Third-quarter net operating revenues were $2.757 billion, down 10.7% on divestitures but up 3.8% same-store; adjusted diluted EPS of $(0.48) missed the $(0.29) estimate.
Adjusted EBITDA fell 25.5% to $280 million and its margin to 10.2% from 12.2%, as an unfavorable payor mix, higher medical specialist fees and supplemental program expense outweighed volume gains.
Full-year 2026 guidance was updated to net operating revenues of $11.3 to $11.5 billion, adjusted EBITDA of $1.225 to $1.275 billion and diluted net loss per share of $(1.70) to $(1.60), with management citing payor mix and acuity for lower expectations.
Volumes did recover: same-store admissions rose 2.2% and adjusted admissions 3.6%, and quarterly operating cash flow improved to $155 million from $70 million.
The one thing that matters: volume came back but did not convert to profit. Same-store revenue grew 3.8% while adjusted EBITDA fell 25.5%, and the full-year guide still needs Q4 adjusted EBITDA of $307 to $357 million, above Q3's $280 million.
Key metrics
Metric
Reported
Prior year
Change
Net operating revenues
$2.757 billion
$3.087 billion
-10.7%
Same-store net operating revenues
$2,750
$2,650
+3.8%
Adjusted EBITDA
$280 million
$376 million
-25.5%
Adjusted EBITDA as a % of net operating revenues
10.2%
12.2%
—
Same-store admissions
85,591
83,708
+2.2%
Net cash provided by operating activities
$155 million
$70 million
+121.4%
Guidance changes
Item
New guidance
Prior guidance
2026 net operating revenues (in millions)
$ 11,300 to $ 11,500
—
2026 Adjusted EBITDA (in millions)
$ 1,225 to $ 1,275
—
2026 net loss per share - diluted
$ (1.70) to $ (1.60)
—
2026 net cash provided by operating activities (in millions)
$100 to $300
—
Quality of earnings
The year-ago base is inflated. Q3 2025 included $28 million from a legal settlement in non-patient revenue and a $173 million income tax benefit, so part of the swing from $130 million net income to an $86 million loss is the comparison, not this quarter.
Adjusted EPS strips real charges. The $(0.48) adjusted figure excludes $14 million of net impairment and $12 million of government and legal matter expense, worth $0.15 per share together.
Year-to-date cash lags. Nine-month operating cash flow was negative $55 million versus $277 million a year earlier, with patient receivables using $113 million.
Gotchas & watch items
Cost pressure sits outside labor: other operating expenses rose to 29.3% of revenue from 26.9%, while salaries and benefits held near 44%.
Interest absorbs most of EBITDA: 2026 interest expense is guided at $820 to $830 million against adjusted EBITDA of $1.225 to $1.275 billion.
Liquidity is thinning: cash fell to $155 million from $260 million at year end, though the ABL had about $745 million of undrawn capacity.
Same-store occupancy improved: 51.1% versus 50.4% a year ago, with average length of stay flat at 4.2 days.