Select Medical (SEM) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue rose 7.2% year-over-year to $1.36 billion, with adjusted EBITDA up 7.5% to $111.7 million and EPS from continuing operations up 21% to $0.23.

• For the nine months ended September 30, 2025, revenue increased 4.7% to $4,056.2 million, with net income from continuing operations up 25.9% to $176.8 million and EPS up 44.9% to $1.00.

• Regulatory relief from the CMS 20% transmittal rule provided a $12–$15 million EBITDA benefit in Q3.

• The company completed the spin-off and tax-free distribution of Concentra in late 2024; Concentra results are now reported as discontinued operations.

• Strategic focus remains on expanding inpatient rehabilitation, with 395 new beds planned through 2027 and multiple new hospital openings.

Financial highlights

• Q3 2025 revenue: $1.36 billion (up 7.2% year-over-year); nine months revenue: $4.06 billion (up 4.7%).

• Q3 2025 adjusted EBITDA: $111.7 million (up 7.5%); nine months adjusted EBITDA: $388.5 million (down 1.5%).

• Q3 2025 EPS from continuing operations: $0.23 (up 21%); nine months EPS: $1.00 (up 44.9%).

• Cash flow from operations: $175.3 million for Q3; $282.1 million for nine months.

• Net impact of CMS rule delay: $12–$15 million EBITDA benefit in Q3.

Outlook and guidance

• 2025 revenue guidance reaffirmed at $5.3–$5.5 billion; adjusted EBITDA guidance at $510–$530 million.

• EPS guidance raised to $1.14–$1.24 for 2025.

• Capital expenditures expected at $180–$200 million, with $100–$105 million for maintenance.

• 2026 expected to see modest Medicare rate increases and continued rehab growth; 20% transmittal rule returns but with reduced impact.

• Management notes potential headwinds from regulatory changes and labor costs.