Ryan Langston

Brian Tanquilut

Albert Rice

A.J. Rice

Benjamin Mayo

Jamie Perse

Meghan Holtz

- Enhabit reported strong **Q2 2025 financial results**, with consolidated net service revenue growing **2.4% sequentially** to **$266.1 million** and Adjusted EBITDA increasing **1.2% sequentially** to **$26.9 million**.  **[1803737_2162441:9]** 
- The company demonstrated continued **balance sheet improvement**, reducing total debt by **$85 million since Q4 2023** and lowering its leverage ratio to **4.3x** as of June 30, 2025, from **4.9x** at December 31, 2024.  **[1803737_2162441:8]** **[1803737_2162441:10]** 
- Both Home Health and Hospice segments showed **growth momentum** in Q2 2025, with Home Health net service revenue growing **2.6% sequentially** to **$205.9 million** and Hospice average daily census (ADC) growing **12.3% year over year**.  **[1803737_2162441:9]** 
- Enhabit is focused on **growth initiatives** for 2025, including expanding home health and hospice census, opening de novo locations, and optimizing existing ones, supported by favorable demographic trends and the cost efficiency of home health care.  **[1803737_2162441:7]** **[1803737_2162441:4]**

Enhabit Reports Strong Q2 2025 Financial Performance and Continued Debt Reduction

- Enhabit, which spun out from Encompass on **July 1, 2022**, operates **249 home health locations** and **114 hospice locations** across **34 states**.  **[1803737_2162572_0]** 
- The company has successfully implemented a payer strategy, contracting with the majority of Medicare Advantage plans and securing a **double-digit rate increase** with a large national payer.  **[1803737_2162572_0]** **[1803737_2162572_5]** **[1803737_2162572_8]** 
- Enhabit is preparing for a proposed **6.4% CMS cut**, which could result in an estimated **$35 million to $40 million headwind** on an unmitigated basis, by piloting a Visits Per Episode (VPE) initiative, targeting G&A savings, and leveraging substantial growth in its hospice platform.  **[1803737_2162572_1]** 
- The VPE pilot aims to reduce visits from just under **14** (current) towards an industry average of **12**, with each **half of a visit per episode** reduction potentially yielding **$5 million to $8 million annually** in benefit.  **[1803737_2162572_2]** 
- The company has made **$85 million in debt prepayments** since Q3 2023, including **$10 million in Q3** to date, reducing annualized interest expense by **over $17 million**.  **[1803737_2162572_3]**

Enhabit (EHAB)