[10-Q] Surgery Partners, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Q2-25 snapshot: Ivanhoe Electric (IE) generated $1.1 million revenue (+98% YoY) from its data-processing subsidiary, yielding $0.8 million gross profit. Exploration spend dropped 62% to $14.1 million as Santa Cruz drilling wound down after the Preliminary Feasibility Study (PFS); G&A slid 9% to $9.7 million. Net loss to common shareholders narrowed 49% to $23.9 million ($0.18/sh); six-month loss fell 47% to $54.4 million.
Balance sheet: Cash & equivalents rose to $88.1 million from $41.0 million at year-end, driven by a $65.8 million February equity/warrant offering. Working capital improved to $77.1 million and equity to $310.8 million. Debt comprises a $38.1 million Santa Cruz land note (prime + 1%) and a $32.3 million VRB 8% convertible bond (matures Jul-26); total liabilities fell 5% to $89.7 million.
Project milestones: The June PFS for the Santa Cruz Copper Project projects 1.4 Mt copper cathode over 23 years with after-tax NPV8 US$1.4 billion, 20% IRR and US$1.24 billion initial capex; financing talks are under way. Subsidiary Cordoba agreed to sell its remaining 50 % Alacr谩n stake to JCHX for up to US$128 million, contingent on EIA approval and shareholder vote. VRB鈥檚 buyer Red Sun missed a US$10 million installment; US$5 million is now expected by Aug-31 and US$5 million by Oct-31.
Outlook: Management believes current liquidity funds operations for 鈮�12 months; a construction decision at Santa Cruz would accelerate external financing needs.
Riepilogo Q2-25: Ivanhoe Electric (IE) ha generato un fatturato di 1,1 milioni di dollari (+98% su base annua) dalla sua controllata nel settore dell'elaborazione dati, con un utile lordo di 0,8 milioni di dollari. La spesa per esplorazioni 猫 diminuita del 62% a 14,1 milioni di dollari, in seguito alla conclusione delle perforazioni a Santa Cruz dopo lo Studio di Fattibilit脿 Preliminare (PFS); le spese generali e amministrative sono scese del 9% a 9,7 milioni di dollari. La perdita netta per gli azionisti comuni si 猫 ridotta del 49% a 23,9 milioni di dollari (0,18 dollari per azione); la perdita semestrale 猫 scesa del 47% a 54,4 milioni di dollari.
Bilancio: La liquidit脿 e gli equivalenti sono aumentati a 88,1 milioni di dollari rispetto ai 41,0 milioni di fine anno, grazie a un'offerta azionaria/warrant da 65,8 milioni di dollari a febbraio. Il capitale circolante 猫 migliorato a 77,1 milioni di dollari e il patrimonio netto a 310,8 milioni di dollari. Il debito comprende una nota per terreni Santa Cruz da 38,1 milioni di dollari (prime + 1%) e un'obbligazione convertibile VRB all'8% da 32,3 milioni di dollari (scadenza luglio 2026); le passivit脿 totali sono diminuite del 5% a 89,7 milioni di dollari.
Traguardi di progetto: Lo studio di fattibilit脿 preliminare di giugno per il progetto Santa Cruz Copper prevede 1,4 milioni di tonnellate di rame catodico in 23 anni con un NPV8 post-tasse di 1,4 miliardi di dollari, un IRR del 20% e un capex iniziale di 1,24 miliardi di dollari; sono in corso trattative di finanziamento. La controllata Cordoba ha accettato di vendere la sua restante partecipazione del 50% in Alacr谩n a JCHX per un massimo di 128 milioni di dollari, subordinato all'approvazione dell'EIA e al voto degli azionisti. L'acquirente delle VRB, Red Sun, ha mancato una rata da 10 milioni di dollari; ora si prevede un pagamento di 5 milioni entro il 31 agosto e altri 5 milioni entro il 31 ottobre.
Prospettive: La direzione ritiene che la liquidit脿 attuale copra le operazioni per almeno 12 mesi; una decisione di costruzione a Santa Cruz accelererebbe la necessit脿 di finanziamenti esterni.
Resumen Q2-25: Ivanhoe Electric (IE) gener贸 ingresos por 1,1 millones de d贸lares (+98% interanual) a trav茅s de su subsidiaria de procesamiento de datos, obteniendo un beneficio bruto de 0,8 millones de d贸lares. El gasto en exploraci贸n cay贸 un 62% hasta 14,1 millones de d贸lares tras la finalizaci贸n de la perforaci贸n en Santa Cruz despu茅s del Estudio de Factibilidad Preliminar (PFS); los gastos generales y administrativos bajaron un 9% a 9,7 millones de d贸lares. La p茅rdida neta atribuible a los accionistas comunes se redujo un 49% hasta 23,9 millones de d贸lares (0,18 d贸lares por acci贸n); la p茅rdida semestral disminuy贸 un 47% hasta 54,4 millones de d贸lares.
Balance: El efectivo y equivalentes aumentaron a 88,1 millones de d贸lares desde 41,0 millones a fin de a帽o, impulsados por una oferta de acciones/bonos por 65,8 millones en febrero. El capital de trabajo mejor贸 a 77,1 millones y el patrimonio neto a 310,8 millones. La deuda incluye una nota de terreno Santa Cruz por 38,1 millones de d贸lares (prime + 1%) y un bono convertible VRB al 8% por 32,3 millones de d贸lares (vence en julio de 2026); los pasivos totales disminuyeron un 5% hasta 89,7 millones.
Hitos del proyecto: El PFS de junio para el Proyecto de Cobre Santa Cruz proyecta 1,4 Mt de c谩todos de cobre durante 23 a帽os con un VAN8 despu茅s de impuestos de 1,4 mil millones de d贸lares, una TIR del 20% y un capex inicial de 1,24 mil millones; las negociaciones de financiamiento est谩n en curso. La subsidiaria C贸rdoba acord贸 vender su participaci贸n restante del 50% en Alacr谩n a JCHX por hasta 128 millones de d贸lares, condicionado a la aprobaci贸n de la EIA y votaci贸n de accionistas. El comprador de los VRB, Red Sun, no cumpli贸 con un pago de 10 millones; ahora se esperan 5 millones para el 31 de agosto y 5 millones para el 31 de octubre.
Perspectivas: La direcci贸n considera que la liquidez actual financia las operaciones por 鈮�12 meses; una decisi贸n de construcci贸n en Santa Cruz acelerar铆a la necesidad de financiamiento externo.
2攵勱赴 25 鞖旍暯: Ivanhoe Electric(IE)電� 雿办澊韯� 觳橂Μ 鞛愴殞靷棎靹� 110毵� 雼煬鞚� 毵れ稖(鞝勲厔 雽�牍� 98% 歃濌皜)鞚� 旮半頃橂┌ 80毵� 雼煬鞚� 齑濎澊鞚奠潉 彀届稖頄堨姷雼堧嫟. 靷绊儉韥（歃� 鞁滌稊臧� 鞓堧箘 韮�雼轨劚 臁办偓(PFS) 鞚错泟 膦呺霅橂┐靹� 韮愳偓 歆�於滌潃 62% 臧愳唽頃� 1410毵� 雼煬毳� 旮半頄堦碃, 鞚茧皹 氚� 甏�毽箘電� 9% 臧愳唽頃� 970毵� 雼煬鞓�鞀惦媹雼�. 氤错喌欤检＜鞐� 雽�頃� 靾滌啇鞁れ潃 49% 臧愳唽頃� 2390毵� 雼煬(欤茧嫻 0.18雼煬)鞓�鞙茧┌, 6臧滌洈 靻愳嫟鞚� 47% 欷勳柎霌� 5440毵� 雼煬鞓�鞀惦媹雼�.
雽赌彀寑臁绊憸: 順勱笀 氚� 順勱笀靹� 鞛愳偘鞚� 鞐半 4100毵� 雼煬鞐愳劀 8810毵� 雼煬搿� 歃濌皜頄堨溂氅�, 鞚措姅 2鞗旍棎 鞁れ嫓頃� 6580毵� 雼煬 攴滊鞚� 欤检嫕/鞗岆煱韸� 瓿惦鞐� 旮办澑頃╇媹雼�. 鞖挫爠鞛愲掣鞚� 7710毵� 雼煬搿� 臧滌劆霅橃棃瓿�, 鞛愲掣齑濌硠電� 3鞏�1080毵� 雼煬鞛呺媹雼�. 攵�毂勲姅 靷绊儉韥（歃� 韱犾毂勱秾 3810毵� 雼煬(頂勲澕鞛� + 1%)鞕� VRB 8% 鞝勴櫂靷眲 3230毵� 雼煬(毵岅赴 2026雲� 7鞗�)搿� 甑劚霅橂┌, 齑� 攵�毂勲姅 5% 臧愳唽頃� 8970毵� 雼煬鞛呺媹雼�.
頂勲鞝濏姼 欤检殧 靹标臣: 6鞗� 靷绊儉韥（歃� 甑Μ 頂勲鞝濏姼 鞓堧箘 韮�雼轨劚 臁办偓(PFS)電� 23雲勱皠 140毵� 韱れ潣 甑Μ 鞚岅饭 靸濎偘鞚� 鞓堨儊頃橂┌, 靹疙泟 NPV8 14鞏� 雼煬, 雮措秬靾橃澋毳�(IRR) 20%, 齑堦赴 鞛愲掣 歆�於� 12鞏�4觳滊 雼煬毳� 鞝滌嫓頃╇媹雼�. 鞛愱笀 臁半嫭 順戩儊鞚� 歆勴枆 欷戩瀰雼堧嫟. 鞛愴殞靷� 旖旊ゴ霃勲皵電� 鞎岆澕韥瀫 歆�攵� 50%毳� EIA 鞀轨澑 氚� 欤检＜ 韴憸 臁瓣贝鞙茧 斓滊寑 1鞏�2800毵� 雼煬鞐� JCHX鞐� 毵り皝頃橁赴搿� 頃╈潣頄堨姷雼堧嫟. VRB 毵れ垬鞛愳澑 Red Sun鞚� 1000毵� 雼煬 攵勴暊旮� 雮╇秬毳� 雴撿长鞙茧┌, 8鞗� 31鞚缄箤歆� 500毵� 雼煬, 10鞗� 31鞚缄箤歆� 500毵� 雼煬毳� 歆�旮夗暊 鞓堨爼鞛呺媹雼�.
鞝勲: 瓴届榿歆勳潃 順勳灛 鞙犽彊靹膘澊 12臧滌洈 鞚挫儊 鞖挫榿 鞛愱笀鞚� 歆�鞗愴暊 瓴冹溂搿� 氤搓碃 鞛堨溂氅�, 靷绊儉韥（歃� 瓯挫劋 瓴办爼鞚� 雮措牑歆�氅� 鞕鸽秬 鞛愱笀 臁半嫭 頃勳殧靹膘澊 臧�靻嶍檾霅� 瓴冹瀰雼堧嫟.
R茅sum茅 T2-25 : Ivanhoe Electric (IE) a g茅n茅r茅 un chiffre d'affaires de 1,1 million de dollars (+98 % en glissement annuel) via sa filiale de traitement des donn茅es, avec un b茅n茅fice brut de 0,8 million de dollars. Les d茅penses d'exploration ont chut茅 de 62 % 脿 14,1 millions de dollars, suite 脿 la fin des forages 脿 Santa Cruz apr猫s l'茅tude de faisabilit茅 pr茅liminaire (PFS) ; les frais g茅n茅raux et administratifs ont diminu茅 de 9 % 脿 9,7 millions de dollars. La perte nette attribuable aux actionnaires ordinaires s'est r茅duite de 49 % 脿 23,9 millions de dollars (0,18 $/action) ; la perte semestrielle a diminu茅 de 47 % 脿 54,4 millions de dollars.
