Encompass Health Corporation reported a significant increase in its financial performance for the third quarter of 2025, with net operating revenues reaching $1.48 billion, a 9.4% increase from $1.35 billion in the same period last year. For the nine months ending September 30, 2025, revenues totaled $4.39 billion, up 10.6% from $3.97 billion in 2024. The company attributed this growth primarily to increased patient volumes and favorable pricing adjustments. Net income attributable to Encompass Health also rose to $126.5 million for the third quarter, compared to $108.2 million in 2024, marking a 16.9% increase.
Operating expenses for the third quarter increased to $1.23 billion, up 8.1% from $1.14 billion in the prior year, driven by higher salaries and benefits, which rose by 7.2% to $784.8 million. Other operating expenses also saw a notable increase of 14.2%, reflecting the company's ongoing expansion efforts and rising provider taxes. Despite these increases, the company managed to improve its operating efficiency, with total operating expenses as a percentage of net operating revenues decreasing from 84.5% to 83.5% year-over-year.
Strategically, Encompass Health has been expanding its footprint, having opened several new inpatient rehabilitation hospitals in 2025, including facilities in Georgia and Florida. The company also announced plans for additional hospitals in various states, aiming to add approximately 140 new beds to its existing capacity. As of September 30, 2025, Encompass Health operated 170 inpatient rehabilitation hospitals across 39 states and Puerto Rico, with a focus on enhancing its service offerings in key markets.
In terms of operational metrics, the company reported a 5.0% increase in discharges year-over-year, totaling 65,839 for the quarter. The average length of stay remained stable at 12.1 days, while occupancy rates improved to 76.2%. The total number of full-time equivalents (FTEs) increased by 4.2% to 29,552, reflecting the company's commitment to maintaining high-quality care amid staffing challenges in the healthcare sector.
Looking ahead, Encompass Health remains optimistic about its growth prospects, driven by demographic trends such as an aging population and an expected increase in Medicare enrollees. The company is focused on delivering high-quality, cost-effective care while navigating the complexities of the healthcare regulatory environment. Encompass Health's strong financial position, characterized by a well-capitalized balance sheet and significant liquidity, positions it well to adapt to changes in reimbursement and continue its expansion efforts.
About Encompass Health Corp
Encompass Health is a leading provider of post-acute healthcare services, primarily operating inpatient rehabilitation hospitals across the U.S. The company specializes in rehabilitative care for patients with neurological, orthopedic, and other medical conditions, serving mostly Medicare and managed care patients. Its business model emphasizes high-quality outcomes, cost efficiency, strategic partnerships, and technological innovation to deliver comprehensive, patient-centered recovery services.
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