Select Medical Holdings Corporation (NYSE: SEM), a diversified healthcare services provider, released its Q4 2025 earnings with a blend of strong top-line growth and margin pressure reflecting rising operating costs. The fourth quarter demonstrates both the resilience and challenges in the company’s core business segments as it navigates reimbursement and cost headwinds.
Quarterly Results Overview
For Q4 ended December 31, 2025, Select Medical reported total revenue of $1.40 billion, exceeding consensus estimates of approximately $1.36 billion and representing year-over-year revenue growth. Strong performance across all business divisions contributed to the revenue beat.
However, earnings per diluted share from continuing operations was $0.16, falling short of analysts’ forecast of $0.23 by about 30 %, primarily due to increased costs and lower than expected profitability. Adjusted EBITDA declined to $104.7 million from $116 million in Q4 2024, reflecting margin compression.
Segment Performance and Cost Dynamics
Select Medical’s three core divisions — inpatient rehabilitation hospitals, critical illness recovery hospitals, and outpatient rehabilitation — all contributed positively to revenue growth compared with the prior year.
- Inpatient rehabilitation hospital revenue increased more than 15 % year-over-year, with improved occupancy and average daily census growth.
- Critical illness recovery hospitals saw revenue increases and modest EBITDA growth, yet margins remained tight.
- Outpatient rehabilitation revenue rose driven by increased patient visits, though reimbursement challenges and payer mix shifts pressured average revenue per visit.
Rising health insurance costs emerged as a significant headwind, elevating claims expenses and impacting profitability. Management underscored the ongoing need to balance revenue growth with effective cost management.
Strategic Context and Outlook
Select Medical maintained its strategic focus on expanding its inpatient rehabilitation footprint, with plans to add nearly 400 beds over 2026 and 2027. Despite the EPS miss, management emphasized the diversified nature of the business and the ability of its segments to generate consistent revenue growth.
For the full year 2025, the company generated total revenue of $5.45 billion, with net income and adjusted EBITDA figures underscoring the scale and complexity of operations. Looking ahead, guidance for 2026 projects continued revenue growth of 4 % to 6 % and an increase in adjusted EBITDA, signaling confidence despite near-term cost pressures.
Select Medical’s Q4 results reflect a healthcare services provider managing growth amid reimbursement shifts and operational cost dynamics — a balance that will continue to shape its financial trajectory in 2026.