Tenet Health closed out 2025 strong with better-than-expected fourth-quarter profit and revenues as well as promises of another year of healthy demand and earnings growth despite exchange plan upheaval.
The hospital and ambulatory surgery center operator announced Wednesday $5.54 billion of net operating revenues, net income of $371 million and adjusted diluted earnings per share of $4.70. Those are year-over-year increases of 8.9%, 16.7% and 36.6%, respectively, and cleanly above analysts’ consensus estimates for the quarter.
Executives, speaking on an earnings call, said the performance was above their own expectations. They attributed the boost to strong payer mix and case acuity within its 50-hospital segment, and those same factors plus volume growth in the ambulatory business.
More specifically, Tenet logged flat adjusted admissions at the hospitals it held on to but a 7.3% increase in net operating revenues and a 7.5% increase in same-hospital patient service revenue per adjusted admission. Executives noted that flu season volumes were weaker than expected when asked about the weak volumes.
In United Surgical Partners International (USPI), the ambulatory unit, same-facility surgical cases rose 1.6% from the prior year and same-facility net patient service revenue per case grew 5.5%. Combined with Tenet’s ongoing strategic push to acquire interests in more facilities (now at 533 ASCs), net operating revenues grew 13.8% year over year.
As for the full year, Tenet landed at $21.31 billion of net operating revenues, a 3.7% year-over-year increase; $1.41 billion net income, a 56% decline largely due to the prior year’s hospital divestitures; and adjusted diluted earnings per share of $16.78, a 41.2% increase.
Chief Financial Officer Sun Park said management was “very pleased with our performance in 2025, which again demonstrated robust same-store revenue growth in both the hospitals and USPI segments and adjusted EBITDA that exceeded our expectations each quarter.”
For the coming year, Tenet issued outlook guidance roughly in line with analysts’ expectations, though executives acknowledged some wider-than-usual ranges to account for 2026’s policy and patient behavior uncertainties.
Net operating revenues for the year are expected to land between $21.5 billion and $22.3 billion, and net income between $2.61 billion to $2.84 billion. Adjusted diluted earnings per share are projected to land between $16.19 and $18.47, adjusted EBITDA between $4.48 billion and $4.79 billion, and adjusted free cash flow between $2.5 billion and $2.8 billion.
“We are confident in our ability to achieve the strong core earnings growth we forecast for 2026,” CEO Saum Sutaria, M.D., said during the earnings call. “The significant margin improvements that we have made over the past few years provide us a strong foundation on which to grow our transformed portfolio of businesses. We carry momentum into this new year and have many opportunities to expand our services and deliver value for patients, physician partners and, in turn, our shareholders."
Executives said the 2026 guidance assumes the company will grow its same-hospital adjusted admissions by 1% to 2% and its same-facility revenue for its outpatient surgical locations by 3% to 6%. It also outlines continued M&A growth within USPI, and the start of a “slow tailwind” for the segment related to the wind-down of Medicare’s inpatient-only list.
Executives said Tenet expects to benefit next year from solid pricing, operational efficiencies and cost controls, the latter of which Sutaria described as a “structural” effort to deploy cost-reducing technologies rather than solely relying on “more traditional annual expense management.”
The projection does not include any supplemental Medicaid program funds that haven’t yet been approved. It also estimates a $250 million hit to adjusted EBITDA, primarily in the hospital segment, due to volume and payer mix declines stemming from the expiration of Affordable Care Act enhanced subsidies. While executives said the company is assuming a 20% decline in Medicaid exchange plan enrollment, it’s less certain about its assumption that 10% to 15% will find alternate coverage rather than go uninsured.
“Clearly, there are a wide range of potential outcomes here, and we will continue to monitor enrollment levels and effectuation rates,” Park said.
The exchanges represented about 7.5% of Tenet’s total admissions and just over 6.5% of its total revenues in the fourth quarter.
Tenet also said it is expecting between $700 million and $800 million of capital expenditures for the coming year. Here, Park said the company will continue to prioritize ambulatory surgery practice acquisitions for USPI, hospital investments to boost organic growth “including our focus on higher acuity service offerings,” a “balanced approach” to stock buybacks informed by market conditions and debt retirement or refinancing.
Tenet’s shares jumped at open and continued to climb following the earnings call, reaching a roughly 17% increase as of midafternoon Wednesday.
The company’s numbers are coming off of last week’s announcement of a multibillion-dollar deal with CommonSpirit Health to prematurely end a long-term revenue cycle contract with Tenet’s Conifer Health Solutions subsidiary at the close of 2026. The terms of that arrangement see Tenet regaining full ownership of Conifer, in which CommonSpirit held a 23.8% equity stake, and receiving about $1.9 billion in three years of annual installments beginning in the current quarter.
Executives, during Wednesday’s call, again described the deal as a beneficial means of reducing liabilities and giving Tenet full control of future growth opportunities for its subsidiary.