Revenue

FY 2025

$5.4 billion to $5.6 billion "

$5.3 billion to $5.5 billion "

lowered

Adjusted EBITDA

FY 2025

$520 million to $540 million "

$510 million to $530 million "

lowered

Adjusted EPS

FY 2025

$1.09 to $1.19 "

$1.09 to $1.19 "

no change

Capital Expenditures

FY 2025

$160 million to $200 million "

$160 million to $200 million "

no change

Inpatient Rehab Performance

Q2, Q3, and Q4 2024 calls reported revenue increases of 11%–14%, modest growth in adjusted EBITDA and stable same‐store occupancy; however, start‐up losses and integration costs impacted margins ( " " " )

Q1 2025 reported a 16% revenue increase, 15% growth in adjusted EBITDA, a 7% rise in rate per patient day, and an occupancy overall of 82% (with same‑store occupancy at 87%) ( " )

Improved revenue and EBITDA growth with continued expansion, though new facilities have lowered overall occupancy while same‑store performance remains solid.

Expansion Pipeline

Q2–Q4 2024 discussions detailed aggressive expansion plans including new bed additions, acquisitions, and joint ventures (e.g. 94 beds added in Q4, multiple new projects announced in Q3 and Q2) ( " " " )

Q1 2025 confirmed new unit openings (e.g. 18, 12, and 20-bed units) and detailed further projects through 2026–2027 adding 440 additional beds ( " )

Robust and continuous expansion efforts with a steady stream of new projects, reflecting a long‐term growth strategy.

Outpatient Rehab Operational Efficiency and Technology Enhancements

Q2, Q3, and Q4 2024 calls discussed technology rollouts, clinical efficiency improvements, and contracting gains (e.g. higher net revenue per visit, productivity improvements, and scheduled major technology updates) ( " " " )

Q1 2025 highlighted the rollout of new technology and improvements in contracting (4%–6% increases), contributing to margin improvement strategies ( " )

Ongoing emphasis on tech-driven productivity and efficiency, with initiatives now fully underway to bolster margins and clinical throughput.

LTAC Regulatory and Operational Challenges

Q2–Q4 2024 mentioned regulatory changes such as increased high‑cost outlier thresholds and updates to CMS rules, with relatively moderate emphasis on operational challenges ( " " " )

Q1 2025 provided detailed discussion on LTAC challenges: nearly doubled high‑cost outlier threshold, introduction of the 20% transmittal rule causing sharp cost increases, and active engagement with CMS ( " " " )

Regulatory pressures have intensified with sharper cost impacts, prompting more active advocacy and strategic shifts in managing LTAC operations.

Leverage Reduction and Financial Flexibility

Consistently across Q2–Q4 2024, the company focused on debt reduction, refinancing activities, and lower interest expenses, with reported leverage ratios around 3.2x–3.5x and strong revolving credit availability ( " " " " )

Q1 2025 continued the trend with further debt reduction (net leverage at 3.4x) and lower interest expenses (decreased from $40.7 million to $29.1 million) ( " )

Steady improvement in financial flexibility through ongoing deleveraging and refinancing, reinforcing a strong balance sheet going forward.

Increased Borrowing Costs and Financing Conditions

In Q2–Q4 2024 calls, there was emphasis on refinancing details, shifts in interest rate spreads (e.g. moving from a 300 bp spread to SOFR plus 4%), and rising borrowing cost expectations impacting guidance ( " " " " )

Q1 2025 did not specifically address increased borrowing costs; details focused on lower interest expense and stable financing activity ( " )

Reduced emphasis on rising borrowing costs in the current period may indicate stabilization relative to earlier periods when this was more pressing.

Labor Cost Stabilization Post-Pandemic

Q2, Q3, and Q4 2024 highlighted normalized agency nurse costs, lower agency utilization, decreases in sign‑on bonuses, and overall SWB ratios trending down, reflecting post‑pandemic stabilization ( " " " )

Q1 2025 has no specific mention of labor cost stabilization, suggesting it is no longer a focus or is considered to be stable ([document])

A diminishing emphasis on labor cost issues, implying that stabilization has likely been achieved and is no longer a headline concern.

Facility Expansion Integration Costs and Start‑Up Losses

Q2–Q4 2024 discussions detailed tangible start‑up losses (ranging from $3 million to $5 million) and integration costs impacting margins, particularly in the inpatient rehab division ( " " " )

Q1 2025 mentioned that start‑up losses remain relatively the same as the previous year, with no new emphasis on integration costs ( " )

Stable recurring costs, signaling that while these impacts continue, they are expected and factored into ongoing growth plans.

Regulatory Engagement and Policy Uncertainties

Q2 2024 provided regulatory updates on CMS rules, but Q3 and Q4 2024 did not emphasize engagement or policy uncertainties ( " " )

Q1 2025 introduced proactive engagement with CMS, with active advocacy to address LTAC thresholds and the transmittal rule, marking a strategic move in regulatory interactions ( " " )

An emergent focus on regulatory advocacy, reflecting a shift towards more proactive engagement to address policy uncertainties.

Occupancy and Patient Volume Trends

Q2–Q4 2024 consistently reported occupancy and volume metrics across divisions, with inpatient rehab occupancy in the mid-80%s, critical illness recovery occupancy around 67–68%, and modest patient day increases ( " " " )

Q1 2025 showed inpatient rehab occupancy at 82% (down by 5% from 87% last year but same‑store occupancy unchanged), critical illness recovery occupancy up from 71% to 73%, and a 6% increase in average daily census ( " )

Mixed trends where growing patient volumes and stable same‑store occupancy are contrasted by lower overall occupancy due to the onboarding of new facilities.

SWB Reduction and Productivity Measures

Q2–Q4 2024 called out explicit reductions in SWB ratios, declines in agency costs and utilization, and productivity measures driven by new technology and improved scheduling ( " " " )

Q1 2025 did not specifically mention SWB reduction measures, though technology improvements were noted in outpatient initiatives ( " )

Less emphasis in the current period, suggesting that earlier gains in SWB reduction and productivity may have stabilized and shifted focus elsewhere.