Encompass Health Reports Strong Q3 2026 Growth and Raises Full-Year Guidance
Encompass Health (EHC) reported robust third-quarter 2026 financial results, characterized by an 8.9% increase in net operating revenue to $1.61 billion. The company saw significant growth in adjusted EPS, which rose 23.6% year-over-year to $1.52, driven by a 5.7% increase in patient discharges and higher net revenue per discharge due to increased patient acuity. Despite facing temporary headwinds from bad debt expenses caused by a billing system conversion disruption, the company demonstrated strong operational efficiency. Contract labor costs reached their lowest levels since late 2020, and premium labor spend continued its 16-quarter decline. Consequently, management raised its full-year guidance for revenue, adjusted EBITDA, and adjusted EPS. The company is aggressively expanding its footprint, particularly in North Carolina following changes to state laws, and continues to see high demand in specialized segments like VA services, which grew by 21%.
Tickers: $EHC
Topics: discharge growth EBITDA EPS guidance upgrade revenue growth share repurchases