Encompass Health Corporation delivers a range of post-acute healthcare services across the United States, offered both in dedicated facilities and directly within ...
Encompass Health Corporation, headquartered in Birmingham, Alabama, is the nation's largest provider of inpatient rehabilitation services, operating approximately 170 hospitals across the U.S. and Puerto Rico. The company was founded in 1984 as HealthSouth and rebranded to Encompass Health in 2018. It operates through two primary divisions: Inpatient Rehabilitation and ...Encompass Health Corporation, headquartered in Birmingham, Alabama, is the nation's largest provider of inpatient rehabilitation services, operating approximately 170 hospitals across the U.S. and Puerto Rico. The company was founded in 1984 as HealthSouth and rebranded to Encompass Health in 2018. It operates through two primary divisions: Inpatient Rehabilitation and Home Health & Hospice. The Inpatient Rehabilitation segment offers focused recovery treatment for patients suffering from strokes, neurological disorders, cardiac and pulmonary issues, brain and spinal cord injuries, complex orthopedic conditions, and amputations. The Home Health and Hospice segment serves primarily the Southeast and Texas regions, providing Medicare-certified skilled nursing, medical social work, home health aide assistance, physical, occupational, and speech therapy, as well as hospice care for terminally ill patients. As of 2025, the company employs approximately 42,000 people and manages 149 hospitals, 252 home health locations, and 99 hospice locations. Financially, the company has a market capitalization of $12.4 billion, with strong profitability margins (net margin ~10%) and a dividend yield of 0.6%. Under CEO Mark Tarr, the company focuses on delivering high-quality, patient-centered care and has been recognized as one of Fortune's 100 Best Companies to Work For. The company also emphasizes innovation in rehabilitation therapies and is committed to expanding its reach to meet the growing demand for post-acute care.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$5.9B
+10.5%
+0.7%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$566.2M
+24.2%
-20.9%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+95.7%
+130.3%
+106.5%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+17.7%
+10.3%
-5.0%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+9.5%
+12.5%
-21.4%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$439.2M
+21.9%
-58.7%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+7.4%
+10.4%
-58.9%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
111.3%
-15.2%
-1.1%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
1.08x
+2.7%
+1.6%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good morning, everyone, and welcome to Encompass Health's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Mark Miller, Encompass Health's Chief Investor Relations Officer. Please go ahead.
Mark Miller: Thank you, operator, and good morning, everyone. Thank you for joining Encompass Health's Second Quarter 2026 Earnings Call. Before we begin, if you do not already have a copy, the second quarter earnings release, supplemental information and related Form 8-K filed with the SEC are available on our website at encompasshealth.com. On Page 2 of the supplemental information, you will find the safe harbor statements, which are also set forth in greater detail on the last page of the earnings release. During the call, we will make forward-looking statements such as guidance and growth projections, which are subject to risks and uncertainties, many of which are beyond our... [Technical Difficulty]
Operator: We ask the audience to please stand by. I believe the speakers have reconnected to the live conference.
Unknown Executive: Yes, we're in the main room.
Mark Miller: [ Aaron ], can you hear me?
Operator: Gentlemen, you are with the audience now. You have reconnected. I'm hearing a little bit of echo at the moment.
Douglas Coltharp: Good morning, everyone. This is Doug Coltharp. We apologize for the technical difficulties we're experiencing this morning. These difficulties are arising through our vendors. It's a vendor we have historically used, and these are not on the Encompass Health side. We appreciate your patience. And with that, we are going to start from the top, assuming that you've heard nothing from us this morning, and I'm going to ask Mark Miller to begin.
Mark Miller: Thank you, Doug, and good morning, everyone. Thank you for joining Encompass Health's Second Quarter 2026 Earnings Call. Before we begin, if you do not already have a copy, the second quarter earnings release, supplemental information and related Form 8-K filed with the SEC are available on our website at encompasshealth.com. On Page 2 of the supplemental information, you will find the safe harbor statements, which are also set forth in greater detail on the last page -- last page of the earnings release. During the call, we will make forward-looking statements such as guidance and growth projections, which are subject to risks and uncertainties, many of which are beyond our control. Certain risks and uncertainties, like those relating to regulatory developments as well as volume, bad debt and cost trends that could cause actual results to differ materially from our projections, estimates and expectations are discussed in the company's SEC filings, including the earnings release and related Form 8-K, the Form 10-K for the year ended December 31, 2025, the Form 10-Q for the quarter ended March 31, 2026, and …