HCA Healthcare’s QQ2 2025 results reflect a solid top-line performance with 6.36% year-over-year revenue growth to $18.605 billion and robust EBITDA leverage, producing an EBITDA of $3.846 billion and an EBITDA margin of approximately 20.7%. Net income of $1.653 billion translated into an 8.88% net margin and diluted EPS of $6.83. Operating income reached $2.967 billion, supporting a stable operating margin near 15.95%. Despite favorable margins, the company remains capital-intensive with a substantial debt burden: total debt of $46.364 billion and net debt around $45.425 billion, against total assets of $59.536 billion and current liabilities just shy of current assets (current ratio ~0.98). Free cash flow stood at $3.034 billion, underscoring meaningful cash generation even after heavy capital expenditure and aggressive shareholder returns (net cash used in financing was $3.089 billion, including $2.506 billion in share repurchases). The balance sheet shows negative shareholders’ equity (-$4.394 billion), highlighting the scale of leverage and equity outflows. The QQ2 2025 performance aligns with industry peers in delivering solid profitability, yet balance sheet risk and liquidity considerations warrant continued attention, particularly around debt maturity profiles, labor costs, and patient volumes. Management commentary (where available) will be critical to gauge trajectory on volumes, cost inflation, and capital allocation priorities going forward.
- Revenue: $18.605 billion (YoY +6.36%, QoQ +1.55%)
- Gross Profit: $2.967 billion (YoY +8.64%, QoQ +3.92%)
- EBITDA: $3.846 billion (EBITDA margin ~20.7%)
- Operating Income: $2.967 billion (Operating margin ~15.95%)
- Net Income: $1.653 billion (Net margin ~8.88%)
- EPS (Diluted): $6.83; Reported EPS: $6.91
- Cash Flow: Operating cash flow $4.21 billion; Free cash flow $3.034 billion
- Cash and equivalents: $0.939 billion; Total debt: $46.364 billion; Net debt: $45.425 billion
- Liquidity: Current ratio 0.98, Quick ratio 0.864, Cash ratio 0.059
- Capital allocation: Share repurchases -$2.506 billion; Dividends paid -$171 million; CAPEX (PP&E) -$1.176 billion
- Balance sheet: Total assets $59.536 billion; Total liabilities $60.774 billion; Stockholders’ equity negative at -$4.394 billion
- Valuation hints (QQ2 data): P/E ~14.0x, Price/Sales ~4.98x, Free Cash Flow Yield implied by FCF per share ~ $12.54 per share (per 241.9–263 million shares outstanding range across quarters)
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
18.61B
6.36%
1.55%
Gross Profit
2.97B
8.64%
3.92%
Operating Income
2.97B
8.64%
3.92%
Net Income
1.65B
13.14%
2.67%
EPS
6.91
23.39%
5.98%
Key Financial Ratios
currentRatio
0.98
grossProfitMargin
15.9%
operatingProfitMargin
15.9%
netProfitMargin
8.88%
returnOnAssets
2.78%
returnOnEquity
-37.6%
debtEquityRatio
-10.55
operatingCashFlowPerShare
$17.4
freeCashFlowPerShare
$12.54
dividendPayoutRatio
10.3%
priceToBookRatio
-21.09
priceEarningsRatio
14.02
Net Income vs. Revenue
Expense Breakdown
Management Commentary
There is no earnings call transcript data provided in the input. Consequently, transcript highlights and management quotes could not be extracted. If a transcript becomes available, the highlights would be organized by themes (strategy, operations, market conditions) with context and significance.
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Forward Guidance
No formal forward guidance was included in the provided data set for QQ2 2025. Given the large leverage, modest current liquidity headroom, and ongoing capital allocation (buybacks and dividends) alongside a rising wage/benefits environment in the US hospital sector, the key guidance follow-through items to monitor include: (1) volume trends and patient mix (inpatient vs. outpatient), (2) wage inflation and labor productivity, (3) continued capital discipline in capex and IT, and (4) debt repayment cadence and refinancing risk. Management commentary, when available, should address: expected free cash flow generation in the near term, any strategic divestitures or asset-light initiatives, and progress on cost containment programs. Based on the quantitative base, the investment thesis remains tempered by leverage but supported by solid EBITDA margins and strong FCF generation; achievability of debt reduction targets and volume growth will be critical to the intermediate-term outlook.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0J1R.L Focus
15.95%
15.90%
-37.60%
14.02%
0JT5.L
47.40%
30.50%
13.50%
19.34%
0JZ1.L
37.70%
20.10%
-3.18%
12.51%
0M3Q.L
72.30%
40.20%
14.40%
24.17%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
HCA’s QQ2 2025 results demonstrate solid profitability and cash generation in a capital-intensive hospital network, supported by an EBITDA margin around 20.7% and a net margin of approximately 8.9%. The primary investment considerations center on the debt burden and liquidity risk: with total debt of $46.4B and negative equity, the stock carries meaningful balance sheet risk. However, the company’s strong OCF and FCF generation, alongside a track record of share repurchases and steady dividends, provide a base for deleveraging and value realization if volumes stabilize and inflation remains manageable. Comparative metrics suggest HCA sits mid-range on valuation versus diversified hospital peers (P/E ~14x; P/Sales ~4.98x), with a healthy but leveraged balance sheet. The key to a constructive longer-term thesis will be evidence of debt reduction, improving liquidity metrics, and sustained utilization growth. Monitor: (1) patient volumes and payer mix; (2) wage inflation and labor productivity; (3) progress on deleveraging, refinancing risk, and capital allocation discipline; (4) any strategic portfolio actions or efficiency programs that could lift cash conversion and ROIC.
Key Investment Factors
Growth Potential
Longer-term growth hinges on volume recovery, higher acuity patient mix, and efficiency gains from scale in a high-volume hospital network. If patient volumes stabilize and payer mix remains favorable, HCA could see continued EBITDA margin maintenance around 20%+ and mid-teens net margins supported by ongoing cost controls and IT-enabled efficiencies.
Profitability Risk
Key risks include high leverage with net debt ~$45.4B, interest coverage ~5.22x which may constrain financial flexibility amid wage inflation and capital intensity. Liquidity headroom is moderate with current ratio <1, and negative shareholders’ equity signals balance sheet stress if revenue growth slows or if there are adverse payer mix shifts.
Financial Position
Strengths include robust operating cash flow ($4.21B) and sizable free cash flow ($3.03B), enabling ongoing buybacks and dividend payments. Weaknesses center on heavy debt load, negative equity, and liquidity constraints (current ratio ~0.98). The asset-light opportunities could be limited by the capital-intensive nature of hospital operations, but scale offers pricing power with managed care."},
SWOT Analysis
Strengths
Largest US hospital operator with broad geographic footprint and scale efficiencies