Encompass Health Corporation · NYSE:EHC
Encompass Health — Q3 2025 Earnings Presentation
33 slides from Encompass Health's earnings presentation, Oct 30, 2025
Slide 1: 2025 Third Quarter Earnings Call
2025 Third Quarter Earnings Call October 30, 2025 Supplemental information
Slide 2: Forward-looking statements
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
Slide 3: Table of contents
Table of contents Summary ................................................................................................................................................................................ 4 Revenue .......................................................................................
Slide 4: Q3 2025 Summary
Q3 2025 Summary Q3 9 Months ($ in millions, except per share data) 2025 2024 %△ 2025 2024 %△ Encompass Health Net operating revenue $ 1,477.5 $ 1,351.0 9.4 % $ 4,390.6 $ 3,968.2 10.6 % Adjusted EBITDA $ 300.1 $ 269.3 11.4 % $ 932.3 $ 814.1 14.5 % Adjusted EPS $ 1.23 $ 1.03 19.4 % $ 3.99 $ 3.26 22.4
Slide 5: Revenue
Revenue Q3 Q3 % Change* ($ in millions) 2025 2024 Net operating revenue: Inpatient $ 1,427.3 $ 1,316.2 8.4% Outpatient and other 50.2 34.8 44.3% Total revenue $ 1,477.5 $ 1,351.0 9.4% (Actual Amounts) Discharges 65,839 62,715 5.0% New-store discharge growth 2.1% Same-store discharge growth 2.9% Net
Slide 6: Adjusted EBITDA
Adjusted EBITDA(2) Q3 % of Q3 % of ($ in millions) 2025 Revenue 2024 Revenue Net operating revenue $ 1,477.5 $ 1,351.0 Operating expenses: Salaries and benefits (784.8) 53.1 % (732.1) 54.2 % Other operating expenses(a) (229.2) 15.5 % (201.8) 14.9 % Supplies (64.6) 4.4 % (60.6) 4.5 % Occupancy costs
Slide 7: Earnings per share - as reported
Earnings per share - as reported Q3 9 Months ($ in millions, except per share data) 2025 2024 2025 2024 Adjusted EBITDA $ 300.1 $ 269.3 $ 932.3 $ 814.1 Depreciation and amortization (82.4) (78.4) (241.5) (221.6) Interest expense and amortization of debt discounts and fees (30.8) (34.9) (93.0) (104.4
Slide 8: Adjusted earnings per share
Adjusted earnings per share(5) 9 Months Q3 2025 2024 2025 2024 Diluted earnings per share, as reported $ 1.24 $ 1.07 $ 4.13 $ 3.31 Adjustments, net of tax: Asset impairment impact(3) — — — 0.02 Income tax adjustments (6) — (0.02) (0.12) (0.05) Change in fair market value of marketable securities (0.
