Universal Health Services delivered a quarter that surpassed Wall Street’s expectations, with notable contributions from its acute care segment and improving expense control. Management highlighted that solid acute care revenues, aided by a 2% rise in adjusted admissions and effective cost management, drove a 10% increase in same-facility EBITDA. CEO Marc Miller acknowledged, "demand, especially for emergency services, has been very encouraging" at newly opened West Henderson Hospital, while the behavioral health segment continued to benefit from pricing gains despite modest volume growth.
Is now the time to buy UHS? Find out in our full research report (it’s free).
Universal Health Services (UHS) Q2 CY2025 Highlights:
- Revenue: $4.28 billion vs analyst estimates of $4.24 billion (9.6% year-on-year growth, 1% beat)
- Adjusted EPS: $5.35 vs analyst estimates of $4.94 (8.4% beat)
- Adjusted EBITDA: $652.3 million vs analyst estimates of $617.1 million (15.2% margin, 5.7% beat)
- Adjusted EPS guidance for the full year is $20 at the midpoint, beating analyst estimates by 1.9%
- EBITDA guidance for the full year is $2.50 billion at the midpoint, above analyst estimates of $2.46 billion
- Operating Margin: 11.7%, in line with the same quarter last year
- Same-Store Sales rose 2% year on year (3.4% in the same quarter last year)
- Market Capitalization: $11.15 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Universal Health Services’s Q2 Earnings Call
- Philip Chickering (Deutsche Bank) asked about strategies to offset the projected $360–$400 million Medicaid revenue reduction by 2032. CFO Steve Filton responded that UHS can shift its business approach, including adjusting behavioral program structures and pursuing new Medicaid payment programs, while CEO Marc Miller expressed confidence that legislative changes may mitigate the worst-case scenario.
- Andrew Mok (Barclays) inquired about the timeline for Cedar Hill Regional Medical Center's ramp to profitability after start-up losses. Filton explained that Medicare certification is imminent, with additional losses expected in the second half, but projected divisional profitability within 12–18 months post-certification.
- Jason Cassorla (Guggenheim) asked how UHS plans to grow outpatient behavioral market share. Filton described opening 10–15 new freestanding outpatient centers annually, focusing on both post-inpatient and community-based patients, with minimal capital intensity.
- Benjamin Rossi (JPMorgan) queried about behavioral health pricing breakdowns and long-term volume targets. Filton clarified that pricing growth remains in the 4–5% range, with volume growth expected to improve, especially through outpatient expansion.
- Sarah James (Cantor Fitzgerald) asked if 2.5–3% behavioral admissions growth is still a realistic target given the outpatient shift. Filton acknowledged historical challenges but maintained that with increased outpatient focus, the long-term target remains achievable.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace of outpatient behavioral health expansion and its impact on segment volumes, (2) the operational ramp of new facilities such as Cedar Hill and West Henderson, and (3) state-level developments regarding Medicaid supplemental payments and the One Beautiful Bill Act. Execution on technology initiatives and labor cost containment will also serve as important markers of progress.
Universal Health Services currently trades at $175.78, up from $154.99 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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