FOR IMMEDIATE RELEASE April 28, 2025 CONTACT: Steve Filton Chief Financial Officer 610-768-3300 UNIVERSAL HEALTH SERVICES, INC. ANNOUNCES 2025 FIRST QUARTER FINANCIAL RESULTS Consolidated Results of Operations, As Reported and As Adjusted – Three-month periods ended March 31, 2025 and 2024: KING OF PRUSSIA, PA – Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $316.7 million, or $4.80 per diluted share, during the first quarter of 2025, as comp ...

Core Insights - Universal Health Services (UHS) reported revenue of $4.1 billion for the quarter ended March 2025, reflecting a year-over-year increase of 6.7% [1] - Earnings per share (EPS) for the quarter was $4.84, up from $3.70 in the same quarter last year, resulting in an EPS surprise of +11.01% against the consensus estimate of $4.36 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $4.14 billion, showing a surprise of -1.06% [1] Financial Performance Metrics - Behavioral health admissions totaled 117,788, which was below the two-analyst average estimate of 122,821 [4] - Net revenues from behavioral health services were reported at $1.75 billion, compared to the average estimate of $1.79 billion, marking a year-over-year increase of +5.5% [4] - Net revenues from acute care hospital services matched the average estimate of $2.35 billion, representing a +7.5% change from the previous year [4] - Operating income for behavioral health care services was $337.68 million, slightly below the three-analyst average estimate of $346.29 million [4] - Operating income for acute care hospital services was reported at $254.79 million, exceeding the average estimate of $206.21 million [4] Stock Performance - Shares of Universal Health Services have returned -7.8% over the past month, compared to a -4.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Core Insights - Universal Health Services (UHS) reported quarterly earnings of $4.84 per share, exceeding the Zacks Consensus Estimate of $4.36 per share, and up from $3.70 per share a year ago, representing an earnings surprise of 11.01% [1] - The company posted revenues of $4.1 billion for the quarter ended March 2025, which was 1.06% below the Zacks Consensus Estimate, but an increase from $3.84 billion year-over-year [2] - UHS has surpassed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates three times as well [2] Earnings Outlook - The sustainability of UHS's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $4.84 on revenues of $4.21 billion, and for the current fiscal year, it is $18.94 on revenues of $17.12 billion [7] Industry Context - The Medical - Hospital industry, to which UHS belongs, is currently ranked in the top 11% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - The company reported a net income attributable to Universal Health Services per diluted share of $4.96 for Q4 2024, with an adjusted net income of $4.92 per diluted share [6] - Adjusted admissions to acute care hospitals increased by 2.2% year-over-year, while same facility net revenues in the acute care segment rose by 8.7%, driven by a 5.3% increase in net revenue per adjusted admission [6] - Cash generated from operating activities was $658 million in Q4 2024, compared to $452 million in Q4 2023, and $2.067 billion for the full year 2024, up from $1.268 billion in 2023 [9] Business Line Data and Key Metrics Changes - Same facility revenues at behavioral health hospitals increased by 11.1%, primarily due to an 8.7% increase in revenue per adjusted patient day [8] - The company recorded $50 million in net incremental reimbursements from various state supplemental Medicaid programs during Q4 2024, exceeding prior projections [9] - Operating expenses were well managed, with premium pay declining to $60 million in Q4 2024, consistent with the previous two quarters [7] Market Data and Key Metrics Changes - The company anticipates a slight decrease in total consolidated Medicaid supplemental payments for 2025 compared to 2024 [13] - The demand for behavioral services remains solid, with a forecasted growth in same facility adjusted patient days of 2.5% to 3% for 2025 [14] Company Strategy and Development Direction - The company is focused on expanding its outpatient presence and broadening its continuum of care, with plans to open new facilities and enhance technology investments in behavioral hospitals [10][14] - The company aims to maintain a leverage level in the high twos, approaching three, while using free cash flow primarily for share repurchases [61][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a more stable operating environment in 2025, with expectations of mid-single-digit EBITDA growth [13][20] - The current political environment presents uncertainty regarding Medicaid reimbursement, but management believes there is significant political support for Medicaid programs at the state level [15][49] Other Important Information - The company spent $944 million on capital expenditures in 2024, consistent with forecasts, and has plans for new hospital openings in 2025 [10][11] - As of December 31, 2024, the company had $1.17 billion of available borrowing capacity under its revolving credit facility [12] Q&A Session Summary Question: What is driving the higher underlying growth in 2025 despite state supplemental payments forecasted to be down year over year? - Management indicated that core EBITDA growth is driven by solid volume growth, robust pricing, and effective expense control, with a more stable operating environment expected [20] Question: Why is the guidance range for 2025 wider than usual? - Management acknowledged that items beyond their control, such as government reimbursement changes, contribute to the wider range in guidance [24] Question: What is the main reason for the decline in DPP payments? - The decline is primarily due to recognizing DPP payments related to prior periods in 2024, rather than significant changes in specific programs [29] Question: How adequate are the malpractice reserves? - Management stated that they have moved towards the higher end of the range for reserves, hoping to avoid further adjustments in 2025 [32] Question: What are the assumptions for acute revenue growth in 2025? - Management expects mid-single-digit revenue growth in the acute division, split evenly between price and volume [73] Question: How does the company view the impact of the flu season on Q1? - Management noted that while the flu season has been strong, it typically does not have a significant impact on earnings [131] Question: What is the expected impact of new hospital openings on consolidated revenue and EBITDA? - New hospitals are expected to be EBITDA positive, but may cause some cannibalization of existing business, affecting same-store metrics [120]