What changed in this filing

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Item 1. Financial Statements

2026-07-27 compared with 2026-04-30 · 342 added, 177 removed, 653 unchanged (44% of the section changed)

3 unchanged sentences

(In thousands, except par values)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets:

Cash and cash equivalents $ 262,300 $ 503,881

Accounts receivable—less allowance for doubtful accounts of $ 7,583 and $ 7,805 at March 31, 2026 and December 31, 2025, respectively

Accounts receivable—less allowance for doubtful accounts of $ 7,895 and $ 7,805 at June 30, 2026 and December 31, 2025, respectively

668,902 636,985

30 unchanged sentences

150,000 shares authorized;

61,990 and 58,423 shares issued and shares outstanding at March 31, 2026, respectively, and 61,652 and 58,085 shares issued and shares outstanding at December 31, 2025, respectively

62,102 and 58,272 shares issued and shares outstanding at June 30, 2026, respectively, and 61,652 and 58,085 shares issued and shares outstanding at December 31, 2025, respectively

Additional paid-in capital 673,846 614,724

Retained earnings 1,947,958 1,756,137

Treasury stock, at cost, 3,567 shares at March 31, 2026 and December 31, 2025

Treasury stock, at cost, 3,830 and 3,567 shares at June 30, 2026 and December 31, 2025

( 180,178 ) ( 139,198 )

7 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

(In thousands, except per share data)

11 unchanged sentences

Interest income 4,633 5,240 11,169 12,123

Other (expense) income ( 885 ) 361

Other income 8,470 5,241 7,585 5,602

OTHER INCOME, NET

29 unchanged sentences

BALANCE - MARCH 31, 2026 58,423 $ 62 $ 653,401 $ 1,852,008 3,567 $ ( 139,221 ) $ 3,447 $ 2,369,697

Issuance of common stock to employees and directors resulting from the exercise of stock options 66 — 4,384 — — — — 4,384

Issuance of restricted stock, net of forfeitures 46 — — — — — — —

Shares of common stock used to satisfy tax withholding obligations ( 6 ) — — — 6 ( 957 ) — ( 957 )

Dividends declared ($ 0.0650 per share)

— — — ( 3,788 ) — — — ( 3,788 )

Employee stock award compensation — — 15,962 — — — — 15,962

Repurchase of common stock (Note 19)

( 257 ) — — — 257 ( 40,000 ) — ( 40,000 )

Net income attributable to noncontrolling interest — — — — — — 96 96

Noncontrolling interests attributable to subsidiary equity plan — — 99 — — — 78 177

Net income attributable to the Ensign Group, Inc.

— — — 99,738 — — — 99,738

BALANCE - JUNE 30, 2026 58,272 $ 62 $ 673,846 $ 1,947,958 3,830 $ ( 180,178 ) $ 3,621 $ 2,445,309

Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Non-Controlling Interest

9 unchanged sentences

( 84 ) — — — 84 ( 10,775 ) — ( 10,775 )

Acquisition of noncontrolling interest shares — — ( 11 ) — — — — ( 11 )

Net income attributable to noncontrolling interest — — — — — — 76 76

3 unchanged sentences

BALANCE - MARCH 31, 2025 57,547 $ 61 $ 551,867 $ 1,503,442 3,484 $ ( 128,553 ) $ 3,340 $ 1,930,157

Issuance of common stock to employees and directors resulting from the exercise of stock options 168 — 8,652 — — — — 8,652

Issuance of restricted stock, net of forfeitures 41 — — — — — — —

Shares of common stock used to satisfy tax withholding obligations ( 7 ) — — — 7 ( 1,057 ) — ( 1,057 )

Dividends declared ($ 0.0625 per share)

— — — ( 3,605 ) — — — ( 3,605 )

Employee stock award compensation — — 11,628 — — — — 11,628

Repurchase of common stock (Note 19)

( 73 ) — — — 73 ( 9,225 ) — ( 9,225 )

Net income attributable to noncontrolling interest — — — — — — 70 70

Noncontrolling interests attributable to subsidiary equity plan — — 53 — — — ( 86 ) ( 33 )

Net income attributable to the Ensign Group, Inc.

— — — 84,396 — — — 84,396

BALANCE - JUNE 30, 2025 57,676 $ 61 $ 572,200 $ 1,584,233 3,564 $ ( 138,835 ) $ 3,324 $ 2,020,983

See accompanying notes to the condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2026 2025

5 unchanged sentences

Stock-based compensation 30,061 22,386

Insurance proceeds and (gain) loss on long-lived assets, net 1,915 420

Insurance proceeds and loss on long-lived assets 2,455 402

Other operating activities, net 1,744 1,279

18 unchanged sentences

Maturities of investments 44,722 53,249

Other investing activities, net 89 ( 9 )

Other investing activities 488 647

NET CASH USED IN INVESTING ACTIVITIES

5 unchanged sentences

Repurchase of shares of common stock (Note 19)

( 40,000 ) ( 20,000 )

Dividends paid ( 7,572 ) ( 7,186 )

Other financing activities ( 24 ) ( 75 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

NET CASH USED IN FINANCING ACTIVITIES

$ ( 34,796 ) $ ( 16,655 )

Net increase (decrease) in cash and cash equivalents 35,617 ( 181,932 )

Net decrease in cash and cash equivalents ( 241,581 ) ( 100,629 )

Cash and cash equivalents beginning of period 503,881 464,598

Cash and cash equivalents end of period $ 262,300 $ 363,969

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2026 2025

16 unchanged sentences

The Company's independent subsidiaries provide health care services across the post-acute care continuum and engage in the ownership, acquisition, development and leasing of skilled nursing, senior living and other healthcare-related properties and ancillary businesses.

As of March 31, 2026, the Company's independent subsidiaries operated 378 facilities and other ancillary operations located in 17 states.

As of June 30, 2026, the Company's independent subsidiaries operated 396 facilities and other ancillary operations located in 17 states.

The Company's independent subsidiaries have a collective capacity of approximately 40,700 operational skilled nursing beds and 3,400 senior living units.

As of March 31, 2026, the Company's independent subsidiaries operated 254 facilities under long-term lease arrangements and had options to purchase eight of those 254 facilities.

As of June 30, 2026, the Company's independent subsidiaries operated 254 facilities under long-term lease arrangements and had options to purchase eight of those 254 facilities.

The Company's real estate portfolio consists of 181 owned real estate properties, which includes 142 facilities operated and managed by the Company's independent subsidiaries, 39 operations leased to and operated by third-party operators and the Service Center (defined below) location.

Of those 39 third-party operations, one senior living operation is located on the same real estate property as a skilled nursing operation that an independent subsidiary operates.

During the three months ended March 31, 2026, the Company expanded its presence with the addition of five stand-alone skilled nursing operations in three states .

These new operations added a total of 582 operational skilled nursing beds to be operated by the Company's independent subsidiaries.

Additionally, the Company entered into definitive agreements to acquire 15 stand-alone skilled nursing operations and two campus operations in Texas subsequent to March 31, 2026, subject to customary closing conditions.

These new operations will add 2,080 operational skilled nursing beds and 155 senior living units to be operated by the Company's independent subsidiaries.

During the six months ended June 30, 2026, the Company expanded its presence with the addition of 21 stand-alone skilled nursing operations and two campus operations in four states .

These new operations added a total of 2,724 operational skilled nursing beds and 135 operational senior living units to be operated by the Company's independent subsidiaries.

Subsequent to June 30, 2026, the Company expanded its presence with the addition of two stand-alone skilled nursing operations in Texas, and these new operations will add 250 operational skilled nursing beds to be operated by the Company's independent subsidiaries.

The Company's captive real estate investment trust (REIT), Standard Bearer Healthcare REIT, Inc.

