Pennant Group, Inc. (PNTG)
SIC breadcrumb: Services > SIC Major Group 80 > SIC 8000 Services-Health Services
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1766400. Latest filing source: 0001766400-26-000014.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 947,705,000 | USD | 2025 | 2026-02-26 |
| Net income | 29,578,000 | USD | 2025 | 2026-02-26 |
| Assets | 968,179,000 | USD | 2025 | 2026-02-26 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001766400.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 250,991,000 | 286,058,000 | 338,531,000 | 390,953,000 | 439,694,000 | 473,241,000 | 544,891,000 | 695,240,000 | 947,705,000 | |
| Net income | 9,867,000 | 15,684,000 | 2,546,000 | 15,744,000 | 2,696,000 | 6,643,000 | 13,379,000 | 22,559,000 | 29,578,000 | |
| Operating income | 15,402,000 | 20,631,000 | 5,670,000 | 18,917,000 | 4,695,000 | 12,739,000 | 25,169,000 | 38,116,000 | 51,886,000 | |
| Diluted EPS | 0.36 | 0.58 | 0.11 | 0.52 | 0.09 | 0.22 | 0.44 | 0.70 | 0.84 | |
| Operating cash flow | 17,250,000 | 23,275,000 | 9,554,000 | 50,204,000 | -18,223,000 | 9,044,000 | 33,090,000 | 39,298,000 | 48,294,000 | |
| Capital expenditures | 3,133,000 | 3,603,000 | 6,714,000 | 7,253,000 | 6,303,000 | 14,170,000 | 8,105,000 | 8,992,000 | 12,039,000 | |
| Assets | 98,151,000 | 447,750,000 | 506,976,000 | 530,297,000 | 512,119,000 | 539,691,000 | 679,521,000 | 968,179,000 | ||
| Liabilities | 32,863,000 | 376,639,000 | 405,804,000 | 416,053,000 | 386,462,000 | 394,176,000 | 367,556,000 | 593,927,000 | ||
| Stockholders' equity | 48,360,000 | 59,916,000 | 65,288,000 | 71,111,000 | 101,172,000 | 114,244,000 | 125,657,000 | 145,515,000 | 311,965,000 | 374,252,000 |
| Free cash flow | 14,117,000 | 19,672,000 | 2,840,000 | 42,951,000 | -24,526,000 | -5,126,000 | 24,985,000 | 30,306,000 | 36,255,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 3.93% | 5.48% | 0.75% | 4.03% | 0.61% | 1.40% | 2.46% | 3.24% | 3.12% | |
| Operating margin | 6.14% | 7.21% | 1.67% | 4.84% | 1.07% | 2.69% | 4.62% | 5.48% | 5.47% | |
| Return on equity | 16.47% | 24.02% | 3.58% | 15.56% | 2.36% | 5.29% | 9.19% | 7.23% | 7.90% | |
| Return on assets | 15.98% | 0.57% | 3.11% | 0.51% | 1.30% | 2.48% | 3.32% | 3.06% | ||
| Liabilities / equity | 0.50 | 5.30 | 4.01 | 3.64 | 3.08 | 2.71 | 1.18 | 1.59 | ||
| Current ratio | 0.99 | 0.76 | 0.67 | 1.06 | 1.05 | 1.12 | 1.21 | 1.14 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001766400.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | -0.09 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.16 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.06 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 1,850,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 132,281,000 | 0.09 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 2,797,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 140,192,000 | 0.15 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 145,954,000 | 4,349,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 156,915,000 | 4,906,000 | 0.16 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | 4,906,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 168,745,000 | 0.18 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | 5,690,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 180,688,000 | 0.20 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 188,892,000 | 5,758,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 209,842,000 | 7,775,000 | 0.22 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 7,775,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 219,501,000 | 0.20 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | 7,085,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 229,039,000 | 0.17 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 289,323,000 | 8,637,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 285,364,000 | 8,519,000 | 0.24 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001766400-26-000054.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis in conjunction with the Interim Financial Statements and the related notes thereto contained in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”). The information contained in this Quarterly Report is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), which discusses our business and related risks in greater detail, as well as subsequent reports we may file from time to time on Form 10-K, Form 10-Q and Form 8-K, for additional information. The section entitled “Risk Factors” filed within our 2025 Annual Report describes some of the important risk factors that may affect our business, financial condition, results of operations and/or liquidity. You should carefully consider those risks, in addition to the other information in this Quarterly Report and in our other filings with the SEC, before deciding to purchase, hold or sell our common stock. Special Note About Forward-Looking Statements This Quarterly Report contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “might,” “will,” “should,” “could,” “seeks,” “approximately,” “goals,” “future,” “projects,” “predicts,” “guidance,” “target,” “intends,” “plans,” “estimates,” “anticipates,” the negative version of these words or other comparable words. Forward-looking statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, the effects of competition and the effects of future legislation or regulations and other non-historical statements. The risk factors discussed in this Quarterly Report and the 2025 Annual Report under the heading “Risk Factors,” could cause our results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: •federal and state changes to, or delays receiving, reimbursement and other aspects of Medicaid and Medicare, including proposed Medicare reimbursement reductions in the Calendar Year 2026 Home Health Prospective Payment System Rate Update Final Rule and changes to Medicaid funding within the One Big Beautiful Bill Act; •changes in, and compliance with, the laws and regulations affecting the U.S. healthcare industry, and changes based on the outcomes of the 2026 midterm elections and state level elections that may affect how these laws are enacted and enforced in the future; •proposed changes to payment models and reimbursement amounts within the Medicare and Medicaid fee schedules for future calendar years, including potentially minimal increases in Medicare Advantage rates and payments in the future; •future cost containment measures undertaken by payors; •government reviews, audits and investigations of our business; •potential additional regulation affecting the transparency, ownership, operating standards, conditions of licensure or participation in certain payment programs, and staffing of businesses in our industry; •increased competition and increased cost of acquisition or retention for, or a shortage of, skilled personnel; •achievement and maintenance of competitive quality of