Surgery Partners (NASDAQ:SGRY) Posts Q3 Sales In Line With Estimates But Stock Drops 13.5%

Core Insights - Surgery Partners (NASDAQ:SGRY) met Wall Street's revenue expectations for Q3 CY2025, reporting a 6.6% year-on-year sales increase to $821.5 million, although its full-year revenue guidance of $3.29 billion was 2% below analysts' estimates [1][6] - The company's non-GAAP profit of $0.13 per share was 19% lower than analysts' consensus estimates [1][6] Company Overview - Surgery Partners operates a national network of outpatient surgical facilities, including over 180 locations across 33 states, providing alternatives to traditional hospital settings [3] Revenue Growth - The company has demonstrated solid long-term sales performance with a 12.4% annualized revenue growth over the last five years, outperforming the average healthcare company [4] - In the last two years, Surgery Partners achieved an annualized revenue growth of 10%, which is below its five-year trend but still considered respectable [5] Financial Performance - Q3 CY2025 revenue was $821.5 million, slightly below analyst estimates of $821.8 million, with a 6.6% year-on-year growth [6] - Adjusted EPS was $0.13, missing analyst expectations of $0.16 by 19% [6] - Adjusted EBITDA was $136.4 million, in line with analyst estimates, with a margin of 16.6% [6] - The company revised its full-year revenue guidance down to $3.29 billion from $3.38 billion, reflecting a 2.6% decrease [6] - Full-year EBITDA guidance is set at $537.5 million, below analyst estimates of $556.1 million [6] - Operating margin improved to 12.9%, up from 7.9% in the same quarter last year [6] - Free cash flow margin increased to 7.8%, compared to 5.8% in the same quarter last year [6] Sales Volumes - Sales volumes rose by 3.4% year on year, compared to a 5.4% increase in the same quarter last year [6] - Over the last two years, units sold averaged a 3.8% year-on-year growth, indicating that revenue growth was supported by price increases [7]