Surgery Partners Inc
NASDAQ:SGRY
Surgery Partners Inc
Surgery Partners Inc., a prominent player in the healthcare industry, orchestrates a robust network of surgical facilities across the United States. The company's business model is centered around operating and acquiring a variety of healthcare services, primarily focusing on short-stay surgeries through its ambulatory surgery centers, surgical hospitals, and ancillary services. Founded in 2004, Surgery Partners has grown its footprint by honing in on cost-effective, high-quality outpatient surgery, offering a compelling alternative to traditional hospital settings. This approach not only reduces healthcare costs for patients and insurers but also provides an efficient model for physicians looking to practice in specialized surgical environments.
Revenue generation for Surgery Partners is multifaceted, deriving primarily from patient service fees and strategic partnerships with healthcare providers and insurers. By maintaining a diversified portfolio that includes musculoskeletal surgeries, cardiac procedures, and other specialist operations, the company captures a broad spectrum of medical needs. Additionally, it benefits from ancillary services such as anesthesia and pathology, which are critical components of the surgical process. This integrated service offering allows Surgery Partners to maximize revenue streams while maintaining a strong presence in the outpatient surgery market. The company’s collaborative approach, working closely with physicians and leveraging strategic acquisitions, fortifies its position as a leader in the evolution toward more efficient, patient-centric healthcare delivery.
Surgery Partners Inc., a prominent player in the healthcare industry, orchestrates a robust network of surgical facilities across the United States. The company's business model is centered around operating and acquiring a variety of healthcare services, primarily focusing on short-stay surgeries through its ambulatory surgery centers, surgical hospitals, and ancillary services. Founded in 2004, Surgery Partners has grown its footprint by honing in on cost-effective, high-quality outpatient surgery, offering a compelling alternative to traditional hospital settings. This approach not only reduces healthcare costs for patients and insurers but also provides an efficient model for physicians looking to practice in specialized surgical environments.
Revenue generation for Surgery Partners is multifaceted, deriving primarily from patient service fees and strategic partnerships with healthcare providers and insurers. By maintaining a diversified portfolio that includes musculoskeletal surgeries, cardiac procedures, and other specialist operations, the company captures a broad spectrum of medical needs. Additionally, it benefits from ancillary services such as anesthesia and pathology, which are critical components of the surgical process. This integrated service offering allows Surgery Partners to maximize revenue streams while maintaining a strong presence in the outpatient surgery market. The company’s collaborative approach, working closely with physicians and leveraging strategic acquisitions, fortifies its position as a leader in the evolution toward more efficient, patient-centric healthcare delivery.
Revenue Growth: Net revenue for the quarter was $821.5 million, up 6.6% year-over-year, with same-facility revenue up 6.3%.
Guidance Lowered: Full-year 2025 revenue guidance was revised to $3.275–$3.3 billion and adjusted EBITDA to $535–$540 million, reflecting slower M&A timing, delayed capital deployment, and softer volume and payer mix.
Stable Margins: Adjusted EBITDA margin for the quarter was 16.6%, essentially flat versus last year, with cost controls offsetting inflation and weaker-than-expected volume.
M&A and Divestitures: Only $71 million deployed year-to-date for acquisitions versus a $250 million annual target; $50 million in divestitures completed but proceeds not yet redeployed.
Growth in High-Acuity Procedures: Volume in orthopedic joint surgeries grew 16% for the quarter and 23% year-to-date.
De Novo Pipeline: Two new facilities opened in Q3, nine under construction, and over a dozen in the development pipeline, though recent openings have been slower to reach breakeven due to construction and regulatory delays.
Payer Mix Pressure: Commercial payer mix declined to 50.6% (down 160 bps YoY); government payer mix rose 120 bps, contributing to margin pressure.
Portfolio Optimization: Ongoing review focused on divesting or partnering on capital-intensive hospitals to accelerate deleveraging and cash flow; Investor Day delayed to spring 2026 to provide further updates.
