Revenue growth accelerated to 35.8% year-over-year in 2026Q2, but gross margin compressed to 14.1% from 20.2% in 2025Q3, indicating acquisition integration costs are pressuring profitability.
The Pennant Group, Inc. (PNTG) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 1.1B | 947.71M | 695.24M | 544.89M | 473.24M | 439.69M | 390.95M | 338.53M | 286.06M | 250.99M |
| Revenue Growth % | 37.9% | 36.31% | 27.59% | 15.14% | 7.63% | 12.47% | 15.49% | 18.34% | 13.97% | - |
| Cost of Goods Sold | 938.81M | 825.24M | 601.48M | 477.86M | 414.66M | 391.1M | 336.06M | 293.92M | 243.62M | 218.58M |
| COGS % of Revenue | - | 87.08% | 86.51% | 87.7% | 87.62% | 88.95% | 85.96% | 86.82% | 85.16% | 87.09% |
| Gross Profit | 162.9M | 122.47M | 93.76M | 67.04M | 58.59M | 48.59M | 54.89M | 44.62M | 42.44M | 32.41M |
| Gross Margin % | 14.79% | 12.92% | 13.49% | 12.3% | 12.38% | 11.05% | 14.04% | 13.18% | 14.84% | 12.91% |
| Gross Profit Growth % | - | 30.61% | 39.87% | 14.43% | 20.56% | -11.47% | 23.03% | 5.13% | 30.95% | - |
| Operating Expenses | 99.34M | 71.08M | 55.65M | 41.87M | 45.85M | 43.9M | 35.97M | 38.95M | 21.81M | 17.01M |
| OpEx % of Revenue | - | 7.5% | 8% | 7.68% | 9.69% | 9.98% | 9.2% | 11.5% | 7.62% | 6.78% |
| Selling, General & Admin | 94.56M | 71.08M | 50.21M | 36.67M | 33.98M | 36.26M | 31.3M | 35.13M | 18.84M | 14.46M |
| SG&A % of Revenue | - | 7.5% | 7.22% | 6.73% | 7.18% | 8.25% | 8.01% | 10.38% | 6.59% | 5.76% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1.65M | 0 | 5.44M | 5.2M | 11.87M | 7.64M | 4.67M | 3.81M | 2.96M | 2.54M |
| Operating Income | 63.56M | 51.39M | 38.12M | 25.17M | 12.74M | 4.7M | 18.92M | 5.67M | 20.63M | 15.4M |
| Operating Margin % | 5.77% | 5.42% | 5.48% | 4.62% | 2.69% | 1.07% | 4.84% | 1.67% | 7.21% | 6.14% |
| Operating Income Growth % | - | 34.83% | 51.44% | 97.57% | 171.33% | -75.18% | 233.63% | -72.52% | 33.95% | - |
| EBITDA | 73.71M | 59.93M | 44.23M | 30.3M | 17.64M | 9.48M | 23.59M | 9.48M | 23.59M | 17.95M |
| EBITDA Margin % | 6.69% | 6.32% | 6.36% | 5.56% | 3.73% | 2.16% | 6.03% | 2.8% | 8.25% | 7.15% |
| EBITDA Growth % | 42.73% | 35.48% | 45.99% | 71.77% | 86.08% | -59.82% | 148.86% | -59.82% | 31.48% | - |
| D&A (Non-Cash Add-back) | 10.15M | 8.54M | 6.12M | 5.13M | 4.9M | 4.78M | 4.67M | 3.81M | 2.96M | 2.54M |
| EBIT | 55.15M | 52.31M | 38.32M | 25.51M | 12.71M | 4.67M | 19.14M | 5.67M | 20.63M | 15.4M |
| Net Interest Income | -4.55M | -6.68M | -6.96M | -5.92M | -3.82M | -1.94M | -1.24M | -410K | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 4.55M | 6.68M | 6.96M | 5.92M | 3.82M | 1.94M | 1.24M | 410K | 0 | 0 |
| Other Income/Expense | -10.96M | -5.76M | -6.75M | -5.58M | -3.85M | -1.97M | -1.01M | -410K | 0 | 0 |
| Pretax Income | 52.6M | 45.63M | 31.37M | 19.58M | 8.89M | 2.73M | 17.9M | 5.26M | 20.63M | 15.4M |
| Pretax Margin % | 4.77% | 4.81% | 4.51% | 3.59% | 1.88% | 0.62% | 4.58% | 1.55% | 7.21% | 6.14% |
| Income Tax | 14.14M | 11.87M | 7.03M | 5.67M | 1.65M | 582K | 2.35M | 2.08M | 4.35M | 5.38M |
| Effective Tax Rate % | 26.89% | 26% | 22.41% | 28.97% | 18.54% | 21.32% | 13.13% | 39.64% | 21.09% | 34.9% |
| Net Income | 32.32M | 29.58M | 22.56M | 13.38M | 6.64M | 2.7M | 15.74M | 2.55M | 15.68M | 9.87M |
| Net Margin % | 2.93% | 3.12% | 3.24% | 2.46% | 1.4% | 0.61% | 4.03% | 0.75% | 5.48% | 3.93% |
| Net Income Growth % | 20.49% | 31.11% | 68.62% | 101.4% | 146.4% | -82.88% | 518.38% | -83.77% | 58.95% | - |
| Net Income (Continuing) | 38.45M | 33.76M | 24.34M | 13.91M | 7.24M | 2.15M | 15.55M | 3.17M | 16.28M | 10.03M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 45.24M | 41.65M | 18.68M | 5.18M | 4.64M | 4.04M | 4.59M | 0 | 9.43M | 4.92M |
| EPS (Diluted) | 0.90 | 0.84 | 0.71 | 0.44 | 0.22 | 0.07 | 0.52 | 0.09 | 0.56 | 0.35 |
| EPS Growth % | 15.38% | 18.31% | 61.36% | 100% | 213.84% | -86.52% | 504.65% | -84.64% | 60% | - |
| EPS (Basic) | - | 0.86 | 0.72 | 0.45 | 0.23 | 0.08 | 0.56 | 0.09 | 0.56 | 0.35 |
| Diluted Shares Outstanding | 35.96M | 35.32M | 32M | 30.19M | 30.16M | 30.64M | 30.23M | 29.59M | 28M | 28M |
| Basic Shares Outstanding | 34.84M | 34.56M | 31.19M | 29.86M | 29.06M | 28.41M | 28.03M | 27.84M | 27.83M | 27.83M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | 455.62% | - | - |
Quick answers to the most common questions about buying PNTG stock.
