HCA Healthcare, Inc.
HCA · NYSE
Next quarter
Reports Oct 23, 2026.
Consensus is $6.80 EPS for Sep 2026 across 9 estimates, ranging $6.49 to $6.96.
HCA Jun 2026
- 0.26%
- +1.94%
- $7.57
- $7.59
- —
- —
Highlights
- Earnings: Adjusted diluted EPS was $7.59 versus $7.57 consensus, a 0.26% beat; GAAP diluted EPS was $7.62 versus $6.83 a year ago and $7.15 in Q1 2026.
- Revenue and volume: Revenue rose 8.7% year over year to $20.230 billion and 5.9% sequentially, supported by 2.7% same-facility equivalent-admission growth and a 6.4% increase in same-facility revenue per equivalent admission.
- Payer pressure: The loss of exchange coverage and related administrative reforms increased uninsured volume; HCA estimated an unfavorable $400 million pretax impact from payer mix in the quarter, including a $75 million revision to the Q1 impact.
- Florida Medicaid program: HCA recognized approximately $400 million of incremental net benefit from Medicaid supplemental payment programs, while recording $1.372 billion of related revenue and $829 million of other operating expense from the Florida directed-payment program.
- Profitability: Net income attributable to HCA increased 2.8% to $1.699 billion, while adjusted EBITDA rose 4.6% to $4.027 billion; adjusted EBITDA margin declined to 19.9% from 20.7% a year ago.
- Service mix: Same-facility inpatient surgeries declined 2.3% and outpatient surgeries fell 3.4%, partially offset by 3.6% growth in emergency-room visits and 2.5% admissions growth.
- Guidance: HCA lowered 2026 revenue guidance to $77.0-$79.5 billion, adjusted EBITDA to $15.4-$16.1 billion and diluted EPS to $28.70-$30.50; its exchange-impact estimate worsened to $1.0-$1.2 billion, partly offset by $300-$500 million of Medicaid-program benefit.
- Cash deployment and leverage: First-half operating cash flow fell to $4.349 billion from $5.861 billion, while total debt rose to $49.718 billion at June 30; HCA repurchased 4.752 million shares for $2.064 billion in Q2 and retained $7.210 billion of authorization.
Analysis
HCA Healthcare delivered a modest beat in the second quarter, with adjusted EPS of $7.59 versus $7.57 consensus. Revenue of $20.230 billion increased 8.7% from $18.605 billion a year ago and 5.9% from $19.11 billion in Q1 2026. Net income attributable to HCA was $1.699 billion, up from $1.653 billion a year ago and approximately $1.62 billion in the prior quarter. The EPS comparison was helped by a materially smaller share count, with diluted shares down to 222.8 million from 241.9 million a year ago.
The print was defined by strong underlying demand but worsening payer quality. Same-facility admissions rose 2.5% and equivalent admissions 2.7%, yet uninsured admissions increased 23.4% as exchange subsidies expired and administrative reforms affected coverage. HCA estimated the resulting payer shift reduced pretax income by approximately $400 million. Florida Medicaid directed and supplemental payments provided a similarly sized $400 million net benefit, but the mix of retroactive revenue and expenses weighed on comparability and pushed adjusted EBITDA margin down 80 basis points to 19.9%. HCA consequently reduced its full-year EPS midpoint by $0.70 to $29.60 and its adjusted EBITDA midpoint by $250 million to $15.75 billion. Cash conversion was also weaker, with Q2 operating cash flow down 44.5% year over year, principally because of working-capital pressure and higher tax payments.
Payer mix and Medicaid
The central issue was the sharp deterioration in coverage mix following the expiration of enhanced exchange premium tax credits at the end of 2025. HCA said the increase in uninsured volume, together with administrative reforms and fewer Medicaid conversions, reduced second-quarter pretax income by approximately $400 million. The impact included an additional $75 million assigned to the first quarter. Uninsured admissions increased 23.4% on a same-facility basis, while uninsured patients represented approximately 8% of admissions versus 7% a year ago.
- Managed care and insurer revenue declined to $9.013 billion, or 44.6% of revenue, from $9.124 billion, or 49.1%, a year earlier.
- Florida and Texas accounted for 55% of revenue and 58% of admissions; those states represented 73% of HCA's uninsured admissions.
- Medicaid revenue increased to $2.789 billion from $1.440 billion, largely reflecting directed and supplemental payment programs.
- HCA recorded $1.372 billion of Florida directed-payment revenue and $829 million of associated other operating expense, including $980 million of revenue and $557 million of expense related to periods before 2026.
- The revised 2026 assumptions now call for a $1.0-$1.2 billion unfavorable exchange impact, versus $600-$900 million previously, and a $300-$500 million Medicaid-program benefit, versus a prior estimated $50-$250 million headwind.
Volume and service mix
Demand remained healthy, but the composition of care was less favorable. Revenue growth combined modest volume expansion with higher revenue per equivalent admission, although the latter was boosted by the Florida payment program. Surgical activity declined in both inpatient and outpatient settings, while emergency care continued to grow.
- Same-facility admissions rose 2.5% and equivalent admissions rose 2.7%; same-facility revenue rose 9.3%.
- Same-facility revenue per equivalent admission increased 6.4% to $19,391.
- Same-facility emergency-room visits increased 3.6% to 2.508 million.
- Same-facility inpatient surgeries declined 2.3% and outpatient surgeries declined 3.4%.
- Same-facility occupancy increased to 72.7% from 72.0%, while average length of stay declined to 4.643 days from 4.726 days.
Margins and guidance
Revenue growth did not translate proportionally into operating profit. Adjusted EBITDA increased $178 million year over year, but the margin contracted as Medicaid-program expenses and professional fees increased. HCA also cited inflationary pressure in operating expenses and a decline in surgical volume as additional constraints.
- Adjusted EBITDA rose 4.6% to $4.027 billion, while adjusted EBITDA margin fell to 19.9% from 20.7%.
- Salaries and benefits improved to 41.0% of revenue from 43.7%, and supplies improved to 14.3% from 15.3%.
- Other operating expenses rose to 24.9% of revenue from 20.4%, primarily because of Medicaid-program expenses and professional fees.
- 2026 revenue guidance narrowed to $77.0-$79.5 billion from $76.5-$80.0 billion previously.
- The new ranges are $6.3-$6.7 billion for net income, $15.4-$16.1 billion for adjusted EBITDA and $28.70-$30.50 for diluted EPS, versus prior ranges of $6.495-$7.035 billion, $15.55-$16.45 billion and $29.10-$31.50, respectively.
Cash flow and capital
Cash generation lagged earnings because of accounts-receivable growth tied primarily to Medicaid directed and supplemental payments, as well as higher tax payments. HCA continued to return capital aggressively while funding a substantial capital program and refinancing near-term debt.
- Second-quarter operating cash flow was $2.335 billion versus $4.210 billion a year ago; first-half operating cash flow was $4.349 billion versus $5.861 billion.
- Q2 capital expenditures were $1.231 billion, and first-half capital expenditures excluding acquisitions were $2.350 billion; full-year capital spending guidance remains $5.0-$5.5 billion.
- HCA repurchased 4.752 million shares for $2.064 billion in Q2 and 7.909 million shares for $3.635 billion in the first half.
- Cash was $1.013 billion and total debt was $49.718 billion at June 30, compared with $1.040 billion and $46.492 billion at December 31, 2025.
- HCA issued $3.0 billion of senior notes in April and redeemed $2.5 billion of notes due in 2026 during May; the quarterly dividend was raised to $0.78 per share.
