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Select Medical Holdings Reports Strong Second Quarter Earnings

On July 31, 2025, Select Medical Holdings Corporation (NYSE: SEM) announced impressive financial results for the second quarter ending June 30, 2025. The corporation, known for being one of the largest operators in the United States for rehabilitative services, reported a revenue increase of 4.5%, reaching $1,339.6 million compared to $1,281.7 million in the corresponding quarter of the previous year. This growth reflects a robust demand for its critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics.

Quarterly Performance Highlights

The news provided significant insights into Select Medical's operational efficiency. Income from continuing operations before other income and expense rose by 17.2%, amounting to $86.5 million, compared to $73.9 million for the same quarter the previous year. Furthermore, income from continuing operations, after tax deductions, jumped an impressive 53.8%, reaching $57.9 million from $37.6 million in the prior year.

Earnings per common share also saw a remarkable increase, surging 88.2% to $0.32 from $0.17 in Q2 2024. Adjusted EBITDA, an essential metric for evaluating operational performance, saw a slight increase of 0.5%, totaling $125.4 million.

For the first half of 2025, Select Medical continued its strong performance, with total revenue rising 3.4% to $2,692.8 million. The six-month income from continuing operations amounted to $132.6 million, representing a 33.7% increase compared to $99.2 million in 2024. Shareholders should also take note that the company proposed a cash dividend of $0.0625 per share, scheduled for distribution on or around August 28, 2025.

Segment Analysis

Critical Illness Recovery Hospitals

In this segment, revenue for Q2 2025 reached $601.1 million, showing a slight decrease from $604.9 million in Q2 2024. Adjusted EBITDA for this segment was $56.3 million, exhibiting a decline compared to the $71.8 million recorded the previous year.

Rehabilitation Hospitals

The rehabilitation segment performed exceedingly well, with revenues increasing by 17.2% to $313.8 million. Adjusted EBITDA saw a 14.7% increase, totaling $71.0 million.

Outpatient Rehabilitation

Revenue in the outpatient segment grew 3.8%, amounting to $327.6 million, while Adjusted EBITDA increased by 6.1% to $30.5 million.

Stock Repurchase Initiative

In a strategic move to optimize shareholder value, Select Medical's Board of Directors approved a stock repurchase program, allowing the company to purchase up to $1.0 billion of its common stock up until December 31, 2025. Over the past six months, Select Medical repurchased 6.375 million shares at about $15.13 per share, demonstrating its commitment to returning capital to shareholders.

Outlook And Future Prospects

Select Medical has reaffirmed its optimistic outlook for the entirety of 2025, projecting revenues between $5.3 billion and $5.5 billion alongside expected Adjusted EBITDA in the range of $510 million to $530 million. The company plans to continue hosting conference calls to discuss business outlooks, with the next scheduled on August 1, 2025.

In conclusion, Select Medical's robust second-quarter performance showcases the strength of its diversified healthcare services portfolio amidst a competitive landscape. With strategic initiatives in place, including stock repurchases and a consistent dividend payout, the company appears poised for sustained growth in the evolving healthcare industry.