care ratings and referrals from referral sources; •changes in, and compliance with, state and federal employment, fair housing, safety, licensing and other laws; •competition from other healthcare providers, federal and state efforts to regulate or deregulate the healthcare services industry, including through staffing levels and requirements, or the construction or expansion of the number of home health, hospice or senior living operations; •actions of labor unions, including strikes, work stoppages, unfair labor practices claims, or related labor activity; •costs associated with litigation or any future litigation settlements; •the leases of our affiliated senior living communities; 23 Table of Contents •inability to complete future acquisitions at attractive prices or at all, and failure to successfully or efficiently integrate new acquisitions into our existing operations and operating subsidiaries; •general economic conditions, including a housing downturn, which could affect seniors’ ability to afford resident fees, or inflation and increasing interest rates, which raise the costs of goods and borrowing capital, which may affect the delivery and affordability of our services; •security breaches and other cyber security incidents; and •the performance of the financial and credit markets and uncertainties related to our ability to obtain financing or the terms of such financing. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any forward-looking statements in this Quarterly Report. Although we may from time to time voluntarily update our prior forward-looking statements, we disclaim any commitment to do so except as required by applicable securities laws. Overview We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. As of March 31, 2026, our home health and hospice business provided home health, hospice and home care services from 174 agencies operating across these 16 states, and our senior living business operated 63 senior living communities throughout seven states. The following table summarizes our affiliated home health and hospice agencies and senior living communities as of: December 31, March 31, 2018 2019 2020 2021 2022 2023 2024 2025 2026 Home health and hospice agencies 54 63 76 88 95 111 123 172 174 Senior living communities 50 52 54 54 49 51 57 63 63 Senior living units 3,820 3,963 4,127 4,127 3,500 3,588 3,960 4,428 4,428 Total number of home health, hospice, and senior living operations 104 115 130 142 144 162 180 235 237 Trends We experienced improvement in senior living revenue per occupied unit and occupancy during the three months ended March 31, 2026, compared to the same period in 2025. Despite year-over-year gains in revenue per occupied unit and occupancy, competition and inflation will continue to influence revenue growth in our senior living communities. When we acquire turnaround or start-up operations, we expect that our combined metrics may be impacted. We expect these metrics to vary from period to period based upon the maturity of the operations within our portfolio. We have generally experienced lower occupancy rates and higher costs at our senior living communities and lower census and higher costs at our home health and hospice agencies for recently acquired operations; as a result, we generally anticipate lower and/or fluctuating consolidated and segment margins during years of acquisition growth. 24 Table of Contents Government Regulation We have disclosed under the heading “Government Regulation” in the 2025 Annual Report a summary of regulations that we believe materially affect our business, financial condition or results of operations. Since the time of the filing of the 2025 Annual Report, the following regulations have been updated. On February 3, 2026, the Consolidated Appropriations Act of 2026 (“CAA 2026”) was passed, which further extended government funding through September 30, 2026. Of specific importance to our businesses are: •Telehealth Waivers: Since the COVID-19 pandemic, Congress has temporarily waived restrictions so Medicare beneficiaries can access telehealth services at home and outside of rural areas. Medicare recipients can now continue using telehealth under these relaxed rules, regardless of location. The waivers expired on September 30, 2025, but the CAA 2026 reinstated them retroactive to October 1, 2025, while extending them through December 31, 2027. Specifically, key waivers that were restored temporarily include: ◦Lifting geographic limitations for medical telehealth services, allowing them to be provided nationwide, including in a person’s home such as an assisted living residence. ◦Delaying the Medicare requirement for in-person visits for mental health services provided through telehealth or audio-only telecommunications technology. ◦Permitting telehealth to be used for face-to-face encounters required for Hospice recertification purposes. •Extension of Funding for Quality Measure Endorsement, Input, and Selection: This extends such funding through September 30, 2026. •Extension of Funding for Medicare Hospice Surveys: This extends such funding through December 31, 2026. •Sequestration: This legislation prevents the triggering of statutory 4.0% Statutory Pay-As-You-Go Act of 2010 sequestration cuts to Medicare. CMS has issued guidance instructing Medicare Administrative Contractors to perform mass adjustments to any paid claims that are inconsistent with the above and instructing Practitioners to resubmit to CMS any returned claims that were previously determined not payable during the shutdown. On April 2, 2026, CMS issued the Calendar Year (“CY”) 2027 Hospice Wage Index and Payment Rate Update proposed rule (“Hospice Payment Proposed Rule”). The 2027 Hospice Payment Proposed Rule includes several changes that, if finalized, could materially impact reimbursement of hospice providers. The Hospice Payment Proposed Rule’s net payment update percentage is 2.4%, which is an estimated increase of $785 million in payments from fiscal year 2026 in the aggregate across all hospice providers. The payment update percentage is based on a 3.2% market basket percentage increase, reduced by a 0.8% productivity adjustment. In addition, the Hospice Payment Proposed Rule proposes to update the statutory aggregate cap of the total overall payments per patient that may be made to a hospice annually to $36,210.11 for fiscal year 2027, which is an increase of 2.4% from the 2026 fiscal year cap of $35,361.44. The Hospice Payment Proposed Rule seeks to make a technical change extending hospice’s ability to use telehealth to conduct encounters that otherwise have to be conducted face-to-face through December 31, 2027, to align with the CAA 2026. Further, CMS is proposing to make the hospice election statement addendum, which was originally only provided to hospice patients upon request, mandatory for all hospice elections. In publishing the 2027 Hospice Payme [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes, which appear elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report. See Item 1A., Risk Factors and Cautionary Note Regarding Forward-Looking Statements. Overview We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. As of December 31, 2025, our home health and hospice business provided 30 Table of Contents home health, hospice and home care services from 172 agencies operating across 16 states, and our senior living business operated 63 senior living communities throughout seven states. The following table summarizes our affiliated home health and hospice agencies and senior living communities as of: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Home health and hospice agencies 39 46 54 63 76 88 95 111 123 172 Senior living communities 36 43 50 52 54 54 49 51 57 63 Senior living units 3,184 3,434 3,820 3,963 4,127 4,127 3,500 3,588 3,960 4,428 Total number of home health, hospice, and senior living operations 75 89 104 115 130 142 144 162 180 235 Recent Activities Acquisitions. During 2025, we expanded our operations with the addition of 30 home health agencies, nine hospice agencies, four home care agencies, and six senior living communities. A subsidiary of the Company entered into a separate purchase agreements with the prior operator of each acquired operation as part of each transaction. Expansion into New States. In the fourth quarter of 2025, we expanded our home health, hospice, and home care operations into the southeastern United States. This expansion was our largest acquisition to date and included 30 home health, hospice, and home care agencies in Alabama, Georgia, and Tennessee. This expansion is part of our strategy to grow our national presence in the post-acute care continuum across both our existing markets and new markets. Trends We have experienced improvement in senior living revenue per occupied unit and occupancy through the year ended December 31, 2025, compared to the same period in 2024. Though we have seen improvements in revenue per occupied unit and occupancy year over year, the highly competitive environment for senior living residents and inflationary factors will continue to impact the rate at which our revenue per occupied unit and occupancy levels change in our senior living communities. When we acquire turnaround or start-up operations, we expect that our combined metrics may be impacted. We expect these metrics to vary from period to period based upon the maturity of the operations within our portfolio. We have generally experienced lower occupancy rates and higher costs at our senior living communities and lower census and higher costs at our home health and hospice agencies for recently acquired operations; as a result, we generally anticipate lower and/or fluctuating consolidated and segment margins during years of acquisition growth. Segments We have two reportable segments: (1) home health and hospice services, which includes our home health, hospice, home care, and geriatric primary and palliative care businesses; and (2) senior living services, which includes our assisted living, independent living and memory care services. Our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), reviews financial information at the operating segment level using segment adjusted EBITDAR from operations. Key Performance Indicators We manage the fiscal aspects of our business by monitoring key performance indicators that affect our financial performance. These indicators and their definitions include the following: Home Health and Hospice Services •Total home health admissions. The total admissions of home health patients, including new acquisitions, new admissions and readmissions. •Total Medicare home health admissions. Total admissions of home health patients, who are receiving care under Medicare reimbursement programs, including new acquisitions, new admissions and readmissions. 31 Table of Contents •Average Medicare revenue per completed 60-day home health episode. The average amount of revenue for each completed 60-day home health episode generated from patients who are receiving care under Medicare reimbursement programs. •Total hospice admissions. Total admissions of hospice patients, including new acquisitions, new admissions and recertifications. •Average hospice daily census. The average number of patients who are receiving hospice care during any measurement period divided by the number of days during such measurement period. •Hospice Medicare revenue per day. The average daily Medicare revenue recorded during any measurement period for services provided to hospice patients. The following table summarizes our overall home health and hospice services statistics for the periods indicated: Year Ended December 31, 2025 2024 Home health services: Total home health admissions 86,076 59,741 Total Medicare home health admissions 34,882 24,598 Average Medicare revenue per completed 60-day home health episode(a) $ 3,755 $ 3,628 Hospice services: Total hospice admissions 15,189 12,208 Average hospice daily census 4,204 3,268 Hospice Medicare revenue per day $ 192 $ 183 (a) The year to date average for Medicare revenue per 60-day completed episode includes post period claim adjustments for prior periods. Senior Living Services •Occupancy. The ratio of actual number of days our units are occupied during any measurement period to the number of units available for occupancy during such measurement period. •Average monthly revenue per occupied unit. The revenue for senior living services during any measurement period divided by actual occupied senior living units for such measurement period divided by the number of months for such measurement period. The following table summarizes our senior living statistics for the periods indicated: Year Ended December 31, 2025 2024 Occupancy 79.7 % 78.8 % Average monthly revenue per occupied unit $ 5,195 $ 4,811 Revenue Sources Home Health and Hospice Services Home Health. We derive the majority of our home health revenue from Medicare and managed care. The Medicare payment is adjusted for differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Net service revenue is recognized in accordance with PDGM methodology. Under PDGM, Medicare provides agencies with payments for each 30-day period of care provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The PDGM payment under the Medicare program is also adjusted for certain variables 32 Table of Contents including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of episodes; (e) changes to the acuity of the patient during the previous 30-day period of care; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. Hospice. We derive the majority of our hospice business revenue from Medicare reimbursement. The estimated payment rates are calculated as daily rates for each of the levels of care we deliver. Rates are set based on specific levels of care, are