Tenet raises 2026 adjusted EBITDA outlook to $5.05–$5.20 billion

Key Facts

Tenet Healthcare reported results on October 29 for the quarter ended September 30, posting operating revenues of $5.631 billion, compared with $5.289 billion in the same period of 2025. Adjusted diluted EPS was $6.64, up 79.5% from $3.70 a year earlier. Adjusted EPS exceeded the average analyst estimate of $4.67 by $1.97, while revenue was $5.63 billion versus an estimate of $5.49 billion. The company raised its annual outlook, including its 2026 adjusted EBITDA range to $5.05–$5.20 billion. THC shares rose 2.05% in premarket trading after the announcement, following a close at $268.5 on October 28.

Net income available to common shareholders was $1 billion in the third quarter, or $12.41 per diluted share, compared with $342 million and $3.86 per share in the year-earlier quarter. These figures are prepared under reported accounting principles, while adjusted EPS is another measure the company uses to present its results. Total operating revenues increased to $5.631 billion from $5.289 billion. Management said same-facility revenue growth and expense management supported the quarterly outperformance. The company also said an unfavorable payer mix, due to lower enrollment in exchange plans, offset part of the improvement.

The hospital segment was one source of growth, with revenue of $4.260 billion, compared with $4.014 billion a year earlier. The segment’s adjusted EBITDA rose to $818 million from $607 million. Same-hospital admissions also increased 2.8% year over year, versus a 1.5% increase in the comparable period cited in the release. In ambulatory care, revenue was $1.371 billion versus $1.275 billion, and adjusted EBITDA rose to $537 million from $492 million. However, same-facility ambulatory patient service revenue increased 4.5%, while surgical cases fell 1.5% year over year, reflecting mixed activity indicators within the segment.

Part of the improvement needs to be viewed in light of items tied to the termination and transition of revenue cycle management services under agreements with Conifer and CommonSpirit. The company increased revenue associated with the contract termination by $233 million and recorded a cumulative adjustment that lifted operating revenue by $97 million, along with about $50 million in benefits from transition activities. The net positive impact of these items on third-quarter adjusted EBITDA was $147 million. Separately, Tenet attributed performance to same-facility revenue growth and expense discipline, while noting that payer mix partly limited the impact. This timing item puts part of the jump in the context of the service transition, rather than ongoing operations alone.

In its annual outlook, Tenet raised its adjusted EBITDA range to $5.05–$5.20 billion, an increase of $195 million at the midpoint compared with its previous outlook. It also raised its adjusted free cash flow range to $2.825–$3.125 billion, an increase of $100 million at the midpoint. The company expects adjusted diluted EPS of $22.05 to $23.01 and operating revenue of $22.05 billion to $22.45 billion in 2026. Its ambulatory care segment guidance includes revenue of $5.35 billion to $5.45 billion and adjusted EBITDA of $2.11 billion to $2.16 billion. Management had scheduled a webcast to discuss the results for October 29 at 10:00 a.m. Eastern Time, or 9:00 a.m. Central Time.

Company data show an improvement in leverage, with net debt to adjusted EBITDA falling to 2.11 times on September 30, from 2.33 times on June 30 and 2.25 times at the end of 2025. In September, Tenet issued $2 billion of senior notes bearing interest at 6.250% and due in 2034, using the proceeds and available cash to refinance existing debt. This included redeeming $1.5 billion of secured notes due in 2027 and repaying $500 million of notes due in 2028. In its second-quarter results, the company reported adjusted EBITDA of $1.304 billion, up 16.3% year over year, and a margin of 23.2%. It also repurchased 5.68 million shares for $1.042 billion during that quarter, and the board authorized a $2 billion increase to the repurchase program.