10-K – 2026-02-04 – ensg-20251231.htm

The Company believes that adequate provision has been made in the Financial Statements for liabilities that may arise out of patient care, workers’ compensation, healthcare benefits and related services provided to date. The amount of the Company’s reserves was determined based on an estimation process that uses information obtained from both company-specific and industry data. This estimation process requires the Company to continuously monitor and evaluate the life cycle of the claims. Using data obtained from this monitoring and the Company’s assumptions about emerging trends, the Company, with the assistance of an independent actuary, develops information about the size of ultimate claims based on the Company’s historical experience and other available industry information. The most significant assumptions used in the estimation process include determining the trend in costs, the expected cost of claims incurred but not reported and the expected costs to settle or pay damage awards with respect to unpaid claims. The self-insured liabilities are based upon estimates, and while management believes that the estimates of loss are reasonable, the ultimate liability may be in excess of or less than the recorded amounts. Due to the inherent volatility of actuarially determined loss estimates, it is reasonably possible that the Company could experience changes in estimated losses that could be material to net income. If the Company’s actual liabilities exceed its estimates of losses, its future earnings, cash flows and financial condition would be adversely affected.
Income Taxes — Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates in effect when such temporary differences are expected to reverse. The Company generally expects to fully utilize its deferred tax assets; however, when necessary, the Company records a valuation allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized.
In determining the need for a valuation allowance or the need for and magnitude of liabilities for uncertain tax positions, the Company makes certain estimates and assumptions. These estimates and assumptions are based on, among other things, knowledge of operations, markets, historical trends and likely future changes and, when appropriate, the opinions of advisors with knowledge and expertise in certain fields. Due to certain risks associated with the Company’s estimates and assumptions, actual results could differ.
Standard Bearer was organized, has operated and intends to continue to operate in a manner to qualify for taxation as a REIT. In order to qualify as a REIT, Standard Bearer must meet certain organizational and operational requirements, including a requirement to distribute to its shareholders, which in this case is the Company, at least 90% of its annual taxable income. As a REIT, Standard Bearer generally will not be subject to federal income tax to the extent it distributes as qualifying dividends, all of its REIT taxable income to its shareholders. If Standard Bearer fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions.
Noncontrolling Interest — The noncontrolling interest in a subsidiary is initially recognized at estimated fair value on the acquisition date and is presented within total equity in the Company's consolidated balance sheets. The Company presents the noncontrolling interest and the amount of consolidated net income attributable to The Ensign Group, Inc. in its consolidated statements of income. Net income per share is calculated based on net income attributable to The Ensign Group, Inc.'s stockholders. The carrying amount of the noncontrolling interest is adjusted based on an allocation of subsidiary earnings based on ownership interest.
Stock-Based Compensation — The Company measures and recognizes compensation expense for all stock-based payment awards made to employees and directors including employee stock options and restricted stock awards based on estimated fair values, ratably over the requisite service period of the award. Net income has been reduced as a result of the recognition of the fair value of all stock options and restricted stock awards issued, the amount of which is based upon the number of grants and other variables. As stock-based compensation expense recognized in the Company’s consolidated statements of income 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.
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. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration.
105

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Recent Accounting Standards Adopted by the Company — In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after December 15, 2024. The Company adopted the requirements of this ASU retrospectively in Note 12, Income Taxes of this Annual Report. The adoption of this ASU does not have an impact on the Company's Consolidated Financial Statements.
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. The Company is currently evaluating the impact of this ASU on its Notes to the Consolidated Financial Statements.
In September 2025, the FASB issued ASU 2025-06 " Targeted Improvements to the Accounting for Internal-Use Software ," which amends the accounting for and disclosure of software costs under the existing standards. The amendments clarify the requirement for capitalizing software costs. ASU 2025-06 is effective beginning with the Company's fiscal year 2028 for both interim and annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements.

3. REVENUE AND ACCOUNTS RECEIVABLE

The Company's service revenue is derived primarily from providing healthcare services to its patients. Revenue is recognized when services are provided to patients at the amount that reflects the consideration that the Company expects to be entitled from patients and third-party payors, including Medicaid, Medicare and insurers (private and Medicare replacement plans), in exchange for providing patient care.
Disaggregation of Revenue
The Company disaggregates revenue from contracts with its patients by payors. The Company has determined that disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Revenue by Payor

The Company’s revenue is derived primarily from providing healthcare services to patients and is recognized on the date services are provided at amounts billable to individual patients, adjusted for estimates for variable consideration. 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 69.5 %, 70.9 % and 72.6 % for the years ended December 31, 2025, 2024 and 2023, respectively. Settlements with Medicare and Medicaid payors for retroactive adjustments due to audits and reviews are considered variable consideration and are included in the determination of the estimated transaction price. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and the Company’s historical settlement activity. 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 years ended December 31, 2025, 2024 and 2023.

106

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Service revenue for the years ended December 31, 2025, 2024 and 2023 is summarized in the following tables:

  Year Ended December 31,
2025 2024 2023
Revenue % of Revenue Revenue % of Revenue Revenue % of Revenue
Medicaid (1)(2)
$ 2,002,007   39.8   % $ 1,682,344   39.7   % $ 1,459,449   39.4   %
Medicare 1,194,554   23.7   1,055,226   24.9   985,749   26.6  
Medicaid-skilled
301,122   6.0   266,738   6.3   245,663   6.6  
Total Medicaid and Medicare
$ 3,497,683   69.5   % $ 3,004,308   70.9   % $ 2,690,861   72.6   %
Managed care 944,316   18.8   789,643   18.6   666,129   18.0  
Private and other (3)
590,119   11.7   443,574   10.5   351,081   9.4  
SERVICE REVENUE $ 5,032,118   100.0   % $ 4,237,525   100.0   % $ 3,708,071   100.0   %
(1) Medicaid payor includes revenue for senior living operations.

(2) Medicaid payor includes revenue related to state relief funding during the year ended December 31, 2023.
(3) 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 $ 25,723 , $ 22,960 and $ 21,284 for the years ended December 31, 2025, 2024 and 2023.
State relief funding
During the year ended December 31, 2023, the Company received $ 64,238 in state relief funding and recognized $ 64,753 as revenue. The state relief funding were provided through Medicaid programs from various states, including healthcare relief funding under the American Rescue Plan Act (ARPA), increases in the Federal Medical Assistance Percentage (FMAP) under the Families First Coronavirus Response Act (FFCRA) and other state specific relief programs. The funding generally incorporates specific use requirements primarily for direct patient care including labor related expenses that are attributable to the COVID-19 pandemic or are associated with providing patient care.
Due to the expiration of the COVID-19 Public Health Emergency in May 2023, the Company did not receive additional funding during the years ended December 31, 2025 and 2024.
Revenues from these additional payments are recognized in accordance with ASC 606, subject to variable consideration constraints. In certain operations where the Company received additional payments that exceeded expenses incurred related to specific qualifiers, the Company recorded deferred revenue for the excess amount until additional expenses are incurred for recognition. Accordingly, the amount of state relief revenue recognized is limited to the actual related expenses incurred.
Balance Sheet Impact
Included in the Company’s 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 December 31, 2025 and 2024, or activity during the years ended December 31, 2025, 2024 and 2023.

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 December 31, 2025 and 2024, is summarized in the following table:
107

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

December 31,
2025 2024
Medicaid $ 296,649   $ 228,872  
Managed care 163,463   139,711  
Medicare 102,693   77,056  
Private and other payors 81,985   132,693  
  $ 644,790   $ 578,332  
Less: allowance for doubtful accounts ( 7,805 ) ( 8,435 )
ACCOUNTS RECEIVABLE, NET $ 636,985   $ 569,897  

4. COMPUTATION OF NET INCOME PER COMMON SHARE

Basic net income per share is computed by dividing income from operations attributable to stockholders of The Ensign Group, Inc. by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.
A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows:

Year Ended December 31,
  2025 2024 2023
NUMERATOR:
Net income $ 344,264   $ 298,458   $ 209,850  
Less: net income attributable to noncontrolling interests 293   485   451  
Net income attributable to The Ensign Group, Inc. $ 343,971   $ 297,973   $ 209,399  

DENOMINATOR:
Weighted average shares outstanding
57,306   56,655   55,708  

Basic net income per common share: $ 6.00   $ 5.26   $ 3.76  

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

Year Ended December 31,
  2025 2024 2023
NUMERATOR:
Net income $ 344,264   $ 298,458   $ 209,850  
Less: net income attributable to noncontrolling interests 293   485   451  
Net income attributable to The Ensign Group, Inc. $ 343,971   $ 297,973   $ 209,399  

DENOMINATOR:
Weighted average common shares outstanding 57,306   56,655   55,708  
Plus: incremental shares from assumed conversion (1)
1,567   1,585   1,615  
Adjusted weighted average common shares outstanding 58,873   58,240   57,323  

Diluted net income per common share: $ 5.84   $ 5.12   $ 3.65  

(1) Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 1,006 , 914 and 1,429 for the years ended December 31, 2025, 2024 and 2023, respectively.
108

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

5. FAIR VALUE MEASUREMENTS

The Company's financial assets include held-to-maturity investments carried at amortized cost basis of $ 150,119 and $ 138,600 , of which $ 81,816 and $ 65,831 are designated to support insurance subsidiary liabilities, as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, 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 December 31, 2025 and 2024 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 December 31, 2025 and 2024, the fair value of the investment funds was $ 74,405 and $ 56,049 , respectively, which are derived using Level 2 inputs. Refer to Note 16, Defined Contribution Plans for more information.
Additionally, the Company has other investments held at historical cost basis, which are not material, for which the fair value is derived using Level 3 inputs.

