Surgery Partners(SGRY) - 2025 Q2 - Quarterly Results

Overview and Highlights 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 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 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] - 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] Financial Performance The company reported strong Q2 2025 financial performance with revenue growth, increased Adjusted EBITDA, and stable liquidity Quarterly and Year-to-Date Results 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 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] 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] Detailed Financial Tables Detailed financial tables provide a comprehensive view of the company's financial performance and key operating metrics Consolidated Financial Data (Income Statement) 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 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) 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 This section explains the company's non-GAAP financial measures and provides detailed reconciliations for key metrics Explanation of Non-GAAP Measures 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][16][26] - 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][27] Reconciliation of Adjusted EBITDA 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 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 This section provides supplementary details including conference call information, company overview, and forward-looking statements Conference Call Information 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] - 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][10] About Surgery Partners 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][12] - The company operates more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, and physician practices[12] Forward-Looking Statements 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] - 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][14]