Tenet Healthcare Corp (NYSE:THC) reported financial results for the fourth quarter and full year 2025 that exceeded analyst expectations, driven by strong performance across its hospital and ambulatory surgery businesses. The company also provided a detailed financial outlook for 2026 that appears largely in line with current analyst forecasts.
Earnings and Revenue vs. Estimates
The company's fourth-quarter performance topped Wall Street estimates on both the top and bottom lines. This beat was achieved through a combination of revenue growth and disciplined expense management.
- Adjusted Earnings Per Share (EPS): Reported at $4.70, significantly above the consensus estimate of $4.09.
- Revenue: Reported at $5.53 billion, essentially meeting the analyst estimate of $5.53 billion.
For the full year 2025, Tenet reported net operating revenues of $21.31 billion and adjusted diluted EPS of $16.78. The annual results were bolstered by robust free cash flow generation of $2.53 billion, which enabled substantial share repurchases totaling $1.39 billion.
Market Reaction
Following the earnings release, Tenet's stock showed modest positive movement in pre-market trading, indicating a favorable initial reception from investors. The reaction suggests the market views the earnings beat and solid forward guidance positively, especially against a backdrop of recent stock performance that has been relatively flat to slightly negative over the past month.
Key Highlights from the Quarter
The strong results were fueled by growth in both of Tenet's core segments, with particular strength in higher-acuity services and favorable payer mix.
Ambulatory Care Segment (USPI):
- Net operating revenues grew 13.8% year-over-year to $1.43 billion.
- Same-facility system-wide revenue increased 7.2%, driven by a 5.5% rise in revenue per case.
- Adjusted EBITDA for the segment reached $580 million, a 9.4% increase.
Hospital Operations Segment:
- Net operating revenues increased 7.3% to $4.09 billion.
- Same-hospital net patient service revenue per adjusted admission grew 7.5%, attributed to higher acuity and favorable payer mix.
- Adjusted EBITDA rose to $603 million, up from $518 million in the prior-year period.
The company also strengthened its balance sheet, completing a debt refinancing transaction in November 2025. Its net debt to Adjusted EBITDA ratio improved to 2.25x at year-end, down from 2.54x at the end of 2024.
2026 Financial Outlook
Tenet provided comprehensive guidance for the full year 2026. Notably, the outlook excludes a one-time revenue recognition of approximately $1.65 billion related to the recently announced termination of its Conifer Health Solutions agreement with CommonSpirit Health.
- Consolidated Net Operating Revenues: Projected between $21.5 billion and $22.3 billion.
- Consolidated Adjusted EBITDA: Forecast in the range of $4.485 billion to $4.785 billion.
- Adjusted Diluted EPS: Expected to be between $16.19 and $18.47.
This revenue guidance bracket encompasses the current analyst sales estimate for 2026 of approximately $22.43 billion. The midpoint of the adjusted EPS range ($17.33) provides a benchmark against which future analyst consensus will develop.
Conclusion
Tenet Healthcare concluded 2025 with a strong quarter, surpassing profit expectations and demonstrating continued momentum in its ambulatory surgery business and hospital operations. The company's outlook for 2026 suggests a year of steady, disciplined growth, with key financial targets that align with market expectations. The significant free cash flow generation remains a cornerstone of its strategy, funding shareholder returns and debt reduction.
For a detailed look at Tenet's historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