6. STANDARD BEARER
Standard Bearer's real estate portfolio consists of 152 of the Company's 158 owned real estate properties, of which 116 are operated and managed by the Company's independent subsidiaries and 37 are leased to and operated by third-party operators. Of those 37 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 year ended December 31, 2025, Standard Bearer added $ 314,189 of real estate assets associated with 25 stand-alone skilled nursing operations, one stand-alone senior living operation and two campus operations . Four of the acquisitions were related to exercising purchase options under an existing lease arrangement from CareTrust REIT, Inc. (CareTrust). Of these additions, four s tand-alone skilled nursing operations are leased to third-party operators and the remaining additions are operated by the Company's independent subsidiaries .
Subsequent to December 31, 2025, Standard Bearer added approximately $ 18,053 of real estate assets associated with two stand-alone skilled nursing operations, of which all were leased back to the Company's independent subsidiaries. In addition, Standard Bearer had previously purchased the real estate for two stand-alone skilled nursing operations, which were subsequently transferred from third-party operators to the Company’s independent subsidiaries. Refer to Note 1, Description of Business , for additional information on operational expansions.
During the year ended December 31, 2024, Standard Bearer added $ 131,927 of real estate assets associated with 11 stand-alone skilled nursing operations, three stand-alone senior living operations and three 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.
During the year ended December 31, 2023, Standard Bearer added $ 65,899 of real estate assets associated with three stand-alone skilled nursing operations and two campus operations. Of these additions, three skilled nursing operations and one campus operation acquired are operated by the Company's independent subsidiaries and the other campus operation is leased to a third-party operator.
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 . All intercompany transactions have been eliminated in consolidation. Refer to Note 7, Business Segments , for additional information related to these intercompany eliminations as well as Standard Bearer as a reportable segment.

109

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Intercompany master lease agreements
Certain of the Company's independent subsidiaries and 116 Standard Bearer independent real estate subsidiaries have entered into seven 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. The rent structure under the Standard Bearer Master Leases includes a fixed component, subject to annual escalation equal to the lesser of (1) the percentage change in the Consumer Price Index (but not less than zero ) or (2) 2.5 %. In addition to rent, the independent subsidiaries are required to pay the following: (1) all impositions and taxes levied on or with respect to the leased properties; (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all facility maintenance and repair costs; 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 was $ 107,560 , $ 78,110 , and $ 66,712 for the years ended December 31, 2025, 2024 and 2023, respectively, which has been eliminated in consolidation.
Intercompany management agreement
Standard Bearer has no employees. The Service Center provides personnel and services to Standard Bearer pursuant to the management agreement between Standard Bearer and the Service Center. 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 years ended December 31, 2025, 2024 and 2023 was $ 7,589 , $ 5,707 and $ 4,948 , respectively, which has been eliminated in consolidation.
Intercompany debt arrangements

Standard Bearer obtains its funding through various sources including operating cash flows, access to debt arrangements and intercompany loans. The intercompany debt arrangements include mortgage loans and a credit facility to fund acquisitions and working capital needs. The interest rate under the credit facility is a base rate plus a margin ranging from 0.25 % to 1.25 % per annum or SOFR plus a margin ranging from 1.25 % to 2.25 % per annum.

In addition, as the Department of Housing and Urban Development (HUD) mortgage loans and promissory note are entered into by real estate subsidiaries of Standard Bearer, the interest expense incurred from these debts are included in Standard Bearer's segment income. Refer to Note 13, Debt , for additional information related to these debts.
Equity Instrument Denominated in the Shares of a Subsidiary
As part of the formation of Standard Bearer in 2022, the Company established the Standard Bearer Healthcare REIT, Inc. 2022 Omnibus Incentive Plan (Standard Bearer Equity Plan). The Company may grant stock options and restricted stock awards under the Standard Bearer Equity Plan to employees and management of Ensign's independent subsidiaries. These awards generally vest over a period of five years or upon the occurrence of certain prescribed events. The value of the stock options and restricted stock awards is tied to the value of the common stock of Standard Bearer, which is determined based on an independent valuation of Standard Bearer. The Company can also call the awards, generally upon employee termination. The Company granted 39 restricted stock awards during the year ended December 31, 2024. No stock options or restricted shares were granted under the Standard Bearer Equity Plan during the years ended December 31, 2025 and 2023. A total of 8 restricted stock awards vested during the year ended December 31, 2025. There were no vestings of restricted stock awards during the years ended December 31, 2024 and 2023.
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 years ended December 31, 2025 and 2024, share-based compensation expense under the Standard Bearer Equity Plan was not material. There was no share-based compensation expense during the year ended December 31, 2023.

7. BUSINESS SEGMENTS

The Company has two reportable segments: (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.
110

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of December 31, 2025, the skilled services segment includes 326 skilled nursing and 31 campus operations that provide both skilled nursing and rehabilitative care services and senior living services. The Company's Standard Bearer segment consists of 152 owned real estate properties.
The Company also reports an “All Other” category that includes results from its senior living operations, which includes 16 stand-alone senior living operations and the senior living operations at 31 campus operations that provide both skilled nursing and rehabilitative care services and senior living services. In addition, the "All Other" category includes mobile diagnostics, medical transportation, other real estate, other ancillary operations and the Service Center. Services included in the “All Other” category are insignificant individually and therefore do not constitute a reportable segment.
The Company’s reportable segments are significant operating segments that offer differentiated services. The segment structure reflects the Company's current operational and financial management and provides the best structure to maximize the quality of care and investment strategy provided, while maintaining financial discipline.
Segment income is defined as income before provision for income taxes, excluding gain or loss from sale of real estate, real estate insurance recoveries and impairment of long-lived assets. The Company's chief operating decision maker or CODM, who is the Chief Executive Officer, reviews segment income for each operating segment to evaluate performance and allocate capital resources. The CODM uses segment income to analyze actual results as part of operational planning and to decide whether to reinvest profits into the segments or into other parts of the Company, such as through acquisitions, to pay dividends or to recommend a stock repurchase program. The Company's CODM does not review assets by segment in his resource allocation and therefore assets by segment are not disclosed below.
Intercompany revenue is eliminated in consolidation, along with corresponding intercompany expenses. Included in segment income for Standard Bearer is expense for intercompany services provided by the Service Center as described in Note 6, Standard Bearer , as it is part of the CODM financial information.

