Tenet Healthcare Tops Q2 Earnings Estimates, Raises 2026 Outlook

The strong quarterly results were driven by strong same-facility revenue growth, higher patient acuity, disciplined expense management and higher Medicaid supplemental revenues. However, the gains were partly offset by an unfavorable payer mix due to lower exchange admissions.

Tenet Healthcare Corporation Price, Consensus and EPS Surprise

Inside THC’s Q2 Performance

Adjusted net income of $514 million climbed 39.3% year over year.

Adjusted EBITDA rose 16.3% year over year to $1.3 billion, supported by strong same-facility revenue growth and disciplined expense management despite an unfavorable payer mix stemming from lower exchange admissions. The figure also exceeded our estimate of $1.1 billion. Adjusted EBITDA margin improved 190 basis points year over year to 23.2%.

Salaries, wages and benefits increased 3.3% year over year to $2.2 billion in the second quarter, while supply costs rose 5.6% and net other operating expenses increased 4.9%.

Q2 Segmental Details

Ambulatory Care: The segment’s net operating revenues climbed 9.3% year over year to $1.4 billion in the quarter, driven by strong growth in consolidated same-facility net patient service revenues, contributions from facility acquisitions and an expansion of service lines. The metric topped our estimate by 1.4%.

Adjusted EBITDA was $542 million, which advanced 8.8% year over year. The metric topped our estimate by 6.6%. Adjusted EBITDA margin contracted 20 basis points year over year to 39.0%.

Hospital Operations and Services: The segment recorded net operating revenues of $4.2 billion, which increased 6% year over year, driven by higher adjusted admissions and increased acuity, partly offset by an unfavorable payer mix. The metric beat our model estimate by 5%.

Adjusted EBITDA rose 22.3% year over year to $762 million in the quarter, driven by strong same-facility revenue growth, disciplined expense management and higher Medicaid supplemental revenues. Adjusted EBITDA margin improved 240 basis points year over year to 18.0%.

THC’s Q2 Financial Update

Tenet Healthcare exited the second quarter with cash and cash equivalents of $2.2 billion, which declined from the 2025-end level of $2.9 billion. Total assets of $30.7 billion rose from the 2025-end figure of $29.7 billion.

Long-term debt, net of the current portion, amounted to $13.1 billion, down marginally from the level as of Dec. 31, 2025. The current portion of long-term debt totaled $160 million.

Total shareholders’ equity of $4.7 billion increased from the 2025-end level of $4.2 billion.

THC generated $585 million of net cash from operations, down 37.5% year over year. Free cash flows decreased 43.9% year over year to $417 million in the quarter.

THC’s Share Repurchase Update

THC repurchased 5.7 million common shares for approximately $1 billion in the second quarter of 2026. The board of directors authorized a $2 billion increase to the company's share repurchase program. As of July 23, 2026, it had approximately $2.1 billion remaining under its share repurchase authorization.

THC Raises 2026 Outlook

Net operating revenues are projected to be in the range of $21.9-$22.5 billion, up from the prior guidance of $21.5-$22.3 billion and $21.3 billion reported in 2025. Hospital segment revenues are expected to be in the band of $16.4-$16.8 billion, up from the previous outlook of $16.0-$16.6 billion. The Ambulatory Care segment's revenue guidance remains unchanged at $5.5-$5.7 billion.

Adjusted EBITDA is now expected to be between $4.83 billion and $5.03 billion, up from the prior guidance of $4.485-$4.785 billion and $4.566 billion reported in 2025. The company also raised its adjusted EBITDA margin outlook to 22.1-22.4% from the previous 20.9-21.5%. At the midpoint, the revised guidance implies an improvement over the 2025 margin of 21.4%. Adjusted EPS for 2026 is now anticipated to be in the range of $20.30-$21.69, up from the earlier guidance of $16.38-$18.68.

Net cash provided by operating activities is now expected to be between $3.84 billion and $4.29 billion, while free cash flow is projected to be in the range of $3.14-$3.49 billion. Capital expenditures are estimated to remain between $700 million and $800 million.

Tenet Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Other Medical Companies Perform?

Here are some stocks from the broader Medical space that have also reported their quarterly results: HCA Healthcare, Inc. HCA, Elevance Health, Inc. ELV and UnitedHealth Group Incorporated UNH. Here's how they performed:

HCA Healthcare reported second-quarter 2026 adjusted earnings per share of $7.59, which beat the Zacks Consensus Estimate of $7.57. The bottom line advanced 11% year over year. Revenues rose 8.7% year over year to $20.2 billion. The top line was in line with the Zacks Consensus Estimate. HCA’s quarterly results benefited from increased same-facility admissions, solid revenue per equivalent admission and strong emergency room visit growth. However, declining inpatient and outpatient surgeries, along with elevated operating expenses, partially offset these positives.

Elevance Health reported second-quarter 2026 adjusted earnings per share of $7.45, which surpassed the Zacks Consensus Estimate by 20.6%. However, the bottom line declined 15.7% year over year. Operating revenues advanced 0.8% year over year to $49.8 billion. The top line beat the consensus mark by 2.9%. ELV’s quarterly results were primarily driven by higher premium yields in the Health Benefits segment and increased CarelonRx product revenues. The gains were partly offset by a decline in overall medical membership and higher operating expenses.

UnitedHealth Group reported second-quarter 2026 adjusted earnings per share of $6.38, which beat the Zacks Consensus Estimate of $4.94. The bottom line rose 56.4% year over year. Revenues rose 0.4% year over year to $112 billion. The top line beat the consensus mark by 1.7%. UNH’s strong quarterly results were aided by growth in commercial fee-based membership and the strength witnessed in Optum Insight. Medical cost management, pricing discipline and benefit design changes also contributed to the upside. However, weaker performance at Optum Health and Optum Rx, along with declining risk-based membership, partially offset these gains.

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