Enhabit Inc, a leading provider of home health and hospice services in the United States, reported its Q2 2024 financial results, showcasing a mixed performance. The company operates in two segments: home health and hospice, with the majority of its revenue generated from the Home Health segment.
Quarterly Performance Overview
For the second quarter of 2024, Enhabit Inc reported:
- Net service revenue of $260.6 million, slightly below the analyst estimate of $267.23 million.
- Net loss attributable to Enhabit Inc of $0.2 million.
- Adjusted EBITDA of $25.2 million, reflecting a 5.4% year-over-year increase.
- Earnings per share (EPS) of $0.00, with adjusted EPS at $0.07, surpassing the analyst estimate of $0.05.
Segment Performance
In the Home Health segment, Enhabit Inc experienced a 1.7% decline in net service revenue year-over-year, primarily due to a decrease in Medicare volume. However, non-Medicare admissions grew by 25.2%, driving a total admissions growth of 6.4% year-over-year. The segment's adjusted EBITDA increased by 3.3%, attributed to lower cost per visit.
In the Hospice segment, net service revenue increased by 3.9% year-over-year, driven by higher Medicare reimbursement rates and an increase in patient days. The segment's adjusted EBITDA rose by 9.6%, reflecting improved revenue and cost management.
Financial Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Service Revenue | $260.6 million | $262.3 million | (0.6)% |
| Adjusted EBITDA | $25.2 million | $23.9 million | 5.4% |
| Adjusted EPS | $0.07 | $0.04 | 75.0% |
Key Metrics and Analysis
Enhabit Inc's gross margin improved to 49.4% from 48.3% in the same period last year, indicating better cost management. The company's general and administrative expenses remained relatively stable, increasing slightly by 0.3% year-over-year.
Enhabit Inc also reduced its bank debt by $15 million during the quarter, reflecting its focus on strengthening its balance sheet. The company opened a new home health location in Florida, expanding its footprint and potential for future growth.
Commentary and Outlook
"The second quarter marked our third sequential quarter demonstrating the success of our strategies," said Enhabit’s President and Chief Executive Officer Barb Jacobsmeyer. "In our home health segment, our total admissions growth of 6.4% was driven by our payor innovation strategy and our focus on improved utilization of our clinical resources. In our hospice segment, we continued to make steady progress in growing our census, with average daily census increasing each month since January 2024. Our focus on recruitment and retention continues to position us for long-term growth, and we remain confident in the long-range growth potential for Enhabit."
Conclusion
Enhabit Inc's Q2 2024 results reflect a mixed performance, with the company missing revenue estimates but exceeding adjusted EPS expectations. The growth in non-Medicare admissions and improved cost management are positive indicators for the company's future. However, the decline in Medicare volume and the net loss attributable to Enhabit Inc highlight ongoing challenges. Investors will be keen to see how the company navigates these challenges and leverages its strategies for long-term growth.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Enhabit Inc for further details.