The following tables set forth financial information for the segments:

  Year Ended December 31, 2025
  Skilled Services Standard Bearer Total

Service revenue (1)
$ 4,837,809   $ —   $ 4,837,809  
Rental revenue
—   126,930   126,930  
Segment revenue
$ 4,837,809   $ 126,930   $ 4,964,739  

Reconciliation of revenue:

All other revenue (2)
232,846  
Elimination of intercompany revenue (3)
( 139,744 )
TOTAL CONSOLIDATED REVENUE
$ 5,057,841  
Less:

Other segment items (4)
4,165,591   11,210  
Depreciation and amortization 55,821   37,599  
Interest expense (5)
—   40,498  
Segment income
$ 616,397   $ 37,623   $ 654,020  

Reconciliation of profit or loss:

All other not included in segment income
( 198,398 )

INCOME BEFORE PROVISION FOR INCOME TAXES
$ 455,622  

(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. Intercompany service revenue is eliminated in "Elimination of intercompany revenue".
(2) All other revenue includes $ 220,364 of service revenue and $ 12,482 of rental revenue for the year ended December 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 $ 113,689 and intercompany service revenue of $ 26,055 for the year ended December 31, 2025.
(4) Other segment items include cost of services of $ 3,846,828 and rent expense of $ 318,763 for the skilled services segment, and cost of services of $ 2,133 , rent expense of $ 1,057 and general and administrative expenses of $ 8,020 for the Standard Bearer segment. Additionally, there are intercompany expenses of $ 139,744 during the year ended December 31, 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 $ 35,058 during the year ended December 31, 2025, which is eliminated in consolidation.
111

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  Year Ended December 31, 2024
  Skilled Services Standard Bearer Total
Service revenue (1)
$ 4,076,825   $ —   $ 4,076,825  
Rental revenue
—   95,086   95,086  
Segment revenue
$ 4,076,825   $ 95,086   $ 4,171,911  

Reconciliation of revenue:

All other revenue (2)
192,881  
Elimination of intercompany revenue (3)
( 104,307 )
TOTAL CONSOLIDATED REVENUE
$ 4,260,485  
Less:

Other segment items (4)
3,513,167   9,152  
Depreciation and amortization 45,195   29,297  
Interest expense (5)
—   27,302  
Segment income $ 518,463   $ 29,335   $ 547,798  

Reconciliation of profit or loss:

All other not included in segment income
( 161,704 )

INCOME BEFORE PROVISION FOR INCOME TAXES
$ 386,094  

(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. Intercompany service revenue is eliminated in "Elimination of intercompany revenue".
(2) All Other revenue includes $ 181,066 of service revenue and $ 11,815 of rental revenue for the year ended December 31, 2024, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".
(3) Elimination of intercompany revenue includes the elimination intercompany rental revenue of $ 83,941 and intercompany service revenue of $ 20,366 for the year ended December 31, 2024.
(4) Other segment items include cost of services of $ 3,242,737 and rent expense of $ 270,430 for the skilled services segment, and cost of services of $ 2,265 , rent expense of $ 983 and general and administrative expenses of $ 5,904 for the Standard Bearer segment. Additionally, there are intercompany expenses of $ 104,307 during the year ended December 31, 2024, 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 $ 20,285 during the year ended December 31, 2024, which is eliminated in consolidation.

112

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  Year Ended December 31, 2023

  Skilled Services Standard Bearer Total
Service revenue (1)
$ 3,578,855   $ —   $ 3,578,855  
Rental revenue
—   82,486   82,486  
Segment revenue
$ 3,578,855   $ 82,486   $ 3,661,341  

Reconciliation of revenue:

All other revenue (2)
155,804  
Elimination of intercompany revenue (3)
( 87,790 )
TOTAL CONSOLIDATED REVENUE
$ 3,729,355  
Less:

Other segment items (4)
3,075,164   8,455  
Depreciation and amortization 38,766   25,205  
Interest expense (5)
—   19,761  
Segment income $ 464,925   $ 29,065   $ 493,990  

Reconciliation of profit or loss:

All other not included in segment income
( 221,228 )

INCOME BEFORE PROVISION FOR INCOME TAXES
$ 272,762  

(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. Intercompany service revenue is eliminated in "Elimination of intercompany revenue".
(2) All Other revenue includes $ 144,667 of service revenue and $ 11,137 of rental revenue for the year ended December 31, 2023, 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 $ 72,339 and intercompany service revenue of $ 15,451 for the year ended December 31, 2023.
(4) Other segment items includes cost of services of $ 2,832,012 and rent expense of $ 243,152 for the skilled services segment, and cost of services of $ 2,104 , rent expense of $ 954 and general and administrative expenses of $ 5,397 for the Standard Bearer segment. Additionally, there are intercompany expenses of $ 87,790 during the year ended December 31, 2023, 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 $ 12,902 during the year ended December 31, 2023, which is eliminated in consolidation.

Service revenue by major payor source were as follows:

  Year Ended December 31, 2025
  Skilled Services All Other (3)
Total Service Revenue Revenue %
Medicaid (1)
$ 1,952,142   $ 49,865   $ 2,002,007   39.8   %
Medicare 1,194,554   —   1,194,554   23.7  
Medicaid-skilled
301,122   —   301,122   6.0  
Total Medicaid and Medicare
$ 3,447,818   $ 49,865   $ 3,497,683   69.5   %
Managed care 944,316   —   944,316   18.8  
Private and other (2)
445,675   144,444   590,119   11.7  
TOTAL SERVICE REVENUE $ 4,837,809   $ 194,309   $ 5,032,118   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.

113

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

  Year Ended December 31, 2024
  Skilled Services All Other (3)
Total Service Revenue Revenue %
Medicaid (1)
$ 1,646,422   $ 35,922   $ 1,682,344   39.7   %
Medicare 1,055,226   —   1,055,226   24.9  
Medicaid-skilled
266,738   —   266,738   6.3  
Total Medicaid and Medicare
$ 2,968,386   $ 35,922   $ 3,004,308   70.9   %
Managed care 789,643   —   789,643   18.6  
Private and other (2)
318,796   124,778   443,574   10.5  
TOTAL SERVICE REVENUE $ 4,076,825   $ 160,700   $ 4,237,525   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.

  Year Ended December 31, 2023

  Skilled Services All Other (3)
Total Service Revenue Revenue %
Medicaid (1)
$ 1,429,473   $ 29,976   $ 1,459,449   39.4   %
Medicare 985,749   —   985,749   26.6  
Medicaid-skilled
245,663   —   245,663   6.6  
Total Medicaid and Medicare
2,660,885   29,976   2,690,861   72.6  
Managed care 666,129   —   666,129   18.0  
Private and other (2)
251,841   99,240   351,081   9.4  
TOTAL SERVICE REVENUE $ 3,578,855   $ 129,216   $ 3,708,071   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.

8.  PROPERTY AND EQUIPMENT - NET
Property and equipment, net consists of the following:

December 31,
2025 2024
Land $ 219,857   $ 162,873  
Buildings and improvements 1,231,704   933,790  
Leasehold improvements 254,309   212,603  
Equipment 478,729   396,018  
Furniture and fixtures 4,588   4,349  
Construction in progress 58,615   41,209  

  $ 2,247,802   $ 1,750,842  
Less: accumulated depreciation ( 550,939 ) ( 459,488 )
PROPERTY AND EQUIPMENT, NET $ 1,696,863   $ 1,291,354  

Real Estate Acquisitions
A majority of the real estate properties were acquired by subsidiaries of Standard Bearer, as detailed in Note 6 . Standard Bearer . The aggregate purchase price for the real estate purchases during the year ended December 31, 2025 was $ 326,667 , which primarily consists of building and improvements of $ 262,305 and land of $ 56,984 . The aggregate purchase price for the real estate purchases during the year ended December 31, 2024 was $ 154,879 , which primarily consists of building and improvements of $ 108,709 and land of $ 20,547 , with the remaining primarily related to goodwill.
114

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

9.  INTANGIBLE ASSETS - NET

Weighted Average Life (Years) December 31,
2025 2024

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Intangible Assets Net Net

Assembled occupancy 0.4 $ —   $ —   $ —   $ 1,991   $ ( 1,316 ) $ 675  
Facility trade name 30.0 733   ( 486 ) 247   733   ( 462 ) 271  
Customer relationships 18.4 4,582   ( 3,114 ) 1,468   4,582   ( 2,902 ) 1,680  
TOTAL   $ 5,315   $ ( 3,600 ) $ 1,715   $ 7,306   $ ( 4,680 ) $ 2,626  

During the years ended December 31, 2025, 2024 and 2023, amortization expense was $ 2,225 , $ 2,019 and $ 1,790 , respectively, of which $ 960 , $ 1,212 , and $ 1,202 was related to the amortization of right-of-use assets, respectively. The Company did no t record any impairment charge to intangible assets during the years ended December 31, 2025, 2024 and 2023.

