Tenet Healthcare (THC) Q1 2026 earnings summary

Executive summary

• Net operating revenues reached $5.37 billion in Q1 2026, up 2.8% year-over-year, with consolidated adjusted EBITDA of $1.162 billion and a margin of 21.6%, exceeding expectations despite payer mix shifts and insurance enrollment uncertainty.

• Net income available to common shareholders rose to $702 million ($8.01 per diluted share), up 73% year-over-year, driven by strong Ambulatory Care growth and a $413 million contract termination payment.

• Adjusted diluted EPS increased 10.6% year-over-year to $4.82.

• Both Ambulatory and Hospital segments performed above expectations, with robust growth in high-acuity service lines and effective cost management.

• Strong free cash flow generation and disciplined operations offset headwinds from unfavorable payer mix and seasonal effects.

Financial highlights

• Adjusted EBITDA margin was 21.6% in Q1 2026; Ambulatory segment margin was 36.7%, and Hospital segment margin was 16.7%.

• Adjusted free cash flow reached $978 million in Q1 2026, up from $678 million a year ago; cash on hand was $2.97 billion.

• Net income as a percentage of net operating revenues was 13.1% in Q1 2026.

• Salaries, wages, and benefits were 40.5% of net revenues, consistent year-over-year.

• Leverage ratio as of March 31, 2026, was 2.24x EBITDA (2.83x EBITDA less NCI).

Outlook and guidance

• Full-year 2026 guidance reaffirmed, with adjusted EBITDA expected at $4.485–$4.785 billion and net operating revenues between $21.5–$22.3 billion.

• Adjusted diluted EPS forecasted at $16.38–$18.68 for FY 2026.

• Adjusted free cash flow for 2026 projected at $1.6–$1.83 billion (excluding $150 million Conifer tax payments) and up to $2.8 billion including all items.

• Capital expenditures for 2026 projected at $700–$800 million.

• Q2 2026 consolidated adjusted EBITDA expected to be 24%-25% of full-year guidance.