Core Points - Encompass Health is offering research-funding grants totaling up to $60,000 for studies on the impact or effectiveness of therapies in inpatient rehabilitation settings [1] - The application deadline for the grants is September 30, 2025, and recipients will be selected by October 30, 2025 [2] Grant Details - The grants are aimed at research in areas such as knowledge translation, implementation science, and the effectiveness of various therapies [1][7] - Applications will be evaluated based on scientific merit, experience of principal investigators, relevance to grant objectives, expected outcomes, and study feasibility [2] - Research must be completed within 12 months of receiving the grant and conducted in the United States or Puerto Rico [2] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with 167 hospitals across 38 states and Puerto Rico [4] - The company is recognized for providing high-quality rehabilitative care and has received accolades from Fortune, Becker's Hospital Review, and Forbes [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-10315 ______________________________ Encompass Health Corporation (Exact name of Registrant as specified in its Charter) (State or Other Jurisdi ...

Financial Data and Key Metrics Changes - The preliminary voting results indicate that stockholders overwhelmingly approved all proposals, including the election of 10 directors and the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm [12]. Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting [11][14]. Market Data and Key Metrics Changes - There were no specific market data or key metrics changes mentioned in the meeting [11][14]. Company Strategy and Development Direction and Industry Competition - The meeting focused on the election of directors and the approval of compensation plans, indicating a stable governance structure and commitment to performance incentives [9][10]. Management's Comments on Operating Environment and Future Outlook - Management expressed gratitude towards employees for their dedication and hard work, emphasizing the company's commitment to being a leading healthcare provider [15][16]. Other Important Information - The meeting had no questions submitted from stockholders, indicating a lack of immediate concerns or inquiries regarding the company's operations or future plans [11][14]. Q&A Session All Questions and Answers Question: Were there any questions regarding the proposals? - No questions regarding the proposals were submitted through the annual meeting website [11]. Question: Were there any general questions about the business of the company? - No general questions were submitted through the annual meeting website [14].

Company Overview - Encompass Health Corp. is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a national footprint of 167 hospitals across 38 states and Puerto Rico [2] - The company provides high-quality rehabilitative care for patients recovering from major injuries or illnesses, utilizing advanced technology and innovative treatments to maximize recovery [2] - Encompass Health has received recognition as one of Fortune's World's Most Admired Companies™, Becker's Hospital Review's 150 Top Places to Work in Healthcare, and Forbes' Most Trusted Companies in America [2] Upcoming Events - Encompass Health will participate in the BofA Securities 2025 Healthcare Conference from May 13-15, 2025 [1] - Doug Coltharp, Executive Vice President and Chief Financial Officer, will engage in a fireside chat on May 13, 2025, from 8:40-9:10 a.m. PT [1] - The presentation will be available via live webcast at investor.encompasshealth.com [1]

