Encompass Health reports results for fourth quarter 2025 and issues 2026 guidance

Rhea-AI Summary

Encompass Health (NYSE: EHC) reported strong Q4 2025 results and issued 2026 guidance. Q4 net operating revenue was $1,544.6M, up 9.9% versus Q4 2024. Adjusted EPS was $1.46 and Adjusted EBITDA was $335.6M. The company added 517 inpatient beds in 2025.

2026 guidance targets net operating revenue of $6,365–$6,465M, Adjusted EBITDA of $1,340–$1,380M, and adjusted EPS of $5.81–$6.10.

Positive

• Net operating revenue +9.9% Q4 2025
• Adjusted EBITDA +15.9% Q4 2025
• Added 517 inpatient rehabilitation beds in 2025
• 2026 guidance showing mid-single-digit to high-single-digit growth

Negative

• GAAP comparable guidance not provided for Adjusted EBITDA and adjusted EPS
• Revenue and margin guidance ranges indicate execution risk toward lower bound

News Market Reaction

+4.08% 2.1x vol

28 alerts

+4.08% News Effect

+29.9% Peak in 1 hr 15 min

+$395M Valuation Impact

$10.07B Market Cap

2.1x Rel. Volume

On the day this news was published, EHC gained 4.08%, reflecting a moderate positive market reaction. Argus tracked a peak move of +29.9% during that session. Our momentum scanner triggered 28 alerts that day, indicating elevated trading interest and price volatility. This price movement added approximately $395M to the company's valuation, bringing the market cap to $10.07B at that time. Trading volume was elevated at 2.1x the daily average, suggesting notable buying interest.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Q4 2025 net operating revenue: $1,544.6M Q4 2025 EPS (continuing ops, diluted): $1.42 Q4 2025 adjusted EPS: $1.46 +5 more

8 metrics

Q4 2025 net operating revenue $1,544.6M Quarter ended Dec. 31, 2025; up 9.9% vs Q4 2024

Q4 2025 EPS (continuing ops, diluted) $1.42 Income from continuing operations per diluted share; up 20.3%

Q4 2025 adjusted EPS $1.46 Adjusted earnings per share; up 24.8% vs Q4 2024

Q4 2025 adjusted EBITDA $335.6M Quarter ended Dec. 31, 2025; up 15.9% vs Q4 2024

Q4 2025 operating cash flow $346.0M Cash flows provided by operating activities; up 24.1% YoY

Q4 2025 adjusted free cash flow $235.4M Quarter ended Dec. 31, 2025; up 23.6% vs Q4 2024

2026 revenue guidance $6,365–$6,465M Net operating revenue guidance range for 2026

2026 adjusted EPS guidance $5.81–$6.10 Adjusted EPS from continuing operations guidance for 2026

Market Reality Check

Price: $105.39 Vol: Volume 2,730,670 is 2.13x...

high vol

$105.39 Last Close

Volume Volume 2,730,670 is 2.13x the 20-day average of 1,279,629, indicating elevated interest into earnings. high

Technical Shares at $99.56 trade 22.21% below the $127.99 52-week high and below the $115.5 200-day MA, despite solid Q4 growth.

Peers on Argus

EHC gained 1.38%, while peers were mixed: ENSG up 10.53%, DVA up 3.86%, FMS up 2...

EHC gained 1.38%, while peers were mixed: ENSG up 10.53%, DVA up 3.86%, FMS up 2.14%, but UHS and THC down. The move appears more company-specific than a broad sector shift.

Previous Earnings Reports

5 past events · Latest: Oct 29 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 29	Q3 2025 earnings	Positive	-0.5%	Strong Q3 growth and guidance raise but shares fell modestly post-report.
Aug 04	Q2 2025 earnings	Positive	+4.0%	Robust Q2 revenue, EPS, EBITDA growth and higher 2025 guidance.
Apr 24	Q1 2025 earnings	Positive	+11.8%	Double-digit revenue and EPS growth with increased full-year guidance.
Apr 09	Earnings call timing	Neutral	-1.0%	Scheduling change for Q1 2025 earnings call preceded a small price drop.
Feb 06	Q4 2024 earnings	Positive	+1.3%	Strong Q4 2024 results and initial 2025 guidance with growth outlook.