10 unchanged sentences

has direct operating assets, employees or revenue, or that any of the subsidiaries are operated by The Ensign Group, Inc.

Other Information — The accompanying condensed consolidated financial statements as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 (collectively, the Interim Financial Statements) are unaudited.

Other Information — The accompanying condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 (collectively, the Interim Financial Statements) are unaudited.

Certain information and note disclosures normally included in the annual consolidated financial statements have been condensed or omitted, as permitted under applicable rules and regulations.

18 unchanged sentences

Recent Accounting Pronouncements — Except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws and a limited number of grandfathered standards, the FASB ASC is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.

For any new pronouncements announced, the Company considers whether the new pronouncements could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

For any new pronouncements announced, the Company considers whether the new pronouncement could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration.

Recently Issued Accounting Pronouncements Not Yet Adopted — In November 2024, the FASB issued ASU 2024-03 " Disaggregation of Income Statement Expenses, " which requires the Company to disaggregate key expense categories such as employee compensation, depreciation and intangible asset amortization within its financial statements.

ASU 2024-03 is effective for annuals periods beginning with the Company's fiscal year 2027, and interim periods within the Company's fiscal year 2028, with early adoption permitted.

ASU 2024-03 is effective for annual periods beginning with the Company's fiscal year 2027, and interim periods within the Company's fiscal year 2028, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its Notes to the Consolidated Financial Statements.

14 unchanged sentences

For patients under reimbursement arrangements with third-party payors, including Medicaid, Medicare and private insurers, revenue is recorded based on contractually agreed-upon amounts or rates, adjusted for estimates for variable consideration, on a per patient, daily basis or as services are performed.

Revenue from the Medicare and Medicaid programs accounted for 69.1 % and 69.5 % of all service revenue for the three months ended March 31, 2026 and 2025, respectively.

Revenue from the Medicare and Medicaid programs accounted for 68.9 % and 69.0 % of the three and six months ended June 30, 2026, and 69.8 % and 69.6 % for the three and six months ended June 30, 2025, respectively.

Settlements with Medicare, Medicaid and managed care payors for retroactive adjustments due to audits and reviews are considered variable consideration and are included in the determination of the estimated transaction price.

1 unchanged sentence

Consistent with healthcare industry practices, any changes to these revenue estimates are recorded in the period the change or adjustment becomes known based on the final settlement.

The Company recorded adjustments to revenue which were not material to the Company's revenue for the three months ended March 31, 2026 and 2025.

Service revenue for the three months ended March 31, 2026 and 2025 is summarized in the following tables:

Three Months Ended March 31,

The Company recorded adjustments to revenue which were not material to the Company's revenue for the three and six months ended June 30, 2026 and 2025.

Service revenue for the three and six months ended June 30, 2026 and 2025 is summarized in the following tables:

Three Months Ended June 30,

Revenue % of Revenue Revenue % of Revenue

9 unchanged sentences

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

In addition to the service revenue above, the Company's rental revenue derived from triple-net lease arrangements with third parties was $ 6,893 and $ 6,001 , respectively, for the three months ended March 31, 2026 and 2025.

Six Months Ended June 30,

Revenue % of Revenue Revenue % of Revenue

$ 1,110,269 39.4 % $ 939,688 39.3 %

Medicare 675,479 24.0 578,868 24.2

Medicaid-skilled

155,902 5.6 144,758 6.1

Total Medicaid and Medicare

$ 1,941,650 69.0 % $ 1,663,314 69.6 %

Managed care 526,199 18.7 456,712 19.1

Private and other (2)

346,951 12.3 268,428 11.3

SERVICE REVENUE $ 2,814,800 100.0 % $ 2,388,454 100.0 %

(1) Medicaid payor includes revenue for senior living operations.

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

In addition to the service revenue above, the Company's rental revenue derived from triple-net lease arrangements with third parties is $ 7,984 and $ 14,877 for the three and six months ended June 30, 2026, respectively, and $ 6,355 and $ 12,356 , for the three and six months ended June 30, 2025, respectively.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Balance Sheet Impact

Included in the Company’s condensed consolidated balance sheets are contract balances, comprised of billed accounts receivable and unbilled receivables, which are the result of the timing of revenue recognition, billings and cash collections, as well as contract liabilities, which primarily represent payments the Company receives in advance of services provided.

The Company had no material contract liabilities or contract assets as of March 31, 2026 and December 31, 2025, or activity during the three months ended March 31, 2026 and 2025.

The Company had no material contract liabilities or contract assets as of June 30, 2026 and December 31, 2025, and no material contracts occurred during the three and six months ended June 30, 2026 and 2025.

Accounts receivable consist primarily of amounts due from Medicare and Medicaid programs, other government programs, managed care health plans and private payor sources, net of estimates for variable consideration and doubtful accounts.

Accounts receivable as of March 31, 2026 and December 31, 2025, is summarized in the following table:

March 31, 2026 December 31, 2025

Accounts receivable as of June 30, 2026 and December 31, 2025, is summarized in the following table:

June 30, 2026 December 31, 2025

Medicaid $ 303,348 $ 296,649

5 unchanged sentences

ACCOUNTS RECEIVABLE, NET $ 668,902 $ 636,985

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

COMPUTATION OF NET INCOME PER COMMON SHARE

3 unchanged sentences

A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income $ 99,834 $ 84,466 $ 199,590 $ 164,819

6 unchanged sentences

$ 1.72 $ 1.48 $ 3.45 $ 2.88

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A reconciliation of the numerator and denominator used in the calculation of diluted net income per common share follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income $ 99,834 $ 84,466 $ 199,590 $ 164,819

4 unchanged sentences

incremental shares from assumed conversion (1)

1,525 1,445 1,662 1,432

Adjusted weighted average common shares outstanding 59,483 58,602 59,527 58,560

1 unchanged sentence

$ 1.68 $ 1.44 $ 3.35 $ 2.81

(1) Options and restricted stock awards outstanding that were anti-dilutive and therefore excluded from the calculation of the weighted average common shares outstanding were 733 and 1,171 for the three months ended March 31, 2026 and 2025, respectivel y.

(1) Options and restricted stock awards outstanding that were anti-dilutive and therefore excluded from the calculation of weighted average common shares outstanding were 1,377 and 1,192 for the three and six months ended June 30, 2026, respectively, and 920 and 855 for the three and six months ended June 30, 2025, respectivel y.

FAIR VALUE MEASUREMENTS

The Company's financial assets include held-to-maturity investments carried at amortized cost basis of $ 156,945 and $ 150,119 , of which $ 100,578 and $ 81,816 are designated to support insurance subsidiary liabilities, as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025, the amortized cost basis of these financial assets are considered to approximate fair value and are derived using Level 2 inputs.

The Company believes its amortized cost basis investments that were in an unrealized loss position as of March 31, 2026 and December 31, 2025 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company's financial assets include held-to-maturity investments carried at amortized cost basis of $ 165,982 and $ 150,119 , of which $ 103,900 and $ 81,816 are designated to support insurance subsidiary liabilities, as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025, the amortized cost basis of these financial assets is considered to approximate fair value and is derived using Level 2 inputs.

The Company believes its amortized cost basis investments that were in an unrealized loss position as of June 30, 2026 and December 31, 2025 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

The Company's financial assets also include the contracts insuring the lives of certain employees who are eligible to participate in non-qualified deferred compensation plans that are held in a rabbi trust.

The cash surrender value of these contracts is based on funds that shadow the investment allocations specified by participants in the deferred compensation plan and are held at fair value.

As of March 31, 2026 and December 31, 2025, the fair value of the investment funds was $ 81,895 and $ 74,405 , respectively, which are derived using Level 2 inputs.

