Core Insights - Surgery Partners is set to announce earnings results, with expectations of revenue growth slowing compared to the previous year [1][2] - The company reported a strong performance last quarter, exceeding revenue expectations by 1.2% [1] Revenue Expectations - Analysts expect Surgery Partners' revenue to grow 6.7% year on year to $821.8 million, down from a 14.3% increase in the same quarter last year [2] - The company reported revenues of $826.2 million last quarter, reflecting an 8.4% year-on-year increase [1] Earnings Performance - Adjusted earnings per share (EPS) are anticipated to be $0.16 [2] - Surgery Partners has missed Wall Street's revenue estimates three times in the past two years [3] Peer Comparison - In the outpatient & specialty care segment, Select Medical reported a 7.2% year-on-year revenue growth, while U.S. Physical Therapy saw a 17.3% increase [4] - Select Medical and U.S. Physical Therapy both experienced declines in share price following their earnings reports [4] Market Sentiment - There is positive sentiment in the outpatient & specialty care segment, with average share prices up 3.9% over the last month [5] - Surgery Partners' share price has increased by 11.1% during the same period, with an average analyst price target of $30.82 compared to the current share price of $21.93 [5]

Core Viewpoint - Surgery Partners, Inc. is set to release its third quarter 2025 results on November 10, 2025, followed by a conference call for investors [1]. Company Overview - Surgery Partners is a leading healthcare services company headquartered in Brentwood, Tennessee, focusing on high-quality, cost-effective surgical and ancillary care solutions [3]. - The company operates over 200 locations across 30 states, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices, and urgent care facilities [3]. - Founded in 2004, Surgery Partners is recognized as one of the largest and fastest-growing surgical services businesses in the United States [3]. Investor Relations - Interested parties can access the conference call via a live webcast on the company's Investor Relations website, with a replay available for a limited time [1]. - Contact information for investor relations includes a dedicated phone line and email for inquiries [4].

Core Viewpoint - Surgery Partners reported mixed financial results for Q2 2025, with revenue exceeding expectations but non-GAAP EPS slightly missing consensus estimates, reflecting ongoing net losses and higher costs associated with network growth [1][2][5] Financial Performance - GAAP revenue reached $826.2 million, surpassing analyst estimates of $818.4 million, and showing an 8.4% increase from $762.1 million in Q2 2024 [2][5] - Non-GAAP EPS was $0.17, missing the consensus estimate of $0.18 and down 19.0% from $0.21 in Q2 2024 [2] - Adjusted EBITDA grew 9.0% year-over-year to $129.0 million, with an adjusted EBITDA margin of 15.6%, slightly above the prior year's margin [2][6] Business Overview - Surgery Partners operates over 160 ambulatory surgery centers (ASCs) and surgical hospitals, focusing on same-day, minimally invasive procedures [3] - The company aims to provide efficient, cost-effective, and high-quality outpatient settings for patients, physicians, and payors [3] Strategic Focus - Recent growth strategies include acquisitions, new site development, and optimizing the facility portfolio for improved profitability [4] - Key success factors involve expanding physician partnerships, negotiating favorable insurance contracts, and ensuring regulatory compliance [4] Operational Highlights - Total cases performed increased to 172,858, up 3.8% year-over-year, with same-facility revenue growth of 5.1% [5] - The company reduced its facility count to 162 from 167, reflecting acquisitions and targeted divestitures [8] - Net interest expense rose to $67.9 million due to higher debt and interest rates [9] Market Trends - Strong volume growth was noted in gastrointestinal and orthopedic surgeries, with outpatient GI endoscopy growing faster than the company average [7][10] - The company maintains low exposure to Medicaid or ACA plans, with over 70% of supply purchases through group purchasing contracts [11] Future Guidance - Surgery Partners reaffirmed its full-year revenue guidance of $3.30–3.45 billion and adjusted EBITDA of $555–565 million, projecting further EBITDA margin expansion [14] - Key areas to monitor include the integration and profitability of newly acquired facilities, elevated debt service costs, and operational execution in working capital management [15]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, and cash flow statements, with accompanying notes [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides key financial metrics, including total assets of $7.95 billion and Q2 2025 revenues of $826.2 million Financial Position (in millions) | Financial Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $1,105.3 | $1,119.4 | | Total assets | $7,954.8 | $7,890.0 | | **Liabilities & Equity** | | | | Total current liabilities | $573.3 | $624.4 | | Long-term debt, less