SURGERY PARTNERS, INC. ANNOUNCES THIRD QUARTER 2026 RESULTS
Surgery Partners, Inc. (SGRY) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 SURGERY PARTNERS, INC. ANNOUNCES THIRD QUARTER 2026 RESULTS BRENTWOOD, Tenn., November 9, 2026 (GLOBE NEWSWIRE) - Surgery Partners, Inc. (NASDAQ:SGRY) (“Surgery Partners” or the “Company”), a leading short-stay surgical facility owner and operator, today announced re
How this was made
The 30-second read
Why it matters
The amendment clarifies deal economics, likely supporting the share price, but the added conditional fee and extended deadline introduce execution risk that could temper gains.
Market read
Primary disclosure of a sizable merger amendment; traders can act on the clarified premium and deadline risk.
What to watch
Potential regulatory scrutiny and Bain Capital's affiliate status may complicate approval, adding execution risk.
Surgery Partners reports Q3 2026 revenue down (0.8)% to $815.3 million and a GAAP net loss attributable to the company of $21.1 million; same-facility revenue up 6.0%; no guidance or call as merger with HealthSpan Partners is pending
Same-facility revenue growth (6.0%) and operating cash flow ($103.5 million vs $83.6 million) improved, but reported revenue declined (0.8)%, Adjusted EBITDA fell from $136.4 million to $132.7 million, operating income fell from $105.7 million to $85.6 million, and the company again reported a GAAP net loss attributable to Surgery Partners, Inc. The company has also stopped providing forward guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 RevenuesGAAP | $815.3M | – | (0.8)% |
| Q3 2026 Cost of revenuesGAAP | $630.3M | – | – |
| Q3 2026 Salaries and benefitsGAAP | $239.8M | – | – |
| Q3 2026 SuppliesGAAP | $214.1M | – | – |
| Q3 2026 Professional and medical feesGAAP | $99.2M | – | – |
| Q3 2026 Lease expenseGAAP | $23.8M | – | – |
| Q3 2026 Other operating expensesGAAP | $53.4M | – | – |
| Q3 2026 General and administrative expensesGAAP | $40.6M | – | – |
| Q3 2026 Depreciation and amortizationGAAP | $39.6M | – | – |
| Q3 2026 Transaction and integration costsGAAP | $22.6M | – | – |
| Q3 2026 Net (gain) loss on disposals, consolidations and deconsolidationsGAAP | $2.9M | – | – |
| Q3 2026 Operating incomeGAAP | $85.6M | – | – |
| Q3 2026 Interest expense, netGAAP | −$67.9M | – | – |
| Q3 2026 Income before income taxesGAAP | $17.7M | – | – |
| Q3 2026 Income tax expenseGAAP | −$3.6M | – | – |
| Q3 2026 Net incomeGAAP | $14.1M | – | – |
| Q3 2026 Net income attributable to non-controlling interestsGAAP | −$35.2M | – | – |
| Q3 2026 Net loss attributable to Surgery Partners, Inc.GAAP | −$21.1M | – | – |
| Q3 2026 Net loss per share attributable to common stockholders, dilutedGAAP | $(0.16) | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $132.7M | – | – |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 16.3% | – | – |
| Q3 2026 Adjusted net income attributable to common stockholdersnon-GAAP | $21.2M | – | – |
| Q3 2026 Adjusted net income per share attributable to common stockholders, dilutednon-GAAP | $0.16 | – | – |
| Q3 2026 Same-facility revenues growthother | 6.0% | – | 6.0% |
| Q3 2026 Same-facility revenue per case growthother | 5.8% | – | 5.8% |
| Q3 2026 Same-facility case growthother | 0.2% | – | 0.2% |
| Q3 2026 Same-facility casesother | 181,102 | – | – |
| Q3 2026 Same-facility revenue per caseother | $4,375 | – | – |
| Q3 2026 Casesother | 159,070 | – | – |
| Q3 2026 Revenue per caseother | $5,125 | – | – |
| Q3 2026 Net cash provided by operating activitiesGAAP | $103.5M | – | – |
| Q3 2026 Purchases of property and equipmentGAAP | −$24.5M | – | – |
| Q3 2026 Distributions to non-controlling interest holdersGAAP | −$53.1M | – | – |
| Q3 2026 Number of surgical facilities at end of periodother | 173 | – | – |