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

2026 $ 234  
2027 234  
2028 234  
2029 234  
2030 234  
Thereafter 545  
  $ 1,715  

Other indefinite-lived intangible assets consist of the following:

December 31,

2025 2024
Trade name $ 889   $ 889  
Medicare and Medicaid licenses 3,777   3,777  
TOTAL $ 4,666   $ 4,666  

10. GOODWILL

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Company's acquisitions are primarily asset acquisitions and provided that goodwill corresponds to the acquisition of a business and not merely the acquisition of real estate property, the Company's Standard Bearer segment appropriately does not carry a goodwill balance. The following table represents goodwill value by the skilled services segment and "all other" category for the years ended December 31, 2025, 2024 and 2023:

  Skilled Services All Other Total

December 31, 2023 $ 67,886   $ 8,983   $ 76,869  

Additions 20,740   372   21,112  
December 31, 2024 $ 88,626   $ 9,355   $ 97,981  

December 31, 2025 $ 88,626   $ 9,355   $ 97,981  

Management has evaluated its goodwill and intangible assets and determined there was no impairment during the years ended December 31, 2025, 2024 and 2023. The Company has recognized cumulative goodwill impairment losses of $ 7,410 , since inception in 1999.
115

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

11.  OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

December 31,
2025 2024
Quality assurance fee $ 17,398   $ 12,667  
Refunds, deferred revenue and advances
105,642   75,573  

Cash held in trust for patients 8,653   6,370  

Dividends payable 3,775   3,589  
Property taxes 7,150   15,400  
Income tax payable
818   —  
Accrued litigation (Note 18)
12,000   —  

Other 18,591   18,458  
OTHER ACCRUED LIABILITIES $ 174,027   $ 132,057  

Quality assurance fee represents the aggregate of amounts payable to various states that have a mandated fee based on patient days or licensed beds. Refunds, deferred revenue and advances consists of liabilities related to duplicate payments and credit balances from various payor sources, as well as payments received from residents in advance of services provided. Cash held in trust for patients reflects monies received from or on behalf of patients. Maintaining a trust account for patients is a regulatory requirement and, while the trust assets offset the liabilities, the Company assumes a fiduciary responsibility for these funds. The cash balance related to this liability is included in other current assets in the consolidated balance sheets.

12. INCOME TAXES
The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 is summarized as follows:

  Year Ended December 31,
  2025   2024   2023
Current:      
Federal $ 102,843   $ 70,144   $ 73,092  
State 25,372   16,857   17,301  
  $ 128,215   $ 87,001   $ 90,393  
Deferred:  
Federal ( 12,689 ) 582   ( 22,280 )
State ( 4,168 ) 53   ( 5,201 )
$ ( 16,857 ) $ 635   $ ( 27,481 )

     TOTAL $ 111,358   $ 87,636   $ 62,912  

A reconciliation of the federal statutory rate to the effective tax rate for income for the years ended December 31, 2025, 2024 and 2023, respectively, is comprised as follows:

  Year Ended December 31,
  2025 2024 2023
Income tax expense at statutory rate $ 95,681   21.0   % $ 81,080   21.0   % $ 57,280   21.0   %
State income taxes - net of federal benefit (a)
16,752   3.7   13,353   3.5   9,536   3.5  
Non-deductible expenses 12,341   2.7   6,848   1.8   9,321   3.4  
Equity compensation ( 12,231 ) ( 2.7 ) ( 12,631 ) ( 3.3 ) ( 11,629 ) ( 4.2 )

Other adjustments ( 1,185 ) ( 0.3 ) ( 1,014 ) ( 0.3 ) ( 1,596 ) ( 0.6 )
TOTAL INCOME TAX PROVISION $ 111,358   24.4   % $ 87,636   22.7   % $ 62,912   23.1   %
(a) State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.

116

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company's effective tax rate was 24.4 % for the year ended December 31, 2025, compared to 22.7 % for the same period in 2024 and 23.1 % in 2023.
The Company's deferred tax assets and liabilities as of December 31, 2025 and 2024 are summarized below.

  December 31,
  2025   2024
Deferred tax assets (liabilities):  
Accrued expenses $ 95,630   $ 76,419  
Revenue related reserves 34,898   27,023  
Tax credits 138   597  
Insurance 27,224   24,817  
Lease liability 532,035   470,313  
State taxes 792   —  
$ 690,717   $ 599,169  
Valuation allowance ( 21 ) ( 93 )
TOTAL DEFERRED TAX ASSETS $ 690,696   $ 599,076  
State taxes —   ( 197 )
Depreciation and amortization ( 67,348 ) ( 57,253 )
Prepaid expenses ( 9,128 ) ( 6,390 )
Right-of-use asset
( 531,082 ) ( 468,955 )
TOTAL DEFERRED TAX LIABILITIES $ ( 607,558 ) $ ( 532,795 )
NET DEFERRED TAX ASSETS $ 83,138   $ 66,281  

As of December 31, 2025, 2024 and 2023, the Company did not have any unrecognized tax benefits, net of its state benefits that would affect the Company's effective tax rate. The Company classifies interest and/or penalties on income tax liabilities or refunds as additional income tax expense or income. Such amounts are not material.
The federal statutes of limitations on the Company's 2021, 2020, and 2019 income tax years lapsed during the third quarter of 2025, 2024, and 2023, respectively. During the fourth quarter of each year, various state statutes of limitations also lapsed.
The Company paid federal income taxes of $ 94,000 , $ 78,250 , and $ 72,500 for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, the Company paid state income taxes of $ 22,202 , $ 18,087 , and $ 17,230 for the years ended December 31, 2025, 2024 and 2023, respectively.

Taxes paid in California accounted to greater than 5% of the total cash paid for taxes for 2025, 2024, and 2023. California cash taxes paid for these years were $ 11,675 , $ 9,175 , and $ 8,350 , respectively.

13. DEBT
Debt consists of the following:

December 31,
2025 2024

Mortgage loans and promissory note $ 144,352   $ 148,438  

Less: current maturities ( 4,227 ) ( 4,086 )
Less: debt issuance costs, net ( 2,596 ) ( 2,767 )
LONG-TERM DEBT LESS CURRENT MATURITIES $ 137,529   $ 141,585  

117

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Credit Facility with a Lending Consortium Arranged by Truist

The Company maintains a revolving credit facility between the Company and its independent subsidiaries, including Standard Bearer as co-borrowers, and Truist Securities (Truist) (the Credit Facility) with a revolving line of credit of up to $ 600,000 in aggregate principal amount with a maturity date of April 8, 2027. Borrowings are supported by a lending consortium arranged by Truist. The interest rates applicable to loans under the Credit Facility are, at the Company's option, equal to either a base rate plus a margin ranging from 0.25 % to 1.25 % per annum or SOFR plus a margin ranging from 1.25 % to 2.25 % per annum, based on the Consolidated Total Net Debt to Consolidated EBITDA ratio (as defined in the Credit Facility). In addition, there is a commitment fee on the unused portion of the commitments that ranges from 0.20 % to 0.40 % per annum, depending on the Consolidated Total Net Debt to Consolidated EBITDA ratio.

Borrowings made under the Credit Facility are guaranteed, jointly and severally, by certain of the Company’s wholly-owned subsidiaries, and are secured by a pledge of stock of the Company's material independent subsidiaries as well as a first lien on substantially all of such independent subsidiaries' personal property. The Credit Facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its independent subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. Under the terms of the Credit Facility, the Company must comply with financial maintenance covenants to be tested quarterly, consisting of (i) a maximum consolidated total net debt to consolidated EBITDA ratio (which shall not be greater than 3.75 :1.00; 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 December 31, 2025 and 2024, there was no outstanding debt under the Credit Facility. The Company was in compliance with all loan covenants as of December 31, 2025 and 2024.
Mortgage Loans and Promissory Note

As of December 31, 2025, the Company has 23 subsidiaries that have mortgage loans insured with HUD in the aggregate amount of $ 143,449 , 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. In addition to the interest rate, the Company incurs other fees for HUD placement, including, but not limited to audit fees. Amounts borrowed under the mortgage loans may be prepaid, subject to prepayment fees based on the principal balance on the date of prepayment. For the majority of the loans, during the first three years, the prepayment fee is 10.0 % and is reduced by 3.0 % in the fourth year of the loan and reduced by 1.0 % per year for years five through ten of the loan. There is no prepayment penalty after year ten. The terms for all the mortgage loans are 25 to 35 years.