Slide 9: 2025 YTD Adjusted free cash flow
2025 YTD Adjusted free cash flow(7) ($ in millions) $118.2 $35.4 $11.3 $(6.7) $(75.5) $582.5 $499.8 Adjusted free cash Adjusted Working capital Cash interest Cash tax payments, Maintenance capital Adjusted free cash flow 9 mos. 2024 EBITDA and other payments net of refunds expenditures flow 9 mos. 2
Slide 10: 2025 Guidance - updated as of October 29, 2025
2025 Guidance - updated as of October 29, 2025 Previous Guidance Updated Guidance ($ in millions, except per share data) Net Operating Revenue $5,880 to $5,980 $5,905 to $5,955 Adjusted EBITDA(2) $1,220 to $1,250 $1,235 to $1,255 Adjusted earnings per share from continuing operations attributable $5
Slide 11: 2025 Guidance considerations - updated as of October 29, 2025
2025 Guidance considerations - updated as of October 29, 2025 u Pricing Medicare pricing increase of approximately 2.9% for Q4 Managed Care pricing increase of approximately 3.0% Bad debt reserves of 2.0% to 2.25% of revenue u Labor SWB per FTE* increase of approximately 3.25% u Capacity add
Slide 12: Adjusted free cash flow assumptions
Adjusted free cash flow(7) assumptions 9 Months 2024 2025 Certain cash flow items 2025 ($ in millions) Actuals Assumptions Actuals Cash interest payments Decreased cash interest (net of amortization of debt $85.8 $127.7 $110 to $120 payments due to repayment of $250 million of Senior discounts and f
Slide 13: Uses of free cash flow
Uses of free cash flow 9 Months 2025 2024 2025 ($ in millions) Actuals Actuals Assumptions IRF bed expansions $116.5 $96.8 $185 to $200 New IRFs Growth - De novos 250.1 358.1 385 to 395 - Replacement IRFs and other — 3.0 TBD $366.6 $457.9 $570 to $595 Debt Change in total debt(9) $64.9 $214.8 TBD re
Slide 14: Appendix
Appendix
Slide 15: Encompass Health: Largest owner and operator of rehabilitation hospitals
Encompass Health Largest owner and operator of rehabilitation hospitals Company profile as of 09/30/25 170 Rehabilitation hospitals “IRFs” 66 are joint ventures 16 39 IRFs under States and development** Puerto Rico Key statistics Rehabilitation hospitals “IRFs” trailing four quarters De novos under
Slide 16: Growth targets, fundamentals and value drivers
Growth targets, fundamentals and value drivers u 2023 - 2027 Growth targets 6 to 10 de novos per year 80 to 120 bed additions per year 6% to 8% discharge CAGR u Large, under penetrated, and growing inpatient rehabilitation market Large addressable market indicated by low conversion rate of p
Slide 17: Development activity
Development activity Inpatient Rehabilitation Hospitals opened or under development Joint Expected venture open date 2025 2026 2027 16 De novos* Athens, GA ü 40 — — IRF development projects Fort Myers, FL ü 60 — — announced and underway** Daytona Beach, FL 50 — — Danbury, CT 40 — — St. Petersburg, F
Slide 18: Debt maturity profile - face value
Debt maturity profile - face value As of September 30, 2025* ($ in millions) Callable Callable at par at 102.375 $873 Available Callable beginning April 2026 $80 Drawn + $47 reserved Revolver for LCs capacity $800 $800 Senior Notes Senior Notes 4.5% 4.75% $400 Senior Notes 4.625% 2025 2026 2027 2028
Slide 19: Debt schedule
Debt schedule Change in September 30, December 31, Debt vs. ($ in millions) 2025 2024 YE 2024 Advances under $1 billion revolving credit facility $ 80.0 $ 20.0 $ 60.0 Bonds Payable: 5.75% Senior Notes due 2025 — 99.8 (99.8) 4.50% Senior Notes due 2028 791.1 788.4 2.7 4.75% Senior Notes due 2030 786.
