Surgery Partners Stock Earnings Reports

Surgery Partners reported a solid start to 2026 with Q1 net revenue of ~$811M, same‑facility revenue growth of 4.4%, and adjusted EBITDA of ~$102M. Same‑facility case growth was modest at 0.6% (impacted by weather-related deferrals and a tough prior‑year comparison), while revenue per case/acuity mix drove stronger net revenue growth. Management emphasized progress across its three growth pillars: organic growth (notably 14.6% growth in ASC total joints and expansion of surgical robots to 73 units), margin improvement (Q1 adjusted EBITDA margin 12.6% with sequential SWB and supply improvement), and disciplined capital deployment (Q1 acquisition spend ~$4M, reiterating a long‑term target of ~$200M annually but no M&A assumed in 2026 guidance). Key near‑term headwinds include reestablished incentive compensation, new provider taxes and prior Medicaid rate reductions (estimated ~ $8M annual EBITDA impact), and higher interest expense following the swap expiration. Operating cash flow improved to ~$12M and net leverage was ~4.3x under the credit agreement (GAAP net debt/EBITDA ~5.1x). Management reiterated full‑year 2026 guidance: revenue $3.35B–$3.45B and adjusted EBITDA of at least $530M, expecting seasonal weighting to the back half and continued focus on working capital, physician recruiting (~140 physicians added in Q1, heavy on MSK), de novo development (1 opened in Q1; 9 in trailing 12 months) and portfolio optimization (in advanced discussions on one larger surgical hospital market with a mid‑2026 target announcement).