Tenet Healthcare Corp. ((THC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Tenet Healthcare’s recent earnings call for Q3 2025 revealed a generally positive sentiment, driven by strong financial results and growth across various segments. The company reported significant increases in revenue, EBITDA, and margins, prompting an upward revision of its full-year guidance. However, there were some concerns regarding potential policy changes that could affect future reimbursement rates.
Strong Financial Performance
Tenet Healthcare reported impressive financial performance for the third quarter of 2025, with net operating revenues reaching $5.3 billion. The company’s consolidated adjusted EBITDA grew by 12% year-over-year to $1.1 billion, and the EBITDA margin improved to 20.8%, marking a 170 basis point increase from the previous year. This robust financial growth underscores Tenet’s effective operational strategies and market positioning.
USPI Segment Growth
The USPI segment of Tenet Healthcare demonstrated remarkable growth, generating $492 million in adjusted EBITDA, which represents a 12% increase year-over-year. Additionally, the segment saw an 8.3% rise in same-facility system-wide revenues, highlighting the segment’s strong performance and contribution to the company’s overall success.
Hospital Segment Achievements
Tenet’s hospital segment also achieved significant milestones, with adjusted EBITDA growing by 13% to $607 million. The segment experienced a 1.4% increase in same-store hospital admissions and a 5.9% rise in revenue per adjusted admission, reflecting the segment’s operational efficiency and enhanced patient care services.
Increased Full-Year Guidance
Reflecting its strong performance, Tenet Healthcare has increased its full-year 2025 adjusted EBITDA guidance to a range of $4.47 billion to $4.57 billion. This adjustment represents a $445 million increase at the midpoint from the initial guidance, showcasing the company’s confidence in its continued growth trajectory.
Robust M&A Activity
Tenet has been actively expanding its footprint through mergers and acquisitions, having acquired 11 centers and opened 2 de novo centers. The company has spent nearly $300 million on M&A activities year-to-date and anticipates further expansions, which are expected to bolster its market presence and operational capabilities.
Free Cash Flow Growth
The company projects its free cash flow for 2025 to be in the range of $2.275 billion to $2.525 billion. This projection includes a $250 million increase in cash flow after non-controlling interests at the midpoint from previous guidance, indicating strong cash generation capabilities.
Exchange Market Uncertainty
Despite the positive financial results, Tenet faces uncertainties related to the exchange market. There is concern about the potential expiration of enhanced premium tax subsidies, which could impact reimbursement and enrollment in exchanges, posing a challenge to future revenue streams.
Potential Impact of Policy Changes
Tenet is closely monitoring potential policy changes, particularly decisions on state-directed payment programs. These changes could have significant implications for Medicaid and exchanges in 2026, and the company is preparing to adapt to these potential shifts in the regulatory landscape.
Forward-Looking Guidance
Looking ahead, Tenet Healthcare has provided optimistic forward-looking guidance, with expectations of continued growth in revenue and EBITDA. The company plans to increase capital expenditures to between $875 million and $975 million, which reflects its commitment to enhancing its infrastructure and service offerings. Additionally, Tenet anticipates generating substantial free cash flow minus non-controlling interests, ranging from $1.495 billion to $1.695 billion.
In conclusion, Tenet Healthcare’s Q3 2025 earnings call highlighted a strong financial performance and positive outlook, despite some uncertainties related to policy changes. The company’s strategic growth initiatives, including robust M&A activity and increased guidance, underscore its resilience and adaptability in a dynamic healthcare landscape.