Short answer
SELECT MEDICAL HOLDINGS CORP (SEM) filed its fiscal 2025 10-K annual report with the SEC on Feb 19, 2026. It reported revenue of $5.5B (+5.1% year over year) and net income of $146M.
- Top risk flagged: Regulatory reimbursement risk from CMS Transmittal 12594 raising LTCH outlier reconciliation CCR threshold to 20%, effective Oct 1, 2025, increasing outlier payment recoupments
FY2025 key financial metrics · XBRL
- Revenue
- $5.5B
- +5.1% YoY
- Net income
- $146M
- −31.7% YoY
- Operating margin
- 6.2%
- +1.0 pp YoY
- EPS (diluted)
- $1.16
- −30.1% YoY
- ROE
- 8.6%
- −4.2 pp YoY
- Operating cash flow
- $346M
- −33.1% YoY
Source: XBRL data from the SELECT MEDICAL HOLDINGS CORP (SEM) FY2025 10-K on SEC EDGAR. USD.
SELECT MEDICAL HOLDINGS CORP FY2025 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business model: Operates critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics across 39 states plus DC
- Discontinued Concentra business via tax-free distribution in November 2024, reflected as discontinued operations for FY2025
- Received non-binding acquisition proposal for a take-private transaction at $16.00-$16.20/share from Executive Chairman in late 2025
- Operated 104 critical illness recovery hospitals, 38 rehabilitation hospitals, and 1,917 outpatient clinics as of December 31, 2025
- Revenue growth slowed to $5.45B in 2025 after divestiture; net income attributable to common stockholders dropped to $146.2M in 2025 from $214M in 2024
Management Discussion & Analysis
- Revenue $5,452.8M for 2025, up 5.1% YoY from $5,187.1M in 2024 and $4,826.0M in 2023
- Adjusted EBITDA $493.2M in 2025, down 3.4% YoY from $510.4M in 2024 and up 10.5% from $446.1M in 2023; margin 9.0% in 2025 vs 9.8% in 2024
- Best performing segment rehab hospital with revenue $1,288.9M (+16.1%), Adjusted EBITDA $278.6M (+13.4%), margin 21.6%
- Worst performing segment outpatient rehab with revenue $1,284.9M (+2.8%), Adjusted EBITDA $90.2M (-17.0%), margin 7.0%
- Net income from continuing operations $214.5M in 2025 vs $130.0M in 2024 and $110.5M in 2023; income growth impacted by debt retirement losses in 2024 and 2023
- Capital allocation details not explicitly stated; tax-free spin-off of Concentra completed Nov 2024, no longer owned
- Regulatory risks from Medicaid funding cuts up to $1 trillion (2025-2034) under OBBBA; potential reimbursement rate cuts and timing uncertainty
- Medicare payment rate increases for critical illness recovery hospitals for FY 2026: standard federal rate $50,825 vs $49,383 in FY 2025; holds telehealth policy expansions through 2025 with some permanent changes
Risk Factors
- Regulatory reimbursement risk from CMS Transmittal 12594 raising LTCH outlier reconciliation CCR threshold to 20%, effective Oct 1, 2025, increasing outlier payment recoupments
- Macroeconomic impact of Medicare payment updates: FY2026 IRF standard payment factor $19,371, up 2.4% vs FY2025, with outlier threshold dropped to $10,141
- Operational exposure to changes in MPFS therapy payments, including a -2.5% efficiency adjustment on non-time-based codes affecting physical/occupational therapy revenue
- Competitive risk from specialty rehabilitation hospitals with 50% Medicare patient days, amid industry-wide reimbursement and regulatory shifts
- Financial risk from insurance programs liability with accrued losses of $143.6M at Dec 31, 2025, including unknown future claim frequency and severity changes
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