TENET HEALTHCARE CORP Q4 FY2025 earnings call

• In 2025, Tenet reported net operating revenues of $21.3 billion and consolidated adjusted EBITDA of $4.57 billion, a 14% growth over 2024. - USPI had strong volumes and good mix, with adjusted EBITDA growing 12% in 2025 to $2.026 billion, and same facility revenues growing 7.5%. - Hospital segment adjusted EBITDA grew 16% to $2.54 billion in 2025, with same-store revenues per adjusted admission up 5.3%. - The company was active in M&A and de novo activity in 2025, investing nearly $350 million and adding 35 facilities, with a strong pipeline for 2026. - Over the past three years, the company has repurchased approximately 22% of its outstanding shares, retiring around $2.5 billion.

For the USPI segment, adjusted EBITDA grew 12% in 2025 to $2.026 billion. Same facility revenues grew 7.5%, with double-digit same-store volume growth in total joint replacements in ASCs. USPI's adjusted EBITDA represented approximately 9.5% of the total net operating revenues of $21.3 billion. For the Hospital segment, adjusted EBITDA grew 16% to $2.54 billion in 2025. Same-store revenues per adjusted admission were up 5.3% over the prior year. The Hospital segment's adjusted EBITDA made up approximately 11.9% of the total net operating revenues.

• 2026 consolidated adjusted EBITDA is projected to be in the range of $4.485 billion to $4.785 billion. - USPI's adjusted EBITDA is expected to be between $2.13 billion and $2.23 billion. - Hospital segment adjusted EBITDA is anticipated to be in the range of $2.355 billion to $2.555 billion. - Anticipates impact from expiration of enhanced premium tax credits on exchange marketplace, assuming a 20% reduction in overall enrollment. - Plans to tackle expense management more structurally and expects contributions from M&A and de novo center openings at USPI.

• Uncertainty regarding effectuation rates as individuals determine if they can afford premiums, leading to expected increase in uninsured rates. - Impact of expiration of enhanced premium tax credits on enrollment and volumes in the hospital segment, estimated to have a $250 million impact on 2026 adjusted EBITDA.

Q: Ben Hendrix asks about same-store hospital volume performance in the quarter and hospital volumes in 2026.

A: Sun Park responds that acuity was good, respiratory season was weaker than expected in Q4, and in 2026, returns from 2025 capital investments are expected to drive improvement Q: Whit Mayo asks about what 'tackling expense management more structurally' means.

A: Saumya Sutaria explains it involves using technology for expense reduction, including in the global business center, automation, and clinical throughput application Q: Ben Hendrix asks about hospital admission growth guide.

A: Sun Park mentions Q4 flu respiratory season impact and 2026 being driven by 2025 CapEx and technology investments, with uncertainty around exchange enrollment impact Q: Kevin Fischbeck asks about sustainability of growth from expense management.

A: Saumya Sutaria states the company has a track record of acuity and margin growth, and is prepared for future environments with creativity and work Q: Josh Raskin asks about broader technology agenda and margin improvement.

A: Saumya Sutaria says there is margin expansion opportunity in hospital segment, with technologies like AI and automation enabling next level of improvement due to established standards Q: Justin Lake asks about DPP and exchange shift.

A: Sun Park provides details on DPP run rates and exchange enrollment assumptions Q: Pito Chickering asks about first-quarter guidance.

A: Sun Park clarifies USPI Q1 guidance and hospital Q1 considerations, and provides DPP Q4 figure Q: Thomas Walsh asks about redeploying resources from Conifer services.

A: Saumya Sutaria discusses Conifer contract execution, future growth opportunities, and NPV calculation of the transaction Q: Scott Fidel asks about ASC business investments and case mix.

A: Saumya Sutaria talks about inpatient-only list tailwind, urology and spine work, robotics capabilities, and M&A de novo activity impact Q: Ryan Langston asks about exchange volumes and Medicaid programs.

A: Sun Park provides Q4 exchange volume and revenue tracking, and mentions monitoring Medicaid program approvals Q: A.J. Rice asks about care contracting.

A: Sun Park states no real change in care contracting commentary, with 3%-5% rate range and high contracting completion Q: Sarah James asks about payer mix in USPI and hospital.

A: Saumya Sutaria and Sun Park discuss consistent USPI payer mix and hospital guidance range uncertainty Q: Benjamin Rossi asks about ambulatory segment payer mix and pull forward.

A: Saumya Sutaria states USPI HICS exposure is less, and no significant pull forward in Q4 Q: John Ransom asks about coding advances and AI.

A: Saumya Sutaria mentions appropriate coding, accuracy, and systems for dispute resolution with payers Q: Craig Hettenbach asks about buyback cadence.

A: Saumya Sutaria links balance sheet strength, Conifer transaction value, and growth guidance to buyback approach