Financial Data and Key Metrics Changes - Surgery Partners reported first quarter net revenue of $776 million and adjusted EBITDA of $103.9 million, both meeting expectations [5][18] - Adjusted EBITDA grew nearly 7% and net revenue grew 8% compared to the prior year's first quarter [5][18] - Same facility revenue growth was over 5%, with total revenue increasing by 5.2% in the first quarter [5][18] Business Line Data and Key Metrics Changes - Surgical case growth was 6.5%, with a decline in rates of approximately 1%, primarily due to growth in lower acuity specialties [6][8] - Orthopedic cases grew by 3.4% year-over-year, driven by a 22% increase in total joint procedures [9][10] - The company performed over 60,000 surgical cases in the first quarter, with growth across all core specialties [8][18] Market Data and Key Metrics Changes - The company expects full year 2025 same facility growth to be at or above the high end of the target of 6% [7] - The company has opened 20 de novo facilities since February 2022, with 10 currently under construction [11] Company Strategy and Development Direction - Surgery Partners focuses on organic growth, margin improvement, and capital deployment for mergers and acquisitions (M&A) [4][12] - The company has a robust pipeline of attractive partnership opportunities and has deployed $55 million in 2025 for five surgical facilities [12][13] - The company aims to maintain a balance between volume and rate growth as the year progresses [7][30] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and the ability to navigate regulatory uncertainties [15][17] - The company does not foresee material exposure to tariff-related price increases or significant risks from potential legislative changes to Medicaid [15] - Management reiterated guidance for full year 2025 revenue and adjusted EBITDA, expecting continued margin expansion [23][22] Other Important Information - The company ended the quarter with $229 million in cash and over $615 million in total liquidity [19][22] - The effective interest rate on corporate debt is fixed at approximately 6%, with no maturity until 2030 [21] Q&A Session Summary Question: Current utilization trends and sustainability - Management acknowledged tough comparisons but noted strong growth in de novos and MSK procedures contributing to case growth [25][26] Question: Pricing and payer mix - Management confirmed no significant changes in payer mix, with strong commercial growth and good visibility in rate negotiations [41][43] Question: Labor dynamics and specialty areas - Management indicated that professional fees were in line with expectations, driven by recent acquisitions, and noted no major headwinds from anesthesia costs [52][54] Question: Physician recruiting and acuity - Management highlighted a diverse recruiting class with a focus on higher acuity service lines, noting a 14% increase in net revenue per physician compared to last year [56][57] Question: Impact of GI mix on revenue - Management reported slight growth in GI cases, with a marginal impact on revenue per case, and expects continued growth throughout the year [61][64] Question: Tariff exposure confidence - Management expressed confidence due to strong relationships with HealthTrust and good visibility into contract protections [70][74] Question: Free cash flow expectations - Management expects free cash flow to improve as the year progresses, despite some timing issues in the first quarter [92][94] Question: Margin expansion efforts - Management discussed ongoing improvements in revenue cycle management and operational efficiencies as key drivers for margin expansion [97][100]

Financial Data and Key Metrics Changes - Surgery Partners reported first quarter net revenue of $776 million and adjusted EBITDA of $103.9 million, both meeting expectations. Adjusted EBITDA grew nearly 7% and net revenue grew 8% compared to the prior year's first quarter [4][16] - The company experienced same facility revenue growth of over 5%, driven by 6.5% surgical case growth, although there was a decline in rates of approximately 1% due to a shift towards lower acuity specialties [5][6] - The adjusted EBITDA margin for the first quarter was 13.4%, with total net debt to EBITDA ratio at 4.1 times, consistent with expectations [17][20] Business Line Data and Key Metrics Changes - The company performed over 160,000 surgical cases in the first quarter, a 4.5% increase