Third Quarter 2025 Highlights
Completed the acquisition of Closing the Gap for approximately $75.1 million in cash, subject to customary working capital and other adjustments.
Adjusted EBITDA(1), excluding out-of-period items, increased by $12.6 million or 36.6% to $46.9 million, driven by continued growth in the home health care segment, improvements in long-term care ("LTC") and a full quarter of contributions from the acquisition of nine Class C LTC homes and Closing the Gap.
Home health care average daily volume ("ADV") increased by 7,428 or 24.6% to 37,609 from Q3 2024, including ADV of 3,500 from Closing the Gap.
Third-party and joint venture beds serviced by SGP reached 152,100 beds, an increase of 6.0% from Q3 2024, driven by continued organic growth.
"This quarter marks our strongest performance in recent years, reflecting margin improvements across all segments, augmented by a full quarter impact of our recent acquisitions," said Dr. Michael Guerriere, President and Chief Executive Officer. "Home health care volumes grew almost 25% from the prior year, reflecting 13% organic growth and the addition of Closing the Gap. The aging demographic is driving demand in a fragmented seniors care market, providing opportunity for further accretive acquisitions that demonstrate the value creation potential of our strategy."
Completed the Acquisition of Closing the Gap
On July 1, 2025, the Company completed the acquisition of all of the issued and outstanding shares of Closing the Gap and certain affiliates (collectively "Closing the Gap") (the "CTG Transaction"). CTG brings a team of 1,200 caregivers who delivered 1.1 million service hours in 2024 and have deep capabilities in nursing, allied health and paediatric services, broadening our home health services.
The purchase price of $75.1 million in cash, subject to customary working capital and other adjustments, was funded from cash on hand and a draw of $55.0 million on the senior secured credit facility. The CTG Transaction includes an earnout that rewards new business revenue generation in the twelve months after closing. The Company anticipates that the additional purchase price from the earnout would be in the range of $1.5 million to $2.0 million, payable on the first anniversary of closing, based on estimated new business revenue of $3.0 to $4.0 million. Additionally, the Company expects to generate approximately $1.1 million in annualized cost synergies in the first year as the operations are integrated.
Q3 2025 Financial Highlights (all comparisons with Q3 2024)
Revenue increased $81.2 million to $440.3 million; excluding the impact of out-of-period LTC funding in both periods, revenue increased by $79.1 million or 22.1% to $436.4 million from $357.3 million, driven primarily by the acquisition of nine Class C LTC homes (the "LTC Acquisition"), the CTG Transaction, LTC funding increases, home health care ADV growth and rate increases, partially offset by the closure of two Class C LTC homes that were vacated following the opening of newly developed LTC homes in Axium JV.
NOI(1) increased $15.8 million to $65.9 million; excluding the impact of out-of-period LTC funding, NOI improved by $13.7 million or 28.3% to $62.0 million from $48.3 million, reflecting revenue growth, partially offset by higher operating costs.
Adjusted EBITDA(1) increased $14.7 million to $50.8 million; excluding the impact of out-of-period funding, Adjusted EBITDA increased by $12.6 million or 36.6% to $46.9 million (10.7% of revenue) in Q3 2025 from $34.3 million (9.6% of revenue) in Q3 2024, reflecting the increase in NOI, partially offset by higher administrative costs of $1.1 million, largely due to higher labour and technology costs.
Other expense increased $0.9 million to $2.0 million, reflecting transaction-related legal and professional costs incurred in Q3 2025 compared to $1.1 million in strategic transformation costs incurred in Q3 2024.
Net earnings increased $7.8 million or 48.0% to $24.1 million, largely driven by the increase in Adjusted EBITDA, partially offset by higher depreciation and amortization costs and net finance costs.
AFFO(1) increased to $29.5 million ($0.349 per basic share) from $23.1 million ($0.274 per basic share); excluding the impact of out-of-period items, AFFO improved by $4.4 million or 20.1% to $26.2 million ($0.309 per basic share) from $21.8 million ($0.259 per basic share), largely reflecting the improvement in Adjusted EBITDA, partially offset by increased current income taxes and higher maintenance capex, in part due to the LTC Acquisition.
Nine Months Financial Highlights (all comparisons with Nine Months 2024)
Revenue increased $123.7 million to $1,198.4 million; excluding the impact of out-of-period funding in both periods, revenue increased by $137.9 million or 13.2% to $1,185.1 million from $1,047.1 million, driven primarily by four months of the LTC Acquisition, three months of the CTG Transaction, LTC funding increases, home health care ADV growth and rate increases, partially offset by the closure of three Class C LTC homes that were vacated following the opening of new LTC homes in Axium JV.