adjusted by a wage index to reflect healthcare labor costs across the country and are established annually through federal legislation. CMS has established a two-tiered payment system for RHC. Hospices are reimbursed at a higher rate for RHC services provided from days of service 1 through 60 and a lower rate for all subsequent days of service. CMS also provided for a Service Intensity Add-On, which increases payments for certain RHC services provided by registered nurses and social workers to hospice patients during the final seven days of life. Medicare reimbursement is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap limit and an overall payment cap, we monitor our provider numbers and based upon empirical experience estimate amounts due back to Medicare to the extent that the cap has been exceeded. Senior Living Services. Within our senior living operations, we generate revenue primarily from private pay sources, with a portion earned from Medicaid or other state-specific programs. Primary Components of Expense Cost of Services (excluding rent, general and administrative expense and depreciation and amortization). Our cost of services represents the costs of operating our independent operating subsidiaries, which primarily consists of employee wages and related benefits, share-based compensation, supplies, purchased services, and ancillary expenses such as the cost of pharmacy and therapy services provided to patients or residents. Cost of services also includes the cost of general and professional liability insurance and other general cost of services specifically attributable to our operations. Rent—Cost of Services. Rent—cost of services consists solely of base minimum rent amounts payable under lease agreements to our landlords. Our subsidiaries lease and operate but do not own the underlying real estate at our operations, and these amounts do not include taxes, insurance, impounds, capital reserves or other charges payable under the applicable lease agreements, which are included in cost of services and general and administrative expense. General and Administrative Expense. General and administrative expense consists primarily of payroll and related benefits and travel expenses for our Service Center personnel in providing training and other operational support. General and administrative expense also includes professional fees (such as accounting and legal fees), costs relating to our information systems, share-based compensation and rent for our Service Center offices. Depreciation and Amortization. Property and equipment are initially recorded at their historical cost. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets (ranging from one to 40 years). Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements and related disclosures requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis we review our judgments and estimates, including but not limited to those related to self-insurance reserves, revenue, and intangible assets and goodwill. We base our estimates and judgments upon our historical experience, knowledge of current conditions and our belief 33 Table of Contents of what could occur in the future considering available information, including assumptions that we believe to be reasonable under the circumstances. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty, and actual results could differ materially from the amounts reported. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when the estimate was made. Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, within the Consolidated Financial Statements for further information on our critical accounting estimates and policies, which are as follows: •Self-insurance reserves - The Company is self-insured for general and professional liability, workers’ compensation, automobile, and its employee health plans while maintaining stop-loss coverage with third-party insurers to limit its total liability exposure. The Company accrues amounts equal to the actuarial estimated costs to settle open claims of insureds, as well as an estimate of the costs of insured claims that have been incurred but not reported. We develop information about the size of the ultimate claims based on historical experience, current industry information, and actuarial analysis; •Revenue recognition - The amounts owed by private pay individuals for services and estimate of variable considerations to arrive at the transaction price, including methods and assumptions, used to determine settlements with Medicare and Medicaid adjustments due to audits and reviews; and •Acquisition accounting and goodwill - The assumptions used to allocate the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions, and the review of goodwill for impairment at the Company’s annual impairment test date or upon the occurrence of a triggering event. Recent Accounting Pronouncements Information concerning recently issued accounting pronouncements which are not yet effective is included in Note 2, Basis of Presentation and Summary of Significant Accounting Policies in the Consolidated Financial Statements. Results of Operations The following table sets forth details of our expenses and earnings as a percentage of total revenue for the periods indicated: Year Ended December 31, 2025 2024 2023 Total revenue 100.0 % 100.0 % 100.0 % Expense: Cost of services 81.1 80.3 80.4 Rent—cost of services 5.1 6.2 7.3 General and administrative expense 7.5 7.2 6.7 Depreciation and amortization 0.9 0.9 0.9 Gain on asset dispositions and impairment, net (0.1) (0.1) — Total expenses 94.5 94.5 95.3 Income from operations 5.5 5.5 4.7 Other expense, net: Other income — — 0.1 Interest expense, net (0.7) (1.0) (1.2) Other expense, net (0.7) (1.0) (1.1) Income before provision for income taxes 4.8 4.5 3.6 Provision for income taxes 1.2 1.0 1.0 Net income 3.6 3.5 2.6 Less: net income attributable to noncontrolling interest 0.5 0.3 0.1 Net income attributable to Pennant 3.1 % 3.2 % 2.5 % 34 Table of Contents Year Ended December 31, 2025 2024 2023 (In thousands) Consolidated GAAP Financial Measures: Total revenue $ 947,705 $ 695,240 $ 544,891 Total expenses 895,819 657,124 519,722 Income from operations $ 51,886 $ 38,116 $ 25,169 The following table presents certain financial information regarding our reportable segments. General and administrative expenses are not allocated to the reportable segments: Home Health and Hospice Services Senior Living Services All Other Total Year Ended December 31, 2025 Segment Revenue $ 731,392 $ 210,078 $ 6,235 $ 947,705 Segment Cost of Services 610,561 149,553 Segment Adjusted EBITDAR from Operations $ 120,831 $ 60,525 $ 181,356 Year Ended December 31, 2024 Segment Revenue $ 515,344 $ 174,767 $ 5,129 $ 695,240 Segment Cost of Services 427,635 123,107 Segment Adjusted EBITDAR from Operations $ 87,709 $ 51,660 $ 139,369 Year Ended December 31, 2023 Segment Revenue $ 385,652 $ 148,198 $ 