PACS Group, Inc. Reports Fiscal Year and Fourth Quarter 2025 Results
SALT LAKE CITY--( BUSINESS WIRE)--PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”), which together with its subsidiaries is one of the largest post-acute healthcare companies in the United States, announced operating results for the fiscal year and fourth quarter of 2025.
Full Year 2025 Financial Highlights
Fourth Quarter 2025 Financial Highlights
Full Year 2025 Select KPIs
“We’re pleased with our overall 2025 results, which reflect our commitment to exceptional patient care, superb quality, consistent operational excellence, and forward-looking strategic growth. These results support our differentiated business model and our optimism for ongoing success,” said Jason Murray, PACS’s Chief Executive Officer. “Quality care remains a key metric: PACS currently has a total of 207 facilities rated 4 or 5 QM Stars, including 80 Four-Star facilities and 127 Five-Star facilities – a key driver of our 29.3% revenue growth in 2025 compared to the prior year.”
“This year's strong revenue growth also reflects the full year contribution from facilities acquired in 2024, as well as the addition of 655 skilled nursing beds across 4 skilled facilities, and 271 assisted living and independent living units across 4 senior living facilities, over the 12 months ending December 31, 2025,” said Mark Hancock PACS’s Interim Chief Financial Officer. “We also continue to execute on our strategic and disciplined growth strategy. Since the end of the fourth quarter, we’ve added 3 facilities and divested one, bringing our current total operated facilities to 323 and our properties wholly owned or owned through JV partnerships to 105. With our locally-led, centrally-supported operating model and experience integrating larger acquisitions, we expect the transitions will be seamless.”
“Since its founding, PACS has been focused on its mission to revolutionize the delivery, leadership, and quality of post-acute care nationally. We believe our strong fourth quarter and 2025 results – achieved despite challenging conditions – demonstrate the relentless execution of our team to deliver on our mission,” said Murray. “Our performance validates our core strengths and our capacity and ability to adapt to market conditions, regulatory changes, and the ongoing evolution of the post-acute care industry. We thank our stakeholders for their support and trust in PACS and remain committed to providing the quality care that our patients have come to expect from us.”
Full-Year 2026 Business Outlook
Based on information available as of today, PACS is providing the following guidance for full year 2026:
As of today, PACS's growing portfolio comprises 323 healthcare operations across 17 states. PACS owns 56 facilities and holds 38 purchase options on leased facilities and 20 purchase options through partnerships or ROFOs/ROFRs. The Company’s strategy remains focused on expanding its footprint through a balanced approach to leasing and acquiring real estate. In addition, PACS is actively evaluating opportunities to acquire both high-performing and underperforming operations across multiple states, with the goal of driving growth and unlocking long-term value.
Earnings Conference Call Details
A live webcast will be held February 26, 2026, at 5:30 p.m. Eastern time to discuss PACS’s fourth quarter financial results. To listen to the webcast please visit the Investors Relations section of PACS’s website at https://IR.pacs.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=kswnlsBk, or by dialing 877-407-0621 / +1 215-268-9899. The webcast will be recorded and will be available for replay via the website for 30 days following the call.
About PACS™
PACS Group, Inc. is a holding company investing in post-acute healthcare facilities, professionals, and ancillary services. Founded in 2013, PACS Group is one of the largest post-acute platforms in the United States. Its independent subsidiaries operate over 320 post-acute care facilities across 17 states serving over 31,700 patients daily. References herein to the consolidated “Company,” as well as the use of the terms “we,” “us,” “our,” “its” and similar verbiage, refer to PACS Group, Inc. and its consolidated subsidiaries, taken as a whole. PACS Group, Inc. and its subsidiaries that are not licensed healthcare providers do not provide healthcare services to patients, residents or any other person, and do not direct or control the provision of services provided or the operations of those provider subsidiaries. All healthcare services are provided solely by its applicable subsidiaries that are licensed healthcare providers, under the direction and control of licensed healthcare professionals in accordance with applicable law. More information about PACS is available at https://IR.pacs.com. The information on our website is not part of this press release.