For fiscal year 2025, The Pennant Group, Inc. (PNTG) reported total revenue of $947.7M. This represents a 277.6% increase compared to $251.0M in 2017.
The Pennant Group, Inc. (PNTG) is profitable, generating $29.6M in net income for the fiscal year ending 2025 with a net profit margin of 3.1%.
The Pennant Group, Inc. (PNTG) reported an operating income of $51.4M, resulting in an operating profit margin of 5.4%. This margin reflects the operational efficiency of the business before interest and taxes.
The Pennant Group, Inc. (PNTG) generated $122.5M in gross profit for the year, representing a gross profit margin of 12.9%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin compression from acquisition integration
Metrics are mathematically derived from official filings.
Revenue Momentum Accelerates on Acquisitions
Revenue growth accelerated to 35.8% year-over-year in 2026Q2, up from 27.6% in 2024Q2, according to the latest quarterly report, suggesting sustained acquisition-driven expansion.
The sequential revenue increase from $285.4M in 2026Q1 to $298.0M in 2026Q2, coupled with a 35.8% year-over-year growth rate, indicates that the pace of expansion is not only holding but strengthening. This acceleration appears to be fueled by inorganic activity, as the company's organic growth in the healthcare services sector typically runs in the high single digits. Investors should monitor whether this growth rate is sustainable as acquisition targets become scarcer or more expensive.
Gross Margin Volatility Raises Integration Concerns
Gross margin swung from 20.2% in 2025Q3 to 14.1% in 2026Q2, as reported in financial statements, indicating that acquisition integration may be pressuring cost structures despite revenue growth.
The gross margin in 2025Q3 spiked to 20.2%, likely due to a one-time benefit or a change in service mix, but has since reverted to the 13-14% range, which is more consistent with the company's historical performance. This volatility suggests that the company's ability to maintain pricing power and control direct costs is not yet stable. Compared to peers like Ensign Group at 15.8%, PNTG's gross margin is slightly lower, which may indicate a less favorable payer mix or higher labor costs.
Operating Leverage Stalls as SG&A Spikes
Operating income grew only 49% from 2024Q2 to 2026Q2, while revenue grew 77%, per the income statement, implying that SG&A expenses are absorbing a larger share of incremental revenue.
In 2025Q3, SG&A jumped to $33.9M, representing 14.8% of revenue, compared to a more typical 6-7% in other quarters. This anomaly suggests that the company may have incurred one-time costs related to acquisitions or restructuring. Excluding that quarter, operating leverage appears positive, with operating margins expanding from 5.4% in 2024Q1 to 5.8% in 2026Q2. However, the elevated SG&A in 2025Q3 warrants monitoring to see if it becomes a recurring trend.
EPS Growth Outpaces Net Income on Buybacks
Diluted EPS grew 25% year-over-year in 2026Q2, while net income grew only 28%, as per the latest filing, suggesting that share repurchases are modestly boosting per-share metrics.
The gap between net income growth and EPS growth is narrow, indicating that the company is not heavily reliant on buybacks to drive EPS. However, stock-based compensation has been rising, from $1.4M in 2024Q1 to $5.5M in 2026Q2, which could dilute shareholders if not offset by repurchases. The effective tax rate appears stable, with net margins consistently around 3%, suggesting no anomalies in tax provisions.
COGS Dominates Cost Structure, SG&A Spikes
COGS consistently represents over 85% of revenue, as shown in the income statement, while SG&A spiked to $33.9M in 2025Q3, indicating that labor and facility costs are the primary drivers.
The cost structure is heavily weighted toward direct operating costs, which is typical for healthcare services. The SG&A spike in 2025Q3 is an outlier that may reflect acquisition-related expenses or legal costs. Management appears to be disciplined in controlling SG&A in other quarters, with it averaging around 6-7% of revenue. Investors should watch for any upward trend in SG&A as the company scales.
Margin Compression Risk from Integration
Despite revenue growth, gross margins have not improved, and the 2025Q3 SG&A spike suggests integration costs could pressure operating margins, as per the financial data.
Short-sellers might argue that the company's growth is purely acquisition-driven, with no evidence of organic same-store growth. The gross margin has remained flat around 13-14% for the past two years, indicating that the company is not achieving economies of scale. Additionally, the elevated SG&A in 2025Q3 could signal that integration costs are higher than expected, which may compress operating margins in future quarters. If the company cannot stabilize margins, the current valuation may be unjustified.