UNIVERSAL HEALTH SERVICES INC Q1 FY2025 earnings call

• Net income attributable to UHS per diluted share was $4.80 for the first quarter of 2025, with adjusted net income per diluted share at $4.84.
• Operating expenses well managed; other operating expenses on same facility basis increased 2.6% over prior year first quarter (excluding insurance subsidiary impact).
• Cash generated from operating activities decreased to $360 million from $396 million in prior year first quarter due to delays in Medicaid supplemental payments.
• Spent $239 million on capital expenditures and acquired 1 million own shares at ~$181 million in first quarter of 2025.
• West Henderson Hospital opened in late 2024 and posted modestly positive EBITDA in first quarter; Cedar Hill Regional Medical Center in Washington, D.C. opened with strong demand for emergency room services.

Acute Care Hospitals

• Same facility adjusted admissions increased 2.4% over first quarter of prior year.
• Same facility net revenues increased by 5.0% during the first quarter of 2025 (excluding impact of insurance subsidiary).
• EBITDA after excluding the impact of Medicaid supplemental payments increased 21%.

Behavioral Health Hospitals

• Same-facility net revenues increased by 5.5%, driven by a 5.8% increase in revenue per adjusted day.
• Adjusted patient days were relatively flat compared to prior year quarter, negatively impacted by leap day and winter weather, but reaccelerated in March.

• Full year earnings guidance reiterated based on current reimbursement and operating cost levels.
• Behavioral patient day revenue growth guidance of 2.5% to 3% remains a reasonable target.
• Nevada supplemental program payments of $82 million received in April related to first quarter revenues, but annualizing this doesn't account for provider taxes.

• Delays in receipt of Medicaid supplemental payments in various states.
• Potential tariff impacts on supply chain, with ~3/4 of supply chain purchases currently insulated but monitoring vendors.
• Labor market challenges in behavioral health affecting patient volumes in some markets.
• Uncertainty around Medicaid program approvals and legislative changes affecting supplemental payments.

Q: Justin Lake asked about behavioral volume and leap year impact.

A: Steve Filton said full year guidance for behavioral volume growth of 2.5% to 3% remains achievable, with reacceleration in March after muted volumes in Jan/Feb due to weather.

Q: Sarah James asked about Nevada DPP payment.

A: Steve Filton explained $82 million payment in April related to first quarter revenues but doesn't include provider taxes, so annualizing is misleading.

Q: Andrew Mok asked about tariffs.

A: Steve Filton said ~3/4 of supply chain purchases insulated from tariffs, monitoring vendors with fixed contracts and preparing for alternatives if needed.

Q: Ben Hendrix asked about behavioral rate growth.

A: Steve Filton said revenue per adjusted day growth of 5.8% is moderating from prior years, due to better contractual pricing from managed Medicaid payers.

Q: Michael Ha asked about California and Florida DPP proposals.

A: Steve Filton said new programs are being reviewed by CMS, with process restarted after administration change, but timing uncertain.