10-Q · May 5, 2026
Surgery Partners, Inc. reported Q1 2026 earnings with revenue of $810.9 million, reflecting a 4.5% increase year-over-year, while EPS improved to a loss of $0.03 compared to a loss of $0.30 in Q1 2025. The company…
Earnings analysis · 10-Q
SGRY earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
Surgery Partners delivered 2.7% year-over-year revenue growth to $848.9 million, supported by 5.0% same-facility revenue growth and a 4.8% increase in revenue per case. However, cost inflation and provider taxes…
Read full summary
Surgery Partners delivered 2.7% year-over-year revenue growth to $848.9 million, supported by 5.0% same-facility revenue growth and a 4.8% increase in revenue per case. However, cost inflation and provider taxes compressed operating margin to approximately 12.0%, Adjusted EBITDA declined 2.9% to $125.2 million, and the attributable net loss widened to $15.0 million. Liquidity remained adequate with $216.7 million of cash and $617.8 million of Revolver capacity, but operating cash flow declined to $71.0 million for the first six months and interest expense increased.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Segment
- Surgical Facilities / patient service revenues: $826.1 million, up 2.7% from $804.2 million year over year; other service revenues: $22.8 million, up from $22.0 million.
What stood out
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Revenue grew and beat consensus
Second-quarter revenue increased 2.7% year over year to $848.9 million from $826.2 million and exceeded consensus of $831.3 million by approximately $17.6 million.
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Same-facility performance remained positive
Days-adjusted same-facility revenue increased 5.0%, driven by a 4.8% increase in revenue per case and a 0.3% increase in same-facility cases.
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Operating margin compressed
Operating income declined to $102.1 million from $111.7 million, reducing operating margin to approximately 12.0% from 13.5% year over year. Cost of revenues rose to 77.6% of revenue from 76.3%.
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GAAP earnings deteriorated
Net loss attributable to Surgery Partners widened to $15.0 million from $2.5 million in the prior-year quarter; diluted EPS was not disclosed in the 10-Q.
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Facility base expanded
The company operated 178 surgical facilities as of June 30, 2026, including 159 ASCs and 19 surgical hospitals, and consolidated 120 facilities for financial reporting.
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Liquidity remained available
Cash and cash equivalents were $216.7 million at June 30, 2026, while Revolver borrowing capacity was $617.8 million. Net working capital increased to approximately $547.5 million from $535.2 million at December 31, 2025.
What to watch
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Profitability and margin pressure
Adjusted EBITDA declined 2.9% to $125.2 million from $129.0 million year over year, while operating income fell $9.6 million to $102.1 million, indicating pressure on underlying profitability.
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Lower operating cash generation
Operating cash flow for the first six months fell to $71.0 million from $87.3 million, a $16.3 million decrease, primarily due to higher cash interest payments and working-capital timing.
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Higher interest burden
Net interest expense increased to $69.8 million from $67.9 million in the quarter; six-month interest expense rose to $138.9 million from $130.1 million, primarily because of increased Revolver borrowings.
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Provider taxes and acuity costs
Cost of revenues increased to $658.7 million from $630.6 million, with management citing high-acuity procedures and increased hospital provider taxes; six-month cost of revenues reached $1.3 billion versus $1.2 billion.
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Transaction execution risk
Management identified transaction and integration costs of $18.4 million in the quarter, including $12.5 million of M&A costs, and warned that the potential sale of Mountain View Hospital and Idaho Falls Community Hospital may be delayed or not completed.
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Macro and liquidity sensitivity
The filing states there were no material changes to the risk factors in the 2025 Form 10-K; however, management warned that interest rates, inflation and market volatility could reduce patient volumes, impair receivables collection and restrict capital access. Cash and cash equivalents declined to $216.7 million from $239.9 million at December 31, 2025.
Management's outlook
The 10-Q does not provide new quantitative revenue or EPS guidance. The filing states that cash flows from operations, available cash, Revolver capacity and anticipated capital-markets access are expected to meet short- and long-term liquidity needs.
Earlier filings 4
10-K · March 2, 2026
Surgery Partners presents scale and a clear outpatient strategy: ~176 owned/operated surgical facilities (157 ASCs, 19 licensed surgical hospitals) and patient services of approximately $3.2 billion in 2025. The company…
10-Q · November 10, 2025
Surgery Partners reported Q3 2025 revenues of $821.5 million, up $51.1 million (6.6%) versus Q3 2024, with operating income increasing to $105.7 million from $60.9 million a year earlier. GAAP diluted loss per share…
10-Q · May 12, 2025
Surgery Partners reported Q1 2025 revenue of $776.0 million, up $58.6 million (+8.2%) year-over-year but down $88.4 million (-10.2%) vs. the prior quarter. Operating income narrowed to $61.9 million (operating margin…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.