Healthcare Services Group Raises 2027 Growth Outlook

The Tip Desk · October 21, 2026 · 3 min read

The company lifted 2027 revenue growth to low double-digits and pointed to fourth-quarter sales of $535 million to $545 million.

Healthcare Services Group (HCSG) raised its 2027 revenue growth outlook from mid single-digits to low double-digits after a third quarter in which the health and hospitality services company said it was delivering the organic growth inflection it had planned for.

Chief Executive Officer Ted Wahl said the quarter’s results reflected underlying strength in business fundamentals and disciplined operational execution, and that the inflection “sets the stage for fourth quarter revenue in the range of $535 to $545 million and low double-digit top-line growth in 2027.” In the second quarter the company had reaffirmed a 2026 mid-single-digit growth outlook.

Revenue for the three months ended September 30, 2026 was $479.6 million, up from $470.8 million in the second quarter. Net income was $24.9 million, or $0.36 a share, compared with $22.7 million, or $0.32 a share, in the prior quarter. A year earlier, net income was $43.0 million, or $0.59 a share. Adjusted EBITDA was $38.6 million, or 8.0% of revenue.

Dietary Services, the larger of the two reportable segments, generated $262.4 million of revenue, with margin expanding to 8.7% from 7.5% in the second quarter. Environmental Services revenue was $217.2 million, with margin holding at 13.3%. Cost of services was $399.2 million, or 83.2% of revenue. The company’s stated goal is to manage cost of services in the 86% range. Selling, general and administrative expense was $48.5 million as reported; after adjusting for a $0.6 million decrease in deferred compensation, SG&A was $49.1 million, or 10.2% of revenue.

Cash flow from operations was $30.2 million, or $20.7 million excluding a $9.5 million increase in the payroll accrual. As of quarter-end the company had cash and marketable securities of $204.3 million and an unutilized $300.0 million credit facility. Under its February 2026 plan to repurchase $75.0 million of common stock through January 2027, HCSG bought $11.7 million of shares in the third quarter, leaving 7.7 million shares remaining under the authorization. The company expects its full-year effective tax rate to be approximately 25.0%.

On October 6, 2026, the company completed the acquisition of NEXDINE Hospitality for an upfront purchase price of $93.5 million, funded with cash on hand. NEXDINE will operate as a wholly owned subsidiary, retaining its brand and leadership team, and is expected to contribute over $150 million in annual revenue at comparable margins while being immediately accretive to earnings. Wahl said the deal deepens health and hospitality services capabilities and opens growth pathways in senior living and hospitality-driven markets.

After a court-approved sale of Genesis to 101 W. State Street on October 14, 2026, the company recorded an estimated recovery of $6.1 million related to the Genesis bankruptcy. It said a substantially higher potential upper-range recovery remains possible, subject to variables and contingencies that cannot be reasonably estimated at this time.

Wahl said the company has confidence in its growth trajectory across healthcare, senior living, and campus environments, citing demand for its services and an expanded operational platform.