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November 8, 2025 • 4 min read
Universal Health Services, Inc. (UHS), one of the nation's largest providers of hospital and healthcare services, recently released its financial results for the third quarter ending September 30, 2025. We're diving into the company's latest 10-Q filing to unpack its performance, understand the key drivers behind its impressive growth, and see what the numbers tell us about its operational health.
UHS turned in a very strong quarter, with net revenues climbing 13.4% to $4.5 billion, up from $4.0 billion in the same period last year. This top-line growth translated into an even more substantial increase in profitability. Net income attributable to UHS soared by 44% to $373 million, or $5.86 per diluted share, a significant jump from $259 million, or $3.80 per diluted share, in the third quarter of 2024.
To see how UHS generates its revenue and where the money goes, the following flow diagram provides a visual breakdown of the company's quarterly income statement. It traces the flow from the two primary business segments all the way down to net income.
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As the diagram shows, UHS's business is split between two major segments: Acute Care Hospital Services, which includes general hospitals offering a range of medical and surgical services, and Behavioral Health Care Services, which provides psychiatric and substance abuse treatment. The unallocated "Other" revenue bucket represents non-segment activities, which at just under $5 million for the quarter, is a very small portion of the company's overall business.
The strong quarterly results were not driven by a single factor, but rather a combination of operational performance, new facility contributions, and a notable boost from a state-level program.
New Hospitals Coming Online: A portion of the growth, approximately $58 million in revenue, came from two newly constructed acute care hospitals: West Henderson Hospital in Las Vegas, which opened late last year, and Cedar Hill Regional Medical Center in Washington, D.C., which opened in the second quarter of 2025. While these new facilities contribute to revenue, they also come with start-up costs, with Cedar Hill reporting a pre-tax loss of $19 million for the quarter.
Medicaid Supplemental Payments: A major contributor to the quarter's stellar results was the recognition of $90 million in revenue from a Washington, D.C. Medicaid state directed payment program. It's important to note that while this revenue was recorded in the third quarter, it covers the entire period from October 1, 2024, through September 30, 2025. This one-time-like boost significantly impacted the quarterly figures, with the Acute Care and Behavioral Health segments receiving approximately $68 million and $17 million, respectively.
Improved Cost Management: UHS also demonstrated better cost control. Salaries, wages, and benefits, the company's largest expense, decreased as a percentage of net revenue from 48.3% in Q3 2024 to 46.1% in Q3 2025. This suggests greater efficiency and operating leverage as revenues have grown.
While the quarter was largely positive, the filing did note a few challenges. The company established an $18 million legal reserve related to a verdict in a litigation case in Nevada.
On the capital allocation front, UHS continued to return value to shareholders. The company repurchased approximately 1.3 million shares for $234 million during the quarter. Signaling continued confidence in its outlook, the Board of Directors authorized a fresh $1.5 billion for its stock repurchase program in late October.
Universal Health Services delivered a robust third quarter, fueled by contributions from new facilities and a significant supplemental payment. The underlying business appears healthy, with "Same Facility" revenue growing and key cost metrics improving. While the exceptional growth in Q3 was amplified by the timing of the D.C. Medicaid payment, the company's proactive capital management and operational execution paint a positive picture. However, as noted in the filing, potential changes to federal and state healthcare policy remain a key area for investors to monitor.
Last updated: November 8, 2025