Bilan : La tr茅sorerie et les 茅quivalents ont augment茅 脿 88,1 millions de dollars contre 41,0 millions de dollars en fin d'ann茅e, gr芒ce 脿 une 茅mission d'actions/bons de souscription de 65,8 millions de dollars en f茅vrier. Le fonds de roulement s'est am茅lior茅 脿 77,1 millions et les capitaux propres 脿 310,8 millions. La dette comprend une note fonci猫re Santa Cruz de 38,1 millions de dollars (prime + 1 %) et une obligation convertible VRB 脿 8 % de 32,3 millions de dollars (茅ch茅ance juillet 2026) ; le passif total a diminu茅 de 5 % 脿 89,7 millions.
脡tapes du projet : Le PFS de juin pour le projet cuivre Santa Cruz pr茅voit 1,4 Mt de cathodes de cuivre sur 23 ans avec une VAN8 apr猫s imp么ts de 1,4 milliard de dollars, un TRI de 20 % et un CAPEX initial de 1,24 milliard ; des discussions de financement sont en cours. La filiale Cordoba a accept茅 de vendre sa participation restante de 50 % dans Alacr谩n 脿 JCHX pour jusqu'脿 128 millions de dollars, sous r茅serve de l'approbation de l'EIE et du vote des actionnaires. L'acheteur des VRB, Red Sun, a manqu茅 un versement de 10 millions de dollars ; 5 millions sont d茅sormais attendus d'ici le 31 ao没t et 5 millions d'ici le 31 octobre.
Perspectives : La direction estime que la liquidit茅 actuelle finance les op茅rations pour au moins 12 mois ; une d茅cision de construction 脿 Santa Cruz acc茅l茅rerait les besoins de financement externe.
Q2-25 脺berblick: Ivanhoe Electric (IE) erzielte 1,1 Millionen US-Dollar Umsatz (+98 % im Jahresvergleich) durch seine Datenverarbeitungstochter und erzielte einen Bruttogewinn von 0,8 Millionen US-Dollar. Die Explorationsausgaben sanken um 62 % auf 14,1 Millionen US-Dollar, da die Bohrungen in Santa Cruz nach der vorl盲ufigen Machbarkeitsstudie (PFS) eingestellt wurden; die Verwaltungs- und Gemeinkosten sanken um 9 % auf 9,7 Millionen US-Dollar. Der Nettoverlust f眉r Stammaktion盲re verringerte sich um 49 % auf 23,9 Millionen US-Dollar (0,18 US-Dollar je Aktie); der Verlust 眉ber sechs Monate sank um 47 % auf 54,4 Millionen US-Dollar.
Bilanz: Zahlungsmittel und Zahlungsmittel盲quivalente stiegen von 41,0 Millionen US-Dollar zum Jahresende auf 88,1 Millionen US-Dollar, angetrieben durch eine Aktien-/Warrant-Emission im Februar in H枚he von 65,8 Millionen US-Dollar. Das Working Capital verbesserte sich auf 77,1 Millionen US-Dollar und das Eigenkapital auf 310,8 Millionen US-Dollar. Die Schulden bestehen aus einer Santa Cruz Landanleihe 眉ber 38,1 Millionen US-Dollar (Prime + 1 %) und einer VRB 8 % Wandelanleihe 眉ber 32,3 Millionen US-Dollar (F盲lligkeit Juli 2026); die Gesamtverbindlichkeiten sanken um 5 % auf 89,7 Millionen US-Dollar.
Projektmeilensteine: Die im Juni ver枚ffentlichte PFS f眉r das Santa Cruz Kupferprojekt prognostiziert 1,4 Mio. Tonnen Kupferkathoden 眉ber 23 Jahre mit einem nach Steuern berechneten NPV8 von 1,4 Milliarden US-Dollar, einer IRR von 20 % und anf盲nglichen Investitionskosten von 1,24 Milliarden US-Dollar; Finanzierungsverhandlungen laufen. Die Tochtergesellschaft Cordoba hat zugestimmt, ihren verbleibenden 50%-Anteil an Alacr谩n an JCHX f眉r bis zu 128 Millionen US-Dollar zu verkaufen, vorbehaltlich der Genehmigung der Umweltvertr盲glichkeitspr眉fung (EIA) und der Zustimmung der Aktion盲re. Der K盲ufer der VRB, Red Sun, hat eine Rate von 10 Millionen US-Dollar vers盲umt; 5 Millionen US-Dollar werden nun bis zum 31. August und weitere 5 Millionen bis zum 31. Oktober erwartet.
Ausblick: Das Management geht davon aus, dass die aktuelle Liquidit盲t die Gesch盲ftst盲tigkeit f眉r mindestens 12 Monate finanziert; eine Bauentscheidung in Santa Cruz w眉rde den Bedarf an externer Finanzierung beschleunigen.
Positive
- Net loss reduced ~49% YoY, reflecting lower exploration and G&A spending.
- Cash & equivalents more than doubled to US$88.1 million after a US$65.8 million equity raise, boosting 12-month liquidity.
- Santa Cruz PFS delivers attractive economics (NPV8 US$1.4 bn, 20% IRR) and provides a clear development roadmap.
- Proposed US$128 million Alacr谩n divestiture could add significant non-dilutive funding.
- Exploration expenses down 63% YTD, demonstrating cost control.
Negative
- Company remains pre-revenue; H1-25 sales of US$1.8 million cover only 2% of operating loss.
- US$1.24 billion capex requirement for Santa Cruz exceeds current liquidity, creating substantial financing risk.
- Outstanding debts: US$38.1 million land note and US$32.3 million convertible bond mature within five years.
- Red Sun defaulted on a US$10 million payment owed to VRB, signalling collection and JV counterparty risk.
- Impairment charge of US$2.6 million on non-core property indicates asset write-down risk.
Insights
TL;DR: Losses shrinking, cash rebuilt, PFS derisks flagship asset but billion-dollar capex keeps valuation hinge on future funding.
Quarterly loss halved as exploration spend normalized post-PFS, highlighting management鈥檚 discipline. The US$88 million cash pile, augmented by February鈥檚 unit financing, provides a year of runway to progress permitting and project finance workstreams. Santa Cruz economics (NPV8 US$1.4 bn vs current market cap ~US$1 bn) underline value creation potential, though the US$1.24 bn initial capex is a material hurdle. Sale of Alacr谩n could add up to US$100 million net, offering optionality without equity dilution. Nevertheless, revenue remains immaterial and the missed VRB China payment underscores counter-party risk. Overall, the filing is strategically positive but financially neutral until project funding clarity emerges.
TL;DR: Early-stage issuer still cash-burning; large capex, debt maturities and payment default keep risk profile elevated.
IE trimmed liabilities but retains US$70 million of debt, including a land note with US$36 million due over three years and a convertible bond maturing in 2026. Project execution risk is high: Santa Cruz needs >14脳 current cash to build. Dependence on equity markets and government/strategic backing is acute. The Alacr谩n sale faces permitting and shareholder contingencies, while the US$10 million Red Sun arrears highlight collection uncertainty. Foreign JV losses widened to US$7.2 million, and impairment signals ongoing portfolio pruning. Despite improved cash, I view overall disclosure as credit-neutral to slightly negative pending funding visibility.
Riepilogo Q2-25: Ivanhoe Electric (IE) ha generato un fatturato di 1,1 milioni di dollari (+98% su base annua) dalla sua controllata nel settore dell'elaborazione dati, con un utile lordo di 0,8 milioni di dollari. La spesa per esplorazioni 猫 diminuita del 62% a 14,1 milioni di dollari, in seguito alla conclusione delle perforazioni a Santa Cruz dopo lo Studio di Fattibilit脿 Preliminare (PFS); le spese generali e amministrative sono scese del 9% a 9,7 milioni di dollari. La perdita netta per gli azionisti comuni si 猫 ridotta del 49% a 23,9 milioni di dollari (0,18 dollari per azione); la perdita semestrale 猫 scesa del 47% a 54,4 milioni di dollari.
Bilancio: La liquidit脿 e gli equivalenti sono aumentati a 88,1 milioni di dollari rispetto ai 41,0 milioni di fine anno, grazie a un'offerta azionaria/warrant da 65,8 milioni di dollari a febbraio. Il capitale circolante 猫 migliorato a 77,1 milioni di dollari e il patrimonio netto a 310,8 milioni di dollari. Il debito comprende una nota per terreni Santa Cruz da 38,1 milioni di dollari (prime + 1%) e un'obbligazione convertibile VRB all'8% da 32,3 milioni di dollari (scadenza luglio 2026); le passivit脿 totali sono diminuite del 5% a 89,7 milioni di dollari.
Traguardi di progetto: Lo studio di fattibilit脿 preliminare di giugno per il progetto Santa Cruz Copper prevede 1,4 milioni di tonnellate di rame catodico in 23 anni con un NPV8 post-tasse di 1,4 miliardi di dollari, un IRR del 20% e un capex iniziale di 1,24 miliardi di dollari; sono in corso trattative di finanziamento. La controllata Cordoba ha accettato di vendere la sua restante partecipazione del 50% in Alacr谩n a JCHX per un massimo di 128 milioni di dollari, subordinato all'approvazione dell'EIA e al voto degli azionisti. L'acquirente delle VRB, Red Sun, ha mancato una rata da 10 milioni di dollari; ora si prevede un pagamento di 5 milioni entro il 31 agosto e altri 5 milioni entro il 31 ottobre.
Prospettive: La direzione ritiene che la liquidit脿 attuale copra le operazioni per almeno 12 mesi; una decisione di costruzione a Santa Cruz accelererebbe la necessit脿 di finanziamenti esterni.
Resumen Q2-25: Ivanhoe Electric (IE) gener贸 ingresos por 1,1 millones de d贸lares (+98% interanual) a trav茅s de su subsidiaria de procesamiento de datos, obteniendo un beneficio bruto de 0,8 millones de d贸lares. El gasto en exploraci贸n cay贸 un 62% hasta 14,1 millones de d贸lares tras la finalizaci贸n de la perforaci贸n en Santa Cruz despu茅s del Estudio de Factibilidad Preliminar (PFS); los gastos generales y administrativos bajaron un 9% a 9,7 millones de d贸lares. La p茅rdida neta atribuible a los accionistas comunes se redujo un 49% hasta 23,9 millones de d贸lares (0,18 d贸lares por acci贸n); la p茅rdida semestral disminuy贸 un 47% hasta 54,4 millones de d贸lares.
Balance: El efectivo y equivalentes aumentaron a 88,1 millones de d贸lares desde 41,0 millones a fin de a帽o, impulsados por una oferta de acciones/bonos por 65,8 millones en febrero. El capital de trabajo mejor贸 a 77,1 millones y el patrimonio neto a 310,8 millones. La deuda incluye una nota de terreno Santa Cruz por 38,1 millones de d贸lares (prime + 1%) y un bono convertible VRB al 8% por 32,3 millones de d贸lares (vence en julio de 2026); los pasivos totales disminuyeron un 5% hasta 89,7 millones.
Hitos del proyecto: El PFS de junio para el Proyecto de Cobre Santa Cruz proyecta 1,4 Mt de c谩todos de cobre durante 23 a帽os con un VAN8 despu茅s de impuestos de 1,4 mil millones de d贸lares, una TIR del 20% y un capex inicial de 1,24 mil millones; las negociaciones de financiamiento est谩n en curso. La subsidiaria C贸rdoba acord贸 vender su participaci贸n restante del 50% en Alacr谩n a JCHX por hasta 128 millones de d贸lares, condicionado a la aprobaci贸n de la EIA y votaci贸n de accionistas. El comprador de los VRB, Red Sun, no cumpli贸 con un pago de 10 millones; ahora se esperan 5 millones para el 31 de agosto y 5 millones para el 31 de octubre.
Perspectivas: La direcci贸n considera que la liquidez actual financia las operaciones por 鈮�12 meses; una decisi贸n de construcci贸n en Santa Cruz acelerar铆a la necesidad de financiamiento externo.
