Surgery Partners, Inc. Announces Third Quarter 2026 Results
The amended merger adds conditional monthly cash payments for eligible stockholders if closing has not occurred by March 1, 2027.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Surgery Partners (NASDAQ:SGRY) reported third-quarter 2026 revenue of $815.3 million, down 0.8% from the same period a year earlier. Same-facility revenue rose 6.0%. The attributable net loss narrowed to $21.1 million from $22.7 million, while adjusted EBITDA fell to $132.7 million from $136.4 million. Results include ownership of the Idaho Falls facilities through September 13, 2026.
An amended merger agreement with HealthSpan Partners raises consideration to $25.00 per share in cash, representing enterprise value of up to approximately $6.0 billion. Eligible holders receive conditional monthly payments if closing slips beyond March 1, 2027. The company expects closing in the first quarter of 2027, subject to stockholder and regulatory approvals. Surgery Partners will no longer provide forward-looking guidance. Nine-month revenue rose 2.1% to $2,475.1 million; its attributable net loss widened to $72.0 million from $62.9 million.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major pointHealthSpan Partners merger consideration increased to $25.00 per share in cash; enterprise value is up to approximately $6.0 billion.
- Moderate pointThird-quarter same-facility revenue increased 6.0% year over year.
- Moderate pointThird-quarter same-facility revenue per case increased 5.8% year over year.
- Moderate pointNine-month revenue increased 2.1% to $2,475.1 million from $2,423.7 million.
- Moderate pointNine-month same-facility revenue increased 4.6% year over year.
- Moderate pointNine-month same-facility revenue per case increased 4.2% year over year.
- Moderate pointThird-quarter operating cash flow increased to $103.5 million from $83.6 million.
- Moderate pointCash rose to $354.5 million at September 30, 2026, from $239.9 million at December 31, 2025.
- Moderate pointLong-term debt excluding current maturities fell to $2,998.7 million from $3,602.9 million at December 31, 2025.
- Moderate pointThird-quarter net interest expense declined to $67.9 million from $74.9 million.
10 minor points
- Minor point. Forward-looking: it has not happened yet and may not happen.Conditional monthly payments accrue at 10% per annum on $25.00 after March 1, 2027, following stockholder approval; Bain affiliates excluded.
- Minor pointThird-quarter same-facility cases increased 0.2% year over year.
- Minor pointThird-quarter attributable net loss narrowed to $21.1 million from $22.7 million; diluted loss per share improved to $0.16 from $0.18.
- Minor pointNine-month same-facility cases increased 0.3% year over year.
- Minor pointNine-month operating cash flow increased to $174.5 million from $170.9 million.
- Minor pointRevolving credit facility offered $692.8 million of borrowing capacity at September 30, 2026.
- Minor pointCurrent debt maturities fell to $56.5 million from $99.3 million at December 31, 2025.
- Minor pointThird-quarter salaries and benefits declined to $239.8 million from $242.8 million.
- Minor pointThird-quarter professional and medical fees declined to $99.2 million from $104.0 million.
- Minor pointDisposal and consolidation-related losses declined to $2.9 million quarterly and $9.6 million year-to-date, from $15.6 million and $19.0 million.
Negative
- Major pointSurgery Partners will no longer provide forward-looking guidance during the pending transaction.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Merger closing remains subject to stockholder and regulatory approvals; the company expects first-quarter 2027 completion.
- Moderate pointThird-quarter revenue declined 0.8% to $815.3 million from $821.5 million.
- Moderate pointThird-quarter adjusted EBITDA declined to $132.7 million from $136.4 million; margin fell to 16.3% from 16.6%.
- Moderate pointNine-month attributable net loss widened to $72.0 million from $62.9 million; diluted loss per share worsened to $0.56 from $0.50.
- Moderate pointOperating income fell to $85.6 million quarterly and $253.5 million year-to-date, from $105.7 million and $279.3 million.
- Moderate pointConsolidated net income fell to $14.1 million quarterly and $41.7 million year-to-date, from $25.3 million and $69.9 million.
- Moderate pointCases declined to 159,070 quarterly and 484,647 year-to-date, from 166,106 and 499,264.
- Moderate pointGeneral and administrative expenses rose to $40.6 million quarterly and $116.2 million year-to-date, from $22.4 million and $94.5 million.