from 2024, with significant growth in gastrointestinal (GI) and musculoskeletal (MSK) procedures [16][6] - Orthopedic cases grew by 3.4% year-over-year, with total joint procedures increasing by 22% [7][6] - The company added nearly 50 new physicians in the first quarter, with a focus on orthopedic specialties, which are expected to contribute to higher acuity surgical cases [8][56] Market Data and Key Metrics Changes - The company reported strong growth across all core specialties, particularly in GI and orthopedic procedures, which are expected to continue throughout the year [6][67] - The company has a robust pipeline of de novo facilities, with 10 currently under construction and a target of 10 new facilities each year [9][108] Company Strategy and Development Direction - Surgery Partners focuses on three pillars for growth: organic growth, margin improvement, and capital deployment for mergers and acquisitions (M&A) [3][10] - The company is committed to margin expansion through operational efficiencies and integration of acquired facilities, with a target of maintaining a leverage ratio below 3 times [20][84] - The company is actively monitoring regulatory changes and has minimal exposure to tariff-related price increases, with less than 5% of revenue coming from Medicaid and exchange-based reimbursement programs [13][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and reaffirmed guidance for full-year 2025 revenue and adjusted EBITDA in the range of $3.3 billion to $3.45 billion and $555 million to $565 million, respectively [21][22] - The management noted that the first quarter's results align with internal expectations and highlighted the importance of physician recruitment and operational efficiencies in driving future growth [15][35] Other Important Information - Surgery Partners has sufficient liquidity, with $229 million in cash and over $615 million in total liquidity, to support growth without needing to access capital markets [17][20] - The company is currently evaluating a nonbinding acquisition proposal from Bain Capital, with a special committee formed to consider the proposal [14] Q&A Session Summary Question: Current utilization trends and sustainability - Management acknowledged tough comparisons due to pricing but noted that first quarter same store revenue growth was in line with expectations, driven by strong growth in de novos and MSK procedures [24][25] Question: Free cash flow generation seasonality - Management indicated that free cash flow is expected to improve as the year progresses, with the second and fourth quarters typically being stronger for cash flow generation [30][31] Question: Changes in payer mix and commercial rates - Management confirmed no significant changes in payer mix and expressed confidence in ongoing constructive negotiations with commercial payers [40][43] Question: Impact of professional fees and labor dynamics - Management clarified that professional fees were in line with expectations, primarily due to recent acquisitions, and noted no significant labor pressures affecting operations [51][52] Question: Physician recruiting and acuity service lines - Management reported a diverse recruiting class with a focus on higher acuity service lines, indicating a 14% increase in net revenue per physician compared to the previous year [56][57] Question: Impact of GI mix on revenue per case - Management noted slight growth in the GI portfolio, with a marginal impact on revenue per case, and emphasized the importance of calendar effects on same store metrics [61][62] Question: Confidence in tariff exposure - Management reiterated confidence in minimal tariff exposure due to strong relationships with suppliers and effective procurement strategies [70][74] Question: Timing of NCI payouts - Management explained that the increase in NCI payouts was due to timing issues related to the holiday calendar, which should normalize throughout the year [75][78]

