Healthcare Services Group, Inc. (NASDAQ:HCSG) shares climbed 6.6% in pre-market trading Wednesday after the company reported fourth-quarter earnings that far exceeded Wall Street expectations, even as revenue came in just shy of forecasts.
The healthcare services provider posted adjusted earnings per share of $0.44, double the consensus estimate of $0.22. Quarterly revenue rose 6.6% year over year to $466.7 million, narrowly missing analyst expectations of $467.23 million. For full-year 2025, revenue increased 7.1% to $1.84 billion.
“I am extremely pleased with our fourth quarter performance, which capped a strong year for Healthcare Services Group,” said Ted Wahl, Chief Executive Officer. “Against the backdrop of solid industry fundamentals, we exceeded our initial 2025 expectations for revenue, earnings, and cash flow, driven by disciplined execution of our strategic priorities.”
The company highlighted disciplined expense management, with cost of services at 84.6% of revenue and adjusted SG&A at 9.8%. For 2026, management guided to mid-single-digit revenue growth.
Healthcare Services Group also signaled confidence in its financial position by completing its $50 million share repurchase program five months ahead of schedule and authorizing a new $75 million buyback plan over the next 12 months. In 2025, the company repurchased $61.6 million of stock, including $19.6 million in the fourth quarter.
The Campus division surpassed $100 million in revenue, marking a milestone for the segment. Operating cash flow totaled $17.4 million for the quarter, or $36.4 million excluding payroll accrual adjustments.
As of December 31, 2025, the company held $203.9 million in cash and marketable securities and had access to an undrawn $300 million credit facility, underscoring a solid balance sheet.