- Moderate pointSupply expenses rose to $214.1 million quarterly and $661.1 million year-to-date, from $208.9 million and $639.7 million.
- Moderate pointTotal net debt to EBITDA under the credit agreement was approximately 4.4x at quarter-end.
8 minor points
- Minor pointNine-month adjusted EBITDA declined to $360.2 million from $369.3 million; margin fell to 14.6% from 15.2%.
- Minor pointTransaction and integration costs rose to $22.6 million quarterly and $56.6 million year-to-date, from $12.6 million and $55.4 million.
- Minor pointLease expenses rose to $23.8 million quarterly and $71.0 million year-to-date, from $21.5 million and $65.2 million.
- Minor pointOther operating expenses rose to $53.4 million quarterly and $164.0 million year-to-date, from $49.0 million and $148.0 million.
- Minor pointNine-month salaries and benefits rose to $740.3 million from $716.6 million.
- Minor pointNine-month professional and medical fees rose to $303.3 million from $301.4 million.
- Minor pointNine-month net interest expense rose to $206.8 million from $205.0 million.
- Minor pointDebt extinguishment loss increased to $3.7 million for both reported 2026 periods, versus $1.3 million in each comparison period.
News Explained
The announced merger amendment adds a conditional cash entitlement: if stockholders approve but the merger has not closed by
AI-generated analysis. How Rhea-AI works. Not financial advice.
BRENTWOOD, Tenn., Nov. 09, 2026 (GLOBE NEWSWIRE) -- Surgery Partners, Inc. (NASDAQ:SGRY) (“Surgery Partners” or the “Company”), a leading short-stay surgical facility owner and operator, today announced results for the third quarter ended September 30, 2026.
Third Quarter 2026 Financial Highlights
(All comparisons are year-over-year unless otherwise noted; results reflect the ownership of the Idaho Falls facilities through September 13, 2026)
- Revenue decreased (0.8)% for the third quarter
- Same-facility revenues increased
6.0% for the third quarter - Same-facility cases increased
0.2% for the third quarter
- Same-facility revenues increased
- Net loss attributable to Surgery Partners, Inc. was
$21.1 million for the third quarter- Adjusted EBITDA was
$132.7 million for the third quarter
- Adjusted EBITDA was
Eric Evans, Chief Executive Officer, stated, “Our financial results in the third quarter reflect the impact of the successful Idaho Falls divestiture and sustained momentum in our core business, underscoring the value of our short-stay surgical platform. Additionally, the recently announced amended merger agreement with HealthSpan Partners serves as further validation of our unique offering, while representing a compelling outcome for our patients, physicians, stockholders, and other stakeholders. We are excited to move forward with this next chapter as we continue to deliver high-quality care to all our patients and support our physicians, colleagues and health system partners.”
Transaction with HealthSpan Partners
On November 9, 2026, Surgery Partners announced an amendment to its previously announced merger agreement with HealthSpan Partners, following Surgery Partners’ receipt of an unsolicited competing proposal from a third party. The amendment increases the merger consideration to
In light of the pending transaction with HealthSpan Partners, and as is customary during the pendency of such transactions, Surgery Partners will not host an earnings conference call and will no longer provide forward-looking guidance.
Third Quarter 2026 Results
Revenues for the third quarter of 2026 decreased (0.8)% to
Year-to-Date 2026 Results
Revenues year-to-date 2026 increased
Liquidity
Surgery Partners had cash and cash equivalents of
The Company’s ratio of total net debt to EBITDA, as calculated under the Company’s credit agreement, was approximately 4.4x at the end of the third quarter of 2026.
About Surgery Partners
Headquartered in Brentwood, Tennessee, Surgery Partners is a leading healthcare services company with a differentiated outpatient delivery model focused on providing high quality, cost effective solutions for surgical and related ancillary care in support of both patients and physicians. Founded in 2004, Surgery Partners is one of the largest and fastest growing surgical services businesses in the country, with more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices and urgent care facilities.
To learn more about Surgery Partners, please visit the Company's website at www.surgerypartners.com. Surgery Partners uses its website as a channel of distribution for material Company information. Financial and other material information regarding Surgery Partners is routinely posted on the Company's website and is readily accessible.
