Enhabit (EHAB) Q2 EPS Jumps 86%
Enhabit (NYSE:EHAB) outperformed earnings estimates, posting Non-GAAP EPS of $0.13 versus the expected $0.10.
Quarterly revenue (GAAP) reached $266.1 million, exceeding analyst estimates and rising 2.1% from the prior year.
Full-year 2025 guidance was raised for revenue, Adjusted EBITDA (non-GAAP), and Adjusted EPS (non-GAAP), reflecting management's improved outlook.
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Enhabit (NYSE:EHAB), a leading US provider of home health and hospice services, released its second quarter 2025 earnings on August 6, 2025. The report highlighted a modest revenue increase and stronger-than-expected profitability, with GAAP revenue exceeding analyst estimates and non-GAAP EPS surpassing expectations. GAAP revenue was $266.1 million, above the $263.4 million analyst expectation and up from $260.6 million in the prior year period. Non-GAAP earnings per share were $0.13, beating the consensus estimate of $0.10 and up from $0.07 a year earlier. Management raised full-year guidance for revenue, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), and adjusted EPS. The quarter showcased stability in home health and accelerated growth in the hospice segment, though some profit margins declined in home health.
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
Enhabit specializes in providing skilled home health and hospice care across 34 states. It delivers nursing, therapy, and specialized medical services to patients in their homes and offers end-of-life care through its hospice branches. With 249 home health and 114 hospice locations, Enhabit is one of the largest standalone operators in its sector.
The business model relies on both Medicare and non-Medicare payers, blending government reimbursements with commercial contracts. Key focus areas include optimizing its mix of payer contracts, expanding value-based payment arrangements, and leveraging its dense branch network to improve operational efficiency. The company also invests heavily in predictive analytics and technology, aiming to enhance both outcomes and cost control. Success hinges on managing labor costs, navigating regulatory changes, and maintaining strong referral relationships in an aging demographic environment.
Quarter in Review: Segment Results and Financial Trends
Revenue (GAAP) grew 2.1%, with both segments reporting different trends. In home health, segment net service revenue (GAAP) declined 2.0% to $205.9 million, mainly due to a 4.7% drop in Medicare revenue. Non-Medicare home health revenue, however, rose 1.7% (GAAP) as payer contract strategies continued to show results. Total home health admissions grew 1.3% year over year, driven by a 5.2% rise in non-Medicare admissions. However, Medicare admissions dropped 3.7%, and recertifications, which track patients re-entering care, fell 2.7%.
Profitability pressures in home health were clear. Adjusted EBITDA for the segment declined by 11.1% to $39.3 million, while the segment EBITDA margin compressed to 19.1% from 21.0% in Q2 2024. Controlling costs helped: home health cost per patient day was flat year over year despite labor market pressures. The company reduced visits per episode by 2.1% compared to Q2 2024, indicating improved efficiency but also raising questions about maintaining care quality. Revenue per episode increased 2.2%.
The hospice segment provided the period's most notable gains. Hospice net service revenue (GAAP) jumped 19.4% year over year to $60.2 million. Admissions grew 8.7%, and average daily census, a critical measure of patients served each day, rose 12.3%. Segment Adjusted EBITDA (non-GAAP) reached $14.0 million, up 53.8% from the prior year. The hospice Adjusted EBITDA margin strengthened to 23.3%, up from 18.1% in Q2 2024. Cost control stood out: hospice cost per patient day increased just 1.0%, far below revenue per patient day growth of 6.3%, boosting margins.
Enhabit opened three new locations in the period, signaling continued expansion. The company also paid down $10.0 million in debt, part of a broader deleveraging plan reducing overall interest expense. However, some challenging trends persist: home health Medicare census remains in decline, total segment revenue fell, and recertification rates (patients re-qualified for care) decreased. Segment Adjusted EBITDA margin in home health narrowed by 1.9 percentage points year over year (non-GAAP). On the hospice side, the discharged average length of stay slipped to 103 days from 108, a trend that may reduce profitability if it extends further.
Enhabit is not a dividend-paying company.