current maturities | $3,465.2 | $3,268.9 | | Total stockholders' equity | $3,156.5 | $3,196.4 | Consolidated Statements of Operations (in millions, except EPS) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $826.2 | $762.1 | $1,602.2 | $1,479.5 | | Operating income | $111.7 | $84.8 | $173.6 | $160.8 | | Net loss attributable to Surgery Partners, Inc. | $(2.5) | $(15.5) | $(40.2) | $(27.9) | | Basic and Diluted EPS | $(0.02) | $(0.12) | $(0.32) | $(0.22) | Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $87.3 | $123.5 | | Net cash used in investing activities | $(74.3) | $(327.2) | | Net cash (used in) provided by financing activities | $(32.4) | $221.3 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, segment reporting, acquisitions, and payor mix for the company's 162 surgical facilities - As of June 30, 2025, the company owned or operated a portfolio of **162 surgical facilities**, including 143 ambulatory surgery centers (ASCs) and 19 surgical hospitals, across 30 states[25](index=25&type=chunk) Patient Service Revenues by Payor (%) | Payor | % of Patient Service Revenues (H1 2025) | % of Patient Service Revenues (H1 2024) | | :--- | :--- | :--- | | Private insurance | 52.6% | 52.2% | | Government | 42.5% | 42.2% | | Self-pay | 2.7% | 2.8% | | Other | 2.2% | 2.8% | - During the first six months of 2025, the company acquired a controlling interest in **four surgical facilities and two physician practices** for aggregate cash consideration of **$48.0 million**, net of cash acquired[62](index=62&type=chunk) - Goodwill increased from **$5,068.0 million** at year-end 2024 to **$5,098.6 million** as of June 30, 2025, primarily due to acquisitions (**$76.1 million**) net of disposals (**$45.5 million**)[48](index=48&type=chunk) - The company operates as a single reportable segment, **"Surgical Facilities,"** which includes ASCs, surgical hospitals, anesthesia services, and physician practices, generating **$289.9 million** in Adjusted EBITDA for the six months ended June 30, 2025[89](index=89&type=chunk)[90](index=90&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, including an 8.3% revenue increase in Q2 2025, liquidity, capital resources, and non-GAAP reconciliations [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section details Q2 2025 revenue growth of 8.3% to $826.2 million, driven by same-facility increases, and changes in net loss Consolidated Results (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $826.2 | $762.1 | 8.4% | | Cost of Revenues | $630.6 | $582.9 | 8.2% | | Operating Income | $111.7 | $84.8 | 31.7% | | Net Loss Attributable to Surgery Partners, Inc. | $(2.5) | $(15.5) | 83.9% improvement | - The increase in Q2 2025 patient service revenues was driven by a **5.1% increase** in days-adjusted same-facility revenues, resulting from a **3.4% increase** in same-facility case volumes and a **1.6% increase** in same-facility revenue per case[113](index=113&type=chunk) - Interest expense for Q2 2025 increased to **$67.9 million** from **$51.5 million** in Q2 2024, primarily due to 2024 financing activities, increased Revolver borrowings, and maturing interest rate swaps[119](index=119&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$250.1 million** in cash and **$394.9 million** available on its revolver, despite a decrease in operating cash flow Liquidity Metrics (in millions) | Liquidity Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $250.1 | $269.5 | | Revolver borrowing capacity | $394.9 | N/A | | Net working capital | $532.0 | $495.0 | - The decrease in operating cash flow for H1 2025 compared to H1 2024 was primarily driven by **higher cash interest payments** and the **timing of changes in working capital**[132](index=132&type=chunk) - Management believes that cash flows from operations, available cash, revolver capacity, and access to capital markets will be adequate to meet both short-term and long-term liquidity needs[139](index=139&type=chunk) [Certain Non-GAAP Measures](index=26&type=section&id=Certain%20Non-GAAP%20Measures) This section reconciles non-GAAP measures, showing Q2 2025 Adjusted EBITDA increased 9.0% to **$129.0 million** Adjusted EBITDA Reconciliation (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income before income taxes | $43.8 | $33.3 | $43.5 | $62.0 | | Adjusted EBITDA | $129.0 | $118.3 | $232.9 | $215.8 | Credit Agreement EBITDA (in millions) | Metric | Twelve Months Ended June 30, 2025 | | :--- | :--- | | Cash flows from operating activities | $263.9 | | Credit Agreement EBITDA | $579.0 | [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk on its variable-rate debt through hedging strategies, anticipating no material impact on 2025 earnings - The company's main market risk is exposure to changes in interest rates on its **variable-rate debt**, primarily indexed to the prime rate or SOFR[149](index=149&type=chunk)[150](index=150&type=chunk) - To mitigate interest rate risk, the company uses a mix of debt maturities and types, and periodically enters into **interest rate swap and cap