Adjusted EBITDA and Margin
Adjusted EBITDA of $309 million in Q1 2026 with a margin of 10.4%, reflecting continued profitability while acknowledging quarter-specific headwinds.
Same-Store Revenue and Pricing
Same-store net revenue increased 3.1% year-over-year, driven by net revenue per adjusted admission growth of 3.7%, reflecting rate increases and state-directed payment benefits.
Strategic Divestitures and Liquidity
Completed divestitures generated more than $1.1 billion in gross proceeds in the quarter; announced $112 million sale of four Arkansas hospitals (expected close in Q2) and used proceeds to pay down debt, reducing net debt to ~ $9.3 billion pro forma and lowering leverage to 6.5x at quarter end (from 7.4x at year-end 2024).
Outpatient/ASC Investment and Growth Initiatives
Announced approximately $85 million of ASC investments (including pending majority acquisition of the Surgical Institute of Alabama performing >8,000 cases annually and other ASCs), expanding outpatient surgical footprint and growth runway.
Quality and Experience Improvements
Management expects significant quality rating improvements: up to ~80% of CHS hospitals to receive a Leapfrog A or B (vs 48% prior year) and 56% to receive CMS ratings of 3+ stars (vs 45% in 2025), underscoring operational and quality progress.
Labor and Supply Cost Management
Average hourly wage increased modestly (~2.3% YoY) while same-store contract labor spend fell ~11% YoY; supplies expense improved, declining 60 basis points to 14.9% of net revenue, aided by procurement and ERP-driven inventory management.
Guidance and Capital Allocation
Full-year 2026 adjusted EBITDA guidance unchanged at $1.34 billion to $1.49 billion; company remains active on both deleveraging and targeted growth investments while keeping next large maturity in 2029 and no ABL draws at quarter end.