Group 1 - The healthcare sector is experiencing significant downturns in 2025, primarily due to impending large Medicaid cuts [1] - Tenet Healthcare (NYSE: THC) is identified as one of the few positive performers within the struggling healthcare sector [1] Group 2 - The article emphasizes the importance of finding underappreciated companies that can deliver value to investors, aligning with a contrarian investment philosophy [1]

Core Insights - Tenet Healthcare reported strong Q2 2025 earnings, with adjusted EPS of $4.02, significantly exceeding Wall Street expectations of $2.87, and revenue of $5.27 billion, surpassing GAAP forecasts of $5.16 billion [1][5][10] Financial Performance - Adjusted EPS increased by 74% year-over-year from $2.31 to $4.02 [2] - Revenue grew by 3.2% from $5.11 billion in Q2 2024 to $5.27 billion in Q2 2025 [2] - Adjusted EBITDA rose 18.6% to $1.12 billion compared to $945 million in Q2 2024 [2] - Free cash flow reached $743 million, a 23.4% increase from $602 million in Q2 2024 [2][8] Segment Performance - Ambulatory Care segment saw net operating revenue increase by 11.3% to $1.27 billion, with adjusted EBITDA rising 11.4% [6] - Hospital Operations revenue grew modestly by 0.9% to $4.00 billion, with adjusted EBITDA up 25% [7] - Same-hospital admissions increased by 1.6%, while outpatient visits and emergency room visits declined by 3.2% and 4.7%, respectively [7] Strategic Focus - Tenet Healthcare is focused on optimizing its portfolio for growth and profitability, emphasizing the expansion of its outpatient services through United Surgical Partners International (USPI) [3][4] - The company is divesting underperforming hospitals and shifting care to outpatient settings, which are seen as more cost-effective [4] Future Guidance - The company raised its full-year FY2025 guidance, projecting adjusted EBITDA between $4.40 and $4.54 billion and adjusted EPS between $15.55 and $16.21 [10] - Revenue is expected to reach between $20.95 and $21.25 billion, with ambulatory net operating revenues projected between $5.0 and $5.15 billion [10]

Core Insights - Tenet Healthcare Corporation (THC) reported strong second-quarter 2025 results with adjusted earnings per share (EPS) of $4.02, exceeding estimates by 41.6% and showing a year-over-year increase of 74% [1][10] - Net operating revenues rose 3.2% year over year to $5.3 billion, surpassing consensus estimates by 2.4% [1][10] Financial Performance - Adjusted net income for the quarter was $369 million, a 63.3% increase year over year [3] - Adjusted EBITDA improved 18.6% year over year to $1.1 billion, exceeding estimates [3] - Adjusted EBITDA margin increased by 280 basis points to 21.3% [3] Segment Performance - Hospital Operations and Services segment generated net operating revenues of $4 billion, a 0.9% year-over-year increase, beating estimates [5] - Ambulatory Care segment saw net operating revenues rise 11.3% year over year to $1.3 billion, also exceeding estimates [7] Cost and Expenses - Total operating costs increased 2.3% year over year to $4.5 billion, primarily due to higher supplies expenses [4] Cash Flow and Financial Position - Cash and cash equivalents stood at $2.6 billion, down 13.1% from the end of 2024 [9] - Net cash from operations for the first half of 2025 was $1.8 billion, a 31.4% increase year over year [12] Share Repurchase and Guidance - THC repurchased shares worth $747 million in Q2 2025 and increased the share repurchase program by $1.5 billion [13] - The company raised its 2025 adjusted EPS guidance to $15.55-$16.21, indicating a 33.7% rise from the previous year [18]

Tenet Healthcare (THC) Q2 2025 Earnings Call July 22, 2025 10:00 AM ET Company ParticipantsWilliam McDowell - VP - IRSaum Sutaria - Chairman & CEOSun Park - EVP & CFOA.J. Rice - Managing DirectorJoshua Raskin - Partner - Managed Care & ProvidersAndrew Mok - DirectorBen Hendrix - Vice PresidentWhit Mayo - Senior Managing DirectorBenjamin Rossi - Equity Research AssociateJohn Ransom - MD & Director - Healthcare ResearchConference Call ParticipantsMatthew Gillmor - Director & Equity Research AnalystJustin Lake ...

Tenet Healthcare (THC) Q2 2025 Earnings Call July 22, 2025 10:00 AM ET Speaker0Good morning. Welcome to Tennant Healthcare's Second Quarter twenty twenty five Earnings Conference Call. After the speakers' remarks, there will be a question and answer session for industry analysts. Each. I'll now turn the call over to your host, Mr.Will McDowell, Vice President of Investor Relations. Mr. McDowell, you may begin.Speaker1Good morning, everyone, and thank you for joining today's call. I am Will McDowell, Vice Pr ...

Tenet Healthcare (THC) reported $5.27 billion in revenue for the quarter ended June 2025, representing a year- over-year increase of 3.3%. EPS of $4.02 for the same period compares to $2.31 a year ago. The reported revenue represents a surprise of +2.43% over the Zacks Consensus Estimate of $5.15 billion. With the consensus EPS estimate being $2.84, the EPS surprise was +41.55%. Adjusted admissions: 211.52 thousand versus the two-analyst average estimate of 223.82 thousand. Net Operating revenues: $5.27 bil ...

