Tenet Healthcare (THC) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated Adjusted EBITDA was $1.163 billion, up 14% year-over-year with a 22.3% margin, exceeding guidance and reflecting strong performance in both Ambulatory and Hospital segments.

• Net operating revenues were $5.223 billion, down 2.7% year-over-year due to hospital divestitures, while Ambulatory Care revenues grew 20%.

• Adjusted diluted EPS rose 35.4% year-over-year to $4.36, with net income available to common shareholders at $406 million.

• Free cash flow for Q1 2025 was $642 million, up from $346 million in Q1 2024.

• Results exceeded internal expectations, driven by high patient acuity, favorable payer mix, and effective cost management.

Financial highlights

• Adjusted EBITDA margin improved to 22.3% from 19.1% in Q1 2024.

• USPI/Ambulatory segment Adjusted EBITDA grew 16% to $456 million with a 38.2% margin; same-facility revenues rose 6.8%.

• Hospital segment Adjusted EBITDA increased 12% to $707 million, margin at 17.5%; same-hospital admissions up 4.4%.

• Repurchased 2.6 million shares for $348 million in Q1 2025; 16% of shares repurchased since Q4 2022.

• Cash on hand was $3.0 billion at March 31, 2025; no borrowings under $1.5 billion credit facility.

Outlook and guidance

• FY 2025 Adjusted EBITDA guidance: $3.975–$4.175 billion; net operating revenues: $20.6–$21.0 billion; adjusted diluted EPS: $11.99–$13.12.

• Free cash flow guidance for FY 2025 is $1.8–$2.05 billion; capital expenditures planned at $700–$800 million.

• Q2 2025 Adjusted EBITDA expected to be 24–25% of full-year guidance midpoint.

• Ambulatory segment revenues expected to grow 3–6%; hospital segment admissions to rise 2–3%.

• Capital deployment priorities: M&A, hospital growth, debt management, and share repurchases.