Strategy, Market Drivers, and Technology
Home health care includes skilled nursing and therapy services provided to patients in their homes—an alternative to facility-based care. Hospice, in contrast, focuses on comfort and symptom management for terminally ill patients, typically provided in the patient's home. Enhabit's recent strategy prioritizes expanding payer innovation contracts—agreements that often link payments to care episodes and patient outcomes.
Demographic tailwinds continue to support the industry, with the US senior population expected to reach 78.3 million by 2040. Enhabit's geographic scale, spread across 34 states, positions it to capture increasing demand for both service lines. The company's investments in technology have notable effects. It uses Medalogix Pulse, a predictive analytics platform, to optimize home health visit allocation by patient need, reducing unnecessary visits while maintaining care standards. Two internal apps, now in pilot testing, further streamline staff communication and referral management.
Outlook and What to Watch
Management raised its guidance for FY2025. Updated expectations for net service revenue (GAAP) are now between $1.060 and $1.073 billion for full-year 2025, compared to the previous guidance of $1.050 to $1.080 billion. Adjusted EBITDA is now guided to $104 to $108 million for 2025, up from $101 to $107 million previously. Adjusted EPS guidance increased to a range of $0.47 to $0.55 for 2025, compared to the previous range of $0.41 to $0.51. This reflects confidence in hospice momentum, continued operational efficiency, and ongoing cost control initiatives.
The company did not announce any dividend policy changes, confirming it does not currently pay a dividend. For the rest of the year, investors should watch ongoing trends in home health Medicare volumes and margins, the company's success in renegotiating payer contracts, and whether technology continues to foster both productivity and quality. Contract renewals, regulatory changes, shifts in patient mix, and the impact of ongoing branch expansion all remain critical factors moving forward.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in Primo Brands' Annual Report on Form 10-K and its quarterly reports on Form 10-Q, as well as other filings with the securities commissions. Primo Brands does not undertake to update or revise any of these statements considering new information or future events, except as expressly required by applicable law. (in millions of U.S. dollars, except share and per share amounts) Unaudited Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net sales $ 1,730.1 $ 1,314.4 $ 3,343.8 $ 2,450.2 Cost of sales 1,189.2 884.6 2,281.9 1,674.9 Gross profit 540.9 429.8 1,061.9 775.3 Selling, general and administrative expenses 378.6 256.3 706.4 475.0 Acquisition, integration and restructuring expenses 49.7 13.2 89.5 19.0 Other operating (income) expense, net (0.2) 1.3 — (2.5) Operating income 112.8 159.0 266.0 283.8 Other income, net (15.9) — (15.8) — Loss on modification and extinguishment of debt — — 18.6 — Interest and financing expense, net 81.9 86.2 164.0 166.1 Income from continuing operations before income taxes 46.8 72.8 99.2 117.7 Provision for income taxes 16.3 18.3 34.0 29.7 Net income from continuing operations $ 30.5 $ 54.5 $ 65.2 $ 88.0 Net loss from discontinued operations, net of tax (2.9) — (8.9) — Net income $ 27.6 $ 54.5 $ 56.3 $ 88.0 Net income (loss) per common share Basic: Continuing operations $ 0.08 $ 0.25 $ 0.17 $ 0.40 Discontinued operations $ (0.01) $ — $ (0.02) $ — Net income per common share $ 0.07 $ 0.25 $ 0.15 $ 0.40 Diluted: Continuing operations $ 0.08 $ 