Tenet Healthcare Raises 2026 Outlook as Adjusted EPS Jumps 79.5%

Tenet Healthcare raised its 2026 financial outlook on Thursday after a third quarter in which adjusted earnings per share jumped 79.5%, helped by strong same-store revenue growth, cost control and a one-time boost from winding down a revenue cycle contract.

The hospital and surgery center operator now expects full-year adjusted EBITDA of $5.05 billion to $5.20 billion, a $195 million increase at the midpoint, according to the earnings release it filed with an 8-K on Thursday. It lifted its adjusted free cash flow outlook by $100 million to $2.825 billion to $3.125 billion and now projects adjusted EPS of $22.05 to $23.01.

Profit nearly triples

Net income available to common shareholders reached $1.000 billion, or $12.41 a diluted share, in the third quarter, compared with $342 million, or $3.86, a year earlier. Adjusted EPS rose to $6.64 from $3.70.

Net operating revenue grew to $5.631 billion from $5.289 billion, and adjusted EBITDA climbed 23.3% to $1.355 billion, for a margin of 24.1%.

"Our outperformance in the third quarter of 2026 was driven by sustained strength in same-store revenue growth and effective expense management," Chairman and CEO Saum Sutaria said in the release.

A timing boost from CommonSpirit transition

Part of the quarter's strength came from the early wind-down of revenue cycle management services that Tenet's Conifer unit provides to CommonSpirit Health. Because that transition moved faster than planned, Tenet recognized catch-up adjustments that added $233 million to revenue from contract termination and $97 million to net operating revenue.

Combined with a roughly $50 million benefit from transition activities, those items gave adjusted EBITDA a favorable net lift of $147 million. Tenet called the revenue adjustments timing-related and said they do not change its full-year expectations for those agreements.

Hospitals and surgery centers

In the Hospital segment, revenue rose 6.1% to $4.260 billion and adjusted EBITDA rose to $818 million from $607 million, including the $147 million transition benefit. Same-hospital adjusted admissions increased 3.2%, though Tenet cited unfavorable payer mix from lower exchange admissions.

The Ambulatory Care segment, made up of United Surgical Partners International, grew revenue 7.5% to $1.371 billion and adjusted EBITDA 9.1% to $537 million. Same-facility surgical cases fell 1.5%, but net revenue per case rose 6.1%, which the company attributed to higher acuity and favorable service mix.

Buybacks and refinancing

Tenet repurchased 970,000 shares for $255 million in the third quarter, bringing nine-month buybacks to 7.99 million shares for $1.615 billion.

In September, it sold $2.0 billion of 6.250% senior notes due 2034 and used the proceeds, with cash on hand, to redeem all $1.5 billion of its 5.125% first lien notes due 2027 and $500 million of its 6.125% notes due 2028. Net debt to adjusted EBITDA improved to 2.11 times at Sept. 30 from 2.33 times at June 30.

Adjusted free cash flow for the first nine months was $2.524 billion, up from $2.247 billion a year earlier.

Sources

1. Tenet Healthcare Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0000070318-26-000045)

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