How did PACS outperform forecasts in Q2 2024?

PACS Group's outperformance in Q2 2024 can be attributed to several key factors:

1. Strong Revenue Growth: PACS Group reported consolidated GAAP revenue of $934.72 million for Q1 2024, marking a significant year-over-year increase of 31.9%. This robust revenue growth surpasses market expectations, indicating a strong operational performance and market demand for PACS's services.
2. Occupancy Rates and Facility Expansion: The company's facilities maintained high occupancy rates, with ramping and mature facilities reaching 93.9% and 94.5% respectively, and an overall occupancy of 90.5%, surpassing the industry average. Additionally, PACS added 10 operating facilities, including 1,334 and 174 skilled nursing and assisted living beds, respectively, which contributed to the revenue outperformance.
3. Price Rate Increases: Average Medicare and Medicaid daily rates increased by 11.0% and 5.3%, respectively, for the three months ended March 31, 2024, as compared to the prior year quarter. These rate increases likely had a positive impact on PACS's revenue, further contributing to the outperformance.
4. Financial Metrics: PACS reported net income of $49.1 million, an increase of 30.7% over the prior year quarter, and GAAP EPS of $0.38, which beat market expectations. The company's adjusted EBITDA and adjusted EBITDAR also showed strong performance, indicating efficient operations and profitability.

In conclusion, PACS's outperformance in Q2 2024 can be attributed to its strong revenue growth, high occupancy rates, facility expansion, price rate increases, and robust financial metrics. These factors combined to exceed market forecasts and demonstrate PACS's solid financial performance and market position.