Forward Looking Statements Disclaimer
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical fact, including statements regarding our future financial performance and guidance, including expected revenue and adjusted EBITDA for fiscal year 2026, business strategy and growth plans, acquisition and integration activities, operational and quality improvement initiatives, capital allocation and investment strategies, industry trends and market conditions, and other expectations, beliefs, plans, or objectives of management,, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” or “continue,” or the negative of these terms or other similar expressions. Forward-looking statements are neither promises nor guarantees and are based on management’s current expectations, estimates, forecasts and assumptions and on trends that we believe may affect our business, results of operations, financial condition and prospects. These statements are subject to risks, uncertainties and other important factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, our dependence on third-party payors, including adverse changes in patient acuity and payor mix, payment methodologies and cost-containment initiatives; our potential inability to obtain full reimbursement for services billed under consolidated billing or bundled payments; our exposure to increased labor costs and staffing shortages of nurses, nurse assistants and other skilled personnel, and monetary fines; state regulatory actions or deregulation affecting healthcare services, facility construction, expansion or acquisition; our ability to attract and retain patients and residents and to compete effectively with other healthcare providers; internal audits and reviews that may result in billing adjustments, repayments, fines or other corrective actions; ongoing and future litigation and self-insurance exposure; material weaknesses in our internal control over financial reporting and risks related to remediation or the emergence of additional material weaknesses; failures to provide consistently high quality care or employee conduct that adversely affects patient health, safety, welfare or clinical treatment; reliance on information technology and the risk that failures, inadequacies or interruptions could disrupt operations; reliance on internally calculated operational metrics that may be subject to measurement challenges or perceived inaccuracies; our ability to complete, integrate and realize expected benefits from acquisitions at attractive prices or dispose of underperforming or non-strategic operating subsidiaries; our ability to integrate; potential costs, liabilities, and regulatory issues arising from acquisitions; our ability to complete partnerships that increase our capacity consistent with our growth strategy; our ability to achieve or maintain competitive quality of care ratings from CMS or private organizations; our ability to obtain insurance at acceptable costs;; geographic concentration of facilities that exposes us to local economic downturns, regulatory changes or natural disasters; the impact of actions by national labor unions; risks associated with leased real property, including lease terminations, extensions and special charges; failure to generate sufficient cash flow to meet long-term debt, mortgage and lease obligations and covenants, which could lead to defaults or loss of facilities; our ability to obtain additional capital on acceptable terms, or at all; extensive and evolving legal and regulatory compliance obligations and the potential costs to achieve or maintain compliance; substantial control of the company by our founders, which may result in conflicts of interest or the appearance of conflicts; and our status as a "controlled company" under NYSE rules and the governance implications of relying on applicable exemptions. These and other important factors are described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and in other filings that we make with the Securities and Exchange Commission from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof. We undertake no obligation to update any forward looking statements contained herein to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
PACS GROUP, INC. AND SUBSIDIARIES
COMBINED/CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except for share and per share values)
December 31,
2025
2024
ASSETS
Current Assets:
