Tenet Health(US:THC)2026-02-11 16:00Financial Data and Key Metrics Changes - Tenet Healthcare reported net operating revenues of $21.3 billion for 2025, with consolidated adjusted EBITDA of $4.57 billion, reflecting a 14% growth over 2024 [4][11] - The full-year adjusted EBITDA margin improved by 200 basis points to 21.4% compared to the prior year [4][12] - In Q4 2025, total net operating revenues were $5.5 billion, with consolidated adjusted EBITDA of $1.183 billion, a 13% increase year-over-year [11][12] Business Line Data and Key Metrics Changes - The USPI segment's adjusted EBITDA grew 12% in 2025 to $2.026 billion, with same-facility revenues increasing by 7.2% [4][12] - The hospital segment's adjusted EBITDA rose 16% to $2.54 billion, with same-store revenues per adjusted admission up 5.3% [5][12] - Same facility revenues in the ASCs grew by 7.5%, driven by double-digit growth in total joint replacements [5] Market Data and Key Metrics Changes - The company anticipates a 20% reduction in overall enrollment due to the expiration of enhanced premium tax credits, particularly affecting states like Arizona, Michigan, and California [9][10] - In Q4, exchange admissions accounted for approximately 7.5% of total admissions, contributing over 6% to consolidated revenues [68] Company Strategy and Development Direction - Tenet plans to continue focusing on organic growth supplemented by M&A, with nearly $350 million invested in 2025 and 35 facilities added to the portfolio [5][6] - The company is tackling expense management more structurally, leveraging technology for sustainable cost reductions [25][26] - The strategic focus includes expanding service lines and enhancing capabilities in high-acuity procedures, particularly in the USPI segment [8][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong core earnings growth for 2026, despite anticipated headwinds from the expiration of enhanced tax credits [10][14] - The company expects adjusted EBITDA for 2026 to be in the range of $4.485 billion to $4.785 billion, driven by ongoing demand and acuity [7][16] - Management highlighted the importance of monitoring enrollment levels and effectuation rates as they impact future performance [10][81] Other Important Information - Tenet has been active in share repurchases, retiring approximately 22% of outstanding shares for around $2.5 billion since Q4 2022 [6][14] - The company generated $2.53 billion of free cash flow for the full year 2025, with $2.8 billion in cash on hand as of December 31, 2025 [13][14] Q&A Session Summary Question: Can you expand on the same-store hospital volume performance in the quarter? - Management noted that while acuity was good, the respiratory season was weaker than expected, impacting volumes [23] Question: What do you mean by tackling expense management more structurally? - Management explained that they are focusing on technology deployment for sustainable expense reductions, moving beyond traditional annual management [25][26] Question: Can you clarify the hospital admission growth guidance of 1%-2%? - Management indicated that the guidance reflects anticipated impacts from exchange enrollment reductions and investments in higher acuity capabilities [30][31] Question: What is the payer mix for USPI in Q4? - Management reported a consistent payer mix, with net revenue per case growth of 5.5% and EBITDA margins above 40% [83]