Financial Data and Key Metrics Changes - In Q4 2025, revenue increased by 9.9% to $1.5 billion, while adjusted EBITDA rose by 15.9% to $335.6 million, driven by a 5.3% growth in discharges and a 4.1% increase in net revenue per discharge [13][5][11] - For the full year 2025, revenue grew by 10.5%, and EBITDA increased by 14.9%, with premium labor costs declining by over $21 million compared to 2024 [5][11] Business Line Data and Key Metrics Changes - The company added 517 beds in 2025, with 390 from new hospitals and 127 from existing hospitals, reflecting ongoing investments in capacity [6][11] - The full-year discharge to community rate was 84.6%, discharge to acute care was 8.6%, and discharge to skilled nursing facilities (SNF) was 6.1%, all favorable compared to industry averages [5][6] Market Data and Key Metrics Changes - The company experienced strong fee-for-service growth in Q4, although challenges were noted with Medicare Advantage, particularly with one national payer that saw a significant drop in conversion rates [28][27] - The Veterans Affairs (VA) program represented 19% of managed care volume, with a 22% growth for the year, indicating strong performance in this segment [30][11] Company Strategy and Development Direction - The company plans to implement small format hospitals starting in 2027 as part of a hub and spoke strategy to address market demand [6][11] - The company is actively engaging with regulatory bodies to ensure compliance and adapt to changes in the IRF industry, including the implementation of the TEAM model [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to regulatory changes and maintain growth, citing a strong demand for IRF services [10][11] - The company anticipates continued growth in 2026, with guidance for net operating revenue between $6.365 billion and $6.465 billion and adjusted EBITDA between $1.34 billion and $1.38 billion [16][11] Other Important Information - The company maintained a strong balance sheet with a year-end net financial leverage of 1.9 times, allowing for continued investments and shareholder distributions [11][15] - Significant investments were made in operations, including $158 million in share repurchases and over $70 million in cash dividends [11][15] Q&A Session Summary Question: Volume evolution and comp issues for 2026 - Management noted that the back half of 2025 faced challenging comps due to strong performance in the previous year, with new hospitals contributing to volume growth [20][21] Question: Payer mix and Medicare Advantage challenges - Fee-for-service growth was strong, but there were challenges with Medicare Advantage, particularly with a national payer that saw a drop in conversion rates [27][28] Question: TEAM pilot program and its implications - Management explained that the TEAM pilot program is similar to previous models and does not represent new risks, with expectations of continued growth despite regulatory changes [39][40] Question: Labor costs and staffing improvements - Management attributed improvements in labor costs to a softening labor market and effective staffing strategies, resulting in lower premium labor costs [51][52] Question: RCD experience in Alabama - The company reported a 93% affirmation rate in Alabama, with ongoing appeals for non-affirmed claims, indicating a strong position in managing regulatory challenges [66][69]

2025 Fourth Quarter Earnings Call February 6, 2026 Supplemental information Forward-looking statements The information contained in this presentation includes certain estimates, projections and other forward-looking information that reflect Encompass Health's current outlook, views and plans with respect to future events, including the business outlook, guidance and growth targets, future reimbursement rates, labor availability and costs, the effect of tariffs on costs, legislative and regulatory developmen ...

