Surgery Partners delivered a second quarter that was broadly in line with Wall Street’s expectations, with modest year-on-year growth in both revenue and profit. Management cited consistent execution across its three growth pillars: organic case growth, margin expansion, and disciplined M&A activity. CEO Eric Evans attributed much of the performance to higher-acuity orthopedic procedures and ongoing investments in new facilities, stating, “Our colleagues and physician partners continue to deliver on our mission to enhance patient quality of life through partnership.”
Is now the time to buy SGRY? Find out in our full research report (it’s free).
Surgery Partners (SGRY) Q2 CY2025 Highlights:
- Revenue: $826.2 million vs analyst estimates of $816.1 million (8.4% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.17 vs analyst estimates of $0.14 (25.8% beat)
- Adjusted EBITDA: $129 million vs analyst estimates of $128.2 million (15.6% margin, 0.6% beat)
- The company reconfirmed its revenue guidance for the full year of $3.38 billion at the midpoint
- EBITDA guidance for the full year is $560 million at the midpoint, in line with analyst expectations
- Operating Margin: 13.5%, up from 11.1% in the same quarter last year
- Sales Volumes rose 3.4% year on year, in line with the same quarter last year
- Market Capitalization: $2.93 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Surgery Partners’s Q2 Earnings Call
- Brian Gil Tanquilut (Jefferies): Asked about the pace and timing of acquisitions. CEO Eric Evans confirmed the $200 million annual target remains but emphasized deal timing can vary, especially following the recent strategic review.
- Zachary Haggerty (KeyBanc Capital Markets): Inquired about service line priorities in portfolio optimization. Evans explained the focus is on accelerating leverage reduction and cash flow, with attention on growing ASC service lines.
- Sarah Elizabeth James (Cantor Fitzgerald): Questioned the impact of CMS removing the inpatient-only list. Evans noted this would gradually allow more higher-acuity procedures in their facilities, potentially raising revenue per case over time.
- Benjamin Whitman Mayo (Leerink Partners): Sought clarity on physician recruitment and its contribution to case growth. Evans stated recruitment remains a key driver, with significant multi-year impact on volumes and revenue.
- Joanna Sylvia Gajuk (Bank of America): Asked about the strategy for asset sales or partnerships. Evans confirmed they are open to selective divestitures and health system partnerships to accelerate deleveraging and fund growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be tracking (1) the pace of new de novo facility openings and their ramp to profitability, (2) execution of the targeted $200 million in acquisitions and timing of integration, and (3) progress on portfolio optimization initiatives, including any asset sales or strategic partnerships. We will also monitor regulatory developments around Medicare’s outpatient procedure list and their effect on case mix and revenue.
Surgery Partners currently trades at $22.51, up from $22.22 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
