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Wednesday, April 23, 2025

Healthcare Services beats, ups cash flow guidance

 Healthcare Services Group, Inc. (NASDAQ:HCSG) reported first quarter earnings that exceeded analyst expectations, driven by robust revenue growth and improved profitability.

The company’s shares jumped 7.33% in premarket trading after the release.

The provider of housekeeping and dining services to the healthcare industry posted adjusted earnings per share of $0.23, beating the analyst consensus of $0.18 by $0.05. Revenue climbed 5.7% year-over-year to $447.7 million, topping estimates of $443.83 million.

"First quarter revenue and cash flow were our best results in five years, and we have carried that positive momentum into the second quarter," said CEO Ted Wahl. "New client wins drove our organic growth, collections exceeded revenue, and we continued to strengthen our balance sheet."

The company reiterated its outlook for mid-single digit revenue growth in 2025. It also raised its 2025 cash flow from operations forecast (excluding payroll accrual changes) to $60-$75 million, up from the previous guidance of $45-$60 million.

Healthcare Services Group reported strong segment performance, with Environmental Services revenue of $196.3 million at a 10.8% margin and Dietary Services revenue of $251.3 million at a 7.6% margin.

The company ended the quarter with $143.9 million in cash and marketable securities. It repurchased approximately $7 million of common stock during Q1.

https://in.investing.com/news/earnings/healthcare-services-group-surges-7-on-q1-earnings-beat-93CH-4786713

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