PACS Group, Inc 10-Q for FY2025 Q1

PACS Group, Inc. (PACS)

10-Q 2025-11-19 For: 2025-03-31

Added on April 08, 2026

About this 10-Q

PACS Group, Inc filed this 10-Q on November 19, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.28B; up 38.8% from $919.84M a year earlier
Net income: $28.47M; down 18.2% from net income of $34.82M a year earlier
Diluted EPS: $0.17; down 37.0% from $0.27 a year earlier

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Delaware		92-3144268
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	262 N. University Ave. Farmington, Utah 84025
	(Address of Principal Executive Offices) (Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PACS	The New York Stock Exchange


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
		Emerging growth company	o


	PACS GROUP, INC. AND SUBSIDIARIES
	QUARTERLY REPORT ON FORM 10-Q
	FOR THE THREE MONTHS ENDED MARCH 31, 2025
	TABLE OF CONTENTS

Part I - Financial Information		Pg.
Item 1. Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 202 5 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 202 5 and 2024	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 5 and 2024	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 3. Quantitative and Qualitative Disclosure About Market Risk		49
Item 4. Controls and Procedures		49

Part II - Other Information
Item 1. Legal Proceedings		52
Item 1A. Risk Factors		54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		54
Item 3. Defaults Upon Senior Securities		54
Item 4. Mine Safety Disclosures		54
Item 5. Other Information		54
Item 6. Exhibits		55
Signatures		56


PACS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for share and per share values)
	(unaudited)
	March 31,		December 31,
	2025		2024
ASSETS
Current Assets:
Cash and cash equivalents	$	287,512	$	157,674
Accounts receivable, net	680,676		641,775
Other receivables	61,025		74,746
Prepaid expenses and other current assets	52,191		64,066
Total Current Assets	1,081,404		938,261
Property and equipment, net	998,541		990,580
Operating lease right-of-use assets	3,075,507		2,994,519
Insurance subsidiary deposits and investments	67,910		66,258
Escrow funds	21,810		25,122
Goodwill and other indefinite-lived assets	67,061		67,061
Other assets	182,167		161,108
Total Assets	$	5,494,400	$	5,242,909


LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	198,617	$	175,062
Accrued payroll and benefits	210,215		146,177
Current operating lease liabilities	141,620		136,232
Current maturities of long-term debt	12,959		14,852
Current portion of accrued self-insurance liabilities	75,464		75,966
Line of credit	142,000		142,000
Refund liability	162,154		145,795
Other accrued expenses	164,384		142,348
Total Current Liabilities	1,107,413		978,432
Long-term operating lease liabilities	3,024,140		2,935,773
Long-term debt, less current maturities, net of deferred financing fees	249,089		250,984
Accrued self-insurance liabilities, less current portion	186,705		164,979
Other liabilities	170,780		197,050
Total Liabilities	$	4,738,127	$	4,527,218
Commitments and contingencies (Note 14)
Equity:
PACS Group, Inc. stockholders’ equity:
Common stock: $0.001 par value; 1,250,000,000 shares authorized, 155,177,511 shares issued and outstanding as of March 31, 2025 and December 31, 2024	155		155
Additional paid-in capital	603,565		591,363
Retained earnings	146,508		118,036
Total stockholders' equity	750,228		709,554
Noncontrolling interest in subsidiary	6,045		6,137
Total Equity	$	756,273	$	715,691
Total Liabilities and Equity	$	5,494,400	$	5,242,909

See accompanying notes to unaudited condensed consolidated financial statements.


