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Tenet Healthcare raised its full-year adjusted earnings outlook Thursday after third-quarter adjusted EBITDA climbed 23.3%, although $147 million of the quarter’s result came from the timing and transition of a revenue-cycle services agreement with CommonSpirit Health.
The hospital and surgery-center operator said it now expects 2026 adjusted EBITDA of $5.05 billion to $5.20 billion, an increase of $195 million at the midpoint. Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization and other adjustments, is a non-GAAP measure.
Third-quarter adjusted EBITDA was $1.355 billion, up from $1.099 billion a year earlier. Net operating revenue rose to $5.631 billion from $5.289 billion.
CommonSpirit transition lifts quarterly results
Tenet said the early conclusion of Conifer’s revenue-cycle management services for CommonSpirit was progressing faster than previously expected, with the transition substantially complete by October 30.
The revised timing produced a $97 million catch-up benefit to quarterly net operating revenue. Another approximately $50 million benefit came from transition activities, including efficiencies from the revised schedule. Together, those items added $147 million to third-quarter adjusted EBITDA.
The company separately recognized a $233 million timing-related increase in contract-termination revenue, which is not included in net operating revenue. Tenet said the timing adjustments did not change its total or full-year 2026 expectations for contract-termination revenue or net operating revenue under the agreements.
Net income available to common shareholders reached $1 billion, or $12.41 per diluted share, compared with $342 million, or $3.86 per share, a year earlier. Adjusted diluted earnings per share rose to $6.64 from $3.70. The adjusted results should not be confused with GAAP earnings.
Surgery-center earnings grow as case mix shifts
The Ambulatory Care segment, which includes United Surgical Partners International, reported adjusted EBITDA of $537 million, up 9.1%.
Same-facility surgical net patient service revenue increased 4.5%, even as cases declined 1.5%. Revenue per case rose 6.1%, which Tenet attributed to higher-acuity care and a favorable mix of services.
The Hospital segment reported adjusted EBITDA of $818 million, compared with $607 million a year earlier. Those results included the $147 million transition benefit. Tenet also cited same-hospital revenue growth and expense management, partly offset by a less favorable payer mix associated with lower admissions from insurance-exchange plans.
For the first nine months of 2026, cash provided by operating activities was $3.507 billion, compared with $2.809 billion a year earlier. Tenet raised its full-year adjusted free cash flow forecast to $2.825 billion to $3.125 billion, a $100 million increase.
JBizNews Desk | Dallas
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