Universal Health Services Q4 Earnings Call Highlights

Key Points

• UHS closed 2025 with strong results: full-year revenue rose ~10%, adjusted EBITDA up ~15% and adjusted EPS up ~31%; the company generated $1.9 billion of operating cash and repurchased 4.65 million shares for $899 million.
• 2026 guidance calls for revenue of $18.4–18.8 billion, adjusted EBITDA of $2.64–2.79 billion and adjusted EPS of $22.64–$24.52, while management flagged headwinds including an estimated ~$75 million pre-tax hit from lower exchange volumes and roughly $35 million from new California behavioral staffing rules, with capex forecast at $950 million–$1.1 billion.
• Operational drivers include acute-care pricing gains and margin expansion (same-facility revenue per admission +5.4%, Q4 segment EBITDA margin 14.8%), sequential behavioral health volume improvement and outpatient expansion (119 locations), and deployment of AI across revenue cycle and post-discharge care to boost efficiency.

Universal Health Services NYSE: UHS executives said the company finished 2025 with “strong results,” pointing to revenue growth, higher profitability metrics, and continued share repurchases, while outlining a 2026 outlook that incorporates several policy and regulatory headwinds.

On the company’s fourth-quarter 2025 earnings call, President and CEO Marc Miller highlighted performance drivers that included “continued strong expense management in acute care,” “sequential volume improvements in behavioral health,” solid pricing across both segments, and “significant share repurchase activity.” CFO Steve Filton added details on same-facility trends, cash flow, and key assumptions embedded in the company’s 2026 guidance.

Fourth-quarter and full-year performance highlights

Miller said fourth-quarter revenue increased 9% year over year, while adjusted EBITDA net of noncontrolling interests rose 10% and adjusted EPS increased 20% compared with the fourth quarter of 2024. For the full year 2025, he reported revenue growth of 10%, adjusted EBITDA net of NCI growth of 15%, and adjusted EPS growth of 31%.

Filton reported net income attributable to UHS of $7.06 per diluted share in the fourth quarter. On an adjusted basis, he said adjusted net income attributable to UHS was $5.88 per diluted share for the quarter ended Dec. 31, 2025.

Acute care: flat admissions, pricing gains, and margin expansion

On a same-facility basis, Filton said adjusted admissions at UHS acute care hospitals were flat year over year in the fourth quarter. He attributed part of the volume pressure to “softness in the Las Vegas market” tied to factors he described as “somewhat transitory,” including lower respiratory case levels versus the prior year. Excluding Las Vegas, Filton said same-facility acute volumes would have increased 1% in the quarter.

Same-facility net revenues in the acute care segment increased 6.9% on a reported basis in the fourth quarter and rose 5.2% excluding the impact of the company’s insurance subsidiary. Acute care same-facility revenue per adjusted admission increased 5.4% during the quarter. Expense controls also contributed to margin improvement, with Filton noting labor, supplies, and other categories were “well managed.” Excluding the insurance subsidiary, same-facility salaries, wages, and benefits increased 4.4% and supply expense increased 1.8% year over year in the fourth quarter. Same-facility contract labor represented 2.4% of acute care revenue, 20 basis points lower than the prior year.

Filton said acute care performance drove 10.4% growth in same-facility segment EBITDA and a 50-basis-point improvement in same-facility segment EBITDA margin to 14.8% in the fourth quarter. For the full year, he reported same-facility segment EBITDA margin improved 150 basis points to 15.8%.

In discussion of operational efficiency, management also referenced length-of-stay trends. Filton said labor productivity improved in 2025 through a 2% reduction in same-facility acute care length of stay, which he called an ongoing opportunity for 2026. In Q&A, Filton added that on an “acuity-adjusted basis,” length of stay is “below pre-pandemic levels,” while pointing to constrained post-acute capacity (skilled nursing, nursing homes, long-term rehab) as a key limiter on further reductions in some markets.

Behavioral health: sequential volume improvement, staffing investments, and outpatient growth

In the behavioral health segment, Filton reported fourth-quarter same-facility net revenues increased 7.2%, supported by a 5.6% increase in revenue per adjusted patient day and a 1.5% increase in adjusted patient days compared with the prior-year quarter. He said expenses rose slightly faster than revenue due to headcount growth in certain markets aimed at easing staffing constraints that have limited volumes. Behavioral segment headcount rose 3.1% in the fourth quarter, and total same-facility labor expense growth was 7.3% per adjusted day in the U.S.

For the quarter, Filton reported behavioral segment EBITDA grew 6.9%, and for the full year 2025 behavioral EBITDA increased 7.8%. In Q&A, Filton said UHS saw “sequential, incremental improvement” in behavioral adjusted patient day growth in each quarter of 2025 and ended the year within “shouting distance” of its longer-standing 2% to 3% target.

Miller emphasized the company’s outpatient behavioral strategy and footprint, stating UHS operates 119 outpatient behavioral locations, including 10 new freestanding centers opened under its Thousand Branches brand during 2025. He said outpatient services represent about 10% of behavioral segment revenue and are expected to grow. Miller described “step-down” offerings (such as partial hospitalization and intensive outpatient programs following inpatient care) as well as “step-in” services intended to serve patients entering the behavioral system in outpatient settings. He said the company is on track to open at least 10 more Branches locations in 2026.