2攵勱赴 25 鞖旍暯: Ivanhoe Electric(IE)電� 雿办澊韯� 觳橂Μ 鞛愴殞靷棎靹� 110毵� 雼煬鞚� 毵れ稖(鞝勲厔 雽�牍� 98% 歃濌皜)鞚� 旮半頃橂┌ 80毵� 雼煬鞚� 齑濎澊鞚奠潉 彀届稖頄堨姷雼堧嫟. 靷绊儉韥（歃� 鞁滌稊臧� 鞓堧箘 韮�雼轨劚 臁办偓(PFS) 鞚错泟 膦呺霅橂┐靹� 韮愳偓 歆�於滌潃 62% 臧愳唽頃� 1410毵� 雼煬毳� 旮半頄堦碃, 鞚茧皹 氚� 甏�毽箘電� 9% 臧愳唽頃� 970毵� 雼煬鞓�鞀惦媹雼�. 氤错喌欤检＜鞐� 雽�頃� 靾滌啇鞁れ潃 49% 臧愳唽頃� 2390毵� 雼煬(欤茧嫻 0.18雼煬)鞓�鞙茧┌, 6臧滌洈 靻愳嫟鞚� 47% 欷勳柎霌� 5440毵� 雼煬鞓�鞀惦媹雼�.
雽赌彀寑臁绊憸: 順勱笀 氚� 順勱笀靹� 鞛愳偘鞚� 鞐半 4100毵� 雼煬鞐愳劀 8810毵� 雼煬搿� 歃濌皜頄堨溂氅�, 鞚措姅 2鞗旍棎 鞁れ嫓頃� 6580毵� 雼煬 攴滊鞚� 欤检嫕/鞗岆煱韸� 瓿惦鞐� 旮办澑頃╇媹雼�. 鞖挫爠鞛愲掣鞚� 7710毵� 雼煬搿� 臧滌劆霅橃棃瓿�, 鞛愲掣齑濌硠電� 3鞏�1080毵� 雼煬鞛呺媹雼�. 攵�毂勲姅 靷绊儉韥（歃� 韱犾毂勱秾 3810毵� 雼煬(頂勲澕鞛� + 1%)鞕� VRB 8% 鞝勴櫂靷眲 3230毵� 雼煬(毵岅赴 2026雲� 7鞗�)搿� 甑劚霅橂┌, 齑� 攵�毂勲姅 5% 臧愳唽頃� 8970毵� 雼煬鞛呺媹雼�.
頂勲鞝濏姼 欤检殧 靹标臣: 6鞗� 靷绊儉韥（歃� 甑Μ 頂勲鞝濏姼 鞓堧箘 韮�雼轨劚 臁办偓(PFS)電� 23雲勱皠 140毵� 韱れ潣 甑Μ 鞚岅饭 靸濎偘鞚� 鞓堨儊頃橂┌, 靹疙泟 NPV8 14鞏� 雼煬, 雮措秬靾橃澋毳�(IRR) 20%, 齑堦赴 鞛愲掣 歆�於� 12鞏�4觳滊 雼煬毳� 鞝滌嫓頃╇媹雼�. 鞛愱笀 臁半嫭 順戩儊鞚� 歆勴枆 欷戩瀰雼堧嫟. 鞛愴殞靷� 旖旊ゴ霃勲皵電� 鞎岆澕韥瀫 歆�攵� 50%毳� EIA 鞀轨澑 氚� 欤检＜ 韴憸 臁瓣贝鞙茧 斓滊寑 1鞏�2800毵� 雼煬鞐� JCHX鞐� 毵り皝頃橁赴搿� 頃╈潣頄堨姷雼堧嫟. VRB 毵れ垬鞛愳澑 Red Sun鞚� 1000毵� 雼煬 攵勴暊旮� 雮╇秬毳� 雴撿长鞙茧┌, 8鞗� 31鞚缄箤歆� 500毵� 雼煬, 10鞗� 31鞚缄箤歆� 500毵� 雼煬毳� 歆�旮夗暊 鞓堨爼鞛呺媹雼�.
鞝勲: 瓴届榿歆勳潃 順勳灛 鞙犽彊靹膘澊 12臧滌洈 鞚挫儊 鞖挫榿 鞛愱笀鞚� 歆�鞗愴暊 瓴冹溂搿� 氤搓碃 鞛堨溂氅�, 靷绊儉韥（歃� 瓯挫劋 瓴办爼鞚� 雮措牑歆�氅� 鞕鸽秬 鞛愱笀 臁半嫭 頃勳殧靹膘澊 臧�靻嶍檾霅� 瓴冹瀰雼堧嫟.
R茅sum茅 T2-25 : Ivanhoe Electric (IE) a g茅n茅r茅 un chiffre d'affaires de 1,1 million de dollars (+98 % en glissement annuel) via sa filiale de traitement des donn茅es, avec un b茅n茅fice brut de 0,8 million de dollars. Les d茅penses d'exploration ont chut茅 de 62 % 脿 14,1 millions de dollars, suite 脿 la fin des forages 脿 Santa Cruz apr猫s l'茅tude de faisabilit茅 pr茅liminaire (PFS) ; les frais g茅n茅raux et administratifs ont diminu茅 de 9 % 脿 9,7 millions de dollars. La perte nette attribuable aux actionnaires ordinaires s'est r茅duite de 49 % 脿 23,9 millions de dollars (0,18 $/action) ; la perte semestrielle a diminu茅 de 47 % 脿 54,4 millions de dollars.
Bilan : La tr茅sorerie et les 茅quivalents ont augment茅 脿 88,1 millions de dollars contre 41,0 millions de dollars en fin d'ann茅e, gr芒ce 脿 une 茅mission d'actions/bons de souscription de 65,8 millions de dollars en f茅vrier. Le fonds de roulement s'est am茅lior茅 脿 77,1 millions et les capitaux propres 脿 310,8 millions. La dette comprend une note fonci猫re Santa Cruz de 38,1 millions de dollars (prime + 1 %) et une obligation convertible VRB 脿 8 % de 32,3 millions de dollars (茅ch茅ance juillet 2026) ; le passif total a diminu茅 de 5 % 脿 89,7 millions.
脡tapes du projet : Le PFS de juin pour le projet cuivre Santa Cruz pr茅voit 1,4 Mt de cathodes de cuivre sur 23 ans avec une VAN8 apr猫s imp么ts de 1,4 milliard de dollars, un TRI de 20 % et un CAPEX initial de 1,24 milliard ; des discussions de financement sont en cours. La filiale Cordoba a accept茅 de vendre sa participation restante de 50 % dans Alacr谩n 脿 JCHX pour jusqu'脿 128 millions de dollars, sous r茅serve de l'approbation de l'EIE et du vote des actionnaires. L'acheteur des VRB, Red Sun, a manqu茅 un versement de 10 millions de dollars ; 5 millions sont d茅sormais attendus d'ici le 31 ao没t et 5 millions d'ici le 31 octobre.
Perspectives : La direction estime que la liquidit茅 actuelle finance les op茅rations pour au moins 12 mois ; une d茅cision de construction 脿 Santa Cruz acc茅l茅rerait les besoins de financement externe.
Q2-25 脺berblick: Ivanhoe Electric (IE) erzielte 1,1 Millionen US-Dollar Umsatz (+98 % im Jahresvergleich) durch seine Datenverarbeitungstochter und erzielte einen Bruttogewinn von 0,8 Millionen US-Dollar. Die Explorationsausgaben sanken um 62 % auf 14,1 Millionen US-Dollar, da die Bohrungen in Santa Cruz nach der vorl盲ufigen Machbarkeitsstudie (PFS) eingestellt wurden; die Verwaltungs- und Gemeinkosten sanken um 9 % auf 9,7 Millionen US-Dollar. Der Nettoverlust f眉r Stammaktion盲re verringerte sich um 49 % auf 23,9 Millionen US-Dollar (0,18 US-Dollar je Aktie); der Verlust 眉ber sechs Monate sank um 47 % auf 54,4 Millionen US-Dollar.
Bilanz: Zahlungsmittel und Zahlungsmittel盲quivalente stiegen von 41,0 Millionen US-Dollar zum Jahresende auf 88,1 Millionen US-Dollar, angetrieben durch eine Aktien-/Warrant-Emission im Februar in H枚he von 65,8 Millionen US-Dollar. Das Working Capital verbesserte sich auf 77,1 Millionen US-Dollar und das Eigenkapital auf 310,8 Millionen US-Dollar. Die Schulden bestehen aus einer Santa Cruz Landanleihe 眉ber 38,1 Millionen US-Dollar (Prime + 1 %) und einer VRB 8 % Wandelanleihe 眉ber 32,3 Millionen US-Dollar (F盲lligkeit Juli 2026); die Gesamtverbindlichkeiten sanken um 5 % auf 89,7 Millionen US-Dollar.
Projektmeilensteine: Die im Juni ver枚ffentlichte PFS f眉r das Santa Cruz Kupferprojekt prognostiziert 1,4 Mio. Tonnen Kupferkathoden 眉ber 23 Jahre mit einem nach Steuern berechneten NPV8 von 1,4 Milliarden US-Dollar, einer IRR von 20 % und anf盲nglichen Investitionskosten von 1,24 Milliarden US-Dollar; Finanzierungsverhandlungen laufen. Die Tochtergesellschaft Cordoba hat zugestimmt, ihren verbleibenden 50%-Anteil an Alacr谩n an JCHX f眉r bis zu 128 Millionen US-Dollar zu verkaufen, vorbehaltlich der Genehmigung der Umweltvertr盲glichkeitspr眉fung (EIA) und der Zustimmung der Aktion盲re. Der K盲ufer der VRB, Red Sun, hat eine Rate von 10 Millionen US-Dollar vers盲umt; 5 Millionen US-Dollar werden nun bis zum 31. August und weitere 5 Millionen bis zum 31. Oktober erwartet.
Ausblick: Das Management geht davon aus, dass die aktuelle Liquidit盲t die Gesch盲ftst盲tigkeit f眉r mindestens 12 Monate finanziert; eine Bauentscheidung in Santa Cruz w眉rde den Bedarf an externer Finanzierung beschleunigen.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
Form 10-Q
_____________________________________
(Mark One)
For the quarterly period ended June 30, 2025
or
Commission file number: 001-37576
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| | ||||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
(615 ) 234-5900
(Registrant’s telephone number, including area code)
_____________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer ☐ | ||||||||
Non-accelerated filer ☐ | Smaller reporting company | |||||||
Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 29, 2025, there were 128,209,410 shares of the registrant’s common stock outstanding.
SURGERY PARTNERS, INC.
FORM 10-Q
TABLE OF CONTENTS
| Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 1 | ||||||
Condensed Consolidated Balance Sheets (Unaudited) | 1 | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | 2 | |||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | 3 | |||||||
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | 4 | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | 5 | |||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 6 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 25 | ||||||
Item 4. | Controls and Procedures | 25 | ||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 26 | ||||||
Item 1A. | Risk Factors | 26 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 | ||||||
Item 3. | Defaults Upon Senior Securities | 26 | ||||||
Item 4. | Mine Safety Disclosures | 26 | ||||||
Item 5. | Other Information | 26 | ||||||
Item 6. | Exhibits | 26 | ||||||
Signatures | 27 | |||||||
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SURGERY PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share amounts)
| (Unaudited) | ||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable | ||||||||||||||
| Inventories | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
Property and equipment, net of accumulated depreciation of $ | ||||||||||||||
Goodwill and other intangible assets, net | ||||||||||||||
| Investments in and advances to affiliates | ||||||||||||||
| Right-of-use operating lease assets | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued payroll and benefits | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Current maturities of long-term debt | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, less current maturities | ||||||||||||||
| Right-of-use operating lease liabilities | ||||||||||||||
Long-term deferred tax liabilities | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Non-controlling interests—redeemable | ||||||||||||||
| Stockholders' equity: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive (loss) income | ( | |||||||||||||
| Retained deficit | ( | ( | ||||||||||||
| Total Surgery Partners, Inc. stockholders' equity | ||||||||||||||
| Non-controlling interests—non-redeemable | ||||||||||||||
| Total stockholders' equity | ||||||||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||||||||
See notes to unaudited condensed consolidated financial statements.
