THC · Tenet Healthcare Corporation

Tenet Healthcare's Q2 2026 results significantly exceeded expectations, driven by robust same-facility revenue growth and disciplined expense management. Consolidated net operating revenues rose 6.8% year-over-year to $5.628B, with the Ambulatory Care segment growing 9.3% to $1.388B and Hospital segment up 6.0% to $4.240B. The hospital business benefited from a 2.3% increase in admissions and a 3.3% rise in revenue per adjusted admission, although unfavorable payer mix due to lower exchange admissions partially offset gains. Adjusted EBITDA increased 16.3% to $1.304B, with margin expanding 190 bps to 23.2%. The hospital segment margin improved 240 bps to 18.0%, aided by $92M in favorable prior-year Medicaid supplemental revenues. The ambulatory segment maintained strong margins at 39.0%, despite a slight decline in surgical cases. CEO Saum Sutaria highlighted 'strong same-store revenue growth and effective expense management' as key drivers. The company raised its FY2026 Adjusted EBITDA guidance to $4.83B-$5.03B (midpoint up $295M) and Adjusted Free Cash Flow to $2.725B-$3.025B. Additionally, the Board authorized a $2.0B increase to the share repurchase program, reflecting confidence in the company's cash flow generation. The balance sheet remains solid with net debt-to-EBITDA at 2.33x, slightly up from 2.24x in Q1 2026 due to share repurchases. Overall, the results underscore Tenet's operational execution and ability to navigate industry dynamics while generating significant free cash flow.