Select Medical Holdings Corporation
Q1 2025 Earnings
Market Reaction
Did SEM Beat Earnings? Q1 2025 Results
Select Medical delivered a tale of two segments in Q1 2025, with a 33.3% surge in earnings per share to $0.44 masking a meaningful deterioration in its largest business line. Total revenue grew 2.4% year-over-year to $1.35 billion, but the headline numbers tell only part of the story. The critical illness recovery hospital segment — the company's biggest revenue driver — saw sales fall 2.9% to $637.03 million while Adjusted EBITDA collapsed 25.3% to $86.65 million, compressing margins from 17.7% to 13.6%. Carrying the other side of the ledger, the rehabilitation hospital segment posted a 15.7% revenue jump to $307.39 million as the company expanded to 35 hospitals. Much of the EPS strength came from a 28.5% decline in interest expense following the November 2024 Concentra spinoff rather than core operating momentum — a distinction investors will weigh against management's updated full-year 2025 outlook, which calls for revenue of $5.30 billion to $5.50 billion and Adjusted EBITDA of $510 million to $530 million, with EPS guidance of $1.09 to $1.19 reaffirmed.
- Rehabilitation hospital segment revenue grew 15.7% driven by expansion to 35 hospitals from 33, 6.9% growth in admissions, and 6.6% increase in revenue per patient day
- Interest expense declined 28.5% to $29.1 million, boosting net income despite lower operating income
- Critical illness recovery hospital segment EBITDA margin declined from 17.7% to 13.6% due to lower revenue per patient day, fewer admissions, and increased cost of services
- Income tax expense declined 19.6% contributing to 21.5% growth in income from continuing operations
- Cost of services increased 4.6% year-over-year, outpacing 2.4% revenue growth
Forward Guidance & Outlook
Select Medical adjusted its 2025 business outlook for revenue and Adjusted EBITDA while reaffirming its fully diluted EPS guidance. For fiscal year 2025, the company expects revenue in the range of $5.3 billion to $5.5 billion, Adjusted EBITDA in the range of $510.0 million to $530.0 million, and fully diluted earnings per share in the range of $1.09 to $1.19. The full-year outlook implies income from continuing operations attributable to Select Medical of $141 million to $154 million.
SEM YoY Financials
SEM Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.