0.25 $ 0.17 $ 0.40 Discontinued operations $ (0.01) $ — $ (0.02) $ — Net income per common share $ 0.07 $ 0.25 $ 0.15 $ 0.40 Weighted-average shares of common stock outstanding (in thousands) Basic 374,796 218,618 377,011 218,618 Diluted 376,815 218,618 379,029 218,618 PRIMO BRANDS CORPORATION EXHIBIT 2 CONDENSED CONSOLIDATED BALANCE SHEETS (in millions of U.S. dollars, except share amounts) Unaudited June 30, 2025 December 31, 2024 ASSETS Current Assets: Cash, cash equivalents and restricted cash $ 412.0 $ 614.4 Trade receivables, net of allowance for expected credit losses of $12.6 ($4.7 as of December 31, 2024) 587.0 444.0 Inventories 248.3 208.4 Prepaid expenses and other current assets 179.3 150.4 Current assets held for sale 76.1 111.8 Total current assets 1,502.7 1,529.0 Property, plant and equipment, net 2,045.4 2,083.9 Operating lease right-of-use-assets, net 611.4 628.7 Goodwill 3,581.4 3,572.2 Intangible assets, net 3,124.2 3,191.7 Other non-current assets 74.6 70.1 Non-current assets held for sale 109.5 118.9 Total assets $ 11,049.2 $ 11,194.5 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 70.4 $ 64.5 Trade payables 533.6 471.6 Accruals and other current liabilities 632.0 697.7 Current portion of operating lease obligations 93.1 95.5 Current liabilities held for sale 90.9 82.2 Total current liabilities 1,420.0 1,411.5 Long-term debt, less current portion 5,022.2 4,963.6 Operating lease obligations, less current portion 540.0 555.6 Deferred income taxes 737.8 738.7 Other non-current liabilities 54.9 49.8 Non-current liabilities held for sale 28.1 31.1 Total liabilities $ 7,803.0 $ 7,750.3 Stockholders' Equity: Common stock, $0.01 par value, 900,000,000 shares authorized, 373,337,220 shares and 379,792,996 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively $ 3.8 $ 3.8 Additional paid-in capital 4,994.1 4,971.3 Accumulated deficit (1,749.7) (1,513.7) Accumulated other comprehensive loss (2.0) (17.2) Total stockholders' equity 3,246.2 3,444.2 Total liabilities and stockholders' equity $ 11,049.2 $ 11,194.5 PRIMO BRANDS CORPORATION EXHIBIT 3 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions of U.S. dollars) Unaudited Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash flows from operating activities of continuing operations: Net income $ 27.6 $ 54.5 $ 56.3 $ 88.0 Less: Net loss from discontinued operations, net of income taxes (2.9) — (8.9) — Net income from continuing operations $ 30.5 $ 54.5 $ 65.2 $ 88.0 Adjustments to reconcile net income from continuing operations to cash flows from operating activities of continuing operations: Depreciation and amortization 145.3 74.3 273.9 149.5 Amortization of debt discount and issuance costs 7.6 4.5 13.7 8.0 Stock-based compensation costs 12.9 0.3 24.9 0.6 Restructuring charges 2.4 — 2.9 — Inventory obsolescence expense 6.0 6.2 7.2 8.7 Charge for expected credit losses 10.3 1.1 17.4 3.2 Deferred income taxes 1.8 (12.9) (0.8) (30.2) Other non-cash items (16.4) 4.2 (14.9) 1.4 Changes in operating assets and liabilities, net of effects of businesses acquired: Trade receivables (91.9) (85.0) (159.0) (146.3) Inventories (3.4) 9.1 (49.1) (28.3) Prepaid expenses and other current and non-current assets (34.9) 6.4 (0.3) 13.7 Trade payables and accruals and other current and non-current liabilities 84.8 39.8 12.7 40.2 Net cash provided by operating activities of continuing operations 155.0 102.5 193.8 108.5 Cash flows from investing activities of continuing operations: Purchases of property, plant and equipment (53.9) (41.1) (115.9) (64.6) Purchases of intangible assets (17.7) (6.2) (25.2) (27.4) Acquisitions, net of cash received (5.7) — (5.7) — Proceeds