Universal Health Services (UHS) Q3 2024 earnings summary

Executive summary

• Net income per diluted share was $3.80 for Q3 2024, with net income attributable to UHS up 55% to $259 million; adjusted net income per diluted share was $3.71, reflecting certain supplemental items.

• Net revenues rose 11.2% year-over-year to $3.96 billion for Q3 2024; nine-month net revenues increased 10.7% to $11.71 billion.

• Growth was driven by both acute care and behavioral health segments, with strong volume and pricing improvements.

• Acute care volumes are normalizing to pre-pandemic patterns, with adjusted admissions up 1.5% year-over-year and overall revenue growth of 8.6% excluding the insurance subsidiary.

• Behavioral Health hospitals saw same facility revenue growth of 10.5%, driven by an 8.5% increase in revenue per adjusted patient day.

Financial highlights

• Q3 2024 operating income was $384 million, up from $285 million in Q3 2023; operating margin improved to 9.7%.

• Q3 2024 EBITDA net of NCI was $528.6 million (13.3% margin), up from $410.1 million (11.5%) in Q3 2023.

• Cash from operating activities was $1.41 billion for the first nine months of 2024, up from $815 million in the same period of 2023.

• $698 million spent on capital expenditures and $350 million on share repurchases (1.7 million shares) in the first nine months of 2024.

• Days sales outstanding improved to 52 days from 58 days year-over-year.

Outlook and guidance

• No change to revised 2024 guidance; incremental Medicaid supplemental payments and nonrecurring corporate expenses offset each other.

• 2025 expected to see continued margin recovery, with new facilities in Las Vegas and Washington, D.C. not expected to significantly drag EBITDA.

• Major potential tailwinds in 2025 from new or expanded Medicaid supplemental programs in Tennessee, D.C., and Nevada, with possible additional upside from California and Florida.

• Behavioral segment expected to see mid-to-upper single-digit same store revenue growth, with 4%-5% from pricing and 3%-3.5% from volume.

• Capital expenditures for 2024 are expected to be $850 million to $1 billion.