munity Health Systems(CYH) - 2025 Q3 - Quarterly Results

Financial Performance - Net operating revenues for Q3 2025 totaled $3.087 billion, a 0.1% decrease from $3.090 billion in Q3 2024, but a 6.0% increase on a same-store basis [4] - Net income attributable to Community Health Systems, Inc. stockholders was $130 million, or $0.96 per share (diluted), compared to a net loss of $(391) million, or $(2.95) per share (diluted), for the same period in 2024 [5] - Adjusted EBITDA for Q3 2025 was $376 million, up from $347 million in Q3 2024, reflecting an increase in non-patient revenue [7] - For the nine months ended September 30, 2025, net operating revenues totaled $9.379 billion, a 0.1% increase compared to $9.369 billion for the same period in 2024 [9] - Net income attributable to Community Health Systems, Inc. stockholders for the nine months ended September 30, 2025, was $399 million, or $2.97 per share (diluted), compared to a net loss of $(446) million, or $(3.38) per share (diluted), for the same period in 2024 [10] - Adjusted EBITDA for the nine months ended September 30, 2025, was $1.131 billion, compared to $1.112 billion for the same period in 2024 [11] - Net income attributable to Community Health Systems, Inc. stockholders for Q3 2025 was $130 million, a significant improvement from a loss of $391 million in Q3 2024, representing a 133.2% increase [41] - Adjusted EBITDA for Q3 2025 was $376 million, up 8.4% from $347 million in Q3 2024, with an adjusted EBITDA margin of 12.2% [41] Operational Metrics - Total operating expenses for Q3 2025 were $2,844 million, down from $3,295 million in Q3 2024, resulting in a more favorable operating expense ratio [32] - The number of hospitals at the end of Q3 2025 was 70, down from 77 in Q3 2024, indicating a strategic reduction in capacity [41] - Admissions decreased by 6.6% to 97,648 in Q3 2025 compared to 104,593 in Q3 2024, reflecting a decline in patient volume [41] - The average length of stay for patients remained stable at 4.2 days in both Q3 2025 and Q3 2024 [41] - The occupancy rate for average beds in service was 49.7% in Q3 2025, a slight decrease from 49.8% in Q3 2024 [41] - The number of admissions decreased by 5.0% to 301,487 in 2025 from 317,396 in 2024 [44] - The average occupancy rate for beds in service increased to 52.8% in 2025 from 51.9% in 2024 [44] Cash Flow and Debt - Net cash provided by operating activities for Q3 2025 was $70 million, an increase of 4.5% from $67 million in Q3 2024 [41] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $277 million, up 4.9% from $264 million in 2024 [49] - Cash and cash equivalents at the end of the period increased to $123 million in 2025 from $37 million in 2024 [47] - Long-term debt decreased to $10,589 million in 2025 from $11,432 million in 2024 [47] - The company completed an offering of $1.790 billion principal amount of 9.750% Senior Secured Notes due 2034, using proceeds to redeem $1.743 billion of its 5.625% Senior Secured Notes due 2027 [14] Strategic Initiatives - The company divested its 50% ownership interest in two hospitals and its 80% ownership interest in one hospital during 2025 [15] - A definitive agreement was made with Labcorp for the acquisition of select assets of the ambulatory outreach business for a total purchase price of $195 million [16] - The company aims to realize anticipated cost savings from current strategic and operational cost-saving initiatives [71] Future Projections - The company projects net operating revenues for 2025 to be between $12.4 billion and $12.6 billion [61] - The projected Adjusted EBITDA for 2025 is estimated to be between $1.5 billion and $1.55 billion [61] - Net income per share (diluted) for 2025 is projected to range from $0.80 to $0.90 [61] - The weighted-average diluted shares outstanding for 2025 are projected to be approximately 135 million [64] - Interest expense for 2025 is estimated to be between $870 million and $880 million [62] - The company expects depreciation and amortization to be approximately 3.4% of net operating revenues for 2025 [62] Risks and Challenges - The company faces risks associated with substantial indebtedness, leverage, and debt service obligations, including the ability to refinance such indebtedness on acceptable terms [69] - Changes in federal and state Medicaid programs may affect the structure and funding, impacting the company's operations [69] - The company is impacted by competitive labor market conditions, affecting the ability to hire and retain qualified medical personnel [69] - The company is subject to risks from cybersecurity threats, including breaches and loss of data [69] - The company may experience adverse impacts from legal, regulatory, and governmental proceedings, including investigations and audits [69] - The company is concentrated in a small number of states, which may pose revenue risks [71] - The consolidated operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of future results [70] - The company cautions that projections for calendar year 2025 are based on currently available information and undertakes no obligation to revise or update any forward-looking statements [70]