Tickers

1. Composite Trajectory Verdict

Given SGRY's capital-intensive, high-leverage surgical-facility model, all three statements carry weight: the income statement shows whether core operations generate surplus, the cash flow statement reveals if that surplus survives debt service and capex, and the balance sheet tracks the resulting leverage and liquidity position.

Composite Trajectory: Mixed

Annual results show revenue and operating income growth (FY2025 revenue $3,308.7M vs $3,114.3M FY2024; operating income $389.5M vs $348.8M) but net loss attributable to Surgery Partners remains substantial (-$77.9M FY2025 vs -$168.1M FY2024). Quarterly trends diverge: Q2 2026 revenue rose 2.7% YoY to $848.9M, yet operating income fell 8.6% to $102.1M and net loss attributable widened to -$15.0M from -$2.5M. Cash from operations declined both annually (FY2025 $274.3M vs FY2024 $300.1M) and year-to-date (six months ended June 2026 $71.0M vs $87.3M). The balance sheet shows rising debt (total debt $3,751.2M at June 30, 2026 vs $3,702.2M at Dec 31, 2025) and declining cash ($216.7M vs $239.9M) and equity ($1,670.7M vs $1,712.9M). Thus, top-line and operating-income trends are improving annually but deteriorating in the most recent quarter, while cash generation and balance-sheet metrics are consistently deteriorating.

2. Red Flags

• Net loss attributable to Surgery Partners persists despite positive consolidated net income ($98.9M FY2025) due to large non-controlling interest allocations ($176.8M FY2025) (10-K 2025-12-31, Consolidated Statements of Operations).
• Interest expense surged 35% YoY to $272.6M in FY2025 (from $201.7M FY2024), consuming 8.2% of revenue (10-K 2025-12-31, MD&A Results of Operations).
• Operating cash flow declined 8.6% in FY2025 to $274.3M and fell 18.6% in the first six months of 2026 to $71.0M (10-K 2025-12-31, Consolidated Statements of Cash Flows; 10-Q 2026-06-30, Condensed Consolidated Statements of Cash Flows).
• Cash balance dropped 9.7% in six months to $216.7M at June 30, 2026 (10-Q 2026-06-30, Condensed Consolidated Balance Sheets).
• Total debt increased to $3,751.2M at June 30, 2026 from $3,702.2M at Dec 31, 2025 while Adjusted EBITDA (non-GAAP) was $526.2M for FY2025 (10-Q 2026-06-30, Note 3; 10-K 2025-12-31, Certain Non-GAAP Measures).
• Valuation allowance on deferred tax assets grew to $317.9M at Dec 31, 2025 from $284.7M at Dec 31, 2024 (10-K 2025-12-31, Critical Accounting Policies – Income Taxes).
• Transaction and integration costs recur annually ($73.9M FY2025, $100.1M FY2024, $61.7M FY2023) and quarterly ($18.4M Q2 2026, $18.1M Q2 2025) (10-K 2025-12-31, Certain Non-GAAP Measures; 10-Q 2026-06-30, Certain Non-GAAP Measures).
• Net loss on disposals, consolidations and deconsolidations recorded in each of the last three years ($30.4M FY2025, $40.6M FY2024, $14.4M FY2023) (10-K 2025-12-31, Consolidated Statements of Operations).

3. Earnings Assessment (Income Statement)

Earnings Trajectory: Mixed

Annual revenue grew 6.2% to $3,308.7M in FY2025 (10-K 2025-12-31, Consolidated Statements of Operations). Operating income rose 11.7% to $389.5M. However, net loss attributable to Surgery Partners was -$77.9M in FY2025, improved from -$168.1M in FY2024 but worse than -$11.9M in FY2023. Interest expense jumped to $272.6M in FY2025 from $201.7M in FY2024. Quarterly, Q2 2026 revenue increased 2.7% to $848.9M but operating income fell 8.6% to $102.1M and net loss attributable widened to -$15.0M from -$2.5M in Q2 2025 (10-Q 2026-06-30, Condensed Consolidated Statements of Operations). Year-to-date June 2026 net loss attributable was -$50.9M vs -$40.2M in the prior year. Cost of revenues as a percentage of revenue ticked up to 76.9% in FY2025 from 76.1% in FY2024 and reached 77.6% in Q2 2026 (10-K 2025-12-31, MD&A; 10-Q 2026-06-30, MD&A).

4. Cash Generation Assessment (Statement of Cash Flows)

Cash Trajectory: Deteriorating

Cash provided by operating activities declined annually to $274.3M in FY2025 from $300.1M in FY2024 and $293.8M in FY2023 (10-K 2025-12-31, Consolidated Statements of Cash Flows). For the six months ended June 30, 2026, operating cash flow was $71.0M versus $87.3M in the same period 2025, an 18.6% drop (10-Q 2026-06-30, Condensed Consolidated Statements of Cash Flows). Capital expenditures were $78.7M in FY2025 and $37.8M in the first half of 2026 (10-K 2025-12-31, Supplemental Information; 10-Q 2026-06-30, Condensed Consolidated Statements of Cash Flows). Free cash flow (operating cash flow less capex) therefore fell both annually and quarterly. Financing cash flows turned negative in FY2025 (-$57.3M) and in H1 2026 (-$61.0M) after positive $262.0M in FY2024, driven by lower debt issuance and higher distributions to non-controlling interests (10-K 2025-12-31, MD&A Liquidity; 10-Q 2026-06-30, Condensed Consolidated Statements of Cash Flows).

5. Balance Sheet Assessment

Balance Sheet Trajectory: Deteriorating

Total assets dipped slightly to $8,049.7M at June 30, 2026 from $8,119.7M at Dec 31, 2025 (10-Q 2026-06-30, Condensed Consolidated Balance Sheets). Cash and cash equivalents fell to $216.7M from $239.9M over the same period. Long-term debt (less current maturities) rose to $3,648.3M from $3,602.9M; total debt including current maturities increased to $3,751.2M from $3,702.2M (10-Q 2026-06-30, Note 3). Surgery Partners' stockholders' equity declined to $1,670.7M from $1,712.9M, with the retained deficit deepening to -$866.1M from -$815.2M (10-Q 2026-06-30, Condensed Consolidated Balance Sheets). Redeemable non-controlling interests decreased to $366.7M from $395.5M. Annually, total assets grew 2.9% from $7,890.0M at Dec 31, 2024 to $8,119.7M at Dec 31, 2025, but long-term debt rose 10.2% and cash fell 11% (10-K 2025-12-31, Consolidated Balance Sheets).

6. Data Gaps

• Quarterly cash flow statements for Q1 2026 and Q2 2026 individually (only six-month YTD provided in 10-Q 2026-06-30).
• Full-year 2026 results (only first two quarters available).
• FY2023 balance sheet details (XBRL only shows 2024 and 2025).
• Segment-level revenue and expense breakdowns for FY2023 (XBRL shows only 2024 and 2025).
• Detailed maturity profile of the $1.4B 2025 Refinancing Term Loans beyond the summary in the 10-K Material Cash Requirements table.
• Breakdown of "Other operating expenses" and "Other segment items" for trend analysis.