Tenet Healthcare Raises 2026 EBITDA Outlook as Hospital Growth and Conifer Transition Lift Q3 Results

Tenet Healthcare Corp. (NYSE: THC) increased its full-year 2026 adjusted EBITDA outlook by $195 million after third-quarter earnings benefited from stronger hospital performance and $147 million of favorable net impact tied to the transition of revenue cycle management services under its Conifer agreements.

The healthcare provider now expects consolidated adjusted EBITDA of $5.05 billion to $5.20 billion, with an adjusted EBITDA margin of 22.9% to 23.2%. Tenet also increased its outlook for adjusted free cash flow after noncontrolling-interest distributions by $100 million, to a range of $1.925 billion to $2.155 billion. That forecast includes a $150 million income tax payment associated with the termination of the revenue cycle management contract.

Third-quarter net operating revenue rose 6.5% to $5.63 billion from $5.29 billion a year earlier. Adjusted EBITDA increased 23.3% to $1.36 billion, while the adjusted EBITDA margin expanded to 24.1% from 20.8%.

Net income available to Tenet common shareholders was $1.00 billion, or $12.41 per diluted share, compared with $342 million, or $3.86 per share, in the prior-year quarter. Excluding items including revenue from contract termination, adjusted net income was $535 million, or $6.64 per diluted share, up from $328 million, or $3.70 per share. Adjusted diluted EPS increased 79.5% year over year.

Hospitals Lead Quarterly Growth

Tenet’s hospital operations recorded 3.2% growth in adjusted admissions from the third quarter of 2025. Hospital adjusted EBITDA increased 34.8%, and the segment posted a 19.2% adjusted EBITDA margin.

Labor costs also declined relative to revenue. Consolidated salaries, wages and benefits represented 38.6% of revenue, compared with 41.7% a year earlier.

The ambulatory business, operated through United Surgical Partners International, reported 4.5% same-facility revenue growth and a 9.1% increase in adjusted EBITDA. Its adjusted EBITDA margin was 39.2%. Tenet added six ambulatory facilities during the quarter, bringing the platform’s total facility count to 560 as of Sept. 30, up from 267 at the end of 2017.

USPI’s same-facility ambulatory surgery centers reported 12.8% growth in total joint procedures during the quarter. The business added 381 service lines in the first nine months of 2026. Tenet expects ambulatory operations to generate $2.16 billion to $2.22 billion of adjusted EBITDA for the full year, representing about 24.5% of its 2026 guidance.

Conifer Transition Creates Timing Effects

The transition of services under Tenet’s revenue cycle management agreements occurred during the third quarter and was expected to be substantially complete by Oct. 30.

During the quarter, Tenet recorded cumulative catch-up adjustments that increased revenue from contract termination by $233 million and net operating revenue by $97 million. The company characterized those adjustments as timing-related and said they do not affect its full-year expectations for the associated revenue.

Other transition activities, including efficiencies related to a revised timeline, contributed about $50 million. Together with the $97 million net operating revenue adjustment, they produced a $147 million favorable net impact on third-quarter adjusted EBITDA.

For the fourth quarter, Tenet expects a $233 million reduction in revenue from contract termination and a $97 million reduction in net operating revenue as the timing effects reverse. The company also expects approximately $110 million of incremental adjusted EBITDA benefits from transition activities.

For all of 2026, transition activities are expected to contribute about $450 million to adjusted EBITDA, including a $40 million deferred-revenue adjustment recorded in the first quarter. Tenet said these contributions are not expected to recur in 2027.

Cash Flow Supports Acquisitions and Buybacks

Third-quarter adjusted free cash flow increased to $1.10 billion from $781 million a year earlier. Adjusted free cash flow after noncontrolling-interest distributions was $886 million.

Tenet ended September with $2.67 billion of cash and $1.9 billion available under its credit line. Its EBITDA leverage ratio was 2.11 times, while leverage measured on an EBITDA-after-NCI basis was 2.58 times.

The company repurchased about 970,000 shares for $255 million during the quarter. Through the first nine months of 2026, it bought back 8.0 million shares for $1.62 billion and had $1.88 billion remaining under its authorization.

Tenet also refinanced $1.5 billion of senior secured notes due in 2027 and $500 million of senior notes due in 2028 with $2.0 billion of newly issued senior notes due in 2034. The company said it has no significant debt maturities until 2028.

2026 Outlook

Tenet expects full-year net operating revenue of $22.05 billion to $22.45 billion. Hospital adjusted EBITDA is projected at $2.89 billion to $2.98 billion, while ambulatory adjusted EBITDA is expected to reach $2.16 billion to $2.22 billion.

The outlook assumes ambulatory same-facility systemwide revenue growth of 3% to 6%, with both inpatient admissions and adjusted admissions increasing 1% to 2% from 2025. Adjusted diluted EPS is forecast at $22.05 to $23.01.

Adjusted cash provided by operating activities is expected to total $3.53 billion to $3.93 billion. After planned capital spending of $700 million to $800 million, adjusted free cash flow is projected at $2.83 billion to $3.13 billion.

Tenet said its capital priorities include ambulatory acquisitions and new facility development, hospital investment in technology, robotics and higher-acuity services, share repurchases, and maintaining a deleveraged balance sheet. Its baseline intention is to invest $250 million annually in ambulatory mergers, acquisitions and de novo projects.

The outlook remains subject to uncertainties involving operating performance, legislation, regulation and broader healthcare-industry developments. The presentation also identified the expiration of enhanced premium tax credits as an expected $250 million headwind to 2026 adjusted EBITDA, including $220 million in hospitals and $30 million in ambulatory operations.