Enhabit, Inc. Reports $264.8M Revenue and $19.2M Net Income in Q1 2026

Enhabit, Inc. reported a net service revenue of $264.8 million for the first quarter of 2026, reflecting a 1.9% increase from $259.9 million in the same period of 2025. The company's net income attributable to Enhabit, Inc. rose to $19.2 million, up 7.9% from $17.8 million year-over-year. The increase in revenue was driven by a 6.2% rise in the hospice segment, which generated $63.0 million, and a 0.6% increase in the home health segment, which brought in $201.8 million. The overall gross margin, excluding depreciation and amortization, was $130.6 million, a slight increase from $129.7 million in the prior year.

The company experienced a notable reduction in general and administrative expenses, which decreased by 10% to $96.7 million, primarily due to a $17.7 million gain from a legal settlement. This decrease was partially offset by increased selling-related and back-office support expenses. Additionally, depreciation and amortization expenses fell by 27% to $4.6 million, attributed to several intangible assets becoming fully amortized. Operating income surged by 84.3% to $29.3 million compared to $15.9 million in the previous year.

Enhabit continues to expand its operational footprint, managing 251 home health agencies and 117 hospice locations across 35 states as of March 31, 2026. The company has not closed or consolidated any branches during the quarter and does not anticipate further closures for the remainder of the year. The company is also in the process of a merger agreement with Anchor Parent, LLC, which is expected to close in the second quarter of 2026, subject to customary closing conditions. If completed, this merger will result in Enhabit becoming a wholly-owned subsidiary of Anchor Parent, and its common stock will no longer be publicly traded.

In terms of operational metrics, the home health segment reported a decrease in Medicare admissions and completed episodes, while non-Medicare admissions increased by 16.8%. The average daily census for the hospice segment rose by 9.3%, indicating growth in patient care. The company’s cash and cash equivalents increased to $50.0 million from $43.6 million at the end of 2025, with $37.5 million available under its revolving credit facility. Enhabit’s management remains focused on maintaining compliance with financial covenants under its credit agreements while navigating the challenges posed by inflation and labor costs in the healthcare sector.

Looking ahead, Enhabit anticipates continued revenue growth driven by its expanding service offerings and operational efficiencies. The company is closely monitoring changes in Medicare reimbursement rates, which significantly impact its revenue, and expects to benefit from a proposed 2.4% increase in hospice payments for fiscal year 2027. Management is committed to enhancing operational efficiencies and maintaining a competitive edge in the home health and hospice markets.