Surgery Partners, Inc. First Quarter 2025 Results [Financial Highlights and 2025 Guidance](index=1&type=section&id=Financial%20Highlights%20and%202025%20Guidance) Surgery Partners reported strong first-quarter 2025 results, with an 8.2% increase in revenue and a 6.6% rise in Adjusted EBITDA year-over-year, reaffirming its full-year 2025 guidance Q1 2025 Financial Highlights (YoY, in millions) | Metric | Q1 2025 | Change | | :--- | :--- | :--- | | Revenue | $776.0 | +8.2% | | Same-facility revenues | N/A | +5.2% | | Same-facility cases | N/A | +6.5% | | Net loss attributable to Surgery Partners, Inc. | $37.7 | N/A | | Adjusted EBITDA | $103.9 | +6.6% | Reaffirmed Full Year 2025 Guidance (in billions/millions) | Metric | Guidance Range | | :--- | :--- | | Revenues | $3.30 billion to $3.45 billion | | Adjusted EBITDA | $555 million to $565 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed satisfaction with the strong start to 2025, driven by portfolio performance, M&A pipeline, and operational efficiencies, while reaffirming guidance and liquidity - CEO Eric Evans stated the **strong start to 2025** is consistent with the company's long-term growth algorithm, driven by maximizing portfolio performance, advancing the M&A pipeline, and improving operating efficiencies[2](index=2&type=chunk) - CFO Dave Doherty noted that results align with internal expectations, giving confidence in reaffirming guidance, anticipating **continued margin expansion** and **sufficient liquidity** to fund future M&A without accessing capital markets for the next five years[2](index=2&type=chunk) [First Quarter 2025 Performance Analysis](index=1&type=section&id=First%20Quarter%202025%20Performance%20Analysis) Q1 2025 revenues grew 8.2% to $776.0 million, primarily from a 5.2% increase in same-facility revenues driven by higher cases, despite a slight decrease in revenue per case Q1 2025 vs Q1 2024 Performance (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $776.0 | $717.4 | +8.2% | | Same-facility Revenues Growth | 5.2% | N/A | N/A | | Same-facility Cases Growth | 6.5% | N/A | N/A | | Same-facility Revenue per Case Growth | (1.2)% | N/A | N/A | | Adjusted EBITDA | $103.9 | $97.5 | +6.6% | [Financial Position and Liquidity](index=1&type=section&id=Financial%20Position%20and%20Liquidity) As of March 31, 2025, Surgery Partners maintained a strong liquidity position with $229.3 million in cash and $388.9 million in revolving credit capacity, despite a decrease in operating cash flow - As of March 31, 2025, the company had **$229.3 million in cash** and cash equivalents and **$388.9 million of borrowing capacity** under its revolving credit facility[4](index=4&type=chunk) - Cash flow from operating activities was **$6.0 million** for Q1 2025, down from **$40.7 million** in Q1 2024, due to the timing of routine working capital transactions[4](index=4&type=chunk) - The ratio of total net debt to EBITDA, as calculated under the Company's credit agreement, was approximately **4.1x** at the end of Q1 2025[5](index=5&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents detailed consolidated financial data, including income statement, balance sheet, cash flow, and key operating metrics [Selected Consolidated Financial Data (Income Statement)](index=4&type=section&id=Selected%20Consolidated%20Financial%20Data%20(Income%20Statement)) For Q1 2025, the company reported revenues of $776.0 million and an increased net loss attributable to Surgery Partners, Inc. of $37.7 million Q1 2025 vs Q1 2024 Income Statement Highlights (in millions, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $776.0 | $717.4 | | Operating Income | $61.9 | $76.0 | | Net Loss Attributable to Surgery Partners, Inc. | $(37.7) | $(12.4) | | Basic & Diluted Net Loss Per Share | $(0.30) | $(0.10) | [Selected Financial and Operating Data (Balance Sheet, Cash Flow & Key Metrics)](index=5&type=section&id=Selected%20Financial%20and%20Operating%20Data%20(Balance%20Sheet,%20Cash%20Flow%20%26%20Key%20Metrics)) As of March 31, 2025, total assets were $7.95 billion, with net cash from operating activities at $6.0 million, and the company operated 164 surgical facilities Balance Sheet Data (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $229.3 | $269.5 | | Total assets | $7,949.2 | $7,890.0 | | Total liabilities | $4,362.7 | $4,254.8 | | Total Surgery Partners, Inc. stockholders' equity | $1,740.4 | $1,789.7 | Cash Flow Data for Three Months Ended March 31 (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from Operating activities | $6.0 | $40.7 | | Net cash used in Investing activities | $(76.4) | $(83.1) | | Net cash from Financing activities | $30.2 | $31.7 | Other Operating Data for Three Months Ended March 31 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of surgical facilities | 164 | 165 | | Cases | 160,300 | 153,392 | | Adjusted EBITDA margin | 13.4% | 13.6% | [Supplemental and