Cash and cash equivalents
$
197,016
$
157,674
Accounts receivable, net
628,128
641,775
Other receivables
73,965
74,746
Prepaid expenses and other current assets
170,630
64,066
Total Current Assets
1,069,739
938,261
Property and equipment, net
1,201,096
990,580
Operating lease right-of-use assets
2,968,176
2,994,519
Insurance subsidiary deposits and investments
87,192
66,258
Escrow funds
18,404
25,122
Goodwill and other indefinite-lived assets
68,061
67,061
Other assets
171,366
161,108
Total Assets
$
5,584,034
$
5,242,909
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable
$
192,232
$
175,062
Accrued payroll and benefits
187,516
146,177
Current operating lease liabilities
153,066
136,232
Current maturities of long-term debt
4,463
14,852
Current portion of accrued self-insurance liabilities
128,994
75,966
Current line of credit
—
142,000
Refund liability
181,129
145,795
Other accrued expenses
154,030
142,348
Total Current Liabilities
1,001,430
978,432
Long-term operating lease liabilities
2,939,854
2,935,773
Line of credit
100,000
—
Long-term debt, less current maturities, net of deferred financing fees
244,803
250,984
Accrued self-insurance liabilities, less current portion
192,561
164,979
Other liabilities
152,937
197,050
Total Liabilities
$
4,631,585
$
4,527,218
Commitments and contingencies
Equity:
PACS Group, Inc. stockholders' equity:
Common stock: $0.001 par value; 1,250,000,000 shares authorized; 156,615,144 shares issued and outstanding as of December 31, 2025, and 155,177,511 shares issued and outstanding as of December 31, 2024
157
155
Additional paid-in capital
637,035
591,363
Retained earnings
309,579
118,036
Total PACS Group, Inc. stockholders' equity
946,771
709,554
Noncontrolling interest in subsidiary
5,678
6,137
Total Equity
$
952,449
$
715,691
Total Liabilities and Equity
$
5,584,034
$
5,242,909
PACS GROUP, INC. AND SUBSIDIARIES
COMBINED/CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except for share and per share values)
Year Ended December 31,
2025
2024
2023
Revenue
Patient and resident service revenue
$
5,287,885
$
4,086,655
$
3,110,114
Additional funding
—
—
375
Other revenues
1,047
3,079
1,003
Total Revenue
$
5,288,932
$
4,089,734
$
3,111,492
Operating Expenses
Cost of services
4,129,696
3,297,091
2,447,713
Rent - cost of services
378,908
284,953
216,711
General and administrative expense
415,070
343,808
213,664
Depreciation and amortization
55,663
40,809
25,632
Total Operating Expenses
$
4,979,337
$
3,966,661
$
2,903,720
Operating income
$
309,595
$
123,073
$
207,772
Other (Expense) Income
Interest expense
(28,363
)
(44,341
)
(49,919
)
Gain on lease termination
—
8,046
—
Other income (expense), net
3,218
14,776
(536
)
Total Other Expense, Net
$
(25,145
)
$
(21,519
)
$
(50,455
)
Income before provision for income taxes
284,450
101,554
157,317
Provision for income taxes
92,989
46,210
44,435
Net Income
$
191,461
$
55,344
$
112,882
Less:
Net (loss) income attributable to noncontrolling interest
(82
)
(416
)
8
Net Income Attributable To PACS Group, Inc.
$
191,543
$
55,760
$
112,874
Net Income Per Share Attributable To PACS Group, Inc.
Basic
$
1.23
$
0.38
$
0.88
Diluted
$
1.22
$
0.38
$
0.88
Weighted-Average Common Shares Outstanding
Basic
156,180,786
146,663,371
128,723,386
Diluted
156,700,339
148,574,606
128,723,386
PACS GROUP, INC. AND SUBSIDIARIES
COMBINED/CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
The following table includes selected data from our consolidated statements of cash flows for the periods presented:
Year Ended December 31,
2025
2024
2023
Net cash provided by/(used in):
Operating activities
$
404,224
$
367,341
$
63,697
Investing activities
(264,025
)
(442,679
)
(172,791
)
Financing activities
(68,990
)
117,476
129,592
Net change in cash
71,209
42,138
20,498
Cash, cash equivalents, and restricted cash - beginning of period
160,842
118,704
98,206
Cash, cash equivalents, and restricted cash
$
232,051
$
160,842
$
118,704
PACS GROUP, INC. AND SUBSIDIARIES
KEY SKILLED SERVICES METRICS (UNAUDITED)
We categorize our facilities into three cohorts. Mature facilities are defined as facilities purchased more than 36 months prior to a respective measurement date. Ramping facilities are defined as facilities purchased within 18 to 36 months prior to a respective measurement date. New facilities are defined as facilities purchased or built less than 18 months prior to a respective measurement date.
