Surgery Partners (SGRY) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenue reached $770.4 million, up 14.3% year-over-year, driven by same-facility growth, acquisitions, and high acuity procedures.

• Adjusted EBITDA grew 21.9% to $128.6 million, with margins expanding 100 basis points to 16.7% compared to the prior year quarter.

• Net loss attributable to the company was $31.7 million for Q3 2024, compared to $4.9 million in Q3 2023.

• Over 230 new physicians joined in Q3, bringing the year-to-date total to over 640, with new recruits outperforming previous cohorts in volume and rate per case.

• As of September 30, 2024, the company operated 166 surgical facilities across 33 states.

Financial highlights

• Q3 net revenue: $770.4 million, up 14.3% year-over-year; nine-month revenues: $2.25 billion.

• Adjusted EBITDA: $128.6 million, margin of 16.7%, up 100 basis points year-over-year; nine-month Adjusted EBITDA: $344.4 million.

• Operating cash flow for Q3: $65 million; year-to-date operating cash flow approaches $190 million.

• Cash and cash equivalents at September 30, 2024: $221.8 million; total liquidity over $815 million.

• Q3 2024 net loss attributable to the company: $31.7 million; nine-month net loss: $59.6 million.

Outlook and guidance

• Full-year 2024 net revenue projected above $3.075 billion and Adjusted EBITDA above $508 million, representing at least 13% and 16% growth, respectively, over the prior year.

• Annualized margins expected to improve by at least 50 basis points over 2023.

• Management expects cash flows from operations, available cash, and borrowing capacity to be adequate for both short- and long-term liquidity needs.

• Focus remains on improving same-facility performance, selective acquisitions, and portfolio management.

• Same facility net revenue growth forecasted to finish in the high single-digit range for 2024.