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; net operating revenues were $5.223 billion, down 2.7% due to hospital divestitures.

• Adjusted diluted EPS rose 35.4% year-over-year to $4.36; net income attributable to common shareholders was $406 million, down from $2.151 billion in Q1 2024, which included large one-time gains.

• Ambulatory Care segment revenues grew 20% year-over-year, while Hospital Operations revenues declined 7.9% due to prior year divestitures.

• Outperformance was driven by strong same-store revenue growth, high patient acuity, favorable payer mix, and disciplined cost management.

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

Financial highlights

• Adjusted EBITDA margin improved to 22.3% from 19.1% in Q1 2024; Hospital segment margin was 17.5%, and Ambulatory segment margin was 38.2%.

• Net income for Q1 2025 was $406 million; adjusted net income was $414 million.

• Cash flows from operating activities were $815 million, up from $586 million year-over-year.

• Repurchased 2.6 million shares for $348 million in Q1 2025; $1.03 billion share repurchase authorization remains.

• Cash and cash equivalents were $3.0 billion at March 31, 2025; no borrowings under the $1.5 billion credit facility.

Outlook and guidance

• FY 2025 Adjusted EBITDA guidance is $3.975–$4.175 billion; net operating revenues projected at $20.6–$21.0 billion.

• Adjusted diluted EPS forecasted at $11.99–$13.12; free cash flow guidance for FY 2025 is $1.8–$2.05 billion.

• Capital expenditures planned at $700–$800 million for FY 2025.

• 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%.