Surgery Partners (SGRY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 14.2% year-over-year to $762.1 million, driven by same-facility growth, acquisitions, and a 3.9% increase in surgical case volume.

• Adjusted EBITDA increased 18.1% to $118.3 million, with margin expanding 50 basis points to 15.5%.

• Net loss attributable to common stockholders was $15.5 million, compared to net income of $18.9 million in Q2 2023.

• Nearly $220 million deployed on acquisitions in Q2, with five to six new facilities and over 200 new physicians added, nearly half in high-acuity specialties.

• Ended Q2 2024 with 167 surgical facilities across 33 states and $213.5 million in cash.

Financial highlights

• Q2 2024 revenues: $762.1 million, up 14.2% year-over-year; year-to-date revenues: $1.48 billion, up 10.9%.

• Q2 2024 Adjusted EBITDA: $118.3 million, up from $100.2 million in Q2 2023; year-to-date Adjusted EBITDA: $215.8 million.

• Q2 operating cash flow was $82.8 million; cash at quarter-end was $213.5 million, with total liquidity over $860 million.

• Net debt to EBITDA ratio was 3.8x at quarter-end.

• Adjusted net income per share (diluted) was $0.21 for Q2 2024, down from $0.28 in Q2 2023.

Outlook and guidance

• Full-year 2024 net revenue outlook raised to greater than $3.075 billion and Adjusted EBITDA to greater than $508 million, representing at least 13% and 16% growth, respectively.

• Same-facility revenue growth expected to finish in the high single digits for 2024.

• Free cash flow target for 2024 remains $140–$160 million.

• Management expects liquidity to be sufficient for both short- and long-term needs.

• Fourth quarter expected to be the strongest due to typical seasonality.