The following tables present the key skilled services metrics by category for all facilities, Mature facilities, Ramping facilities and New facilities as of and for the years ended December 31, 2025 and 2024:
Year ended December 31,
2025
2024
Change
% Change
Total Facility Results
(Dollars in thousands)
Skilled nursing services revenue
$
5,178,456
$
4,014,412
$
1,164,044
29.0
%
Skilled mix by nursing revenue
48.8
%
50.3
%
(1.5
)%
(3.0
)%
Skilled mix by nursing days
28.7
%
29.2
%
(0.5
)%
(1.7
)%
Occupancy for skilled services:
Available patient days
11,836,845
9,493,639
2,343,206
24.7
%
Actual patient days
10,541,457
8,585,654
1,955,803
22.8
%
Occupancy rate (operational beds)
89.1
%
90.4
%
(1.3
)%
(1.4
)%
Number of facilities at period end
291
287
4
1.4
%
Number of operational beds at period end
32,854
32,016
838
2.6
%
Year ended December 31,
2025
2024
Change
% Change
Mature facility results:
(Dollars in thousands)
Skilled services revenue
$
2,914,727
$
1,443,958
$
1,470,769
101.9
%
Skilled mix by nursing revenue
56.0
%
54.4
%
1.6
%
2.9
%
Skilled mix by nursing days
33.4
%
32.1
%
1.3
%
4.0
%
Occupancy for skilled services:
Available patient days
5,748,879
3,139,441
2,609,438
83.1
%
Actual patient days
5,457,745
2,964,909
2,492,836
84.1
%
Occupancy rate (operational beds)
94.9
%
94.4
%
0.5
%
0.5
%
Number of facilities at period end
149
137
12
8.8
%
Number of operational beds at period end
16,415
14,893
1,522
10.2
%
Year ended December 31,
2025
2024
Change
% Change
Ramping facility results:
(Dollars in thousands)
Skilled services revenue
$
1,108,849
$
1,521,162
$
(412,313
)
(27.1
)%
Skilled mix by nursing revenue
41.8
%
54.2
%
(12.4
)%
(22.9
)%
Skilled mix by nursing days
22.8
%
31.6
%
(8.8
)%
(27.8
)%
Occupancy for skilled services:
Available patient days
2,806,713
3,254,715
(448,002
)
(13.8
)%
Actual patient days
2,422,237
3,054,690
(632,453
)
(20.7
)%
Occupancy rate (operational beds)
86.3
%
93.9
%
(7.6
)%
(8.1
)%
Number of facilities at period end
64
48
16
33.3
%
Number of operational beds at period end
8,286
5,737
2,549
44.4
%
Year ended December 31,
2025
2024
Change
% Change
New facility results:
(Dollars in thousands)
Skilled services revenue
$
1,154,880
$
1,049,292
$
105,588
10.1
%
Skilled mix by nursing revenue
37.7
%
39.2
%
(1.5
)%
(3.8
)%
Skilled mix by nursing days
24.6
%
22.8
%
1.8
%
7.9
%
Occupancy for skilled services:
Available patient days
3,281,253
3,099,483
181,770
5.9
%
Actual patient days
2,661,475
2,566,055
95,420
3.7
%
Occupancy rate (operational beds)
81.1
%
82.8
%
(1.7
)%
(2.1
)%
Number of facilities at period end
78
102
(24
)
(23.5
)%
Number of operational beds at period end
8,153
11,386
(3,233
)
(28.4
)%
The following tables present additional detail regarding our skilled mix, including our percentage of nursing patient days and revenue by payor source for all facilities, Mature facilities, Ramping facilities and New facilities for the years ended December 31, 2025 and 2024:
Year ended December 31,
Skilled mix by revenue
Mature
Ramping
New
Total
2025
2024
2025
2024
2025
2024
2025
2024
Medicare
40.4
%
37.3
%
29.6
%
36.9
%
20.2
%
22.5
%
33.5
%
33.2
%
Managed care
15.6
17.1
12.2
17.3
17.5
16.7
15.3
17.1
Skilled mix
56.0
54.4
41.8
54.2
37.7
39.2
48.8
50.3
Medicaid
35.2
38.1
48.5
37.8
52.1
51.6
41.9
41.6
Private and other
8.8
7.5
9.7
8.0
10.2
9.2
9.3
8.1
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Year ended December 31,
Skilled mix by nursing patient days
Mature
Ramping
New
Total
2025
2024
2025
2024
2025
2024
2025
2024
Medicare
21.5
%
18.8
%
13.7
%
18.8
%
11.5
%
10.6
%
17.2
%
16.4
%
Managed care
11.9
13.3
9.1
12.8
13.1
12.2
11.5
12.8
Skilled mix
33.4
32.1
22.8
31.6
24.6
22.8
28.7
29.2
Medicaid
57.4
59.3
66.9
59.3
63.8
66.6
61.2
61.4
Private and other
9.2
8.6
10.3
9.1
11.6
10.6
10.1
9.4
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
