PACS Group (NYSE:PACS) delivered a robust financial performance in the second quarter of 2026, reporting a 9.1% revenue increase to $1.43 billion and a 50% jump in net income to $76.4 million, driven by higher occupancy rates and a strengthened patient mix across its skilled nursing portfolio.
Operational Strength and Same-Store Growth
CEO Jason Murray attributed the company’s success primarily to the performance of its existing portfolio rather than aggressive new acquisitions. Same-store facilities saw revenue climb 5.8% to $1.35 billion, while occupancy levels rose 150 basis points to 90.6%. Across the entire portfolio, PACS maintained an occupancy rate of 90.4%, significantly outperforming the industry average of 79.5%.
The company’s adjusted EBITDA grew by 25% year-over-year, reaching $166.8 million, while the adjusted EBITDAR margin expanded by 150 basis points to 11.7%.
Improving Quality and Facility Turnarounds
Quality measures remain a cornerstone of the PACS business model. By the end of Q2, approximately 83.6% of its facilities held four- or five-star CMS ratings. Murray highlighted the successful turnaround of a California-based behavioral-health facility that had previously been designated as a “Special Focus Facility.” Following intensive clinical and operational improvements, the facility successfully graduated from the program on June 29, 2026.
COO Josh Jergensen noted that as facilities stabilize, the company has seen a marked reduction in reliance on agency labor, overtime, and double-time, which has been instrumental in supporting margin expansion.
Expansion Strategy and Future Outlook
PACS is entering a new phase of growth, recently closing on the acquisition of 20 skilled nursing facilities from Eduro Healthcare in Texas, with 14 additional facilities expected to be acquired in the coming quarters. While these new sites currently operate at lower occupancy levels, management views them as prime opportunities for operational improvement.
Reflecting this confidence, PACS has raised its full-year 2026 revenue guidance to a range of $5.75 billion to $5.85 billion, with adjusted EBITDA projections increased to between $640 million and $660 million.
Financial Position and Compliance
As of June 30, PACS operated 324 facilities across 17 states with a total of 35,631 beds. The company maintains a strong balance sheet with $756.6 million in available liquidity and zero borrowings under its $600 million credit line. Net leverage stands at a conservative 0.1 times.
Regarding administrative expenses, which rose to $114.3 million due to investments in systems and infrastructure, the company confirmed it is actively working to remediate previously disclosed material weaknesses in internal financial reporting, with a target for completion by the end of the year. CEO Jason Murray also reaffirmed that the company continues to cooperate with ongoing government investigations.