Select Medical (SEM) Q1 2026 earnings summary

Executive summary

• Announced agreement to be acquired by a consortium for $16.50 per share in cash, with closing expected mid-2026 pending regulatory and shareholder approvals; company will become private upon closing.

• Revenue for Q1 2026 was $1,421.5 million, up 5.0% year-over-year, but net income declined to $44.0 million from $56.7 million in Q1 2025; EPS was $0.35, down from $0.44.

• Adjusted EBITDA was $141.6 million (10.0% margin), down 6.5% from $151.4 million (11.2% margin) in Q1 2025.

• Continued expansion in inpatient rehabilitation, adding 166 beds in Q1 2026 and planning 275 more beds through 2027.

• Regulatory review advanced with HSR Act waiting period expiration; company expects to delist from NYSE upon closing.

Financial highlights

• Total revenue grew 5% year-over-year to $1,421.5 million, driven by growth in rehabilitation and outpatient segments.

• Adjusted EBITDA declined 6.5% to $141.6 million; EPS was $0.35, or $0.36 excluding take-private costs.

• Operating expenses rose to $1,285.4 million (90.5% of revenue); cost of services was $1,246.0 million (87.7% of revenue).

• Cash flow from operations was $37.9 million; interest expense was $28.3 million, down from $29.1 million.

• Cash and cash equivalents at quarter-end were $25.7 million; $443.5 million available on revolving loans.

Outlook and guidance

• Full-year 2026 guidance maintained: revenue $5.6–$5.8 billion, adjusted EBITDA $520–$540 million, EPS $1.22–$1.32.

• Capital expenditures expected between $200 million and $220 million; $58.9 million spent in Q1 2026.

• Management expects continued inflationary pressures on labor and supply costs.

• Regulatory changes, including Medicaid and Medicare reimbursement adjustments, may impact future results.