| YTD 2026 Revenues (nine months ended September 30, 2026)GAAP | $2.48B | – | 2.1% |
| YTD 2026 Cost of revenues (nine months)GAAP | $1.94B | – | – |
| YTD 2026 General and administrative expenses (nine months)GAAP | $116.2M | – | – |
| YTD 2026 Transaction and integration costs (nine months)GAAP | $56.6M | – | – |
| YTD 2026 Operating income (nine months)GAAP | $253.5M | – | – |
| YTD 2026 Interest expense, net (nine months)GAAP | −$206.8M | – | – |
| YTD 2026 Net income (nine months)GAAP | $41.7M | – | – |
| YTD 2026 Net loss attributable to Surgery Partners, Inc. (nine months)GAAP | −$72M | – | – |
| YTD 2026 Net loss per share attributable to common stockholders, diluted (nine months)GAAP | $(0.56) | – | – |
| YTD 2026 Adjusted EBITDA (nine months)non-GAAP | $360.2M | – | – |
| YTD 2026 Adjusted EBITDA margin (nine months)non-GAAP | 14.6% | – | – |
| YTD 2026 Adjusted net income attributable to common stockholders (nine months)non-GAAP | $30.6M | – | – |
| YTD 2026 Adjusted net income per share attributable to common stockholders, diluted (nine months)non-GAAP | $0.24 | – | – |
| YTD 2026 Same-facility revenues growth (nine months)other | 4.6% | – | 4.6% |
| YTD 2026 Same-facility revenue per case growth (nine months)other | 4.2% | – | 4.2% |
| YTD 2026 Same-facility case growth (nine months)other | 0.3% | – | 0.3% |
| YTD 2026 Cases (nine months)other | 484,647 | – | – |
| YTD 2026 Revenue per case (nine months)other | $5,107 | – | – |
| YTD 2026 Net cash provided by operating activities (nine months)GAAP | $174.5M | – | – |
| YTD 2026 Purchases of property and equipment (nine months)GAAP | −$62.3M | – | – |
| YTD 2026 Payments for acquisitions, net of cash acquired (nine months)GAAP | −$10.2M | – | – |
| YTD 2026 Distributions to non-controlling interest holders (nine months)GAAP | −$156.6M | – | – |
Capital returns
- Distributions to non-controlling interest holders were $(53.1) million in Q3 2026 versus $(52.5) million in Q3 2025, and $(156.6) million year-to-date 2026 versus $(168.8) million year-to-date 2025.
- The filing reports no share repurchases or common dividends for the periods presented.
- The merger amendment provides that stockholders (other than affiliates of Bain Capital Private Equity) receive additional monthly cash payments (the Ticking Fee) if stockholder approval has been obtained but the merger has not occurred by March 1, 2027, at a rate equal to 10% per annum on the $25.00 per share merger consideration.
What drove it
- The company states that its third quarter results reflect the impact of the Idaho Falls divestiture, and that results reflect ownership of the Idaho Falls facilities through September 13, 2026.
- Same-facility revenues increased 6.0% in Q3 2026, with a 5.8% increase in revenue per case and a 0.2% increase in same-facility cases.
- Year-to-date same-facility revenues increased 4.6%, with a 4.2% increase in revenue per case and a 0.3% increase in same-facility cases.
- Interest expense, net decreased to $(67.9) million in Q3 2026 from $(74.9) million in Q3 2025.
- Equity in earnings of unconsolidated affiliates was $6.4 million in Q3 2026 versus $5.2 million in Q3 2025, and management fee revenues were $8.9 million versus $7.8 million.
- Transaction and integration costs were $22.6 million in Q3 2026 versus $12.6 million in Q3 2025. The company's reconciliation attributes $14.1 million to M&A costs and $8.5 million to other costs, including severance, IT implementation and revenue cycle standardization.
- Total cases were 159,070 in Q3 2026 versus 166,106 in Q3 2025, while the number of surgical facilities rose to 173 from 165.
Concerns
- Reported revenues decreased (0.8)% to $815.3 million in Q3 2026, while same-facility revenue grew 6.0%. The filing attributes the difference in part to the Idaho Falls divestiture, but it does not quantify the divestiture's revenue contribution.
