Exchange: LSE | Sector: Healthcare | Industry: Medical Equipment Services
Q3 2025
Published: Oct 24, 2025
Earnings Highlights
Revenue of $19.16B up 9.6% year-over-year
EPS of $-13.20 decreased by 372.1% from previous year
Gross margin of -30.4%
Net income of -3.24B
"N/A" - N/A
HCA Healthcare Inc (0J1R.L) QQ3 2025 Results — Revenue Erosion and Margin Compression Drive Significant Net Loss Despite Revenue Base
Executive Summary
HCA Healthcare reported a difficult QQ3 2025 quarter characterized by a negative gross profit and operating income despite a sizable revenue base. Revenue stood at USD 19.161 billion, but cost of revenue of USD 31.104 billion produced a gross loss of USD -5.822 billion and a gross margin of -30.38%. This, coupled with substantial depreciation (USD 0.889B) and interest expense (USD 0.561B), culminated in an EBITDA of USD -1.277B and an operating loss of USD -5.822B (EBITDA margin -6.66%, operating margin -30.38%). After other income of USD 2.642B, income before tax remained negative at USD -3.180B, with a net income of USD -3.243B and an EPS of -13.44 (diluted -13.20). The year-over-year and quarter-over-quarter metric set provided shows revenue decline and deteriorating profitability metrics, though there is a notable positive swing in Q2 2025 versus Q3 2024 on several lines of the income statement that warrants a discussion of volatility in the cost base and mix. Management commentary from the earnings call is not provided in the data set, so the synthesis relies on the disclosed numbers and standard sector considerations.
Key takeaways for investors:
- Profitability collapsed in QQ3 2025 as gross and operating margins turned negative despite a substantial revenue base; this implies a disproportionate rise in cost of revenue or unusual charges weighting the quarter.
- The company demonstrates pronounced margin compression with a negative EBITDA and a negative net income, underscoring elevated cost pressures and potential non-operating offset from other income sources. The operating cash flow profile is unclear in the data provided, and liquidity metrics show stress (current ratio below 1).
- The market context for hospital operators remains sensitive to payer mix, reimbursement changes, labor costs, and utilization trends. In this quarter, revenue growth versus prior periods is not clearly translating into bottom-line earnings power, which raises questions about sustainability of the cost base and the ability to convert volume into profits in the near term.
Key Performance Indicators
Revenue
19.16B
QoQ: 2.99% | YoY:9.57%
Gross Profit
-5.82B
-30.38% margin
QoQ: -296.23% | YoY:-341.58%
Operating Income
-5.82B
QoQ: -296.23% | YoY:-341.58%
Net Income
-3.24B
QoQ: -296.17% | YoY:-355.34%
EPS
-13.44
QoQ: -294.50% | YoY:-372.06%
Revenue Trend
Margin Analysis
Key Insights
Revenue: USD 19.161B; YoY change reported as -9.57% and QoQ change +2.99% per the data set, though the revenue level relative to QQ3 2024 (USD 17.487B) suggests a possible data inconsistency in YoY calculation. If taken literally, the YoY percentage implies a decline, contradicting the raw quarterly revenue progression shown in other quarters. This discrepancy warrants data verification.
Gross Profit: USD -5.822B; Gross Margin -30.38% (grossProfitMargin: -0.304). Indicates cost of revenue has surged relative to revenue or a significant non-cash/one-off charge affecting gross profitability.
Operating Income: USD -5.822B; Operating Margin -30.38% (operatingIncomeRatio: -0.3038). The operating loss mirrors the gross loss and suggests operating cost discipline is not compensating for top-line performance.
Net Income: USD -3.243B; Net Margin: -16.92% (netIncomeRatio: -0.169).
Financial Highlights
Key QQ3 2025 metrics and narrative:
- Revenue: USD 19.161B; YoY change reported as -9.57% and QoQ change +2.99% per the data set, though the revenue level relative to QQ3 2024 (USD 17.487B) suggests a possible data inconsistency in YoY calculation. If taken literally, the YoY percentage implies a decline, contradicting the raw quarterly revenue progression shown in other quarters. This discrepancy warrants data verification.
- Gross Profit: USD -5.822B; Gross Margin -30.38% (grossProfitMargin: -0.304). Indicates cost of revenue has surged relative to revenue or a significant non-cash/one-off charge affecting gross profitability.
- Operating Income: USD -5.822B; Operating Margin -30.38% (operatingIncomeRatio: -0.3038). The operating loss mirrors the gross loss and suggests operating cost discipline is not compensating for top-line performance.
- EBITDA: USD -1.277B; EBITDA Margin (EBITDARatio): -6.66%.
- Net Income: USD -3.243B; Net Margin: -16.92% (netIncomeRatio: -0.169).
- EPS (diluted): -13.20; EPS (basic): -13.44.
- Interest Expense: USD 0.561B; Depreciation & Amortization: USD 0.889B.
- Other Income/Expenses: Net other income of USD 2.642B provides a meaningful offset, yet it is not sufficient to offset the operating shortfall.
- Liquidity and leverage indicators: current ratio 0.889; quick ratio 0.771; cash ratio 0.0673; suggesting tighter near-term liquidity. Debt ratio 0.0867 and total debt-to-capitalization reported as 1.000 imply an unusual or data-structured view of capitalization; the latter indicates debt-heavy capitalization in the context of the presented metric set. Payout and dividend metrics show negative or very low implied distributions (dividend yield 0.169%).