1
Table of Contents
SURGERY PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, dollars in millions, except per share amounts; shares in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Salaries and benefits | |||||||||||||||||||||||
| Supplies | |||||||||||||||||||||||
| Professional and medical fees | |||||||||||||||||||||||
| Lease expense | |||||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Transaction and integration costs | |||||||||||||||||||||||
| Net (gain) loss on disposals, consolidations and deconsolidations | ( | ||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | ( | ( | ( | ( | |||||||||||||||||||
| Litigation settlements | ( | ||||||||||||||||||||||
| Loss on debt extinguishment | |||||||||||||||||||||||
| Other income, net | ( | ( | ( | ( | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income attributable to non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net loss attributable to Surgery Partners, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
Diluted (1) | |||||||||||||||||||||||
(1)The impact of potentially dilutive securities for all periods was not considered because the effect would be anti-dilutive.
See notes to unaudited condensed consolidated financial statements.
2
Table of Contents
SURGERY PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, dollars in millions)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||
Derivative activity, net of tax of $ | ( | ( | ( | ( | ||||||||||||||||||||||
| Comprehensive income | ||||||||||||||||||||||||||
| Less: Comprehensive income attributable to non-controlling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Comprehensive loss attributable to Surgery Partners, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
See notes to unaudited condensed consolidated financial statements.
3
Table of Contents
SURGERY PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, dollars in millions, shares in thousands)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Deficit | Non-Controlling Interests— Non-Redeemable | Total | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Acquisition and disposal of shares of non-controlling interests, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests—non-redeemable holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Acquisition and disposal of shares of non-controlling interests, net | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests—non-redeemable holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Acquisition and disposal of shares of non-controlling interests, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests—non-redeemable holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Acquisition and disposal of shares of non-controlling interests, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests—non-redeemable holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
See notes to unaudited condensed consolidated financial statements.
4
Table of Contents
SURGERY PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, dollars in millions)
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Non-cash lease expense | ||||||||||||||
| Non-cash interest expense, net | ||||||||||||||
| Equity-based compensation expense | ||||||||||||||
| Net loss on disposals, consolidations and deconsolidations | ||||||||||||||
| Loss on debt extinguishment | ||||||||||||||
| Deferred income taxes | ( | |||||||||||||
| Equity in earnings of unconsolidated affiliates, net of distributions received | ||||||||||||||
| Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||||||||||||||
| Accounts receivable | ( | |||||||||||||
| Other operating assets and liabilities | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchases of property and equipment | ( | ( | ||||||||||||
| Payments for acquisitions, net of cash acquired | ( | ( | ||||||||||||
| Proceeds from disposals of facilities and other assets | ||||||||||||||
| Purchases of equity investments | ( | ( | ||||||||||||
| Proceeds from sales of equity investments | ||||||||||||||
| Other investing activities | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Principal payments on long-term debt | ( | ( | ||||||||||||
| Borrowings of long-term debt | ||||||||||||||
| Payments of debt issuance costs | ( | |||||||||||||
| Distributions to non-controlling interest holders | ( | ( | ||||||||||||
| Proceeds related to ownership transactions with non-controlling interest holders | ||||||||||||||
| Other financing activities | ( | ( | ||||||||||||
| Net cash provided by financing activities | ( | |||||||||||||
| Net decrease in cash and cash equivalents | ( | |||||||||||||
| Cash and cash equivalents at beginning of period | ||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||||||||
See notes to unaudited condensed consolidated financial statements.
5
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Summary of Accounting Policies
Organization
Surgery Partners, Inc., a Delaware corporation, acting through its subsidiaries, owns and operates a national network of surgical facilities and ancillary services. The surgical facilities, which include ambulatory surgery centers ("ASCs") and surgical hospitals, primarily provide non-emergency surgical procedures across many specialties, including, among others, orthopedics and pain management, gastroenterology, ophthalmology, and general surgery. Although some of the Company's surgical hospitals may include emergency departments, they are generally not equipped to handle a broad spectrum of patient needs, including critical and traumatic injuries. Ancillary services are comprised of multi-specialty physician practices, urgent care facilities and anesthesia services. Unless the context otherwise indicates, Surgery Partners, Inc. and its subsidiaries are referred to herein as "Surgery Partners," "we," "us," "our" or the "Company."
As of June 30, 2025, the Company owned or operated a portfolio of 162 surgical facilities, comprised of 143 ASCs and 19 surgical hospitals in 30 states. The Company owns these facilities in partnership with physicians and, in some cases, health care systems in the markets and communities it serves. The Company owned a majority interest in 83 of these surgical facilities and consolidated 115 surgical facilities for financial reporting purposes.
Basis of Presentation
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes. Examples include, but are not limited to, estimates of accounts receivable allowances, professional and general liabilities and the estimate of deferred tax assets or liabilities. Actual results could differ from those estimates.
Revenues
The Company's revenues generally relate to contracts with patients in which the performance obligations are to provide health care services. The Company recognizes revenues in the period in which its obligations to provide health care services are satisfied and reports the amount that reflects the consideration the Company expects to be entitled to receive. The contractual relationships with patients, in most cases, also involve a third-party payor (e.g., Medicare, Medicaid and private insurance organizations, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by or negotiated with the third-party payors. The payment arrangements with third-party payors for the services provided to the related patients typically specify payments at amounts less than the Company's standard charges. The Company continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.
The following table presents a summary of revenues by service type as a percentage of total revenues:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Patient service revenues | % | % | % | % | ||||||||||||||||||||||
| Other service revenues | % | % | % | % | ||||||||||||||||||||||
| Total revenues | % | % | % | % | ||||||||||||||||||||||
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Patient service revenues. This revenue is related to charging facility fees in exchange for providing patient care. The fee charged for health care procedures performed in surgical facilities varies depending on the type of service provided, but usually includes all charges for usage of an operating room, a recovery room, special equipment, medical supplies, nursing staff and medications. The fee does not normally include professional fees charged by the patient’s surgeon, anesthesiologist or other attending physician, which are billed directly by such physicians to the patient or third-party payor. However, in several surgical facilities, the Company charges for anesthesia services. Ancillary service revenues include fees for patient visits to the Company's physician practices, pharmacy services and diagnostic tests ordered by physicians.
Patient service revenues are recognized as performance obligations are satisfied. Performance obligations are based on the nature of services provided. Typically, the Company recognizes revenue at a point in time in which services are rendered and the Company has no obligation to provide further patient services. Because the Company primarily performs outpatient procedures, performance obligations are generally satisfied same day and revenue is recognized on the date of service.
The Company determines the transaction price based on gross charges for services provided, net of estimated contractual adjustments and implicit price concessions. The Company estimates its contractual adjustments and implicit price concessions based on contractual agreements, its discount policies and historical experience of cash collections and historical write-offs. The estimated contractual adjustments are recognized at the time of services being performed, with ASCs typically based on contractual agreements and surgical hospitals typically based on historical experience of cash collections and write-offs. Changes in estimated contractual adjustments are recorded in the period of change, with final adjustments, if any, typically at the time of payment.
Several states utilize supplemental Medicaid reimbursement programs for the purpose of providing reimbursement to providers to increase base rates to the levels that Medicare would have paid for the same service or for payments that offset a portion of the cost of providing care to Medicaid and indigent patients. These programs are designed with input from the Centers for Medicare & Medicaid Services (“CMS”) and are funded with a combination of state and federal resources, including, in certain instances, fees or taxes levied on the providers. We account for payments under these supplemental programs as variable consideration and estimate the amount using the most likely amount method. Reimbursement under these programs, including the recognition of variable consideration, is reflected in patient service revenues. Taxes or other program-related costs are reflected in other operating expenses.
The following table sets forth patient service revenues by type of payor and as a percentage of total patient service revenues for the Company's consolidated surgical facilities (dollars in millions):
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Amount | % | Amount | % | |||||||||||||||||||||||
| Patient service revenues: | ||||||||||||||||||||||||||
| Private insurance | $ | % | $ | % | ||||||||||||||||||||||
| Government | % | % | ||||||||||||||||||||||||
| Self-pay | % | % | ||||||||||||||||||||||||
Other (1) | % | % | ||||||||||||||||||||||||
| Total patient service revenues | % | % | ||||||||||||||||||||||||
| Other service revenues | ||||||||||||||||||||||||||
| Total revenues | $ | $ | ||||||||||||||||||||||||
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Amount | % | Amount | % | |||||||||||||||||||||||
| Patient service revenues: | ||||||||||||||||||||||||||
| Private insurance | $ | % | $ | % | ||||||||||||||||||||||
| Government | % | % | ||||||||||||||||||||||||
| Self-pay | % | % | ||||||||||||||||||||||||
Other (1) | % | % | ||||||||||||||||||||||||
| Total patient service revenues | % | % | ||||||||||||||||||||||||
| Other service revenues | ||||||||||||||||||||||||||
| Total revenues | $ | $ | ||||||||||||||||||||||||
(1)Other is comprised of automobile liability, letters of protection and other payor types.
Accounts Receivable
Accounts receivable from third-party payors are recorded net of contractual allowances and implicit price concessions, which are estimated based on established fee schedules, relationships with payors, procedure statistics and other objective information including the historical trend of cash collections and contractual write-offs. The Company estimates its contractual adjustments and implicit price concessions based on contractual agreements, its discount policies and historical experience of cash collections and historical write-offs. The estimated contractual adjustments are recognized at the time of services being performed, with ASCs typically based on contractual agreements and surgical hospitals typically based on historical experience of cash collections and write-offs. Changes in estimated contractual adjustments are recorded in the period of change, with final adjustments, if any, typically at the time of payment. While changes in estimated reimbursement from third-party payors remain a possibility, the Company expects that any such changes would be minimal and, therefore, would not have a material effect on its financial condition or results of operations.
Accounts receivable consists of receivables from federal and state agencies (under the Medicare and Medicaid programs), private insurance organizations, employers and patients. Management recognizes that revenues and receivables from government agencies are significant to the Company's operations, but it does not believe that there is significant credit risk associated with these government agencies. Concentration of credit risk with respect to other payors is limited because of the large number of such payors.
The Company recognizes that final reimbursement of accounts receivable is subject to final approval by each third-party payor. However, because the Company has contracts with its third-party payors and also verifies insurance coverage of the patient before medical services are rendered, the amounts that are pending approval from third-party payors are not considered significant. Amounts are classified outside of self-pay if the Company has an agreement with the third-party payor or has verified a patient’s coverage prior to services rendered. The Company's policy is to collect co-payments and deductibles prior to providing medical services. Patient services of the Company are primarily non-emergency, which allows the surgical facilities to control the procedures for which third-party reimbursement is sought and obtained. The Company does not require collateral from self-pay patients.
The Company's collection policies and procedures are based on the type of payor, size of claim and estimated collection percentage for each patient account. The Company analyzes accounts receivable at each of its surgical facilities to ensure the proper collection and aged category. Collection efforts include direct contact with third-party payors or patients, written correspondence and the use of legal or collection agency assistance, as required.
Income Taxes
We use the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We assess the likelihood that deferred tax assets will be recovered from sources of future taxable income. To the extent we believe that recovery is not probable, a valuation allowance is established. To the extent we establish a valuation allowance or subsequently increase or decrease this allowance, we must include an adjustment as part of the income tax provision in our results of operations.
The first step in determining the deferred tax asset valuation allowance is identifying reporting jurisdictions where we have a history of tax and operating losses or are projected to have losses in future periods as a result of changes in operational performance. We then determine if a valuation allowance should be established against the deferred tax assets for that reporting jurisdiction. The second step is to determine the amount of the valuation allowance. We will generally establish a valuation allowance equal to the net deferred tax asset (deferred tax assets less deferred tax liabilities) related to the jurisdiction identified in step one of the analysis. In certain cases, we may not reduce the valuation allowance by the amount of the deferred tax liabilities depending on the nature and timing of future taxable income attributable to deferred tax liabilities.
