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    HCA
    Earnings call· Sep 2025(Q3 FY25)

    HCA Healthcare, Inc. HCA

    Oct 24, 2025 Source

    Executive summary

    HCA Healthcare Q3 FY25 — Strong Volume Growth and Raised Full-Year Guidance

    HCA Healthcare delivered a strong Q3 FY25, marked by broad-based volume growth and improved payer mix, leading to a 9.6% revenue increase and 42% adjusted diluted EPS growth. The company raised its full-year guidance, reflecting solid operational performance and increased Medicaid supplemental payments. Management emphasized its diversified portfolio, ongoing resiliency programs, and strategic investments in capacity and digital tools to sustain future growth and navigate potential policy headwinds.

    Highlights

    5

    • Diluted earnings per share as adjusted grew 42% year-over-year.

    • Revenue increased by 9.6% year-over-year, driven by broad-based volume growth and improved payer mix.

    • Same facility equivalent admissions increased 2.4% year-over-year.

    • Adjusted EBITDA margin improved due to strong performance in labor and supplies.

    • Full-year 2025 guidance was raised for revenue, net income, adjusted EBITDA, and diluted EPS.

    Concerns

    5

    • Medicaid and self-pay ER visits were down year-over-year.

    • A slow start to the respiratory season impacted admissions and ER visits by an estimated 50 and 70 basis points, respectively.

    • One geographic division is still working through challenges, though another previously underperforming one has recovered.

    • Professional fees increased 11% year-over-year, running hotter than average inflationary levels.

    • Potential negative impact from the non-extension of enhanced premium tax credits for 24 million Americans.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2025 Revenue
    $75 billion and $76.5 billion
    high materiality
    High
    Full-year 2025 Net Income Attributable to HCA Healthcare
    $6.50 billion and $6.72 billion
    high materiality
    High
    Full-year 2025 Adjusted EBITDA
    $15.25 billion and $15.65 billion
    high materiality
    High
    Full-year 2025 Diluted Earnings Per Share
    $27 and $28
    high materiality
    High
    Full-year 2025 Capital Spending
    approximately $5 billion
    medium materiality
    High
    Full-year 2025 Net Benefit from Medicaid State Supplemental Payments vs 2024
    $250 million to $350 million favorable
    high materiality
    High
    Q4 2025 Net Benefit from Medicaid State Supplemental Payments vs prior year
    $120 million decline
    medium materiality
    High
    Full-year 2025 Adjusted EBITDA Growth from Hurricane-Impacted Markets vs 2024
    approximately $100 million
    medium materiality
    High
    2026 Volume Growth
    within our long-term 2% to 3% growth range
    high materiality
    Medium
    2026 Operating Costs
    mostly stable trends consistent with the past couple of years
    high materiality
    Medium

    Operational metrics

    30
    Diluted Earnings Per Share as Adjusted
    42%YoY growth
    Q3 FY25

    Company produced strong results when compared to last year.

    Revenue Growth
    9.6%YoY
    Q3 FY25
    Same Facility Equivalent Admissions Growth
    2.4%YoY
    Q3 FY25
    Same Facility Inpatient Surgical Volume Growth
    1.4%YoY
    Q3 FY25
    Same Facility Outpatient Surgical Volume Growth
    1.1%YoY
    Q3 FY25
    Same Facility ER Visits Growth
    1.3%YoY
    Q3 FY25
    Commercial and Medicare ER Visits Growth
    4.1%YoY
    Q3 FY25
    Impact of Respiratory Season on Admissions Growth
    50estimated impact on YoY growth
    Q3 FY25

    Slow start to the respiratory season in 2025.

    Impact of Respiratory Season on ER Visits Growth
    70estimated impact on YoY growth
    Q3 FY25

    Slow start to the respiratory season in 2025.

    Net Revenue Per Equivalent Admission Growth Drivers
    —
    Q3 FY25

    About half of the growth was related to state supplemental payment increases in revenue.

    Same Facility Total Commercial Equivalent Admissions Growth
    3.7%YoY
    Q3 FY25
    Same Facility Exchange Equivalent Admissions Growth
    8%YoY
    Q3 FY25
    Same Facility Commercial (excluding exchanges) Equivalent Admissions Growth
    2.4%YoY
    Q3 FY25
    Same Facility Medicare Equivalent Admissions Growth
    3.4%YoY
    Q3 FY25
    Same Facility Medicaid Equivalent Admissions Growth
    1.4%YoY
    Q3 FY25
    Same Facility Self-Pay Equivalent Admissions Decline
    6%YoY
    Q3 FY25
    Net Benefit to Adjusted EBITDA from Medicaid State Supplemental Programs
    $240 millionincrease YoY
    Q3 FY25
    Same Facility Contract Labor as % of Total Labor Costs
    4.2%flat YoY
    Q3 FY25
    Estimated Impact from Hurricanes
    $50 millionimpact on Adjusted EBITDA
    Q3 2024

    Reference to Q3 2024 impact.

    Share Repurchases
    $2.5 billion
    Q3 FY25
    Dividends Paid
    $166 million
    Q3 FY25
    Deferred Federal Income Tax Payments
    $1.3 billion
    YTD Q3 FY25

    Payments deferred to Q4.

    Implied Q4 2025 Growth Rate (Adjusted EBITDA)
    7%YoY
    Q4 FY25

    Considering hurricane impact and decline in state supplemental payments.