Forward-Looking Statements
This press release contains forward-looking statements, including those regarding growth, our anticipated operating results for future periods, the proposed Merger and its expected timing, completion, benefits, and effects, and other similar statements. All statements in this press release other than statements of historical fact are forward-looking statements. These statements can be identified by the use of words such as "believes," "anticipates," "expects," "intends," "plans," "continues," "estimates," "predicts," "projects," "forecasts," "may," "could," "likely," "will," "should," or the negative of these words and similar expressions. All forward-looking statements are based on current expectations and beliefs as of the date of this release and are subject to risks, uncertainties and other factors that may cause actual results to differ materially from the expectations discussed in, or implied by, the forward-looking statements.
Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors. Important factors that could cause actual outcomes or results to differ materially from the forward-looking statements include, but are not limited to, (a) the ability of the parties to consummate the proposed Merger in a timely manner or at all; (b) the satisfaction (or waiver) of closing conditions to the consummation of the proposed Merger; (c) potential delays in consummating the proposed Merger; (d) the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed Merger that could delay the consummation of the proposed Merger or cause the parties to abandon the proposed Merger; (e) the possibility that the Company may not receive the requisite stockholder approval for the proposed Merger; (f) the ability of the Company to timely and successfully achieve the anticipated benefits of the proposed Merger; (g) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement with BSMH; (h) the Company’s ability to implement its business strategy; (i) significant transaction costs associated with the proposed Merger, as well as liabilities that are not known, probable or estimable at this time or other unexpected costs, charges or expenses; (j) the possibility that the proposed Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (k) potential litigation relating to the proposed Merger; (l) the risk that disruptions from the proposed Merger will harm the Company’s business, including current plans and operations; (m) risks related to the diversion of management’s time and attention from the Company’s ongoing business operations to matters relating to the proposed Merger; (n) the ability of the Company to retain and hire key personnel; (o) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Merger; (p) legislative, regulatory and economic developments affecting the Company’s business; (q) general economic and market developments and conditions; (r) the legal, regulatory and tax regimes under which the Company operates; (s) potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed Merger that could affect the Company’s financial performance; (t) the risk that any announcements relating to the proposed Merger or competing acquisition proposals could have adverse effects on the market price of the Company’s common stock, and the risk that such price may decline significantly if the proposed Merger is not consummated on the anticipated timeline, or at all; (u) restrictions during the pendency of the proposed Merger that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (v) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities; (w) the possibility that the anticipated benefits from the previously announced sale of the Company's ownership interests in Mountain View Hospital, LLC, Idaho Falls Community Hospital, LLC and associated subsidiaries to Intermountain Health (the “Idaho Transaction”) are not realized as expected, the potential adverse effect on the Company's business relationships, operating results, and business generally, including the ability to retain key personnel; (x) potential litigation relating to the Idaho Transaction that could be instituted against the Company or its affiliates, officers, or directors, and the effects of any outcomes related thereto; (y) reductions in payments from government health care programs and private insurance payors, such as health maintenance organizations, preferred provider organizations, and other managed care organizations and employers; (z) our ability to contract with private insurance payors; (aa) changes in our payor mix or surgical case mix; (bb) failure to maintain or develop relationships with physicians on beneficial or favorable terms, or at all; (cc) the impact of payor controls designed to reduce the number of surgical procedures; (dd) our efforts to integrate operations of acquired or developed businesses and surgical facilities, attract new physician partners, or acquire additional surgical facilities; (ee) supply chain issues, including shortages or quality control issues with surgery-related products, equipment and medical supplies; (ff) competition for physicians, nurses, strategic relationships, acquisitions and managed care contracts; (gg) our ability to attract and retain qualified health care professionals; (hh) our ability to enforce non-compete restrictions against our physicians; (ii) our ability to manage material liabilities whether known or unknown incurred as a result of acquiring or operating surgical facilities; (jj) the impact of future legislation and other health care regulatory reform actions, and the effect of that legislation and other regulatory actions on our business; (kk) our ability to comply with current health care laws and regulations; (ll) the outcome of legal and regulatory proceedings that have been or may be brought against us; (mm) the impact of cybersecurity attacks or intrusions, changes in the regulatory, economic and other conditions of the states where our surgical facilities are located; (nn) our indebtedness; and (oo) the social and economic impact of a pandemic, epidemic or outbreak of a contagious disease on our business, as well as the Company’s response to any of the aforementioned factors and the risks and uncertainties identified and discussed from time to time in the Company’s reports filed with the Securities and Exchange Commission (the "SEC"), including in Item 1A under the heading "Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and other reports filed with the SEC, as well as the risks and uncertainties that will be described in the proxy statement and Schedule 13E-3 to be filed in connection with the proposed Merger. Except as required by law, the Company undertakes no obligation to revise or update publicly any forward-looking statements to reflect events or circumstances after the date of this report, or to reflect the occurrence of unanticipated events or circumstances. The foregoing list of factors is not exhaustive, and new risks may emerge from time to time.