Non-GAAP Information](index=6&type=section&id=Supplemental%20and%20Non-GAAP%20Information) This section provides supplemental data, including same-facility performance and reconciliations of non-GAAP financial measures [Same-Facility Information](index=6&type=section&id=Same-Facility%20Information) For Q1 2025, same-facility cases grew 6.5% on a days-adjusted basis, contributing to a 5.2% days-adjusted revenue growth Q1 2025 Same-Facility Information (YoY) | Metric | Value | | :--- | :--- | | Case growth | 4.8% | | Revenue per case growth | (1.2)% | | Case growth (days adjusted) | 6.5% | | Revenue growth (days adjusted) | 5.2% | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company reconciled its GAAP loss before income taxes to an Adjusted EBITDA of $103.9 million and its GAAP net loss to an Adjusted Net Income of $5.4 million for Q1 2025 Reconciliation to Adjusted EBITDA (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | (Loss) income before income taxes | $(0.3) | $28.7 | | Adjustments (Interest, D&A, etc.) | $104.2 | $68.8 | | **Adjusted EBITDA** | **$103.9** | **$97.5** | Reconciliation to Adjusted Net Income (in millions, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income | $(0.3) | $24.3 | | Adjustments | $5.7 | $(12.2) | | **Adjusted net income attributable to common stockholders** | **$5.4** | **$12.1** | | **Adjusted diluted EPS** | **$0.04** | **$0.10** |

Group 1 - Surgery Partners, Inc. will release its first quarter 2025 results on May 12, 2025, before the market opens, followed by a conference call at 8:30 a.m. Eastern Time [1] - Interested parties can access the conference call via a webcast on the company's Investor Relations website, with a replay available for a limited time [1] - The company is headquartered in Brentwood, Tennessee, and operates over 200 locations across 30 states, focusing on outpatient surgical services [3] Group 2 - Surgery Partners is recognized as a leading healthcare services company, emphasizing high-quality and cost-effective surgical solutions [3] - The company was founded in 2004 and has rapidly grown to become one of the largest surgical services businesses in the United States [3] - The company operates various facilities, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices, and urgent care facilities [3]

Financial Performance - Surgery Partners, Inc. reported net losses of $168.1 million, $11.9 million, and $54.6 million for the years 2024, 2023, and 2022, respectively, indicating ongoing challenges in achieving profitability[137]. - The company’s ability to generate cash flow is critical for servicing its debt, and any failure to do so may adversely affect its financial condition[140]. - The company’s financial condition may be adversely affected if it fails to comply with restrictive covenants in its debt instruments[145]. - The company is exposed to significant financial penalties under the False Claims Act for any false claims submitted, which could lead to treble damages[181]. - The company's insurance coverage may not adequately protect against all claims, potentially impacting financial condition and operational results[191]. Debt and Indebtedness - As of December 31, 2024, the company had approximately $3.4 billion in total indebtedness, including $1.4 billion in senior secured term loans and $800 million in senior unsecured notes due 2032[139]. - The company had $192 million in outstanding borrowings under its $703.8 million senior secured revolving credit facility, leaving $501.5 million available for additional borrowings[139]. - The company may incur additional indebtedness in the future, which could exacerbate existing risks associated with its leverage[147]. - The company is exposed to interest rate risk due to variable rate indebtedness, which could increase debt service obligations if interest rates rise[153]. - The company’s subsidiaries are subject to various business considerations and statutory restrictions that may limit the distribution of earnings necessary to meet debt obligations[149]. Regulatory and Compliance Risks - The company is subject to various federal and state laws and regulations, which could result in significant penalties or operational changes if not complied with[164]. - The Affordable Care Act has changed how healthcare services are covered and reimbursed, potentially impacting the company's financial condition and operations[169]. - Violations of