from sale of other assets 11.3 — 56.9 — Other investing activities 15.4 (0.3) 16.1 2.7 Net cash used in investing activities of continuing operations (50.6) (47.6) (73.8) (89.3) Cash flows from financing activities of continuing operations: Proceeds from 2024 Incremental Term Loan, net of discount — — — 392.0 Proceeds from borrowings from ABL Credit Facility — — — 25.0 Repayment of borrowings from ABL Credit Facility — (60.0) — (60.0) Repayment of Term Loans (7.8) (8.0) (15.5) (16.0) Proceeds from borrowings of other debt — 1.0 — 3.1 Principal repayment of other debt (1.4) (1.3) (2.7) (1.7) Principal payment of finance leases (8.6) (1.5) (15.8) (2.3) Financing fees (0.2) — (7.7) (5.1) Issuance of common stock 3.6 — 4.8 — Common stock repurchased and cancelled (101.8) — (221.0) — Dividends paid to common stockholders (37.4) — (76.0) — Dividends paid to Sponsor Stockholder — — — (382.7) Other financing activities (0.4) — (0.9) — Net cash used in financing activities of continuing operations (154.0) (69.8) (334.8) (47.7) Cash flows from discontinued operations: Net cash (used in) provided by operating activities from discontinued operations (0.6) — 2.3 — Net cash provided by (used in) investing activities from discontinued operations 6.7 — (1.3) — Net cash provided by financing activities from discontinued operations 1.0 — 3.4 — Net cash provided by discontinuing operations 7.1 — 4.4 — Effect of exchange rates on cash, cash equivalents and restricted cash 1.6 (0.1) 2.1 (0.4) Net decrease in cash, cash equivalents and restricted cash (40.9) (15.0) (208.3) (28.9) Cash and cash equivalents and restricted cash, beginning of period 453.3 33.1 620.7 47.0 Cash and cash equivalents and restricted cash, end of period $ 412.4 $ 18.1 $ 412.4 $ 18.1 Cash and cash equivalents and restricted cash of discontinued operations, end of period 0.4 — 0.4 — Cash and cash equivalents and restricted cash of continuing operations, end of period $ 412.0 $ 18.1 $ 412.0 $ 18.1 PRIMO BRANDS CORPORATION EXHIBIT 4 & AMORTIZATION (EBITDA) (in millions of U.S. dollars, except percentage amounts) Unaudited Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income from continuing operations $ 30.5 $ 54.5 $ 65.2 $ 88.0 Interest and financing expense, net 81.9 86.2 164.0 166.1 Provision for income taxes 16.3 18.3 34.0 29.7 Depreciation and amortization 145.3 74.3 273.9 149.5 EBITDA $ 274.0 $ 233.3 $ 537.1 $ 433.3 Acquisition, integration and restructuring expenses (a) 1 72.8 13.2 112.6 19.0 Stock-based compensation costs (b) 12.9 0.3 24.9 0.6 Unrealized (gain) loss on foreign exchange and commodity forwards, net (c) (0.2) 1.1 — (2.7) Loss on disposal of property plant and equipment, net (d) 1.9 0.1 3.4 1.7 Loss on modification and extinguishment of debt (e) — — 18.6 — Management fees (f) — 4.8 — 14.1 Purchase accounting adjustments (g) — — 1.2 — Other adjustments, net (h) 5.3 5.2 10.4 9.7 Adjusted EBITDA $ 366.7 $ 258.0 $ 708.2 $ 475.7 Net sales $ 1,730.1 $ 1,314.4 $ 3,343.8 $ 2,450.2 Adjusted EBITDA margin % 21.2 % 19.6 % 21.2 % 19.4 % Three Months Ended June 30, Six Months Ended June 30, Location in Consolidated Statements of Operations 2025 2024 2025 2024 (Unaudited) (a) Acquisition, integration and restructuring expenses 1 Acquisition, integration and restructuring expenses $ 49.7 $ 13.2 $ 89.5 $ 19.0 Cost of Sales 23.1 — 23.1 — (b) Stock-based compensation costs Selling, general and administrative expenses 12.9 0.3 24.9 0.6 (c) Unrealized (gain) loss on foreign exchange and commodity forwards, net Other operating (income) expense, net (0.2) 1.1 — (2.7) (d) Loss on disposal of property plant and equipment, net Cost of sales 2.3 0.1 3.8 1.7 Selling, general