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]