Executive Summary

Q4 2024 delivered strong top-line and earnings growth: net revenues rose 11.1% to $4.114B and diluted EPS was $4.96 ($4.92 adjusted), with EBITDA net of NCI up 30% to $620M; adjusted EBITDA margin expanded to 14.9% from 12.8% YoY .
Management issued FY 2025 guidance implying continued growth: net revenues $17.02–$17.36B (+7.5%–9.7% YoY), adjusted EBITDA $2.357–$2.484B (+4.9%–10.6% YoY), EPS $18.45–$19.95 (+11.1%–20.1% YoY vs 2024 adjusted EPS) and capex $0.85–$1.00B .
Operating catalysts: supplemental Medicaid reimbursements above internal projections in Q4, improved labor costs (premium pay ~$60M in Q4), robust cash generation ($658M in Q4; $2.067B FY) and active buybacks (~1.25M shares repurchased in Q4; ~$598.5M FY) .
Risks and watch items: malpractice reserve additions ($35M in Q4; $79M FY) expected not to recur in 2025, ongoing policy uncertainty around Medicaid programs and provider taxes; Tennessee and DC DPP not included in 2025 guide until CMS approval .
Estimates context: S&P Global Wall Street consensus for Q4 2024 EPS/revenue was unavailable at time of retrieval; management did not reference beats/misses versus Street in materials .

What Went Well and What Went Wrong

What Went Well

Same-facility growth across segments: acute care revenues +8.7% (pricing +5.3% per adjusted admission), behavioral revenues +11.1% (revenue per adjusted patient day +9.1%) in Q4 2024 .
Cost discipline and wage moderation: “The amount of premium paid…declined from a peak of $153M…was $60M in the fourth quarter of 2024,” aiding margin expansion in both segments .
Forward momentum and tech investment: “We’ve accelerated technology investments in our behavioral hospitals to improve patient care, including electronic health record implementations and expanded use of patient monitoring automation” .

What Went Wrong

Malpractice reserves raised: “We recorded a $35 million increase…during the fourth quarter of 2024…our operating results for the full year…included a $79 million increase” (volatile but expected not to recur in 2025) .
Behavioral volumes softer in late December and impacted by winter weather, especially for child/adolescent populations; volumes expected to normalize in 2025 with 2.5%–3% patient-day growth .
Ongoing reimbursement uncertainty: FY25 guidance widened to reflect potential federal/state changes; Tennessee and DC supplemental programs excluded pending CMS approvals .

Financial Results

Consolidated Results vs Prior Periods

Metric	Q4 2023	Q3 2024	Q4 2024
Net Revenues ($USD Billions)	$3.704	$3.963	$4.114
Diluted EPS ($)	$3.16	$3.80	$4.96
Adjusted EPS ($)	$3.13	$3.71	$4.92
EBITDA net of NCI ($USD Millions)	$476.9	$528.6	$620.2
EBITDA Margin %	12.9%	13.3%	15.1%
Adjusted EBITDA Margin %	12.8%	13.3%	14.9%
Cash Flow from Operations ($USD Millions)	$452.4	$333.0	$658.4

Notes: Adjusted metrics exclude other (income)/expense and certain items as detailed in the non-GAAP schedules .

Segment Breakdown

Segment Metric	Q4 2023	Q3 2024	Q4 2024
Acute Care Net Revenues ($USD Billions)	$2.088	$2.246	$2.318
Acute Care Income from Ops Margin %	6.9%	8.9%	9.5%
Behavioral Net Revenues ($USD Billions)	$1.616	$1.715	$1.793
Behavioral Income from Ops Margin %	18.0%	18.6%	20.1%

KPIs (Same-Facility, YoY %)