As of June 30, 2026 and December 31, 2025, the fair value of the investment funds was $ 90,890 and $ 74,405 , respectively, which are derived using Level 2 inputs.

Refer to Note 16, Defined Contribution Plans for more information.

3 unchanged sentences

Of those 38 operations, one senior living operation is located on the same real estate property as a skilled nursing operation that an independent subsidiary operates.

During the three months ended March 31, 2026, Standard Bearer added $ 17,468 of real estate assets associated with two stand-alone skilled nursing operations, both of which are operated by the Company's independent subsidiaries .

Additionally , during the three months ended March 31, 2026, the operating responsibility for two stand-alone skilled nursing operations previously acquired by Standard Bearer was transitioned from third-party operators to the Company's independent subsidiaries.

R efer to Note 8, Property and Equipment - Net, for additional information on real estate acquisitions subsequent to March 31, 2026.

During the three months ended March 31, 2025, Standard Bearer added $ 147,796 of real estate assets associated with eight stand-alone skilled nursing operations, one stand-alone senior living operation and two campus operations.

During the six months ended June 30, 2026, Standard Bearer added $ 374,645 of real estate assets associated with 18 stand-alone skilled nursing operations, three stand-alone senior living operations and two campus operations.

Of these additions, three stand-alone senior living operations are leased to a third-party operator and the remaining additions are operated by the Company's independent subsidiaries.

Subsequent to June 30, 2026, Standard Bearer added approximately $ 36,000 real estate assets associated with two stand-alone skilled nursing operations to be operated by the Company's independent subsidiaries.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the six months ended June 30, 2025, Standard Bearer added $ 195,045 of real estate assets associated with 11 stand-alone skilled nursing operations, one stand-alone senior living operation and two campus operations.

Four of these additions were related to the exercise of purchase options under an existing lease arrangement from CareTrust REIT, Inc.

All these additions are operated by the Company's independent subsidiaries.

Of these additions, one stand-alone skilled nursing operation is leased to a third-party operator and the remaining additions are operated by the Company's independent subsidiaries.

As part of the formation of Standard Bearer, certain of the Company's independent subsidiaries , Standard Bearer and Standard Bearer's independent real estate subsidiaries entered into several agreements that include leasing, management services and debt arrangements between the operations .

2 unchanged sentences

Intercompany master lease agreements

Certain of the Company's independent subsidiaries and 120 Standard Bearer independent real estate subsidiaries have entered into seven triple-net master lease agreements (collectively, the Standard Bearer Master Leases).

Certain of the Company's independent subsidiaries and 138 Standard Bearer independent real estate subsidiaries have entered into 10 triple-net master lease agreements (collectively, the Standard Bearer Master Leases).

The lease periods range from 15 to 19 years with three five-year renewal options beyond the initial term, on the same terms and conditions.

6 unchanged sentences

and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties.

Intercompany rental revenue generated from Ensign-affiliated operations for the three months ended March 31, 2026 and 2025 was $ 30,832 and $ 23,904 , respectively, which has been eliminated in consolidation.

Intercompany rental revenue generated from Ensign affiliated operations was $ 37,785 and $ 68,617 for the three and six months ended June 30, 2026, respectively and $ 26,756 and $ 50,660 for the three and six months ended June 30, 2025, respectively.

Intercompany management agreement

2 unchanged sentences

The management agreement provides for a base management fee that is equal to 5.0 % of total rental revenue and an incentive management fee that is equal to 5.0 % of funds from operations (FFO) and is capped at 1.0 % of total rental revenue, for a total of 6.0 %.

Management fee generated between Standard Bearer and the Service Center for the three months ended March 31, 2026 and 2025 was $ 2,163 and $ 1,692 , respectively, which has been eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Management fee generated between Standard Bearer and the Service Center for the three and six months ended June 30, 2026 were $ 2,646 and $ 4,809 , respectively.

Management fees generated between Standard Bearer and the Service Center for the three and six months ended June 30, 2025 were $ 1,883 and $ 3,575 , respectively.

Intercompany debt arrangements

11 unchanged sentences

The Company can also call the awards, generally upon employee termination.

During the three months ended March 31, 2026 and 2025, the Company did not grant any stock options or restricted shares under the Standard Bearer Equity Plan.

During the three months ended March 31, 2026 and 2025, there were no restricted stock awards vested for the periods.

During the six months ended June 30, 2026 and 2025, the Company did not grant any stock options or restricted shares under the Standard Bearer Equity Plan.

During the six months ended June 30, 2026 and 2025, no restricted stock awards vested during either period.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The grant-date fair value of the awards is recognized as compensation expense over the relevant vesting periods, with a corresponding adjustment to noncontrolling interests.

The grant value was determined based on an independent valuation of the subsidiary shares.

For the three months ended March 31, 2026 and 2025, share-based compensation expense under the Standard Bearer Equity Plan was not material.

For the three and six months ended June 30, 2026 and 2025, share-based compensation expense under the Standard Bearer Equity Plan was not material.

BUSINESS SEGMENTS

1 unchanged sentence

(1) skilled services, which includes the operation of skilled nursing facilities and rehabilitation therapy services and (2) Standard Bearer, which is comprised of selected real estate properties owned by Standard Bearer and leased to skilled nursing and senior living operators.

As of March 31, 2026, the skilled services segment includes 331 skilled nursing and 31 campus operations that provide both skilled nursing and rehabilitative care services and senior living services.

As of June 30, 2026, the skilled services segment includes 348 skilled nursing and 32 campus operations that provide both skilled nursing and rehabilitative care services and senior living services.

The Company's Standard Bearer segment consists of 175 owned real estate properties.

13 unchanged sentences

The following tables set forth financial information for the segments:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Skilled Services Standard Bearer Total

16 unchanged sentences

INCOME BEFORE PROVISION FOR INCOME TAXES $ 133,674

(1) Skilled services service revenue does not include intercompany service revenue generated by ancillary operations provided to the Company's independent subsidiaries and management service revenue generated by the Service Center with Standard Bearer.

(1) Skilled services service revenue does not include intercompany service revenue generated by ancillary operations provided to the Company's independent subsidiaries or management service revenue generated by the Service Center for services provided to Standard Bearer.

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All other revenue includes $ 59,061 of service revenue and $ 3,195 of rental revenue for the three months ended March 31, 2026, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 32,404 and intercompany service revenue of $ 7,593 for the three months ended March 31, 2026.

(2) All other revenue includes $ 61,053 of service revenue and $ 3,215 of rental revenue for the three months ended June 30, 2026, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 39,364 and intercompany service revenue of $ 8,468 for the three months ended June 30, 2026.

(4) Other segment items include cost of services of $ 1,089,109 and rent expense of $ 95,737 for the skilled services segment and cost of services of $ 500 , rent expense of $ 346 and general and administrative expenses of $ 2,775 for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 39,997 during the three months ended March 31, 2026, which are eliminated in consolidation.

Additionally, there are intercompany expenses of $ 47,832 during the three months ended June 30, 2026, which are eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 9,767 during the three months ended March 31, 2026, which is eliminated in consolidation.

of $ 14,149 during the three months ended June 30, 2026, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Skilled Services Standard Bearer Total

16 unchanged sentences

INCOME BEFORE PROVISION FOR INCOME TAXES $ 112,358

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All Other revenue includes $ 49,427 of service revenue and $ 2,999 of rental revenue for the three months ended March 31, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 25,399 and intercompany service revenue of $ 5,941 for the three months ended March 31, 2025.

(2) All Other revenue includes $ 54,174 of service revenue and $ 3,158 of rental revenue for the three months ended June 30, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 28,271 and intercompany service revenue of $ 6,336 for the three months ended June 30, 2025.