Pattern Detected

Earnings releases have consistently highlighted strong revenue, EBITDA and EPS growth, often with guidance raises. Market reactions have been mixed, with several positive reports followed by modest or even negative price moves, though some quarters (e.g., Q1 2025) saw strong upside.

Recent Company History

Recent earnings releases show a pattern of steady growth for Encompass Health. In Q1–Q3 2025, net operating revenue, adjusted EPS and adjusted EBITDA all grew solidly, with repeated full-year guidance increases. The prior Q4 2024 report also showed double-digit revenue growth and guided for 2025 expansion. Today’s Q4 2025 results and 2026 guidance continue that trajectory of higher revenue, earnings and capacity additions.

Historical Comparison

earnings

+3.1 %

Average Historical Move

Historical Analysis

In the past year, EHC’s earnings-related headlines moved the stock by an average of 3.1%. Today’s 1.38% gain ahead of/around Q4 2025 results sits at the lower end of that typical reaction range.

Typical Pattern

Across successive quarters in 2025, Encompass Health reported consistent growth in net operating revenue, adjusted EPS and adjusted EBITDA, often raising full-year guidance. The new Q4 2025 report and 2026 guidance extend this pattern of scaling inpatient rehab capacity and increasing profitability metrics.

Market Pulse Summary

This announcement highlights strong Q4 2025 performance for Encompass Health, with net operating rev...

Analysis

This announcement highlights strong Q4 2025 performance for Encompass Health, with net operating revenue of $1,544.6M and adjusted EPS of $1.46, both rising solidly year over year. Adjusted EBITDA reached $335.6M, and management issued 2026 guidance calling for $6,365–$6,465M in revenue and adjusted EPS of $5.81–$6.10. Historically, earnings updates have often featured similar growth and capacity expansion, making guidance execution and future discharge trends key metrics to watch.

Key Terms

adjusted earnings per share, adjusted ebitda, adjusted free cash flow, gaap, +1 more

5 terms

adjusted earnings per share financial

"Adjusted earnings per share | 1.46 | | 1.17 | | 0.29 | | 24.8 %"

Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.

adjusted ebitda financial

"Adjusted EBITDA | 335.6 | | 289.6 | | 46.0 | | 15.9 %"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted free cash flow financial

"Adjusted free cash flow | 235.4 | | 190.5 | | 44.9 | | 23.6 %"

Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.

gaap financial

"non-GAAP measures and reconciliations to their most comparable GAAP measure."

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

inpatient rehabilitation medical

"largest owner and operator of inpatient rehabilitation hospitals in the United States"

Inpatient rehabilitation is a hospital-level service where patients stay overnight in a dedicated facility to receive daily, coordinated therapy and medical care after a serious illness, injury or surgery until they can safely return home. For investors, it matters because these stays drive predictable revenue, bed occupancy and reimbursement rates for healthcare providers—much like a specialty hotel that charges for both room and intensive services—so changes in demand, length of stay or payment rules directly affect a provider’s earnings and costs.

AI-generated analysis. Not financial advice.

BIRMINGHAM, Ala., Feb. 5, 2026 /PRNewswire/ -- Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the fourth quarter ended December 31, 2025.

Summary results

					Growth
	Q4 2025		Q4 2024		Dollars		Percent
	(In Millions, Except Per Share Data)
Net operating revenue	$      1,544.6		$      1,405.0		$     139.6		9.9 %
Income from continuing operations attributable to      Encompass Health per diluted share	1.42		1.18		0.24		20.3 %
Adjusted earnings per share	1.46		1.17		0.29		24.8 %
Cash flows provided by operating activities	346.0		278.8		67.2		24.1 %
Adjusted EBITDA	335.6		289.6		46.0		15.9 %
Adjusted free cash flow	235.4		190.5		44.9		23.6 %
(Actual Amounts)
Discharges	67,238		63,839				5.3 %
Same-store discharge growth							3.2 %
Net patient revenue per discharge	$       22,273		$       21,399				4.1 %

See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure.