Use of Non-GAAP Financial Measures
In addition to the results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") provided throughout this press release, Surgery Partners has presented the following non-GAAP financial measures: Adjusted net income (loss) attributable to common stockholders, Adjusted net income (loss) per share attributable to common stockholders, Adjusted EBITDA, and Adjusted EBITDA related to unconsolidated affiliates, which exclude various items detailed in the "Reconciliation of Non-GAAP Financial Measures" below.
These non-GAAP financial measures are not intended to replace financial performance measures determined in accordance with GAAP. Rather, they are presented as supplemental measures of the Company's performance that management believes may enhance the evaluation of the Company's ongoing operating results. These non-GAAP financial measures are not presented in accordance with GAAP, and the Company’s computation of these non-GAAP financial measures may vary from similar measures used by other companies. These measures have limitations as an analytical tool and should not be considered in isolation or as a substitute or alternative to revenue, net income or loss, operating income or loss, cash flows from operating activities, total indebtedness or any other measures of operating performance, liquidity or indebtedness derived in accordance with GAAP.
| SURGERY PARTNERS, INC. Selected Consolidated Financial Data (Dollars in millions, except per share amounts, shares in thousands) (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues | $ | 815.3 | $ | 821.5 | $ | 2,475.1 | $ | 2,423.7 | |||||||
| Operating expenses: | |||||||||||||||
| Salaries and benefits | 239.8 | 242.8 | 740.3 | 716.6 | |||||||||||
| Supplies | 214.1 | 208.9 | 661.1 | 639.7 | |||||||||||
| Professional and medical fees | 99.2 | 104.0 | 303.3 | 301.4 | |||||||||||
| Lease expense | 23.8 | 21.5 | 71.0 | 65.2 | |||||||||||
| Other operating expenses | 53.4 | 49.0 | 164.0 | 148.0 | |||||||||||
| Cost of revenues | 630.3 | 626.2 | 1,939.7 | 1,870.9 | |||||||||||
| General and administrative expenses | 40.6 | 22.4 | 116.2 | 94.5 | |||||||||||
| Depreciation and amortization | 39.6 | 39.5 | 117.4 | 116.1 | |||||||||||
| Transaction and integration costs | 22.6 | 12.6 | 56.6 | 55.4 | |||||||||||
| Net (gain) loss on disposals, consolidations and deconsolidations | 2.9 | 15.6 | 9.6 | 19.0 | |||||||||||
| Equity in earnings of unconsolidated affiliates | (6.4 | ) | (5.2 | ) | (16.9 | ) | (16.3 | ) | |||||||
| Litigation settlements | 0.4 | 5.1 | 2.9 | 7.3 | |||||||||||
| Loss on debt extinguishment | 3.7 | 1.3 | 3.7 | 1.3 | |||||||||||
| Other income, net | (4.0 | ) | (1.7 | ) | (7.6 | ) | (3.8 | ) | |||||||
| 729.7 | 715.8 | 2,221.6 | 2,144.4 | ||||||||||||
| Operating income | 85.6 | 105.7 | 253.5 | 279.3 | |||||||||||
| Interest expense, net | (67.9 | ) | (74.9 | ) | (206.8 | ) | (205.0 | ) | |||||||
| Income (loss) before income taxes | 17.7 | 30.8 | 46.7 | 74.3 | |||||||||||
| Income tax (expense) benefit | (3.6 | ) | (5.5 | ) | (5.0 | ) | (4.4 | ) | |||||||
| Net income (loss) | 14.1 | 25.3 | 41.7 | 69.9 | |||||||||||
| Less: Net income attributable to non-controlling interests | (35.2 | ) | (48.0 | ) | (113.7 | ) | (132.8 | ) | |||||||
| Net income (loss) attributable to Surgery Partners, Inc. | $ | (21.1 | ) | $ | (22.7 | ) | $ | (72.0 | ) | $ | (62.9 | ) | |||
| Net income (loss) per share attributable to common stockholders | |||||||||||||||
| Basic | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.56 | ) | $ | (0.50 | ) | |||
| Diluted (1) | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.56 | ) | $ | (0.50 | ) | |||
| Weighted average common shares outstanding | |||||||||||||||
| Basic | 128,865 | 127,206 | 128,688 | 126,932 | |||||||||||
| Diluted (1) | 128,865 | 127,206 | 128,688 | 126,932 | |||||||||||
(1) The impact of potentially dilutive securities for all periods was not considered because the effect would be anti-dilutive.
