Enhabit, Inc.

Consolidated net revenue was $263.6 million, up $10 million or 3.9% year over year. Consolidated adjusted EBITDA was $27 million, up $2.5 million or 10.2% year over year, and adjusted EBITDA margin was 10.2%, up 50 basis points. Home health revenue was $200.5 million, down $0.5 million or 0.2%, with average daily census of 41,451, up 3.7% year over year; home health adjusted EBITDA was $33.9 million, down $2.6 million or 7.1%. Hospice revenue was $63.1 million, up $10.5 million or 20%, with adjusted EBITDA of $17.2 million, up $7.2 million or 72%, and margin of 27.3%. Adjusted free cash flow year-to-date was $64.8 million; the company reduced bank debt by $15.5 million in the quarter and ended with about $57 million in cash and $143.3 million of available liquidity. Management raised full-year guidance to revenue of $1.058 billion to $1.063 billion, adjusted EBITDA of $106 million to $109 million, and adjusted free cash flow of $53 million to $61 million.

Barbara Jacobsmeyer emphasized operational momentum, payer strategy, and the company’s ability to grow despite disruption. She said the team recovered census after a national payer renegotiation, achieved a low double-digit increase in per-visit rate effective August 15, and secured another favorable national payer update effective in November without disrupting patient access. She also highlighted seven straight quarters of sequential hospice census growth, the de novo pipeline, and the rollout of the visits-per-episode management pilot as ways to protect margins and support growth.

Ryan Solomon framed the quarter around improving profitability, free cash flow, and balance sheet strength. He said leverage improved to 3.9x from 5.4x in Q4 2023, lowering annualized cash interest expense by about $19 million versus that period, and noted year-to-date adjusted free cash flow of $64.8 million, with about $45 million normalized for the extra payroll period. He pointed to home office G&A improvement to $24.1 million, or 9.1% of revenue, versus $26.4 million and 9.9% in the prior quarter, and said roughly $1 million to $1.5 million of the sequential G&A improvement appears durable.

Analysts pressed on the new national payer contract, asking about the size of the rate increase and the pipeline of renewals; management declined to disclose the update but said most future national agreements are not due until late next year into early 2027, while regional agreements roll sooner. Questions also focused on hospice seasonality, where Barb Jacobsmeyer said the holiday period is often unpredictable and can be bumpy because some patients wait until after the holidays to elect hospice. On labor, management said applicant flow has improved, clinical headcount is up, and wage inflation is running around the normal 3% merit level, with more pressure in some therapy markets.