Tenet Healthcare Corporation

Good morning. Welcome to Tenet Healthcare's third quarter 2025 earnings conference call. After the speaker remarks, there will be a question and answer session for industry analysts. If you'd like to ask a question, the command is star one to enter the queue. Tenet respectfully asks that analysts limit themselves to one question each. I'll now turn the call over to your host, Mr. Will McDowell, Vice President of Investor Relations. Mr. McDowell, you may begin.

Good morning, everyone, and thank you for joining today's call. I am Will McDowell, Vice President of Investor Relations. We're pleased to have you join us for a discussion of Tenant's third quarter 2025 results, as well as a discussion of our financial outlook. Tenant Senior Management participating in today's call will be Dr. Sam Satoria, Chairman and Chief Executive Officer, and Sun Park, Executive Vice President and Chief Financial Officer. Our webcast this morning includes a slide presentation, which has been posted to the investor relations section of our website, tenanthealth.com. Listeners to this call are advised that certain statements made during our discussion today are forward-looking and represent management's expectations based on currently available information. Actual results and plans could differ materially. Tenant is under no obligation to update any forward-looking statements based on subsequent information. Investors should take note of the cautionary statement slide included in today's presentation, as well as the risk factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission. And with that, I'll turn the call over to Sam. All right. Thank you all, and good morning, everyone.

We had another quarter of strong performance where we exceeded our expectations for revenue, adjusted EBITDA, and margins. Third quarter 2025 net operating revenues were $5.3 billion and consolidated adjusted EBITDA grew 12% over the third quarter 2024 to $1.1 billion. This represents an adjusted EBITDA margin of 20.8%, which is 170 basis points improvement over the prior year, driven by our strong same-store growth and continued operating efficiency. USPI continues to excel, and we generated $492 million in adjusted EBITDA, which represents 12% growth year over year. Same facility revenues grew by 8.3% in the third quarter, highlighted by 11% growth in total joint replacements in the ASCs over the prior year. Our M&A and de novo activity remains robust. As we acquired 11 centers and opened two de novo centers in the quarter, including facilities specializing in high acuity procedures such as spine and orthopedics. We have already spent nearly $300 million on M&A in this space year to date and expect to continue adding additional centers in the fourth quarter. The M&A and de novo pipelines remain strong. Turning to our hospital segment, adjusted EBITDA grew 13% to $607 million in the third quarter of 2025. Same-store hospital admissions adjusted admissions were up 1.4% in the quarter, and third quarter 2025 revenue per adjusted admission was up 5.9% over the prior year, as payer mix and acuity remained strong. In September, we opened our newest hospital facility in Port St. Lucie, Florida. This facility expands capacity in one of the fastest growing areas in the country. The hospital will provide comprehensive emergency and specialty care and is focused on leveraging state-of-the-art technology, including robotics and advanced cardiac catheterization techniques. Turning to our full-year guidance, at this point in the year, we are once again raising our full-year 2025 adjusted EBITDA guidance to a range of $4.47 to $4.57 billion. Building upon our substantial post-second quarter guidance increase indicating the confidence we have in our business this year. We have now increased our adjusted EBITDA guidance by 445 million or 11% at the midpoint of the range from our initial guidance. Additionally, we are increasing our investments in capital expenditures in 2025 and now expect to invest 875 to $975 million to fuel organic growth in the future. a $150 million increase at the midpoint over our prior expectations. In addition to this increased investment, we are also raising our expectations for full year 2025 free cash flow minus NCI to a range of $1.495 to $1.695 billion, an increase of $250 million at the midpoint from our previous guidance range. This increase is driven not only by the fundamental growth in adjusted EBITDA, but also by the strong cash collection performance of Conifer. Let me turn to 2026 with a few points. Uncertainty about the enhanced premium tax subsidies and the impact on reimbursement and enrollment in the exchanges still exists. Approvals for various increases in state-directed payment programs for 2026 are still pending. Currently, in our hospital segment planning process, we see healthy patient demand that would support same-store volume growth and a stable operating environment supported by disciplined cost controls in 2026. Our strategy, which is more focused on higher acuity services, has delivered a track record of improved margins and strong earnings growth over the past few years. The return on invested capital for this improved portfolio of hospital assets is such that we have confidently increased our capex per bed from prior levels to higher levels in both 2024 and 2025, and we should continue to see the benefits of that into 2026. At USPI, we expect same-store revenue growth in line with our long-term expectations, a continued focus on high-acuity cases, operational efficiencies, and discipline cost controls. Additionally, we expect further contributions from M&A and de novo development. I would note that USPI is less exposed to Medicaid and the exchanges, and our ASCs are on freestanding rates. We will continue to operate and invest in this attractive segment. In summary, we continue to deliver our commitments for sustained growth, expanding margins, a delevered balance sheet, and improved free cash flow generation. Our strong execution is driving attractive EBITDA growth that we are converting into significant free cash flow. And our transformed portfolio of businesses are well positioned to drive sustained performance in the future. And with that, Son will provide us a more detailed review of our financial results. Son, over to you.