11,041 $ 544,891 Segment Cost of Services 320,046 102,904 Segment Adjusted EBITDAR from Operations $ 65,606 $ 45,294 $ 110,900 The table below provides a reconciliation of Segment Adjusted EBITDAR from Operations above to income from operations: Year Ended December 31, 2025 2024 2023 Segment Adjusted EBITDAR from Operations(a) $ 181,356 $ 139,369 $ 110,900 Less: Unallocated corporate expenses 60,455 43,587 31,704 Less: Depreciation and amortization 8,538 6,119 5,130 Rent—cost of services 48,700 43,029 39,759 Other income 422 207 339 Adjustments to Segment EBITDAR from Operations: Less: Start-up operations (b) 182 137 102 Share-based compensation expense(c) 9,036 8,242 5,565 Acquisition related costs(d) 6,587 1,278 476 Activities associated with transitioning operations(e) (880) (570) 612 Transition services costs(f) 503 — — Unusual, non-recurring, or redundant charges(g) 113 1,004 2,575 Add: Net income attributable to noncontrolling interest 4,186 1,780 531 Income from operations $ 51,886 $ 38,116 $ 25,169 35 Table of Contents (a) Segment Adjusted EBITDAR from Operations is net income attributable to the Company's reportable segments excluding interest expense, provision for income taxes, depreciation and amortization expense, rent, unallocated corporate and administrative expenses, and, in order to view the operations’ performance on a comparable basis from period to period, certain adjustments including: (1) activities associated with start-up operations, (2) share-based compensation expense, (3) acquisition related costs, (4) activities associated with transitioning operations, (5) transition services costs, (6) unusual, non-recurring, or redundant charges, and (7) net income attributable to noncontrolling interest. “All Other” consists of revenues generated at operating locations not included in the segment financial information reviewed by the CODM. Revenue included in the “All Other” category is insignificant individually, and therefore does not constitute a reportable segment. General and administrative expenses are not allocated to the reportable segments, and are included as “Unallocated corporate expenses”, accordingly the segment earnings measure reported is before allocation of corporate general and administrative expenses. The Company's segment measures may be different from the calculation methods used by other companies and, therefore, comparability may be limited. (b) Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations. (c) Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense. (d) Non-capitalizable costs associated with acquisitions and write-offs for amounts in dispute with the prior owners of certain acquired operations. (e) During the year ended December 31, 2023, an affiliate of the Company placed its memory care units into transition and is converting the facility into an assisted living community. We received insurance proceeds related to the property in 2024 and 2025 which were recorded in gain on disposition of property and equipment, net on the consolidated statements of income. The amounts reported exclude rent and depreciation and amortization expense related to such operations. (f) Costs identified as redundant or non-recurring incurred by the Company as a result of the transition services agreement between the Company and UnitedHealth entered into as part of the acquisition agreement. All amounts are included in Cost of services. Fees incurred under the transition services agreement were $3,001 for the year ended December 31, 2025. (g) Represents unusual, non-recurring, or redundant charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses. Performance and Valuation Measures: Year Ended December 31, 2025 2024 2023 (In thousands) Consolidated Non-GAAP Financial Measures: Performance Metrics Consolidated EBITDA $ 56,660 $ 42,662 $ 30,107 Consolidated Adjusted EBITDA $ 72,466 $ 53,286 $ 40,716 Valuation Metric Consolidated Adjusted EBITDAR $ 120,901 Year Ended December 31, 2025 2024 2023 (In thousands) Segment Non-GAAP Measures:(a) Segment Adjusted EBITDA from Operations Home health and hospice services $ 111,135 $ 80,660 $ 60,128 Senior living services $ 21,785 $ 16,213 $ 12,293 (a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss. 36 Table of Contents The table below reconciles Consolidated Net Income to Consolidated EBITDA, Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDAR for the periods presented: Year Ended December 31, 2025 2024 2023 (In thousands) Consolidated Net income $ 33,764 $ 24,339 $ 13,910 Less: Net income attributable to noncontrolling interest 4,186 1,780 531 Add: Provision for income taxes 11,866 7,028 5,674 Net interest expense 6,678 6,956 5,924 Depreciation and amortization 8,538 6,119 5,130 Consolidated EBITDA 56,660 42,662 30,107 Adjustments to Consolidated EBITDA Add: Start-up operations(a) 182 137 102 Share-based compensation expense(b) 9,036 8,242 5,565 Acquisition related costs(c) 6,587 1,278 476 Activities associated with transitioning operations(d) (880) (570) 612 Transition services costs(e) 503 — — Unusual, non-recurring, or redundant charges(f) 113 1,004 2,575 Rent related to items (a) and (e) above 265 533 1,279 Consolidated Adjusted EBITDA 72,466 53,286 40,716 Rent—cost of services 48,700 43,029 39,759 Rent related to items (a) and (e) above (265) (533) (1,279) Adjusted rent—cost of services 48,435 42,496 38,480 Consolidated Adjusted EBITDAR $ 120,901 (a) Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations. (b) Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense. (c) Non-capitalizable costs associated with acquisitions and write-offs for amounts in dispute with the prior owners of certain acquired operations. (d) During the year ended December 31, 2023, an affiliate of the Company placed its memory care units into transition and is converting the facility into an assisted living community. We received insurance proceeds related to the property in 2024 and 2025 which were recorded in gain on disposition of property and equipment, net on the consolidated statements of income. The amounts reported exclude rent and depreciation and amortization expense related to such operations. (e) Costs identified as redundant or non-recurring incurred by the Company as a result of the transition services agreement between the Company and UnitedHealth entered into as part of the acquisition agreement. All amounts are included in Cost of services. Fees incurred under the transition services agreement were $3,001 for the year ended December 31, 2025. (f) Represents unusual, non-recurring, or redundant charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses. 37 Table of Contents The table below reconciles Segment Adjusted EBITDAR from Operations to Segment Adjusted EBITDA from Operations for the periods presented: Year Ended December 31, Home Health and Hospice Senior Living 2025 2024 2023 2025 2024 2023 (In thousands) Segment Adjusted EBITDAR from