"Our Q4 performance was very strong, capping a stellar 2025," said President and Chief Executive Officer Mark Tarr. "Our 2025 revenue increased 10.5% and Adjusted EBITDA grew 14.9%. During the year, we significantly increased our capacity, adding a total of 517 inpatient rehabilitation beds via eight new hospitals and the addition of 127 beds to existing hospitals. The need for the services we provide continues to grow as the U.S. population ages. We are uniquely positioned to meet this rising demand."

2026 Guidance 

The Company provided the following guidance for 2026.

	2026 Guidance
	(In millions, Except Earnings per Share Data)
Net operating revenue	$6,365 to $6,465
Adjusted EBITDA	$1,340 to $1,380
Adjusted earnings per share from continuing operations      attributable to Encompass Health	$5.81 to $6.10

For considerations regarding the Company's 2026 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share.

Earnings conference call and webcast

The Company will host an investor conference call at 10:00 a.m. Eastern Time on Friday, February 6, 2026 to discuss its results for the fourth quarter of 2025. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com.

The conference call may be accessed by dialing 800 267-6316 and giving the conference ID EHCQ425. International callers should dial 203 518-9783 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link.

About Encompass Health

Encompass Health (NYSE: EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 173 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is recognized as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and is ranked among Fortune's World's Most Admired Companies™¹ and Forbes' America's Best Companies. For more information, visit encompasshealth.com, or follow us on our newsroom, X, Instagram and Facebook.

1 From Fortune. © 2026 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Encompass Health.

Other information

The information in this press release is summarized and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), when filed, as well as the Company's Current Report on Form 8-K filed on February 5, 2026 (the "Q4 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its February 6, 2026 earnings call.

The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q4 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q4 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures.

Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include government, class action, and related settlements; professional fees—accounting, tax, and legal; mark-to-market adjustments for stock appreciation rights; gains or losses related to hedging instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP.

However, the following reasonably estimable GAAP measures for 2026 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted:

• Interest expense and amortization of debt discounts and fees - approximately $120 million
• Amortization of debt-related items - approximately $10 million

The Q4 Earnings Form 8-K and, when filed, the 2025 Form 10-K can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at www.sec.gov.

Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
	For the Three Months Ended December 31,				For the Year Ended December 31,
	2025		2024		2025		2024
	(In Millions, Except Per Share Data)
Net operating revenues	$  1,544.6		$  1,405.0		$  5,935.2		$  5,373.2
Operating expenses:
Salaries and benefits	801.1		756.8		3,115.9		2,901.0
Other operating expenses	226.3		206.4		888.7		802.6
Occupancy costs	14.5		14.7		59.0		57.3
Supplies	64.5		62.3		254.4		239.0
General and administrative expenses	68.4		54.5		236.2		209.2
Depreciation and amortization	86.4		78.0		327.9		299.6
Total operating expenses	1,261.2		1,172.7		4,882.1		4,508.7
Loss on early extinguishment of debt	—		0.2		—		0.6
Interest expense and amortization of debt discounts and      fees	30.2		33.0		123.2		137.4
Other income	(3.7)		(2.1)		(18.8)		(20.1)
Equity in net income of nonconsolidated affiliates	(0.8)		(0.2)		(4.3)		(3.0)
Income from continuing operations before income tax      expense	257.7		201.4		953.0		749.6
Provision for income tax expense	55.4		37.6		192.9		150.2
Income from continuing operations	202.3		163.8		760.1		599.4
Income (loss) from discontinued operations, net of tax	0.8		0.4		(1.0)		(2.8)
Net income	203.1		164.2		759.1		596.6
Less: Net income attributable to noncontrolling interests	(57.0)		(43.3)		(192.9)		(140.9)
Net income attributable to Encompass Health	$     146.1		$     120.9		$     566.2		$     455.7
Weighted average common shares outstanding:
Basic	100.2		100.0		100.5		99.9
Diluted	102.0		102.3		102.2		102.2
Earnings per common share:
Basic earnings per share attributable to Encompass      Health common shareholders:
Continuing operations	$       1.44		$       1.20		$       5.63		$       4.56
Discontinued operations	0.01		—		(0.01)		(0.03)
Net income	$       1.45		$       1.20		$       5.62		$       4.53
Diluted earnings per share attributable to Encompass      Health common shareholders:
Continuing operations	$       1.42		$       1.18		$       5.55		$       4.49
Discontinued operations	0.01		—		(0.01)		(0.03)
Net income	$       1.43		$       1.18		$       5.54		$       4.46
Amounts attributable to Encompass Health common      shareholders:
Income from continuing operations	$     145.3		$     120.5		$     567.2		$     458.5
Income (loss) from discontinued operations, net of tax	0.8		0.4		(1.0)		(2.8)
Net income attributable to Encompass Health	$     146.1		$     120.9		$     566.2		$     455.7

