Enhabit Inc
Q1 2025 Earnings
Market Reaction
Did EHAB Beat Earnings? Q1 2025 Results
Enhabit Home Health & Hospice delivered a sharply profitable first quarter in 2025, with adjusted diluted EPS of $0.10 beating the $0.06 consensus estimate by 60.26%, even as revenue of $259.90 million came in 2.33% below expectations and slipped 0.9% year over year. The standout driver was the hospice segment, where revenue surged 20.5% to $59.30 million on a 12.3% rise in average daily census, and Adjusted EBITDA margins expanded to 25.3% from 18.5%, reflecting improved clinical productivity and disciplined cost management. Home health revenue declined 5.9% to $200.60 million, though sequential ADC growth and a new national payer contract signed in late 2024 signaled a pivot from volume replacement toward genuine growth. The company also meaningfully strengthened its balance sheet, reducing bank debt by $25.00 million in the quarter and exiting its covenant relief period one quarter ahead of schedule, with plans to open 13 new hospice locations in 2025 supporting its de novo growth strategy. Enhabit reaffirmed full-year guidance of $1.05 to $1.08 billion in revenue and Adjusted EBITDA of $101.00 to $107.00 million.
- Hospice average daily census increased 12.3% year over year with ADC growth every month since January 2024
- Hospice Adjusted EBITDA increased 64.8% year over year driven by improved clinical productivity
- Home health non-Medicare admissions increased 7.4% year over year aided by key national contract signed in December 2024
- Home health cost per patient day decreased 2.4% year over year on improved clinical staff productivity
- Home health total ADC grew 3.7% sequentially, exiting Q1 2025 above prior year levels
- Consolidated Adjusted EBITDA grew 5.1% year over year and 6.0% sequentially
- Gain on sale of Medalogix investment contributed $14.7 million net of tax to net income
- Home office G&A expenses decreased 1.3% due to cost control initiatives
- Gross margin expanded to 49.9% from 48.9% year over year
“Enhabit's first quarter 2025 results are a product of steadfast execution of our strategies. Home health census grew 3.7% sequentially and hospice census grew 12.3% year over year. The combination of strong growth, improved profitability and continued balance sheet improvements resulted in a leverage ratio now below 4.5 times. This enables us to formally exit the covenant relief period restrictions in our credit agreement and allows us to benefit from improved pricing on our debt and added flexibility going forward.”
Enhabit CEO, on the earnings call
Forward Guidance & Outlook
Enhabit reaffirmed its full-year 2025 guidance as of May 7, 2025: net service revenue of $1,050 to $1,080 million, Adjusted EBITDA of $101 to $107 million, and Adjusted EPS of $0.41 to $0.51. Key assumptions include home health ADC growth of 4-5%, home health unit revenue per patient day decline of 0.5% to flat, home health cost per day increase of 2-3%, hospice ADC growth of 7-8.5%, hospice revenue per patient day increase of 4-5%, hospice cost per patient day increase of 2-3%, a tax rate of approximately 25%, and diluted share count of approximately 51.6 million. Adjusted free cash flow is expected in the range of $47 to $58 million. The company expects to become a cash taxpayer in 2025.
EHAB YoY Financials
EHAB Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.