(4) Other segment items include cost of services of $ 932,823 and rent expense of $ 76,999 for the skilled services segment and cost of services of $ 472 , rent expense of $ 270 and general and administrative expenses of $ 2,024 for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 31,340 during the three months ended March 31, 2025, which is eliminated in consolidation.

Additionally, there are intercompany expenses of $ 34,607 during the three months ended June 30, 2025, which is eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 7,040 during the three months ended March 31, 2025, which is eliminated in consolidation.

of $ 9,023 during the three months ended June 30, 2025, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Six Months Ended June 30, 2026

Skilled Services Standard Bearer Total

Service revenue (1)

$ 2,710,747 $ — $ 2,710,747

Rental revenue

— 80,235 80,235

Segment revenue

$ 2,710,747 $ 80,235 $ 2,790,982

Reconciliation of revenue:

All other revenue (2)

Elimination of intercompany revenue (3)

TOTAL CONSOLIDATED REVENUE

Other segment items (4)

2,326,354 6,743

Depreciation and amortization 30,755 23,459

Interest expense (5)

Segment income

$ 353,638 $ 22,879 $ 376,517

Reconciliation of profit or loss:

All other not included in segment income

INCOME BEFORE PROVISION FOR INCOME TAXES

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All other revenue includes $ 120,114 of service revenue and $ 6,410 of rental revenue for the six months ended June 30, 2026, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 71,768 and intercompany service revenue of $ 16,061 for the six months ended June 30, 2026.

(4) Other segment items includes cost of services of $ 2,141,833 and rent expense of $ 184,521 for the skilled services segment and cost of services of $ 1,125 , rent expense of $ 611 and general and administrative expenses of $ 5,007 for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 87,829 during the six months ended June 30, 2026, which are eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 23,916 during the six months ended June 30, 2026, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Six Months Ended June 30, 2025

Skilled Services Standard Bearer Total

Service revenue (1)

$ 2,297,130 $ — $ 2,297,130

Rental revenue

— 59,869 59,869

Segment revenue

$ 2,297,130 $ 59,869 $ 2,356,999

Reconciliation of revenue:

All other revenue (2)

Elimination of intercompany revenue (3)

TOTAL CONSOLIDATED REVENUE

Other segment items (4)

1,976,232 5,372

Depreciation and amortization 26,963 17,741

Interest expense (5)

Segment income $ 293,935 $ 17,709 $ 311,644

Reconciliation of profit or loss:

All other not included in segment income

INCOME BEFORE PROVISION FOR INCOME TAXES

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All Other revenue includes $ 103,601 of service revenue and $ 6,157 of rental revenue for the six months ended June 30, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 53,670 and intercompany service revenue of $ 12,277 for the six months ended June 30, 2025.

(4) Other segment items include cost of services of $ 1,824,678 and rent expense of $ 151,554 for the skilled services segment and cost of services of $ 1,070 , rent expense of $ 527 and general and administrative expenses of $ 3,775 for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 65,947 during the six months ended June 30, 2025, which are eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 16,063 during the six months ended June 30, 2025, which is eliminated in consolidation.

Service revenue by major payor source were as follows:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Skilled Services All Other (3)

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TOTAL SERVICE REVENUE $ 1,379,912 $ 52,585 $ 1,432,497 100.0 %

(1) Medicaid payor includes revenue generated from senior living operations and revenue related to state relief funding.

(1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Skilled Services All Other (3)

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TOTAL SERVICE REVENUE $ 1,173,576 $ 47,838 $ 1,221,414 100.0 %

(1) Medicaid payor includes revenue generated from senior living operations and revenue related to state relief funding.

(1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

(3) All Other incorporates intercompany eliminations.

Six Months Ended June 30, 2026

Skilled Services All Other (3)

Total Service Revenue Revenue %

$ 1,081,921 $ 28,348 $ 1,110,269 39.4 %

Medicare 675,479 — 675,479 24.0

Medicaid-skilled

155,902 — 155,902 5.6

Total Medicaid and Medicare

$ 1,913,302 $ 28,348 $ 1,941,650 69.0 %

Managed care 526,199 — 526,199 18.7

Private and other (2)

271,246 75,705 346,951 12.3

TOTAL SERVICE REVENUE $ 2,710,747 $ 104,053 $ 2,814,800 100.0 %

( 1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

(3) All Other incorporates intercompany eliminations.

Six Months Ended June 30, 2025

Skilled Services All Other (3)

Total Service Revenue Revenue %

$ 917,315 $ 22,373 $ 939,688 39.3 %

Medicare 578,868 — 578,868 24.2

Medicaid-skilled

144,758 — 144,758 6.1

Total Medicaid and Medicare

$ 1,640,941 $ 22,373 $ 1,663,314 69.6 %

Managed care 456,712 — 456,712 19.1

Private and other (2)

199,477 68,951 268,428 11.3

TOTAL SERVICE REVENUE $ 2,297,130 $ 91,324 $ 2,388,454 100.0 %

(1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other includes revenue for skilled services (private, Veteran Affairs and hospice payors), senior living and ancillary operations.

(3) All Other incorporates intercompany eliminations.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

PROPERTY AND EQUIPMENT - NET

Property and equipment, net consists of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Land $ 257,995 $ 219,857

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Standard Bearer .

The aggregate purchase price for the real estate purchases during the three months ended March 31, 2026 was $ 18,086 , which primarily consists of building and improveme nts of $ 16,117 and land of $ 1,351 , respectively.

The aggregate purchase price for the real estate purchases during the three months ended March 31, 2025 was $ 159,172 , which primarily consists of building and improvements of $ 135,654 and land of $ 20,453 , respectively.

The Company finalized the purchase price allocation for certain acquisitions during the three months ended March 31, 2025 resulting in no activities in goodwill during that period.

During the three months ended March 31, 2026, the Company, including Standard Bearer, entered into definitive agreements to acquire real estate assets associated with 19 operations subsequent to March 31, 2026, subject to customary closing conditions, for an aggregate purchase price of approximately $ 342,350 .

The real estate assets are associated with 15 stand-alone skilled nursing operations and two campus operations to be operated by the Company's independent subsidiaries and two stand-alone senior living operations to be leased to a third-party operator beginning on May 1, 2026, in each case, assuming the closing of the acquisitions.

The aggregate purchase price for the real estate purchases during the six months ended June 30, 2026 was $ 375,263 , which primarily consists of building and improveme nts of $ 326,417 and land of $ 38,138 .

The aggregate purchase price for the real estate purchases during the six months ended June 30, 2025 was $ 204,609 , which primarily consists of building and improvements of $ 162,806 and land of $ 37,493 .

Subsequent to June 30, 2026, the Company, through Standard Bearer, added approximately $ 36,000 real estate assets associated with two stand-alone skilled nursing operations to be operated by the Company's independent subsidiaries.

INTANGIBLE ASSETS - NET

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Weighted Average Life (Years)

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TOTAL $ 5,315 $ ( 3,718 ) $ 1,597 $ 5,315 $ ( 3,600 ) $ 1,715

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the three months ended March 31, 2026 and 2025, amortization expense was $ 333 and $ 811 , respectively, of which $ 274 and $ 142 was related to the amortization of right-of-use assets, respectively.

Estimated amortization expense for each of the years ending December 31 is as follows:

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Other indefinite-lived intangible assets consist of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Trade name $ 889 $ 889

1 unchanged sentence

TOTAL $ 4,666 $ 4,666

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Goodwill is subject to annual testing for impairment during the fourth quarter of each year.

In addition, goodwill is tested for impairment if events occur or circumstances indicate that its carrying value may not be recoverable.

There were no indicators of goodwill impairment noted during the three months ended March 31, 2026.

The Company anticipates that the majority of goodwill recognized will be fully deductible for tax purposes as of March 31, 2026.

There were no activities in goodwill during the three months ended March 31, 2026.