Operations $ 120,831 $ 87,709 $ 65,606 $ 60,525 $ 51,660 $ 45,294 Less: Rent—cost of services 9,752 7,189 5,791 38,949 35,840 33,967 Rent related to start-up and transitioning operations (56) (140) (313) (209) (393) (966) Segment Adjusted EBITDA from Operations $ 111,135 $ 80,660 $ 60,128 $ 21,785 $ 16,213 $ 12,293 The following discussion includes references to certain performance and valuation measures, which are non-GAAP financial measures, including Consolidated EBITDA, Consolidated Adjusted EBITDA, Segment Adjusted EBITDA from Operations, and Consolidated Adjusted EBITDAR (collectively, “Non-GAAP Financial Measures”). Non-GAAP Financial Measures are used in addition to, and in conjunction with, results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Non-GAAP Financial Measures reflect an additional way of viewing aspects of our operations and company that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, we believe can provide a more comprehensive understanding of factors and trends affecting our business. We believe these Non-GAAP Financial Measures are useful to investors and other external users of our financial statements regarding our results of operations because: •they are widely used by investors and analysts in our industry as a supplemental measure to evaluate the overall performance of companies in our industry without regard to items such as interest expense, rent expense and depreciation and amortization, which can vary substantially from company to company depending on the book value of assets, the length of the lease to which the asset applies, the method by which assets were acquired, and differences in capital structures; •they help investors evaluate and compare the results of our operations from period to period by removing the impact of our asset base and capital structure from our operating results; and •Consolidated Adjusted EBITDAR is used by investors and analysts in our industry to value the companies in our industry without regard to capital structures. We use Non-GAAP Financial Measures: •as measurements of our operating performance to assist us in comparing our operating performance on a consistent basis from period to period; •to allocate resources to enhance the financial performance of our business; •to assess the value of a potential acquisition; •to assess the value of a transformed operation’s performance; •to evaluate the effectiveness of our operational strategies; and •to compare our operating performance to that of our competitors. We typically use Non-GAAP Financial Measures to compare the operating performance of each operation from period to period. We find that Non-GAAP Financial Measures are useful for this purpose because they do not include such costs as interest expense, income taxes, depreciation and amortization expense, which may vary from period-to-period depending upon various factors, including the method used to finance operations, the date of acquisition of a community or business, and the tax law of the state in which a business unit operates. 38 Table of Contents Non-GAAP Financial Measures have no standardized meaning defined by GAAP. Therefore, our Non-GAAP Financial Measures have limitations as analytical tools, and they should not be considered in isolation, or as a substitute for analysis of our results as reported in accordance with GAAP. Some of these limitations are: •they do not reflect our current or future cash requirements for capital expenditures or contractual commitments; •they do not reflect changes in, or cash requirements for, our working capital needs; •they do not reflect the net interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; •in the case of Consolidated Adjusted EBITDAR, it does not reflect rent expenses, which are normal and recurring operating expenses that are necessary to operate our leased operations; •they do not reflect any income tax payments we may be required to make; •although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-cash charges do not reflect any cash requirements for such replacements; and •other companies in our industry may calculate the same Non-GAAP Financial Measures differently than we do, which may limit their usefulness as comparative measures. We compensate for these limitations by using Non-GAAP Financial Measures only to supplement net income on a basis prepared in accordance with GAAP in order to provide a more complete understanding of the factors and trends affecting our business. We strongly encourage investors to review our Consolidated Financial Statements, included in this report in their entirety and to not rely on any single financial measure. Because these Non-GAAP Financial Measures are not standardized, it may not be possible to compare these financial measures with other companies’ Non-GAAP financial measures having the same or similar names. These Non-GAAP Financial Measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. We strongly urge you to review the reconciliation of income from operations to the Non-GAAP Financial Measures in the table presented above, along with our Consolidated Financial Statements and related notes included elsewhere in this report. We believe the following Non-GAAP Financial Measures are useful to investors as key operating performance measures and valuation measures: Performance Measures: Consolidated EBITDA We believe Consolidated EBITDA is useful to investors in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of our asset base (depreciation and amortization expense) from our operating results. We calculate Consolidated EBITDA as net income, adjusted for net income (loss) attributable to noncontrolling interest, before (a) interest expense (b) provision for income taxes and (c) depreciation and amortization. Consolidated Adjusted EBITDA We adjust Consolidated EBITDA when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Consolidated Adjusted EBITDA, when considered with Consolidated EBITDA and GAAP net income, is beneficial to an investor’s complete understanding of our operating performance. We calculate Consolidated Adjusted EBITDA by adjusting Consolidated EBITDA to exclude the effects of non-core business items, which for the reported periods includes, to the extent applicable: •results at start-up operations; •share-based compensation expense; •acquisition related costs; 39 Table of Contents •activities associated with transitioning operations; and •unusual, non-recurring, or redundant charges. Segment Adjusted EBITDA from Operations We calculate Segment Adjusted EBITDA from Operations by adjusting Segment Adjusted EBITDAR from Operations to include rent-cost of services. We believe that the inclusion of rent-cost of services provides useful supplemental information to investors regarding our ongoing operating performance for each segment. Valuation Measure: Consolidated Adjusted EBITDAR We use Consolidated Adjusted EBITDAR as one measure