In addition to the HUD mortgage loans above, the Company has a promissory note of $ 903 that bears a fixed interest rate of 5.3 % per annum and has a term of 12 years. The note, which was assumed as part of an acquisition, is secured by the real property comprising the facility and the rent, issues and profits thereof, as well as all personal property used in the operation of the facility.
Future principal payments due under the long-term debt arrangements discussed above are as follows:

Years Ending December 31, Amount
2026 $ 4,227  
2027 3,897  
2028 3,779  
2029 3,896  
2030 4,017  
Thereafter 124,536  
  $ 144,352  
Off-Balance Sheet Arrangements

As of December 31, 2025 and 2024, the Company had approximately $ 8,402 and $ 27,893 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 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.
118

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

14. OPTIONS AND AWARDS
The Company has one stock incentive plan, the Amended and Restated 2022 Omnibus Incentive Plan (the Amended and Restated Plan), pursuant to which grants of the Company's securities may currently be made. During the second quarter of 2025, the Company’s stockholders approved the Amended and Restated Plan, which increased the total number of shares authorized for issuance under the 2022 Omnibus Incentive Plan (the Predecessor Plan). Including the shares rolled over from the Predecessor Plan, the Amended and Restated Plan provides for the issuance of 4,231 shares of common stock. The number of shares available to be issued under the Amended and Restated Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) two shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). Non-employee director options, to the extent granted, will vest and become exercisable in three equal annual installments, or the length of the term if less than three years , on the completion of each year of service measured from the grant date. All other options generally vest over five years at 20 % per year on the anniversary of the grant date. Options expire ten years from the date of grant. At December 31, 2025, the total number of shares available for issuance under the Amended and Restated Plan was 3,397 .
The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for stock option awards. Determining the appropriate fair-value model and calculating the fair value of stock option awards at the grant date requires judgment, including estimating stock price volatility, expected option life, and forfeiture rates. The fair-value of the restricted stock awards at the grant date is based on the market price on the grant date, adjusted for forfeiture rates. The Company develops estimates based on historical data and market information, which can change significantly over time.
• The expected option term is calculated by the average of the contractual term of the options and the weighted average vesting period for all options. The calculation of the expected option term is based on the Company's experience due to sufficient history.
• The Company utilizes its own experience to calculate estimated volatility for options granted.
• The dividend yield is based on the Company's historical pattern of dividends as well as expected dividend patterns.
• The risk-free rate is based on the implied yield of U.S. Treasury notes as of the grant date with a remaining term approximately equal to the expected term.
• Estimated forfeiture rate of approximately 4.62 % per year is based on the Company's historical forfeiture activity of unvested stock options.
Stock Options
The Company granted 721 , 704 and 1,008 stock options during the years ended December 31, 2025, 2024 and 2023, respectively. The Company used the following assumptions for stock options granted during the years ended December 31, 2025, 2024 and 2023:

Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield
2025 721 4.1 % 6.2 years 39.2 % 0.2 %
2024 704 4.3 % 6.2 years 40.5 % 0.2 %
2023 1,008 4.3 % 6.2 years 41.3 % 0.2 %

For the years ended December 31, 2025, 2024 and 2023, 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
2025 721 $ 160.61   $ 71.32  
2024 704 $ 132.46   $ 60.37  
2023 1,008 $ 95.05   $ 43.85  

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the periods ended December 31, 2025, 2024 and 2023 and therefore, the intrinsic value was $ 0 at the date of grant.

119

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table represents the employee stock option activity during the years ended December 31, 2025, 2024 and 2023:

Number of Options Outstanding Weighted Average
Exercise Price Number of
Options Vested Weighted Average Exercise Price of Options Vested

January 1, 2023 3,833   $ 46.72   2,069   $ 28.87  
Granted 1,008   95.05  
Forfeited ( 91 ) 71.44  
Exercised ( 759 ) 24.21  
December 31, 2023 3,991   $ 62.65   1,887   $ 39.58  
Granted 704   132.46  
Forfeited ( 76 ) 86.92  
Exercised ( 632 ) 35.28  
December 31, 2024 3,987   $ 78.84   1,895   $ 52.64  
Granted 721   160.61  
Forfeited ( 60 ) 110.62  
Exercised ( 577 ) 50.39  
December 31, 2025 4,071   $ 96.87   1,991   $ 67.10  

The following table represents the employee stock option activity during the year ended December 31, 2025:

Stock Options Outstanding Stock Options Vested
 
Number Outstanding Black-Scholes Fair Value Remaining Contractual Life (Years) Vested and Exercisable
Year of Grant Exercise Price

2016 $ 15.93 - $ 16.86 53   $ 314   1 53  
2017 15.80 - 19.41 104   617   2 104  
2018 22.49 - 32.71 196   2,069   3 196  
2019 41.07 - 45.76 302   4,743   4 302  
2020 44.84 - 59.49 332   6,562   5 332  
2021 73.47 - 83.64 395   12,973   6 298  
2022 79.79 - 94.88 430   16,364   7 235  
2023 89.83 - 98.83 896   39,354   8 336  
2024 119.19 - 146.37 651   39,371   9 135  
2025 $ 126.34 - $ 189.93 712   50,864   10 —  
TOTAL   4,071   $ 173,231     1,991  

The aggregate intrinsic value of options outstanding, vested and expected to vest as of December 31, 2025, 2024 and 2023 is as follows:

December 31,

Options 2025 2024 2023
Outstanding $ 317,984   $ 219,309   $ 197,819  
Vested 213,189   152,011   137,048  
Expected to vest 98,487   63,243   56,759  

The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options . At December 31, 2025, 2024 and 2023, t he aggregate intrinsic value of options that vested during the years ended December 31, 2025, 2024 and 2023 was $ 54,478 , $ 37,700 , and $ 31,658 , respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 60,636 , $ 60,358 , and $ 56,186 , respectively.
120

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Restricted Stock Awards
The Company granted 248 , 232 and 219 restricted stock awards during the years ended December 31, 2025 , 2024 and 2023, 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 years ended December 31, 2025 , 2024 and 2023 ranged from $ 126.34 to $ 189.93 , $ 116.65 to $ 149.12 and $ 89.83 to $ 98.31 , respectively. The fair value per share includes quarterly stock awards to non-employee directors. Included in the restricted stock award grants are $ 8,003 and $ 6,165 of annual bonuses that were settled in vested restricted stock awards during the years ended December 31, 2025 and 2024, respectively.
A summary of the status of the Company's non-vested restricted stock awards as of December 31, 2025 and changes during the years ended December 31, 2025, 2024 and 2023 is presented below:

Non-Vested Restricted Awards Weighted Average Grant Date Fair Value
Nonvested at January 1, 2023 487   $ 64.92  
Granted 219   92.04  
Vested ( 255 ) 64.21  
Forfeited ( 20 ) 71.53  
Nonvested at December 31, 2023 431   $ 78.91  
Granted 232   131.26  
Vested ( 215 ) 86.97  
Forfeited ( 13 ) 83.12  
Nonvested at December 31, 2024 435   $ 102.71  
Granted 248   155.13  
Vested ( 236 ) 109.30  
Forfeited ( 11 ) 109.85  
Nonvested at December 31, 2025
436   $ 129.54  

During the year ended December 31, 2025 , the Company granted 14 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 ranged from $ 129.09 to $ 177.94 based on the market price on the grant date.
Stock-based compensation expense
Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the years ended December 31, 2025, 2024 and 2023 was as follows:

Year Ended December 31,
  2025 2024 2023
Stock-based compensation expense related to stock options $ 30,676   $ 22,439   $ 17,221  
Stock-based compensation expense related to restricted stock awards 15,121   11,662   11,845  
Stock-based compensation expense related to restricted stock awards to non-employee directors
2,098   2,082   1,688  
TOTAL $ 47,895   $ 36,183   $ 30,754  

In future periods, the Company expects to recognize approximately $ 102,691 and $ 49,326 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of December 31, 2025. Future stock-based compensation expense will be recognized over 3.7 and 3.8 weighted average years for unvested options and restricted stock awards, respectively. There were 2,080 unvested and outstanding options as of December 31, 2025, of which 1,916 options are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest as of December 31, 2025 was  6.7 years.