Core Insights - Encompass Health reported revenue of $1.54 billion for the quarter ended December 2025, reflecting a year-over-year increase of 9.9% [1] - The earnings per share (EPS) for the quarter was $1.46, up from $1.17 in the same quarter last year, indicating a significant improvement [1] - The revenue exceeded the Zacks Consensus Estimate by 0.23%, while the EPS surpassed the consensus estimate by 12.95% [1] Financial Performance Metrics - Net patient revenue per discharge was reported at $22,273, which was higher than the estimated $22,062.08 [4] - The total number of discharges was 67,238, slightly below the estimated 67,407 [4] - Net Operating Revenues from inpatient services reached $1.5 billion, exceeding the estimated $1.49 billion, marking a 9.6% increase compared to the previous year [4] Stock Performance - Encompass Health's shares have declined by 10.1% over the past month, contrasting with a 0.5% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Encompass Health (EHC) reported quarterly earnings of $1.46 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, and showing an increase from $1.17 per share a year ago, indicating a positive earnings surprise of +12.95% [1] Financial Performance - The company achieved revenues of $1.54 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.23% and up from $1.41 billion year-over-year [2] - Over the last four quarters, Encompass Health has consistently exceeded consensus EPS estimates and revenue estimates [2] Stock Performance - Encompass Health shares have declined approximately 9.9% since the beginning of the year, contrasting with the S&P 500's gain of 0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.50 on revenues of $1.58 billion, and for the current fiscal year, it is $5.81 on revenues of $6.44 billion [7] - The trend of earnings estimate revisions for Encompass Health was mixed prior to the earnings release, which may influence future stock performance [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Encompass Health belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Net operating revenue for Q4 2025 was $1,544.6 million, representing a 9.9% increase from $1,405.0 million in Q4 2024[2] - Adjusted EBITDA for Q4 2025 was $335.6 million, up 15.9% from $289.6 million in Q4 2024[2] - Net income for 2025 was $759.1 million, a 27.2% increase compared to $596.6 million in 2024[19] - Adjusted EBITDA for the year ended 2025 reached $1,267.9 million, up 15% from $1,103.7 million in 2024[21] - Net income for Q4 2025 was $203.1 million, an increase of 23.7% from $164.2 million in Q4 2024[30] - Income from continuing operations attributable to Encompass Health for Q4 2025 was $145.3 million, up from $120.5 million in Q4 2024, representing a growth of 20.6%[25][26] - Income from continuing operations attributable to Encompass Health for the year 2025 was $567.2 million, up from $458.5 million in 2024, a year-over-year increase of 24%[27][28] Earnings Per Share - Adjusted earnings per share for 2026 is expected to be between $5.81 and $6.10[5] - Basic earnings per share for 2025 were $5.63, a 23.5% increase from $4.56 in 2024[21] - Diluted earnings per share from continuing operations for Q4 2025 was $1.42, an increase from $1.18 in Q4 2024, marking a rise of 20.3%[25][26] - Diluted earnings per share from continuing operations for the year 2025 was $5.55, compared to $4.49 in 2024, reflecting a growth of 23.6%[27][28] Cash Flow and Investments - Cash flows from operating activities increased to $346.0 million in Q4 2025, a 24.1% rise from $278.8 million in Q4 2024[2] - Cash flows from operating activities totaled $1,175.6 million in 2025, compared to $1,002.8 million in 2024, marking a 17.3% increase[19] - Adjusted free cash flow for Q4 2025 was $235.4 million, a 23.6% increase from $190.5 million in Q4 2024[2] - Net cash provided by operating activities for Q4 2025 was $346.0 million, compared to $278.8 million in Q4 2024, reflecting a 24.2% increase[31] - Net cash used in investing activities for the year ended December 31, 2025, was $764.6 million, primarily due to capital expenditures[33] - Net cash used in financing activities for the year ended December 31, 2025, was $431.2 million, driven by stock repurchases and distributions to noncontrolling interests[33] Assets and Liabilities - Total assets increased to $7,089.7 million in 2025, up from $6,534.7 million in 2024, representing an 8.4% growth[17] - Total current liabilities decreased slightly to $836.4 million in 2025 from $841.0 million in 2024[17] - Long-term debt, net of current portion, increased to $2,447.2 million in 2025 from $2,359.2 million in 2024, reflecting a 3.7% rise[17] - Total shareholders' equity increased to $3,217.5 million in 2025, up from $2,792.7 million in 2024, indicating a 15.2% growth[17] Operational Metrics - The company added a total of 517 inpatient rehabilitation beds in 2025, including eight new hospitals and 127 beds to existing facilities[3] - The number of discharges in Q4 2025 was 67,238, reflecting a 5.3% increase from 63,839 in Q4 2024[2] - Net patient revenue per discharge increased to $22,273, a 4.1% rise from $21,399 in Q4 2024[2] Tax and Other Expenses - The company reported a provision for income tax expense of $55.4 million for Q4 2025, compared to $37.6 million in Q4 2024, an increase of 47.8%[25][26] - The company experienced a loss on disposal or impairment of assets of $0.3 million in Q4 2025, compared to $6.1 million in Q4 2024, showing a significant reduction in losses[25][26] - The company reported a loss from discontinued operations of $0.8 million in Q4 2025, compared to a loss of $0.4 million in Q4 2024[30] Future Projections - For 2026, the company projects net operating revenue between $6,365 million and $6,465 million[5] - The company anticipates continued growth in adjusted EBITDA and free cash flow, supported by strategic investments and operational efficiencies[36]

