Tenet Healthcare (THC) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and FY 2024 performance with $20.7B net operating revenues, $4B consolidated adjusted EBITDA (up 13% year-over-year), and a 19.3% adjusted EBITDA margin, over 200 basis points higher than 2023.

• Significant portfolio transformation included divesting 14 hospitals for $4.9B–$5B in gross proceeds, adding nearly 70 ambulatory surgical centers (ASCs), and substantial deleveraging, reducing the EBITDA leverage ratio to 2.54x by year-end 2024.

• Returned $1.12B to shareholders via share repurchases since late 2022, retiring 14% of outstanding shares.

• Net income available to common shareholders in Q4 2024 was $318M ($3.32 per diluted share), up from $244M ($2.30) in Q4 2023; FY 2024 net income was $3.2B, including a $2.916B pre-tax gain from divestitures.

• Operational efficiency and ambulatory segment growth drove margin expansion and balance sheet improvement.

Financial highlights

• Q4 2024 net operating revenues were $5.072B, with adjusted EBITDA of $1.048B (20.7% margin), up from $1.012B (18.8%) in Q4 2023.

• FY 2024 adjusted EBITDA was $3.995B, up from $3.541B in 2023; adjusted diluted EPS for Q4 2024 was $3.44, up from $2.68 in Q4 2023.

• Free cash flow for FY 2024 was $1.116B, or nearly $2B excluding tax payments on divestitures; $3B cash on hand at year-end.

• USPI segment achieved $1.81B adjusted EBITDA (17% growth), 40% margin, and 7.8% same-facility revenue growth for 2024.

• Hospital segment generated $2.185B adjusted EBITDA (9% growth), with 4.7% same-store admissions growth and 4.6% increase in same-store revenue per adjusted admission.

Outlook and guidance

• FY 2025 guidance: consolidated net operating revenues of $20.6–$21.0B and adjusted EBITDA of $3.975–$4.175B, representing 7% normalized growth at the midpoint.

• FY 2025 adjusted diluted EPS guidance is $11.74–$12.84; free cash flow projected at $1.8–$2.05B before NCI distributions, $1.05–$1.25B after NCI.

• USPI expected to grow adjusted EBITDA by 8.5% and hospital segment by 5.7% at midpoints; ambulatory segment revenues expected to grow 3–6%, hospital admissions 2–3%.

• Plans to invest ~$250M annually in ambulatory M&A and add 10–12 de novo centers in 2025.

• Capital expenditures for 2025 projected at $700M–$800M.