Q1 2025 Surgery Partners Inc Earnings Call Transcript
Key Points
- Surgery Partners Inc (SGRY) reported first quarter net revenue of $776 million and adjusted EBITDA of $103.9 million, both in line with expectations.
- The company experienced a 6.5% growth in surgical cases, contributing to an 8% increase in net revenue compared to the prior year.
- Surgery Partners Inc (SGRY) added nearly 150 new physicians in the first quarter, with a focus on orthopedic specialties, enhancing their service capabilities.
- The company has invested in 68 surgical robots, supporting complex and higher acuity procedures, which aids in physician recruitment and operational efficiency.
- Surgery Partners Inc (SGRY) maintains a robust pipeline for M&A, having deployed $55 million to add 5 surgical facilities at an effective multiple under 8 times adjusted EBITDA.
- The company faced a decline in rates of approximately 1%, primarily due to growth in lower acuity specialties.
- There was slight margin pressure during the quarter, attributed to the mix of business, which is expected to improve throughout the year.
- Operating cash flows were lower in the first quarter, influenced by timing of working capital activities and higher distributions to physician partners.
- Interest rate exposure increased as the interest rate swap expired, replaced by a cap that could lead to higher interest costs.
- The company continues to face challenges with payer mix and rate pressures, particularly in the GI and MSK service lines.
Greetings, and welcome to Surgery Partners' first quarter 2025 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Dave Doherty, CFO. Thank you. You may begin
Good morning, and thank you for joining Surgery Partners' first quarter 2025 earnings Call. My name is Dave Doherty, CFO of Surgery Partners. I am joined today by Eric Evans, our CEO.
During this call, we will make forward-looking statements. There are risk factors that could cause future results to be materially different from these statements that are described in this morning's press release and the reports we filed with the SEC, each of which are available on our corporate website.
The company does not undertake any duty to update these forward-looking statements. In addition, we reference certain financial measures that are non-GAAP, which we believe can be useful in evaluating our performance. We
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