SGRY: Solid 1Q26 beat, despite modest weather-related volume disruption; guidance affirmed

Research evidence excerpt

SGRY: Solid 1Q26 beat, despite modest weather-related volume disruption; guidance affirmed

1 Q2 Q3 Q4

attributed softer case volumes primarily to temporary weather-related 2025 776.0A 826.2A 821.5A 885.0A

disruptions early in the quarter, which impacted higher-volume, lower- 2026 810.9A 838.1E 851.5E 910.7E

acuity markets and weighed on SS case growth by approximately 40 bps. Prev. 800.4E 834.8E 861.0E 903.9E

• Management noted that the three surgical hospital markets that drove EBITDA,2025 Adj 103.9A 129.0A 136.4A 156.9A

the 4Q25 miss are executing their recovery plans and performing in line 2026 102.3A 124.6E 136.2E 168.3E

with expectations, with new leadership teams in place and payer mix Prev. 100.9E 130.4E 136.0E 163.2E

pressure moderating relative to the second half of 2025. Commercial $MM except per share data.

mix came in at ~50% in 1Q, with modest sequential pressure that All values in USD unless otherwise noted.

was notably less severe than what the company experienced in 4Q25. Priced as of prior trading day's market close, EST (unless otherwise noted).

Management remains focused on competing for commercial patients

and improving physician transition management to stabilize and grow

commercial market share.

• SGRY is progressing its effort to restructure ownership of a few

larger surgical hospitals that sit outside its core short-stay model.

Management is in advanced discussions on one opportunity and is

targeting an announcement by mid-2026. The preferred structure,

modeled on last year's Bryan, TX transaction, involves selling a majority

interest to a health system partner, which brings better insurance rates to

the facility while SGRY retains management responsibilities and benefits

from the improved economics. The net result reduces debt, improves