The following table represents goodwill value by the skilled services segment and "all other" category for March 31, 2026 and December 31, 2025:

There were no indicators of goodwill impairment noted during the six months ended June 30, 2026.

The Company anticipates that the majority of goodwill recognized will be fully deductible for tax purposes as of June 30, 2026.

There were no activities in goodwill during the six months ended June 30, 2026.

The following table represents goodwill value by the skilled services segment and "all other" category for June 30, 2026 and December 31, 2025:

Skilled Services All Other Total

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Other accrued liabilities consist of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Quality assurance fee $ 15,121 $ 17,398

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The cash balance related to this liability is included in other current assets in the condensed consolidated balance sheets.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company recorded income tax expense of $ 28,816 and $ 26,227 during the three months ended March 31, 2026 and 2025, respectively, or 22.4 % of earnings before income taxes for the three months ended March 31, 2026, compared to 24.6 % for the three months ended March 31, 2025.

The Company recorded income tax expense of $ 62,656 and $ 54,119 during the six months ended June 30, 2026 and 2025, respectively, or 23.9 % of earnings before income taxes for the six months ended June 30, 2026, compared to 24.7 % for the six months ended June 30, 2025.

The effective tax rate for both periods is driven by the impact of excess tax benefits from stock-based compensation, offset by non-deductible expenses including non-deductible compensation.

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The Company does not believe the federal or state statute lapses or any other event will significantly impact the balance of unrecognized tax benefits in the next twelve months.

The net balance of unrecognized tax benefits was not material to the Interim Financial Statements for the three months ended March 31, 2026 and 2025.

The net balance of unrecognized tax benefits was not material to the Interim Financial Statements for the six months ended June 30, 2026 and 2025.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Debt consists of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Mortgage loans and promissory note $ 142,258 $ 144,352

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provided that if the aggregate consideration for approved acquisitions in a six month period is greater than $ 50,000 , then the ratio can be increased at the election of the Company with notice to the administrative agent to 4.25 :1.00 for the first fiscal quarter and the immediately following three fiscal quarters), and (ii) a minimum interest/rent coverage ratio (which cannot be less than 1.50 :1.00).

As of March 31, 2026, there was no outstanding debt under the Credit Facility.

The Company was in compliance with all loan covenants as of March 31, 2026.

As of June 30, 2026, there was no outstanding debt under the Credit Facility.

The Company was in compliance with all loan covenants as of June 30, 2026.

Mortgage Loans and Promissory Note

As of March 31, 2026, the Company has 23 subsidiaries that have mortgage loans insured with HUD in the aggregate amount of $ 142,571 , which subjects these subsidiaries to HUD oversight and periodic inspections.

As of June 30, 2026, the Company has 23 subsidiaries that have mortgage loans insured with HUD in the aggregate amount of $ 141,686 , which subjects these subsidiaries to HUD oversight and periodic inspections.

The mortgage loans bear effective interest rates in a range of 3.1 % to 4.2 %, including fixed interest rates in a range of 2.4 % to 3.3 % per annum.

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The terms for all the mortgage loans are 25 to 35 years.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In addition to the HUD mortgage loans above, the Company has a promissory note of $ 572 that bears a fixed interest rate of 5.3 % per annum and has a term of 12 years.

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Off-Balance Sheet Arrangements

As of March 31, 2026 and December 31, 2025, the Company had approximately $ 8,402 of borrowing capacity under the Credit Facility pledged as collateral to secure outstanding letters of credit.

The Company believes that its outstanding letters of credit as of March 31, 2026 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

As of June 30, 2026 and December 31, 2025, the Company had approximately $ 8,402 of borrowing capacity under the Credit Facility pledged as collateral to secure outstanding letters of credit.

The Company believes that its outstanding letters of credit as of June 30, 2026 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

OPTIONS AND AWARDS

Stock-based compensation expense consists of stock-based payment awards made to employees and directors, including employee stock options and restricted stock awards, based on estimated fair values.

As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three months ended March 31, 2026 and 2025 was based on awards expected to vest, it has been reduced for estimated forfeitures.

Stock-based compensation expense consists of stock-based payment awards made to employees and directors, including employee stock options, restricted stock awards and performance stock units (PSUs) based on estimated fair values.

As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2026 and 2025 was based on awards expected to vest, it has been reduced for estimated forfeitures.

The Company estimates forfeitures at the time of grant and, if necessary, revises the estimate in subsequent periods if actual forfeitures differ.

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There are 4,231 shares of common stock available for issuance under the Amended and Restated Plan, and the number of shares available for issuance is reduced by one share for each share subject to an option or stock appreciation right award and by two shares for each share subject to an award other than an option or stock appreciation right.

At March 31, 2026, 2,804 shares remained available for future issuance under the Amended and Restated Plan.

At June 30, 2026, 2,425 shares remained available for future issuance under the Amended and Restated Plan.

Non-employee director stock options, to the extent granted, vest and become exercisable in three equal annual installments, or over the term of the award if less than three years , subject to continued service from the grant date through the date of vesting.

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Stock Options

The Company used the following assumptions for stock options granted during the three months ended March 31, 2026 and 2025:

The Company used the following assumptions for stock options granted during the three months ended June 30, 2026 and 2025:

Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield

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2025 175 4.2 % 6.2 years 39.1 % 0.2 %

For the three months ended March 31, 2026 and 2025, the following represents the exercise price and fair value displayed at grant date for stock option grants:

The Company used the following assumptions for stock options granted during the six months ended June 30, 2026 and 2025:

Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield

2026 509 3.9 % 6.2 years 38.2 % 0.1 %

2025 327 4.2 % 6.2 years 39.4 % 0.2 %

For the six months ended June 30, 2026 and 2025, the following represents the exercise price and fair value displayed at grant date for stock option grants:

Grant Year Granted Weighted Average Exercise Price Weighted Average Fair Value of Options

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2025 327 $ 137.42 $ 61.71

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the three months ended March 31, 2026 and 2025 and therefore, the intrinsic value was $ 0 at the date of grant.

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the six months ended June 30, 2026 and 2025 and therefore, the intrinsic value was $ 0 at the date of grant.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table represents the employee stock option activity during the three months ended March 31, 2026:

The following table represents the employee stock option activity during the six months ended June 30, 2026:

Number of Options Outstanding Weighted Average

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Exercised ( 254 ) 62.45

March 31, 2026 4,173 $ 107.01 1,955 $ 70.45

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of March 31, 2026 and December 31, 2025 is as follows:

Options March 31, 2026 December 31, 2025

June 30, 2026 4,283 $ 110.77 2,042 $ 73.22

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of June 30, 2026 and December 31, 2025 is as follows:

Options June 30, 2026 December 31, 2025

Outstanding $ 239,432 $ 317,984

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The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options .

The aggregate intrinsic value of options that vested during the three months ended March 31, 2026 and 2025 was $ 12,451 and $ 6,045 , respectively.

The total intrinsic value of options exercised during the three months ended March 31, 2026 and 2025 was $ 26,483 and $ 9,470 , respectively.

The aggregate intrinsic value of options that vested during the six months ended June 30, 2026 and 2025 was $ 17,267 and $ 22,121 , respectively.

The total intrinsic value of options exercised during the six months ended June 30, 2026 and 2025 was $ 33,869 and $ 24,957 , respectively.

Restricted Stock Awards

The Company granted 155 and 92 restricted stock awards during the three months ended March 31, 2026 and 2025 , respectively.

The Company granted 50 and 205 restricted stock awards during the three and six months ended June 30, 2026, respectively.

The Company granted 42 and 134 restricted stock awards during the three and six months ended June 30, 2025, respectively.

All awards were granted at an issue price of $ 0 and generally vest over five years .

