HCSG Q2 2025 Earnings Call Transcript

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Wednesday, July 23, 2025 astatine 8:30 a.m. ET

• Chief Executive Officer — Theodore Wahl

• Chief Communications Officer — Matthew J. McKee

• Chief Financial Officer — Vikas Singh

Theodore Wahl: Good morning, everyone, and invited to HCSG's Second Quarter 2025 Earnings Call. With maine contiguous are Matt McKee, our Chief Communications Officer; and Vikas Singh, our Chief Financial Officer. Earlier this morning, we released our 2nd 4th results and program connected filing our 10-Q by the extremity of the week. Today, successful my opening remarks, I'll sermon our Q2 highlights, stock our position connected the wide concern environment, sermon our strategical priorities and supply details connected our $50 cardinal stock repurchase plan. Matt volition past supply a much elaborate treatment connected our Q2 results. And past Vikas volition supply an update connected our equilibrium expanse and superior allocation progression. We volition past unfastened up the telephone for Q&A.

But first, I'd similar to remark connected the antecedently announced Genesis HealthCare restructuring. Genesis filed for Chapter 11 bankruptcy connected July 9. Following the petition date, we person continued our contractual narration with the Genesis facilities without disruption successful services oregon payments. And portion we're disappointed successful the interaction that this lawsuit had connected our 2nd 4th results, we judge its basal causes are circumstantial to Genesis and its past circumstances and decisions and is not a reflection connected the existent authorities of the industry. There's been a large woody of outer attraction paid to Genesis done the years and rightfully so. They are an important lawsuit of ours, and we've had a long-standing partnership.

That said, we judge this lawsuit volition effect successful stronger, healthier lawsuit facilities, supply equilibrium expanse clarity for our stakeholders and region an overhang that has weighed connected our banal for years. And present I'd similar to determination connected to sermon results that are much indicative of our underlying concern fundamentals and the breathtaking opportunities that prevarication ahead. Second 4th maturation exceeded our expectations. Q2 was our 5th consecutive sequential gross summation and our highest complaint of maturation since Q1 2018. New lawsuit wins and precocious retention drove our integrated growth, and we person carried that affirmative momentum into the backmost fractional of the year.

Despite the Genesis quality and the resulting interaction connected our Q2 reported results, our 2025 maturation plans and currency travel outlook stay strong. We are reiterating our 2025 mid-single-digit maturation expectations and raising our 2025 currency travel from operations forecast, excluding the alteration successful payroll accrual, from $60 cardinal to $75 cardinal to $70 cardinal to $85 million. I'd present similar to stock our position connected the wide concern environment. Industry fundamentals proceed to summation strength, highlighted by the multi-decade demographic tailwind that is present opening to enactment its mode into the semipermanent and post-acute attraction system. The astir caller manufacture operating trends stay affirmative arsenic well, highlighted by dependable occupancy, expanding workforce availability and a unchangeable reimbursement environment.