The following table presents average daily rates by payor source, excluding services that are not covered by the daily rate, for the years ended December 31, 2025 and 2024:
Year ended December 31,
Average daily rate
Mature
Ramping
New
Total
2025
2024
2025
2024
2025
2024
2025
2024
Medicare
$
988.46
$
953.72
$
983.18
$
979.20
$
765.30
$
887.75
$
949.55
$
951.35
Managed care
688.43
620.20
610.06
671.44
584.66
571.75
644.71
624.64
Total for skilled patient payors (1)
881.22
815.46
833.83
854.30
669.45
718.53
826.82
807.76
Medicaid
322.91
309.76
329.58
317.30
356.12
323.83
333.32
316.90
Private and other
497.45
419.41
421.35
438.41
383.87
363.94
446.41
407.30
Total (2)
$
525.57
$
481.54
$
453.97
$
498.25
$
436.31
$
418.23
$
486.56
$
468.56
Represents weighted average of revenue generated by Medicare and managed care payor sources.
Represents weighted average.
Key Skilled Services Metrics
We monitor the below key skilled services metrics across all of our facilities and by Mature facilities, Ramping facilities, and New facilities. Mature facilities are defined as facilities purchased more than 36 months prior to a respective measurement date. Ramping facilities are defined as facilities purchased within 18 to 36 months prior to a respective measurement date. New facilities are defined as facilities purchased less than 18 months prior to a respective measurement date.
PACS GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (UNAUDITED)
(dollars in thousands)
Year ended December 31,
2025
2024
2023
Net income
$
191,461
$
55,344
$
112,882
Less: Net (loss) income attributable to noncontrolling interest
(82
)
(416
)
8
Add: Interest expense
28,363
44,341
49,919
Provision for income taxes
92,989
46,210
44,435
Depreciation and amortization
55,663
40,809
25,632
EBITDA
$
368,558
$
187,120
$
232,860
Adjustments to EBITDA:
Acquisition related costs
310
2,506
998
Loss resulting from debt restructuring
—
—
3,628
Gain on lease termination
—
(8,046
)
—
Stock-based compensation
54,069
115,544
—
Loss from equity method investment
—
2,736
—
Forfeiture of seller's note
—
500
—
Bargain purchase gain
—
(17,185
)
—
Legal and other costs
97,032
9,727
—
Employee Retention Tax Credit
(14,946
)
(14,599
)
—
Disaster relief payment
—
1,154
—
Adjusted EBITDA
$
505,023
$
279,457
$
237,486
Rent - cost of services
378,908
284,953
216,711
Adjusted EBITDAR
$
883,931
Non-GAAP Financial Measures
In addition to our results provided throughout that are determined in accordance with GAAP, we also present the following non-GAAP financial measures: EBITDA, Adjusted EBITDA and Adjusted EBITDAR (collectively, Non-GAAP Financial Measures). EBITDA and Adjusted EBITDA are performance measures. Adjusted EBITDAR is a valuation measure. These Non-GAAP Financial Measures have no standardized meaning defined by GAAP, and therefore have limitations as analytical tools, and they should not be considered in isolation, or as a substitute for analysis of our results as reported in accordance with GAAP. You should review the reconciliation of net income to the Non-GAAP Financial Measures in the table above, together with our current quarter condensed combined/consolidated financial statements and the related notes in their entirety, and should not rely on any single financial measure. Additionally, other companies may define these or similar Non-GAAP Financial Measures with the same or similar names differently, and because these Non-GAAP Financial Measures are not standardized, it may not be possible to compare these financial measures to those of other companies. A reconciliation of Adjusted EBITDA guidance to Net Income on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, and certain other expenses that are not representative of our underlying operating performances, all of which are adjustments to Adjusted EBITDA.