The fair value per share of restricted awards granted during the three months ended March 31, 2026 and 2025 ranged from $ 183.54 to $ 212.65 and $ 126.34 to $ 134.58 , respectively.

The fair value per share of restricted awards granted during the six months ended June 30, 2026 and 2025 ranged from $ 178.00 to $ 212.65 and $ 126.34 to $ 147.04 , respectively.

The fair value per share includes quarterly stock awards to non-employee directors.

Included in the restricted stock award grants are $ 13,555 and $ 8,003 of annual bonuses that were settled in vested restricted stock awards during the three months ended March 31, 2026 and 2025, respectively.

A summary of the status of the Company's non-vested restricted stock awards as of March 31, 2026 and changes during the three months ended March 31, 2026 is presented below:

Included in the restricted stock award grants are $ 13,555 and $ 8,003 of annual bonuses that were settled in vested restricted stock awards during the six months ended June 30, 2026 and 2025, respectively.

A summary of the status of the Company's non-vested restricted stock awards as of June 30, 2026 and changes during the six months ended June 30, 2026 is presented below:

Non-Vested Restricted Awards Weighted Average Grant Date Fair Value

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Forfeited ( 9 ) 123.94

Nonvested at March 31, 2026

During the three months ended March 31, 2026, the Company granted three automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors.

The fair value per share of these stock awards was $ 183.54 based on the market price on the grant date.

Nonvested at June 30, 2026

During the three and six months ended June 30, 2026, the Company granted four and seven automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors.

The fair value per share of these stock award s ranged from $ 183.54 to $ 197.92 based on the market price on the grant date.

Performance Stock Units

PSU awards are granted to certain employees and vest based on the achievement of specified Company performance objectives over a designated performance period.

During the three months ended June 30, 2026, the Company granted 54 PSU awards with a grant date fair values ranging from $ 169.70 to $ 257.70 per share.

PSU awards are subject to a three-year cliff vesting schedule and the ultimate number of shares granted may range from 0 to 2.5 times the target number of awards based on the Company's achievement of earnings and shareholder returns.

Compensation expense is recognized over the requisite service period based on the estimated number of awards expected to vest.

THE ENSIGN GROUP, INC.

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Stock-based compensation expense

Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the three months ended March 31, 2026 and 2025 was as follows:

Three Months Ended March 31,

Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the three and six months ended June 30, 2026 and 2025 was as follows:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Stock-based compensation expense related to stock options $ 9,456 $ 7,402 $ 18,108 $ 14,207

1 unchanged sentence

Stock-based compensation expense related to restricted stock awards to non-employee directors

713 465 1,374 949

Stock-based compensation expense related to performance stock units 1,066 — 1,066 —

TOTAL $ 15,962 $ 11,628 $ 29,655 $ 22,319

In future periods, the Company expects to recognize approximately $ 121,924 and $ 62,954 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of March 31, 2026.

Future stock-based compensation expense will be recognized over 3.9 and 4.0 weighted average years for unvested options and restricted stock awards, respectively.

There were 2,218 unvested and outstanding options as of March 31, 2026, of which 2,049 options are expected to vest.

The weighted average contractual life for options outstanding, vested and expected to vest as of March 31, 2026 was 6.8 years.

In future periods, the Company expects to recognize approximately $ 126,656 , $ 65,928 and $ 10,450 in stock-based compensation expense for unvested options, restricted stock awards and performance stock units, respectively, that were outstanding as of June 30, 2026.

Future stock-based compensation expense will be recognized over 3.8 , 3.9 and 2.1 weighted average years for unvested options, restricted stock awards and performance stock units, respectively.

There were 2,241 unvested and outstanding options as of June 30, 2026, of which 2,068 options are expected to vest.

The weighted average contractual life for options outstanding, vested and expected to vest as of June 30, 2026 was 6.7 years.

The Company leases real property associated with 103 independent skilled nursing and senior living facilities under eight triple‑net master lease agreements with CareTrust REIT, Inc.

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As triple‑net leases, the Company is responsible for substantially all property‑level operating costs, including taxes, insurance, utilities, and maintenance.

Total rent expense under the Master Leases was $ 19,631 and $ 17,126 for the three months ended March 31, 2026 and 2025, respectively.

Total rent expense under the Master Leases was approximately $ 19,755 and $ 39,386 for the three and six months ended June 30, 2026, respectively, and $ 16,904 and $ 34,030 for the three and six months ended June 30, 2025, respectively.

The Master Leases require the Company to comply with certain financial covenants, including portfolio coverage and minimum rent coverage ratios, as well as customary reporting and other requirements.

The Company was in compliance with all such requirements as of March 31, 2026.

The Company was in compliance with all such requirements as of June 30, 2026.

The Company leases facilities where its independent subsidiaries operate under non-cancelable operating leases, most of which have initial lease terms ranging from 15 to 20 years.

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The components of operating lease expense are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Rent - cost of services (1)

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Cost of services (2)

7,922 6,611 14,901 13,040

General and administrative expense 275 214 495 413

$ 74,609 $ 64,020 $ 147,314 $ 127,724

(1) Rent - cost of services includes deferred rent expense adju stments of $ 321 and $ 208 for the three months ended March 31, 2026 and 2025, respectively.

Additionally, rent - cost of services includes other variable lease costs such as consumer price index increases and short-term leases of $ 5,131 and $ 4,004 for the three months ended March 31, 2026 and 2025, respectively.

(1) Rent - cost of services includes deferred rent expense adju stments of $ 255 and $ 576 for the three and six months ended June 30, 2026, respectively, and $ 199 and $ 407 for the three and six months ended June 30, 2025, respectively.

Additionally, rent - cost of services includes other variable lease costs such as consumer price index increases and short-term leases of $ 5,127 and $ 10,258 for the three and six months ended June 30, 2026, respectively, and $ 4,634 and $ 8,638 for the three and six months ended June 30, 2025, respectively.

(2) Cost of services includes variable lease costs consisting of property taxes and insurance.

Future minimum lease payments for all third-party leases as of March 31, 2026 are as follows:

Future minimum lease payments for all third-party leases as of June 30, 2026 are as follows:

2026 (remainder) $ 122,703

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In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the lease commencement date.

As of March 31, 2026, the weighted average remaining lease term is 13.9 years and the weighted average discount rate used to determine the operating lease liabilities is 6.2 %.

As of June 30, 2026, the weighted average remaining lease term is 13.7 years and the weighted average discount rate used to determine the operating lease liabilities is 6.1 %.

Lessor Activities

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The initial terms range from 14 to 16 years.

During the three months ended March 31, 2026, the Company, through Standard Bearer, entered into a definitive agreement to acquire real estate assets associated with two stand-alone senior living operations on May 1, 2026 subject to customary closing conditions.

Assuming the closing of the acquisitions, these operations will be leased to a third-party operator beginning on May 1, 2026.

Total rental income from all third-party sources for the three months ended March 31, 2026 and 2025 is as follows:

Three Months Ended March 31,

During the three and six months ended June 30, 2026, the Company, through Standard Bearer, entered into three lease agreements with a third-party operator for three stand-alone senior living operations, each with initial lease terms of 15 years.

Total rental income from all third-party sources for the three and six months ended June 30, 2026 and 2025 is as follows:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

$ 4,427 $ 4,082 $ 8,640 $ 8,204

Other third-party (2)(3)

3,557 2,273 6,237 4,152

TOTAL $ 7,984 $ 6,355 $ 14,877 $ 12,356

(1) Pennant rental income includes variable rent such as property taxes of $ 312 and $ 310 during the three months ended March 31, 2026 and 2025, respectively.

(2) Other third-party includes rental revenue associated with the Company's subleases to third parties of $ 1,135 and $ 1,107 for the three months ended March 31, 2026 and 2025.

