The Ensign Group (NASDAQ:ENSG) raised its 2026 earnings and revenue outlook after reporting second-quarter gains in revenue, earnings and occupancy, while highlighting continued acquisition activity and clinical quality measures across its skilled nursing portfolio.
For the second quarter, the company reported GAAP diluted earnings per share of $1.68, up 16.7% from a year earlier. Adjusted diluted earnings per share increased 20.8% to $1.92. Consolidated GAAP revenue and adjusted revenue each rose 17.3% to $1.4 billion, while GAAP net income increased 18.2% to $99.7 million. Adjusted net income grew 22.5% to $114.3 million.
Higher 2026 Outlook
Port said the midpoint of the revised earnings outlook would represent growth of 18.7% over 2025 and 41.8% over 2024. CFO Suzanne Snapper said the guidance incorporates acquisitions completed and expected to close during the third quarter, as well as management’s expectations for reimbursement rates.
Snapper said the company ended June with $262.3 million in cash and cash equivalents and generated $272.1 million in operating cash flow. Ensign spent more than $460 million during the first half of 2026 on its growth strategy, while its lease-adjusted net debt-to-EBITDA ratio stood at 2 times. The company had more than $592 million available under its credit line, giving it more than $850 million of available liquidity when combined with cash on hand.
The company paid a quarterly cash dividend of 6.5 cents per common share and said it has raised its annual dividend for 23 consecutive years.
Occupancy, Skilled Mix and Quality Measures
Port said same-store occupancy was 84.1% in the second quarter, while transitioning facilities had occupancy of 84.7%. Combined same-store and transitioning-facility revenue increased 10.7% year over year, while days increased 6.7%.
Managed care revenue rose 6.1% for same-store operations and 16.2% for transitioning operations. Skilled-mix days increased 6.2% and 9.4%, respectively, from the second quarter of 2025.
The company said more than 80% of its skilled nursing operations had four- or five-star CMS quality-measure ratings at quarter-end. Port said Ensign’s same-store facilities recorded quality-measure ratings 23% above averages in the states where it operates. He also said Cycle 1 inspection results were 18% better than state averages and 26% better than county averages.
According to Port, Ensign’s rehospitalization rates and long-stay emergency department visit rates were better than national averages by 15% and 24%, respectively. The company said it had no CMS Special Focus Facilities among its affiliated operations.
During the question-and-answer session, President and COO Spencer Burton said CMS methodology changes to five-star ratings are expected to affect the company, but preliminary analysis suggests the impact could be less severe than industry expectations. Burton said improvements in other rating areas may offset some changes, and the net effect on Ensign’s overall five-star ratings “is actually looking to not be that much.”
Reserve Turnaround Highlights Clinical Model
Burton highlighted The Reserve, a 135-bed skilled nursing operation in the Charleston, South Carolina, area that Ensign acquired in 2023 while it was under state conservatorship and designated as a CMS Special Focus Facility.
Prior to the transition, the facility had received a Cycle 1 survey score of 500 points, which Burton said was more than 900% worse than the South Carolina average. The operation had low occupancy, staffing shortages, contract labor use and limited ability to accept admissions.
Burton said The Reserve exited the Special Focus Facility program six months after the acquisition and has since recorded three consecutive deficiency-free health inspections. It now has a five-star CMS overall rating and five-star quality-measure rating, according to the company.
The facility reached 100% occupancy during the second quarter and averaged 92% occupancy for the period, compared with 83% in the prior-year quarter. Skilled days rose 39%, managed care revenue increased 69%, total revenue rose 18% and EBIT increased 97% from a year earlier, Burton said.
Acquisitions Expand Texas Presence
Chief Investment Officer Chad Keetch said Ensign added 20 operations during and after the quarter, all including real estate assets. The purchases brought the number of operations acquired during 2025 and since to 71.
The latest additions included 19 operations in Texas and one in Iowa, adding 2,392 skilled nursing beds, 100 senior living beds and 55 independent living beds. Keetch said recently acquired operations now account for 18% of the company’s portfolio.
He described the Texas properties as newly constructed, high-quality facilities in growing metropolitan markets, but said they generally have below-average occupancy for their geographies and face clinical and operational challenges. The facilities are not currently accretive, Port said, and may take time to generate expected returns.
Keetch said the company reviewed more than 350 acquisition opportunities within its markets so far this year and completed 25 transactions. He said leadership planning remains a central consideration in acquisition decisions, with Ensign sometimes retaining existing administrators and other times installing experienced leaders or graduates of its administrator-in-training program.
Standard Bearer Healthcare REIT added 23 assets during and after the quarter, including two senior living communities in Wisconsin and a memory-care facility in California that will be operated by third parties under triple-net leases. The REIT owned 177 properties at quarter-end, including 140 leased to Ensign-affiliated operators and 38 leased to third-party operators.
Standard Bearer generated $44.1 million in rental revenue during the quarter, including $37.8 million from Ensign-affiliated operations, and reported $24.7 million in funds from operations. Its EBITDA-to-rent coverage ratio was 2.4 times at quarter-end.
About The Ensign Group (NASDAQ:ENSG)
The Ensign Group, Inc is a diversified provider of post-acute healthcare services in the United States, operating a network of skilled nursing, assisted living, independent living, home health and hospice care centers. The company’s model emphasizes integrated care by employing multidisciplinary teams—including nursing staff, therapists and physicians—to deliver personalized rehabilitation and long-term care services for seniors and other patients recovering from injury, illness or surgery.
Through its owned and managed centers, The Ensign Group offers a broad spectrum of rehabilitation services such as physical, occupational and speech therapy.