Performance Measures
We use EBITDA and Adjusted EBITDA to facilitate internal comparisons of our historical operating performance on a more consistent basis, as well as for business planning and forecasting purposes. In addition, we believe the presentation of EBITDA and Adjusted EBITDA is useful to investors, analysts and other interested parties in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance.
EBITDA – We calculate EBITDA as net income, adjusted for net losses attributable to noncontrolling interest, before: interest expense; provision for income taxes; and depreciation and amortization.
Adjusted EBITDA – We calculate Adjusted EBITDA as EBITDA further adjusted for non-core business items, which for the reported periods includes, to the extent applicable, costs incurred to acquire operations that are not capitalizable, losses incurred from debt restructuring, gains on lease termination, stock-based compensation expense, loss from equity method investment, forfeiture of a seller’s note, recognition of a bargain purchase gain, legal and other costs, recognition of Employee Retention Tax Credit (ERTC), disaster relief payment, and certain one-time expenses that are not representative of our underlying operating performance. Costs related to acquisitions include costs related to our acquisition of SNF facilities and providers, including related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. The loss related to our equity method investment is a loss allocated to us from a discrete disposal recognized by one of our equity method investments. The bargain purchase gain was recognized as part of our acquisition from the former operator Prestige. Legal and other costs include legal and professional fees incurred associated with the Audit Committee’s independent investigation and with other ongoing investigations. The adjustment related to the ERTC represents the recognition of the tax credit against labor as the statute of limitations surrounding the uncertainty of the qualifications, for a portion of the funds received, expired. The disaster relief payment was made to support facilities impacted by Hurricane Helene.
Valuation Measure
We use Adjusted EBITDAR as a measure to determine the value of prospective acquisitions and to assess the enterprise value of our business without regard to differences in capital structures and leasing arrangements. In addition, we believe that Adjusted EBITDAR is also a commonly used measure by investors, analysts and other interested parties to compare the enterprise value of different companies in the healthcare industry without regard to differences in capital structures and leasing arrangements, particularly for companies with operating and finance leases. For example, finance lease expenditures are recorded in depreciation and interest and are therefore removed from Adjusted EBITDA, whereas operating lease expenditures are recorded in rent expense and are therefore retained in Adjusted EBITDA. Adjusted EBITDAR is a financial valuation measure that is not specified in GAAP, and is not displayed as a performance measure as it excludes rent expense, which is a normal and recurring cash operating expense, and is therefore presented only for the current period. While we believe that Adjusted EBITDAR provides useful insight regarding our underlying operations, excluding the impact of our operating leases, we must still incur cash operating expenses related to our operating leases and rent and such expenses are necessary to operate our leased operations. As a result, Adjusted EBITDAR may understate the extent of our cash operating expenses for the respective period relative to our actual cash needs to operate our leased operations and business.
Adjusted EBITDAR – We calculate Adjusted EBITDAR as Adjusted EBITDA plus rent-cost of services.