Q1 2025 Encompass Health Corp Earnings Call Transcript
Key Points
- First quarter revenues increased by 10.6% and adjusted EBITDA rose by 14.9%, indicating strong financial performance.
- Total discharge growth of 6.3% was achieved, with same-store discharges growing by 4.4%, showcasing robust operational performance.
- The company opened a new 40-bed joint venture hospital in Athens, Georgia, and plans to open six De Novos with a total of 300 beds, reflecting strategic expansion efforts.
- Encompass Health Corp (EHC) reported a decrease in premium labor costs, with contract labor costs down by $2.9 million from the previous year.
- The company increased its 2025 guidance for net operating revenue, adjusted EBITDA, and adjusted earnings per share, demonstrating confidence in future performance.
- Benefits expense per FTE increased by 14%, driven by an increase in the severity and frequency of group medical claims, which could impact future profitability.
- The company anticipates elevated group medical expense growth in Q2, which may affect financial results.
- Despite a decrease in contract labor costs, the company still faces challenges in maintaining labor efficiency and managing staffing levels.
- The company's exposure to regulatory developments and potential changes in Medicare and Medicaid reimbursement rates pose risks to future financial performance.
- The high occupancy rates and demand for inpatient rehabilitation services may strain existing resources and require significant capital investment for expansion.
Good morning everyone and welcome to Encompass Health's first quarter 2025 earnings conference call. (Operator Instructions) Today's conference call is being recorded. If you have any objections to potentially being recorded, you may disconnect at this time. I'll now turn the call over to Mark Miller, Encompass Health's chief investor relations officer.
Thank you, operator, and good morning, everyone. Thank you for joining Encompass Health's first quarter 2025 earnings call. Before we begin, if you do not already have a copy, the first quarter earnings release supplemental information and related Form 8-K filed with the SEC are available on our website at www.encompasshealth.com.
On page two of the supplemental information, you will find the safe harbor statements, which are also set forth in greater detail on the last page of the earnings release. During the call, we will make forward-looking statements such as
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