self-referral laws could lead to civil or criminal penalties, including up to $15,000 per prohibited service billed and exclusion from Medicare and Medicaid programs[178]. - The company’s surgical facilities do not meet the requirements for safe harbors under the federal Anti-Kickback Statute, which could expose it to penalties and loss of revenue[173]. - The company is regularly subject to federal and state audits, which could result in material repayments and penalties[186]. Legal and Operational Challenges - The company faces potential legal liabilities from ongoing lawsuits and investigations, which could divert resources and negatively impact its business[188]. - The company’s surgical hospitals are restricted from expanding capacity due to the Affordable Care Act, limiting growth opportunities[179]. - The company’s management agreements may not fully comply with the Anti-Kickback Statute, posing risks of legal challenges[174]. - The company faces potential legal claims from former employees alleging violations of labor regulations, which could result in significant financial liabilities[189]. - Increasing malpractice and legal claims against healthcare providers may lead to substantial damages that are not fully covered by insurance[190]. Medicare and Quality Metrics - Compliance with Medicare's conditions is critical, as failure to meet quality metrics could result in reduced payments and significant penalties[193]. - The company is at risk of decreased Medicare payments if it fails to report and meet various quality metrics, which could affect patient volumes[195]. Ownership and Governance - As of December 31, 2024, Bain Capital owns approximately 39.3% of the company's outstanding common stock, influencing key decisions[199]. - The company's charter provisions may deter beneficial takeover efforts, impacting stockholder value[200]. Cybersecurity - Cybersecurity remains a priority, with the company experiencing an immaterial cybersecurity incident in May 2023 that temporarily disrupted operations in Idaho[158]. Interest Rate Management - The company utilizes interest rate swap and cap agreements to manage exposure to interest rate fluctuations, with no expected material effect on net earnings in 2025[292].

Financial Data and Key Metrics Changes - Surgery Partners reported full-year adjusted EBITDA growth of 16% and net revenue growth of 13.5%, resulting in margin expansion of 30 basis points [7][17] - The company achieved revenue over $3 billion and adjusted EBITDA over $500 million for the first time [8] - Adjusted EBITDA for Q4 was $163.8 million, with a margin of 18.9%, while full-year adjusted EBITDA was $508.2 million, reflecting a 16% increase over 2023 [40][41] Business Line Data and Key Metrics Changes - The company performed over 656,000 surgical cases in 2024, an increase from 605,000 in 2023, with significant growth in orthopedic cases, which rose by 11% [12][38] - Total joint procedures within orthopedics grew by 50% in 2024, with over 70% of surgical facilities capable of performing higher acuity orthopedic procedures [13] - Same facility revenue increased by 5.6% in Q4 and 8% for the full year, exceeding the growth algorithm target of 4% to 6% [39] Market Data and Key Metrics Changes - Approximately 90% of the company's revenue was generated from commercial payers and Medicare in 2024 [18] - The managed care team secured over 99% of expected contractual rates for 2025, with Medicare rate increases projected at approximately 3% [19] Company Strategy and Development Direction - The company focuses on organic growth, margin improvement, and capital deployment for M&A as part of its growth algorithm [6][20] - Surgery Partners plans to continue investing in acquisitions, facility expansions, and service line expansions, with expectations of at least 10 de novo facilities annually [16][21] - The company aims for margin expansion in 2025 and beyond, supported by procurement and operational efficiency initiatives [20][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning relative to the current regulatory environment, noting minimal exposure to Medicaid and site neutrality legislation [28][30] - The company anticipates continued growth driven by a robust pipeline of acquisitions and strong operational execution [37][49] - Initial guidance for 2025 includes net revenue in the range of $3.3 billion to $3.45 billion and adjusted EBITDA between $555 million