| SURGERY PARTNERS, INC. Selected Financial and Operating Data (Dollars in millions, except per case and per share amounts) (Unaudited) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| Balance Sheet Data (at period end): | |||||||
| Cash and cash equivalents | $ | 354.5 | $ | 239.9 | |||
| Total current assets | 1,080.0 | 1,150.7 | |||||
| Total assets | 7,049.8 | 8,119.7 | |||||
| Current maturities of long-term debt | 56.5 | 99.3 | |||||
| Total current liabilities | 498.6 | 615.5 | |||||
| Long-term debt, less current maturities | 2,998.7 | 3,602.9 | |||||
| Total liabilities | 3,793.1 | 4,592.9 | |||||
| Non-controlling interests—redeemable | 356.8 | 395.5 | |||||
| Total Surgery Partners, Inc. stockholders' equity | 1,664.6 | 1,712.9 | |||||
| Non-controlling interests—non-redeemable | 1,235.3 | 1,418.4 | |||||
| Total stockholders' equity | 2,899.9 | 3,131.3 | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Cash Flow Data: | |||||||||||||||
| Net cash provided by (used in): | |||||||||||||||
| Operating activities | $ | 103.5 | $ | 83.6 | $ | 174.5 | $ | 170.9 | |||||||
| Investing activities | 468.0 | (46.2 | ) | 434.8 | (120.5 | ) | |||||||||
| Purchases of property and equipment | (24.5 | ) | (19.8 | ) | (62.3 | ) | (65.9 | ) | |||||||
| Payments for acquisitions, net of cash acquired | (6.1 | ) | (4.6 | ) | (10.2 | ) | (52.6 | ) | |||||||
| Purchases of equity investments | — | (9.6 | ) | — | (13.4 | ) | |||||||||
| Financing activities | (433.7 | ) | (84.1 | ) | (494.7 | ) | (116.5 | ) | |||||||
| Distributions to non-controlling interest holders | (53.1 | ) | (52.5 | ) | (156.6 | ) | (168.8 | ) | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Other Data: | |||||||||||||||
| Number of surgical facilities as of the end of period | 173 | 165 | 173 | 165 | |||||||||||
| Number of consolidated surgical facilities as of the end of period | 115 | 114 | 115 | 114 | |||||||||||
| Cases | 159,070 | 166,106 | 484,647 | 499,264 | |||||||||||
| Revenue per case | $ | 5,125 | $ | 4,946 | $ | 5,107 | $ | 4,855 | |||||||
| Adjusted EBITDA (1) | $ | 132.7 | $ | 136.4 | $ | 360.2 | $ | 369.3 | |||||||
| Adjusted EBITDA margin (2) | 16.3 | % | 16.6 | % | 14.6 | % | 15.2 | % | |||||||
| Adjusted net income per share attributable to common stockholders - Basic (1) | $ | 0.16 | $ | 0.13 | $ | 0.24 | $ | 0.35 | |||||||
| Adjusted net income per share attributable to common stockholders - Diluted (1) | $ | 0.16 | $ | 0.13 | $ | 0.24 | $ | 0.34 | |||||||
(1) A reconciliation of these non-GAAP financial measures appears below.
