Surgery Partners, Inc.

Second-quarter net revenue was approximately $849 million, up 2.7% year over year. Adjusted EBITDA was approximately $125 million, compared with approximately $129 million in the prior-year period, and adjusted EBITDA margin was 14.7%. For the first half of 2026, net revenue was approximately $1.66 billion, up 3.6%, and adjusted EBITDA was approximately $228 million, down 2.3%; year-to-date adjusted EBITDA margin was 13.7% versus 14.5% last year. Same-facility net revenue increased 5% in the quarter, with 4.8% from rate, and same-facility net revenue rose 4.9% year to date. Full-year 2026 guidance was reaffirmed at revenue of $3.35 billion to $3.45 billion and adjusted EBITDA of at least $530 million, excluding Idaho Falls. The Idaho Falls sale is expected to generate approximately $795 million of gross proceeds, with net proceeds dependent on closing debt, cash and working capital, and to reduce balance sheet leverage by approximately 0.3 turns.

Eric Evans framed the quarter as strong operationally and strategically, saying results came in ahead of expectations and supported reaffirming full-year guidance. He emphasized continued focus on higher-acuity surgery, physician recruiting, de novo growth and disciplined M&A, while calling the Idaho Falls sale the most impactful step in the portfolio review. His tone was constructive and confident, stressing that the company is becoming a simpler, more focused short-stay surgical platform with a stronger long-term growth profile.

David Doherty said Q2 adjusted EBITDA of approximately $125 million was in line with expectations despite being below the prior-year $129 million, and noted year-to-date adjusted EBITDA of approximately $228 million with margin at 13.7%. He walked through expense lines, including salaries and wages at 29.8% of revenue, supplies at 26.7%, professional fees and medical-related expenses at 12.1%, other operating expenses at 6.1%, and G&A at 4.3%, each improving sequentially from Q1. He also highlighted operating cash flow of approximately $59 million in Q2, $217 million of cash flow at quarter end, $75 million of revolver borrowings, $618 million of available revolver capacity, and leverage of 4.4x on a credit-agreement basis and 5.1x on a balance-sheet basis. On Idaho Falls, he said gross proceeds are expected to be about $795 million, net cash will depend on closing adjustments, and the proceeds will be used primarily to pay down debt.

Analysts pressed on whether broader surgical volumes are holding up, and management pointed to strong higher-acuity growth in joints, spine and vascular, saying same-store net revenue is the best way to view the business. Questions on payer mix focused on the moderation in commercial mix; management said the change was expected, mostly more visible in surgical hospitals than ASCs, and not a sign of weak demand. On Idaho Falls, management confirmed the deal includes the entire market, including ASCs, physician practices and ancillary businesses, and said the transaction should materially reduce acute-care exposure, Medicaid mix and capital intensity. They also said there are no current staffing or anesthesia constraints limiting capacity, and that the ASC rate proposal for 2027 looked broadly in line with expectations.