SEM earnings analysis
What we found in SEM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
In Q1 2026, Select Medical Holdings Corporation reported revenue of $1.42 billion, a 5.0% increase from $1.35 billion in Q1 2025. Gross margin declined slightly to 10.3%, while diluted EPS decreased to $0.44 from $0.43 year-over-year. The Rehabilitation Hospital segment demonstrated robust growth, with a 14.5% rise in revenue, while the Critical Illness Recovery Hospital segment remained flat. Management anticipates that ongoing labor costs and regulatory changes will impact future financial performance.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Growth Continues
- Q1 2026 revenue increased by 5.0% to $1.42 billion from $1.35 billion in Q1 2025.
- Operating Income Declines
- Operating income fell to $98.4 million, a decrease of 12.7% from $112.7 million a year prior.
- Rehabilitation Hospital Segment Outpaces Others
- Rehabilitation hospital revenue surged 14.5% to $351.9 million compared to $307.4 million in Q1 2025.
- Adjusted EBITDA Decline
- Adjusted EBITDA decreased 6.5% to $141.6 million from $151.4 million year-over-year.
- Strong Operating Cash Flow Improvement
- Operating cash flow improved to $37.9 million in Q1 2026 from cash used of $3.5 million in Q1 2025.
- Work Capital Growth
- Net working capital increased significantly to $141.7 million from $40.8 million at year-end 2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Labor Cost Increases
- Management noted ongoing inflationary pressures, especially in labor costs, impacting margins.
- Regulatory Risks
- Changes in Medicare reimbursement policies may adversely affect revenue and profitability.
- Merger Risks
- Pending litigation related to the proposed merger could delay or prevent its completion, impacting business operations.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.44
- Gross margin
- 10.3%
- Operating margin
- 6.9%
- Segment
- Critical Illness Recovery Hospital: $638.8M
- Segment
- Rehabilitation Hospital: $351.9M
- Segment
- Outpatient Rehabilitation: $321.3M
What they said about what is next.
Management notes potential challenges from regulatory changes and increasing labor costs.
The filing reads about the same as the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
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