121

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

15. LEASES
The Company leases from CareTrust real property associated with 104 independent skilled nursing and senior living facilities used in the Company’s operations under eight “triple-net” master lease agreements (collectively, the Master Leases), which range in terms from 13 to 20 years. At the Company’s option, the Master Leases may be extended for two or three five-year renewal terms beyond the initial term, on the same terms and conditions. The extension of the term of any of the Master Leases is subject to the following conditions: (1) no event of default under any of the Master Leases having occurred and continuing; and (2) the tenants providing timely notice of their intent to renew. The term of the Master Leases is subject to termination prior to the expiration of the current term upon default by the tenants in their obligations, if not cured within any applicable cure periods set forth in the Master Leases. If the Company elects to renew the term of a Master Lease, the renewal will be effective to all, but not less than all, of the leased property then subject to the Master Lease. During the year ended December 31, 2025, the Company added eight operations to an existing Master Lease and amended the initial term to 15 years. As a result, the total lease liabilities and right-of-use assets increased by $ 124,761 to reflect the new lease obligations.
The Company does not have the ability to terminate the obligations under a Master Lease prior to its expiration without CareTrust’s consent. If a Master Lease is terminated prior to its expiration other than with CareTrust’s consent, the Company may be liable for damages and incur charges such as continued payment of rent through the end of the lease term as well as maintenance and repair costs for the leased property.
The rent structure under the Master Leases includes a fixed component, subject to annual escalation equal to the lesser of (1) the percentage change in the Consumer Price Index (but not less than zero ) or (2) 2.5 %. In addition to rent, the Company is required to pay the following: (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all facility maintenance and repair costs; 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. Total rent expense for continuing operations under the Master Leases was approximately $ 72,460 , $ 69,399 and $ 66,439 for the years ended December 31, 2025, 2024 and 2023, respectively.
Among other things, under the Master Leases, the Company must maintain compliance with specified financial covenants measured on a quarterly basis, including a portfolio coverage ratio and a minimum rent coverage ratio. The Master Leases also include certain reporting, legal and authorization requirements. The Company is in compliance with requirements of the Master Leases as of December 31, 2025.
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. Most of these leases contain renewal options, certain of which involve rent increases.
The Company's 104 independent subsidiaries, excluding the subsidiaries that are operated under the Master Leases with CareTrust, are operated under 19 separate master lease arrangements. During the year ended December 31, 2025, the Company entered into five new master leases to add 14 stand-alone skilled nursing facilities operated by the Company's independent subsidiaries with initial terms between 14 and 15 years. The new master leases increased the lease liabilities and right-of-use assets by $ 134,893 to reflect the new lease obligations. Under the master leases, a default at a single facility could subject one or more of the other facilities covered by the same master lease to the same default risk. Failure to comply with Medicare and Medicaid provider requirements is an event of default under several of the Company’s leases, master lease agreements and debt financing instruments. In addition, other potential defaults related to an individual facility may cause a default of an entire master lease portfolio and could trigger cross-default provisions in the Company’s outstanding debt arrangements and other leases. With an indivisible lease, it is difficult to restructure the composition of the portfolio or economic terms of the lease without the consent of the landlord.

122

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The components of operating lease expense are as follows:

Year Ended December 31,
2025 2024 2023
Rent - cost of services (1)
$ 239,312   $ 216,016   $ 197,358  
Cost of services (2)
26,828   24,297   20,454  
General and administrative expense 793   700   498  
Depreciation and amortization (3)
960   1,212   1,202  
$ 267,893   $ 242,225   $ 219,512  

(1) Rent- cost of services includes deferred rent expense adju stments of $ 868 , $ 808 and $ 870 for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, rent- cost of services includes other variable lease costs such as consumer price index increases and short-term leases of $ 18,540 , $ 14,013 , and $ 10,259 for the years ended December 31, 2025, 2024, and 2023 respectively.
(2) Cost of services includes variable lease costs consisting of property taxes and insurance.
(3) Depreciation and amortization is related to the amortization of favorable and direct lease costs.

Future minimum lease payments for all third-party leases as of December 31, 2025 are as follows:

Year Amount

2026 $ 238,459  
2027 238,047  
2028 237,089  
2029 231,668  
2030 226,246  
Thereafter 1,904,147  
TOTAL LEASE PAYMENTS $ 3,075,656  
Less: present value adjustment ( 1,011,627 )
PRESENT VALUE OF TOTAL LEASE LIABILITIES $ 2,064,029  
Less: current lease liabilities ( 114,816 )
LONG-TERM OPERATING LEASE LIABILITIES $ 1,949,213  

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. 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 December 31, 2025 and 2024, the weighted average remaining lease term is  13.9 years and 14.5 years, respectively and the weighted average discount rate used to determine the operating lease liabilities is  6.2 % and 6.3 %, respectively.
Subsequent to December 31, 2025, the Company expanded its operations through a long-term lease with the addition of one stand-alone skilled nursing operation. The aggregate impact to the carrying value of lease liabilities and right-of-use assets related to the long-term lease is estimated to be $ 26,837 .
Lessor Activities

The Company leases 38 of its owned real estate properties to third-party operators, of which 32 senior living operations are operated by The Pennant Group, Inc. (Pennant). All of these properties are triple-net leases, whereby the respective tenants are responsible for all costs at the properties including: (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all facility maintenance and repair costs; 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. The initial terms range from 14 to 16 years.

During 2025, the Company entered into five lease agreements with separate third-party operators of four skilled nursing operations and one senior living operation, with initial lease terms between two months and 15 years. Subsequent to December 31, 2025, two of these skilled nursing operations were transferred to the Company's independent subsidiaries to operate.
During 2024, the Company expanded its operations through a separate master lease arrangement for three stand-alone senior living operations with a third-party operator for an initial lease term of 15 years.
123

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Total rental income from all third-party sources for the years ended December 31, 2025, 2024 and 2023 is as follows:

Year Ended December 31,
2025 2024 2023
Pennant (1)
$ 16,497   $ 15,480   $ 15,048  
Other third-party (2)
9,226   7,480   6,236  
TOTAL $ 25,723   $ 22,960   $ 21,284  
(1) Pennant rental income includes variable rent such as property taxes of $ 1,163 , $ 1,235 , and $ 1,296 during the year ended December 31, 2025, 2024, and 2023.
(2) Other third-party includes rental revenue associated with the Company's subleases to third parties of $ 4,455 , $ 4,347 and $ 3,897 for the years ended December 31, 2025, 2024 and 2023.

Future contractual minimum annual rental income for all third-party leases as of December 31, 2025 were as follows:

Year Amount

2026 $ 27,573  
2027 26,757  
2028 26,379  
2029 26,268  
2030 25,201  
Thereafter 122,863  
TOTAL $ 255,041  

16. DEFINED CONTRIBUTION PLANS

The Company has a 401(k) defined contribution plan (the 401(k) Plan), whereby eligible employees may contribute up to 90 % of their annual basic earnings, subject to applicable annual Internal Revenue Code limits. Additionally, the 401(k) Plan provides for discretionary matching contributions (as defined in the 401(k) Plan) by the Company. The Company expensed matching contributions to the 401(k) Plan of $ 4,291 , $ 3,532 and $ 2,836 during the years ended December 31, 2025, 2024 and 2023, respectively.

The Company has a non-qualified deferred compensation plan (DCP), whereby certain highly compensated employees who are otherwise ineligible to participate in the Company's 401(k) plan, may defer the receipt of a portion of their base compensation and, for certain employees, up to  100 % of their eligible bonuses. 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 December 31, 2025 and 2024, the Company accrued $ 81,553 and $ 63,051 , respectively, as long term deferred compensation in other long term liabilities on the 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 years ended December 31, 2025, 2024 and 2023, the Company recorded gains related to its DCP of $ 8,354 , $ 5,157 and $ 4,634 , respectively, which are included in other income, net, and recorded offsetting expenses of 8,782 , $ 5,559 , and $ 4,887 , respectively, which are allocated between cost of services and general administrative expenses.
124

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

17. SELF INSURANCE LIABILITIES
The following table represents the Company's self-insurance insurance liabilities, on an undiscounted basis, inclusive of anticipated insurance recoveries, as of December 31, 2025 and 2024:

December 31,

2025 2024
Accrued general liability and professional malpractice liabilities $ 186,780     $ 160,149  
Accrued workers’ compensation liabilities 42,121     37,291  
Accrued health benefits
17,514     14,312  

TOTAL SELF-INSURANCE LIABILITIES $ 246,415   $ 211,752  
Less: current self-insurance liabilities
81,623   67,331  
LONG-TERM SELF-INSURANCE LIABILITIES
$ 164,792   $ 144,421  

The following table represents activity in our self-insurance liabilities as of and for the years ended December 31, 2025 and 2024:

Amount
Balance January 1, 2024
$ 165,910  
Current year provisions 217,631  
Claims paid and direct expenses ( 173,617 )
Change in long-term insurance losses recoverable 1,828  
Balance December 31, 2024
$ 211,752  
Current year provisions 245,038  
Claims paid and direct expenses ( 209,777 )
Change in long-term insurance losses recoverable ( 598 )
Balance December 31, 2025
$ 246,415  

The anticipated insurance recoveries included in the self-insurance liabilities are presented gross rather than net with the corresponding asset of $ 17,143 and $ 17,741 as of December 31, 2025 and 2024, respectively, included in Restricted and other assets on the consolidated balance sheets.

