Universal Health Services (0LJL.L) Q1 2025 Earnings Report

Universal Health Services Inc reported a first quarter (Q1 2025) ending March 31 with solid top-line momentum and continued profitability, albeit with leverage considerations. Revenue stood at 4.09972 billion USD, up 6.66% year over year (YoY) and down 0.34% quarter over quarter (QoQ). Gross profit totaled 3.69684 billion USD, yielding a robust gross margin of 90.17%. Operating income reached 454.83 million USD, up 16.99% YoY but down 3.74% QoQ, while EBITDA was 607.98 million USD (EBITDA margin ≈ 14.83%). Net income was 316.68 million USD, up 20.95% YoY and down 4.73% QoQ, with earnings per share (EPS) of 4.87 (diluted 4.80). The company generated operating cash flow of 360.05 million USD and free cash flow of 121.02 million USD, supporting a conservative payout policy and a modest dividend yield.

On the balance sheet, UHS maintains a solid asset base and liquidity, with total assets of 14.88 billion USD and cash at period-end of 223.73 million USD. Total debt stood at 5.09 billion USD, yielding a debt ratio of 0.34 and a debt-to-capitalization ratio of 0.429, while interest coverage remained healthy at 11.24x. Shareholders’ equity totaled 6.79 billion USD, and the company reported a price-to-earnings multiple around 9.6x with a price-to-book of 1.80x. A notable feature is the cash conversion cycle, which is negative (CCC ≈ -365 days) driven by an unusually long days payable outstanding, implying strong working-capital efficiency or supplier payment terms that may be leveraged for financing operating needs.

Overall, the QQ1 2025 results reflect a financially stable operation with growing revenue, solid profitability, and positive cash generation, offset by a relatively high leverage load that warrants close monitoring given potential wage and reimbursement pressures in the healthcare sector.