In August 2025, Surgery Partners released its Second Quarter (Q2) 2025 earnings, highlighting continued growth in case volumes, a shift toward higher-acuity procedures, and ongoing network expansion. This report examines the company’s operational performance, strategic initiatives, and full-year outlook through the lens of Pinnacle Healthcare Consulting.
Key Q2 Financial Metrics
Surgery Partners posted year-over-year revenue and EBITDA growth, supported by same-facility volume gains, a favorable case mix, and strength in musculoskeletal and orthopedic procedures. Growth in higher-acuity surgeries, particularly joint replacements, contributed to margin expansion.
- Revenue: $826 million (+8.4%)[1]
- EBITDA: $129 million (+9.0%)
Segment & Service Line Performance
Surgery Partners reported higher surgical case volumes across its network, with same-facility revenues and cases both increasing. Orthopedics and GI remained growth drivers, with total joint procedures up sharply year-over-year. The company noted that 80% of its facilities can now perform higher-acuity surgeries, positioning it to capture additional market share.
Investments in technology and recruitment further supported growth. Surgery Partners deployed 69 surgical robots and added 300 new physicians, with a strong tilt toward orthopedics. Expansion continued through eight new facilities since 2024, part of a broader de novo pipeline that now includes 10 projects under construction, most focused on higher-acuity specialties.
M&A activity is expected to total about $200 million for the year, with integration costs trending lower than in 2024.
Volume Trends
- Same-Facility Revenue: +5.1%
- Same-Facility Cases: +3.4%
- Total Surgical Cases: +3.8%
Regulatory Environment & Strategic Positioning
Surgery Partners reported a stable regulatory backdrop in Q2 2025, with no pricing impact from tariffs and no supply chain risks. The company’s exposure to Medicare remains limited at roughly 5% of revenue, minimizing the impact of proposed changes under the Big Beautiful Bill (BBB).
For 2026, the CMS proposed outpatient rate update that would affect Surgery Partners stands at 2.4%, with adjustments varying by specialty. Notably, the agency proposed adding 76 procedures and removing 271 from the inpatient-only list, a shift expected to drive more surgical cases into outpatient settings, a trend aligned with the company’s growth strategy.
On the strategic front, the previously announced acquisition proposal from Bain Capital did not move forward. Management emphasized that remaining a publicly traded company supports long-term value creation, citing the company’s strong positioning in the $40 billion short-stay surgical market and its preference among physicians, patients, and payors.
From Pinnacle’s perspective, Surgery Partners is well-positioned for growth due to its expanding capacity, strong foothold in high-acuity outpatient specialties, and favorable regulatory trends. The company’s investment enhances its ability to capture market share and boost revenue per case. However, these same growth drivers carry risks. High-acuity concentration can lead to sharper volume fluctuations, ongoing recruitment and technology integration require sustained capital, and reliance on acquisitions introduces execution challenges. Even with minimal Medicare exposure, changes in commercial or state reimbursements could still pressure margins, making operational efficiency key to sustaining valuation momentum.
Full Year Outlook
Surgery Partners projects revenue of $3.3-3.5 billion and adjusted EBITDA of $555-565 million, expecting results toward the lower end of the range due to M&A timing. Growth will continue to be driven by high-acuity procedures, network expansion, and operational efficiencies.
Surgery Partners closed Q2 with strong liquidity, including $250 million in cash and nearly $395 million in revolver capacity. While the proposed Bain Capital acquisition did not move forward, management emphasized confidence in the company’s ability to create shareholder value as a public company, citing its positioning in the $40 billion short-stay surgical market. With minimal exposure to Medicare and a favorable regulatory outlook, Surgery Partners remains focused on physician alignment, patient preference, and expanding its footprint in higher-acuity outpatient care.
Pinnacle believes the company’s strong liquidity, focus on high-acuity outpatient care, and minimal regulatory risk set it up well for continued valuation growth. The main drivers will be maintaining efficiency as the network expands, scaling physician partnerships, and ensuring new facilities ramp quickly. Over time, a larger share of complex surgeries in outpatient settings will strengthen both margins and investor confidence.
[1] All percent changes represent Year-Over-Year growth unless otherwise noted