and administrative expenses (0.4) — (0.4) — (e) Loss on modification and extinguishment of debt Loss on modification and extinguishment of debt — — 18.6 — (f) Management fees Selling, general and administrative expenses — 4.8 — 14.1 (g) Purchase accounting adjustments Cost of sales — — 1.2 — (h) Other adjustments, net Other income, net (15.8) — (15.8) — Cost of Sales 12.5 — 12.5 — Selling, general and administrative expenses 8.6 5.2 13.7 9.7 1 Amounts include labor related costs. PRIMO BRANDS CORPORATION EXHIBIT 5 SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (in millions of U.S. dollars) Unaudited Three Months Ended June 30, 2025 2024 Net cash provided by operating activities of continuing operations $ 155.0 $ 102.5 Less: Additions of property, plant and equipment (53.9) (41.1) Less: Additions of intangible assets (17.7) (6.2) Free cash flow $ 83.4 $ 55.2 Acquisition and integration cash costs 62.0 13.2 Integration capital expenditures 23.3 — Management fees — 4.8 Debt restructuring costs 0.8 — Tariffs refunds related to property, plant and equipment 0.2 — Adjusted Free Cash Flow $ 169.7 $ 73.2 Six Months Ended June 30, 2025 2024 Net cash provided by operating activities of continuing operations $ 193.8 $ 108.5 Less: Additions to property, plant and equipment (115.9) (64.6) Less: Additions to intangible assets (25.2) (27.4) Free cash flow $ 52.7 $ 16.5 Acquisition, integration and restructuring cash costs 127.2 19.0 Integration capital expenditures 26.1 — Management fees — 14.1 Debt restructuring costs 18.2 — Tariffs refunds related to property, plant and equipment 0.2 — Adjusted free cash flow $ 224.4 $ 49.6 PRIMO BRANDS CORPORATION EXHIBIT 6 SUPPLEMENTARY INFORMATION-NON-GAAP-ADJUSTED NET INCOME AND ADJUSTED EPS (in millions of U.S. dollars, except share amounts) Unaudited Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income from continuing operations $ 30.5 $ 54.5 $ 65.2 $ 88.0 Adjustments: Amortization expense of customer lists 46.5 4.8 68.6 9.5 Acquisition, integration and restructuring expenses 72.8 13.2 112.6 19.0 Stock-based compensation costs 12.9 0.3 24.9 0.6 Unrealized (gain) loss on foreign exchange and commodity forwards, net (0.2) 1.1 — (2.7) Gain on sale leaseback — — — — Loss on modification and extinguishment of debt — — 18.6 — Management fees — 4.8 — 14.1 Purchase accounting adjustments — — 1.2 — Other adjustments, net 5.3 5.2 10.4 9.7 Tax impact of adjustments 1 (30.7) (7.2) (52.5) (12.4) Adjusted net income $ 137.1 $ 76.7 $ 249.0 $ 125.8 Earnings Per Share (as reported) Net income from continuing operations $ 30.5 $ 54.5 $ 65.2 $ 88.0 Basic EPS $ 0.08 $ 0.25 $ 0.17 $ 0.40 Diluted EPS $ 0.08 $ 0.25 $ 0.17 $ 0.40 Weighted average shares of common stock outstanding (in thousands) Basic 374,796 218,618 377,011 218,618 Diluted 376,815 218,618 379,029 218,618 Adjusted Earnings Per Share (Non-GAAP) Adjusted net income from continuing operations (Non-GAAP) $ 137.1 $ 76.7 $ 249.0 $ 125.8 Adjusted diluted EPS (Non-GAAP) $ 0.36 $ 0.35 $ 0.66 $ 0.58 Weighted average shares of common stock outstanding (in thousands) Basic 374,796 218,618 377,011 218,618 Diluted weighted average common shares outstanding (in thousands) (Non-GAAP)2 376,815 218,618 379,029 218,618 1 The tax effect for adjusted net income is based upon an analysis of the statutory tax treatment and the applicable tax rate for the jurisdiction in which the pre-tax adjusting items incurred and for which realization of the resulting tax benefit (if any) is expected. A reduced or 0% tax rate is applied to jurisdictions where we do not expect to realize a tax benefit due to a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets.