 

Encompass Health Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
	As of December 31,
	2025		2024
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$                72.2		$                85.4
Restricted cash	30.7		37.7
Accounts receivable	619.2		598.8
Prepaid expenses	53.9		42.3
Other current assets	129.9		122.7
Total current assets	905.9		886.9
Property and equipment, net	4,101.6		3,643.1
Operating lease right-of-use assets	212.6		203.7
Goodwill	1,317.6		1,284.0
Intangible assets, net	308.3		297.8
Other long-term assets	243.7		219.2
Total assets	$           7,089.7		$           6,534.7
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt	$                43.6		$              138.6
Current operating lease liabilities	26.5		26.3
Accounts payable	178.2		171.0
Accrued payroll	243.7		227.9
Accrued distributions	54.8		31.4
Other current liabilities	289.6		245.8
Total current liabilities	836.4		841.0
Long-term debt, net of current portion	2,447.2		2,359.2
Long-term operating lease liabilities	196.6		189.7
Self-insured risks	153.1		138.6
Deferred income tax liabilities	126.8		105.2
Other long-term liabilities	53.8		51.8
Total liabilities	3,813.9		3,685.5
Commitments and contingencies
Redeemable noncontrolling interests	58.3		56.5
Shareholders' equity:
Encompass Health shareholders' equity	2,438.2		2,067.0
Noncontrolling interests	779.3		725.7
Total shareholders' equity	3,217.5		2,792.7
Total liabilities and shareholders' equity	$           7,089.7		$           6,534.7

 

Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
	For the Year Ended December 31,
	2025		2024
	(In Millions)
Cash flows from operating activities:
Net income	$            759.1		$            596.6
Loss from discontinued operations, net of tax	1.0		2.8
Adjustments to reconcile net income to net cash provided by operating      activities—
Depreciation and amortization	327.9		299.6
Amortization of debt-related items	9.6		9.7
Equity in net income of nonconsolidated affiliates	(4.3)		(3.0)
Distributions from nonconsolidated affiliates	4.1		4.0
Stock-based compensation	56.5		48.3
Deferred tax expense	22.3		10.7
Other, net	(3.5)		15.3
Change in assets and liabilities, net of acquisitions—
Accounts receivable	(15.2)		3.0
Prepaid expenses and other assets	(31.2)		(57.3)
Accounts payable	(22.6)		3.0
Accrued payroll	15.9		20.4
Other liabilities	57.4		52.8
Net cash used in operating activities of discontinued operations	(1.4)		(3.1)
Total adjustments	415.5		403.4
Net cash provided by operating activities	1,175.6		1,002.8
Cash flows from investing activities:
Purchases of property, equipment, and intangible assets	(736.4)		(642.5)
Proceeds from sale of restricted investments	172.8		18.9
Purchases of restricted investments	(184.4)		(22.5)
Other, net	(16.6)		(7.2)
Net cash used in investing activities	(764.6)		(653.3)
Cash flows from financing activities:
Principal payments on debt, including pre-payments	(115.1)		(255.2)
Principal borrowings on notes	—		15.0
Borrowings on revolving credit facility	220.0		80.0
Payments on revolving credit facility	(110.0)		(60.0)
Principal payments under finance lease obligations	(23.9)		(21.8)
Repurchases of common stock, including fees and expenses	(158.0)		(31.1)
Dividends paid on common stock	(71.1)		(62.8)
Distributions paid to noncontrolling interests of consolidated affiliates	(152.1)		(125.0)
Taxes paid on behalf of employees for shares withheld	(20.0)		(12.1)
Contributions from noncontrolling interests of consolidated affiliates	1.8		140.4
Other, net	(2.8)		2.0
Net cash used in financing activities	(431.2)		(330.6)
(Decrease) increase in cash, cash equivalents, and restricted cash	(20.2)		18.9
Cash, cash equivalents, and restricted cash at beginning of period	123.1		104.2
Cash, cash equivalents, and restricted cash at end of period	$            102.9		$            123.1