Slide 20: New-store/same-store growth
New-store/same-store growth Kissimmee, FL (50 beds) Clermont, FL (50 beds) Atlanta, GA (40 beds) Bowie, MD (60 beds) Louisville, KY (40 beds) Daytona Beach, FL (50 beds) Danbury, CT (40 beds) Prosper, TX (40 beds) Houston, TX Fitchburg, WI (56 beds) (61 beds) Knoxville, TN (73 beds) Fort Myers, FL O
Slide 21: Payment sources (percent of revenues)
Payment sources (percent of revenues) Q3 9 Months Full Year 2025 2024 2025 2024 2024 Medicare 64.1 % 65.4 % 65.2 % 64.8 % 65.1 % Medicare Advantage 16.6 % 16.4 % 16.7 % 16.9 % 16.8 % Managed care 11.1 % 11.0 % 10.8 % 10.9 % 10.8 % Medicaid 3.4 % 3.4 % 3.1 % 3.4 % 3.3 % Other third-party payors 0.7 %
Slide 22: Operational metrics
Operational metrics Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full Year 2025 2025 2025 2024 2024 2024 2024 2024 Net patient revenue-inpatient $ 1,427.3 $ 1,413.7 $ 1,417.7 $ 1,366.1 $ 1,316.2 $ 1,265.5 $ 1,282.7 $ 5,230.5 Net patient revenue-outpatient and other revenues 50.2 44.0 37.7 38.9 34.8 35.7 33.3 142.7 Net oper
Slide 23: Share information
Share information Weighted Average for the Period Q3 9 Months Full Year (in millions) 2025 2024 2025 2024 2024 2023 2022 Basic shares outstanding 100.5 99.9 100.5 99.9 99.9 99.5 99.2 Restricted stock awards, dilutive stock options, and restricted stock units 1.8 2.2 1.8 2.3 2.3 1.8 1.2 Diluted share
Slide 24: Net cash provided by operating activities reconciled to Adjusted EBITDA
Net cash provided by operating activities reconciled to Adjusted EBITDA(2) Q3 9 Months Full Year ($ in millions) 2025 2024 2025 2024 2024 Net cash provided by operating activities $ 270.8 $ 267.8 $ 829.6 $ 724.0 $ 1,002.8 Interest expense and amortization of debt discounts and fees 30.8 34.9 93.0 10
Slide 25: Reconciliation of net income to Adjusted EBITDA
Reconciliation of net income to Adjusted EBITDA(2) Q3 9 Months Full Year ($ in millions) 2025 2024 2025 2024 2024 Net income $ 174.6 $ 147.1 $ 556.0 $ 432.4 $ 596.6 Loss from discontinued operations, net of tax, attributable to Encompass Health 0.4 0.7 1.8 3.2 2.8 Net income attributable to noncontr
Slide 26: Reconciliation of net cash provided by operating activities to adjusted free cash flow
Reconciliation of net cash provided by operating activities to adjusted free cash flow(7) Q3 9 Months Full Year ($ in millions) 2025 2024 2025 2024 2024 Net cash provided by operating activities $ 270.8 $ 267.8 $ 829.6 $ 724.0 $ 1,002.8 Impact of discontinued operations 0.6 1.0 2.5 3.7 3.1 Net cash
Slide 27: Adjusted EPS - Q3 2025
Adjusted EPS(5) - Q3 2025 For the Three Months Ended September 30, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 300.1 $ — $ — $ 300.1 Depreciation and amortization (82.
Slide 28: Adjusted EPS - Q3 2024
Adjusted EPS(5) - Q3 2024 For the Three Months Ended September 30, 2024 Adjustments Loss on Change in Fair Early Market Value of As Exting. Income Tax Marketable As Reported of Debt Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 269.3 $ — $ — $ — $ 269
Slide 29: Adjusted EPS - YTD Q3 2025
Adjusted EPS(5) - YTD Q3 2025 For the Nine Months Ended September 30, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 932.3 $ — $ — $ 932.3 Depreciation and amortizatio
Slide 30: Adjusted EPS - YTD Q3 2024
Adjusted EPS(5) - YTD Q3 2024 For the Nine Months Ended September 30, 2024 Adjustments Change in Fair Loss on Market Asset Early Value of As Impairment Exting. Income Tax Marketable As Reported Impact of Debt Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITD
Slide 31: Adjusted EPS - 2024
Adjusted EPS(5) - 2024 For the Year Ended December 31, 2024 Adjustments Change in Fair Loss on Market Asset Early Value of As Impairment Exting. Income Tax Marketable As Reported Impact of Debt Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $1,103.7 $ —
Slide 32: End notes
End notes (1) Historically, we have used the term “provider tax revenues” to refer to “Medicaid supplemental payments,” both of which represent amounts received in connection with state Medicaid programs that are not included in the specific Medicaid claim reimbursements we receive. These amounts in
Slide 33: End notes (continued)
End notes (continued) (8) Our inpatient rehabilitation hospitals (“IRFs”) may operate one or more satellite and/or remote locations. Satellite and remote locations are located proximate to one of our existing IRFs but do not have a separate Medicare provider number. As such, they are considered a be