- Operating income fell to $85.6 million from $105.7 million, and Adjusted EBITDA fell to $132.7 million from $136.4 million. Adjusted EBITDA margin declined to 16.3% from 16.6%.
- General and administrative expenses rose to $40.6 million from $22.4 million. The filing does not explain this increase.
- Net loss attributable to Surgery Partners, Inc. was $(21.1) million in Q3 2026 versus $(22.7) million in Q3 2025, and $(72.0) million year-to-date versus $(62.9) million.
- Year-to-date Adjusted EBITDA margin was 14.6% versus 15.2%, and year-to-date Adjusted EBITDA was $360.2 million versus $369.3 million.
- The company reports total net debt to EBITDA of approximately 4.4x at the end of Q3 2026 under its credit agreement.
- The company will no longer provide forward-looking guidance, and it will not host an earnings conference call, as is customary during the pendency of the HealthSpan Partners transaction.
What to watch
- Completion of the amended merger with HealthSpan Partners at $25.00 per share in cash, which the company expects to close in the first quarter of 2027, subject to stockholder approval, regulatory approvals and other customary conditions.
- The unsolicited competing proposal from a third party that the filing says prompted the amendment. The filing does not describe the proposal's terms.
- Whether the Ticking Fee becomes payable, which depends on whether the merger has not occurred by March 1, 2027 after stockholder approval is obtained.
- The trend in general and administrative expenses and transaction and integration costs, which together rose in Q3 2026.
- Same-facility case growth, which was 0.2% in Q3 2026 and 0.3% year-to-date, compared with revenue per case growth of 5.8% and 4.2%.
- Net debt to EBITDA of approximately 4.4x and the timing of debt maturities, given current maturities of $56.5 million and long-term debt of $2,998.7 million.
Balance sheet and cash flow
- Cash and cash equivalents were $354.5 million at September 30, 2026, versus $239.9 million at December 31, 2025.
- Borrowing capacity under the revolving credit facility was $692.8 million at September 30, 2026.
- Total assets were $7,049.8 million at September 30, 2026, versus $8,119.7 million at December 31, 2025.
- Total liabilities were $3,793.1 million at September 30, 2026, versus $4,592.9 million at December 31, 2025.
- Long-term debt, less current maturities, was $2,998.7 million at September 30, 2026, versus $3,602.9 million at December 31, 2025. Current maturities of long-term debt were $56.5 million, versus $99.3 million.
- Total stockholders' equity was $2,899.9 million at September 30, 2026, versus $3,131.3 million at December 31, 2025. Total Surgery Partners, Inc. stockholders' equity was $1,664.6 million, versus $1,712.9 million.
- The ratio of total net debt to EBITDA, as calculated under the credit agreement, was approximately 4.4x at September 30, 2026.
- Net cash provided by investing activities was $468.0 million in Q3 2026 versus $(46.2) million in Q3 2025, and $434.8 million year-to-date 2026 versus $(120.5) million year-to-date 2025. The filing does not itemize the drivers of this change beyond the cash flow lines shown.
- Net cash used in financing activities was $(433.7) million in Q3 2026 versus $(84.1) million in Q3 2025, and $(494.7) million year-to-date 2026 versus $(116.5) million year-to-date 2025.
Analysis
Surgery Partners reported third quarter 2026 revenues of $815.3 million, a decline of (0.8)% from $821.5 million a year earlier. The company attributes the reported decline in part to the Idaho Falls divestiture, with results reflecting ownership of those facilities through September 13, 2026. On a same-facility basis, revenues rose 6.0%, driven by a 5.8% increase in revenue per case and a 0.2% increase in same-facility cases. Year-to-date reported revenues rose 2.1% to $2,475.1 million, and same-facility revenues rose 4.6%, with revenue per case up 4.2% and same-facility cases up 0.3%. The filing shows that the revenue growth came from price and mix per case rather than volume.