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Earnings Per Share
	Q4				Year Ended
	2025		2024		2025		2024
	(In Millions, Except Per Share Data)
Adjusted EBITDA	$     335.6		$     289.6		$  1,267.9		$  1,103.7
Depreciation and amortization	(86.4)		(78.0)		(327.9)		(299.6)
Interest expense and amortization of debt discounts      and fees	(30.2)		(33.0)		(123.2)		(137.4)
Stock-based compensation	(18.4)		(12.5)		(56.5)		(48.3)
Loss on disposal or impairment of assets	(0.3)		(6.1)		(2.7)		(17.4)
	200.3		160.0		757.6		601.0
Items not indicative of ongoing operating performance:
Loss on early extinguishment of debt	—		(0.2)		—		(0.6)
Change in fair market value of marketable securities	0.4		(1.7)		2.5		1.0
Asset impairment impact on noncontrolling interests	—		—		—		7.3
Pre-tax income	200.7		158.1		760.1		608.7
Income tax expense	(55.4)		(37.6)		(192.9)		(150.2)
Income from continuing operations (1)	$     145.3		$     120.5		$     567.2		$     458.5
Basic shares	100.2		100.0		100.5		99.9
Diluted shares	102.0		102.3		102.2		102.2
Basic earnings per share (1)	$       1.44		$       1.20		$       5.63		$       4.56
Diluted earnings per share (1)	$       1.42		$       1.18		$       5.55		$       4.49

(1)	Income from continuing operations attributable to Encompass Health

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
	Q4				Year Ended
	2025		2024		2025		2024
Earnings per share, as reported	$      1.42		$    1.18		$      5.55		$      4.49
Adjustments, net of tax:
Asset impairment impact	—		—		—		0.02
Income tax adjustments	0.04		(0.03)		(0.08)		(0.08)
Change in fair market value of marketable securities	—		0.01		(0.02)		(0.01)
Adjusted earnings per share*	$      1.46		$    1.17		$      5.45		$      4.43

*	Adjusted EPS may not sum due to rounding.

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
	Q4				Year Ended
	2025		2024		2025		2024
	(In Millions)
Net cash provided by operating activities	$     346.0		$     278.8		$  1,175.6		$  1,002.8
Interest expense and amortization of debt discounts and      fees	30.2		33.0		123.2		137.4
(Loss) gain on sale of investments, excluding impairments	(0.3)		(3.1)		5.9		2.7
Equity in net income of nonconsolidated affiliates	0.8		0.2		4.3		3.0
Net income attributable to noncontrolling interests in      continuing operations	(57.0)		(43.3)		(192.9)		(140.9)
Amortization of debt-related items	(2.4)		(2.4)		(9.6)		(9.7)
Distributions from nonconsolidated affiliates	(2.7)		(0.9)		(4.1)		(4.0)
Current portion of income tax expense	36.3		29.0		170.6		139.5
Change in assets and liabilities	(13.9)		(2.8)		(4.3)		(21.9)
Cash (provided by) used in operating activities of      discontinued operations	(1.1)		(0.6)		1.4		3.1
Asset impairment impact on noncontrolling interests	—		—		—		(7.3)
Change in fair market value of marketable securities	(0.4)		1.7		(2.5)		(1.0)
Other	0.1		—		0.3		—
Adjusted EBITDA	$     335.6		$     289.6		$  1,267.9		$  1,103.7

