Tenet Healthcare (THC) Q2 2024 earnings summary

Executive summary

• Q2 2024 results exceeded expectations, with net operating revenues of $5.1 billion and consolidated Adjusted EBITDA up 12% year-over-year to $945 million, driven by strong operating performance, disciplined cost control, and robust ambulatory and hospital segment growth.

• Net income available to common shareholders was $259 million, or $2.64 per diluted share, up from $123 million in Q2 2023.

• Ambulatory segment delivered 21% Adjusted EBITDA growth and 7.1% same-facility revenue growth, while hospital segment Adjusted EBITDA rose 5.3% with improved margins.

• Significant deleveraging achieved, with EBITDA leverage ratio at 2.61x as of June 30, 2024.

• Board authorized a new $1.5 billion share repurchase program after completing the previous $1 billion program.

Financial highlights

• Net operating revenues for Q2 2024 were $5.1 billion, nearly flat year-over-year.

• Adjusted EBITDA for Q2 2024 was $945 million, up 12% year-over-year, with an 18.5% margin.

• Net income for Q2 2024 was $259 million; Adjusted diluted EPS was $2.31, up from $1.44 in Q2 2023.

• Free cash flow for Q2 2024 was $602 million; cash on hand at June 30, 2024, was $2.88 billion.

• Recognized a $30 million favorable pre-tax impact from additional Medicaid supplemental revenues in Texas.

Outlook and guidance

• FY 2024 Adjusted EBITDA guidance raised to $3.825–$3.975 billion, a $300 million increase.

• FY 2024 net operating revenues expected at $20.6–$21.0 billion.

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

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

• Adjusted diluted EPS forecasted at $10.41–$11.12 for FY 2024.