    Medicare Advantage Admissions Growth
    4.8%YoY
    Q3 FY25
    Traditional Medicare Admissions Growth
    90YoY
    Q3 FY25
    Traditional Medicare Case Mix Index Change
    up a bit
    Q3 FY25
    Medicare Advantage Case Mix Index Change
    pretty flatYoY
    Q3 FY25
    Same-Facility Professional Fees Growth
    11%YoY
    Q3 FY25

    Represents about 24% of total other operating expenses.

    Professional Fees Sequential Growth
    1%sequential increase
    Q3 FY25 vs Q2 FY25
    Hurricane Markets Adjusted EBITDA
    modestly below prior yearYoY
    YTD Q3 FY25

    Anticipating all of the $100M growth for FY25 to occur in Q4.

    Industry KPIs

    4
    MetricValueDetails
    Utilization trendsSame facility equivalent admissions: 2.4% increase%
    Same facility volumesSame facility equivalent admissions: 2.4% increase%
    Payer mix supplemental paymentsMedicaid state supplemental payment net benefit to adjusted EBITDA: $240 million increaseUSD
    Adjusted EPS EBITDA leverage guidanceDiluted earnings per share as adjusted: 42% growth%

    Risks & headwinds

    4
    Non-extension of enhanced premium tax credits (EPTCs)2026

    negative impact on 24 million Americans

    Mitigation: continue to advocate strongly for the extension of this program; beefing up resources with Parallon to help patients navigate coverage

    Slow start to respiratory seasonQ3 2025

    estimated 50 and 70 basis points impact on year-over-year growth rate in admissions and ER visits, respectively

    Deteriorated payer mix and premium labor in North Carolina hurricane marketsQ1-Q3 FY25

    contributes to hurricane markets being modestly below prior year YTD Q3 FY25

    Mitigation: general resiliency efforts, expectation of $100M EBITDA growth in Q4 FY25 for these markets

    Professional fees running hotter than average inflationary levelsQ3 FY25

    increased 11% over the prior year in Q3 FY25

    Mitigation: efforts to integrate Valesco for improved management of emergency physician management and hospital medicine, expecting continued financial improvement

    What to watch in Q4 FY25

    5

    Extension of Enhanced Premium Tax Credits (EPTCs)

    Q4 FY25 / early FY26
    CurrentFluid nature of the federal policy environment
    TargetExtension of the program for 2026

    Why it matters

    The extension impacts health insurance coverage for 24 million Americans and HCA's payer mix and volumes.

    We continue to advocate strongly for the extension of this program for the 24 million Americans who depend on it for health insurance coverage. Today, we believe there is greater recognition by legislators of the negative impact this issue will have on families, small businesses and individuals than earlier in the year. At this point, however, we still do not know how this policy will play out.

    Q&A highlights

    6

    Asked about pending grandfathered applications in other states (beyond TN, KS, TX) and potential incremental quantification.

    Mike Marks stated that Florida, Georgia, and Virginia have pending applications. CMS reviews are active but approvals are not expected during the shutdown. The updated guidance does not include any impact from these pending approvals.

    “We do not expect that CMS will be approving these additional grandfathering programs during the shutdown. I would say that we have reports that indicate though that the reviews between CMS and these states are active and those reviews continue during the shutdown.”

    asked by Ann Hynes · answered by Mike Marks

    2 min read5 chapters

    Detailed Narrative

    01

    Q3 Performance Highlights

    HCA Healthcare reported strong Q3 FY25 results, with revenue increasing 9.6% year-over-year, driven by broad-based volume growth, improved payer mix, and increased utilization of complex services. Diluted EPS as adjusted grew 42%, leading the company to raise its full-year 2025 guidance for revenue, net income, adjusted EBITDA, and diluted EPS. The adjusted EBITDA midpoint was raised by $450 million, with $250 million attributed to state supplemental payment programs and $200 million to operational performance.

    02

    Volume and Payer Mix Dynamics

    Same facility equivalent admissions increased 2.4% YoY, with commercial equivalent admissions up 3.7% (exchanges up 8%, commercial ex-exchanges up 2.4%). Medicare admissions rose 3.4%, and Medicaid increased 1.4%, while self-pay declined 6%. Surgical volumes also improved, with inpatient up 1.4% and outpatient up 1.1%. The company noted a slow start to the respiratory season, impacting admissions and ER visits by 50-70 basis points.

    03

    Medicaid Supplemental Programs

    Medicaid state supplemental payment programs contributed significantly to revenue growth, driving about half of the overall increase in net revenue per equivalent admission. These programs provided an approximate $240 million increase in net benefit to adjusted EBITDA in Q3 FY25, largely due to Tennessee program payments and approvals in Kansas and Texas. Several other states, including Florida, Georgia, and Virginia, have pending grandfathered applications, which are not yet included in the updated guidance.

    04

    Operational Efficiency and Resiliency

    The company demonstrated strong operating leverage and expense management, particularly in labor and supplies, contributing to improved adjusted EBITDA margins. Contract labor expenses were flat YoY and represented 4.2% of total labor costs. HCA continues to enhance and accelerate its resiliency program, focusing on revenue and cost opportunities, digital tools, and shared service platforms to drive efficiencies and manage supply costs, including tariff risks.

    05

    Capital Allocation and Future Outlook

    HCA allocated capital effectively, with $4.4 billion in cash flow from operations, $1.3 billion in capital expenditures, $2.5 billion in share repurchases, and $166 million in dividends. The debt-to-adjusted EBITDA leverage remains in the lower half of the target range. For 2026, the company anticipates volumes within its long-term 2% to 3% growth range and mostly stable operating cost trends, though final guidance will be provided on the Q4 call.

    AI-generated summary of the company’s earnings call. Not investment advice.