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars in thousands, except for share and per share values)
	Three Months Ended March 31,
	2025		2024
			(as restated)
Revenue
Patient and resident service revenue	$	1,276,985	$	919,413

Other revenues	165		423
Total Revenue	$	1,277,150	$	919,836
Operating Expenses
Cost of services	1,023,791		735,992
Rent - cost of services	93,795		63,513
General and administrative expense	98,719		46,906
Depreciation and amortization	12,705		8,116
Total Operating Expenses	$	1,229,010	$	854,527
Operating income	48,140		65,309
Other (Expense) Income
Interest expense	(6,904)		(16,096)
Gain on lease termination	—		8,046
Other income, net	1,494		440
Total Other Expense, Net	$	(5,410)	$	(7,610)
Income before provision for income taxes	42,730		57,699
Provision for income taxes	14,350		22,880
Net Income	$	28,380	$	34,819
Less:
Net (loss) income attributable to noncontrolling interest	(92)		2
Net Income Attributable To PACS Group, Inc.	$	28,472	$	34,817
Net Income Per Share Attributable To PACS Group, Inc.
Basic	$	0.18	$	0.27
Diluted	$	0.17	$	0.27
Weighted-Average Common Shares Outstanding
Basic	155,177,511		128,723,386
Diluted	166,415,616		128,723,386
Other Comprehensive Income, Net of Tax:
Unrealized gain on available-for-sale debt securities, net of tax	$	—	$	201
Total other comprehensive income	$	—	$	201
Comprehensive Income	$	28,380	$	35,020
Less:
Comprehensive (loss) income attributable to noncontrolling interest	(92)		2
Comprehensive Income Attributable To PACS Group, Inc.	$	28,472	$	35,018





	Common Stock			Additional Paid-In Capital		Retained Earnings		Noncontrolling Interest		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance January 1, 2024	128,723,386	$	129	—		$	95,997	$	5,600	$	—	$	101,726
Dividends on common stock ($0.1358 per share)	—	—		—		(17,474)		—		—		(17,474)
Other comprehensive income	—	—		—		—		—		201		201
Net income attributable to noncontrolling interest	—	—		—		—		2		—		2
Net income attributable to PACS Group, Inc. (as restated)	—	—		—		34,817		—		—		34,817
Balance March 31, 2024 (as restated)	128,723,386	$	129	$	—	$	113,340	$	5,602	$	201	$	119,272


PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
	Three Months Ended March 31,
	2025		2024
			(as restated)
Cash flows from operating activities
Net income	$	28,380	$	34,819
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	12,705		8,116
Amortization of deferred financing fees	787		775
Stock-based compensation	12,202		—
Gain on insurance subsidiary deposits and investments	(1,652)		—
Deferred taxes	(19,580)		3,950
Noncash lease expense	12,703		6,863
Other noncash operating activities, net	298		223

Change in operating assets and liabilities
Accounts receivable, net	(38,901)		(63,992)
Other receivables	13,721		(13,755)
Prepaid expenses and other current assets	11,800		(5,009)
Other assets	(3,833)		(1,802)
Escrow funds	3,312		(5,807)
Operating lease liabilities	64		(8,234)
Accounts payable	20,606		13,938
Accrued payroll and benefits	61,446		51,577
Accrued self-insurance liabilities	21,224		10,399
Refund liability	16,359		3,947
Other accrued expenses	22,280		1,304
Other liabilities	(23,677)		21,439
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	150,244	$	58,751

Cash flows from investing activities
Investment in partnerships	$	—	$	(5,081)
Non-operating distributions from investment in partnership	1,301		673
Purchase of available-for-sale securities	—		(25,000)
Acquisition of facilities	—		(78,500)
Purchase of property and equipment	(17,717)		(10,761)

NET CASH USED IN INVESTING ACTIVITIES	$	(16,416)	$	(118,669)






Cash flows from financing activities
Borrowing on line of credit, net of deferred financing fees	$	—	$	117,000
Payments on line of credit	—		(100,000)
Borrowings of long-term debt, net of deferred financing fees	—		39,786
Payments on long-term debt	(4,065)		(4,823)

Dividends on common stock	—		(17,474)



NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES	$	(4,065)	$	34,489

Net change in cash	129,763		(25,429)
Cash, cash equivalents, and restricted cash - beginning of period	160,842		118,704
Cash, cash equivalents, and restricted cash - end of period	$	290,605	$	93,275

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	8,085	$	16,343
Income taxes	$	357	$	—

Non-cash financing and investing activity
Accrued capital expenditures	$	6,665	$	4,112
Assets acquired in operation expansions through settlement of notes receivable	$	—	$	500


PACS GROUP, INC. AND SUBSIDIARIES
RESTATED UNAUDITED CONDENSED COMBINED/CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for share and per share values)

	March 31, 2024
	As Previously Reported		Restatement Adjustments		Category Reference	As Restated
ASSETS
Current Assets:
Cash and cash equivalents	$	81,213	$	—		$	81,213
Accounts receivable, net	622,737		(10,938)		MPB	611,799
Other receivables	66,014		—			66,014
Prepaid expenses and other current assets	61,761		—			61,761
Total Current Assets	831,725		(10,938)			820,787
Property and equipment, net	660,157		6,745		LEA	666,902
Operating lease right-of-use assets	2,175,169		(1,614)		LEA	2,173,555
Insurance subsidiary deposits and investments	25,201		—			25,201
Escrow funds	21,456		—			21,456
Goodwill and other indefinite-lived assets	65,291		—			65,291
Other assets	87,329		—			87,329
Total Assets	$	3,866,328	$	(5,807)		$	3,860,521

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	157,000	$	—		$	157,000
Accrued payroll and benefits	143,811		—			143,811
Current operating lease liabilities	113,617		(113)		LEA	113,504
Current maturities of long-term debt	16,837		—			16,837
Current portion of accrued self-insurance liabilities	29,210		—			29,210
Refund liability	—		3,947		MPB	3,947
Other accrued expenses	71,073		—			71,073
Total Current Liabilities	531,548		3,834			535,382
Long-term operating lease liabilities	2,123,865		(1,562)		LEA	2,122,303
Accrued benefits, less current portion	6,738		—			6,738
Lines of credit	537,000		—			537,000
Long-term debt, less current maturities, net of deferred financing fees	230,855		—			230,855
Accrued self-insurance liabilities, less current portion	154,892		—			154,892
Other liabilities	147,837		6,242		MPB, LEA(1)	154,079
Total Liabilities	$	3,732,735	$	8,514		$	3,741,249
Commitments and contingencies
Equity:
PACS Group, Inc. stockholders’ equity:
Common stock - 64,361,693,000 shares authorized, $0.001 par value, 128,723,386 shares issued and outstanding as of March 31, 2024	129		—			129
Accumulated other comprehensive income	201		—			201
Retained earnings	127,661		(14,321)			113,340
Total stockholders' equity	127,991		(14,321)			113,670
Noncontrolling interest in subsidiary	5,602		—			5,602
Total Equity	$	133,593	$	(14,321)		$	119,272
Total Liabilities and Equity	$	3,866,328	$	(5,807)		$	3,860,521


	March 31, 2025		December 31, 2024
Cash and cash equivalents	$	287,512	$	157,674
Restricted cash (included in prepaid expenses and other current assets)	3,093		3,168
Total cash, cash equivalents, and restricted cash	$	290,605	$	160,842


	Three Months Ended March 31,
	2025		% of Revenue		2024		% of Revenue
					(as restated)		(as restated)
Medicare	$	443,476	34.7	%	$	318,548	34.6	%
Medicaid	515,004		40.3	%	362,453		39.4	%
Managed care	238,172		18.7	%	184,483		20.1	%
Private and other	80,333		6.3	%	53,929		5.9	%
Total patient and resident service revenue	$	1,276,985	100.0	%	$	919,413	100.0	%