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
	For the Three Months Ended December 31, 2025
			Adjustments
	As Reported		Income Tax Adjustments		Change in Fair Market Value of Marketable Securities		As Adjusted
	(In Millions, Except Per Share Amounts)
Adjusted EBITDA*	$    335.6		$                —		$                   —		$     335.6
Depreciation and amortization	(86.4)		—		—		(86.4)
Interest expense and amortization of debt discounts and fees	(30.2)		—		—		(30.2)
Stock-based compensation	(18.4)		—		—		(18.4)
Loss on disposal or impairment of assets	(0.3)		—		—		(0.3)
Change in fair market value of marketable securities	0.4		—		(0.4)		—
Income from continuing operations before income tax expense	200.7		—		(0.4)		200.3
Provision for income tax expense	(55.4)		3.9		—		(51.5)
Income from continuing operations attributable to Encompass Health	$    145.3		$             3.9		$                (0.4)		$     148.8
Diluted earnings per share from continuing operations**	$      1.42		$           0.04		$                   —		$       1.46
Diluted shares used in calculation	102.0

*	See reconciliation of net income to Adjusted EBITDA.
**	Adjusted EPS may not sum across due to rounding.

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
	For the Three Months Ended December 31, 2024
			Adjustments
	As Reported		Loss on Early Exting. of Debt		Income Tax Adjustments		Change in Fair Market Value of Marketable Securities		As Adjusted
	(In Millions, Except Per Share Amounts)
Adjusted EBITDA*	$    289.6		$        —		$                —		$                  —		$     289.6
Depreciation and amortization	(78.0)		—		—		—		(78.0)
Interest expense and amortization of debt discounts and fees	(33.0)		—		—		—		(33.0)
Stock-based compensation	(12.5)		—		—		—		(12.5)
Loss on disposal or impairment of assets	(6.1)		—		—		—		(6.1)
Loss on early extinguishment of debt	(0.2)		0.2		—		—		—
Change in fair market value of marketable securities	(1.7)		—		—		1.7		—
Income from continuing operations before income tax expense	158.1		0.2		—		1.7		160.0
Provision for income tax expense	(37.6)		(0.1)		(2.6)		(0.4)		(40.7)
Income from continuing operations attributable to Encompass      Health	$    120.5		$       0.1		$             (2.6)		$                1.3		$     119.3
Diluted earnings per share from continuing operations**	$      1.18		$        —		$           (0.03)		$              0.01		$       1.17
Diluted shares used in calculation	102.3

*	See reconciliation of net income to Adjusted EBITDA.
**	Adjusted EPS may not sum across due to rounding.

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
	For the Year Ended December 31, 2025
			Adjustments
	As Reported		Income Tax Adjustments		Change in Fair Market Value of Marketable Securities		As Adjusted
	(In Millions, Except Per Share Amounts)
Adjusted EBITDA*	$ 1,267.9		$               —		$                  —		$  1,267.9
Depreciation and amortization	(327.9)		—		—		(327.9)
Interest expense and amortization of debt discounts and fees	(123.2)		—		—		(123.2)
Stock-based compensation	(56.5)		—		—		(56.5)
Loss on disposal or impairment of assets	(2.7)		—		—		(2.7)
Change in fair market value of marketable securities	2.5		—		(2.5)		—
Income from continuing operations before income tax expense	760.1		—		(2.5)		757.6
Provision for income tax expense	(192.9)		(7.9)		0.6		(200.2)
Income from continuing operations attributable to Encompass Health	$    567.2		$           (7.9)		$               (1.9)		$     557.4
Diluted earnings per share from continuing operations**	$      5.55		$         (0.08)		$             (0.02)		$       5.45
Diluted shares used in calculation	102.2

*	See reconciliation of net income to Adjusted EBITDA.
**	Adjusted EPS may not sum across due to rounding.