and $565 million [27][49] Other Important Information - Surgery Partners has a strong liquidity position with $270 million in cash and over $770 million in total liquidity [40] - The company incurred approximately $11 million in costs related to strategic alternatives considered by the Board in 2024, with expectations for similar costs in 2025 [45][134] Q&A Session Summary Question: Impact of potential legislation on site neutrality - Management indicated that the worst-case scenario would limit revenue impact to approximately 1%, with potential upside from procedures shifting from acute care to their facilities [55][60] Question: Guidance considerations for Q1 - Management noted that unusual weather patterns in January were factored into guidance, with expectations for a consistent quarterly pattern [64][66] Question: M&A strategy and pipeline - Management confirmed that the ongoing special committee review has not impacted their M&A approach, maintaining a strong pipeline for 2025 [71][74] Question: De novo facility ramp-up and costs - Management expressed optimism about the de novo pipeline, with expectations for facilities to reach breakeven within the first year [76][80] Question: Revenue impact from divestitures - Management clarified that divestitures would contribute less than 2% to revenue growth, emphasizing a focus on portfolio optimization [88][89] Question: Operating costs and EBITDA pressure - Management acknowledged higher operating costs due to performance management incentives and payer mix, but indicated these are manageable [125][128] Question: Transaction and integration costs visibility - Management expects a significant reduction in transaction and integration costs in 2025, improving free cash flow [131][132]

Surgery Partners, Inc. (NASDAQ:SGRY) Q4 2024 Earnings Conference Call March 3, 2025 8:30 AM ET Company Participants Eric Evans - Chief Executive Officer Dave Doherty - Executive Vice President and Chief Financial Officer Conference Call Participants Brian Tanquilut - Jefferies Benjamin Rossi - JPMorgan Chase Joanna Gajuk - Bank of America A.J. Rice - Credit Suisse Tao Qiu - Macquarie Research Andrew Mok - Barclays Matthew Gillmor - KeyBanc Capital Markets Whit Mayo - SVB Leerink Sarah James - Cantor Fitzge ...

Group 1 - Surgery Partners reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, with an earnings surprise of 15.79% [1] - The company posted revenues of $864.4 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.29%, compared to $735.4 million in the same quarter last year [2] - Surgery Partners has outperformed the S&P 500, gaining approximately 13.8% since the beginning of the year, while the S&P 500 has gained 1.2% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $798.93 million, and for the current fiscal year, it is $0.91 on revenues of $3.39 billion [7] - The Medical Services industry, to which Surgery Partners belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook [8]

Revenue Growth - Fourth quarter 2024 revenues increased 17.5% to $864.4 million compared to $735.4 million in Q4 2023[3] - Full year 2024 revenues rose 13.5% to $3.1 billion from $2.7 billion in 2023[4] - Same-facility revenue growth for 2024 was 8.0%, with a 4.0% increase in revenue per case and a 3.9% increase in same-facility cases[4] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was $163.8 million, a 15.1% increase from $142.3 million in Q4 2023[4] - Full year 2024 Adjusted EBITDA increased 16.0% to $508.2 million compared to $438.1 million in 2023[4] - Adjusted EBITDA for the three months ended December 31, 2024, was $163.8 million, compared to $142.3 million in 2023, marking a year-over-year increase of 15.1%[25] Net Loss and Income - The net loss attributable to Surgery Partners, Inc. for Q4 2024 was $108.5 million, and for the full year, it was $168.1 million[4] - For the three months ended December 31, 2024, the net income was $(46.6) million, compared to $46.7 million in the same period of 2023[30] - Adjusted net income attributable to common stockholders for the year ended December 31, 2024, was $118.8 million, down from $126.7 million in 2023, representing a decrease of approximately 6.2%[30] Cash and Liquidity - The liquidity position at the end of 2024 was over $770 million, including $269.5 million in cash and $501.5 million in borrowing capacity[5] - Cash and cash equivalents increased to $269.5 million in 2024 from $195.9 million in 2023, representing a growth of 37.4%[21] Assets and Liabilities - Total assets rose to $7,890.0 million in 2024, up from $6,876.7 million in 2023, reflecting an increase of 14.7%[21] - Total liabilities increased to $4,254.8 million in 2024 from $3,514.8 million in 2023, an increase of 21.0%[21] - The ratio of total net debt to EBITDA was approximately 3.7x at the end of Q4 2024[6] Acquisitions and Growth - The company deployed nearly $400 million on accretive acquisitions and opened eight new facilities in 2024[2] - The company reported a case growth of 6.8% for the three months ended December 31, 2024, compared to the same period in 2023[23] - The number of cases performed in Q4 2024 was 174,185, up from 153,193 in Q4 2023, indicating a growth of 13.7%[21] Shareholder Information - Adjusted net income per share (diluted) remained stable at $0.44 for Q4 2024, compared to $0.44 in Q4 2023[21] - The adjusted net income per share attributable to common stockholders for 2024 was $0.94 (basic) and $0.93 (diluted), compared to $1.01 (basic) and $1.00 (diluted) in 2023[30] - The weighted average common shares outstanding for basic shares was 126,209 for the three months ended December 31, 2024, compared to 125,774 in 2023[30] Costs and Expenses - The company incurred transaction, integration, and acquisition costs of $36.8 million in Q4 2024, compared to $26.1 million in Q4 2023, reflecting an increase of 40.5%[25] - Equity-based compensation expense increased to $6.2 million for the three months ended December 31, 2024, compared to $4.5 million in 2023[30] - The company reported a net loss on disposals, consolidations, and deconsolidations of $19.1 million for the three months ended December 31, 2024, up from $6.9 million in 2023[30] Future Projections - The company projects 2025 revenue to be between $3.30 billion and $3.45 billion, with Adjusted EBITDA expected to be between $555 million and $565 million[7] Tax Information - The company made income tax payments of $1.6 million and $1.4 million for the years ended December 31, 2024, and 2023, respectively[30] - No federal income tax payments were made during the years ended December 31, 2024, and 2023, due to the utilization of net operating loss carryforwards[30] Valuation Allowance - The change in valuation allowance on deferred tax assets contributed $99.5 million for the year ended December 31, 2024[30]

Core Insights - Surgery Partners, Inc. reported a strong financial performance for the fourth quarter and full year of 2024, with revenues increasing by 17.5% to $864.4 million in Q4 and 13.5% to $3.1 billion for the full year [3][4][6] - The company achieved same-facility revenue growth of 5.6% in Q4 and 8.0% for the full year, indicating consistent organic growth [3][4][6] - Adjusted EBITDA for Q4 was $163.8 million, a 15.1% increase year-over-year, while full year Adjusted EBITDA rose 16.0% to $508.2 million [6][4] - Surgery Partners anticipates 2025 revenue in the range of $3.30 billion to $3.45 billion and Adjusted EBITDA between $555 million and $565 million [8] Financial Highlights - Q4 2024 revenues increased to $864.4 million from $735.4 million in Q4 2023, while full year revenues rose to $3.1 billion from $2.7 billion in 2023 [3][4] - Same-facility cases grew by 5.1% in Q4 and 3.9% for the full year, with revenue per case increasing by 0.5% in Q4 and 4.0% for the full year [6][4] - The net loss attributable to Surgery Partners was $108.5 million for Q4 and $168.1 million for the full year, primarily due to a non-cash valuation allowance against deferred tax assets [6][4] Liquidity and Cash Flow - As of December 31, 2024, Surgery Partners had cash and cash equivalents of $269.5 million and $501.5 million in borrowing capacity under its revolving credit facility [5][19] - Operating cash flows for Q4 were $111.4 million, up from $62.6 million in Q4 2023, reflecting operational growth and working capital improvements [5][20] - The company ended 2024 with a liquidity position exceeding $770 million, enhancing its ability to fund future acquisitions without accessing capital markets [2][5] 2025 Outlook - The company projects full year 2025 revenue between $3.30 billion and $3.45 billion, with Adjusted EBITDA expected to be in the range of $555 million to $565 million [8][2] - The guidance includes approximately $11 million of Adjusted EBITDA related to divestitures that occurred late in Q4 2024 [8]