Tenet Healthcare (THC) Q2 2024 earnings summary

Executive summary

• Q2 2024 results exceeded expectations, with consolidated Adjusted EBITDA up 12% year-over-year to $945 million and net income available to common shareholders rising to $259 million, or $2.64 per diluted share.

• Net operating revenues for Q2 2024 were $5.1 billion, nearly flat year-over-year, with strong operating performance and disciplined cost control across all segments.

• Ambulatory segment delivered 21% Adjusted EBITDA growth, 7.1% same-facility revenue growth, and expanded through acquisitions and new centers.

• Hospital segment saw Adjusted EBITDA of $498 million, with same-hospital admissions up 5.2% and margin improving to 12.6%.

• Board authorized a new $1.5 billion share repurchase program after completing the prior authorization.

Financial highlights

• Q2 2024 net operating revenues: $5.1 billion; Adjusted EBITDA: $945 million (18.5% margin); net income available to common shareholders: $259 million.

• Adjusted diluted EPS for Q2 2024 was $2.31, up from $1.44 in Q2 2023.

• Free cash flow for Q2 2024 was $602 million; cash on hand at quarter-end was $2.88 billion.

• Debt-to-Adjusted EBITDA ratio improved to 2.61x at June 30, 2024.

• Recognized a $30 million favorable Medicaid adjustment in Texas for prior years.

Outlook and guidance

• FY 2024 Adjusted EBITDA guidance raised to $3.825–$3.975 billion, up $300 million from prior guidance.

• FY 2024 net operating revenues expected at $20.6–$21.0 billion; Adjusted diluted EPS forecasted at $10.41–$11.12.

• Ambulatory segment FY 2024 Adjusted EBITDA expected at $1.75–$1.81 billion; hospital segment at $2.08–$2.17 billion.

• FY 2024 free cash flow guidance raised to $1.1–$1.35 billion.

• Q3 2024 consolidated Adjusted EBITDA expected in the $900–$950 million range.