Total Revenue

Approximately 7% QoQ decline from $1,761.2M in Q3 2024 to –$122.6M in Q4 2024

Total Revenue experienced a dramatic drop in Q4 2024 largely due to the reclassification effects from the Concentra spin‐off, which shifted significant revenue streams out of SEM’s consolidated reporting compared to the solid revenue contributions across all segments in Q3 2024. " "

Adjustments for Non-Cash Items

Increased to $171,108K in Q4 2024

The surge in non‑cash adjustments reflects significant changes such as increased equity earnings from unconsolidated subsidiaries and additional non‑cash charges, contrasting with comparatively lower adjustments in the previous period. "

Stock-Based Compensation

Rose to $61,271K in Q4 2024

The notable increase is primarily driven by accelerated vesting and award modifications—actions linked to the Concentra spin‑off—which amplified expense recognition compared to prior quarters where vesting and grant activity were more moderate. "

Capital Expenditures

Dropped dramatically from approximately $50.7M in Q3 2024 to $16 in Q4 2024

The substantial reduction in CapEx indicates a strategic shift in spending, with fewer investments in property and equipment in Q4 2024 as many development projects were either completed or temporarily on hold, in stark contrast to the expansion-driven investments in Q3 2024. "

Net Change in Cash

Turned negative at –$115,088K in Q4 2024

After a strong cash increase in Q3 2024, Q4 2024 saw a reversal due to major financing outflows—including significant debt repayments and changes in financing activities associated with the spin‑off—resulting in a steep downturn in the net cash position. "

Cash and Cash Equivalents

Fell from $191,468K in Q3 2024 to $59,694K in Q4 2024

The decline in liquidity is a direct outcome of the negative net cash change and substantial cash outflows tied to financing adjustments and lower operating inflows in Q4 2024, contrasting with the robust cash buildup seen in the prior quarter. "

Long-Term Debt

Reduced from $3,098,957K in Q3 2024 to $1,691,546K in Q4 2024

Long-term debt decreased markedly as debt repayments were accelerated using proceeds from the Concentra IPO, coupled with amendments that reclassified Concentra’s debt out of SEM’s consolidated figures, a significant shift from the higher leverage maintained in Q3 2024. "

Shareholders’ Equity

Increased modestly to $1,986,928K in Q4 2024

Despite other declines, equity grew modestly driven by robust net income and capital contributions from Concentra IPO proceeds, which offset the impact of cash dividends and share repurchases—continuing a positive trend from previous periods. "

Revenue

FY 2025

no prior guidance

$5.4 billion to $5.6 billion "

no prior guidance

Adjusted EBITDA

FY 2025

no prior guidance

$520 million to $540 million "

no prior guidance

Adjusted EPS

FY 2025

no prior guidance

$1.09 to $1.19 "

no prior guidance

Capital Expenditures

FY 2025

no prior guidance

$160 million to $200 million "

no prior guidance

Facility Expansion & Bed Capacity Growth

Q1–Q3 calls consistently discussed adding new hospitals and bed capacity—in Q1 new hospital openings and a plan to add 537 beds " , Q2 detailed opening new facilities with 449 additional beds and a critical illness recovery hospital " " , and Q3 highlighted new inpatient rehab hospitals and joint venture deals. "

In Q4, 94 inpatient rehab beds were added (including a 50‐bed facility in Oklahoma City) with detailed plans for adding 481 more beds by 2026, representing the most active development phase in the company’s history. " "

Consistent aggressive expansion with more concrete and ambitious plans in Q4. However, integration challenges from rapid growth have begun to weigh on margins.

Outpatient Rehabilitation Efficiency & Technology Innovation

Q2 emphasized scheduling improvements and increasing daily patient loads " ; Q3 highlighted an imminent “game changer” technology release to boost clinical efficiency. " (Q1 had no specific mention.)

Q4 showcased strong performance improvements in outpatient revenue and EBITDA, with a technology rollout in January contributing to improved clinical productivity and robust margin gains. " "

Ongoing focus on technology and efficiency; sentiment remains positive as innovations mature, with a stronger operational impact noted in Q4.

