On March 3, 2025, CEO Eric Evans told investors on the Q4 2024 earnings call: "We expect margin expansion in 2025 and beyond." On the same call, he stated the Company had "high confidence in and significant visibility to our expected 2025 rate growth." CFO Dave Doherty added that the Company expected to "deploy at least $200 million of capital on M&A" and that "leverage to decrease based on sustained double-digit earnings growth." These statements set investor expectations for the quarters ahead.
By Q4 2025, the actual results told a different story. Surgery Partners reported an EPS miss and issued FY 2026 guidance well below expectations. Margins did not expand as promised in 2025 and the 2026 guidance suggested margin expansion had halted and earnings would be virtually flat in the next year. Earnings growth fell well short of the "double-digit" projection Doherty had outlined. The $250 million acquisition deployment target Evans described — "$200 million plus proceeds from divestitures" — did not materialize at the levels management had guided. Payer-mix shifts and softer-than-expected case growth drove the shortfall, factors management had previously dismissed as immaterial.
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