HCA Healthcare, Inc.

HCA did not disclose quarterly revenue, EPS, or gross margin in the transcript, but it said diluted EPS grew 11% in Q2 and 11% year to date. Same-facility admissions increased 2.5%, equivalent admissions increased 2.7%, ER visits increased 3.6%, inpatient surgeries were down 2.3%, and outpatient surgeries were down 3.4%. Net revenue per equivalent admission increased 6.4%. The company said the exchange-related payer mix shift hurt adjusted EBITDA by approximately $400 million in the quarter, while Medicaid supplemental payment programs contributed $400 million of incremental net benefit, including $540 million tied to Florida for the period from October 1, 2024 to June 30, 2026. Full-year 2026 guidance was lowered to revenue of $77 billion to $79.5 billion, adjusted EBITDA of $15.4 billion to $16.1 billion, net income attributable to HCA Healthcare of $6.3 billion to $6.7 billion, and diluted EPS of $28.70 to $30.50. Management now expects health insurance exchange-related adjusted EBITDA pressure of negative $1 billion to $1.2 billion and Medicaid supplemental payment net benefit of $300 million to $500 million. Capex guidance was maintained at $5 billion to $5.5 billion, and the company said it expects to complete most of its existing authorized share repurchase program.

Samuel Hazen framed the quarter around three themes: a payer mix shock from the expiration of enhanced premium tax credits, still-solid demand, and progress on the company’s financial resiliency program. He stressed that HCA is continuing to add capacity and facilities, with more than $7 billion in capex approved for the next three years, and said the company is positioning itself for long-term demand growth of 2% to 3%. His tone was confident and defensive at the same time: acknowledging the headwinds, but emphasizing discipline, execution, and HCA’s ability to respond to policy and market changes.

Mike Marks emphasized that the key financial issue was the exchange-related mix shift, which he said reduced adjusted EBITDA by about $400 million in Q2, with the biggest change versus prior assumptions being that nearly all patients losing exchange coverage are becoming uninsured rather than moving to other coverage. He also highlighted $400 million of incremental net benefit from Medicaid supplemental payments in the quarter, including a $540 million Florida benefit tied to the 10/1/2024 to 6/30/2026 period. Cash flow from operations was $2.3 billion, down 45% year over year due mainly to timing differences around Florida Medicaid supplemental payments and prior-year tax deferrals; capex was $1.2 billion, share repurchases were $2.1 billion, and dividends were $171 million. He said leverage remains in the lower half of the target range and reiterated that the resiliency program should help bend the cost curve into 2027 and beyond.

Analysts focused on the larger-than-expected exchange headwind, the decline in surgeries, cost trends, and the outlook for 2027 coverage and reimbursement dynamics. Management said the exchange issue is now being modeled as almost a 1-for-1 shift into uninsured, with 3 divisions — Gulf Coast, North Florida, and South Atlantic — responsible for about 50% of the impact. On surgeries, HCA said the stable emergency component is growing, while elective inpatient and outpatient volumes are under pressure, partly from exchange disenrollment and partly from broader affordability and some Medicare rule changes. Management also said it is generally pleased with proposed 2027 inpatient/outpatient payment updates, is monitoring Medicaid work requirements, and believes it can manage through them reasonably well.