- Operational cycle metrics: DSO ~48.98 days; DIO ~5.02 days; DPO ~13.17 days; CCC ~40.83 days, indicating moderately efficient working capital by some measures but not directly compensating for profitability pressures.
Notes: The above figures reflect the QQ3 2025 data and, where relevant, YoY/QoQ comparisons are drawn from the provided data. Some inconsistencies in the YoY metric vs. the actual revenue progression across QQ3 2024 to QQ3 2025 are evident and should be reconciled with the company’s official notes or filings.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
19.16B
9.57%
2.99%
Gross Profit
-5.82B
-341.58%
-296.23%
Operating Income
-5.82B
-341.58%
-296.23%
Net Income
-3.24B
-355.34%
-296.17%
EPS
-13.44
-372.06%
-294.50%
Key Financial Ratios
currentRatio
0.89
grossProfitMargin
-30.4%
operatingProfitMargin
-30.4%
netProfitMargin
-16.9%
returnOnAssets
-3.54%
dividendPayoutRatio
-5.38%
priceEarningsRatio
-7.97
Net Income vs. Revenue
Expense Breakdown
Management Commentary
transcriptHighlights: "N/A"
N/A
— N/A
N/A
— N/A
Forward Guidance
Forward-looking assessment:
- The QQ3 2025 results show a sharp deterioration in profitability despite a relatively robust revenue level, signaling that significant cost pressures or one-off charges dominated the quarter. There is no explicit management guidance provided in the dataset; therefore, the outlook relies on typical sector expectations and the disclosed trajectory.
- Key factors that would influence the near-term trajectory include: (i) stabilization or reduction of cost of revenue as a percentage of revenue, (ii) successful containment of operating expenses, (iii) improved payer mix and favorable reimbursement trends, and (iv) any non-operating items that could recur or reverse in subsequent quarters.
- If management implements aggressive cost-reduction measures and achieves a meaningful reduction in the cost of revenue or operational leverage through efficiency initiatives, the company could see a path back toward profitability. Conversely, continued inflationary labor and supply costs, volume weakness, or unfavorable payer changes could perpetuate negative margins.
- Given the lack of stated guidance in the provided data, investors should monitor quarterly progress in: cost of revenue as a % of revenue, operating expense discipline, cash flow generation, and any strategic updates on outpatient expansion, payer mix optimization, and capital allocation priorities.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0J1R.L Focus
-30.38%
-30.40%
0.00%
-7.97%
0JT5.L
49.00%
33.10%
14.00%
16.76%
0JZ1.L
36.60%
18.00%
-1.90%
27.28%
0M3Q.L
69.20%
38.50%
13.00%
32.26%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the QQ3 2025 results, the near-term investment stance would be cautious. The company exhibits a meaningful deterioration in profitability despite revenue scale, raising concerns about the sustainability of earnings power without substantive cost-control measures. The investment thesis rests on visible margin stabilization and a credible path to free cash flow generation. Key catalysts to watch include: (1) cost of revenue as a % of revenue normalization, (2) evidence of operating-expense discipline and efficiency gains, (3) improvements in working capital and cash flow generation, and (4) any strategic updates on outpatient expansion, payer mix optimization, and capital allocation that could drive earnings upside. In the absence of clarified guidance, a neutral-to-underweight stance would be prudent until margin improvement and cash generation become more evident.
Key Investment Factors
Growth Potential
Potential upside from cost normalization, improved patient mix, and growth in outpatient/ambulatory services, which typically offer better margin profiles. Scale advantages and optimization of hospital network utilization could yield improved fixed-cost absorption, higher volume leverage, and potential efficiency gains. Any approved capital investment programs that reduce long-term unit costs could provide a runway for margin expansion.
Profitability Risk
Key risks include sustained inflation in labor and supply costs, payer reimbursement pressures (especially if Medicare/Medicaid policies tighten), regulatory scrutiny, and potential impairment charges. Liquidity stress indicated by a sub-1 current ratio and the reliance on other income to offset operating losses heighten the risk profile. Competitive dynamics in Healthcare Services and changes in demand for inpatient services could also impact volumes.
Financial Position
Near-term liquidity appears tighter given working-capital indicators (current ratio <1). While debt ratio is modest, capitalization in the presented metrics suggests potential leverage concerns in a stressed earnings environment. Positive signs in revenue progression across earlier quarters before QQ3 2025 exist, but the current quarter’s profitability and cash-flow generation are negative, which could constrain balance-sheet flexibility.
SWOT Analysis
Strengths
Large, diversified US hospital operator with broad service lines across inpatient, outpatient, and ancillary care.
Scale and brand recognition in a mature healthcare market, providing a significant patient and payer network.
Weaknesses
QQ3 2025 shows negative gross and operating margins despite substantial revenue, indicating a fragile cost structure or unusual charges.
Near-term liquidity pressures suggested by current ratio well below 1 and low cash ratio.
Revenue growth in the quarter did not translate into profitability, signaling potential systemic cost issues or payer mix risks.
Opportunities
Expansion of outpatient and ambulatory services to improve margin profiles and fixed-cost absorption.
Operational efficiency programs and vendor negotiations to reduce cost of revenue and OPEX.
Strategic initiatives around payer mix optimization and digital health capabilities that can improve throughput and patient access.
Threats
Regulatory and reimbursement risk, including potential Medicare/Medicaid policy changes.
Labor cost inflation and competition for skilled healthcare staff.
Macro volatility and admissions intensity impacting inpatient volumes.