Financial Performance Highlights - Consolidated Adjusted EBITDA reached $1.121 billion, exceeding the high end of the Q2 outlook [7] - Consolidated Adjusted EBITDA grew by 19% with a margin of 21.3% [8] - Adjusted diluted EPS increased by 74% [8] Segment Performance - Ambulatory Adjusted EBITDA grew by 11%, with same-facility revenue growth of 7.7% and a 39.2% Adjusted EBITDA margin; 8 facilities were added in Q2 [8] - Hospitals Adjusted EBITDA grew by 25%, with same-hospital admissions growth of 1.6% and a 15.6% Adjusted EBITDA margin [8] Financial Outlook - The company increased its FY 2025 Consolidated Adjusted EBITDA outlook by $395 million, now expecting $4.40 to $4.54 billion [9] - Net operating revenues for 2025 are projected to be between $20.95 and $21.25 billion [10] - Free cash flow for 2025 is expected to be between $2.025 and $2.275 billion [12] USPI Performance - USPI's net revenue is projected to reach $5.075 billion in 2025, reflecting a CAGR of 15.3% [16] - USPI's Adjusted EBITDA is projected to reach $2.020 billion in 2025, reflecting a CAGR of 14.5% [17] - USPI has a consistent track record of approximately 40% Adjusted EBITDA margins [18] - USPI's same-facility system-wide revenue CAGR from 2015-2025 is 6.1% [20] Capital Allocation - Q2 2025 free cash flow was $743 million [31] - The company repurchased approximately 4.6 million shares in Q2 2025 for $747 million, and 7.2 million shares YTD for $1.1 billion [32] - The Board of Directors authorized a $1.5 billion increase to the share repurchase program [32] Balance Sheet - The company has $2.6 billion cash on hand as of June 30, 2025 [31] - The company's EBITDA leverage ratio is 2.45x (3.11x EBITDA-NCI) [31]

Tenet Healthcare (THC) came out with quarterly earnings of $4.02 per share, beating the Zacks Consensus Estimate of $2.84 per share. This compares to earnings of $2.31 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +41.55%. A quarter ago, it was expected that this hospital operator would post earnings of $3.11 per share when it actually produced earnings of $4.36, delivering a surprise of +40.19%. Over the last four quarters ...

Exhibit 99.1 Tenet Reports Strong Second Quarter 2025 Results; Raises 2025 Financial Outlook DALLAS — July 22, 2025 — Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended June 30, 2025. "Our strong second quarter results extend our track record of attractive same store revenue growth, operational performance driven by fundamentals, and robust free cash flow generation," said Saum Sutaria, M.D., Chairman and Chief Executive Officer of Tenet. "We continue to make ...

Industry Overview - The Zacks Medical-Hospital industry includes for-profit hospital companies providing various healthcare services, such as acute care, rehabilitation, and psychiatric services [3] - Revenue generation is influenced by inpatient occupancy levels, medical services ordered by physicians, and outpatient procedure volumes [3] - Payments for services come from government programs like Medicare and Medicaid, managed care plans, private insurers, and directly from patients [3] Key Trends - Rising patient demand is noted, particularly with an increase in elective procedures, while the 65+ population is projected to grow from 17.3% in 2022 to 22.8% by 2050 [4] - Health spending is expected to reach $5.3 trillion by 2025, but there is a shift from inpatient to outpatient and home-based services, leading to underused hospital beds [4] - Labor shortages, higher wages, and supply chain disruptions are squeezing hospital margins, prompting providers to adopt automation and refine staffing models [5] - Hospitals are investing in AI, automation, and real-time analytics to improve care delivery and operational efficiency [6] Consolidation and M&A Activity - Consolidation through mergers and acquisitions is a key strategy for hospitals to scale operations and increase market share in a fragmented market [2] - Post-pandemic, M&A activity has rebounded as hospitals seek efficiency and financial resilience, driven by economic recovery and regulatory clarity [7] Financial Performance and Outlook - The Zacks Medical-Hospital industry currently holds a Zacks Industry Rank of 181, placing it in the bottom 26% of nearly 250 Zacks industries, indicating challenging near-term prospects [8] - Aggregate earnings estimates for the industry have decreased by 0.2% since February-end, reflecting a negative outlook for earnings growth [9] - The industry has gained 4.2% over the past year, underperforming the S&P 500's 13.1% but outperforming the broader Medical sector's decline of 17.6% [11] Current Valuation - The industry trades at a trailing 12-month EV/EBITDA ratio of 7.84X, compared to the S&P 500's 17.79X and the sector's 9.72X [14] - Over the past five years, the industry's EV/EBITDA ratio has ranged from a high of 9.55X to a low of 6.45X, with a median of 8.03X [14] Notable Companies - **HCA Healthcare**: Positioned to benefit from rising patient volumes, with a projected 15% year-over-year EPS growth for 2025 and a 5.7% revenue increase [18] - **Tenet Healthcare Corporation**: Strong revenue growth driven by its Ambulatory Care and Hospital segments, with projected revenue of $20.9 billion for 2025 [22] - **Universal Health Services**: Growth supported by rising patient days and network expansion, with projected EPS growth of 17% for 2025 [26] - **Community Health Systems**: Benefiting from higher occupancy rates and a growing telehealth focus, with projected EPS growth of 69.9% for 2025 [31]