Tenet Healthcare (THC) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated adjusted EBITDA reached $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 for Q1 2025 were $5.223 billion, down 2.7% year-over-year due to hospital divestitures, but Ambulatory Care revenues grew 20%.

• Adjusted diluted EPS rose 35% year-over-year to $4.36, and net income available to common shareholders was $406 million.

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

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

Financial highlights

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

• Salaries, wages, and benefits were 40.6% of net revenues, a 260 basis point improvement year-over-year.

• Net cash from operating activities was $815 million in Q1 2025.

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

• Long-term debt was $13.08 billion at March 31, 2025, all fixed-rate except for undrawn revolver.

Outlook and guidance

• FY 2025 adjusted EBITDA guidance is $3.975–$4.175 billion, with net operating revenues projected at $20.6–$21.0 billion.

• Adjusted diluted EPS guidance for FY 2025 is $11.99–$13.12.

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

• Second quarter 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%.