AI-extracted from the 10-Q filed 2026-08-07 — Q2 FY2026 (quarter ended June 30, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Encompass Health grew Q2 FY2026 revenue 9.6% YoY to $1,597.4M on 5.6% discharge growth and higher reimbursement rates, while refinancing debt with a $500M 2034 note issuance and lifting its buyback authorization to $1.0B.
Biggest Revenue Drivers
Inpatient$1,551.6M+9.8% YoY
Increased volumes and favorable pricing, including growth in net patient revenue per discharge from higher reimbursement rates and patient mix
Other$45.8M+4.1% YoY
Increase of $2.9 million in Medicaid supplemental payments
Biggest Revenue Drivers
Total revenue: $1,597.4M+9.6% YoY
Inpatient$1,551.6M+9.8% YoY
Increased volumes and favorable pricing, including growth in net patient revenue per discharge from higher reimbursement rates and patient mix
Other$45.8M+4.1% YoY
Increase of $2.9 million in Medicaid supplemental payments
Largest Expense Items
Salaries and benefits$820.3M+6.9% YoY
Salary and benefit cost increases and higher patient volumes, including more FTEs from development activities; declined as % of revenue on lower EPOB and reduced contract labor/bonuses
Other operating expenses$254.9M+19.2% YoY
Increased provider taxes and higher costs from development activities
Depreciation and amortization$90.4M+13.1% YoY
Capital investments; expected to keep rising with ongoing capex
General and administrative expenses$62.6M+5.4% YoY
Higher costs from transition to new ERP system, Oracle Fusion
Margins: Total operating expenses fell to 81.9% of revenue from 82.2%, as salaries and benefits declined as a percent of revenue (51.4% vs. 52.7%) on lower EPOB and less contract labor/sign-on bonuses, partially offset by higher provider-tax-driven other operating expenses (16.0% vs. 14.7% of revenue).
Watch Items from the Filing
Medicare (65.8%) and Medicare Advantage (16.2%) together comprised 82% of Q2 net operating revenues, concentrating the company in federal reimbursement policy.
33 IRFs (11.9% of Medicare claims) are now under CMS's Review Choice Demonstration as of June 30, 2026, with expansion to Texas (March 2026) and California (May 2026); the Alabama MAC has failed to affirm many claims despite appeals.
CMS's 2027 Final IRF Rule is expected to yield a net 2.3% increase to Medicare payment rates effective October 1, 2026.
Issued $500M of 5.875% Senior Notes due 2034 to redeem $400M of 4.50% 2028 Notes and repay $100M of revolver borrowings, incurring a $3.2M loss on early extinguishment; no significant debt maturities until 2028.
Board raised the buyback authorization to $1.0B and the quarterly dividend to $0.21/share; 2026 capex guidance of $920M-$995M funds an active de novo hospital pipeline.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
4 transactions in EHC reported by 1 member of Congress under the STOCK Act, most recent trade Oct 31, 2025. Reported transactions, not recommendations.
About Encompass Health Corp (EHC): stock profile, AI score and financials
Encompass Health Corp (EHC) stock profile, AI quality score, and SEC EDGAR financial data, a Healthcare sector company. 13F Pro's AI-powered ranking engine scores EHC at 66.7/100 on a composite quality score built from its SEC filings, placing it at rank #395 of 2,925 stocks — the top 25% of the AI-ranked universe. EHC scores in the top quartile across earnings quality (83.6), balance sheet strength (82.4), revenue scale (80.7). Based on the latest XBRL financial filings (Q2 2026), Encompass Health Corp reports quarterly revenue of $1.6B, net income of $153.9M, an operating margin of 16.4%. Top institutional holders of EHC by reported 13-F value include BlackRock, PRICE T ROWE ASSOCIATES, VANGUARD PORTFOLIO MANAGEMENT, based on the most recent SEC filings. EHC trades on the NYSE exchange and files with the SEC under CIK 785161. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate EHC daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for Encompass Health Corp directly from SEC EDGAR.