	March 31, 2025		December 31, 2024
Buildings and improvements	$	660,533	$	654,975
Leasehold improvements	83,298		79,440
Furniture, fixtures, and other	111,656		107,896
Construction in process	31,154		23,952
Land	84,774		84,774
Finance lease right-of-use assets	145,262		145,262
	1,116,677		1,096,299
Less: accumulated depreciation and amortization	(118,136)		(105,719)
Property and equipment, net	$	998,541	$	990,580


	March 31, 2025		December 31, 2024
HUD-insured mortgage loans	$	251,927	$	252,913
Other non-HUD mortgage loans and promissory notes	14,162		16,997
Less: current maturities	(12,959)		(14,852)
Less: deferred financing fees, net	(4,041)		(4,074)
Total	$	249,089	$	250,984


	As of March 31, 2025
Weighted-average remaining lease term (years)
Operating leases	14
Finance leases	6
Weighted-average discount rate
Operating leases	6.4	%
Finance leases	6.1	%


	Finance Leases		Operating Leases		Total
2025 (remainder)	$	27,354	$	250,364	$	277,718
2026	92,513		338,965		431,478
2027	19,132		340,271		359,403
2028	1,949		344,168		346,117
2029	1,588		346,869		348,457
2030	1,228		352,187		353,415
Thereafter	53,506		2,932,199		2,985,705
Total lease payments	$	197,270	$	4,905,023	$	5,102,293
Less: present value discount	(50,868)		(1,739,263)		(1,790,131)
Present value of lease liabilities	$	146,402	$	3,165,760	$	3,312,162


	Non-Vested Restricted Stock Unit Awards	Weighted Average Grant Date Fair Value
Non-vested at January 1, 2025	11,561,818	$	21.01
Granted	1,962,425	13.72
Vested	—	—
Forfeited	(440,973)	20.69
Non-vested at March 31, 2025	13,083,270	$	19.92


	Leased		Owned		Total
	Facilities	Beds/Units	Facilities	Beds/Units	Facilities	Beds/Units
Alaska	1	102	—	—	1	102
Arizona	10	1,352	—	—	10	1,352
California	113	13,095	26	2,934	139	16,029
Colorado	19	2,210	1	242	20	2,452
Idaho	6	407	—	—	6	407
Kansas	3	378	—	—	3	378
Kentucky	5	596	2	340	7	936
Missouri	2	190	3	424	5	614
Montana	1	64	—	—	1	64
Nevada	6	411	2	165	8	576
Ohio	24	2,733	—	—	24	2,733
Oregon	21	1,514	—	—	21	1,514
Pennsylvania	4	597	4	602	8	1,199
South Carolina	21	2,354	4	488	25	2,842
Tennessee	12	1,299	—	—	12	1,299
Texas	3	290	2	246	5	536
Washington	20	1,520	—	—	20	1,520
	271	29,112	44	5,441	315	34,553


	Total Facility Results
	Three Months Ended March 31,
	2025			2024			Change		% Change

				(as restated)
	(Dollars in thousands)
Skilled nursing services revenue	$	1,254,075		$	912,575		$	341,500	37.4	%
Skilled mix by revenue	50.0		%	52.0		%			(2.0)	%
Skilled mix by nursing patient days	29.6		%	29.8		%			(0.2)	%
Occupancy for skilled nursing services:
Available patient days	2,898,481			2,164,061			734,420		33.9	%
Actual patient days	2,585,719			1,970,602			615,117		31.2	%
Occupancy rate (operational beds)	89.2		%	91.1		%			(1.9)	%
Number of facilities at period end	288			212			76		35.8	%
Number of operational beds at period end	32,309			24,315			7,994		32.9	%


	Mature Facility Results
	Three Months Ended March 31,
	2025			2024			Change		% Change

