Select Medical (SEM) Q1 2026 earnings summary

Executive summary

• Announced agreement to be acquired and taken private at $16.50 per share, expected to close mid-2026 pending regulatory and shareholder approvals; Hart-Scott-Rodino waiting period expired.

• Q1 2026 revenue was $1,421.5 million, up 5% year-over-year, but net income and EPS declined to $44.0 million and $0.35, respectively.

• Adjusted EBITDA fell 6.5% to $141.6 million (10.0% margin), down from $151.4 million (11.2% margin) in Q1 2025.

• Board approved a $0.0625 per share cash dividend, payable May 28, 2026.

• Continued expansion in inpatient rehabilitation, adding 166 beds YTD and planning 275 more through 2027.

Financial highlights

• Total revenue grew 5% year-over-year in Q1 2026, driven by rehabilitation and outpatient segments.

• Adjusted EBITDA declined 6.5% to $141.6 million; operating income was $98.4 million, down from $112.7 million.

• Earnings per share was $0.35, or $0.36 adjusted for transaction costs, versus $0.44 prior year.

• Operating expenses rose to $1,285.4 million (90.5% of revenue); cost of services was $1,246.0 million (87.7% of revenue).

• Depreciation and amortization expense was $37.7 million, up from $34.8 million.

Outlook and guidance

• Full-year 2026 revenue expected between $5.6 billion and $5.8 billion; Adjusted EBITDA guidance at $520–$540 million; EPS at $1.22–$1.32.

• Capital expenditures projected at $200–$220 million.

• Management expects continued inflationary pressures on labor and supply costs.

• Regulatory changes, including Medicaid and Medicare reimbursement adjustments, may impact future results.

• Merger expected to close mid-2026, subject to approvals.