Capital deployment, AI initiatives, and the 2026 outlook

UHS said it continues to invest in new capacity while also focusing on expense management and technology adoption. Miller said that over the past two years the company opened two new acute care hospitals and is preparing additional projects for 2026, including three inpatient expansions totaling 178 licensed beds in Florida, California, and Nevada, plus a 156-bed de novo hospital in Palm Beach Gardens, Florida, expected to open in the second quarter. In behavioral health, Miller said UHS took a “disciplined approach” to new bed capacity in 2025 while devoting resources to outpatient growth, and he cited two behavioral de novo projects totaling 264 beds planned for 2026, including a joint venture with Jefferson Health in Pennsylvania.

On technology, Miller said UHS has deployed AI and advanced technologies in operations and administrative functions. He said the company rolled out “agentic AI” to improve post-discharge care and reduce readmissions, and is deploying AI in acute care departments and functions. Filton and Miller also pointed to AI-driven improvements in documentation and claims appeals in acute care revenue cycle operations, with plans to roll out process improvements and new technologies in behavioral revenue cycle over the next several quarters. Both executives cautioned that it is difficult to precisely quantify the financial impact to date, though they characterized the opportunities as significant and cited potential efficiencies, reduced headcount needs in certain tasks, and quality/patient safety applications.

Filton reported cash generated from operating activities of $1.9 billion for 2025, compared with $2.1 billion in 2024, citing impacts from higher receivables at the two most recent de novo hospitals ($50 million) and timing of payments for certain Medicaid supplemental programs ($145 million). Capital expenditures totaled $1 billion in 2025, with roughly 35% tied to the Florida de novo hospital and major expansions in Florida and California. The company repurchased 4.65 million shares for $899 million during 2025, including 1.46 million shares in the fourth quarter. At year-end, UHS had $1.425 billion remaining under its repurchase authorization and about $900 million of available borrowing capacity under its $1.3 billion revolving credit facility.

For 2026, Filton guided to:

• Revenue: $18.4 billion to $18.8 billion (6% to 8% growth)
• Adjusted EBITDA net of NCI: $2.64 billion to $2.79 billion (2% to 8% growth)
• Adjusted EPS: $22.64 to $24.52 (4% to 13% growth)

The guidance assumes same-facility volume growth of 2% to 3% in both segments for 2026, though Filton said volumes could run below that range in the first quarter due to winter storms affecting behavioral operations and the company’s Washington, D.C., acute care operations. He said 2026 capital expenditures are expected to be $950 million to $1.1 billion as several large inpatient projects are completed and come online in the first half of the year.

Filton also outlined specific 2026 headwinds and assumptions discussed on the call, including an estimated adverse pre-tax earnings impact of about $75 million from reductions in health insurance exchanges, based on an assumed 25% to 30% decline in exchange volumes (with 10% to 20% shifting to other coverage and “the vast majority” shifting to self-pay/uninsured). In California behavioral health, UHS expects a negative pre-tax earnings impact of about $35 million in 2026 associated with new Acute Psychiatric Hospital Staffing Regulations effective June 1, 2026, with an ongoing annual cost estimated at about $30 million after 2026 once initial recruiting, training, and any short-term disruption subside.

Additional guidance assumptions included a total net benefit from Medicaid supplemental payments of $1.36 billion in 2026 (including a newly approved Nevada program), a roughly $23 million increase versus 2025, and approximately $50 million of favorability tied to Cedar Hill improvements offset by startup costs at the Palm Beach Gardens de novo hospital. Filton also cited an expected favorable pre-tax impact of about $50 million from three discrete items: a one-time legal settlement recognized in 2025 that is not expected to recur, operational improvements in the Nevada health plan, and modest contributions from behavioral M&A completed in 2025, primarily in the U.K.

In Q&A, Filton said acute care pricing implied in guidance is expected to be in the 3% to 4% range, while behavioral pricing is expected to be 2% to 3%, which management characterized as lower than the past several years but more in line with historical rates. The company reiterated its focus on maintaining balance sheet flexibility, with Filton describing an “ideal” leverage range of 2 to 3 and noting UHS expects to continue share repurchases while not anticipating dramatic leverage changes absent compelling M&A opportunities.

About Universal Health Services NYSE: UHS

Universal Health Services, Inc NYSE: UHS is one of the largest diversified health care management companies in the United States, offering a broad spectrum of services through its acute care hospital and behavioral health segments. The company operates general acute care hospitals, surgical hospitals and ambulatory centers, as well as inpatient and outpatient behavioral health facilities. Its network provides emergency and specialized medicine, diagnostic imaging, laboratory services, advanced surgical care and rehabilitation, complemented by a comprehensive array of behavioral services including psychiatric treatment, addiction programs and developmental disabilities care.

In the acute care segment, UHS's facilities deliver services ranging from emergency department treatment and intensive care to maternity care and outpatient surgery.

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