				(as restated)
	(Dollars in thousands)
Skilled nursing services revenue	$	692,159		$	282,038		$	410,121	145.4	%
Skilled mix by revenue	56.9		%	55.6		%			1.3	%
Skilled mix by nursing patient days	34.1		%	32.5		%			1.6	%
Occupancy for skilled nursing services:
Available patient days	1,363,226			634,543			728,683		114.8	%
Actual patient days	1,301,707			600,003			701,704		117.0	%
Occupancy rate (operational beds)	95.5		%	94.6		%			0.9	%
Number of facilities at period end	139			65			74		113.8	%
Number of operational beds at period end	15,223			6,973			8,250		118.3	%


	Ramping Facility Results
	Three Months Ended March 31,
	2025			2024			Change		% Change

				(as restated)
	(Dollars in thousands)
Skilled nursing services revenue	$	246,770		$	397,861		$	(151,091)	(38.0)	%
Skilled mix by revenue	44.0		%	57.6		%			(13.6)	%
Skilled mix by nursing patient days	24.2		%	34.1		%			(9.9)	%
Occupancy for skilled nursing services:
Available patient days	612,325			825,990			(213,665)		(25.9)	%
Actual patient days	529,172			784,834			(255,662)		(32.6)	%
Occupancy rate (operational beds)	86.4		%	95.0		%			(8.6)	%
Number of facilities at period end	58			84			(26)		(31.0)	%
Number of operational beds at period end	7,174			9,380			(2,206)		(23.5)	%


	New Facility Results
	Three Months Ended March 31,
	2025			2024			Change		% Change

				(as restated)
	(Dollars in thousands)
Skilled nursing services revenue	$	315,146		$	232,676		$	82,470	35.4	%
Skilled mix by revenue	39.9		%	38.4		%			1.5	%
Skilled mix by nursing patient days	25.5		%	21.4		%			4.1	%
Occupancy for skilled nursing services:
Available patient days	922,930			703,528			219,402		31.2	%
Actual patient days	754,840			585,765			169,075		28.9	%
Occupancy rate (operational beds)	81.8		%	83.3		%			(1.5)	%
Number of facilities at period end	91			63			28		44.4	%
Number of operational beds at period end	9,912			7,962			1,950		24.5	%


	Three Months Ended March 31,
Skilled mix by revenue	Mature				Ramping				New				Total
	2025		2024		2025		2024		2025		2024		2025		2024
Medicare	41.3	%	37.6	%	32.6	%	39.2	%	21.2	%	22.1	%	34.4	%	34.3	%
Managed care	15.6		18.0		11.4		18.4		18.7		16.3		15.6		17.7
Skilled mix	56.9		55.6		44.0		57.6		39.9		38.4		50.0		52.0
Medicaid	34.9		37.8		47.3		35.2		50.7		52.7		41.4		40.5
Private and other	8.2		6.6		8.7		7.2		9.4		8.9		8.6		7.5
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


	Three Months Ended March 31,
Average daily rate	Mature				Ramping				New				Total
	2025		2024		2025		2024		2025		2024		2025		2024
Medicare	$	981.74	$	937.66	$	983.51	$	968.59	$	771.85	$	917.80	$	941.86	$	949.23
Managed care	679.15		601.48		621.39		660.85		569.38		558.19		633.00		614.99
Total for skilled patient payors (1)	875.06		794.16		854.19		843.08		661.40		721.10		817.72		800.91
Medicaid	319.31		295.05		334.65		308.88		335.35		308.60		327.64		304.70
Private and other	488.77		380.32		444.93		408.15		379.67		354.26		444.41		382.61
Total (2)	$	523.52	$	464.08	$	470.76	$	500.21	$	423.17	$	401.37	$	483.43	$	459.83


	PACS GROUP, INC.

Date: November 19, 2025	By:	/s/ Jason Murray
		Jason Murray
		Director, Chairman and Chief Executive Officer
		(Principal Executive Officer)


Date: November 19, 2025	By:	/s/ Mark Hancock
		Mark Hancock
		Director, Executive Vice Chairman, and Interim Chief Financial Officer
		(Principal Financial Officer)