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In assessing tax contingencies, we apply the provisions of ASC 740, “Income Taxes”. We apply the recognition threshold and measurement of a tax position taken or expected to be taken in a tax return and follow the guidance on various matters such as derecognition, interest, penalties and disclosure. We classify interest and penalties as a component of income tax expense. During each reporting period, we assess the facts and circumstances related to recorded tax contingencies, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, release of administrative guidance, or rendering of a court decision affecting a particular tax issue. If tax contingencies are no longer deemed probable based upon new facts and circumstances, the contingency is reflected as a reduction of the provision for income taxes in the current period.
Goodwill
A summary of activity related to goodwill for the six months ended June 30, 2025 is as follows (in millions):
| Balance as of December 31, 2024 | $ | |||||||
| Acquisitions, including post acquisition adjustments | ||||||||
| Disposals | ( | |||||||
| Balance as of June 30, 2025 | $ | |||||||
A detailed evaluation of potential impairment indicators was performed as of June 30, 2025, which specifically considered recent changes in interest rates, inflation risk and market volatility. On the basis of available evidence as of June 30, 2025, no indicators of impairment were identified. Future estimates of fair value could be adversely affected if the actual outcome of one or more of the Company's assumptions changes materially in the future, including a material decline in the Company’s stock price and the fair value of its long-term debt, lower than expected surgical case volumes, higher market interest rates or increased operating costs. Such changes impacting the calculation of fair value could result in a material impairment charge in the future.
Derivative Instruments and Hedging Activities
The Company records all derivatives on the balance sheet at fair value and any financing elements treated as debt instruments are recorded at amortized cost. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
The Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Non-Controlling Interests—Redeemable
Each partnership and limited liability company through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement, respectively. In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members’ ownership, as applicable, if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility. Management believes the likelihood of an event occurring that would trigger such purchases was remote as of June 30, 2025. The non-controlling interests—redeemable are reported outside of stockholders' equity in the condensed consolidated balance sheets.
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A summary of activity related to redeemable non-controlling interests is as follows (in millions):
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Net income attributable to non-controlling interests—redeemable | ||||||||||||||
| Acquisition and disposal of shares of non-controlling interests, net—redeemable | ( | |||||||||||||
| Distributions to non-controlling interest —redeemable holders | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
Fair Value of Financial Instruments
The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on inputs classified into the following hierarchy:
•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These may include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, depending on the nature of the item being valued.
A summary of the carrying amounts and estimated fair values of the Company's long-term debt follows (in millions):
| Carrying Amount | Fair Value | |||||||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Senior secured term loan | $ | $ | $ | $ | ||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
The fair values in the table above were based on Level 2 inputs using quoted prices for identical liabilities in inactive markets. The carrying amounts related to the Company's other long-term debt obligations, including finance lease obligations, approximate their fair values.
Variable Interest Entities
The total assets (excluding goodwill and intangible assets, net) of the consolidated VIEs included in the accompanying condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, were $78.5 million and $87.0 million, respectively, and the total liabilities of the consolidated VIEs were $40.6 million and $55.0 million, respectively.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which establishes new requirements for the categorization and disaggregation of information in the rate reconciliation as well as for disaggregation of income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024. The amendments in this ASU may be applied prospectively or retrospectively to all periods presented and early adoption is permitted. The Company is planning to adopt during the year ended December 31, 2025.
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. Acquisitions, Disposals and Deconsolidations
Acquisitions
During the six months ended June 30, 2025:
•The Company acquired a controlling interest in four surgical facilities and two physician practices for aggregate cash consideration of $48.0 million, net of cash acquired, and non-cash consideration of $2.3 million, which consisted of a non-controlling interest in one of the Company's existing surgical facilities. In connection with these acquisitions, the Company preliminarily recognized non-controlling interests of $28.0 million and goodwill of $73.7 million.
•The Company acquired a non-controlling interest in one surgical facility for aggregate cash consideration of $3.8 million. The non-controlling interest was accounted for as an equity method investment and recorded as a component of investments in and advances to affiliates in the condensed consolidated balance sheets.
During the six months ended June 30, 2024:
•The Company acquired a controlling interest in six surgical facilities and several physician practices for aggregate cash consideration of $264.6 million, net of cash acquired, and non-cash consideration of $1.1 million, which consisted of a non-controlling interest in one of the Company's existing surgical facilities. In connection with these acquisitions, the Company preliminarily recognized non-controlling interests of $290.7 million, goodwill of $483.0 million and investments and advances to affiliates of $44.6 million related to an acquired surgical facility accounted for as an equity method investment.
Disposals and Deconsolidations
During the six months ended June 30, 2025:
•The Company sold a portion of its interests in one surgical facility for net cash proceeds of $0.5 million. As a result of the transaction, the Company no longer controlled the previously controlled surgical facility but retained a non-controlling interest, resulting in the deconsolidation of the previously consolidated entity. This transaction resulted in a pre-tax net loss on deconsolidation of $2.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2025. The net loss was determined based on the difference between the net cash proceeds plus the fair value of the Company’s retained interests in the entity and the carrying values of both the tangible and intangible assets and liabilities of the entity immediately prior to the transaction.
•The Company sold its controlling interests in two surgical facilities for aggregate net cash proceeds of $42.4 million. In connection with the transactions, the Company recognized a pre-tax net gain of $6.0 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2025.
During the six months ended June 30, 2024:
•The Company disposed of its non-controlling interests in one surgical facility, which was previously accounted for as an equity method investment, for cash proceeds of $2.0 million. In connection with this transaction, the Company recognized a pre-tax loss of $3.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2024.
•The Company sold a portion of its interests in one surgical facility for net cash proceeds of $2.5 million. As a result of the transaction, the Company lost control of the previously controlled surgical facility but retains a non-controlling interest, resulting in the deconsolidation of the previously consolidated entity. This transaction resulted in a pre-tax net gain on deconsolidation of $2.7 million, which is included in net loss on disposals, consolidations and deconsolidations in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2024. The net gain was determined based on the difference between the net cash proceeds plus the fair value of the Company’s retained interests in the entity and the carrying values of both the tangible and intangible assets of the entity immediately prior to the transaction.
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Long-Term Debt
A summary of long-term debt follows (in millions):
| June 30, 2025 | December 31, 2024 | |||||||||||||
Senior secured term loan (1) | $ | $ | ||||||||||||
| Senior secured revolving credit facility | ||||||||||||||
| Notes payable and other secured loans | ||||||||||||||
| Finance lease obligations | ||||||||||||||
| Less: unamortized debt issuance costs and discounts | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
| Less: current maturities | ||||||||||||||
| Total long-term debt | $ | $ | ||||||||||||
(1)Includes unamortized fair value discount of $1.4
Revolving Credit Facility
As of June 30, 2025, the Company's availability on its $703.8 million senior secured revolving credit facility (the "Revolver") was $394.9 million (including letters of credit of $10.9 million). The increase in outstanding borrowings on the Revolver compared to December 31, 2024 was primarily due to the timing of acquisitions.
4. Leases
The following table presents the components of the Company's right-of-use assets and liabilities related to leases and their classification in the condensed consolidated balance sheets (in millions):
| Classification in Condensed Consolidated Balance Sheets | June 30, 2025 | December 31, 2024 | ||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Operating lease assets | Right-of-use operating lease assets | $ | $ | |||||||||||||||||
| Finance lease assets | ||||||||||||||||||||
| Total leased assets | $ | $ | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Operating lease liabilities: | ||||||||||||||||||||
| Current | $ | $ | ||||||||||||||||||
| Long-term | Right-of-use operating lease liabilities | |||||||||||||||||||
| Total operating lease liabilities | ||||||||||||||||||||
| Finance lease liabilities: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Long-term | ||||||||||||||||||||
| Total finance lease liabilities | ||||||||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||||||||
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the components of the Company's lease expense and their classification in the condensed consolidated statements of operations (in millions):
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Operating lease costs | $ | $ | ||||||||||||
| Finance lease costs: | ||||||||||||||
| Amortization of leased assets | ||||||||||||||
| Interest on lease liabilities | ||||||||||||||
| Total finance lease costs | ||||||||||||||
| Variable and short-term lease costs | ||||||||||||||
| Total lease costs | $ | $ | ||||||||||||
The following table presents supplemental cash flow information (in millions):
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating cash outflows from operating leases | $ | $ | ||||||||||||
| Operating cash outflows from finance leases | ||||||||||||||
| Financing cash outflows from finance leases | ||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | ||||||||||||||
| Operating leases | ||||||||||||||
| Finance leases | ||||||||||||||
5. Derivatives and Hedging Activities
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. During 2025 and 2024, such derivatives have been used to hedge the variable cash flows associated with existing variable-rate debt.
The key terms of interest rate swaps and interest rate caps outstanding are presented below:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Description | Effective Date | Notional Amount (in millions) | Status | Notional Amount (in millions) | Status | Maturity Date | ||||||||||||||||||||||||||||||||
| Pay-fixed swap | May 7, 2021 | $ | Matured | $ | Active | March 31, 2025 | ||||||||||||||||||||||||||||||||
| Pay-fixed swap | May 7, 2021 | Matured | Active | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Pay-fixed swap | May 7, 2021 | Matured | Active | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Interest rate cap | September 30, 2021 | Matured | Active | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Interest rate cap | September 30, 2021 | Matured | Active | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Deferred premium cap | March 31, 2025 | Active | Active | December 31, 2028 | ||||||||||||||||||||||||||||||||||
| Deferred premium cap | March 31, 2025 | Active | Active | December 31, 2028 | ||||||||||||||||||||||||||||||||||
| Deferred premium cap | March 31, 2025 | Active | Active | December 31, 2028 | ||||||||||||||||||||||||||||||||||
| Deferred premium cap | March 31, 2025 | Active | Active | December 31, 2028 | ||||||||||||||||||||||||||||||||||
| Deferred premium cap | March 31, 2025 | Active | Active | December 31, 2028 | ||||||||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||||||||||
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company had three interest rate swaps designated in cash flow hedging relationships, which matured on March 31, 2025. Prior to maturity, the interest rate swaps had a total notional amount of $1.2 billion and were pay-fixed, received 1-Month SOFR (subject to a minimum of 0.75 %).
The Company had two interest rate caps designated in cash flow hedging relationships, which matured on March 31, 2025. Prior to maturity, the interest caps had a total notional amount of $151.8 million.
Effective March 31, 2025, the Company had five deferred premium interest rate cap agreements. The deferred premium interest rate caps are designated in cash flow hedging relationships with a total notional amount of $1.4 billion. These financial instruments are designed to limit the Company's interest rate exposure on its term loan concurrent with the positions that matured on March 31, 2025.
Prior to maturity, the pay-fixed, receive floating interest rate swaps did not meet the requirements to be considered derivatives in their entirety as a result of the financing component. Accordingly, the swaps were considered hybrid instruments, consisting of a financing element treated as a debt instrument and an embedded at-market derivative that was designated as a cash flow hedge. Within the Company’s condensed consolidated balance sheets, the financing elements treated as debt instruments were carried at amortized cost and the embedded at-market derivatives were recorded at fair value. The fair value was determined using pricing models that rely on market observable inputs such as yield curve data, which are classified as Level 2 inputs within the fair value hierarchy. The cash flows related to the portion treated as debt are classified as financing activities in the condensed consolidated statements of cash flows while the portions that were treated as an at-market derivative are classified as operating activities.
Within the Company’s condensed consolidated balance sheets, the interest rate caps are recorded at fair value. The cash flows related to the interest rate caps are classified as operating activities in the condensed consolidated statements of cash flows. The fair value of the interest rate caps is determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. The interest rate caps are classified using Level 2 inputs within the fair value hierarchy.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income ("OCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings, as documented at hedge inception in accordance with the Company’s accounting policy election. Amounts reported in accumulated OCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Over the next 12 months, the Company estimates that an additional $5.6 million will be reclassified as an increase to interest expense.