Core Insights - Encompass Health Corporation reported strong financial performance for Q4 2025, with net operating revenue increasing by 9.9% year-over-year to $1,544.6 million, and adjusted earnings per share rising by 24.8% to $1.46 [2][3] Financial Performance - Net operating revenue for Q4 2025 was $1,544.6 million, compared to $1,405.0 million in Q4 2024, reflecting a growth of $139.6 million [2] - Income from continuing operations attributable to Encompass Health per diluted share increased by 20.3% to $1.42 from $1.18 [2] - Adjusted EBITDA for Q4 2025 was $335.6 million, up 15.9% from $289.6 million in Q4 2024 [2] - Cash flows from operating activities rose by 24.1% to $346.0 million, compared to $278.8 million in the previous year [2] Operational Highlights - The company discharged 67,238 patients in Q4 2025, a 5.3% increase from 63,839 in Q4 2024, with same-store discharge growth of 3.2% [2] - Net patient revenue per discharge increased by 4.1% to $22,273 from $21,399 [2] - Encompass Health added 517 inpatient rehabilitation beds through eight new hospitals and 127 beds to existing facilities during 2025, indicating a significant capacity expansion [3] 2026 Guidance - For 2026, Encompass Health expects net operating revenue between $6,365 million and $6,465 million, and adjusted EBITDA between $1,340 million and $1,380 million [5] - The company anticipates adjusted earnings per share from continuing operations to be in the range of $5.81 to $6.10 [5] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with 173 hospitals across 39 states and Puerto Rico [9] - The company is recognized for its high-quality rehabilitative care and has received accolades such as being ranked among Fortune's World's Most Admired Companies and Forbes' America's Best Companies [9]

BIRMINGHAM, Ala., Feb. 2, 2026 /PRNewswire/ -- Encompass Health Corp. (NYSE: EHC) today announced the appointment of Cain A. Hayes to its board of directors. Continue Reading Cain A. Hayes Hayes joins the Encompass Health board with significant experience in health care, strategic leadership, human capital management, risk management and governmental regulation. He retired as president and chief executive officer of Point32Health, Inc., a top-20 U.S. health plan, in 2024. Prior to joining Point32Health in 2 ...

Core Viewpoint - Encompass Health Corp. will report its fourth quarter results for the period ending December 31, 2025, on February 5, 2026, and will host an investor conference call on February 6, 2026, to discuss these results [1]. Group 1 - The company is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a total of 173 hospitals across 39 states and Puerto Rico [3]. - Encompass Health provides high-quality rehabilitative care for patients recovering from major injuries or illnesses, utilizing advanced technology and innovative treatments [3]. - The company has received recognition as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista, and is ranked among Fortune's World's Most Admired Companies and Forbes' Most Trusted Companies in America [3]. Group 2 - The investor conference call can be accessed by dialing 800-267-6316 for domestic callers and 203-518-9783 for international callers, with a conference ID of EHCQ425 [2]. - A live webcast and an online replay of the conference call will be available on the company's investor website [2].

Core Insights - Encompass Health Corporation (EHC) is experiencing growth due to increasing patient volumes, expansion initiatives, and a strong financial position [1] Financial Performance - EHC has a Zacks Rank of 2 (Buy) and its stock has increased by 16.6% over the past year, outperforming the industry growth of 7.2% [2] - The Zacks Consensus Estimate for EHC's 2025 earnings is $5.30 per share, reflecting a year-over-year increase of 19.6%, with revenues expected to reach $5.9 billion, indicating a 10.4% growth [5] - The 2026 earnings estimate is $5.81 per share, showing a 9.6% increase from 2025 [5] - The consensus estimate for 2026 revenues is projected at $6.5 billion, representing an 8.8% growth from the 2025 estimate [6] - EHC's earnings have consistently surpassed estimates, with an average surprise of 12.47% over the last four quarters [8] Growth Drivers - EHC's revenue growth is primarily driven by an expanding patient base in its inpatient rehabilitation hospitals, with a reported 10.6% revenue increase in the first nine months of 2025 compared to the same period in the previous year [9] - The company plans to add 150-200 beds in both 2026 and 2027, supported by a robust financial foundation, including $48.7 million in cash and cash equivalents as of September 30, 2025, and $829.6 million in operating cash flows for the first nine months of 2025, a 14.6% year-over-year increase [12] Expansion Initiatives - EHC is actively launching new inpatient rehabilitation hospitals, either independently or in collaboration with healthcare partners, enhancing its service capacity and nationwide footprint [10] - As of now, EHC operates 173 hospitals across 39 states and Puerto Rico, with the latest addition being the Rehabilitation Hospital of Lake Worth, opened in December [11]

Core Insights - Prysmian's Draka EHC has been awarded the title of Best Supplier for Ropes/Traveling Cables at the 2025 Elevator Industry (Ellie) Awards [1] - The company also secured the runner-up position for Best Supplier in Safety Products [1] - The Ellie Awards have been recognizing outstanding North American vertical-transportation businesses for the past eight years [1] Company Recognition - The awards were presented by Elevator World, highlighting the achievements of companies that excel in customer service, employee satisfaction, and community engagement [1] - Draka EHC's recognition reflects its commitment to quality and innovation in the elevator industry [1]