pacs-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______.

Commission file number 001-42011

_________________________

PACS Group, Inc.

(Exact name of registrant as specified in its charter)

_________________________


Delaware		92-3144268
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	90 S. 400 W. Suite 700 Salt Lake City, Utah 84101
	(Address of Principal Executive Offices) (Zip Code)

(801) 447-9829

Registrant's telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PACS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of May 8, 2026, there were 158,272,376 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

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	PACS GROUP, INC. AND SUBSIDIARIES
	QUARTERLY REPORT ON FORM 10-Q
	FOR THE THREE MONTHS ENDED MARCH 31, 2026
	TABLE OF CONTENTS

Part I - Financial Information		Pg.
Item 1. Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	3
	Condensed Consolidated Statements of Income for the three months ended March 31, 2026 and 2025	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosure About Market Risk		37
Item 4. Controls and Procedures		37

Part II - Other Information
Item 1. Legal Proceedings		41
Item 1A. Risk Factors		43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 3. Defaults Upon Senior Securities		43
Item 4. Mine Safety Disclosures		43
Item 5. Other Information		43
Item 6. Exhibits		45
Signatures		46

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements including, but not limited to, statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market growth; our plans, objectives, and expectations for our business, including facility acquisitions, divestitures, openings, and closures; the effects of industry and regulatory developments; our liquidity, capital resources, and uses of cash, including our Amended and Restated Credit Facility, amendments, waivers, and forbearance arrangements, and access to capital; the scope, timing, costs, and potential impacts of governmental and regulatory investigations and the SEC investigation, as well as other litigation and legal proceedings; the restatement of prior periods and related impacts; our internal controls and disclosure controls and procedures, including any material weaknesses and related remediation; and self-insurance liabilities, including actuarial estimates and related reserves. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our dependence on reimbursement from third-party payors, and changes in patient acuity mix, payor mix, payment methodologies, or new cost-containment initiatives could negatively impact our revenue and results of operations; we may not be fully reimbursed for all services billed through consolidated billing or bundled payments, reducing our revenue and financial condition; increased competition for, or shortages of, nurses, nurse assistants and other skilled personnel could raise labor costs and subject us to monetary fines; state efforts to regulate or deregulate healthcare services or the construction, expansion, or acquisition of healthcare facilities could impair our ability to expand or increase competition; failure to attract patients and residents or compete effectively with other healthcare providers may reduce our revenue and profitability; reviews and audits of care delivery, recordkeeping and billing may detect noncompliance requiring repayment of billed amounts or other costs; litigation and claims common in our industry could result in significant legal costs, settlements or damage awards, and our self-insurance programs may expose us to unexpected costs and losses; material weaknesses in our internal control over financial reporting, or failure to remediate such weaknesses or maintain effective controls, could impair timely and accurate reporting, reduce investor confidence, subject us to penalties, and affect the value of our common stock; inability to provide consistently high quality of care, or employee conduct that impacts patient health, safety or clinical treatment, could result in civil or criminal penalties and harm our operations; significant reliance on information technology, and any failure or interruption of that technology, could impair our operations; operational metrics derived from internal systems without independent verification may contain inaccuracies that harm our reputation; inability to complete acquisitions at attractive prices or at all may reduce revenue, and divestitures of underperforming or non-strategic subsidiaries would further decrease revenue; we may not successfully integrate acquired facilities or achieve expected benefits; acquisitions may entail unforeseen costs, liabilities or regulatory issues that adversely affect our operations; difficulty completing partnerships consistent with our growth strategy; failure to achieve or maintain competitive quality ratings from CMS or private rating organizations could negatively affect us; inability to obtain insurance or increases in insurance costs could impair our financial condition; geographic concentration of our facilities, including in California, increases vulnerability to local economic downturns, regulatory changes or natural disasters; actions of national labor unions may reduce our revenue and profitability; because we lease most facilities, we face risks from lease termination, extensions and special charges that could affect our financial condition and results of operations; insufficient cash flow to cover required payments or meet covenants under long-term debt, mortgages and leases could trigger defaults and cross-defaults, risking loss of facilities or foreclosures; we may need additional capital to fund operations and growth, which may be unavailable or available only on unfavorable terms; extensive and complex laws and regulations govern our industry, and noncompliance or regulatory changes could require significant expenditures or operational modifications; our founders, Jason Murray and Mark Hancock, hold substantial control and a substantial portion of our outstanding common stock, and their interests may conflict with those of other stockholders; as a "controlled company" under NYSE governance standards, we may rely on exemptions from certain requirements, and stockholders may not have the same protections afforded to stockholders of non-controlled companies, and the other important factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K filed for

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the year ended December 31, 2025, filed with the SEC on February 27, 2026.The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context requires otherwise, the terms “PACS Group,” the “Company,” “we,” “us,” and “our” refer to PACS Group, Inc. and its consolidated subsidiaries.

