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Earnings analysis · 10-Q

SEM earnings analysis

Filed April 30, 2026 · Our reading of the company's report

The latest report

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…

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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.

Read the original on SEC.gov

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $90 Operating expenses $3 Left as operating profit $7

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

Where revenue came from

The business segments reported by the company.

Critical Illness Recovery Hospital 48.7% Rehabilitation Hospital 26.8% Outpatient Rehabilitation 24.5%

Shares of the segments disclosed in this filing, largest first.

Reported figures

Earnings per share
$0.44

What stood out

  • 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.

What to watch

  • 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.

Management's outlook

Management notes potential challenges from regulatory changes and increasing labor costs.

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.