In This Article:
-
Net Revenue: $776 million, an 8.2% increase from the first quarter of 2024.
-
Adjusted EBITDA: $103.9 million, representing a margin of 13.4%.
-
Same-Facility Revenue Growth: 5.2% in the first quarter.
-
Surgical Cases: Over 160,000 cases performed, a 4.5% increase from 2024.
-
Orthopedic Cases: Over 29,000 cases, a 3.4% increase from 2024, with total joint procedures growing 22%.
-
Cash and Liquidity: $229 million in cash, with over $615 million in total liquidity.
-
Operating Cash Flows: $6 million in the first quarter of 2025.
-
Corporate Debt: $2.2 billion with no maturities until 2030, effective interest rate fixed at approximately 6%.
-
Leverage Ratio: Total net debt-to-EBITDA ratio of 4.1 times.
-
2025 Revenue Guidance: Reaffirmed at $3.3 billion to $3.45 billion.
-
2025 Adjusted EBITDA Guidance: Reaffirmed at $555 million to $565 million.
Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Surgery Partners Inc (NASDAQ:SGRY) reported first quarter net revenue of $776 million and adjusted EBITDA of $103.9 million, both in line with expectations.
-
The company experienced a 6.5% growth in surgical cases, contributing to an 8% increase in net revenue compared to the prior year.
-
Surgery Partners Inc (NASDAQ:SGRY) added nearly 150 new physicians in the first quarter, with a focus on orthopedic specialties, enhancing their service capabilities.
-
The company has invested in 68 surgical robots, supporting complex and higher acuity procedures, which aids in physician recruitment and operational efficiency.
-
Surgery Partners Inc (NASDAQ:SGRY) maintains a robust pipeline for M&A, having deployed $55 million to add 5 surgical facilities at an effective multiple under 8 times adjusted EBITDA.
Negative Points
-
The company faced a decline in rates of approximately 1%, primarily due to growth in lower acuity specialties.
-
There was slight margin pressure during the quarter, attributed to the mix of business, which is expected to improve throughout the year.
-
Operating cash flows were lower in the first quarter, influenced by timing of working capital activities and higher distributions to physician partners.
-
Interest rate exposure increased as the interest rate swap expired, replaced by a cap that could lead to higher interest costs.
-
The company continues to face challenges with payer mix and rate pressures, particularly in the GI and MSK service lines.
Q & A Highlights
Q: Eric, congrats on the strong volume quarter. How are you thinking about current utilization trends and the sustainability of that? Also, the same-store revenue per procedure was softer this past quarter. Is that due to a tough comp, or is there something else to consider for future modeling? A: The first quarter same-store revenue growth was in line with expectations. The case growth reflects stronger de novos and MSK growth, which is higher volume but lower revenue. The softer revenue per procedure is due to a mix shift and tough comp. We expect more balanced growth between volume and rate by year-end, consistent with our long-term range.