KPI	Q3 2024	Q4 2024
Acute Adjusted Admissions	+1.5%	+2.2%
Acute Adjusted Patient Days	+2.0%	+0.1%
Acute Revenue per Adjusted Admission	+7.0%	+5.3%
Acute Revenue per Adjusted Patient Day	+6.5%	+7.5%
Behavioral Adjusted Admissions	+2.2%	+2.0%
Behavioral Adjusted Patient Days	+1.8%	+1.6%
Behavioral Revenue per Adjusted Patient Day	+8.5%	+9.1%
Days Sales Outstanding (Consolidated)	52	50
Premium Pay (Quarter)	~$60M	~$60M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenues ($USD Billions)	FY 2025	N/A	$17.020–$17.364	New
Adjusted EBITDA net of NCI ($USD Billions)	FY 2025	N/A	$2.357–$2.484	New
EPS Diluted ($)	FY 2025	N/A	$18.45–$19.95	New
Capital Expenditures ($USD Billions)	FY 2025	N/A	$0.85–$1.00	New
Dividend per Share ($)	Q1 2025	N/A	$0.20 (payable Mar 17, 2025)	Announced

Guidance notes and assumptions: Excludes certain non-recurring/non-operational items (e.g., equity mark-to-market, ASU 2016-09 effects) and excludes DPP programs in Tennessee and Washington, DC pending CMS approvals; management expects consolidated supplemental Medicaid payments to be slightly down vs 2024 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Supplemental Medicaid (DPP)	Q2: FY24 DPP outlook lifted to low/mid-$900M; ~half of guidance raise tied to DPP . Q3: Continued strong same-facility growth across segments .	Q4: ~$50M net incremental reimbursements; FY25 assumes slight decline largely due to prior-period recognition in 2024; TN/DC excluded until CMS approved .	Stable-to-slightly down in 2025; timing risk.
Labor and Premium Pay	Q2: Premium pay ~$61M; cost controls improving; physician expense stabilized ~7.5% of revenues . Q3: Opex discipline supports margin expansion .	Q4: Premium pay ~$60M for last three quarters; wage inflation moderated; continued efficiency improvements .	Improving; stable run-rate.
Behavioral Volume/Price	Q2: Pricing strong; patient-day growth tracking towards 3% by year-end; hiring constraints and Medicaid disenrollments weighed . Q3: BH same-facility revenue +10.5% .	Q4: Late-December softness and weather impacts, but FY25 BH patient-day growth guided 2.5%–3%; core pricing assumed ~3%–4% (ex supplemental) .	Volumes normalizing; pricing resilient.
Acute Volume/Margins	Q2: Acute adjusted admissions +3.4%; surgical growth flattened vs tough comps; targeting 5–6% same-store revenue growth longer term . Q3: Acute same-facility revenue +9.2% .	Q4: Acute same-facility adjusted admissions +2.2%; management targets ~2.5%–3% volume and ~2.5%–3% price in FY25 .	Solid growth with margin expansion.
New Facilities	Q2: West Henderson (Las Vegas) late 2024; Cedar Hill (DC) spring 2025; typical ramp 6–12 months to breakeven . Q3: De novo projects continue .	Q4: West Henderson opened late 2024; Cedar Hill opening within two months; combined EBITDA-positive in 2025; some cannibalization may depress same-store optics .	Incremental tailwinds; near-term optical headwind to same-store.
Policy/Medicaid/Provider Taxes	Q2: Two Midnight rule impact minimal; exchange coverage ~5% admissions .	Q4: Congressional/provider tax debate monitored; bipartisan state support for DPP noted; exchange subsidies risk in 2026 estimated ~$50M headwind if removed .	Policy risk watched; balanced stance.
Leverage & Buybacks	Q2: FY24 buybacks expected $500–$600M; program increased by $1B .	Q4: Leverage now ~2x; buybacks likely $600–$800M in 2025, potential to lever up further; generally programmatic pacing .	Ongoing capital returns; optionality to add leverage.

