operating at a high level. The steady climb in occupancy to 84.1% reinforces the long-term case for this business as a premier operator in senior care.