Net Operating Revenue

FY 2025

$5.85 to $5.925 billion "

$5.88 to $5.98 billion " "

raised

Adjusted EBITDA

FY 2025

$1.185 to $1.220 billion "

$1.22 to $1.25 billion " "

raised

Adjusted EPS

FY 2025

$4.85 to $5.10 "

$5.12 to $5.34 " "

raised

Full Year Adjusted Free Cash Flow

FY 2025

$620 to $715 million "

$705 to $795 million " "

raised

Preopening and Ramp-Up Costs

FY 2025

no prior guidance

$18 to $22 million " "

no prior guidance

Capacity Expansion and New Hospital Openings

Q1 earnings detailed plans to add 125–145 beds, multiple de novo hospitals and joint ventures. " " " " Q4 emphasized a $450M capacity expansion with 7 new hospitals and 107 new beds across multi‐state initiatives. " " Q3 highlighted adding 99 beds, including prefabrication projects like the Houston facility, with an active pipeline. "

Q2 reported adding 26 beds to an existing hospital with plans to add 30–50 more beds; opened a new 60-bed hospital and another 50-bed facility, with a full-year plan for additional de novo and satellite hospitals; noted market entry into Connecticut for Q3 2025. " " " "

Consistent emphasis on capacity growth with incremental, targeted bed additions and geographic expansion; sentiment remains proactive and growth‐oriented. " " " "

Revenue, Discharge Growth and Operational Efficiency

Q1 showed revenue increasing to $1.46B with discharge growth between 6.3%–7.8% and improved efficiency through higher same‐store metrics. " " " " " Q3 reported revenue up by 11.9% to $1.35B along with improved operational metrics. " " Q4 detailed revenue growth of 12.7% to $1.4B with broad-based discharge and efficiency improvements. " "

Q2 reported revenue up 12% to $1.46B, with discharge growth of 7.2% and ongoing operational efficiency improvements, supported by consistent clinical performance. " "

Steady revenue and discharge growth with continuously improving operational efficiency; overall positive sentiment remains consistent across periods. " "

Payer Mix Dynamics and Shifts in Medicare Advantage

Q1 noted an unexpected shift favoring Medicare fee‐for‐service with a decline in Medicaid and managed care by 140 bp while increasing higher‐reimbursing segments. " " Q3 documented Medicare Advantage discharges growing 12.6%. " " Q4 highlighted strong Medicare Advantage growth (14.7% increase) along with proactive managed care contracting. " " "

Q2 described stable Medicare fee‐for‐service mix with a slight increase in managed care driven by the VA Community Care Network contract, which now comprises almost 18% of the managed care business. " "

Overall payer mix remains steady with nuanced shifts; enhanced managed care focus via specific contracts appears to be a positive refinement of the strategy. " "

Rising Cost Pressures and Margin Squeeze Risks

Q1 reported a 14% rise in benefits expense per FTE along with increasing preopening costs and labor pressures. " " Q3 observed a 14% increase in benefits per FTE and rising preopening costs. " Q4 described a 30.6% spike in benefits expense per FTE, higher CapEx for expansion, and moderate margin contraction concerns. " " "

Q2 noted benefits expense per FTE up 18%, increased growth CapEx (with an additional $25M for bed expansions and $5M for land acquisition), and cautioned that potential resumption of TPE activity in H2 could lift bad debt expense from 2% to 2.5%. " " "

Cost pressures remain a central challenge, with rising employee benefit costs and preopening expenses; margin risks are ongoing and require careful management, indicating a slightly heightened concern. " " "

TPE Activity and Audit Dynamics Uncertainty

Q1 described TPE activity as “lumpy” with impacts driven largely by the MAC’s RCD focus (Palmetto). " Q3 discussed a significant resolution of earlier TPE claims with only a few new claims emerging, alongside ongoing challenges with the RCD process. " "

Q2 indicated that while bad debt expense is currently at 2%, there is an expectation of resumed TPE activity later in the year, potentially increasing bad debt to 2.5%. " "

Uncertainty regarding TPE activity persists; recent guidance in Q2 remains cautious about potential future increases in bad debt expense despite prior resolutions, reflecting a continuing risk factor. " "

Regulatory and Claims Review Risks

Q1 highlighted regulatory challenges with pre-authorization under Medicare Advantage and Medicaid supplemental payment impacts. " " " " Q3 emphasized active management of claims review risks under TPE and difficulties with the RCD process as well as tax variability. " " " " Q4 focused on advocacy around Medicare Advantage preauthorization, favorable resolution of bad debt reserves, and variability in provider tax impacts. " " " "

Q2 introduced updates from the CMS 2026 IRF final rule (a net market basket update of 2.6%), anticipated revenue benefits starting in October 2025, and reviewed managed care pricing adjustments along with the benefits from bonus depreciation impacting free cash flow. " " " " "

The regulatory landscape is evolving with new CMS rules and proactive contractual adjustments; while audit and claims review risks remain, tax benefits partially offset risks, suggesting an adaptive strategic stance. " " " " "

Technological Integration for Enhanced Efficiency

Q3 emphasized prefabrication strategies (e.g., the Houston and upcoming Athens projects) achieving reduced construction time and cost savings. " " Q4 expanded the focus to include predictive analytics in clinical outcomes (fall prevention and ReACT tools); Q1 had no coverage on this topic.

Q2 introduced the use of AI to reduce administrative burden, enhance recruitment through predictive analytics, and further advances in prefabricated hospital construction, demonstrating an integrated approach. " "

Building on established prefabrication, the current period expands technological integration to include AI and predictive analytics, signaling an emerging but increasingly positive trend toward efficiency gains. " "

Free Cash Flow Generation and Capital Allocation Discipline

Q1 reported strong free cash flow growth (up 32.7%) with disciplined use for capacity expansion, share repurchases, and dividends. " " " Q3 highlighted a 27.1% increase in free cash flow with improved net leverage and reinvestment into capacity expansions. " " Q4 detailed a 103.7% increase in free cash flow, robust capital returns, and higher growth CapEx commitments. " "

Q2 noted a 30.5% increase in adjusted free cash flow to $186M (YTD reaching $408M) with raised full-year guidance to $705M–$795M; maintained disciplined capital allocation through prioritizing capacity investments, share repurchases, and strong liquidity (net leverage of 2.0x). " " "

Consistently strong free cash flow generation underpins a disciplined capital allocation strategy focused on growth initiatives and shareholder returns; the trend remains robust with further enhancements in liquidity and repurchase activity. " " "

External Operational Disruptions

Q3 documented hurricane impacts in Florida with evacuations and temporary closures (with minimal facility damage and brief operational disruptions). " " "

N/A

External operational disruptions were noted previously (in Q3), but there is no mention in the current period, suggesting either reduced impact or lower topical emphasis in Q2 2025 [N/A].