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
	For the Year Ended December 31, 2024
			Adjustments
	As Reported		Asset Impairment Impact		Loss on Early Exting. of Debt		Income Tax Adjustments		Change in Fair Market Value of Marketable Securities		As Adjusted
	(In Millions, Except Per Share Amounts)
Adjusted EBITDA*	$  1,103.7		$             —		$       —		$                —		$                  —		$  1,103.7
Depreciation and amortization	(299.6)		—		—		—		—		(299.6)
Interest expense and amortization of debt discounts and fees	(137.4)		—		—		—		—		(137.4)
Stock-based compensation	(48.3)		—		—		—		—		(48.3)
Loss on disposal or impairment of assets	(17.4)		10.4		—		—		—		(7.0)
Loss on early extinguishment of debt	(0.6)		—		0.6		—		—		—
Change in fair market value of marketable securities	1.0		—		—		—		(1.0)		—
Asset impairment impact on noncontrolling interests	7.3		(7.3)		—		—		—		—
Income from continuing operations before income tax      expense	608.7		3.1		0.6		—		(1.0)		611.4
Provision for income tax expense	(150.2)		(1.3)		(0.2)		(7.7)		0.3		(159.1)
Income from continuing operations attributable to      Encompass Health	$    458.5		$           1.8		$     0.4		$             (7.7)		$              (0.7)		$     452.3
Diluted earnings per share from continuing operations**	$      4.49		$         0.02		$      —		$           (0.08)		$            (0.01)		$       4.43
Diluted shares used in calculation	102.2

*	See reconciliation of net income to Adjusted EBITDA.
**	Adjusted EPS may not sum across due to rounding.

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Income to Adjusted EBITDA
	Q4				Year Ended
	2025		2024		2025		2024
	(In Millions)
Net income	$     203.1		$    164.2		$    759.1		$     596.6
(Income) loss from discontinued operations, net of tax,      attributable to Encompass Health	(0.8)		(0.4)		1.0		2.8
Net income attributable to noncontrolling interests included      in continuing operations	(57.0)		(43.3)		(192.9)		(140.9)
Provision for income tax expense	55.4		37.6		192.9		150.2
Interest expense and amortization of debt discounts and      fees	30.2		33.0		123.2		137.4
Depreciation and amortization	86.4		78.0		327.9		299.6
Loss on early extinguishment of debt	—		0.2		—		0.6
Loss on disposal or impairment of assets	0.3		6.1		2.7		17.4
Stock-based compensation	18.4		12.5		56.5		48.3
Asset impairment impact on noncontrolling interests	—		—		—		(7.3)
Change in fair market value of marketable securities	(0.4)		1.7		(2.5)		(1.0)
Adjusted EBITDA	$     335.6		$    289.6		$ 1,267.9		$  1,103.7

 

Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
	Q4				Year Ended
	2025		2024		2025		2024
	(In Millions)
Net cash provided by operating activities	$     346.0		$     278.8		$  1,175.6		$  1,002.8
Impact of discontinued operations	(1.1)		(0.6)		1.4		3.1
Net cash provided by operating activities of continuing      operations	344.9		278.2		1,177.0		1,005.9
Capital expenditures for maintenance	(69.0)		(50.8)		(209.5)		(184.6)
Distributions paid to noncontrolling interests of      consolidated affiliates	(42.7)		(39.5)		(152.1)		(125.0)
Items not indicative of ongoing operating performance:
Transaction costs and related liabilities	2.2		2.6		2.5		(6.0)
Adjusted free cash flow	$     235.4		$     190.5		$     817.9		$     690.3

For the three months ended December 31, 2025, net cash used in investing activities was $239.4 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended December 31, 2025 was $97.4 million and resulted primarily from repurchases of common stock, distributions paid to noncontrolling interests of consolidated affiliates and cash dividends paid on common stock partially offset by net principal borrowings on debt.

