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Select Medical Holdings Announces Strong Q4 Results and 2025 Overview

Select Medical Holdings Corporation, listed on NYSE under the ticker SEM, has recently released its financial results for the fourth quarter and entire year ended December 31, 2025. The company's performance reflects significant growth across multiple segments and a positive outlook for 2026.

Financial Highlights

For the fourth quarter, Select Medical reported a revenue increase of 6.4%, amounting to $1.396 billion compared to $1.313 billion in the same period last year. Notably, income from continuing operations soared by an impressive 203.1%, reaching $63.9 million, up from $21.1 million a year earlier. Furthermore, the net income from continuing operations showed a remarkable increase of 461.0%, totaling $37.7 million, contrasting with a loss of $10.5 million from the previous year.

Despite facing a one-time acceleration of stock compensation expenses amounting to $45.9 million due to the distribution of Concentra Group Holdings common stock, Select Medical displayed resilience in its operations. Adjusted EBITDA for the fourth quarter stands at $104.7 million, slightly lower than last year’s $116.0 million.

Earnings per common share from continuing operations also saw a significant rise of 184.2%, reaching $0.16 compared to a diluted loss of $0.19 from the previous year. Adjusted earnings per share remained steady at $0.16, despite last year's adjusted earnings being slightly higher at $0.18.

For the entire year of 2025, revenues grew by 5.1%, amounting to $5.453 billion compared to $5.187 billion in 2024. Continuing operations before other income and expense exhibited a 25.3% rise, totaling $336.2 million. The net income under this category improved by 65.0%, reaching $214.5 million from the prior year’s $130 million.

Substantial Growth in Segments

The analysis of Select Medical's reportable segments reveals significant annual improvements:

• - Critical Illness Recovery Hospitals: Revenues rose to $2.478 billion, a 1.4% increase from the previous year's total of $2.444 billion, while the adjusted EBITDA margin decreased from 12.3% to 10.7%.
• - Rehabilitation Hospitals: Showcased a remarkable revenue increase of 16.1%, amounting to $1.289 billion, compared to $1.111 billion in 2024. Adjusted EBITDA for this segment grew by 13.4%, totaling $278.6 million.
• - Outpatient Rehabilitation Clinics: Reported a modest revenue growth of 2.8%, achieving $1.285 billion, yet the adjusted EBITDA saw a decline to $90.2 million compared to the previous year’s $108.6 million.

Dividend and Share Repurchase Program

In notable corporate governance developments, on February 12, 2026, Select Medical's Board of Directors declared a cash dividend of $0.0625 per share, set for distribution around March 12, 2026, to stockholders registered by March 2. There’s no commitment for ongoing dividends, as these are subject to the Board's discretion based on various financial and operational factors.

In addition, the company has initiated a stock repurchase program, allowing it to buy back up to $1 billion in common stock, set to remain effective until December 31, 2027. In 2025 alone, Select Medical repurchased 6.375 million shares at an average cost of $15.13 each, totaling approximately $96.5 million.

2026 Outlook

Looking forward, Select Medical has provided a business outlook for 2026, projecting revenues in the range of $5.6 billion to $5.8 billion and an expected adjusted EBITDA range of $520 million to $540 million, with fully diluted earnings per share anticipated between $1.22 and $1.32. This forecast reflects the company's strategic positioning and operational adjustments in a competitive healthcare market.

Furthermore, the company will hold a conference call on February 20, 2026, to elaborate on these results and answer inquiries regarding the business outlook.

Overall, Select Medical's strong performance and growth strategies illustrate its commitment to delivering quality healthcare and maximizing shareholder value.