On February 6, 2025, Encompass Health Corp (EHC, Financial), the largest owner and operator of inpatient rehabilitation hospitals in the United States, announced its financial results for the fourth quarter ending December 31, 2024. The company reported a 12.7% increase in net operating revenue, driven by a 7.8% growth in discharges. Encompass Health also provided its financial guidance for 2025, projecting continued growth in revenue and earnings.
Positive Highlights
- Net operating revenue increased by 12.7% to $1,405 million compared to Q4 2023.
- Income from continuing operations per diluted share rose by 25.5% to $1.18.
- Adjusted EBITDA grew by 13.6% to $289.6 million.
- Cash flows from operating activities increased by 38.7% to $278.8 million.
Negative Aspects
- Net cash used in investing activities was $203.7 million, primarily due to capital expenditures.
- Net cash used in financing activities was $150.9 million, driven by debt payments and stock repurchases.
Financial Analyst Perspective
Encompass Health Corp's Q4 2024 results demonstrate robust financial health, with significant increases in revenue and earnings per share. The company's ability to grow its discharge rates and maintain strong cash flow positions it well for future expansion. The 2025 guidance suggests confidence in continued growth, with projected net operating revenue between $5,800 million and $5,900 million and adjusted EBITDA between $1,160 million and $1,200 million.
Market Research Analyst Perspective
Encompass Health Corp's performance in Q4 2024 reflects a strong market position in the inpatient rehabilitation sector. The company's strategic expansion, including the addition of 427 beds in 2024, supports its growth trajectory. The positive discharge growth and revenue per discharge indicate effective operational strategies and market demand for rehabilitation services. The 2025 guidance aligns with industry trends, suggesting a favorable outlook for the company.
Frequently Asked Questions
Q: What was the net operating revenue for Q4 2024?
A: The net operating revenue for Q4 2024 was $1,405 million, a 12.7% increase from Q4 2023.
Q: How much did the adjusted EBITDA increase in Q4 2024?
A: Adjusted EBITDA increased by 13.6% to $289.6 million in Q4 2024.
Q: What is the 2025 financial guidance for Encompass Health Corp?
A: The 2025 guidance projects net operating revenue between $5,800 million and $5,900 million, with adjusted EBITDA between $1,160 million and $1,200 million.
Read the original press release here.
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