PACS 2025 Q3 Earnings Net Income Surges 222.8% Amid Strong Revenue Growth

PACS Group, Inc. (NYSE:PACS) delivered robust third-quarter 2025 results, exceeding expectations with a 31.2% revenue increase and a 222.8% surge in net income. The company also raised full-year guidance, signaling confidence in sustained momentum following a completed financial restatement and strengthened internal controls.

Revenue

PACS’s total revenue soared to $1.34 billion in Q3 2025, a 31.2% increase from $1.02 billion in Q3 2024. Patient and resident service revenue, which accounts for the vast majority of the company’s income, reached $1.34 billion, while other revenue streams contributed $265,000. The performance underscores the company’s dominance in skilled nursing services, with mature facilities reporting 94.8% occupancy, significantly outpacing industry averages.

Earnings/Net Income

The company’s earnings per share (EPS) surged 230.0% to $0.33 in Q3 2025 from $0.10 in Q3 2024, while net income ballooned to $52.33 million, a 222.8% increase from $16.21 million. This dramatic improvement reflects operational efficiency and strong demand for post-acute care services, positioning PACS as a resilient player in a challenging healthcare sector.

Post-Earnings Price Action Review

The strategy of buying PACS shares after a revenue drop quarter-over-quarter on the financial report release date and holding for 30 days showed mixed performance over the past three years. While the strategy yielded brief gains, such as a 16.63% rise in Q3 2025, it also incurred significant volatility, with a cumulative return of -100% over three years. Frequent and substantial losses in subsequent months rendered the approach unprofitable for long-term investors.

CEO Commentary

Jason Murray, CEO & Chairman, emphasized PACS’s operational and clinical progress, highlighting record revenue and adjusted EBITDA in the first nine months of 2025. He cited strengthened internal controls post-restatement and a renewed focus on transparency, accountability, and governance. Murray underscored the company’s locally led, centrally supported model, which drives clinical excellence and operational consistency, enabling high occupancy (89% total, 95% mature facilities). Strategic priorities include disciplined acquisitions, leadership development (36 AITs in training), and expanding in states with robust Medicaid reimbursement. He expressed optimism about the aging demographic driving demand for post-acute care and PACS’s ability to transform underperforming facilities, citing the Colorado turnaround as a case study. The tone was confident, with Murray stating, “We’re building on strength, executing with urgency, and driving toward being the best in our sector.”

Guidance

Mark Hancock, Interim CFO, provided 2025 full-year guidance: revenue of $5.25–$5.35 billion (midpoint implies 30% YoY growth) and adjusted EBITDA of $480–$490 million. He noted year-to-date 2025 revenue of $3.9 billion (36% YoY growth) and diluted EPS of $0.80. Qualitative expectations included continued integration of 2024 acquisitions, disciplined M&A (7 facilities YTD 2025, targeting historical averages of ~20 annually), and real estate ownership expansion (now covering ~50% of facilities). Hancock emphasized momentum in occupancy and skilled mix improvements in new/ramping facilities, with mature facilities sustaining 95% occupancy and 34% skilled mix.

Additional News

1. M&A Activity: PACS expanded its footprint by acquiring 32 skilled nursing and 21 assisted living facilities in 2024, adding 2,511 skilled nursing beds and 1,334 assisted living beds. This acquisition expanded operations into eight states, five of which were new to its portfolio.

2. C-Level Changes: Derick Apt resigned as CFO in 2025 following a misconduct probe, prompting interim leadership under Mark Hancock.

3. SEC Compliance: The company completed a financial restatement for Q2 2024 and resolved audit committee investigations, restoring compliance with regulatory requirements and rebuilding investor trust.