Management Commentary

“We’re expecting a much more sort of stable operating environment… solid volume growth, robust pricing and very effective expense control… significant amount of incremental malpractice expense in 2024 that we are hoping will not recur in 2025” — Steve Filton .
“We’ve accelerated technology investments in our behavioral hospitals… electronic health record implementations and expanded use of patient monitoring automation” — Marc Miller .
“Included in our operating results during the fourth quarter of 2024, were aggregate net incremental reimbursements of approximately $50 million recorded in connection with various state supplemental Medicaid programs” — Steve Filton .
“We plan to open Cedar Hill Medical Center in Washington, D.C. in the next two months. We forecast that these facilities will be EBITDA positive in 2025 on a combined basis” — Steve Filton .
FY25 guidance ranges and non-GAAP reconciliations detailed in the press release, with revenue $17.020–$17.364B, adjusted EBITDA $2.357–$2.484B, EPS $18.45–$19.95, capex $0.85–$1.00B; TN/DC DPP excluded pending approvals .

Q&A Highlights

Guidance drivers: Underlying core EBITDA growth in both segments, expected normalization of malpractice expense, lower interest expense and share count supporting EPS; wider guidance range reflects reimbursement uncertainty .
DPP outlook: FY25 slight decline mainly due to prior-period recognition in 2024; roughly half of FY25 DPP dollars already approved with remainder pending; TN/DC excluded until CMS approvals .
Labor trends: Premium pay stabilized ~$60M/quarter; wage inflation moderated; behavioral SWB per patient day improved with productivity gains and reduced temp labor .
Capital structure/returns: Leverage ~2x; comfortable operating near high-2s; buybacks expected ~$600–$800M in 2025 with potential to lever up further depending on market/opportunity .
New hospitals: West Henderson (Las Vegas) and Cedar Hill (DC) expected EBITDA-positive in 2025; may temporarily depress same-store metrics due to cannibalization in overlapping markets .
Tariffs/supply costs: Near-term impact limited due to multi-year fixed-price supply contracts; no material 2025 supply expense impact assumed .

Estimates Context

S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at time of retrieval due to data access limits; therefore, explicit numeric comparisons to Street consensus cannot be provided. Management did not cite specific beats/misses vs consensus in the press release or call .

Key Takeaways for Investors

Q4 2024 was a clean print with double-digit revenue growth and substantial margin expansion; adjusted EPS of $4.92 supports FY strength and underpins FY25 EPS guide of $18.45–$19.95 .
Acute and behavioral segments both showed healthy same-facility pricing and revenue growth; behavioral margins reached ~20%, with acute margins expanding toward ~9.5% .
FY25 has multiple potential upside levers: normalization of malpractice expense, de novo hospitals turning EBITDA-positive, and any incremental DPP approvals (TN/DC) not in guidance; downside risk resides in Medicaid policy changes and DPP timing .
Cash generation remains robust; ongoing buybacks ($600–$800M expected in 2025) and willingness to operate at higher leverage suggest continued EPS accretion and capital returns .
Operational KPIs are improving: DSO down to 50 days, premium pay stabilized, and technology investments in behavioral settings enhancing care/process efficiency .
Near-term optics: same-store measures may be modestly dampened by cannibalization from new hospitals in overlapping markets; look through to consolidated EBITDA positivity .
Monitoring list: CMS decisions on TN/DC programs, malpractice trend stability, wage/inflation dynamics, and any policy developments around provider taxes/exchange subsidies that could shift 2026 backdrop .

Additional references:

Dividend declared: $0.20/share payable March 17, 2025 .
2025 conference participation cadence for investor access .

Sources: Q4 2024 press release (financials and guidance) ; Q4 2024 earnings call transcript (operational detail, DPP, malpractice, capital returns, strategy) –; Q3 2024 press release (prior period trends) –; Q2 2024 earnings call transcript (prior period themes) –.

UNIVERSAL HEALTH SERVICES INC (UHS)·Q4 2024 Earnings Summary