The following table presents the fair values of our derivatives and their location on the condensed consolidated balance sheets (in millions):
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||
| Derivatives in cash flow hedging relationships | ||||||||||||||||||||||||||
Interest rate caps (1) | $ | $ | — | $ | $ | — | ||||||||||||||||||||
Interest rate swaps (1) | — | — | ||||||||||||||||||||||||
Interest rate caps (2) | — | — | ||||||||||||||||||||||||
Interest rate swaps (3) (4) | — | — | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Amounts were included in other current assets on the condensed consolidated balance sheets as of December 31, 2024.
(2)Amounts were included in other long-term liabilities on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.
(3)Amounts were included in other current liabilities on the condensed consolidated balance sheets as of December 31, 2024.
(4)Amounts related to the financing component of the pay-fixed interest rate swaps.
The following table presents the pre-tax effect of the interest rate swaps and caps on the Company's accumulated OCI and condensed consolidated statements of operations (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| Location | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Derivatives in cash flow hedging relationships | |||||||||||||||||||||||||||||
| (Loss) gain recognized in OCI (effective portion) | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||
| Loss (gain) reclassified from accumulated OCI into income (effective portion) | Interest expense, net | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Earnings Per Share
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net loss attributable to Surgery Partners, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
Diluted (1) | ||||||||||||||||||||||||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||||||||||||
| Basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Dilutive securities outstanding not included in the computation of diluted loss per share as their effect is antidilutive: | ||||||||||||||||||||||||||
| Stock options | ||||||||||||||||||||||||||
| Restricted shares | ||||||||||||||||||||||||||
(1)The impact of potentially dilutive securities for all periods was not considered because the effect would be anti-dilutive.
7. Income Taxes
For the six months ended June 30, 2025, the Company calculated its effective tax rate under a discrete-period approach based solely on its income from operations for the six months ended June 30, 2025. The Company's effective tax rate was (2.5 )% for the six months ended June 30, 2025. For the six months ended June 30, 2025, the effective tax rate differed from the U.S. federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations, and a permanent difference between the book and tax gain on the divestiture of partnership interests.
For the six months ended June 30, 2024, the Company estimated its effective tax rate under the annual effective tax rate approach. The Company’s effective tax rate was 15.0 % for the six months ended June 30, 2024. For the six months ended June 30, 2024, the effective tax rate differed from the U.S. federal statutory rate of 21% primarily due to earnings attributable to non-controlling interests, an increase in the Company’s valuation allowance attributable to interest expense limitations, state tax expense, and a discrete tax expense of $0.6 million related to the vesting of restricted stock awards. Based upon the application of interim accounting guidance, the tax rate as a percentage of net income after income attributable to non-controlling interests will vary based upon the relative net income from period to period.
As of June 30, 2025 and December 31, 2024, the Company was in a cumulative three-year pre-tax loss position, which was considered significant negative evidence that could not be overcome by objective and verifiable positive evidence. Based on the weight of available evidence, the Company concluded that it was more likely than not that a portion of its net deferred tax assets will not be realized. Therefore, in accordance with ASC 740-10-30, the Company recorded a full valuation allowance, net of future reversing deferred tax liabilities, on its deferred tax assets to reflect the net realizable value as of the balance sheet dates.
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Other Current Liabilities
A summary of other current liabilities was as follows (in millions):
| June 30, 2025 | December 31, 2024 | |||||||||||||
| Right-of-use operating lease liabilities | $ | $ | ||||||||||||
| Cost report liabilities | ||||||||||||||
| Amounts due to patients and payors | ||||||||||||||
| Interest payable | ||||||||||||||
| Interest rate swaps | ||||||||||||||
| Accrued expenses and other | ||||||||||||||
| Total | $ | $ | ||||||||||||
9. Commitments and Contingencies
Professional, General and Workers' Compensation and Cyber Liability Risks
10. Segment Reporting
Segment information is prepared on the same basis that our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), manages our segments, evaluates financial results, and makes key operating decisions. We have one reportable segment: Surgical Facilities.
The Surgical Facilities reportable segment is comprised of two operating segments, which we have aggregated to a single reportable segment in consideration of the aggregation criteria set forth in ASC 280.
The Surgical Facilities reportable segment includes the operation of ASCs, surgical hospitals, anesthesia services, and multi-specialty physician practices, which earns revenues primarily from contracts with patients in which the performance obligations are to provide health care services. The "All other" line item primarily consists of amounts attributable to the Company's corporate general and administrative functions. The Company defines its segments on the basis of the way in which its internally reported financial information is regularly reviewed by the CODM to assess performance and allocate resources.
During the three and six months ended June 30, 2025, the operating segment previously defined as "Ancillary services" was included with Surgical Facilities based on changes in the operational management of our multi-specialty physician practices. Accordingly, the Company has recast segment disclosures previously reported to conform to current year presentation.
The Company’s CODM uses Adjusted EBITDA to assess performance and allocate resources. The CODM considers budget-to-actual and actual versus prior period variances on a periodic basis as a means of assessing performance. The following segment information, including significant segment expenses, is presented in millions:
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SURGERY PARTNERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Surgical Facilities Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Salaries and benefits | ||||||||||||||||||||||||||
Supplies | ||||||||||||||||||||||||||
Professional and medical fees | ||||||||||||||||||||||||||
| Lease expense | ||||||||||||||||||||||||||
Other segment items (1) | ||||||||||||||||||||||||||
| Adjusted Surgical Facilities EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
Reconciliation: | ||||||||||||||||||||||||||
| Add back: Net income attributable to non-controlling interests | ( | ( | ( | ( | ||||||||||||||||||||||
| Unallocated amounts: | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Transaction and integration costs | ||||||||||||||||||||||||||
| Other corporate expenses | ( | |||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Other segment items includes equity in earnings of unconsolidated affiliates, net income attributable to non-controlling interests and other expenses, net.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Depreciation and amortization: | ||||||||||||||||||||||||||
| Surgical Facilities | $ | $ | $ | $ | ||||||||||||||||||||||
| All other | ||||||||||||||||||||||||||
| Total depreciation and amortization expense | $ | $ | $ | $ | ||||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||
| Assets: | ||||||||||||||
Surgical Facilities | $ | $ | ||||||||||||
| All other | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash purchases of property and equipment: | ||||||||||||||
Surgical Facilities | $ | $ | ||||||||||||
| All other | ||||||||||||||
| Total cash purchases of property and equipment | $ | $ | ||||||||||||
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report and our 2024 Annual Report on Form 10-K. Unless the context otherwise indicates, the terms "Surgery Partners," "we," "us," "our" or the "Company," as used herein, refer to Surgery Partners, Inc. and its subsidiaries, and the term "affiliates" means direct and indirect subsidiaries of Surgery Partners, Inc. and partnerships and joint ventures in which such subsidiaries are partners. The terms "facilities" or "hospitals" refer to entities owned and operated by affiliates of Surgery Partners, Inc. and the term "employees" refers to employees of affiliates of Surgery Partners, Inc.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements, which are based on our current expectations, estimates and assumptions about future events. All statements other than statements of current or historical fact contained in this report are forward-looking statements. These statements include, but are not limited to, statements regarding our future financial position, business strategy, budgets, effective tax rate, projected costs and plans and objectives of management for future operations. The words "projections," "believe," "continue," "drive," "estimate," "expect," "intend," "may," "plan," "will," "could," "would" and similar expressions are generally intended to identify forward-looking statements.
By their nature, forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ from the expectations expressed in the statements. Many of these factors are beyond our ability to control or predict. These factors include, without limitation, reductions in payments from government health care programs and private insurance payors, such as health maintenance organizations, preferred provider organizations, and other managed care organizations and employers; our ability to contract with private insurance payors; changes in our payor mix or surgical case mix; failure to maintain or develop relationships with physicians on beneficial or favorable terms, or at all; the impact of payor controls designed to reduce the number of surgical procedures; our efforts to integrate operations of acquired businesses and surgical facilities, attract new physician partners, or acquire additional surgical facilities; supply chain issues, including shortages or quality control issues with surgery-related products, equipment and medical supplies; competition for physicians, nurses, strategic relationships, acquisitions and managed care contracts; our ability to attract and retain qualified health care professionals; our ability to enforce non-compete restrictions against our physicians; our ability to manage material liabilities whether known or unknown incurred as a result of acquiring surgical facilities; the impact of current and future legislation and other health care public policy changes, and the effect of that legislation and other regulatory actions on our business; our ability to comply with current health care laws and regulations; the outcome of legal and regulatory proceedings that have been or may be brought against us; the impact of cybersecurity attacks or intrusions; changes in the regulatory, economic and other conditions of the states where our surgical facilities are located; our indebtedness; the social and economic impact of a pandemic, epidemic or outbreak of a contagious disease on our business; and the risks and uncertainties set forth under the heading "Risk Factors" in our 2024 Annual Report on Form 10-K and discussed from time to time in our reports filed with the SEC.
Considering these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this report.
These forward-looking statements speak only as of the date made. Other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
Executive Overview
As of June 30, 2025, we owned or operated, primarily in partnership with physicians, a portfolio of 162 surgical facilities comprised of 143 ASCs and 19 surgical hospitals across 30 states. We owned a majority interest in 83 of the surgical facilities and consolidated 115 of these facilities for financial reporting purposes.
Total revenues for the second quarter of 2025 increased 8.3% to $826.2 million from $762.1 million for the second quarter of 2024. The increase in revenues was attributable to same-facility revenue growth and the net impact from acquisitions and divestitures completed during the last twelve months ended June 30, 2025. Days adjusted same-facility revenues for the second quarter of 2025 increased 5.1% from the second quarter of 2024, with a 1.6% increase in revenue per case and a 3.4% increase in same-facility cases. Additionally, for the second quarter of 2025, net loss attributable to Surgery Partners, Inc. was $2.5 million compared to $15.5 million for the 2024 period. For the second quarter of 2025, Adjusted EBITDA increased 9.0% to $129.0 million compared to $118.3 million for the same period in 2024. The increase in Adjusted EBITDA was primarily attributable to revenue growth, continued cost management initiatives and acquisitions completed since the prior year period. A reconciliation of non-GAAP financial measures appears below under the heading "Certain Non-GAAP Measures."
We continue to focus on improving our same-facility performance, selectively acquiring established facilities, developing new facilities and pursuing other portfolio management initiatives. During the second quarter of 2025, we acquired a controlling interest in four surgical facilities and two physician practice for aggregate cash consideration of $48.0 million, net of cash acquired.
We had cash and cash equivalents of $250.1 million and $394.9 million of borrowing capacity under the Revolver as of June 30, 2025.
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Recent Legislation
On July 4, 2025, Congress passed the One Big Beautiful Bill Act (the “OBBBA”), which introduced significant changes to federally funded healthcare programs, including Medicaid, Medicare, and the Affordable Care Act. While such changes are projected to reduce overall healthcare spending and increase regulatory burdens in certain jurisdictions in which the Company operates, they are not expected to materially impact the Company's financial statements.
The OBBBA also makes permanent key elements of the Tax Cuts and Jobs Act including, among others, 100% bonus depreciation and the business interest expense limitations. The Company is currently assessing the implications of these tax law changes. Since the OBBBA Act was enacted subsequent to the balance sheet date, the Company’s tax provision for the three and six months ended June 30, 2025, does not incorporate the effects of these tax law changes.
Revenues
Our revenues consist of patient service revenues and other service revenues. Patient service revenues consist of revenue from our Surgical Facilities reportable segment. Specifically, patient service revenues include fees for surgical or diagnostic procedures performed at surgical facilities that we consolidate for financial reporting purposes, as well as for patient visits to our physician practices, anesthesia services, pharmacy services and diagnostic screens ordered by our physicians. Other service revenues include management and administrative service fees derived from our non-consolidated facilities that we account for under the equity method, management of surgical facilities and physician practices in which we do not own an interest, management services we provide to physician practices for which we are not required to provide capital or additional assets and other non-patient services.