Profitability weakened in the quarter. Operating income was $85.6 million versus $105.7 million, and Adjusted EBITDA was $132.7 million versus $136.4 million, with the Adjusted EBITDA margin at 16.3% versus 16.6%. General and administrative expenses rose to $40.6 million from $22.4 million, and transaction and integration costs rose to $22.6 million from $12.6 million. The company's reconciliation attributes $14.1 million of those transaction costs to M&A costs and $8.5 million to other items. Lower interest expense, net of $(67.9) million versus $(74.9) million, supported pre-tax income, which was $17.7 million versus $30.8 million. Net loss attributable to Surgery Partners, Inc. was $(21.1) million versus $(22.7) million, so the loss narrowed slightly while remaining negative. Adjusted net income attributable to common stockholders was $21.2 million versus $16.5 million, and Adjusted diluted EPS was $0.16 versus $0.13, but these are non-GAAP measures and the filing does not reconcile the difference in the adjustments to a single cause.
Cash generation improved. Operating cash flow was $103.5 million versus $83.6 million in Q3 2026 and 2025 respectively, and $174.5 million versus $170.9 million year-to-date. Capital expenditures were $(24.5) million versus $(19.8) million. Cash and cash equivalents rose to $354.5 million from $239.9 million at December 31, 2025, and total assets fell to $7,049.8 million from $8,119.7 million, with long-term debt, less current maturities, reduced to $2,998.7 million from $3,602.9 million. The company reports total net debt to EBITDA of approximately 4.4x. Distributions to non-controlling interest holders were $(53.1) million in the quarter and $(156.6) million year-to-date.
The central corporate event is the amended merger agreement with HealthSpan Partners, which increases the consideration to $25.00 per share in cash, representing an enterprise value of up to approximately $6.0 billion, after the company received an unsolicited competing proposal from a third party. The Ticking Fee applies to stockholders other than affiliates of Bain Capital Private Equity if stockholder approval has been obtained but the merger has not occurred by March 1, 2027. The company expects closing in the first quarter of 2027. Because of the pending transaction, the company has stopped providing forward-looking guidance and will not hold an earnings call, so the outlook for 2026 and beyond is not quantified in this filing. The reader should weigh the operating trends above against the transaction's conditions and timing.
Management, verbatim
Our financial results in the third quarter reflect the impact of the successful Idaho Falls divestiture and sustained momentum in our core business, underscoring the value of our short-stay surgical platform.
Eric Evans, Chief Executive Officer
Additionally, the recently announced amended merger agreement with HealthSpan Partners serves as further validation of our unique offering, while representing a compelling outcome for our patients, physicians, stockholders, and other stakeholders.
Eric Evans, Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter (Q2 2026) figures are not printed in the filing, so all qoq_change and prior_quarter fields are null.
- No prior-period outlook was provided with this filing, so vs_prior_guidance is empty.
- Forward guidance is not provided; the company states it will no longer provide forward-looking guidance.
- Segment or geographic revenue breakdown is not reported in the filing.
- The filing does not report percentage changes for cost lines, operating income, net income, or EPS, so those yoy_change fields are null.
- The filing does not state the year-end 2025 comparison for net debt to EBITDA or for a prior-year net debt to EBITDA ratio.
- The filing does not describe the terms of the unsolicited competing proposal.
- The filing does not state the total dollar amount of revenue contributed by the Idaho Falls facilities.
- Consensus estimates and the share-price reaction are not included in the documents.
- Adjusted EBITDA and Adjusted net income prior-period percentage changes are not printed, so those yoy_change fields are null.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Surgery Partners (NASDAQ:SGRY) reported Q3 2026 results and disclosed an amendment to its pending merger with HealthSpan Partners, increasing the cash consideration and adding a conditional ticking fee.
Ticker impact
Amended merger agreement with HealthSpan Partners raises cash consideration to $25 per share, adding a ticking fee and extending the deadline, which materially changes the deal economics.
potential upside as investors price in the higher cash premium, with possible pressure if the deadline is missed.
Deal size (~$6 bn) and new cash terms are fresh primary disclosure; market typically reacts favorably to higher cash offers, though the ticking fee adds risk.
Market effects
Consolidation trend in outpatient surgical facilities may pressure peers' valuations.
U.S. healthcare sector sees modest uplift from the announced premium.
Limited to U.S. healthcare investors; no broader macro effect.
Counterpoint
The ticking fee could erode the effective premium if the merger stalls, making the stock vulnerable to a pull‑back.
Key entities
- CompanySurgery Partners, Inc.
U.S. short‑stay surgical facility operator (NASDAQ:SGRY).
- CompanyHealthSpan Partners
Merger counterpart acquiring Surgery Partners.