(1) Pennant rental income includes variable rent such as property taxes of $ 321 and $ 633 during the three and six months ended June 30, 2026 and $ 270 and $ 580 for the three and six months ended June 30, 2025.

(2) Other third-party includes rental revenue associated with the Company's subleases to third parties of $ 1,144 and $ 2,279 for the three and six months ended June 30, 2026, and $ 1,116 and $ 2,223 for the three and six months ended June 30, 2025, respectively.

(3) For the three and six months ended June 30, 2026, other third-party revenue included $ 1,016 of rental income earned from acquired real estate properties during the period prior to their lease to the Company's independent operating subsidiaries.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Future contractual minimum annual rental income for all third-party leases as of March 31, 2026 were as follows:

Future contractual minimum annual rental income for all third-party leases as of June 30, 2026 were as follows:

2026 (remainder) $ 14,647

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Additionally, the DCP allows for the employee deferrals to be deposited into a rabbi trust and the funds are generally invested in individual variable life insurance contracts owned by the Company that are specifically designed to fund savings plans of this nature.

As of March 31, 2026 and December 31, 2025, the Company accrued $ 86,070 and $ 81,553 , respectively, as long term deferred compensation in other long term liabilities on the condensed consolidated balance sheets.

As of June 30, 2026 and December 31, 2025, the Company accrued $ 98,224 and $ 81,553 , respectively, as long term deferred compensation in other long term liabilities on the condensed consolidated balance sheets.

Cash surrender value of the contracts is based on investment funds that shadow the investment allocations specified by participants in the deferred compensation plan.

Refer to Note 5, Fair Value Measurements for more information on the funds.

For the three months ended March 31, 2026 and 2025, the Company recorded a loss on its DCP of $ 1,694 and $ 282 , respectively, which is included in other income, net.

During the same periods, the Company recorded an offsetting reduction in expenses of $ 1,598 and $ 234 , respectively, which is allocated between cost of services and general and administrative expenses.

For the three and six months ended June 30, 2026, the Company recorded gains on its DCP of $ 7,640 and $ 5,946 , which is included in other income, net and recorded offsetting expense of $ 7,804 and $ 6,206 , respectively, which is allocated between cost of services and general and administrative expenses.

For the three and six months ended June 30, 2025, the Company recorded gains on its DCP of $ 4,482 and $ 4,200 , which is included in other income, net and recorded offsetting expenses of $ 4,578 and $ 4,344 , respectively, which is allocated between cost of services and general and administrative expenses.

SELF INSURANCE LIABILITIES

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The captive insurance subsidiary is subject to certain statutory requirements as an insurance provider.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s policy is to accrue amounts equal to the actuarial estimated costs to settle open claims of insureds, as well as an estimate of the cost of insured claims that have been incurred but not reported.

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The Company uses actuarial valuations to estimate the liability based on historical experience and industry information.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s independent subsidiaries are self-insured for workers’ compensation liabilities in California.

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To protect itself against loss exposure with this policy, the Company has purchased individual stop-loss insurance coverage that insures individual claims that exceed $ 525 for each covered person for fiscal year 2026.

The following table represents the Company's self-insurance insurance liabilities, on an undiscounted basis, inclusive of anticipated insurance recoveries, as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

The following table represents the Company's self-insurance liabilities, on an undiscounted basis, inclusive of anticipated insurance recoveries, as of June 30, 2026 and December 31, 2025:

June 30, 2026 December 31, 2025

Accrued general liability and professional malpractice liabilities $ 222,192 $ 186,780

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$ 195,813 $ 164,792

The anticipated insurance recoveries included in the self-insurance liabilities are presented gross rather than net with the corresponding asset of $ 19,007 and $ 17,143 , as of March 31, 2026 and December 31, 2025, respectively, included in Restricted and other assets on the consolidated balance sheets.

The anticipated insurance recoveries included in the self-insurance liabilities are presented gross rather than net with the corresponding asset of $ 18,587 and $ 17,143 , as of June 30, 2026 and December 31, 2025, respectively, included in Restricted and other assets on the consolidated balance sheets.

The Company believes that adequate provision has been made in the Interim Financial Statements for liabilities that may arise out of patient care, workers’ compensation, healthcare benefits and related services provided to date.

COMMITMENTS AND CONTINGENCIES

Indemnities — From time to time, the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims.

Indemnities — From time to time, the independent subsidiaries of the Company enter into certain types of contracts that contingently require the affiliates to indemnify parties against third-party claims.

The terms of such obligations vary by contract and, in most instances, do not expressly state or include a specific or maximum dollar amount.

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Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s condensed consolidated balance sheets for any of the periods presented.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Litigation and Regulatory Matters — The Company and its independent subsidiaries are party to various legal actions and administrative proceedings and are subject to various claims arising in the ordinary course of business.

Such claims may be related to, but are not limited to, the Health Insurance Portability and Accountability Act of 1996, alleged Medicare or Medicaid false claims, qui tam or "whistleblower" claims related to alleged violations of the False Claims Act and/or the Anti-Kickback Statute, alleged violations of state and federal wage and hour laws, environmental matters, investigations, examinations, audits and surveys or other claims in connection with the delivery of healthcare and non-healthcare services and general business operations.

Such claims may be related to, but are not limited to, the Health Insurance Portability and Accountability Act of 1996, alleged Medicare or Medicaid false claims, qui tam or "whistleblower" claims related to alleged violations of the False Claims Act (FCA) and/or the Anti-Kickback Statute, alleged violations of state and federal wage and hour laws, environmental matters, investigations, examinations, audits and surveys or other claims in connection with the delivery of healthcare and non-healthcare services and general business operations.

These claims may come from a variety of governmental agencies, including but not limited to, the following federal agencies:

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Department of Justice (DOJ);

Occupational Safety and Health Administration (OHSA), U.S.

Occupational Safety and Health Administration (OSHA);

Equal Employment Opportunity Commission (EEOC);

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Department of Veterans Affairs (VA);

Environmental Protection Agency (EPA);

and Office of Health Care Affordability (OHCA).

In addition to these federal agencies, there are also a variety of state and local authorities with the ability to bring claims against our independent subsidiaries.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

and Environmental Protection Agency (EPA).

In addition to these federal agencies, there are also a variety of state and local authorities with the ability to bring claims against our independent subsidiaries, such as the Office of Health Care Affordability (OHCA).

The Company and its independent subsidiaries are also subject to requests for information and investigations by other state and federal governmental entities.

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The Company cannot predict or provide any assurance as to the possible outcome of any such request, inquiry, investigation or subsequent litigation.

If any such request, inquiry, investigation or related litigation were to proceed, and the Company and/or its independent subsidiaries are subjected to, alleged to be liable for, or agree to a settlement of related claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and regulations, the Company's business, financial condition, results of operations and cash flows could be materially and adversely affected and its stock price could be adversely impacted.

In addition, if the Company and/or its independent subsidiaries are alleged or found to be liable on theories of general or professional negligence or conduct alleged to be related to its employment practices (including wage and hour violations), the Company's business, financial condition and results of operations and cash flows could be materially and adversely affected and its stock price could be adversely impacted.

Among other things, any settlement or litigation could involve the payment of substantial sums to settle any alleged violations and may also include the assumption of specific procedural and financial obligations by the Company or its independent subsidiaries under a Corporate Integrity Agreement and/or other such arrangement.

Among other things, any settlement or litigation could involve the payment of substantial sums to resolve any alleged violations and may also include the assumption of specific procedural and financial obligations by the Company or its independent subsidiaries under a corporate integrity agreement and/or other such arrangement.

From time to time, various state or Federal agencies may issue requests for information, including but not limited to a subpoena.

