Surgery Partners, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue increased 2.7% year-over-year to $848.9 million for the second quarter of 2026, compared to $826.2 million in the second quarter of 2025.
• Year-to-date revenue increased 3.6% to $1,659.8 million for the first six months of 2026, compared to $1,602.2 million in the same period of 2025.
• Same-facility revenue increased 5.0% in the second quarter of 2026, driven by a 4.8% increase in revenue per case and a 0.3% increase in same-facility cases.
• Year-to-date same-facility revenue increased 4.9%, with a 4.0% increase in revenue per case and a 0.8% increase in same-facility cases.
• Net loss attributable to Surgery Partners, Inc. was $15.0 million for the second quarter of 2026, compared to a net loss of $2.5 million in the prior year period.
• Adjusted EBITDA was $125.2 million for the second quarter of 2026, down from $129.0 million in the second quarter of 2025.
• Year-to-date Adjusted EBITDA was $227.5 million for 2026, compared to $232.9 million in the prior year period.
• Adjusted EBITDA margin was 14.7% for the second quarter of 2026, compared to 15.6% in the prior year period.
• Operating cash flow was $59.3 million for the second quarter of 2026, down from $81.3 million in the prior year period.
• Year-to-date operating cash flow was $71.0 million for 2026, compared to $87.3 million in the prior year period.
• Cash and cash equivalents were $216.7 million as of June 30, 2026.
• Borrowing capacity under the revolving credit facility was $617.8 million as of June 30, 2026.
• The ratio of total net debt to EBITDA was approximately 4.4x at the end of the second quarter of 2026.
• Total long-term debt (less current maturities) was $3,648.3 million as of June 30, 2026.

Guidance and Future Outlook

• The Company reaffirmed full-year 2026 revenue guidance to be in the range of $3.35 billion to $3.45 billion.
• The Company reaffirmed full-year 2026 Adjusted EBITDA guidance of at least $530 million, excluding the impact of the pending divestiture of facilities in Idaho Falls, Idaho.
• Management expects to capitalize on structural tailwinds underpinning long-term ambulatory surgery center (ASC) market growth.
• The Company plans to enhance operational efficiency and thoughtfully deploy capital to deliver long-term shareholder value.

Business Segments and Product Lines

• The Company operates more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices, and urgent care facilities.
• The number of surgical facilities increased to 178 as of June 30, 2026, up from 162 in the prior year period.
• The number of consolidated surgical facilities increased to 120 as of June 30, 2026, up from 115 in the prior year period.
• Total cases for the second quarter of 2026 were 167,866, compared to 172,858 in the prior year period.
• Revenue per case for the second quarter of 2026 was $5,057, compared to $4,780 in the prior year period.
• Same-facility cases for the second quarter of 2026 were 197,078, compared to 196,552 in the prior year period.
• Same-facility revenue per case for the second quarter of 2026 was $4,898, compared to $4,676 in the prior year period.
• Management fee revenues related to unconsolidated affiliates were $10.5 million for the second quarter of 2026, compared to $8.6 million in the prior year period.

Market and Competitive Landscape

• The Company operates in the short-stay surgical facility market, focusing on high-quality, cost-effective solutions for surgical and ancillary care.
• Management cited structural tailwinds underpinning long-term ASC market growth as a key factor supporting future performance.
• The Company faces competition for physicians, nurses, strategic relationships, acquisitions, and managed care contracts.

Risks and Challenges

• The pending sale of ownership interests in Mountain View Hospital and Idaho Falls Community Hospital to Intermountain Health is subject to closing conditions, including physician, regulatory, and governing board approvals, which may not be obtained or may be delayed.
• Risks include potential adverse effects on the market price of securities, business relationships, and the ability to retain key personnel due to the sale transaction.
• Potential risks include reductions in payments from government health care programs and private insurance payors, changes in payor mix, and the impact of payor controls on surgical procedures.
• The Company faces risks related to supply chain issues, including shortages or quality control issues with surgery-related products and equipment.
• Risks include the ability to enforce non-compete restrictions against physicians and the ability to manage material liabilities incurred from acquiring or operating surgical facilities.
• Future legislation, regulatory reform actions, and cybersecurity attacks pose potential risks to the business.

Management Commentary and Tone

• Eric Evans, CEO, expressed pleasure with the quarter's progress, citing disciplined execution against strategic priorities to support a return to growth.
• Evans highlighted the pending Idaho Falls transaction as a key achievement in the portfolio optimization strategy to improve the financial profile and sharpen strategic focus.
• Dave Doherty, CFO, stated that financial results demonstrate momentum in ongoing performance improvement initiatives.
• Doherty noted that the Idaho Falls transaction will further strengthen the financial position through improved cash conversion and deleveraging.
• Management emphasized a commitment to disciplined capital allocation to support continued business growth.

Other Key Points

• The Company announced a pending divestiture of its facilities in Idaho Falls, Idaho, to Intermountain Health, which is excluded from the full-year 2026 Adjusted EBITDA guidance.
• Transaction and integration costs were $18.4 million for the second quarter of 2026, including $12.5 million in M&A costs and $5.9 million in other costs.
• Litigation settlements and other litigation costs were $2.7 million for the second quarter of 2026.
• Equity-based compensation expense was $3.8 million for the second quarter of 2026.
• Distributions to non-controlling interest holders were $45.5 million for the second quarter of 2026.
• A conference call was held on August 10, 2026, to discuss the results.