agreements**[149](index=149&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[152](index=152&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended June 30, 2025[153](index=153&type=chunk) [PART II - OTHER INFORMATION](index=29&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other disclosures, including equity sales and trading arrangements [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Management believes no current legal proceedings will have a material adverse effect on the company's business or financial condition - In management's opinion, the company is not currently a party to any proceedings that would have a **material adverse effect** on its business, financial condition, or results of operations[155](index=155&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred regarding the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There have been **no material changes** with respect to the risk factors discussed in the company's 2024 Annual Report on Form 10-K[156](index=156&type=chunk) [Other Information (Items 2-6)](index=29&type=section&id=Other%20Information%20%28Items%202-6%29) This section confirms no unregistered equity sales, no defaults on senior securities, and no Rule 10b5-1 trading arrangement changes - The company reports **no unregistered sales of equity securities** and **no defaults upon senior securities**[157](index=157&type=chunk)[158](index=158&type=chunk) - During the three months ended June 30, 2025, none of the company's directors or officers adopted or terminated any **Rule 10b5-1 trading arrangement**[160](index=160&type=chunk)

Company Performance - Surgery Partners reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, but down from $0.21 per share a year ago, representing an earnings surprise of +6.25% [1] - The company posted revenues of $826.2 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.15%, and up from $762.1 million year-over-year [2] - Over the last four quarters, Surgery Partners has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Market Outlook - Surgery Partners shares have increased approximately 4.9% since the beginning of the year, compared to the S&P 500's gain of 7.6% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $0.21 on revenues of $841.4 million, and $0.95 on revenues of $3.39 billion for the current fiscal year [7] Industry Context - The Medical Services industry, to which Surgery Partners belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Surgery Partners' stock performance [5][6]

Financial Data and Key Metrics Changes - Surgery Partners reported second quarter net revenue of $826 million, an increase of 8.4% compared to the previous year, and adjusted EBITDA of $129 million, reflecting a 9% growth [6][25][26] - The company achieved a same facility revenue growth of 5.1%, with same facility case growth at 3.4% and rate growth at 1.6% [25][26] - The adjusted EBITDA margin was 15.6%, which is 10 basis points higher than the prior year [26] Business Line Data and Key Metrics Changes - The company performed nearly 173,000 surgical cases in the second quarter, a 3.8% increase from the previous year, with significant growth in gastrointestinal (GI) and musculoskeletal (MSK) procedures [9][25] - Total joint procedures grew by 26% in the second quarter compared to the prior year, indicating strong demand for orthopedic surgeries [10] Market Data and Key Metrics Changes - The total addressable market for Surgery Partners is estimated to grow from $40 billion to over $150 billion in the near to medium term, driven by demographic trends and technological advancements [22] - The company has less than 5% exposure to Medicaid, indicating limited risk from changes in Medicaid reimbursement policies [18] Company Strategy and Development Direction - The company focuses on three growth pillars: organic growth, margin improvement, and capital deployment for mergers and acquisitions (M&A) [5][6] - Surgery Partners plans to deploy $200 million in acquisitions for the year, with a disciplined approach to ensure long-term value creation [15][31] - The company is actively evaluating its asset portfolio to optimize for growth and leverage reduction, including potential partnerships or sales of non-core facilities [22][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning within the current regulatory environment, noting minimal exposure to tariff-related price increases and a favorable outlook from CMS regarding outpatient rates [17][18] - The company anticipates continued growth in same facility revenue, expecting to reach the high end of its growth target of 6% for the full year [9][81] Other Important Information - Surgery Partners opened eight de novo facilities in 2024 and has a robust pipeline for future developments, particularly in higher acuity specialties [12][22] - The company recorded a 27% sequential decrease in transaction and integration costs, reflecting a more normalized M&A activity level [17] Q&A Session Summary Question: What is the expected pace of acquisitions for the year? - Management confirmed a strong pipeline and reiterated the target of at least $200 million in acquisitions, emphasizing