18. 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. The terms of such obligations vary by contract and, in most instances, do not expressly state or include a specific or maximum dollar amount. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s consolidated balance sheets for any of the periods presented.
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. These claims may come from a variety of governmental agencies, including but not limited to, the following federal agencies: U.S. Department of Health and Human Services (HHS), including the Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services (CMS), Office for Civil Rights (OCR) and Office of Inspector General (OIG); U.S. Department of Justice (DOJ); Occupational Safety and Health Administration (OHSA), U.S. Equal Employment Opportunity Commission (EEOC); National Labor Relations Board (NLRB); U.S. Department of Labor (DOL); U.S. Department of Housing and Urban Development (HUD); U.S. Department of Veterans Affairs (VA); 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.
125

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company and its independent subsidiaries are also subject to requests for information and investigations by other state and federal governmental entities (e.g., Offices of the Attorney General and Offices of the Inspector General). The Company cannot predict or provide any assurance as to the possible outcome of any inquiry, investigation or related litigation. If any such 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, claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and related regulations, or if the Company and/or its independent subsidiaries are alleged or found to be liable on theories of general or professional negligence or under the law of 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.
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 our California operations. 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. It also has requested that OHCA be ordered to withdraw the subpoena and close the inquiry, so the underlying transaction can be completed.
Other claims and suits, including class actions, continue to be filed against the Company and other companies in its industry. The Company and its independent subsidiaries have been subjected to, and are currently involved in, class action litigation alleging violations (alone or in combination) of state and federal wage and hour laws as related to the alleged failure to pay wages, to timely provide and compensate for meal and rest breaks, and related causes of action. 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 consolidated balance sheet as of 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.
In 2024, the Company, on behalf of its independent subsidiaries, received a Civil Investigative Demand (CID) from the U.S. Department of Justice (DOJ) indicating that the DOJ is investigating the Company to determine whether claims have been submitted to Medicare and Texas Medicaid for services which were unnecessary or otherwise not consistent with existing reimbursement requirements. The CID covers the period from January 1, 2016, to the present. As a general matter, the Company's independent subsidiaries maintain policies and procedures to promote compliance with all applicable Medicare and Medicaid requirements, including but not limited to those relating to the presentation of claims for reimbursement for services provided . The Company is fully cooperating with the DOJ in response to the CID. However, the Company cannot predict the outcome of the investigation or its potential impact on the consolidated financial statements.
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.
In 2018, the Company, on behalf of its independent subsidiaries, received a CID from the DOJ stating that it was investigating to determine whether there had been a violation of the False Claims Act (FCA) and/or the Anti-Kickback Statute (AKS) with respect to the relationships between certain of the Company’s independent subsidiaries and persons who serve or have served as medical directors. In 2020, the Company was advised that the DOJ declined to intervene in any subsequent action filed in connection with the subject matter of this investigation. Despite the decision of the DOJ to decline to participate in litigation based on the subject matter of its previously issued CID, the involved qui tam relator moved forward with the complaint in 2020. In 2024, the Company mediated with the involved parties and agreed to settle the civil case for $ 48,000 and recorded the accrual as of December 31, 2023. Following the finalization of the settlement documents and payment of the settlement funds during the fourth quarter of 2024, the qui tam complaint was dismissed and the matter was resolved.
126

Table of Contents     
THE ENSIGN GROUP, INC.
NOTES TO THE 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; 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 December 31, 2025, and through the filing date of this report, 25 of the Company's independent subsidiaries had multi-claim Reviews scheduled or in process.
Concentrations
Credit Risk — The Company has significant accounts receivable balances, the collectability of which is dependent on the availability of funds from certain governmental programs, primarily Medicare and Medicaid. These receivables represent the only significant concentration of credit risk for the Company. The Company does not believe there are significant credit risks associated with these governmental programs. 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 61.9 % and 52.9 % of its total accounts receivable as of December 31, 2025 and 2024, respectively. Revenue from reimbursement under the Medicare and Medicaid programs accounted for 69.5 %, 70.9 % and 72.6 % of the Company's revenue for the years ended December 31, 2025, 2024 and 2023, respectively.

19. COMMON STOCK REPURCHASE PROGRAM
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. During the year ended December 31, 2025, 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 year ended December 31, 2025, the Company purchased 157 shares of its common stock for $ 20,000 . This repurchase program expired upon the repurchase of the fully authorized amount under the plan and is no longer in effect.
On May 16, 2024, 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 September 1, 2024. The Company did not purchase any shares pursuant to this stock repurchase program before the repurchase program was cancelled on February 21, 2025.
On August 29, 2023, 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 September 1, 2023, which terminated by its terms on August 31, 2024. The Company did not purchase any shares pursuant to this stock repurchase program.
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. The share repurchase program does not obligate the Company to acquire any specific number of shares. Any such repurchases will depend on the Company's business strategy, prevailing market conditions, the Company's liquidity requirements, contractual restrictions or covenants, compliance with securities laws, and other factors. The amounts involved in any such transaction may be material.

Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

    None.
127

Table of Contents

Item 9A. CONTROLS AND PROCEDURES
(a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
 
 
The Company maintains disclosure controls and procedures that are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In connection with the preparation of this Annual Report on Form 10-K our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.
(b) Management's Report on Internal Control over Financial Reporting
 
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). As a result of this assessment, management concluded that, as of December 31, 2025, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our independent registered public accounting firm, Deloitte & Touche LLP, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued an audit report, included herein, on the effectiveness of our internal control over financial reporting. Their report is set forth below.
(c) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, that occurred during the fourth quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(d) Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of The Ensign Group, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of The Ensign Group, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

128

Table of Contents

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 4, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California February 4, 2026

Item 9B. OTHER INFORMATION

Rule 10b5-1 Plan Elections

Mark V. Parkinson , a member of our Board of Directors , entered into a Rule 10b5-1 trading arrangement on November 6, 2025 . Mr. Parkinson's 10b5-1 Plan provides for the potential sale of up to 400 shares of the Company's common stock between February 9, 2026 and October 15, 2026 .

Dr. Ann S. Blouin , a member of our Board of Directors , entered into a Rule 10b5-1 trading arrangement on November 7, 2025 . Dr. Blouin's 10b5-1 Plan provides for the potential sale of up to 375 shares of the Company's common stock between February 9, 2026 and November 5, 2026 .

These Rule 10b5-1 trading arrangements were entered into during open trading windows and are intended to satisfy the affirmative defense conditions of Rule 10b5-1 (c) under the Securities Exchange Act of 1934, as amended, and the Company's policies regarding transactions in Company securities.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
    
    Not applicable.
129

Table of Contents

PART III.

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is hereby incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders.

We have adopted a code of ethics and business conduct that applies to all employees, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), and employees of our subsidiaries, as well as each member of our Board of Directors. The code of ethics and business conduct is available on our website at www.ensigngroup.net under the Investor Relations section. The information contained in, or that can be accessed through, our website does not constitute a part of this Annual Report on Form 10-K. We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the code of ethics by posting such information on our website, at the address specified above.

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is hereby incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is hereby incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is hereby incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is hereby incorporated by reference to our definitive proxy statement for the 2026 Annual Meeting of Stockholders. Our principal accountant is Deloitte & Touche LLP (PCAOB ID No. 34 ).

PART IV.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 
The following documents are filed as a part of this report:

 
(a) (1)  Financial Statements:
The Financial Statements described in Part II. Item 8 and beginning on page 93 are filed as part of this Annual Report on Form 10-K.

 
(a) (3)  Exhibits:   The following exhibits are filed or furnished with or incorporated by reference this Annual Report on Form 10-K.

Exhibit       File   Exhibit   Filing   Filed
No. Exhibit Description* Form   No.   No.   Date   Herewith
3.1
Fifth Amended and Restated Certificate of Incorporation of the Corporation, filed with the Delaware Secretary of State on November 15, 2007, and all Certificates of Amendment thereto filed with the Delaware Secretary of State through May 23, 2024. 10-Q 001-33757 3.1  7/25/2024  

