Universal Health Services (UHS) Q2 2024 earnings summary

Executive summary

• Net income attributable to UHS rose to $289.2M ($4.26/diluted share) in Q2 2024, up from $171.3M ($2.42/diluted share) in Q2 2023; adjusted net income was $292.6M ($4.31/diluted share).

• Net revenues for Q2 2024 increased 10.1% year-over-year to $3.91B; six-month net revenues rose 10.5% to $7.75B.

• Growth was driven by both acute care and behavioral health segments, with significant contributions from state Medicaid supplemental payment programs.

• Cash from operating activities for the first six months of 2024 rose to $1.1B, up from $654M in 2023.

• Board authorized a $1B increase to the stock repurchase program, bringing total authorization to $1.228B.

Financial highlights

• Q2 2024 EBITDA net of NCI was $573.2M (14.7% margin), up from $419.3M (11.8%) in Q2 2023; adjusted EBITDA net of NCI was $578.7M (14.8% margin), up from $425.9M (12.0%).

• Operating income for Q2 2024 rose 56% to $436M; operating margin improved to 11.2% from 7.9% year-over-year.

• Capital expenditures totaled $450M in the first half of 2024; $195M spent on share repurchases.

• Effective tax rate decreased to 23.0% in Q2 2024 from 24.7% in Q2 2023, aided by favorable share-based payment tax benefits.

• Debt/total capitalization improved to 41.2% from 43.7% year-over-year.

Outlook and guidance

• 2024 adjusted EPS-diluted forecast raised to $15.40–$16.20, up 18.5%–15.7% from prior guidance.

• 2024 net revenue forecast raised to $15.565B–$15.753B, up 1.0%–0.3% from prior guidance.

• 2024 adjusted EBITDA net of NCI forecast increased to $2.154B–$2.226B, up 11.5%–10.3% from prior guidance.

• Capital expenditures for 2024 are expected to be $850M to $1B, with $450M spent in the first half.

• Guidance includes first-half outperformance and known supplemental payments, but excludes potential new programs in Tennessee and Washington, D.C.