the importance of timing and quality over rushing to meet targets [34][36] Question: How do de novo facilities impact margins? - Management explained that de novo facilities take time to reach full profitability, typically achieving breakeven within 6-12 months and full run rate earnings within three years [39][40] Question: Are there any service lines considered less core? - Management indicated that they are evaluating opportunities to optimize the portfolio, which may include divesting non-core facilities or expanding partnerships with local health systems [45][80] Question: What is the impact of the potential removal of the inpatient-only list? - Management expressed optimism about the potential for increased revenue from higher acuity procedures being performed in outpatient settings, although they cautioned against overestimating immediate impacts [51][72] Question: How is the company addressing payer behavior and revenue cycle standardization? - Management noted ongoing efforts to improve revenue cycle processes and maintain strong relationships with payers, which are crucial for optimizing cash flow and operational efficiency [62][63]

Financial Data and Key Metrics Changes - Surgery Partners reported Q2 2025 net revenue of $826 million, an increase of 8.4% compared to Q2 2024, and adjusted EBITDA of $129 million, reflecting a 9% growth year-over-year [6][25]. - The adjusted EBITDA margin improved to 15.6%, up 10 basis points from the previous year [25]. - The company ended the quarter with $250 million in cash and total liquidity of $645 million [25][26]. Business Line Data and Key Metrics Changes - Same facility revenue growth was 5.1%, driven by a 3.4% increase in surgical case volume and a 1.6% increase in rates [24][25]. - Total joint procedures grew by 26% year-over-year, indicating strong demand in orthopedic surgeries [9]. - The company performed nearly 173,000 surgical cases in Q2 2025, a 3.8% increase from the previous year [24]. Market Data and Key Metrics Changes - The total addressable market for Surgery Partners is estimated to exceed $150 billion, with a current market size of over $40 billion [21]. - The company has limited exposure to Medicaid, accounting for less than 5% of revenue, which mitigates risks from regulatory changes [17]. - Proposed changes by CMS could add 276 procedures to the ASC covered list, enhancing the company's market position [18]. Company Strategy and Development Direction - The company focuses on three growth pillars: organic growth, margin improvement, and M&A activities [5][14]. - Surgery Partners plans to deploy $200 million in acquisitions for 2025, with a disciplined approach to ensure long-term value [15][29]. - The company is actively evaluating its asset portfolio to optimize operations and reduce leverage [21][44]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current regulatory environment, with minimal exposure to tariff-related price increases [16][17]. - The company anticipates continued growth in same facility revenue, aiming for the high end of the 6% growth target for the full year [8][25]. - Management highlighted the importance of physician recruitment and the positive impact of new facilities on long-term growth [11][20]. Other Important Information - Surgery Partners opened eight de novo facilities in 2024 and has 10 more under construction, focusing on higher acuity specialties [12][20]. - The company recorded a 27% sequential decrease in transaction and integration costs, indicating improved efficiency in M&A activities [15][16]. - The strategic review process concluded with a reaffirmation of the company's value creation opportunities as a publicly traded entity [20][22]. Q&A Session Summary Question: What is the pace of acquisitions and how should it be modeled going forward? - Management indicated that while the pace of acquisitions has been slower, they remain confident in achieving the $200 million target for the year, emphasizing the importance of finding the best deals [32][34]. Question: What are the economics of de novo facilities and their impact on margins? - Management explained that de novo facilities take time to ramp up but are expected to contribute positively to margins as they focus on higher acuity procedures [35][39]. Question: Are there any service lines considered less core during portfolio optimization? - Management stated they are evaluating opportunities to maximize long-term shareholder value, which may include partnerships or sales in certain markets [42][44]. Question: What is the company's exposure to health exchange volume and its potential impact? - Management noted that their exposure to health exchange volume is limited and not a significant part of their business, indicating minimal risk from potential declines in exchange membership [97]. Question: What drove the increase in operating expenses and variability in other OpEx? - Management clarified that fluctuations in operating expenses are due to various miscellaneous items and that the increase in professional fees is related to newly acquired surgical facilities [84][86].