The following table summarizes revenues by service type as a percentage of total revenues:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Patient service revenues: | ||||||||||||||||||||||||||
Patient service revenues | 97.3 | % | 98.1 | % | 97.5 | % | 98.3 | % | ||||||||||||||||||
| Other service revenues | 2.7 | % | 1.9 | % | 2.5 | % | 1.7 | % | ||||||||||||||||||
| Total revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||
Payor Mix
The following table sets forth by type of payor the percentage of our patient service revenues generated at the surgical facilities that we consolidate for financial reporting purposes:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Private insurance payors | 51.8 | % | 53.2 | % | 52.6 | % | 52.2 | % | ||||||||||||||||||
| Government payors | 43.3 | % | 41.5 | % | 42.5 | % | 42.2 | % | ||||||||||||||||||
| Self-pay payors | 2.7 | % | 2.8 | % | 2.7 | % | 2.8 | % | ||||||||||||||||||
Other payors (1) | 2.2 | % | 2.5 | % | 2.2 | % | 2.8 | % | ||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||
(1)Comprised of automobile liability, letters of protection and other payor types.
Surgical Case Mix
We primarily operate multi-specialty surgical facilities where physicians perform a variety of procedures in various specialties. We believe this diversification helps to protect us from adverse pricing and utilization trends in any individual procedure type and results in greater consistency in our case volume.
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The following table sets forth the percentage of cases in each specialty performed at the surgical facilities that we consolidate for financial reporting purposes for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Orthopedics and pain management | 39.8 | % | 39.9 | % | 40.2 | % | 40.0 | % | ||||||||||||||||||
| Ophthalmology | 22.2 | % | 23.4 | % | 22.1 | % | 23.4 | % | ||||||||||||||||||
| Gastrointestinal | 24.8 | % | 22.6 | % | 24.6 | % | 22.3 | % | ||||||||||||||||||
| General surgery | 1.8 | % | 2.3 | % | 2.0 | % | 2.3 | % | ||||||||||||||||||
| Other | 11.4 | % | 11.8 | % | 11.1 | % | 12.0 | % | ||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||
Critical Accounting Policies
A summary of significant accounting policies is disclosed in our 2024 Annual Report on Form 10-K under the caption “Critical Accounting Policies” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes in the nature of our critical accounting policies or the application of those policies since December 31, 2024.
Results of Operations
Comparison of Operating Results for the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024
The following tables summarize certain results from the condensed consolidated statements of operations for the periods indicated (in millions):
| Three Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Revenues | $ | 826.2 | $ | 762.1 | ||||||||||
| Operating expenses: | ||||||||||||||
| Cost of revenues | 630.6 | 582.9 | ||||||||||||
| General and administrative expenses | 36.1 | 40.3 | ||||||||||||
| Depreciation and amortization | 40.3 | 34.8 | ||||||||||||
| Transaction and integration costs | 18.1 | 19.3 | ||||||||||||
| Net (gain) loss on disposals, consolidations and deconsolidations | (3.0) | 5.3 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | (5.5) | (4.4) | ||||||||||||
| Litigation settlements | — | 0.5 | ||||||||||||
| Loss on debt extinguishment | — | 5.1 | ||||||||||||
| Other income, net | (2.1) | (6.5) | ||||||||||||
| 714.5 | 677.3 | |||||||||||||
| Operating income | 111.7 | 84.8 | ||||||||||||
| Interest expense, net | (67.9) | (51.5) | ||||||||||||
| Income before income taxes | 43.8 | 33.3 | ||||||||||||
| Income tax benefit (expense) | 1.1 | (4.9) | ||||||||||||
| Net income | 44.9 | 28.4 | ||||||||||||
| Less: Net income attributable to non-controlling interests | (47.4) | (43.9) | ||||||||||||
| Net loss attributable to Surgery Partners, Inc. | $ | (2.5) | $ | (15.5) | ||||||||||
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Revenues. The following table sets forth patient service revenues (in millions):
| Three Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Patient service revenues | $ | 804.2 | $ | 748.1 | ||||||||||
| Other service revenues | 22.0 | 14.0 | ||||||||||||
| Total revenues | $ | 826.2 | $ | 762.1 | ||||||||||
Patient service revenues increased 7.5% to $804.2 million for the three months ended June 30, 2025 compared to $748.1 million for the three months ended June 30, 2024. The increase was primarily driven by a 5.1% increase in days adjusted same-facility revenues and the net impact from acquisitions and divestitures completed during the twelve months ended June 30, 2025. The increase in days adjusted same-facility revenues was attributable to a 3.4% increase in same-facility case volumes and a 1.6% increase in same-facility revenue per case.
Cost of Revenues. Cost of revenues was $630.6 million for the three months ended June 30, 2025 compared to $582.9 million for the three months ended June 30, 2024. The increase was primarily driven by an increase in case volume and the performance of high acuity procedures as well as acquisitions completed during the twelve months ended June 30, 2025. As a percentage of revenues, cost of revenues was 76.3% and 76.5% for the three months ended June 30, 2025 and 2024, respectively.
General and Administrative Expenses. General and administrative expenses were $36.1 million and $40.3 million for the three months ended June 30, 2025 and 2024, respectively. As a percentage of revenues, general and administrative expenses were 4.4% and 5.3% for the three months ended June 30, 2025 and 2024, respectively.
Depreciation and Amortization. Depreciation and amortization expenses were $40.3 million and $34.8 million for the three months ended June 30, 2025 and 2024, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.9% and 4.6% for the three months ended June 30, 2025 and 2024, respectively.
Transaction and Integration Costs. The Company incurred $18.1 million of transaction and integration costs for the three months ended June 30, 2025 compared to $19.3 million for the three months ended June 30, 2024. The costs for both periods primarily related to ongoing development initiatives and the integration of acquisitions. The decrease was primarily driven by reduced transaction and integration costs related to acquisitions and divested facilities, partially offset by an increase in severance, IT implementation, and revenue cycle standardization costs.
Net (Gain) Loss on Disposals, Consolidations and Deconsolidations. The net loss on disposals, consolidations and deconsolidations for the three months ended June 30, 2025 and 2024 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements. The remaining net loss in both periods was primarily attributable to sales and disposals of other assets.
Interest Expense, Net. Interest expense, net was $67.9 million for the three months ended June 30, 2025 compared to $51.5 million for the three months ended June 30, 2024. As a percentage of revenues, interest expense, net was 8.2% and 6.8% for the three months ended June 30, 2025 and 2024, respectively. The increase was primarily driven by financing activities in 2024 related to the senior unsecured notes, increased borrowings on the Revolver and the maturity of certain interest rate swaps in the first quarter of 2025.
Income Tax Benefit (Expense). Income tax benefit was $1.1 million for the three months ended June 30, 2025 compared to income tax expense of $4.9 million for the three months ended June 30, 2024. The effective tax rate was (2.5)% and 14.7% for the three months ended June 30, 2025 and 2024, respectively. See Note 7. "Income Taxes" for additional information related to the Company's effective tax rates for the three months ended June 30, 2025 and 2024, including why these rates differed from the U.S. federal statutory rate of 21%.
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 5.7% and 5.8% for the three months ended June 30, 2025 and 2024, respectively.
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Comparison of Operating Results for the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024
The following tables summarize certain results from the statements of operations for the periods indicated (dollars in millions):
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Revenues | $ | 1,602.2 | $ | 1,479.5 | ||||||||||
| Operating expenses: | ||||||||||||||
| Cost of revenues | 1,244.7 | 1,145.0 | ||||||||||||
| General and administrative expenses | 72.1 | 73.5 | ||||||||||||
| Depreciation and amortization | 76.6 | 68.5 | ||||||||||||
| Transaction and integration costs | 42.8 | 36.7 | ||||||||||||
| Net loss on disposals, consolidations and deconsolidations | 3.4 | 6.8 | ||||||||||||
| Equity in earnings of unconsolidated affiliates | (11.1) | (7.1) | ||||||||||||
| Litigation settlements | 2.2 | (1.3) | ||||||||||||
| Loss on debt extinguishment | — | 5.1 | ||||||||||||
| Other income, net | (2.1) | (8.5) | ||||||||||||
| 1,428.6 | 1,318.7 | |||||||||||||
| Operating income | 173.6 | 160.8 | ||||||||||||
| Interest expense, net | (130.1) | (98.8) | ||||||||||||
| Income before income taxes | 43.5 | 62.0 | ||||||||||||
| Income tax benefit (expense) | 1.1 | (9.3) | ||||||||||||
| Net income | 44.6 | 52.7 | ||||||||||||
| Less: Net income attributable to non-controlling interests | (84.8) | (80.6) | ||||||||||||
| Net loss attributable to Surgery Partners, Inc. | $ | (40.2) | $ | (27.9) | ||||||||||
Revenues. The following table sets forth patient service revenues (in millions):
| Six Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Patient service revenues | $ | 1,562.6 | $ | 1,453.4 | ||||||||||
| Other service revenues | 39.6 | 26.1 | ||||||||||||
| Total revenues | $ | 1,602.2 | $ | 1,479.5 | ||||||||||
Patient service revenues increased 7.5% to $1.6 billion for the six months ended June 30, 2025 compared to $1.5 billion for the six months ended June 30, 2024. The increase was primarily driven by an 5.1% increase in days adjusted same-facility revenues and the net impact from acquisitions and divestitures completed during the twelve months ended June 30, 2025. The increase in days adjusted same-facility revenues was attributable to a 4.7% increase in same-facility case volumes and a 0.4% increase in same-facility revenue per case.
Cost of Revenues. Cost of revenues was $1.2 billion for the six months ended June 30, 2025 compared to $1.1 billion for the six months ended June 30, 2024. The increase was primarily driven by an increase in case volume and the performance of high acuity procedures as well as acquisitions completed during the twelve months ended June 30, 2025. As a percentage of revenues, cost of revenues was 77.7% and 77.4% for the six months ended June 30, 2025 and 2024, respectively.
General and Administrative Expenses. General and administrative expenses were $72.1 million and $73.5 million for the six months ended June 30, 2025 and 2024, respectively. As a percentage of revenues, general and administrative expenses were 4.5% and 5.0% for the six months ended June 30, 2025 and 2024, respectively.
Depreciation and Amortization. Depreciation and amortization expenses were $76.6 million and $68.5 million for the six months ended June 30, 2025 and 2024, respectively. As a percentage of revenues, depreciation and amortization expenses were 4.8% and 4.6% for the six months ended June 30, 2025 and 2024, respectively.
Transaction and Integration Costs. The Company incurred $42.8 million of transaction and integration costs for the six months ended June 30, 2025 compared to $36.7 million for the six months ended June 30, 2024. The costs for both periods primarily related to ongoing development initiatives and the integration of acquisitions. The increase was primarily driven by an increase in severance, IT implementation, and revenue cycle standardization costs, partially offset by reduced transaction and integration costs related to acquisitions and divested facilities.
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Net Loss on Disposals, Consolidations and Deconsolidations. The net loss on disposals, consolidations and deconsolidations for the six months ended June 30, 2025 and 2024 includes activity discussed in Note 2. "Acquisitions, Disposals and Deconsolidations" of the accompanying notes to the condensed consolidated financial statements. The remaining net loss in both periods was primarily attributable to sales and disposals of other assets.
Interest Expense, Net. Interest expense, net was $130.1 million for the six months ended June 30, 2025 compared to $98.8 million for the six months ended June 30, 2024. As a percentage of revenues, interest expense, net was 8.1% and 6.7% for the six months ended June 30, 2025 and 2024, respectively. The increase was primarily driven by financing activities in 2024 related to the senior unsecured notes and increased borrowings on the Revolver.
Income Tax Benefit (Expense). Income tax benefit was $1.1 million for the six months ended June 30, 2025 compared to income tax expense of $9.3 million for the six months ended June 30, 2024. The effective tax rate was (2.5)% and 15.0% for the six months ended June 30, 2025 and 2024, respectively. See Note 7. "Income Taxes" for additional information related to the Company's effective tax rates for the six months ended June 30, 2025 and 2024, including why these rates differed from the U.S. federal statutory rate of 21%.
