Enhabit (EHAB) Q1 2026 earnings summary

Executive summary

• Net service revenue rose 1.9% year-over-year to $264.8 million for Q1 2026, driven by 6.2% growth in Hospice and 0.6% in Home Health.

• Net income attributable to shareholders increased 7.9% to $19.2 million, with EPS at $0.37 (basic) and $0.36 (diluted).

• A merger agreement was signed in February 2026; closing is expected in Q2 2026, after which shares will be delisted.

• No branch closures occurred in Q1 2026, and none are anticipated for the remainder of the year.

Financial highlights

• Gross margin was $130.6 million, up 0.7% year-over-year.

• General and administrative expenses fell 10.0% to $96.7 million, aided by a $17.7 million litigation settlement gain.

• Adjusted EBITDA was $24.4 million, down from $26.6 million in Q1 2025.

• Operating income increased 84.3% to $29.3 million, reflecting lower G&A expenses.

• Effective tax rate dropped to 13.5% from 28.7% due to changes in valuation allowance.

Outlook and guidance

• The proposed 2027 Hospice Rule would increase payments by 2.4% starting October 2026, expected to benefit revenue.

• Management expects continued compliance with debt covenants but notes ongoing monitoring is required.