For the three months ended December 31, 2024, net cash used in investing activities was $203.7 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended December 31, 2024 was $150.9 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.

For the year ended December 31, 2025, net cash used in investing activities was $764.6 million and resulted primarily from capital expenditures. Net cash used in financing activities during the year ended December 31, 2025 was $431.2 million and resulted primarily from repurchases of common stock,  distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock and net debt payments.

For the year ended December 31, 2024, net cash used in investing activities was $653.3 million and resulted primarily from capital expenditures. Net cash used in financing activities during the year ended December 31, 2024 was $330.6 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.

Encompass Health Corporation and Subsidiaries
Forward-Looking Statements

Statements contained in this press release and the supplemental information which are not historical facts, such as those relating to the business, strategy, outlook, growth targets and guidance considerations, dividend strategies, effective income tax rates, cost trends, legislative and regulatory developments or their impacts, financial guidance, ability to return value to shareholders, projected capital expenditures, acquisition opportunities, development projects, addressable market size, other balance sheet and cash flow plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, infectious disease outbreak, including the speed, depth, geographic reach and duration of its spread, which could decrease our patient volumes and revenues and lead to staffing and supply shortages and associated cost increases; Encompass Health's infectious disease prevention and control efforts; the demand for Encompass Health's services, including based on any downturns in the economy and consumer confidence in patient care; the price of Encompass Health's common stock as it affects Encompass Health's willingness and ability to repurchase shares and the financial and accounting effects of any repurchases; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health, including any matters related to yet undiscovered issues, if any, in acquired operations; Encompass Health's ability to attract and retain key management personnel; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners' information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability; Encompass Health's ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures consistent with its growth strategy; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs, including group medical expenses; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis, including as part of the review choice demonstration; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing such as the transforming episode accountability model and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any instability or uncertainty related to trade war, armed conflict or an act of terrorism, governmental impasse over approval of the United States federal budget, an increase in the debt ceiling, or an international sovereign debt crisis; the increase in the cost of, or the decrease in the availability of, construction materials and necessary supplies, including as a result of tariffs and import restrictions; the increase in the costs of defending and insuring against alleged professional liability claims, and Encompass Health's ability to predict the estimated costs related to such claims; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including Encompass Health's Form 10‑K for the year ended December 31, 2025, when filed.

Media Contact
Polly Manuel, 205 969-4532
polly.manuel@encompasshealth.com

Investor Relations Contact
Mark Miller, 205 970-5860
mark.miller@encompasshealth.com

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SOURCE Encompass Health Corp.

FAQ

What were Encompass Health (EHC) Q4 2025 revenues and growth rates?

Q4 2025 net operating revenue was $1,544.6 million, up 9.9% year-over-year. According to the company, growth was driven by higher discharges and net patient revenue per discharge improving 4.1% versus Q4 2024.

What 2026 guidance did Encompass Health (EHC) provide for adjusted EPS and EBITDA?

Encompass Health guided adjusted EPS of $5.81 to $6.10 and Adjusted EBITDA of $1,340 to $1,380 million. According to the company, those ranges reflect expected volume, pricing and planned capacity additions for 2026.

How did Encompass Health (EHC) perform on cash flow and free cash flow in Q4 2025?

Cash flows from operations were $346.0 million and adjusted free cash flow was $235.4 million in Q4 2025. According to the company, operating cash improved about 24.1% year-over-year, supporting capital expansion and balance sheet strength.

What operational expansion did Encompass Health (EHC) report in 2025?

Encompass Health added 517 inpatient rehabilitation beds via eight new hospitals and 127 beds added to existing hospitals in 2025. According to the company, these additions increased capacity to meet rising demand from an aging population.

When and how can investors access Encompass Health (EHC) Q4 2025 earnings call?

The company will host a conference call at 10:00 a.m. ET on February 6, 2026, accessible by phone and live webcast. According to the company, supplemental materials will be posted on its investor website for reference during the call.