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HCSG Q1 2025 Earnings Report
HCSG reported strong first quarter results with increased revenue, net income, and cash flow from operations.
Key Takeaways
Healthcare Services Group, Inc. reported a strong first quarter for 2025, with revenue increasing by 5.7% over the prior year to $447.7 million. Net income was $17.2 million, and diluted EPS was $0.23. The company also saw a significant increase in cash flow from operations, reaching $27.5 million, or $32.1 million excluding changes in payroll accrual.
Revenue increased by 5.7% to $447.7 million compared to the prior year.
Net income was $17.2 million, with diluted EPS at $0.23.
Cash flow from operations was $27.5 million, or $32.1 million excluding payroll accrual changes, marking a $41.3 million increase over the prior year.
The company reiterated its 2025 mid-single digit revenue growth expectations and raised its 2025 cash flow from operations forecast.
Forward Guidance
Healthcare Services Group, Inc. has reiterated its 2025 mid-single digit revenue growth expectations and raised its 2025 cash flow from operations forecast (excluding the change in payroll accrual) from $45.0-$60.0 million to $60.0-$75.0 million.
Positive Outlook
- Reiterated 2025 mid-single digit revenue growth expectations.
- Raised 2025 cash flow from operations forecast (excluding payroll accrual) from $45.0-$60.0 million to $60.0-$75.0 million.
- Expects to manage SG&A in the 9.5% to 10.5% range in the near term, with a longer-term goal of 8.5% to 9.5%.
- 2025 goal to manage cost of services in the 86% range.
- Positive momentum from Q1 expected to carry into Q2.
Challenges Ahead
- Potential for significant additional bad debts due to delays in payments from customers and/or customer restructurings.
- Operating results could be adversely affected by continued inflation, particularly if cost increases cannot be passed on to customers.
- Risks related to providing services to the healthcare industry, primarily long-term care providers.
Historical Earnings Impact
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