Pennant Q2 2026 Earnings: Home Health and Hospice Drive 35.8% Revenue Growth

Pennant (NASDAQ: PNTG) reported Q2 2026 revenue of $298.0 million, up 35.8% from $219.5 million a year earlier, while GAAP diluted EPS increased to $0.25 from $0.20. Adjusted EBITDA rose 48.2% to $24.3 million, with home health and hospice accounting for most of the revenue increase as both acquired and same-agency operations expanded.

Core earnings data

For the quarter ended June 30, revenue growth translated into faster increases in operating income and adjusted EBITDA. Cost of services rose 36.9%, slightly faster than revenue, but rent and general and administrative expenses increased at slower rates, lifting the GAAP operating margin by approximately 52 basis points.

Net income attributable to Pennant grew more slowly than operating income. Net interest expense increased to $3.3 million from $1.2 million, while net income attributable to noncontrolling interests rose to $1.8 million from $0.9 million.

Adjusted net income, adjusted EPS and adjusted EBITDA are non-GAAP measures. The quarter’s principal adjustments included $3.1 million of share-based compensation, $1.3 million of transition services costs and $0.4 million of acquisition-related costs.

Business and segment performance

Home health and hospice generated 79.8% of consolidated revenue and contributed $71.8 million of Pennant’s $78.5 million year-over-year revenue increase. Its adjusted EBITDA from operations also grew faster than segment revenue, while senior living produced more moderate growth.

Home health revenue increased to $119.4 million from $79.2 million, while hospice revenue rose to $103.6 million from $73.8 million. Volume was the clearest reported driver: total home health admissions increased 62.3%, total Medicare home health admissions rose 70.7%, and hospice average daily census grew 40.1%.

The gap between total and same-agency performance shows the importance of acquired operations. Same-agency home health and hospice revenue grew 10.7%, compared with 43.2% for the full segment. Same-agency home health admissions increased 9.7%, Medicare admissions rose 13.6%, and hospice average daily census advanced 10.8%.

Senior living revenue increased 12.6%, supported by higher revenue per occupied room and improvement in the established portfolio. Total occupancy was nearly unchanged at 78.9%, but same-store occupancy rose 150 basis points to 81.6%. Average monthly revenue per occupied room increased 3.9% overall and 5.5% on a same-store basis.

Profitability, cash flow and balance sheet

Adjusted EBITDA margin increased to approximately 8.1% from 7.5%, consistent with adjusted EBITDA growing faster than revenue. The home health and hospice segment provided most of this operating leverage, while senior living adjusted EBITDAR growth of 7.9% trailed its 12.6% revenue increase.

Cash flow data were provided for the first six months rather than Q2 alone. First-half operating cash flow reached $18.4 million, up approximately 37.4% from $13.4 million a year earlier. Pennant used $45.3 million for investing activities and generated $25.1 million from financing activities, resulting in a $1.8 million decline in cash during the six-month period.

Cash stood at $15.3 million on June 30, down from $17.0 million at the end of 2025. Debt, including current maturities, increased to approximately $197.5 million from $173.8 million, consistent with the higher interest expense recorded during the quarter.

2026 guidance

Pennant updated its full-year outlook after the second-quarter results. Management said the company was on pace to exceed the upper end of its original annual guidance, although the prior ranges were not included in the release, so the size of the revision cannot be quantified.

The outlook assumes approximately 37.0 million diluted weighted-average shares and a 26.0% effective tax rate. It includes transition-service costs and reimbursement adjustments but excludes any unannounced acquisitions.

Management said integration of the recently acquired Southeast operations was progressing ahead of its expectations. Pennant expects to transition the two largest waves of operations fully by the middle of the fourth quarter, making execution during the second half important to the annual outlook.

Risks investors need to watch

• Acquisition integration: The former UnitedHealth and Amedisys assets represent a meaningful portion of the 2026 outlook. Delays or higher transition costs could affect revenue, margins and the timing of expected benefits.
• Dependence on acquired growth: Home health and hospice revenue grew 43.2% overall but 10.7% on a same-agency basis. Continued headline growth therefore depends partly on integrating and improving acquired operations.
• Reimbursement exposure: Medicare represented 50.9% of quarterly revenue, while Medicare and Medicaid together accounted for 64.3%. Changes in reimbursement rates could directly affect revenue and segment profitability.
• Higher debt and interest expense: Debt increased from the end of 2025, and quarterly net interest expense rose from $1.2 million to $3.3 million. Further increases could continue to limit the conversion of operating growth into GAAP net income.
• Cash requirements: First-half operating cash flow improved but remained below investing outflows, with financing inflows covering much of the difference. Acquisition and integration spending therefore remains relevant to liquidity.

Summary

Pennant’s Q2 2026 growth was led by home health and hospice, where acquisitions substantially amplified positive same-agency volume trends. Operating income and adjusted EBITDA grew faster than revenue, but higher interest expense and noncontrolling interests moderated growth in earnings attributable to Pennant. The main follow-up points are the integration of the Southeast operations, delivery of the updated annual guidance and whether acquired businesses can sustain the quarter’s operating leverage.