Core Viewpoint - Encompass Health Corporation (EHC) reported strong first-quarter 2025 results, with adjusted earnings per share (EPS) of $1.37, exceeding estimates and showing significant year-over-year growth [1][2] Financial Performance - Net operating revenues increased by 10.6% year over year to $1.5 billion, surpassing consensus estimates by 1.3% [2] - Net patient revenue per discharge grew by 3.9% year over year, with total discharges reaching 64,985, a 6.3% increase year over year [3] - Net and comprehensive income rose by 41.6% year over year to $196.5 million, while adjusted EBITDA improved by 14.9% year over year to $313.6 million, exceeding estimates [4] Operational Highlights - Total operating expenses increased by 7.2% year over year to $1.19 billion, driven by higher salaries and benefits [3] - The company added 25 beds to existing hospitals and opened one new de novo hospital during the quarter [4] Cash Flow and Capital Management - EHC generated $288.6 million in net cash from operations, a 20.9% increase year over year, with adjusted free cash flow soaring by 32.7% to $222.4 million [6] - The company repurchased shares worth $32.1 million and had approximately $458 million remaining under its buyback authorization [7] 2025 Outlook - The company updated its 2025 net operating revenue forecast to between $5.85 billion and $5.925 billion, indicating a 9.6% rise from 2024 [8] - Adjusted EBITDA is now estimated to be between $1.185 billion and $1.22 billion, reflecting a 9% growth from 2024 [9] - Adjusted EPS from continuing operations is expected to range from $4.85 to $5.10, suggesting a 12.3% increase from 2024 [9] Growth Strategy - EHC aims to open seven de novo hospitals and add 340 beds in 2025, with plans to add 100-120 beds to existing hospitals [10] - Over the 2023-2027 period, the company targets the inauguration of six to ten de novos each year and a compound annual growth rate (CAGR) of 6-8% in discharges [11]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 10.6% to $1.46 billion, while adjusted EBITDA rose by 14.9% to $313.6 million [16] - Total discharges grew by 6.3%, with same-store discharges increasing by 4.4% [8][16] - Net revenue per discharge increased by 3.9%, driven by a favorable payer mix [16][20] Business Line Data and Key Metrics Changes - The company reported a discharge community rate of 84%, with a discharge to acute rate of 8.9% and a discharge to skilled nursing facility (SNF) rate of 6.4% [9] - Annualized RN turnover decreased to 20.1% from 20.4%, and therapist turnover fell to 6.3% from 7.7% [10] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation services remains strong, with plans to open six de novo hospitals and add 300 beds in 2025 [11][12] - The company anticipates adding approximately 120 beds to existing hospitals in both 2026 and 2027 due to strong volumes and occupancy levels [12] Company Strategy and Development Direction - The company is increasing its 2025 guidance based on strong Q1 results, with net operating revenue expected to be between $5.85 billion and $5.925 billion [20] - The company continues to invest in capacity additions to meet the growing demand for inpatient rehabilitation services, particularly as the U.S. population ages [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand for services is not expected to fluctuate with economic conditions, as patients are nondiscretionary [95] - The company is closely monitoring the payer mix and does not anticipate the recent trends to become the new normal [25][121] Other Important Information - The company opened a new 40-bed joint venture hospital in Athens, Georgia, and plans to open additional facilities throughout the year [11] - The company has a strong pipeline of de novo projects, with 10 hospitals and 500 beds expected to open beyond 2025 [12] Q&A Session Summary Question: Inquiry about the increase in Medicare fee-for-service discharges - Management confirmed that the increase was not due to strategic actions but rather a surprising shift in payer mix, with Medicare fee-for-service growing faster than Medicare Advantage [24][25] Question: Discussion on employee metrics and hiring plans - Management stated that they remain committed to maintaining an employee per occupied bed (EPOB) ratio of 3.4 and are actively hiring to meet demand [30][32] Question: Concerns regarding supply costs and construction expenses - Management indicated that they do not foresee significant near-term risks related to construction costs or supply chain issues [40][41] Question: Clarification on Medicaid supplemental payments - Management noted that Medicaid supplemental payments are not a significant concern for the company compared to acute care hospitals [45] Question: Insights on labor efficiency and sustainability - Management expressed optimism about maintaining low contract labor levels and improving labor efficiency, although they cautioned that one quarter's performance does not establish a trend [51][52] Question: Discussion on capacity expansion and growth strategy - Management confirmed that they are accelerating their growth strategy through bed expansions and are focused on maintaining high-quality patient outcomes [62][64] Question: Inquiry about the impact of economic conditions on demand - Management reassured that demand for services remains stable regardless of economic fluctuations, as patients require care regardless of economic status [95]

Company Performance - Encompass Health (EHC) reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.19 per share, and up from $1.12 per share a year ago, representing an earnings surprise of 15.13% [1] - The company posted revenues of $1.46 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.31%, compared to $1.32 billion in the same quarter last year [2] - Over the last four quarters, Encompass Health has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - Encompass Health shares have increased approximately 9.1% since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $1.42 billion, and for the current fiscal year, it is $4.80 on revenues of $5.85 billion [7] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Encompass Health belongs, is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Exhibit 99.1 Media Contact April 24, 2025 Polly Manuel, 205 969-4532 polly.manuel@encompasshealth.com Investor Relations Contact Mark Miller, 205 970-5860 mark.miller@encompasshealth.com Encompass Health reports results for first quarter 2025 Increases full-year guidance BIRMINGHAM, Ala. - Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the first quarter ended March 31, 2025. Sum ...

Core Viewpoint - Encompass Health Corporation reported strong first-quarter results for 2025, with significant revenue and earnings growth, leading to an increase in full-year guidance for key financial metrics [1][4]. Financial Performance - Net operating revenue for Q1 2025 was $1,455.4 million, a 10.6% increase from $1,316.0 million in Q1 2024, reflecting a growth of $139.4 million [2][9]. - Income from continuing operations attributable to Encompass Health per diluted share rose to $1.48, up 33.3% from $1.11 in the previous year [2][14]. - Adjusted earnings per share increased by 22.3% to $1.37 from $1.12 [2][21]. - Cash flows from operating activities increased by 20.9% to $288.6 million compared to $238.8 million in Q1 2024 [2][18]. - Adjusted EBITDA for the quarter was $313.6 million, a 14.9% increase from $273.0 million [2][20]. Operational Highlights - Total discharges increased by 6.3% to 64,985, with same-store discharge growth of 4.4% [2][9]. - Net patient revenue per discharge grew by 3.9% to $21,816 from $20,990 [2][9]. - The company opened one new 40-bed hospital and added 25 beds to existing facilities during the quarter [3]. Updated Guidance - The company raised its full-year guidance for 2025, with net operating revenue now expected to be between $5,850 million and $5,925 million, up from the previous range of $5,800 million to $5,900 million [4]. - Adjusted EBITDA guidance was updated to a range of $1,185 million to $1,220 million, compared to the previous guidance of $1,160 million to $1,200 million [4]. - Adjusted earnings per share from continuing operations is now projected to be between $4.85 and $5.10, an increase from the prior range of $4.67 to $4.96 [4].

Investors interested in Medical stocks should always be looking to find the best-performing companies in the group. Encompass Health (EHC) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Medical peers, we might be able to answer that question.Encompass Health is a member of the Medical sector. This group includes 1000 individual stocks and cu ...