PACS Group Q3 2026: EBITDA Surges 33.6% as Nursing Facilities Mature

PACS Group delivered adjusted earnings of $0.63 per share for the third quarter of fiscal 2026, beating the $0.58 consensus estimate. Revenue came in at $1.50 billion, up 11.5% year over year and ahead of analyst estimates. The bigger move came below the revenue line.

Adjusted EBITDA climbed 33.6% to $175.7 million, a pace that significantly outran top-line growth. That gap reflects the company's core acquisition strategy: buy skilled nursing facilities, absorb the initial drag, and let them season into higher-margin operations. Same-store revenue across 284 facilities rose 6.4%, and same-store occupancy reached 91.3%, compared with an industry average of 80.2% cited by the company.

PACS closed the acquisition of 32 Florida skilled nursing facilities totaling 4,049 beds on October 1, 2026, marking its entry into the state. It also closed on 10 skilled nursing facilities and one assisted living facility in Texas as of November 1, 2026, stretching the portfolio to 398 operations across 21 states. CEO Jason Murray said the Florida and Texas moves 'significantly broaden our geographic reach and create new opportunities to bring our operating model to more communities.'

Management responded to the quarter's momentum by raising full-year 2026 guidance. Adjusted EBITDA is now expected in a range of $685 million to $695 million, up from a prior range of $640 million to $660 million, with the midpoint representing approximately 37% growth over 2025. Full-year revenue guidance was lifted to $5.95 billion to $6.05 billion from $5.75 billion to $5.85 billion.

The Q3 result continues a streak of beats after two consecutive quarters of missing estimates in Q2 and Q3 of 2025. Q1 2026 was the most decisive outperformance in the recent run, with reported EPS of $0.64 against a $0.41 estimate, showing that the maturing-facility thesis gained traction earlier this year and has held through the most recent period.

Investors should note that the quarter was not without complications. Legal costs tied to ongoing investigations and SEC matters totaled $9.5 million in the period, and stock-based compensation expense rose sharply to $45.3 million from $12.5 million in the year-ago quarter. The company also carries a refund liability of $181.1 million on its balance sheet, and management disclosed material weaknesses in internal controls over financial reporting.