Enhabit, Inc. Reports $266.1M Net Service Revenue with Significant Growth in Hospice Segment

Enhabit, Inc. reported a net service revenue of $266.1 million for the three months ended June 30, 2025, reflecting a 2.1% increase from $260.6 million in the same period of the previous year. For the first half of 2025, the company achieved a revenue of $526.0 million, a slight increase of 0.6% compared to $523.0 million in the first half of 2024. The company’s operating income rose significantly to $16.7 million for the second quarter, up 49.1% from $11.2 million a year earlier, while net income attributable to Enhabit, Inc. was $5.2 million, a substantial increase from a loss of $0.2 million in the prior year.

The financial performance was bolstered by a notable increase in the Hospice segment, which saw a revenue growth of 19.4% in the second quarter, driven by a 12.3% rise in average daily census and a 6.3% improvement in unit revenue per patient day. Conversely, the Home Health segment experienced a revenue decline of 2.0%, attributed to a decrease in unit revenue per patient day, primarily due to a shift towards non-Medicare patients. The overall cost of service, excluding depreciation and amortization, increased by 2.8% in the second quarter, reflecting the company's efforts to manage operational efficiencies amid rising costs.

In terms of strategic developments, Enhabit has been actively managing its branch operations, closing seven Home Health and four Hospice branches in the first half of 2025 based on performance metrics. The company also completed a significant transaction in March 2025, selling its investment in TVG Holdings for approximately $21 million, which resulted in a gain of $19.3 million. This transaction allowed Enhabit to reduce its debt by $20 million, enhancing its financial flexibility.

Operationally, Enhabit maintained a footprint of 249 home health and 114 hospice locations across 34 states as of June 30, 2025. The company reported a total of 42,122 average daily census across its segments, with a slight increase in admissions in the Hospice segment. However, the Home Health segment saw a decrease in admissions and completed episodes, indicating challenges in maintaining volume in that area. The company’s employee headcount remained stable, supporting its operational needs.

Looking ahead, Enhabit faces potential challenges from proposed changes in Medicare reimbursement rates, particularly a projected 6.4% decrease for home health services in 2026. The company is actively engaging in advocacy efforts to mitigate the impact of these changes. Despite these challenges, management remains optimistic about the growth potential in the Hospice segment and is focused on enhancing operational efficiencies to navigate the evolving healthcare landscape.