EHAB

• Enhabit named one of Fortune's Best Places to Work in healthcare.
• Home health total admissions up 3.6% year-over-year, census up 3.7%; non-Medicare admissions up 10.4%.
• Hospice has 7 straight quarters of sequential census growth; total admissions up 1.4% year-over-year, census up 12.6%.
• De novo strategy: opened 2 de novos in Q3, 6 year-to-date, on pace for 10 de novos in 2025.
• Advanced visit per episode management pilot: initiated in 11 branches mid-August, early results promising; 83 branches rolled out in October, rest by end of November.
• G&A expenses: $24.1 million in Q3, 9.1% of revenues, down $2.3 million sequentially from prior quarter due to cost management initiatives.

• Full year revenue expected in range of $1.058 billion to $1.063 billion.
• Adjusted EBITDA guidance increased to range of $106 million to $109 million.
• Adjusted free cash flow guidance increased to range of $53 million to $61 million.

Home Health

• Revenue: $200.5 million, down 0.2% year-over-year. Without payer renegotiation disruption and branch closures, would have been ~$3 million higher, showing ~1% growth. Average daily census: 41,451, up 3.7% year-over-year but down 1.6% sequentially due to payer disruption. Unit revenue per patient day lower sequentially and year-over-year. Adjusted EBITDA: $33.9 million, down 7.1% year-over-year and 13.7% sequentially.

Hospice

• Revenue: $63.1 million, up 20% year-over-year. Census grew 12.6% year-over-year. Adjusted EBITDA: $17.2 million, up 72% year-over-year. Adjusted EBITDA margin as percent of revenue improved 830 basis points year-over-year to 27.3%.

• CMS 2026 home health rule could impact pricing.
• Potential disruptions from payer mix changes.
• Seasonal factors affecting hospice average length of stay, especially around holidays.

Q: Can you provide color on the rate increase from the November payer negotiation and the pipeline of upcoming payer innovation contracts?

A: This was the first payer innovation contract renewal. We won't disclose the rate update, but we continue to work with negotiated payers. Regional type agreements will come up in the next year, and future national agreements will be later in 2027.

Q: Can you provide color where the G&A expense reduction is coming from and how much runway is left to reduce costs in that line?

A: G&A improvement is from a combination of headcount reductions and in-sourcing capabilities from third-party vendors. Roughly $1 million to $1.5 million of the sequential improvement in Q3 is durable.

Q: Should we expect a similar tailwind in hospice average length of stay sequentially this year due to seasonality?

A: Seasonality affects hospice, especially around holidays as folks may wait to elect until after holidays. It's one of the more unpredictable times of year, and we've added resources to manage outreach.

Q: How long is the re-contracting cycle typically for payer innovation contracts?

A: It's by contract, with the majority of contracts being 3 years, though some are 2 years.

Q: Can you speak to labor in the quarter and wage inflation in 2026?

A: We've seen an uptick in the applicant pool for nursing and therapy. Headcount on clinical capacity for home health and hospice is up. Wage inflation is around 3% normally, with some markets more challenging, especially in therapy, monitored at market level.