(2) Defined as Adjusted EBITDA as a % of Revenues.
| SURGERY PARTNERS, INC. Supplemental Information (Dollars in millions, except per case amounts) (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Same-facility Information (1): | |||||||||||||||
| Cases | 181,102 | 180,652 | 518,357 | 516,639 | |||||||||||
| Case growth | 0.2 | % | N/A | 0.3 | % | N/A | |||||||||
| Revenue per case | $ | 4,375 | $ | 4,136 | $ | 4,377 | $ | 4,200 | |||||||
| Revenue per case growth | 5.8 | % | N/A | 4.2 | % | N/A | |||||||||
| Number of work days in the period | 64 | 64 | 191 | 191 | |||||||||||
| Case growth (days adjusted) | 0.2 | % | N/A | 0.3 | % | N/A | |||||||||
| Revenue growth (days adjusted) | 6.0 | % | N/A | 4.6 | % | N/A | |||||||||
(1) Same-facility information includes cases and revenues from our consolidated and non-consolidated surgical facilities (excluding facilities acquired in new markets or divested during the current and prior periods).
| SURGERY PARTNERS, INC. Reconciliation of Non-GAAP Financial Measures (Dollars in millions, except per share amounts, shares in thousands) (Unaudited) | |||||||||||||||
| The following table reconciles Adjusted EBITDA to income before income taxes in the reported consolidated financial information, the most directly comparable GAAP financial measure: | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Income (loss) before income taxes | $ | 17.7 | $ | 30.8 | $ | 46.7 | $ | 74.3 | |||||||
| Net income attributable to non-controlling interests | (35.2 | ) | (48.0 | ) | (113.7 | ) | (132.8 | ) | |||||||
| Interest expense, net | 67.9 | 74.9 | 206.8 | 205.0 | |||||||||||
| Depreciation and amortization | 39.6 | 39.5 | 117.4 | 116.1 | |||||||||||
| Equity-based compensation expense | 6.0 | 2.6 | 15.6 | 17.0 | |||||||||||
| Transaction and integration costs (1) | 22.6 | 12.6 | 56.6 | 55.4 | |||||||||||
| De novo start-up costs | 1.2 | 1.7 | 4.3 | 5.4 | |||||||||||
| Net (gain) loss on disposals, consolidations and deconsolidations | 2.9 | 15.6 | 9.6 | 19.0 | |||||||||||
| Litigation settlements and other litigation costs (2) | 5.9 | 5.4 | 12.8 | 8.6 | |||||||||||
| Loss on debt extinguishment | 3.7 | 1.3 | 3.7 | 1.3 | |||||||||||
| Undesignated derivative activity | 0.4 | — | 0.4 | — | |||||||||||
| Adjusted EBITDA (3) | $ | 132.7 | $ | 136.4 | $ | 360.2 | $ | 369.3 | |||||||
(1) For the three months ended September 30, 2026, this amount includes due diligence, transaction and integration costs related to acquisitions (both completed and in the pipeline - collectively “M&A costs”) of
For the nine months ended September 30, 2026, this amount includes M&A costs of
(2) This amount includes a litigation settlement loss of
This amount includes a litigation settlement loss of
(3) We use Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by management to assess operating performance, make business decisions and allocate resources. Non-controlling interests represent the interests of third parties, such as physicians, and in some cases, healthcare systems that own an interest in surgical facilities that we consolidate for financial reporting purposes. We believe that it is helpful to investors to present Adjusted EBITDA as defined above because it excludes the portion of net income attributable to these third-party interests and clarifies for investors our portion of Adjusted EBITDA generated by our surgical facilities and other operations. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as a substitute for net income, operating income or any other measure calculated in accordance with GAAP. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating our financial performance. We believe such adjustments are appropriate, as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
The following table provides supplemental information for Adjusted EBITDA related to unconsolidated affiliates:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates: | |||||||||||||||
| Management fee revenues (1)(2) | $ | 8.9 | $ | 7.8 | $ | 29.4 | $ | 24.6 | |||||||
| Equity in earnings of unconsolidated affiliates (2) | 6.4 | 5.2 | 16.9 | 16.3 | |||||||||||
| Plus: | |||||||||||||||
| Start-up costs related to unconsolidated de novo surgical facilities (3) | 1.1 | 1.6 | 4.2 | 4.3 | |||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | $ | 16.4 | $ | 14.6 | $ | 50.5 | $ | 45.2 | |||||||
(1) Includes management and administrative service fees derived from the non-consolidated facilities that the Company accounts for under the equity method and management of surgical facilities in which it does not own an interest. Management fee revenues are included in Revenues on the Consolidated Statements of Operations.