[Overview and Highlights](index=1&type=section&id=SURGERY%20PARTNERS%2C%20INC.%20ANNOUNCES%20SECOND%20QUARTER%202025%20RESULTS) Surgery Partners reported strong Q2 2025 financial results and reaffirmed its full-year guidance, reflecting confidence in its operational strategy [Second Quarter 2025 Financial Highlights & 2025 Guidance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights%20%26%202025%20Guidance) Surgery Partners reported strong Q2 2025 results with 8.4% revenue growth and 9.0% Adjusted EBITDA increase, reaffirming full-year guidance Q2 2025 Key Financial Metrics (in millions) | Metric | Q2 2025 | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | $826.2 | 8.4 | | Same-facility Revenues | - | 5.1 | | Same-facility Cases | - | 3.4 | | Adjusted EBITDA | $129.0 | 9.0 | | Net Loss Attributable to SGRY | $2.5 | - | Full Year 2025 Guidance (Reaffirmed, in millions) | Metric | Guidance Range | | :--- | :--- | | Revenue | $3,300 - $3,450 | | Adjusted EBITDA | $555 - $565 | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributed strong growth to operational strategy and market momentum, reaffirming full-year guidance and expecting margin expansion - CEO Eric Evans highlighted the company's focus on maximizing portfolio performance, capitalizing on surgical trends, and evaluating opportunities to expedite **leverage reduction** and accelerate **cash flow generation**[2](index=2&type=chunk) - CFO Dave Doherty expressed confidence in achieving **full-year guidance**, citing ongoing operating system improvements and benefits from recent acquisitions and new facility openings[2](index=2&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) The company reported strong Q2 2025 financial performance with revenue growth, increased Adjusted EBITDA, and stable liquidity [Quarterly and Year-to-Date Results](index=1&type=section&id=Quarterly%20and%20Year-to-Date%20Results) Q2 2025 revenues grew 8.4% to $826.2 million, with year-to-date revenues up 8.3% to $1.6 billion Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $826.2 | $762.1 | 8.4% | | Same-Facility Revenues | - | - | 5.1% | | Adjusted EBITDA | $129.0 | $118.3 | 9.0% | Year-to-Date 2025 vs 2024 Performance (in millions) | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $1,602.2 | $1,479.5 | 8.3% | | Same-Facility Revenues | - | - | 5.1% | | Adjusted EBITDA | $232.9 | $215.8 | 7.9% | [Liquidity and Financial Position](index=2&type=section&id=Liquidity) Surgery Partners reported $250.1 million cash, $394.9 million credit availability, and a 4.1x net debt to EBITDA ratio - The company had cash and cash equivalents of **$250.1 million** and a borrowing capacity of **$394.9 million** under its revolving credit facility at the end of Q2 2025[6](index=6&type=chunk) Cash Flow from Operating Activities (in millions) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Second Quarter | $81.3 | $82.8 | | Year-to-Date | $87.3 | $123.5 | - The ratio of total net debt to EBITDA, calculated per the company's credit agreement, was approximately **4.1x** at the end of Q2 2025[8](index=8&type=chunk) [Detailed Financial Tables](index=4&type=section&id=Detailed%20Financial%20Tables) Detailed financial tables provide a comprehensive view of the company's financial performance and key operating metrics [Consolidated Financial Data (Income Statement)](index=4&type=section&id=Selected%20Consolidated%20Financial%20Data) The consolidated income statement highlights key financial results for Q2 2025, including revenues, operating income, and net loss Q2 2025 Consolidated Income Statement Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $826.2 | $762.1 | | Operating Income | $111.7 | $84.8 | | Interest Expense, net | $(67.9) | $(51.5) | | Net Income | $44.9 | $28.4 | | Net Loss Attributable to SGRY | $(2.5) | $(15.5) | [Selected Financial and Operating Data](index=5&type=section&id=Selected%20Financial%20and%20Operating%20Data) This section presents key balance sheet data and operating metrics, including cases, revenue per