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Jun 30, 2025
HCSG Q2 2025 Earnings Report
HCSG's second quarter 2025 results were reported, exceeding growth expectations, raising the 2025 cash flow forecast, and announcing a $50.0 million share repurchase plan.
Key Takeaways
Healthcare Services Group, Inc. reported strong second-quarter results, with revenue increasing by 7.6% year-over-year to $458.5 million, driven by new client wins and higher retention. Despite a significant non-cash charge related to the Genesis HealthCare restructuring, the company's growth plans and cash flow outlook remain robust, leading to an increased 2025 cash flow from operations forecast.
Revenue for Q2 2025 reached $458.5 million, marking a 7.6% increase compared to the prior year.
Net loss and diluted EPS were ($32.4) million and ($0.44) respectively, impacted by a $0.65 non-cash charge from the Genesis HealthCare restructuring.
Cash flow from operations was $28.8 million, with cash flow from operations (excluding payroll accrual) at $8.5 million, an increase of $10.9 million year-over-year.
The company raised its 2025 cash flow from operations forecast (excluding payroll accrual) to $70.0-$85.0 million and announced a $50.0 million share repurchase plan.
Revenue by Segment
Forward Guidance
HCSG reiterates its expectation for mid-single digit revenue growth in 2025 and has raised its cash flow from operations forecast (excluding payroll accrual) for 2025. The company also plans to manage cost of services and SG&A within specific ranges.
Positive Outlook
- Reiterates 2025 mid-single digit revenue growth expectations.
- Raises 2025 cash flow from operations forecast (excluding payroll accrual) from $60.0-$75.0 million to $70.0-$85.0 million.
- Goal to manage second half of 2025 cost of services in the 86% range.
- Expects to manage SG&A in the 9.5% to 10.5% range in the near term.
- Longer-term goal to manage SG&A into the 8.5% to 9.5% range.
Challenges Ahead
- Estimates a third quarter $0.04 per share non-cash charge related to the Genesis restructuring.
- Operating results could be adversely affected by continued inflation if cost increases cannot be passed on to customers.
- Delays in payments from customers and/or customers undergoing restructurings could result in significant additional bad debts.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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