Net Income Attributable to Non-Controlling Interests. As a percentage of revenues, net income attributable to non-controlling interests was 5.3% and 5.4% for the six months ended June 30, 2025 and 2024, respectively.
Liquidity and Capital Resources
Cash and cash equivalents were $250.1 million at June 30, 2025 compared to $269.5 million at December 31, 2024.
The primary source of our operating cash flows is the collection of accounts receivable from private insurance companies, federal and state agencies (under the Medicare and Medicaid programs) and individuals. Our cash flows provided by operating activities was $87.3 million for the six months ended June 30, 2025 compared to $123.5 million for the six months ended June 30, 2024. The $36.2 million decrease was primarily driven by driven by higher cash interest payments and timing of changes in working capital.
Net cash used in investing activities for the six months ended June 30, 2025 was $74.3 million compared to $327.2 million for the six months ended June 30, 2024. The $252.9 million decrease was primarily driven by an aggregate net decrease of $214.5 million in payments for acquisitions (net of cash acquired) and purchases of equity method investments and a $41.4 million increase in proceeds from sales of facilities.
Net cash used in financing activities for the six months ended June 30, 2025 was $32.4 million compared to net cash provided of $221.3 million for the six months ended June 30, 2024. The decrease of $253.7 million was primarily driven by net proceeds from borrowings on long-term debt during the six months ended June 30, 2024 and a $35.6 million increase in distributions to non-controlling interest holders in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Capital Resources
Net working capital was approximately $532.0 million at June 30, 2025 compared to $495.0 million at December 31, 2024.
In addition to cash flows from operations and available cash, other sources of capital include amounts available on our Revolver as well as anticipated continued access to the capital markets.
Material Cash Requirements
There have been no material changes outside of the ordinary course of business to our upcoming cash obligations during the six months ended June 30, 2025 from those disclosed under “Material Cash Requirements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K.
Summary
Broad economic factors, including recent changes in interest rates, inflation and supply chain risks and market volatility, could negatively affect our payor mix, increase the relative proportion of lower margin services we provide and reduce patient volumes, as well as diminish our ability to collect outstanding receivables. Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our cash flows and results of operations, requiring an increased level of working capital.
If general economic conditions, including recent changes in interest rates, inflation risk and market volatility, continue to deteriorate or remain uncertain for an extended period of time, our ability to access capital could be harmed, which could negatively affect our liquidity and ability to repay our outstanding debt.
Based on our current level of operations, we believe cash flows from operations, available cash, available capacity on our Revolver and continued anticipated access to capital markets, will be adequate to meet our short-term (i.e., 12 months) and long-term (beyond 12 months) liquidity needs.
Certain Non-GAAP Measures
Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as a substitute for net income, operating income or any other measure calculated in accordance with GAAP. The items excluded from this non-
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GAAP metric are significant components in understanding and evaluating our financial performance. We believe such adjustments are appropriate, as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We use Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by our management to assess operating performance, make business decisions and allocate resources.
The following table reconciles Adjusted EBITDA to income before income taxes, the most directly comparable GAAP financial measure (in millions and unaudited):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
Condensed Consolidated Statements of Operations Data: | ||||||||||||||||||||||||||
| Income before income taxes | $ | 43.8 | $ | 33.3 | $ | 43.5 | $ | 62.0 | ||||||||||||||||||
| Plus (minus): | ||||||||||||||||||||||||||
| Net income attributable to non-controlling interests | (47.4) | (43.9) | (84.8) | (80.6) | ||||||||||||||||||||||
| Interest expense, net | 67.9 | 51.5 | 130.1 | 98.8 | ||||||||||||||||||||||
| Depreciation and amortization | 40.3 | 34.8 | 76.6 | 68.5 | ||||||||||||||||||||||
| Equity-based compensation expense | 6.8 | 15.1 | 14.4 | 20.0 | ||||||||||||||||||||||
Transaction and integration costs (1) | 18.1 | 19.3 | 42.8 | 36.7 | ||||||||||||||||||||||
| De novo start-up costs | 2.1 | 1.5 | 3.7 | 3.0 | ||||||||||||||||||||||
| Net loss on disposals, consolidations and deconsolidations | (3.0) | 5.3 | 3.4 | 6.8 | ||||||||||||||||||||||
Litigation settlements and other litigation costs (2) | 0.4 | 1.1 | 3.2 | (0.1) | ||||||||||||||||||||||
| Loss on debt extinguishment | — | 5.1 | — | 5.1 | ||||||||||||||||||||||
| Other | — | (4.8) | — | (4.4) | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 129.0 | $ | 118.3 | 232.9 | 215.8 | ||||||||||||||||||||
(1)For the three months ended June 30, 2025, this amount includes due diligence, transaction and integration costs related to acquisitions (both completed and in the pipeline) and divested facilities (collectively “M&A costs”) of $14.1 million and other costs, including severance, IT implementation, revenue cycle standardization of $4.0 million For the three months ended June 30, 2024, this amount includes M&A costs of $16.2 million and other costs, including severance, IT implementation, revenue cycle standardization of $3.1 million.
For the six months ended June 30, 2025, this amount includes M&A costs of $30.9 million and other costs, including severance, IT implementation, revenue cycle standardization of $11.9 million For the six months ended June 30, 2024, this amount includes M&A costs of $32.1 million and other costs, including severance, IT implementation, revenue cycle standardization of $4.6 million.
(2)This amount includes a litigation settlement loss of $0.5 million for the three months ended June 30, 2024. This amount also includes other litigation costs of $0.4 million and $0.6 million for the three months ended June 30, 2025 and 2024, respectively.
This amount includes a litigation settlement loss of $2.2 million and a gain of $1.3 million for the six months ended June 30, 2025 and 2024, respectively. This amount also includes other litigation costs of $1.0 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.
We use Credit Agreement EBITDA as a measure of liquidity and to determine our compliance under certain covenants pursuant to our Credit Agreement, as amended. Credit Agreement EBITDA is determined on a trailing twelve-month basis. We have included it because we believe that it provides investors with additional information about our ability to incur and service debt and make capital expenditures. Credit Agreement EBITDA is not a measurement of liquidity under GAAP and should not be considered in isolation or as a substitute for any other measure calculated in accordance with GAAP. The items excluded from Credit Agreement EBITDA are significant components in understanding and evaluating our liquidity. Our calculation of Credit Agreement EBITDA may not be comparable to similarly titled measures reported by other companies.
When we use the term "Credit Agreement EBITDA," we are referring to Adjusted EBITDA, as defined above, further adjusted for acquisitions and synergies. These adjustments do not relate to our historical financial performance and instead relate to estimates compiled by management and calculated in conformance with the definition of "Consolidated EBITDA" used in the credit agreements governing our credit facilities.
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The following table reconciles Credit Agreement EBITDA to cash flows from operating activities, the most directly comparable GAAP financial measure (in millions and unaudited):
| Twelve Months Ended June 30, 2025 | ||||||||
| Cash flows from operating activities | $ | 263.9 | ||||||
| Plus (minus): | ||||||||
| Non-cash interest expense, net | (7.4) | |||||||
| Non-cash lease expense | (39.7) | |||||||
| Deferred income taxes | (122.1) | |||||||
| Equity in earnings of unconsolidated affiliates, net of distributions received | 2.0 | |||||||
| Changes in operating assets and liabilities, net of acquisitions and divestitures | 133.3 | |||||||
| Income tax expense | 124.2 | |||||||
| Net income attributable to non-controlling interests | (184.8) | |||||||
| Interest expense, net | 233.0 | |||||||
| Transaction and integration costs | 106.2 | |||||||
| De novo start-up costs | 8.6 | |||||||
| Litigation settlements and other litigation costs | 6.4 | |||||||
| Other | 1.7 | |||||||
Acquisitions and synergies (1) | 53.7 | |||||||
| Credit Agreement EBITDA | $ | 579.0 | ||||||
(1)Represents impact of acquisitions as if each acquisition had occurred on July 1, 2024. Further this includes revenue and cost synergies from other business initiatives and de novo facilities and an adjustment for the effects of adopting the new lease accounting standard, as defined in the credit agreement governing the Credit Agreement, as amended.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to market risk primarily from exposure to changes in interest rates based on our financing, investing and cash management activities. We utilize a balanced mix of maturities along with both fixed rate and variable rate debt to manage our exposures to changes in interest rates. Additionally, we periodically enter into interest rate swap and cap agreements to manage our exposure to interest rate fluctuations. Our interest rate swap and cap agreements involve the exchange of fixed and variable rate interest payments between two parties, based on common notional principal amounts and maturity dates. The notional amounts of the agreements represent balances used to calculate the exchange of cash flows and are not our assets or liabilities. Our credit risk related to these agreements is considered low because the agreements are with creditworthy financial institutions. The interest payments under these agreements are settled on a net basis. These derivatives have been recognized in the financial statements at their respective fair values. Changes in the fair value of these derivatives, which are designated as cash flow hedges, are included in other comprehensive income.
Our variable rate debt instruments are primarily indexed to the prime rate or SOFR. Without derivatives, interest rate changes would result in gains or losses in the market value of our fixed rate debt portfolio due to differences in market interest rates and the rates at the inception of the debt agreements. Based on our indebtedness and the effectiveness of our interest rate cap agreements at June 30, 2025, we do not expect changes in interest rates to have a material effect on our net earnings or cash flows in 2025.
For more information regarding our interest rate swap and cap agreements, please refer to Note 5. "Derivatives and Hedging Activities" of the accompanying notes to the condensed consolidated financial statements for additional information.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including the chief executive officer and the chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of June 30, 2025. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, subject to claims and suits, or threats of claims or suits, relating to our business, including claims for damages for personal injuries, breach of management contracts and employment related claims. In certain of these actions, plaintiffs request payment for damages, including punitive damages, which may not be covered by insurance or may otherwise have a material adverse effect on our business or results of operations. In the opinion of management, we are not currently a party to any proceedings that would have a material adverse effect on our business, financial condition, or results of operations.
Item 1A. Risk Factors
There have been no material changes with respect to the risk factors discussed in our 2024 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
From time to time, certain of our executive officers and directors have, and we expect they will in the future, enter into, amend and terminate written trading arrangements pursuant to Rule 10b5-1 of the Securities and Exchange Act of 1934 or otherwise. During the three months ended June 30, 2025, none of the Company’s directors or officers adopted terminated
Item 6. Exhibits
| No. | Description | |||||||
| 10 | Surgery Partners, Inc. 2025 Omnibus Incentive Plan (incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed April 24, 2025). | |||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Taxonomy Extension Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL (included in Exhibit 101). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SURGERY PARTNERS, INC. | |||||||||||
Date: | August 5, 2025 | By: | /s/ David T. Doherty | ||||||||
| David T. Doherty | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
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FAQ
How much cash does Ivanhoe Electric (IE) have after Q2 2025?
IE reported US$88.1 million in cash and cash equivalents as of June 30 2025.
What are the key economics of the Santa Cruz Copper Project PFS?
The PFS shows NPV8 US$1.4 billion, IRR 20%, 1.4 Mt copper cathode over 23 years and initial capex US$1.24 billion.
Did Ivanhoe Electric reduce its quarterly loss in Q2 2025?
Yes. Net loss attributable to common shareholders fell to US$23.9 million from US$46.8 million in Q2 2024.
What is the status of the Alacr谩n Copper Project sale?
Cordoba agreed to sell its remaining 50 % interest to JCHX for up to US$128 million, pending EIA approval and shareholder vote.
Why did accounts receivable decline sharply?
VRB received the first US$10 million tranche from Red Sun for the VRB China sale; the second US$10 million is now due by Oct 31 2025.
How long can current cash fund operations?
Management estimates the cash runway is at least 12 months; a construction decision at Santa Cruz would accelerate funding needs.
Surgery Partners Inc
NASDAQ:SGRY
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Medical Care Facilities
Services-general Medical & Surgical Hospitals, Nec
United States
BRENTWOOD