Healthcare company Surgery Partners (NASDAQ: SGRY) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 2.7% year on year to $848.9 million. The company expects the full year’s revenue to be around $3.4 billion, close to analysts’ estimates. Its non-GAAP profit of $0.10 per share was 49.4% above analysts’ consensus estimates.

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Eric Evans, Chief Executive Officer, stated, “We are pleased with our progress this quarter, which reflects disciplined execution against our key strategic priorities to support a return to growth and reinforces our conviction in our short stay surgical platform. The announcement of the pending Idaho Falls transaction was a key achievement and represents an important step forward in our portfolio optimization strategy, as we take decisive actions to improve our financial profile and sharpen our strategic focus. Looking ahead, we will capitalize on the structural tailwinds underpinning long-term ASC market growth, enhance operational efficiency, and thoughtfully deploy capital to deliver long-term value for our shareholders.”

Company Overview

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ: SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Surgery Partners grew its sales at a decent 9.9% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Surgery Partners’s annualized revenue growth of 7.9% over the last two years is below its five-year trend, but we still think the results were respectable.

Surgery Partners also reports its number of units sold. Over the last two years, Surgery Partners’s units sold averaged 3% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, Surgery Partners reported modest year-on-year revenue growth of 2.7% but beat Wall Street’s estimates by 2.2%.

Looking ahead, sell-side analysts expect revenue to grow 3.9% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will face some demand challenges.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Surgery Partners’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 14.1% over the last five years. This profitability was higher than the broader healthcare sector, showing it did a decent job managing its expenses.

Looking at the trend in its profitability, Surgery Partners’s adjusted operating margin of 13.3% for the trailing 12 months may be around the same as five years ago, but it has decreased by 1.8 percentage points over the last two years.

In Q2, Surgery Partners generated an adjusted operating margin profit margin of 12%, down 2.4 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Surgery Partners’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q2, Surgery Partners reported adjusted EPS of $0.10, down from $0.17 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Surgery Partners’s full-year EPS to grow 75.8% from $0.32 to $0.56.

Key Takeaways from Surgery Partners’s Q2 Results

It was good to see Surgery Partners beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $15.53 immediately following the results.

Is Surgery Partners an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).