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Select Medical Q1 2025 Earnings Report
Select Medical Holdings Corporation reported a decrease in net income and Adjusted EBITDA, despite an increase in total revenue, primarily due to a decrease in revenue within the Critical Illness Recovery Hospital segment and higher labor costs in Outpatient Rehabilitation.
Key Takeaways
Select Medical Holdings Corporation experienced a mixed financial performance in Q1 2025. While total revenue increased to $1,353,172,000, net income attributable to common stockholders decreased to $56,681,000 from $96,897,000 in the prior year. Adjusted EBITDA also saw a decline, primarily driven by lower revenue in the Critical Illness Recovery Hospital segment and increased labor costs in Outpatient Rehabilitation, partially offset by strong performance in the Rehabilitation Hospital segment.
Total revenue increased by 2.4% to $1,353,172,000 in Q1 2025 compared to $1,321,211,000 in Q1 2024.
Net income attributable to Select Medical Holdings Corporation's common stockholders decreased to $56,681,000 in Q1 2025 from $96,897,000 in Q1 2024.
Adjusted EBITDA decreased by 8.6% to $151,445,000 in Q1 2025 from $165,775,000 in Q1 2024.
The Critical Illness Recovery Hospital segment experienced a revenue decrease of 2.9% and a significant Adjusted EBITDA decrease of 25.3%.
Revenue by Segment
Forward Guidance
The company expects to continue to face challenges from changes in government reimbursement policies, inflationary pressures, and labor shortages. However, it aims to mitigate these by expanding services, pursuing acquisitions, and leveraging existing referral relationships.
Positive Outlook
- Continued expansion of services and potential for new joint venture relationships.
- Ability to grow through opportunistic acquisitions.
- Leveraging existing referral relationships and brand awareness to produce incremental growth.
- Extension of certain telehealth waivers through December 31, 2025, providing continued flexibility.
- The company's interest rate cap contract limits exposure to increases in variable interest rates.
Challenges Ahead
- Changes in government reimbursement for services and new payment policies may reduce revenue and profitability.
- Adverse economic conditions, including inflation, could increase labor and other operating costs.
- Shortages in qualified healthcare professionals could limit the ability to staff facilities and increase operating costs.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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