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Part I

Item 1. Financial Statements


PACS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for share and per share values)
	(unaudited)
	March 31,		December 31,
	2026		2025
ASSETS
Current Assets:
Cash and cash equivalents	$	247,981	$	197,016
Accounts receivable, net	648,037		628,128
Other receivables	85,183		73,965
Prepaid expenses and other current assets	86,904		170,630
Total Current Assets	1,068,105		1,069,739
Property and equipment, net	1,308,168		1,201,096
Operating lease right-of-use assets	2,907,903		2,968,176
Insurance subsidiary deposits and investments	107,323		87,192
Escrow funds	18,260		18,404
Goodwill and other indefinite-lived assets	68,061		68,061
Other assets	185,698		171,366
Total Assets	$	5,663,518	$	5,584,034


LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	180,662	$	192,232
Accrued payroll and benefits	242,698		187,516
Current operating lease liabilities	154,302		153,066
Current maturities of long-term debt	8,385		4,463
Current portion of accrued self-insurance liabilities	137,934		128,994
Refund liability	181,129		181,129
Other accrued expenses	168,413		154,030
Total Current Liabilities	1,073,523		1,001,430
Long-term operating lease liabilities	2,888,283		2,939,854
Line of credit	45,000		100,000
Long-term debt, less current maturities, net of deferred financing fees	239,814		244,803
Accrued self-insurance liabilities, less current portion	208,948		192,561
Other liabilities	165,760		152,937
Total Liabilities	$	4,621,328	$	4,631,585
Commitments and contingencies (Note 15)
Equity:
PACS Group, Inc. stockholders’ equity:
Common stock: $0.001 par value; 1,250,000,000 shares authorized; 157,165,029 shares issued and outstanding as of March 31, 2026, and 156,615,144 shares issued and outstanding as of December 31, 2025	157		157
Additional paid-in capital	646,738		637,035
Retained earnings	390,274		309,579
Total PACS Group, Inc. stockholders' equity	1,037,169		946,771
Noncontrolling interest in subsidiary	5,021		5,678
Total Equity	$	1,042,190	$	952,449
Total Liabilities and Equity	$	5,663,518	$	5,584,034

See accompanying notes to unaudited condensed consolidated financial statements.

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PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except for share and per share values)
	Three Months Ended March 31,
	2026		2025
Revenue
Patient and resident service revenue	$	1,419,959	$	1,276,985

Other revenues	535		165
Total Revenue	$	1,420,494	$	1,277,150
Operating Expenses
Cost of services	1,074,536		1,023,791
Rent - cost of services	95,531		93,795
General and administrative expense	112,315		98,719
Depreciation and amortization	18,077		12,705
Total Operating Expenses	$	1,300,459	$	1,229,010
Operating income	120,035		48,140
Other (Expense) Income
Interest expense	(6,424)		(6,904)
Other income, net	125		1,494
Total Other Expense, Net	$	(6,299)	$	(5,410)
Income before provision for income taxes	113,736		42,730
Provision for income taxes	33,068		14,350
Net Income	$	80,668	$	28,380
Less:
Net loss attributable to noncontrolling interest	(27)		(92)
Net Income Attributable To PACS Group, Inc.	$	80,695	$	28,472
Net Income Per Share Attributable To PACS Group, Inc.
Basic	$	0.51	$	0.18
Diluted	$	0.50	$	0.17
Weighted-Average Common Shares Outstanding
Basic	157,073,382		155,177,511
Diluted	162,080,007		166,415,616

See accompanying notes to unaudited condensed consolidated financial statements.

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PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(dollars in thousands, except for share and per share values)
	Common Stock			Additional Paid-In Capital		Retained Earnings		Noncontrolling Interest		Total
	Shares	Amount
Balance January 1, 2026	156,615,144	$	157	$	637,035	$	309,579	$	5,678	$	952,449
Stock-based compensation	—	—		20,348		—		—		20,348
Issuance of common stock to employees and directors resulting from the vesting of restricted stock unit awards	820,364	1		(1)		—		—		—
Tax withholdings related to net share settlement of equity awards	(270,479)	(1)		(10,662)		—		—		(10,663)
Distributions	—	—		—		—		(208)		(208)
Purchase of equity in noncontrolling interest	—	—		18		—		(422)		(404)
Net loss attributable to noncontrolling interest	—	—		—		—		(27)		(27)
Net income attributable to PACS Group, Inc.	—	—		—		80,695		—		80,695
Balance March 31, 2026	157,165,029	$	157	$	646,738	$	390,274	$	5,021	$	1,042,190





	Common Stock			Additional Paid-In Capital		Retained Earnings		Noncontrolling Interest		Total
	Shares	Amount
Balance January 1, 2025	155,177,511	$	155	591,363		$	118,036	$	6,137	$	715,691
Stock-based compensation	—	—		12,202		—		—		12,202
Net loss attributable to noncontrolling interest	—	—		—		—		(92)		(92)
Net income attributable to PACS Group, Inc.	—	—		—		28,472		—		28,472
Balance March 31, 2025	155,177,511	$	155	$	603,565	$	146,508	$	6,045	$	756,273

SEC Form 10-Q filed by PACS Group Inc.