Encompass Health raises 2026 guidance as Q3 cash flow accelerates
Revenue rose 8.9% and adjusted EBITDA 15.5% year over year, with operating cash flow up 33.7%.
Encompass Health reported third-quarter 2026 net operating revenue of $1.6095 billion, up 8.9% from $1.4775 billion a year earlier. Diluted earnings per share from continuing operations rose to $1.51 from $1.24, while adjusted EPS increased to $1.52 from $1.23.
The inpatient-rehabilitation operator said discharges increased 5.7% to 69,605, including 3.0% same-store growth, and net patient revenue per discharge rose 4.0% to $22,543. Adjusted EBITDA grew faster than revenue, while operating cash flow and adjusted free cash flow showed stronger year-over-year gains.
Encompass increased its 2026 outlook: revenue is now expected at $6.450 billion–$6.500 billion, adjusted EBITDA at $1.395 billion–$1.415 billion, and adjusted EPS at $6.23–$6.37. The prior ranges were $6.410 billion–$6.490 billion, $1.365 billion–$1.395 billion and $6.02–$6.25, respectively. The release did not provide a reliable external consensus comparison.
At September 30, cash and cash equivalents were $76.2 million, versus $72.2 million at year-end 2025. Long-term debt, net of current maturities, was $2.551 billion, up from $2.447 billion, while property and equipment increased to $4.478 billion from $4.102 billion as the company expanded its hospital network. Nine-month operating cash flow was $844.9 million versus $699.1 million a year earlier.
Revenue
$1.6095B
↑ +8.9% Q3 2026 vs Q3 2025
Adjusted EBITDA
$346.6M
↑ +15.5% year over year
Operating cash flow
$362.0M
↑ +33.7% year over year
Adjusted free cash flow
$263.4M
↑ +51.2% year over year
Sources
Quarterly revenue, Encompass Health
Twelve quarters of figures
| Quarter | Q3 '23 | Q4 '23 | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $1.2B | $1.2B | $1.3B | $1.3B | $1.4B | $1.4B | $1.5B | $1.5B | $1.5B | $1.5B | $1.6B | $1.6B |
| Revenue growth | 10.8% | 9.6% | 13.4% | 9.6% | 11.9% | 12.7% | 10.6% | 12.0% | 9.4% | 9.9% | 9.0% | 9.6% |
| Net income | $85.3M | $87.6M | $113M | $114M | $108M | $121M | $152M | $142M | $127M | $146M | $195M | $154M |
| Diluted EPS | $0.84 | $0.85 | $1.10 | $1.12 | $1.06 | $1.18 | $1.48 | $1.39 | $1.24 | $1.43 | $1.93 | $1.54 |
| Cash from operations | $215M | $201M | $239M | $217M | $268M | $279M | $289M | $270M | $271M | $346M | $313M | $283M |
| Capital expenditure | $147M | $212M | $139M | $157M | $148M | $199M | $163M | $157M | $187M | $229M | $162M | $220M |
| Free cash flow | $68.5M | −$10.7M | $99.4M | $60.5M | $120M | $80.1M | $126M | $113M | $83.7M | $117M | $151M | $62.3M |
| Dividends and buybacks | $15.0M | $14.9M | $15.9M | $31.7M | $21.8M | $24.5M | $50.1M | $41.8M | $41.9M | $95.3M | $91.9M | $93.1M |
This story describes figures the company has published. It is for information only and is not investment advice or a recommendation to buy, sell or hold any security. Check the original filings before relying on any figure. Stoqly is not affiliated with the SEC or Encompass Health.
