BIRMINGHAM, Ala., April 30, 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 first quarter ended March 31, 2026.
Summary results
Growth
Q1 2026
Q1 2025
Dollars
Percent
(In Millions, Except Per Share Data)
Net operating revenue
$ 1,586.6
$ 1,455.4
$ 131.2
9.0 %
Income from continuing operations attributable to Encompass Health per diluted share
1.77
1.48
0.29
19.6 %
Adjusted earnings per share
1.60
1.37
0.23
16.8 %
Cash flows provided by operating activities
313.1
288.6
24.5
8.5 %
Adjusted EBITDA
348.8
313.6
35.2
11.2 %
Adjusted free cash flow
193.8
222.4
(28.6)
(12.9) %
(Actual Amounts)
Discharges
67,763
64,985
4.3 %
Same-store discharge growth
1.6 %
Net patient revenue per discharge
$ 22,633
$ 21,816
3.7 %
See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure.
"We are very pleased with our start to 2026 as first quarter revenue increased 9.0% and Adjusted EBITDA grew 11.2%," said Mark Tarr, President and Chief Executive Officer. "During the quarter, we continued to expand our capacity to treat patients in need of inpatient rehabilitation services, opening a new 49-bed hospital in Irmo, South Carolina, and adding 44 beds across existing facilities. For the full-year 2026, we expect to open eight hospitals with a total of 389 beds and add approximately 175 beds to existing hospitals. Our value proposition and operating strategy continue to be validated and we remain highly optimistic about the long-term prospects of our business."
2026 Guidance
The Company increased its full-year guidance as follows:
Full-Year 2026 Guidance
Previous Guidance
Updated Guidance
(In Millions, Except Per Share Data)
Net operating revenue
$6,365 to $6,465
$6,375 to $6,470
Adjusted EBITDA
$1,340 to $1,380
$1,350 to $1,380
Adjusted earnings per share from continuing operations attributable to Encompass Health
$5.81 to $6.10
$5.89 to $6.11
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, May 1, 2026 to discuss its results for the first quarter of 2026. 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 EHCQ126. 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 174 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "March 2026 Form 10-Q"), when filed, as well as the Company's Current Report on Form 8-K filed on April 30, 2026 (the "Q1 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 May 1, 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 Q1 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q1 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 $125 million
Amortization of debt-related items - approximately $10 million
The Q1 Earnings Form 8-K and, when filed, the March 2026 Form 10-Q 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)
Three Months Ended March 31,
2026
2025
(In Millions, Except Per Share Data)
Net operating revenues
$ 1,586.6
$ 1,455.4
Operating expenses:
Salaries and benefits
818.1
762.3
Other operating expenses
241.9
217.5
Occupancy costs
15.2
14.9
Supplies
64.3
62.2
General and administrative expenses
58.2
52.3
Depreciation and amortization
87.3
79.2
Total operating expenses
1,285.0
1,188.4
Loss on early extinguishment of debt
0.2
—
Interest expense and amortization of debt discounts and fees
31.8
31.8
Other income
(18.7)
(2.5)
Equity in net income of nonconsolidated affiliates
(0.4)
(0.9)
Income from continuing operations before income tax expense
288.7
238.6
Provision for income tax expense
56.4
41.6
Income from continuing operations
232.3
197.0
Income (loss) from discontinued operations, net of tax
15.9
(0.5)
Net income
248.2
196.5
Less: Net income attributable to noncontrolling interests
(53.7)
(45.0)
Net income attributable to Encompass Health
$ 194.5
$ 151.5
Weighted average common shares outstanding:
Basic
99.2
100.5
Diluted
100.6
102.1
Earnings per common share:
Basic earnings per share attributable to Encompass Health common shareholders:
Continuing operations
$ 1.80
$ 1.50
Discontinued operations
0.16
—
Net income
$ 1.96
$ 1.50
Diluted earnings per share attributable to Encompass Health common shareholders:
Continuing operations
$ 1.77
$ 1.48
Discontinued operations
0.16
—
Net income
$ 1.93
$ 1.48
Amounts attributable to Encompass Health common shareholders:
Income from continuing operations
$ 178.6
$ 152.0
Income (loss) from discontinued operations, net of tax
15.9
(0.5)
Net income attributable to Encompass Health
$ 194.5
$ 151.5
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, 2026
December 31, 2025
(In Millions)
Assets
Current assets:
Cash and cash equivalents
$ 110.5
$ 72.2
Restricted cash
52.9
30.7