case, and Adjusted EBITDA margin Balance Sheet Data at Period End (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $250.1 | $269.5 | | Total Assets | $7,954.8 | $7,890.0 | | Long-term debt, less current | $3,465.2 | $3,268.9 | | Total Liabilities | $4,375.9 | $4,254.8 | | Total SGRY Stockholders' Equity | $1,748.3 | $1,789.7 | Key Operating Metrics (Q2) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cases | 172,858 | 166,520 | | Revenue per Case ($) | 4,780 | 4,577 | | Adjusted EBITDA Margin (%) | 15.6 | 15.5 | [Supplemental Information (Same-Facility Data)](index=6&type=section&id=Supplemental%20Information) Supplemental information details same-facility performance, including case growth, revenue per case, and days-adjusted revenue growth Same-Facility Performance (Q2) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cases | 183,623 | 177,514 | | Case Growth (%) | 3.4 | N/A | | Revenue per Case ($) | 4,736 | 4,663 | | Revenue per Case Growth (%) | 1.6 | N/A | | Revenue Growth (days adjusted) (%) | 5.1 | N/A | [Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains the company's non-GAAP financial measures and provides detailed reconciliations for key metrics [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Surgery Partners uses non-GAAP measures like Adjusted EBITDA to supplement GAAP results, aiding performance evaluation - The company presents non-GAAP measures like **Adjusted EBITDA** and **Adjusted net income** as supplemental tools that management uses to assess operating performance, make business decisions, and allocate resources[15](index=15&type=chunk)[16](index=16&type=chunk)[26](index=26&type=chunk) - These measures are not intended to replace GAAP metrics and have limitations, as they exclude items that can be significant in evaluating financial performance[16](index=16&type=chunk)[27](index=27&type=chunk) [Reconciliation of Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company provides a detailed reconciliation of Adjusted EBITDA from income before income taxes for Q2 2025, totaling $129.0 million Adjusted EBITDA Reconciliation (Q2 2025, in millions) | Description | Amount | | :--- | :--- | | Income before income taxes | $43.8 | | Net income attributable to NCI | $(47.4) | | Interest expense, net | $67.9 | | Depreciation and amortization | $40.3 | | Transaction and integration costs | $18.1 | | Other Adjustments | $(0.5) | | **Adjusted EBITDA** | **$129.0** | Adjusted EBITDA from Unconsolidated Affiliates (Q2, in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Management fee revenues | $8.6 | $6.8 | | Equity in earnings | $5.5 | $4.4 | | **Total** | **$15.2** | **$11.8** | [Reconciliation of Adjusted Net Income](index=7&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income) Adjusted net income attributable to common stockholders for Q2 2025 was $21.9 million, or $0.17 per diluted share Adjusted Net Income Reconciliation (Q2 2025, in millions) | Description | Amount | | :--- | :--- | | Net income | $44.9 | | Net income attributable to NCI | $(47.4) | | Transaction and integration costs | $18.1 | | Equity-based compensation expense | $6.8 | | Other Adjustments | $(0.5) | | **Adjusted net income** | **$21.9** | Adjusted Net Income Per Share (Diluted) | Period | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Second Quarter | 0.17 | 0.21 | | Year-to-Date | 0.21 | 0.31 | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides supplementary details including conference call information, company overview, and forward-looking statements [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Surgery Partners held a conference call on August 5, 2025, to discuss quarterly results, with replay information available - A conference call was held on **August 5, 2025**, at 8:30 a.m. (Eastern Time) to discuss the results[9](index=9&type=chunk) - A replay of the call is available until **August 19, 2025**, and a webcast replay is accessible on the company's Investor Relations website[9](index=9&type=chunk)[10](index=10&type=chunk) [About