PACS Group (NYSE: PACS) on Wednesday held its first quarterly earnings call in about 15 months, with leadership bullish on the company’s new compliance framework and touting record revenue and adjusted earnings year to date.

The executive team was eager to turn the page given that the company has been beleaguered since Hindenburg Research, a now-defunct institutional short seller, in November 2024 made allegations of improper billing practices.

“PACS moves forward with confidence, strength, and an unwavering commitment to doing things the right way,” CEO Jason Murray said on the company’s earnings call. “In short, today is the start of a new chapter for PACS.”

The Farmington, Utah-based organization has regained compliance with Securities and Exchange Commission (SEC) filing requirements following the completion of an internal audit and posted a 31% year-over-year surge in revenue in the third financial quarter of 2025.

The company also continues to integrate a large wave of 2024 acquisitions, maintain high occupancy levels and strong star ratings, according to its earnings report. And Murray highlighted the compliance-related changes as the most significant outcome, following the internal investigation by the audit committee.

“There’s been a lot of lessons that we’ve learned through this process, but I would say the one that stands out to me is our ability to continue to develop and strengthen our compliance within the organization,” Murray said. “That’s an area that we feel passionate about, and I think it aligns with our mission as an organization as well. It’s something that we, over the last year, have worked tirelessly to improve.”

While the company has not publicly reported quarterly earnings, it has shared some updates. The company in June admitted to overstating revenue by more than $60 million over two quarters. Coupled with the completed audit, PACS announced restatement of previously issued financial statements for three months ended March 31, 2024 and for three and six months ended June 30, 2024.

As for its Q3 2025 results, PACS reported $1.34 billion in revenue, while net income was $52.3 million, and adjusted EBITDA was $131.5 million.

“We delivered record revenue and adjusted EBITDA in the first nine months of 2025,” said Murray. “We believe this record performance validates PACS’ core strengths, our commitment to clinical and operational excellence, our industry leading talent, and a strategy designed for sustainable growth.”

Murray referred to PACS’ locally led, centrally supported model that empowers local leaders to make operational and clinical decisions at the facility level.

“At the same time, we maintain robust regional and central support systems that provide resources oversight and regular regulatory expertise, establishing clear guardrails that help our local teams remain compliant with local, state and federal requirements,” said Murray.

The company reported that 192 properties, or 68.6% of PACS’ skilled nursing portfolio, have a four- or five-star rating from the Centers for Medicare & Medicaid Services (CMS).

Year-to-date, PACS reported revenue of $3.93 billion, a 36.4% jump compared to the prior year period. PACS leases and owns a combined 320 facilities, totaling 35,202 beds across 17 states – the company is one of the largest skilled nursing facility operators in the country. More than 47,000 people are employed by PACS.

On Wednesday, PACS shares closed at $16.83, up $2.40, or 16.63%. The company’s shares are up nearly 50% over the last five days, having jumped earlier in the week on the news of the planned earnings release and long-delayed SEC filings.

Assimilating significant volume

In the second half of 2024 alone, PACS acquired 94 facilities as part of 106 acquisitions for the whole year, the largest of which was the Prestige portfolio, adding 53 properties across eight states. Five of the eight states were new markets for PACS, Murray said, significantly expanding the company’s geographic footprint.

PACS tacked on the operations of seven more facilities in 2025, Murray said, all within the company’s existing footprint.

“2025 has provided time to assimilate the significant volume of transactions completed in 2024 and demonstrates our intentional focus on integrating that large cohort,” said Mark Hancock, executive vice chairman and interim CFO for PACS. Hancock is serving as interim CFO following the resignation of former PACS CFO Derick Apt. He left the company after the internal investigation found that he had violated company policy by “accepting high-value items” from parties that do business with PACS.

Cost of services increased by 32%, Hancock said, reflective of the company’s growth and efforts to make operational and clinical improvements.

“What we’ve learned over the process of our acquisitions is that it takes time to implement and deploy our policies, procedures, and our model of increasing the clinical capabilities of our facilities,” added PACS President and COO Josh Jergensen. “You heard, obviously, the sheer number of facilities that we took on, it creates challenges for us to ensure that those teams are supported in a way that allows them to have the confidence to increase both skilled mix and occupancy.”

Occupancy stands at 89%, with PACS’ mature facilities at 95%, up one percentage point from last year.

“We expect to see continued improvement in both occupancy and skilled mix over time. Our locally-led model is foundational to driving increased occupancy, which prioritizes matching patient acuity with the right clinical capabilities at each facility,” Murray said.

PACS also continues to invest in its leadership pipeline, with 261 administrators in training (AITs) hired since its founding – 203 are currently employed at PACS facilities as licensed administrators or in other roles, reflecting a 78% retention rate. There are 36 AITs currently going through the program, noted Murray.

Audit complete

Having been formed in the wake of the Hindenburg report, PACS’ independent audit committee, supported by external counsel and advisors, found that the company didn’t have the right environment needed for financial reporting as a public company. Specifically, the company wasn’t able to identify, assess and communicate risks to appropriate levels of the organization, including compliance risks, through its hotline process at the time.

PACS wasn’t appropriately recognizing revenue for new services either, the committee said, as detailed in the company’s 10-Q.

Katherine Lauer has served as interim chief compliance officer, and PACS is in the process of hiring a permanent CCO who has “public company and post-acute healthcare experience,” according to the 10-Q. PACS is also recruiting additional compliance, legal and internal audit personnel to enhance its risk assessment capabilities.

A compliance committee of senior management was formed and chaired by the CCO, complete with a detailed charter and oversight from the audit committee and board of directors. PACS started a compliance training program as well, while upgrading its compliance hotline and process for investigating complaints – elevating matters that may have a financial impact to the CFO, chief accounting officer and board.

Furthermore, PACS is in the process of enhancing “controls related to revenue recognition,” or ensuring the right billing codes are being used for the best and most accurate reimbursement, with oversight by the company’s compliance team.

Sub-certifications and key personnel were added as well to its disclosure committee process, in order to address the evaluation and communication of compliance and other business activities, if they impact financial reporting. A broader group of internal stakeholders will ensure that time sensitive information is being shared when it impacts financial reporting.

PACS is still under investigation by the SEC’s Division of Enforcement related to accounting, financial reporting and internal controls. The company is cooperating, producing requested information and documentation as needed, the 10-Q disclosed.

But while some uncertainties remain, PACS’ executive team on Wednesday kept the messaging upbeat and forward-looking.

“The committee’s work and its resulting recommendations, which have been or are being implemented, reinforce our commitment to transparency, accountability and strong governance,” said Murray. “Now our focus is squarely on the future – executing our strategy, delivering exceptional care and continuing to build trust with our stakeholders.”