Surgery Partners (SGRY) Barclays 28th Annual Global Healthcare Conference summary

Market dynamics and performance

• Experienced shifts in payer mix, with increased Medicare cases impacting revenue despite higher procedure volumes.

• Commercial patient access and coordination with independent physicians identified as areas needing improvement.

• Rural market performance affected by physician retirements and transitions, now stabilized.

• High acuity growth in orthopedics and total joints, but lower net revenue due to payer mix.

• Guidance reflects current trends, with gradual recovery expected rather than immediate rebound.

Cost management and operational changes

• Active cost reduction initiatives underway, including efficiency improvements and leadership changes.

• Adjustments to anesthesia coverage and subsidies in response to payer mix changes.

• Focus on maintaining high patient experience and outcomes while managing staffing and supply costs.

• New COO appointed to drive operational focus and response to market dynamics.

Strategic and financial planning

• Conservative 2026 guidance excludes unannounced M&A, maintaining a $200 million capital deployment target.

• Portfolio optimization includes potential divestitures of larger, higher-debt facilities to accelerate deleveraging and free cash flow.

• Board authorized a $200 million share repurchase program, signaling confidence in portfolio optimization and capital flexibility.

• M&A remains a strategic focus, but future deals will be additive to guidance rather than embedded.