As an example, California's Office of Health Care Affordability is currently conducting a Cost and Market Impact Review (CMIR) with respect to specific components of a proposed transaction involving three of the Company's independent subsidiaries in California.

The Company provided OHCA with requested information regarding specific components of the proposed transaction as part of the CMIR.

The Company has been unable to effect resolution including attempts to narrow the scope, and limit the requests to its independent subsidiaries operating in California.

The Company has filed a Petition in the Superior Court of the State of California, County of Orange, seeking a declaration that the CMIR regulations violate the United States Constitution and/or the California Constitution, and is void and unenforceable as applied to the Company.

The Company provided OHCA with the requested information regarding specific components of the proposed transaction as part of the CMIR.

The Company has been unable to effect resolution including attempts to narrow the scope of the inquiry to that contemplated by the applicable regulation, and limit the requests to its independent subsidiaries operating in California.

The Company has filed a Petition in the Superior Court of the State of California, County of Orange, seeking a declaration that the CMIR regulations violate the United States Constitution and/or the California Constitution, and are void and unenforceable as applied to the Company.

It also has requested that OHCA be ordered to withdraw the subpoena and close the inquiry, so the underlying transaction can be completed.

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In 2025, the Company agreed to settle substantially all alleged wage, hour or labor code-related violations asserted on a class or representative basis against its independent subsidiaries in California for purported violations occurring during the six year period ending December 2025, pending court approval.

Accordingly, the Company has recorded an accrual of $ 12,000 within Other accrued liabilities on the condensed consolidated balance sheet as of December 31, 2025.

Accordingly, the Company has recorded an accrual of $ 12,000 within Other accrued liabilities on the condensed consolidated balance sheet both as of June 30, 2026 and December 31, 2025.

The Company does not believe that the ultimate resolution of these actions will have an ongoing material adverse effect on the Company’s business, cash flows, financial condition or results of operations.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On July 16, 2026, a purported stockholder filed a derivative complaint in the Superior Court of the State of California, County of Orange, captioned Thompson v.

al., Case No.

2026-01584212-CU-NP-CXC (the “Derivative Action”) against certain current and former directors and officers of the Company and against the Company as a nominal defendant.

The complaint asserts claims for, among other things, breach of fiduciary duty and unjust enrichment arising from allegations relating to the Company's healthcare regulatory compliance, staffing, executive compensation, stock sales by certain of the individual defendants, and related-party transactions.

The complaint seeks, on behalf of the Company, unspecified damages, disgorgement, corporate governance reforms, attorneys' fees and costs, and other relief.

No responsive pleading has been filed.

As the Company is unable to determine at this time whether any loss ultimately will occur or to reasonably estimate the possible loss or range of loss, no amount has been accrued in the financial statements at this time.

From time to time, the Company has received Civil Investigative Demands (CID) from the U.S.

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In 2023, following a four-week medical negligence trial in the State of Arizona, the jury returned a verdict against one of the Company’s independent subsidiaries.

The Company is in the process of appealing the jury verdict.

The Company has in the past appealed similar decisions and has, in some circumstances, received decisions in its favor.

Although the Company intends to vigorously defend against these specific claims and in general these types of claims and cases, there can be no assurance that the outcomes of these matters will not have a material adverse effect on operational results and financial condition.

The Company has recorded an estimated liability for this matter.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Medicare Revenue Recoupments — The Company's independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare and Medicaid services, billings and potential overpayments as a result of Recovery Audit Contractors (RAC), and various Program Safeguard Contractors and Medicaid Integrity Contractors (collectively referred to as Reviews).

Reviews vary in claim selection size and processes, ranging from a single episode/claim month to larger, multi-claim batches;

The Company appealed the result, and the Arizona Court of Appeals issued its decision in the Company's favor on July 6, 2026.

The Company vigorously defends against these specific claims, and in general these types of claims and cases, however, there can be no assurance that the outcomes of these matters will not have a material adverse effect on operational results and financial condition.

Medicare Revenue Recoupments — The Company's independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare and Medicaid services, to include reviews of billings and potential overpayments by Recovery Audit Contractors (RAC), and various Program Safeguard Contractors and Medicaid Integrity Contractors (collectively referred to as Reviews).

Reviews vary in claim selection size and processes, ranging from a single episode/claim to larger, multi-claim batches;

and from single rounds of review to reviews of multiple rounds with pass/fail criteria.

If an operation has a significant error rate or fails a Review and/or subsequent Reviews, the operation could then be subject to extended review or an extrapolation of the identified error rate to billings in the same time period.

The Company anticipates that these Reviews could increase in frequency in the future.

As of March 31, 2026, and through the filing date of this report, 22 of the Company's independent subsidiaries had multi-claim Reviews scheduled or in process.

As of June 30, 2026, and through the filing date of this report, 18 of the Company's independent subsidiaries had multi-claim Reviews scheduled or in process.

Concentrations

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The Company believes that an appropriate allowance has been recorded for the possibility of these receivables proving uncollectible and continually monitors and adjusts these allowances as necessary.

The Company’s receivables from Medicare and Medicaid payor programs accounted for 60.7 % and 61.9 % of its total accounts receivable as of March 31, 2026 and December 31, 2025, respectively.

Revenue from reimbursement under the Medicare and Medicaid programs accounted for 69.1 % and 69.5 % of the Company's revenue for the three months ended March 31, 2026 and 2025, respectively.

The Company’s receivables from Medicare and Medicaid payor programs accounted for 61.0 % and 61.9 % of its total accounts receivable as of June 30, 2026 and December 31, 2025, respectively.

Revenue from reimbursement under the Medicare and Medicaid programs accounted for 68.9 % and 69.0 % of the Company's revenue for the three and six months ended June 30, 2026, respectively, and 69.8 % and 69.6 % for the three and six months ended June 30, 2025, respectively.

COMMON STOCK REPURCHASE PROGRAM

On May 13, 2026, the Board of Directors approved a stock repurchase program pursuant to which the Company is authorized to repurchase up to $ 40,000 of its common stock under the program for a period of approximately 12 months from June 12, 2026.

During the three months ended March 31, 2026, the Company did not repurchase any shares pursuant to this stock repurchase program.

As of March 31, 2026, the full $ 20,000 authorized for repurchase remained available under the stock repurchase program.

On June 12, 2026, the Board of Directors approved an amendment to the stock repurchase program pursuant to which the Company is authorized to repurchase an additional $ 60,000 of its common stock under the program.

During the three months ended June 30, 2026, the Company repurchased 257 shares of its common stock for $ 40,000 .

As of June 30, 2026, $ 60,000 authorized for repurchase remained available under the stock repurchase program.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On May 15, 2025, the Board of Directors approved a stock repurchase program pursuant to which the Company is authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from June 16, 2025.

The stock repurchase program expired on June 16, 2026 and is no longer in effect.

The Company did not repurchase any shares pursuant to this stock repurchase program.

On February 21, 2025, the Board of Directors approved a stock repurchase program pursuant to which the Company was authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from March 26, 2025.

During the first quarter of 2025, the Company repurchased 84 shares of its common stock for $ 10,775 .

Subsequent to March 31, 2025, the Company repurchased an additional 73 shares of its common stock for $ 9,225 .

This repurchase program expired upon the repurchase of the fully authorized amount under the plan.

Under the repurchase program, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions, tender offers, pursuant to contractual provisions, and block trades, or otherwise in accordance with federal securities laws.

During the second quarter of 2025, the Company repurchased an additional 73 shares of its common stock for $ 9,225 .

This repurchase program expired upon the repurchase of the maximum authorized amount.

Under each of the repurchase programs, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions, tender offers, pursuant to contractual provisions, and block trades, or otherwise in accordance with federal securities laws.

The share repurchase program does not obligate the Company to acquire any specific number of shares.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements