Financial Data and Key Metrics Changes - The company reported net income attributable to UHS per diluted share of $5.43 for Q2 2025, with adjusted net income per diluted share at $5.35 after adjustments [5][6] - Adjusted admissions to acute care hospitals increased by 2% year-over-year, while surgical volumes decreased slightly [5] - Same facility net revenues in the acute care hospital segment increased by 5.7% compared to Q2 2024, excluding the impact of the insurance subsidiary [5][6] - Cash generated from operating activities decreased by $167 million to $9 million in Q2 2025 compared to $1,076 million in Q2 2024 [8] - The company repurchased approximately 1.9 million shares at a total cost of about $332 million since 2019, representing 34% of outstanding shares [9] Business Line Data and Key Metrics Changes - Same facility net revenues at behavioral health hospitals increased by 5.4%, driven by a 4.2% increase in revenue per adjusted day [7] - Adjusted patient days in behavioral health were up 1.2% compared to the prior year's second quarter [8] - Operating expenses on a same facility basis increased by 3.1% year-over-year, excluding the impact of the insurance subsidiary [6] Market Data and Key Metrics Changes - The company noted a cannibalization impact on same facility volumes and revenues from the newly opened West Henderson Hospital [6] - The performance of the Las Vegas and District of Columbia markets showed some economic softness, impacting overall volumes [91] Company Strategy and Development Direction - The company is focusing on outpatient growth, aiming to capture a larger share of the outpatient behavioral care market [25][26] - New developments include a 96-bed behavioral hospital in Grand Rapids, Michigan, and a 41-bed substance use disorder treatment center in South Carolina, among others [12][13] - The company is also expanding its Signet Behavioral Health Network in the UK, adding six new facilities and 137 beds [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to potential Medicaid revenue reductions starting in 2028, emphasizing strategic shifts in the behavioral business [17][19] - The company anticipates that the impact of the One Beautiful Bill Act on Medicaid revenues will be manageable, with ongoing discussions with state representatives [20][21] - Management acknowledged challenges in the startup of Cedar Hill Regional Medical Center but remains optimistic about long-term prospects [11][30] Other Important Information - The company spent $5 million on capital expenditures in 2025, with 25% allocated to new replacement facilities in California and Florida set to open in 2026 [8] - The company has approximately $1 billion of available borrowing capacity under its revolving credit facility [9] Q&A Session Summary Question: Impact of Medicaid changes on EBITDA - Management indicated that reductions from Medicaid changes will not begin until 2028, allowing time to adjust business strategies, particularly in the behavioral segment [17][18] Question: Behavioral patient days split - Management noted that adjusted patient days have grown faster than unadjusted patient days, indicating outpatient growth is a significant opportunity [24][25] Question: Update on Cedar Hill's accreditation status - Management acknowledged startup losses of $25 million in Q2 for Cedar Hill, with another $25 million expected in the second half of the year, pending Medicare certification [30] Question: Behavioral pricing growth - Management confirmed that behavioral pricing growth has outperformed expectations, with a breakdown of 4.2% increase in pricing and 1.2% in adjusted patient days [50][52] Question: Long-term margin targets - Management expressed confidence in maintaining long-term margin targets despite upcoming challenges, emphasizing flexibility in programming adjustments [96][98] Question: Labor market challenges - Management reported that while wage inflation has decelerated, staffing challenges persist in certain markets, particularly in behavioral health [68][70]

Financial Data and Key Metrics Changes - The company reported net income attributable to UHS per diluted share of $5.43 for Q2 2025, with adjusted net income per diluted share at $5.35 after adjustments [4][6] - Adjusted admissions to acute care hospitals increased by 2% year-over-year, while surgical volumes decreased slightly [4] - Same facility net revenues in the acute care hospital segment increased by 5.7% compared to Q2 2024, excluding the impact of the insurance subsidiary [4] - Cash generated from operating activities decreased by $167 million to $909 million in Q2 2025 compared to $1,076 million in Q2 2024 [6] - The company spent $500 million on capital expenditures, with 25% allocated to new replacement facilities in California and Florida [6] Business Line Data and Key Metrics Changes - Same facility EBITDA increased by 10% in the acute care segment, driven by solid revenue and effective expense controls [5] - In the behavioral health segment, same facility net revenues increased by 5.4%, with a 4.2% increase in revenue per adjusted day [5] - Adjusted patient days in the behavioral health segment were up 1.2% compared to the prior year's second quarter [6] Market Data and Key Metrics Changes - The West Henderson Hospital, opened in late 2024, had a cannibalization impact on same facility volumes and revenues [5] - The company noted a slight decrease in surgical volumes, indicating potential market challenges [4] Company Strategy and Development Direction - The company is increasing its EPS guidance for 2025 by 7% to $20.50 per diluted share, driven by increased DPP reimbursement [10] - The company is focusing on outpatient growth in the behavioral segment, with plans to open 10-15 new outpatient facilities annually [42] - The company is developing new behavioral health hospitals in various locations, including Michigan and Pennsylvania, to expand its service offerings [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects for the Cedar Hill Regional Medical Center despite initial startup challenges [11] - The company anticipates potential changes to Medicaid programs that could impact future revenues, with a projected reduction in net benefits starting in 2028 [8] - Management emphasized the ability to pivot and adapt to changes in the operating environment, drawing on past experiences during the pandemic [17][20] Other Important Information - The company repurchased approximately 1.9 million shares at a cost of $332 million since 2019, representing about 34% of outstanding shares [7] - The One Beautiful Bill Act includes significant changes to the Medicaid program, which may impact future revenues [8] Q&A Session Summary Question: Impact of Medicaid changes on EBITDA - Management confirmed the projected reduction of $360 million to $400 million in net benefits starting in 2028, with strategies to offset this through operational adjustments [15][17] Question: Behavioral health volume growth - Management noted that outpatient growth is a significant opportunity, with adjusted patient days growing faster than inpatient days [21][24] Question: Cedar Hill's startup losses - Management acknowledged $25 million in startup losses for Cedar Hill in Q2, with another $25 million expected in the second half of the year, but expressed optimism for future profitability [26][30] Question: Outpatient behavioral growth strategy - Management detailed plans to enhance outpatient services through step-down and step-in business models, aiming to capture a larger share of the outpatient market [38][42] Question: Labor market challenges - Management indicated that while wage inflation has slowed, staffing challenges persist, particularly in the behavioral segment [66][68] Question: DPP program updates - Management provided updates on ongoing discussions with CMS regarding the approval of DPP programs, emphasizing the potential for new programs despite legislative changes [70][72]

Financial Performance - Reported net income attributable to Universal Health Services was $353.2 million, or $5.43 per diluted share, for Q2 2025, compared to $289.2 million, or $4.26 per diluted share, in Q2 2024, representing a 22.1% increase in net income[1] - Net revenues increased by 9.6% to $4.284 billion in Q2 2025, up from $3.908 billion in Q2 2024[1] - Adjusted net income attributable to Universal Health Services for Q2 2025 was $347.9 million, or $5.35 per diluted share, compared to $292.6 million, or $4.31 per diluted share, in Q2 2024[2] - EBITDA net of noncontrolling interests was $651.4 million in Q2 2025, compared to $573.2 million in Q2 2024, reflecting a 13.6% increase[6] - For the first six months of 2025, reported net income was $669.9 million, or $10.23 per diluted share, compared to $551.0 million, or $8.08 per diluted share, in the same period of 2024[8] - Net revenues for the first six months of 2025 increased by 8.2% to $8.384 billion, up from $7.751 billion in the same period of 2024[8] - Net income attributable to Universal Health Services (UHS) for the six months ended June 30, 2025, was $669,898, an increase from $550,986 for the same period in 2024, representing a growth of 21.5%[43] - Adjusted EBITDA for the six months ended June 30, 2025, was $1,241,102, up from $1,104,477 in 2024, reflecting a year-over-year increase of 12.4%[43] - Total net revenues for the six months ended June 30, 2025, reached $8,383,536, compared to $7,751,186 in 2024, marking a growth of 8.1%[43] Forecast and Projections - The revised forecast for 2025 projects net revenues between $17.096 billion and $17.312 billion, an increase from the original forecast of $17.020 billion to $17.364 billion[25] - Adjusted EBITDA net of noncontrolling interests for 2025 is forecasted to be between $2.458 billion and $2.543 billion, up from the original forecast of $2.357 billion to $2.484 billion[25] - The revised 2025 forecasted net revenues are estimated to be approximately $17.096 billion to $17.312 billion, reflecting a change of 0.4% to -0.3% compared to the original forecast[30] - The revised 2025 forecasted Adjusted EBITDA, net of NCI, is estimated to be approximately $2.458 billion to $2.543 billion, representing increases of 4.3% to 2.4% over the original range[30] - The revised 2025 forecasted Adjusted EPS-diluted is estimated to be $20.00 to $21.00 per share, indicating increases of 8.4% to 5.3% over the original forecast[30] - Net income attributable to UHS is forecasted to be between $1,298,461 and $1,363,549 for the year ending December 31, 2025[68] - Adjusted EBITDA net of NCI is projected to be between $2,457,678 (14.4% of net revenue) and $2,543,208 (14.7% of net revenue) for the same period[68] Shareholder Actions - The company repurchased 875,000 shares at an aggregate cost of approximately $150.8 million during Q2 2025, with a total of 1.875 million shares repurchased for approximately $331.5 million in the first six months of 2025[21] Operational Metrics - Total patient revenue for the three months ended June 30, 2025, reached $23,518.12 million, a 12.1% increase from $20,979.78 million in the prior year[63] - Average daily census in behavioral health for the three months ended June 30, 2025, was 17,840.2, a 0.6% increase from 17,732.4 in the same period of 2024[63] - The number of hospitals owned and leased increased to 29 for acute care, a 7.4% increase from 27 in the prior year[63] - Average licensed beds for acute care increased to 7,112, a 5.4% increase from 6,750 in the same period of 2024[63] - Admissions in behavioral health for the three months ended June 30, 2025, were 118,974, a slight increase of 0.1% from 118,912 in the prior year[63] - The average daily census in the acute segment increased by 3.0% to 4,590.8, while the behavioral health segment saw a slight increase of 0.5% to 17,792.0[65] Cost and Expense Management - The interest expense, net for the three months ended June 30, 2025, was $35.364 million, a decrease from $48.899 million in the same period of 2024, indicating a reduction of 27.7%[37] - Total operating expenses for Acute Care Hospital Services were $2,017,870 in Q2 2025, up from $1,889,090 in Q2 2024, indicating a 6.8% increase[53] - Operating expenses for the three months ended June 30, 2025, totaled $1,483.62 million, representing 78.9% of net revenues, compared to 79.2% in the prior year[59] - Total deductions increased by 12.0% to $42,962,871, reflecting higher operational costs[65] Assets and Equity - Total assets as of June 30, 2025, were $14,985,577, an increase from $14,469,749 at the end of 2024, representing a growth of 3.6%[47] - UHS's total equity increased to $7,143,040 as of June 30, 2025, compared to $6,749,523 at the end of 2024, reflecting a growth of 5.8%[47] - The company reported a debt to total capitalization ratio of 39.5% for the six months ended June 30, 2025, down from 41.2% in the previous year[51] Risks and Challenges - The company faces risks related to changes in government healthcare programs, which could materially affect revenues and operations[33] - The increase in interest rates has significantly impacted the company's interest expense and free cash flow, posing a risk to future financial performance[33]

Core Insights - Universal Health Services (UHS) reported $4.28 billion in revenue for Q2 2025, a year-over-year increase of 9.6% [1] - Earnings per share (EPS) for the same period was $5.35, compared to $4.31 a year ago, representing a surprise of +10.31% over the consensus estimate of $4.85 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $4.22 billion by +1.51% [1] Financial Performance Metrics - Behavioral health admissions were 118,974, below the estimated 122,616 [4] - Net revenues from behavioral health services reached $1.88 billion, slightly above the average estimate of $1.86 billion, with a year-over-year change of +8.6% [4] - Net revenues from acute care hospital services were $2.4 billion, exceeding the estimated $2.37 billion, reflecting a +10.5% change compared to the previous year [4] - Operating income for behavioral health care services was $396.46 million, surpassing the estimated $368.68 million [4] - Operating income for acute care hospital services was $225.22 million, slightly below the average estimate of $226.87 million [4] Stock Performance - Shares of Universal Health Services have returned -12.6% over the past month, contrasting with the Zacks S&P 500 composite's +4.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - Universal Health Services (UHS) reported quarterly earnings of $5.35 per share, exceeding the Zacks Consensus Estimate of $4.85 per share, and showing an increase from $4.31 per share a year ago, resulting in an earnings surprise of +10.31% [1] - The company achieved revenues of $4.28 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.51%, and up from $3.91 billion year-over-year [2] - Over the last four quarters, UHS has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] 分组2 - The stock has underperformed the market, losing about 13.3% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $4.36 on revenues of $4.31 billion, and for the current fiscal year, it is $19.43 on revenues of $17.09 billion [7] - The Zacks Industry Rank for Medical - Hospital is currently in the bottom 26% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Reported net income attributable to Universal Health Services, Inc. (UHS) for Q2 2025 was $353.2 million, or $5.43 per diluted share, compared to $289.2 million, or $4.26 per diluted share in Q2 2024, reflecting a significant increase [1][2] - Net revenues for Q2 2025 increased by 9.6% to $4.284 billion from $3.908 billion in Q2 2024 [1] - Adjusted net income attributable to UHS for Q2 2025 was $347.9 million, or $5.35 per diluted share, compared to $292.6 million, or $4.31 per diluted share in Q2 2024 [2][36] Medicaid Reimbursements - Included in the reported and adjusted net income for Q2 2025 were approximately $101 million in net pre-tax incremental reimbursements related to Medicaid programs, with $58 million from the Tennessee Medicaid directed payment program and $43 million from other states' supplemental Medicaid programs [3] EBITDA Metrics - EBITDA net of noncontrolling interests (NCI) for Q2 2025 was $651.4 million, up from $573.2 million in Q2 2024 [6] - Adjusted EBITDA net of NCI for Q2 2025 was $642.9 million, compared to $578.7 million in Q2 2024 [6][37] Acute Care Services - In Q2 2025, adjusted admissions at acute care hospitals increased by 2.0%, and adjusted patient days increased by 1.1% compared to Q2 2024 [12] - Net revenues from acute care services on a same facility basis increased by 7.9% in Q2 2025 compared to Q2 2024 [12] Behavioral Health Care Services - For Q2 2025, adjusted admissions at behavioral health care facilities increased by 0.4%, while adjusted patient days increased by 1.2% compared to Q2 2024 [14][15] - Net revenues from behavioral health care services increased by 8.9% during Q2 2025 compared to Q2 2024 [15] Cash Flow and Liquidity - Net cash provided by operating activities for the first six months of 2025 was $909 million, down from $1.076 billion in the same period of 2024 [17] - As of June 30, 2025, UHS had $1.08 billion of available borrowing capacity under its revolving credit facility [18] Stock Repurchase Program - During Q2 2025, UHS repurchased 875,000 shares at an aggregate cost of approximately $150.8 million, with a total of 1.875 million shares repurchased for $331.5 million in the first six months of 2025 [20][21] Revised Operating Results Forecast - UHS revised its 2025 operating results forecast, estimating net revenues between $17.096 billion and $17.312 billion, and adjusted EBITDA net of NCI between $2.458 billion and $2.543 billion [22][25] - The revised forecast for adjusted EPS-diluted is estimated to be between $20.00 and $21.00 per share, reflecting increases over the original forecast [25]

Core Insights - Universal Health Services (UHS) is expected to report quarterly earnings of $4.85 per share, reflecting a 12.5% increase year over year, with revenues projected at $4.22 billion, an 8% increase compared to the previous year [1] Earnings Estimates and Revisions - The consensus EPS estimate for the quarter has been revised downward by 0.5% over the past 30 days, indicating a collective reassessment by analysts [2] - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics and Projections - Analysts predict 'Net Revenues- Acute care hospital services' will reach $2.37 billion, indicating a year-over-year change of +9.1% [5] - 'Net Revenues- Behavioral health services' are expected to be $1.86 billion, reflecting a year-over-year increase of +7.4% [5] - The consensus for 'Admissions - Behavioral health' is projected at 122,616, up from 119,798 in the same quarter last year [5] - 'Operating Income- Behavioral Health Care Services' is forecasted to be $368.68 million, compared to $360.62 million from the previous year [6] - 'Operating Income- Acute Care Hospital Services' is estimated at $226.87 million, up from $212.25 million year over year [6] Market Performance - Over the past month, shares of Universal Health Services have declined by 7.2%, while the Zacks S&P 500 composite has increased by 5.9% [6] - UHS currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [6]

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]

Group 1 - Universal Health Services, Inc. (UHS) announced a cash dividend of $0.20 per share to be paid on September 16, 2025, to shareholders of record as of September 2, 2025 [1] - UHS is one of the largest providers of hospital and healthcare services in the United States, operating acute care hospitals, behavioral health facilities, outpatient facilities, and ambulatory care access points [2]

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Universal Health Services (UHS) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - UHS has a favorable Growth Score and a top Zacks Rank, indicating strong potential for growth investors [2][11] Group 2: Earnings Growth - Historical EPS growth for UHS is 7.1%, but projected EPS growth is expected to be 17% this year, surpassing the industry average of 15% [5] Group 3: Asset Utilization - UHS has an asset utilization ratio (sales-to-total-assets ratio) of 1.11, indicating that the company generates $1.11 in sales for every dollar in assets, which is higher than the industry average of 0.9 [7] - The company's sales are projected to grow by 8% this year, compared to the industry average of 3.4% [7] Group 4: Earnings Estimate Revisions - There have been upward revisions in current-year earnings estimates for UHS, with the Zacks Consensus Estimate increasing by 0.1% over the past month [9] Group 5: Investment Potential - UHS has earned a Growth Score of B and carries a Zacks Rank 2 due to positive earnings estimate revisions, suggesting it is a solid choice for growth investors [11]