SGRY earnings analysis
What we found in SGRY'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
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.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
- 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.
- 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%.
- 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.
- 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.
- 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.
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 22.4%
- Operating margin
- 12.0%
- 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 they said about what is next.
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.
The filing reads about the same as the one before it.
What came before.
- 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…
- 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. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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