Financial Leverage Management & Borrowing Cost Trends

Q1 outlined high leverage with prepayments and plans for credit management " ; Q2 described a net leverage of 4.13x with expectations of higher borrowing costs due to rising SOFR " ; Q3 highlighted reduced consolidated debt and improved leverage metrics. "

Q4 reported a refinancing of $1.6 billion, including new term loans and extended credit facility maturities, which lowered interest expense (from $40.3 million to $28.6 million) and improved leverage ratios. " " "

Steady improvement in financial leverage through proactive refinancing; borrowing costs are trending lower with a strategic focus on debt reduction.

LTAC Segment Performance & Growth Strategy

Q1 was bullish with strong margins, high-acuity patient mix, and plans to add 70 LTAC beds " " " ; Q2 showed steady revenue increases and margin improvements " ; Q3 reported modest gains with occupancy and revenue up. "

In Q4, the LTAC segment maintained stable margins and is expected to grow at low single-digit rates in 2025, reflecting a more cautious and steady outlook compared to earlier, more aggressive growth projections. "

Shift from aggressive to cautious growth—LTAC performance remains solid but the outlook has become more measured, focusing on stability.

Critical Illness Recovery Performance & Cost Control

Q1 highlighted robust revenue (up 10%) and dramatic adjusted EBITDA improvements with strong cost control (e.g. 6% reduction in SW&B ratios) " ; Q2 showed further margin gains and reduced cost ratios " " ; Q3 reported continued revenue strength despite start-up losses. "

Q4 continued to show revenue and EBITDA growth with improved occupancy, yet integration and start-up costs in new facilities resulted in a 6% decline in adjusted EBITDA margins (from 25.5% previously to 21.2%). "

Consistent strong performance overall, though Q4’s integration costs have introduced short-term margin pressures despite underlying operational efficiency.

Labor Cost Stabilization & Staffing Efficiency

Q1 demonstrated significant improvements with reductions in RN agency costs (–23%) and lower incentive bonuses, dropping SW&B ratios from 56.2% to 52.9% " " ; Q2 and Q3 continued to see decreases in agency utilization and incentive expenses. " "

Q4 maintained the trend with a further decrease in SW&B (down to 56.9% from 57.6% in the prior year) and a 15% reduction in nursing sign-on/incentive bonuses, alongside steady agency nurse utilization at 14%. " " "

Continuing positive trend—labor costs remain well-managed with ongoing efficiency improvements, reflecting successful operational initiatives.

Payer Mix, Reimbursement Pressures & Demand Shifts

Q1 provided detailed discussion on outpatient declines in net revenue per visit (from $101 to $99) due to changes in Medicare fee schedules and shifts in payer mix " ; Q2 and Q3 had limited or no dedicated discussion on this topic.

Q4 offered only peripheral mentions, noting that in outpatient care, improvements in commercial rates helped offset declines in Medicare reimbursements, leading to a modest increase in net revenue per visit (from $100 to $102). " "

Reduced emphasis—the topic is less front-and-center in Q4, suggesting that earlier reimbursement challenges have been largely integrated into broader revenue dynamics with mitigated concerns.

Integration Costs & Start-Up Losses from New Facilities

Q1 mentioned modest start-up losses in critical illness recovery ($2.2 million) with no talk of integration costs. " Q2 saw higher losses ($3–3.6 million) in both inpatient rehab and critical illness divisions. " Q3 reported notable start-up losses in inpatient rehab and critical illness, but with less focus on integration expenses. "

Q4 focused on significant integration costs impacting the inpatient rehab division: start-up losses and integration expenses led to a 6% decline in EBITDA margins, with additional challenges from hurricane-driven referral drops, even though facilities are expected to mature rapidly. " "

Worsening short-term cost pressures—integration costs and start-up losses have increasingly affected margins in Q4, highlighting growing near-term operational challenges despite long-term growth potential.