(2) Included as a component of income before income taxes in the Adjusted EBITDA reconciliation table above.
(3) Included as a component of de novo start-up costs in the Adjusted EBITDA reconciliation table above.
From time to time, the Company incurs certain non-recurring gains or losses that are normally non-operational in nature and management does not consider relevant in assessing its ongoing operating performance. When significant, Surgery Partners’ management and the Company's Board of Directors typically exclude these gains or losses when evaluating the Company’s operating performance and in certain instances when evaluating performance for incentive compensation purposes. Additionally, management believes that certain investors and equity analysts exclude these or similar items when evaluating the Company’s current or future operating performance and in making informed investment decisions regarding the Company. Accordingly, the Company provides adjusted net income (loss) attributable to common stockholders and adjusted net income (loss) per share attributable to common stockholders as supplements to the comparable GAAP financial measures. Adjusted net income (loss) attributable to common stockholders and adjusted net income (loss) per share attributable to common stockholders should not be considered measures of financial performance under GAAP, and the items excluded from such measures are significant components in understanding and assessing financial performance. These measures should not be considered in isolation or as an alternative to the comparable GAAP measures as presented in the consolidated financial statements.
The following table reconciles net income (loss) as reflected in the consolidated statements of operations to adjusted net income attributable to common stockholders used to calculate adjusted net income per share attributable to common stockholders:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Consolidated Statements of Operations Data: | |||||||||||||||
| Net income (loss) | $ | 14.1 | $ | 25.3 | $ | 41.7 | $ | 69.9 | |||||||
| Plus (minus): | |||||||||||||||
| Net income attributable to non-controlling interests | (35.2 | ) | (48.0 | ) | (113.7 | ) | (132.8 | ) | |||||||
| Equity-based compensation expense | 6.0 | 2.6 | 15.6 | 17.0 | |||||||||||
| Transaction and integration costs | 22.6 | 12.6 | 56.6 | 55.4 | |||||||||||
| De novo start-up costs | 1.2 | 1.7 | 4.3 | 5.4 | |||||||||||
| Net (gain) loss on disposals, consolidations and deconsolidations | 2.9 | 15.6 | 9.6 | 19.0 | |||||||||||
| Litigation settlements and other litigation costs | 5.9 | 5.4 | 12.8 | 8.6 | |||||||||||
| Loss on debt extinguishment | 3.7 | 1.3 | 3.7 | 1.3 | |||||||||||
| Adjusted net income (loss) attributable to common stockholders | $ | 21.2 | $ | 16.5 | $ | 30.6 | $ | 43.8 | |||||||
| Adjusted net income (loss) per share attributable to common stockholders | |||||||||||||||
| Basic | $ | 0.16 | $ | 0.13 | $ | 0.24 | $ | 0.35 | |||||||
| Diluted | $ | 0.16 | $ | 0.13 | $ | 0.24 | $ | 0.34 | |||||||
| Weighted average common shares outstanding | |||||||||||||||
| Basic | 128,865 | 127,206 | 128,688 | 126,932 | |||||||||||
| Diluted | 129,614 | 128,112 | 129,375 | 127,867 | |||||||||||
Contact
Surgery Partners Investor Relations
(615) 234-8940
IR@surgerypartners.com
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Surgery Partners' third-quarter 2026 earnings results?
Surgery Partners reported $815.3 million in revenue and a $21.1 million attributable net loss for the quarter ended September 30, 2026. Revenue declined 0.8% year over year, while the attributable net loss narrowed from $22.7 million. Adjusted EBITDA, a non-GAAP earnings measure, was $132.7 million versus $136.4 million.
How do Surgery Partners' merger ticking fee payments work?
Stockholders other than Bain Capital Private Equity affiliates qualify for additional monthly cash payments if requisite stockholder approval has been obtained but the merger has not closed by March 1, 2027. Payments are made in equal monthly installments in arrears at a rate of 10% per annum on the $25.00 per-share merger consideration.
How does Surgery Partners calculate same-facility operating results?
Surgery Partners' same-facility results include cases and revenues from consolidated and non-consolidated surgical facilities, excluding facilities acquired in new markets or divested during the current and prior periods. This scope differs from the consolidated case totals reported elsewhere in its results.