in determining the value of prospective acquisitions. It is also a measure commonly used by us, research analysts and investors to compare the enterprise value of different companies in the healthcare industry, without regard to differences in capital structures. Additionally, we believe the use of Consolidated Adjusted EBITDAR allows us, research analysts and investors, to compare operational results of companies without regard to operating or financed leases. A significant portion of financed lease expenditures are recorded in interest, whereas operating lease expenditures are recorded in rent expense. This measure is not displayed as a performance measure as it excludes rent expense, which is a normal and recurring operating expense and, as such, does not reflect our cash requirements for leasing commitments. Our presentation of Consolidated Adjusted EBITDAR should not be construed as a financial performance measure. The adjustments made and previously described in the computation of Consolidated Adjusted EBITDA are also made when computing Consolidated Adjusted EBITDAR. We calculate Consolidated Adjusted EBITDAR by excluding rent-cost of services and rent related to start-up operations from Consolidated Adjusted EBITDA. Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue Year Ended December 31, 2025 2024 Revenue Dollars Revenue Percentage Revenue Dollars Revenue Percentage (In thousands) Home health and hospice services Home health $ 351,240 37.1 % $ 239,539 34.5 % Hospice 317,801 33.5 240,102 34.5 Home care and other(a) 63,686 6.7 39,843 5.7 Total home health and hospice services 732,727 77.3 519,484 74.7 Senior living services 214,978 22.7 175,756 25.3 Total revenue $ 947,705 100.0 % $ 695,240 100.0 % (a) Home care and other revenue is included with home health revenue in other disclosures in this report. Our consolidated revenue increased $252.5 million, or 36.3%, driven by the net organic growth of existing operations across all segments of $67.5 million or 9.7% as well as increased revenue from acquired operations of $185.0 million, or 26.6%, during the year ended December 31, 2025. 40 Table of Contents Home Health and Hospice Services Year Ended December 31, 2025 2024 Change % Change (In thousands) Home health and hospice revenue Home health services $ 351,240 $ 239,539 $ 111,701 46.6 % Hospice services 317,801 240,102 77,699 32.4 Home care and other 63,686 39,843 23,843 59.8 Total home health and hospice revenue $ 732,727 $ 519,484 $ 213,243 41.0 % Year Ended December 31, 2025 2024 Change % Change Home health services: Total home health admissions 86,076 59,741 26,335 44.1 % Total Medicare home health admissions 34,882 24,598 10,284 41.8 Average Medicare revenue per 60-day completed episode(a) $ 3,755 $ 3,628 $ 127 3.5 Hospice services: Total hospice admissions 15,189 12,208 2,981 24.4 Average daily census 4,204 3,268 936 28.6 Hospice Medicare revenue per day $ 192 $ 183 $ 9 4.9 Number of home health and hospice agencies at period end 172 123 49 39.8 % (a) The year to date average for Medicare revenue per 60-day completed episode includes post period claim adjustments for prior periods. Home health and hospice revenue increased $213.2 million, or 41.0%. Revenue grew due to an increase in all key performance indicators including an increase in total home health admissions of 44.1%, an increase in Medicare home health admissions of 41.8%, an increase in average Medicare revenue per 60-day completed episode of 3.5%, an increase of 24.4% in total hospice admissions, and an increase of 28.6% in hospice average daily census, and an increase in Hospice Medicare revenue per day of 4.9%. The improvement in these metrics resulted in net organic revenue growth of $52.8 million for the year ended December 31, 2025. Growth was also driven by the acquisition of forty-three home health, home care and hospice operations during the year ended December 31, 2025, and the acquisition of eleven home health, home care, and hospice operations during the year ended December 31, 2024, resulting in an increase in revenue of $160.5 million, or 30.9% overall. Senior Living Services Year Ended December 31, 2025 2024 Change % Change Revenue (in thousands) $ 214,978 $ 175,756 $ 39,222 22.3 % Number of communities at period end 63 57 6 10.5 Occupancy 79.7 % 78.8 % 0.9 % Average monthly revenue per occupied unit $ 5,195 $ 4,811 $ 384 8.0 % Senior living revenue increased $39.2 million, or 22.3%, for the year ended December 31, 2025 when compared to the same period in the prior year primarily due to an 8.0% increase in average monthly revenue per occupied unit and a 90 basis point increase in occupancy rate. Growth in revenue was also driven by the acquisition of six senior living communities during the year ended December 31, 2025, and the acquisition of six senior living communities during the year ended December 31, 2024, resulting in an increase of $24.6 million, or 14.0% overall. 41 Table of Contents Cost of Services The following table sets forth total cost of services by each of our reportable segments for the periods indicated: Year Ended December 31, 2025 2024 Change % Change (In thousands) Home Health and Hospice $ 612,460 $ 433,474 $ 178,986 41.3 % Senior Living 156,043 124,975 31,068 24.9 Total cost of services $ 768,503 $ 558,449 $ 210,054 37.6 % Consolidated cost of services increased $210.1 million, or 37.6%, for the year ended December 31, 2025 when compared to the year ended December 31, 2024. The increase in the amount of cost of services was driven primarily by volume of services provided and increased wages and benefits. Cost of services as a percentage of revenue increased by 80 basis points from 80.3% to 81.1% over the same time period. Home Health and Hospice Services Year Ended December 31, 2025 2024 Change % Change (In thousands) Cost of service $ 612,460 $ 433,474 $ 178,986 41.3 % Cost of services as a percentage of revenue 83.6 % 83.4 % 0.2 % Cost of services related to our Home Health and Hospice services segment increased $179.0 million, or 41.3%, primarily due to increased volume of services from the growth in admissions and average daily census as well as increased wages and benefits. Cost of services as a percentage of revenue for the year ended December 31, 2025 increased by 20 basis points compared to the year ended December 31, 2024 primarily due to increased wages and benefits. Senior Living Services Year Ended December 31, 2025 2024 Change % Change (In thousands) Cost of service $ 156,043 $ 124,975 $ 31,068 24.9 % Cost of services as a percentage of revenue 72.6 % 71.1 % 1.5 % Cost of services related to our Senior Living services segment increased $31.1 million, or 24.9%, during the year ended December 31, 2025 in response to higher occupancy, acquisitions and wage rate increases. As a percentage of revenue, costs of service increased by 150 basis points during the year ended December 31, 2025 when compared to the year ended December 31, 2024 primarily due to increased wages and benefits. Rent—Cost of Services. Rent increased 13.2% from $43.0 million to $48.