Surgery Partners](index=2&type=section&id=About%20Surgery%20Partners) Surgery Partners is a leading healthcare services company operating over 200 short-stay surgical facilities across 30 states - Surgery Partners is a leading owner and operator of **short-stay surgical facilities**, with a model focused on high-quality, cost-effective outpatient care[1](index=1&type=chunk)[12](index=12&type=chunk) - The company operates more than **200 locations** in **30 states**, including ambulatory surgery centers, surgical hospitals, and physician practices[12](index=12&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report includes forward-looking statements concerning growth and future results, which are subject to **risks and uncertainties**[13](index=13&type=chunk) - Factors that could affect results include **payment reductions** from payors, physician relationships, **competition**, **regulatory changes**, and other risks detailed in the company's Form 10-K[13](index=13&type=chunk)[14](index=14&type=chunk)

Core Viewpoint - Surgery Partners, Inc. reaffirms its full-year 2025 guidance for revenue and Adjusted EBITDA, reflecting strong growth in the ambulatory surgery industry and operational strategy [2][3]. Financial Highlights - Full-year 2025 revenue guidance is reaffirmed to be in the range of $3.30 billion to $3.45 billion, and Adjusted EBITDA guidance is set between $555 million and $565 million [2]. - Revenues for Q2 2025 increased by 8.4% to $826.2 million compared to $762.1 million in Q2 2024 [3][6]. - Same-facility revenues for Q2 2025 rose by 5.1%, with a 1.6% increase in revenue per case and a 3.4% increase in same-facility cases [3][4]. - Adjusted EBITDA for Q2 2025 was $129.0 million, a 9.0% increase from $118.3 million in Q2 2024 [3][6]. Year-to-Date Results - Year-to-date revenues for 2025 increased by 8.3% to $1,602.2 million compared to $1,479.5 million in the same period of 2024 [4]. - Year-to-date Adjusted EBITDA was $232.9 million, up from $215.8 million in the prior year [4]. Liquidity and Cash Flow - As of June 30, 2025, the company had cash and cash equivalents of $250.1 million and $394.9 million in borrowing capacity under its revolving credit facility [5]. - Cash flows from operating activities for Q2 2025 were $81.3 million, slightly down from $82.8 million in Q2 2024 [5][7]. Debt and Leverage - The ratio of total net debt to EBITDA was approximately 4.1x at the end of Q2 2025, while leverage calculated using consolidated debt divided by Adjusted EBITDA was 4.7x [8]. Operational Performance - The number of surgical facilities as of the end of the period was 162, down from 167 in the previous year [22]. - The company reported a net loss attributable to Surgery Partners, Inc. of $2.5 million for Q2 2025, compared to a net loss of $15.5 million in Q2 2024 [19].

Company Overview - Surgery Partners, Inc. is a leading healthcare services company focused on providing high-quality, cost-effective surgical and ancillary care solutions [3] - The company operates more than 200 locations across 30 states, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices, and urgent care facilities [3] - Founded in 2004, Surgery Partners is recognized as one of the largest and fastest-growing surgical services businesses in the United States [3] Upcoming Financial Results - Surgery Partners will release its second quarter 2025 results before the market opens on August 5, 2025 [1] - A conference call will follow at 8:30 a.m. Eastern Time on the same day [1] - Interested parties can access the call via a webcast on the company's Investor Relations website, with a replay available for a limited time [1][2] Investor Relations - The company provides material information through its website, ensuring easy access for investors [2] - Contact information for investor relations includes a dedicated phone line and email address for inquiries [4] - Live access to the conference call is available through specific dial-in numbers for domestic and international participants [4]