NOI(1) increased $23.4 million to $171.1 million; excluding the impact of out-of-period items, NOI improved by $28.4 million or 21.3% to $162.2 million from $133.8 million, reflecting revenue growth, partially offset by higher operating costs.
Adjusted EBITDA(1) increased $21.3 million to $126.2 million; excluding the impact of out-of-period funding, Adjusted EBITDA increased by $26.3 million or 28.9% to $117.3 million (9.9% of revenue) from $91.0 million (8.7% of revenue), reflecting the increase in NOI, partially offset by higher administrative costs of $2.1 million, largely due to higher labour and technology costs.
Other income increased $4.0 million to $6.7 million, reflecting a $5.0 million increase in gains from asset sales and a $1.6 million reduction in strategic transformation costs, partially offset by $2.6 million in transaction-related legal and professional costs.
Net earnings increased $15.8 million or 28.6% to $71.1 million, largely driven by the increase in Adjusted EBITDA and contribution from other income of $4.0 million ($2.5 million net of tax), partially offset by a $0.9 million reduction in the share of profit from joint ventures and higher depreciation and amortization costs.
Share of profit from joint ventures declined $0.9 million to $0.9 million; excluding a reduction in out-of-period items of approximately $0.4 million, the decline of $0.6 million related to increased depreciation and amortization costs and higher net finance costs associated with the opening of three new homes in the joint ventures and elevated operating costs associated with the opening of the new homes.
AFFO(1) increased to $74.1 million ($0.877 per basic share) from $63.8 million ($0.758 per basic share); excluding the impact of out-of-period items, AFFO increased by $14.4 million or 27.2% to $67.3 million ($0.796 per basic share) from $52.9 million ($0.628 per basic share), largely reflecting the improvement in Adjusted EBITDA and lower maintenance capex, partially offset by increased current income taxes and an unfavourable change in the adjustment for non-cash share-based compensation.
Business Updates
The following is a summary of Extendicare's revenue, NOI(1) and NOI margins(1) by business segment for the three and nine months ended September 30, 2025 and 2024.
(unaudited)
Three months ended September 30
Nine months ended September 30
(millions of dollars
2025
2024
2025
2024
unless otherwise noted)
Revenue
NOI
Margin
Revenue
NOI
Margin
Revenue
NOI
Margin
Revenue
NOI
Margin
Long-term care
237.9
31.6
13.3
%
201.8
24.6
12.2
%
642.8
76.7
11.9
%
602.5
75.6
12.5
%
Home health care
186.8
25.4
13.6
%
138.4
15.6
11.3
%
503.7
65.9
13.1
%
418.3
43.5
10.4
%
Managed services
15.6
8.9
57.2
%
18.8
9.9
52.6
%
51.9
28.5
54.9
%
53.9
28.6
53.2
%
440.3
65.9
15.0
%
359.1
50.1
14.0
%
1,198.4
171.1
14.3
%
1,074.6
147.7
13.7
%
Note: Totals may not sum due to rounding.
Long-term Care
LTC average occupancy increased by 10 bps to 98.5% in Q3 2025 from 98.4% in Q3 2024.
Revenue increased by $36.1 million or 17.9% to $237.9 million in Q3 2025. Excluding out-of-period funding recognized of $3.9 million in Q3 2025 and $1.8 million in Q3 2024, revenue increased by $34.0 million, largely driven by approximately $32.9 million from the LTC Acquisition, funding increases, timing of spend and improved preferred occupancy, partially offset by a revenue reduction of approximately $8.0 million due to the closure of two Class C LTC homes replaced by newly opened LTC homes in Axium JV.
NOI and NOI margin were $31.6 million and 13.3% respectively in Q3 2025, compared to $24.6 million and 12.2% in Q3 2024. Excluding the increase in out-of-period funding of $2.1 million, NOI improved by $4.8 million or 21.2% to $27.7 million (11.8% of revenue) from $22.8 million (11.4% of revenue) in Q3 2024. This increase reflects approximately $3.2 million from the LTC Acquisition, funding enhancements, timing of spend, and improved preferred occupancy, partially offset by higher operating costs, and an NOI reduction of approximately $0.6 million due to the closure of two redeveloped Class C LTC homes.
Home Health Care
Home health care ADV of 37,609 in Q3 2025 increased by 24.6% from Q3 2024, consisting of 13.0% organic growth augmented by a full quarter of volume from the CTG Transaction.
Revenue increased to $186.8 million in Q3 2025, an increase of 35.0% from ...