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily as a result of the newly acquired senior living communities. As a percentage of revenue, rent—cost of services decreased 110 basis points when compared to the year ended December 31, 2024 due to improved overall sales leverage and performance. General and Administrative Expense. General and administrative expense increased $20.9 million, or 41.6%, from $50.2 million to $71.1 million for the year ended December 31, 2025 when compared to the year ended December 31, 2024. The increase in general and administrative expense was primarily due to an increase of $18.8 million in wages and benefits for the year ended December 31, 2025 when compared to the year ended December 31, 2024. Depreciation and Amortization. Depreciation and amortization expense stayed flat as a percentage of total revenue. 42 Table of Contents Gain on Asset Dispositions and Impairment, Net. Gain on asset dispositions and impairment, net was $1.0 million for the year ended December 31, 2025 compared to $0.7 million for the year ended December 31, 2024 primarily due to insurance proceeds related to one of our senior living communities. Provision for Income Taxes. Our effective tax rate for the year ended December 31, 2025 was 26.0% of earnings before income taxes compared with an effective tax rate of 22.4% for the year ended December 31, 2024. The increase in the effective tax rate is primarily driven by the change in discrete tax effects of share-based compensation. See Note 14, Income Taxes, to the Consolidated Financial Statements included elsewhere in this report filed on Form 10-K for further discussion. Comparison of Prior Year Information For a comparison of our results of operations of the fiscal year ended December 31, 2024 as compared to the year ended December 31, 2023 refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations on Form 10-K filed with the SEC on February 27, 2025. Liquidity and Capital Resources Our primary sources of liquidity are cash generated through operating activities and borrowings under our credit agreement. Credit Agreement On July 31, 2024, Pennant amended and restated its existing credit agreement (as amended, the “Amended Credit Agreement”), which provides for an increased revolving credit facility with a syndicate of banks with a borrowing capacity of $250.0 million (the “Amended Revolving Credit Facility”). The Amended Revolving Credit Facility is not subject to interim amortization and the Company will not be required to repay any loans under the Amended Revolving Credit Facility prior to maturity in 2029. The Company is permitted to prepay all or any portion of the loans under the Amended Revolving Credit Facility prior to maturity without premium or penalty, subject to reimbursement of any SOFR breakage costs of the lenders. On November 3, 2025, Pennant entered into the First Amendment to Amended and Restated Credit Agreement (the “First Amendment”), pursuant to which, Pennant obtained an incremental term loan facility in an aggregate principal amount of $100 million (the “Incremental Term Loans”). The Incremental Term Loans constitute term loans under, and are subject to the terms and provisions of, the Amended Credit Agreement, including bearing interest at the same interest rate, and having the same maturity date, as the Amended Revolving Credit Facility. In conjunction with the First Amendment, the Company incurred additional debt issuance costs of $1,203. The Company used the proceeds of the Incremental Term Loans to refinance a portion of the outstanding revolving loans under the Amended Revolving Credit Facility and to pay fees and expenses incurred in connection with the First Amendment. The Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its independent operating subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. Financial covenants require compliance with certain levels of leverage ratios that impact the amount of interest. As of December 31, 2025, the Company was compliant with all such financial covenants. On October 2, 2024, the Company closed the public offering (the “Offering”) of 4,025 shares of its common stock, $0.001 par value per share (“common stock”). The net proceeds to the Company from the offering, after underwriting discounts, commissions, and expenses, was approximately $118.1 million. The majority of the proceeds were subsequently used to pay the outstanding balance on our Amended Revolving Credit Facility. As of December 31, 2025 we had $17.0 million of cash and $171.6 million of available borrowing capacity on our Amended Revolving Credit Facility. We believe that our existing cash, cash generated through operations, and access to available borrowing capacity under our Amended Credit Agreement, will be sufficient to provide adequate liquidity for the next twelve months for both our operating activities and opportunities for acquisition growth. 43 Table of Contents The following table presents selected data from our statement of cash flows for the periods presented: Year Ended December 31, 2025 2024 (In thousands) Net cash provided by operating activities $ 48,294 $ 39,298 Net cash used in investing activities (227,971) (70,684) Net cash provided by financing activities 172,455 49,573 Net change in cash (7,222) 18,187 Cash at beginning of year 24,246 6,059 Cash at end of year $ 17,024 $ 24,246 Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Our net cash flow from operating activities for the year ended December 31, 2025 increased by $9.0 million when compared to the year ended December 31, 2024. The primary drivers of this difference were a $9.4 million increase in net income and a $2.5 million net decrease in cash flows from the change in operating assets and liabilities. Our net cash used in investing activities for the year ended December 31, 2025 increased by $157.3 million compared to the year ended December 31, 2024, primarily driven by a $154.7 million increase in business acquisitions, asset acquisitions, and escrow deposits and a $3.0 million increase in purchases of property and equipment during the year ended December 31, 2025 compared to the year ended December 31, 2024. Our net cash provided by financing activities increased by $122.9 million for the year ended December 31, 2025 when compared to the year ended December 31, 2024, primarily driven by an increase in net proceeds from our Amended Revolving Credit Facility of $140.0 million and an increase in proceeds from our Incremental Term Loans of $100.0 million. During the year ended December 31, 2024, we received $118.1 million through a secondary offering. Payments for deferred financing costs decreased $2.7 million during the year ended December 31, 2025 compared to the year ended December 31, 2024.