3.2
Amended and Restated Bylaws of The Ensign Group, Inc. 10-Q 001-33757 3.2  12/21/2007  

130

Table of Contents

Exhibit       File   Exhibit   Filing   Filed
No. Exhibit Description* Form   No.   No.   Date   Herewith
3.3
Amendment to the Amended and Restated Bylaws, dated August 5, 2014 8-K 001-33757 3.2  8/8/2014
3.4
Amendment to the Amended and Restated Bylaws of The Ensign Group, Inc., dated March 15, 2024 10-Q 001-33757 3.4  4/29/2025
4.1
Description of the Common stock of The Ensign Group, Inc. 10-K 001-33757 4.1  2/5/2020
4.2
Specimen common stock certificate S-1 333-142897 4.1  10/5/2007  
10.1
+ The Ensign Group, Inc. 2007 Omnibus Incentive Plan S-1 333-142897 10.3  10/5/2007  
10.2
+ Amendment to The Ensign Group, Inc. 2007 Omnibus Incentive Plan 8-K 001-33757 99.2  7/28/2009  
10.3
+ Form of 2007 Omnibus Incentive Plan Notice of Grant of Stock Options; and form of Non-Incentive Stock Option Award Terms and Conditions S-1 333-142797 10.4  10/5/2007  
10.4
+ Form of 2007 Omnibus Incentive Plan Restricted Stock Agreement S-1 333-142897 10.5  10/5/2007  
10.5
+ Form of Indemnification Agreement entered into between The Ensign Group, Inc. and its directors, officers and certain key employees S-1 333-142897 10.6  10/5/2007  
10.6
Form of Independent Consulting and Centralized Services Agreement between Ensign Facility Services, Inc. and certain of its subsidiaries S-1 333-142897 10.41  5/14/2007
10.7
Form of Health Insurance Benefit Agreement pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the Medicare program S-1 333-142897 10.48  10/19/2007
10.8
Form of Medi-Cal Provider Agreement pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the California Medicaid program S-1 333-142897 10.49  10/19/2007
10.9
Form of Provider Participation Agreement pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the Arizona Medicaid program S-1 333-142897 10.50  10/19/2007
10.10
Form of Contract to Provide Nursing Facility Services under the Texas Medical Assistance Program pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the Texas Medicaid program S-1 333-142897 10.51  10/19/2007
10.11
Form of Client Service Contract pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the Washington Medicaid program S-1 333-142897 10.52  10/19/2007
10.12
Form of Provider Agreement for Medicaid and UMAP pursuant to which certain subsidiaries of The Ensign Group, Inc. participate in the Utah Medicaid program S-1 333-142897 10.53  10/19/2007
10.13
Form of Medicaid Provider Agreement pursuant to which a subsidiary of The Ensign Group, Inc. participates in the Idaho Medicaid program S-1 333-142897 10.54  10/19/2007
10.14
Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and The Ensign Group, Inc. dated October 1, 2013. 10-K 001-33757 10.74  2/13/2014
10.15
Settlement agreement dated October 1, 2013, entered into among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS) (collectively the "United States") and the Company.
8-K 001-33757 10.75  5/8/2014
10.16
Form of Master Lease by and among certain subsidiaries of The Ensign Group, Inc. and certain subsidiaries of CareTrust REIT, Inc. 8-K 001-33757 10.1  6/5/2014

131

Table of Contents

Exhibit       File   Exhibit   Filing   Filed
No. Exhibit Description* Form   No.   No.   Date   Herewith
10.17
Form of Guaranty of Master Lease by The Ensign Group, Inc. in favor of certain subsidiaries of CareTrust REIT, Inc., as landlords under the Master Leases 8-K 001-33757 10.2  6/5/2014
10.18
Amended and Restated Credit Agreement as of February 5, 2016, by and among The Ensign Group, Inc., SunTrust Bank, now known as Truist, as administrative agent, and the lenders party thereto 8-K 001-33757 10.1  2/8/2016
10.19
Second Amended Credit Agreement as of July 19, 2016, by and among The Ensign Group, Inc., SunTrust Bank, now known as Truist, as administrative agent, and the lenders party thereto 8-K 001-33757 10.1  7/25/2016
10.20
The Ensign Group, Inc. 2017 Omnibus Incentive Plan DEF 14A 001-33757 A 4/13/2017
10.21
Form of 2017 Omnibus Incentive Plan Notice of Grant of Stock Options; and form of Non-Incentive Stock Option Award Terms and Conditions 10-K 001-33757 10.87  2/8/2018
10.22
Form of 2017 Omnibus Incentive Plan Restricted Stock Agreement 10-K 001-33757 10.88  2/8/2018
10.23
Form of U.S. Department of Housing and Urban Development Healthcare Facility Note and schedule of individual subsidiary loans, by and among The Ensign Group, Inc.'s subsidiaries listed therein and U.S. Department of Housing and Urban Development 8-K 001-33757 10.1  1/3/2018
10.24
Form of U.S. Department of Housing and Urban Development Security Instrument/Mortgage/Deed of Trust 8-K 001-33757 10.2  1/3/2018
10.25
Third Amended and Restated Credit Agreement, dated as of October 1, 2019, by and among The Ensign Group, Inc., SunTrust Bank, now known as Truist, as administrative agent, and the lenders party thereto 8-K 001-33757 10.4  10/1/2019
10.26
Lease Agreement, dated as of October 1, 2019, by and between The Ensign Group, Inc. and The Pennant Group, Inc. 8-K 001-33757 10.5  10/1/2019
10.27
+ The Ensign Services, Inc. Deferred Compensation Plan 10-K 001-33757 10.1  2/3/2021
10.28
+ First Amendment to The Ensign Services, Inc. Deferred Compensation Plan 10-K 001-33757 10.2  2/3/2021
10.29
First Amendment to Third Amended and Restated Credit Agreement, dated as of February 8, 2022, by and among The Ensign Group, Inc., Standard Bearer Healthcare REIT, Inc., Truist Bank (as successor by merger to SunTrust Bank), as administrative agent, and the lenders party thereto 10-K 001-33757 10.1  2/9/2022
10.30
Second Amendment to Third Amended and Restated Credit Agreement, dated as of April 8, 2022, by and among The Ensign Group, Inc. and Truist Bank, as administrative agent, and the lenders party thereto. 8-K 001-33757 10.1  4/12/2022
10.31
+ The Ensign Group, Inc. Amended and Restated Omnibus Incentive Plan
S-8
001-33757 4.5  6/26/2025
10.32
+ Form of Omnibus Incentive Plan Notice of Grant of Stock Options; and form of Non-Incentive Stock Option Award Terms and Conditions
10-K 001-33757 10.2  2/2/2023
10.33
+ Form of Omnibus Incentive Plan Restricted Stock Agreement
10-K 001-33757 10.3  2/2/2023
10.34
+ Form of Notice of Restricted Stock Award to the Amended and Restated Omnibus Incentive Plan of the Company; and Terms and Conditions of Restricted Stock Awards pursuant to the Amended and Restated Omnibus Incentive Plan of the Company
10-Q
001-33757
10.1  7/24/2025

132

Table of Contents

Exhibit       File   Exhibit   Filing   Filed
No. Exhibit Description* Form   No.   No.   Date   Herewith
10.35
+ Form of Notice of Non-Incentive Stock Option Award to the Amended and Restated Omnibus Incentive Plan of the Company ; and Terms and Conditions of Non-Incentive Stock Option Awards to the Amended and Restated Omnibus Incentive Plan of the Company
10-Q
001-33757
10.2  7/24/2025
13.1
Annual Report to Security Holders
ARS
001-33757
ARS
4/4/2025
19.1
Statement of Company Policy Regarding Insider Trading 10-K 001-33757 19.1  2/5/2025
19.2
Addendum to Statement of Company Policy Regarding Insider Trading
10-K 001-33757 19.2  2/5/2025
21.1
Subsidiaries of The Ensign Group, Inc., as amended X
23.1
Consent of Deloitte & Touche LLP X

31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
97. 1
+ Policy for Recovery of Erroneously Awarded Incentive-Based Compensation 10-K 001-33757 97.0 2/1/2024
101   Interactive data file (furnished electronically herewith pursuant to Rule 406T of Regulations S-T)
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+ Indicates management contract or compensatory plan.
* Documents not filed herewith are incorporated by reference to the prior filings identified in the table above.

Item 16.    FORM 10-K SUMMARY
Not applicable

133

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  THE ENSIGN GROUP, INC.

February 4, 2026 BY:  /s/ SUZANNE D. SNAPPER  
    Suzanne D. Snapper 
    Chief Financial Officer, Executive Vice President and Director (Principal Financial Officer and Principal Accounting Officer) 

 
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
 
Signature Title   Date

/s/ BARRY R. PORT Chief Executive Officer and Chairman of the Board (principal executive officer)   February 4, 2026
Barry R. Port

/s/  SUZANNE D. SNAPPER Chief Financial Officer, Executive Vice President and Director (principal financial officer and principal accounting officer) 
  February 4, 2026
Suzanne D. Snapper

/s/  DAREN J. SHAW Director February 4, 2026
Daren J. Shaw

/s/  BARRY M. SMITH Director   February 4, 2026
Barry M. Smith

/s/  ANN S. BLOUIN Director   February 4, 2026
Ann S. Blouin

/s/  SWATI B. ABBOTT Director   February 4, 2026
Swati B. Abbott

/s/  JOHN O. AGWUNOBI Director   February 4, 2026
John O. Agwunobi

/s/ MARK V. PARKINSON Director February 4, 2026
Mark V. Parkinson

/s/ MARIVIC UYCHIAT PISON
Vice President of Clinical Services and Director
February 4, 2026
Marivic Uychiat Pison

134