Encompass Health Reports 12% Revenue Growth to $1.46 Billion in Q2 2025

Encompass Health Corporation reported a significant increase in financial performance for the second quarter of 2025, with net operating revenues reaching $1.46 billion, a 12% increase from $1.30 billion in the same period of 2024. For the first half of 2025, revenues totaled $2.91 billion, up 11.3% from $2.62 billion year-over-year. The company attributed this growth primarily to increased patient volumes and favorable pricing, with a notable rise in Medicare revenues, which accounted for 64.5% of total revenues in the second quarter.

Operating expenses also rose, totaling $1.20 billion for the second quarter, a 10.4% increase from $1.09 billion in the prior year. Salaries and benefits, which comprised a significant portion of operating costs, increased by 9.6% to $767.7 million, reflecting higher staffing levels due to increased patient volumes. Despite the rise in expenses, the company reported a net income of $184.9 million for the quarter, a 26.2% increase compared to $146.5 million in the same quarter of 2024. This resulted in earnings per share of $1.41, up from $1.13 a year earlier.

Strategically, Encompass Health has been expanding its operations, having opened a new 40-bed inpatient rehabilitation hospital in Athens, Georgia, and a 60-bed facility in Fort Myers, Florida, both in 2025. The company also added 51 new beds to existing hospitals and announced plans for several new facilities across various states, including Florida and Texas. As of June 30, 2025, Encompass Health operated 168 inpatient rehabilitation hospitals, with a focus on enhancing its capacity to meet growing demand.

Operationally, the company reported a 7.2% increase in discharges year-over-year, totaling 65,237 for the quarter. The average length of stay for patients decreased slightly to 12.0 days, while occupancy rates improved to 76.6%. The total number of full-time equivalent employees rose to 29,163, reflecting the company's commitment to maintaining adequate staffing levels amid ongoing labor market challenges. Encompass Health's focus on quality care and operational efficiency has positioned it well within the competitive healthcare landscape.

Looking ahead, Encompass Health remains optimistic about its growth prospects, driven by demographic trends such as an aging population and increasing demand for rehabilitation services. The company anticipates continued revenue growth, supported by its strategic investments and expansion plans. However, it also acknowledges potential challenges, including regulatory changes and competition from other healthcare providers. The company is committed to adapting to these challenges while maintaining its focus on delivering high-quality, cost-effective care.