HCA's Q2 2026 revenue rose 8.7% to $20.23B and EPS 11.6% to $7.62, lifted by a back-dated Florida Medicaid payment and buybacks, while a ~$400M hit from patients losing exchange coverage led HCA to cut its 2026 profit guidance.
Revenue
$20.2B
+8.7% YoY
Net income
$1.7B
+2.8% YoY
Diluted EPS
$7.62
+11.6% YoY
Operating margin
15.3%
What happened
HCA Healthcare, the largest for-profit hospital operator in the US (190 hospitals and about 2,600 outpatient sites in 19 states and the UK), grew second-quarter 2026 revenue 8.7% to $20.23 billion. Net income attributable to HCA rose only 2.8%, to $1.699 billion. Two large, roughly offsetting forces sit under those numbers:
A one-time Medicaid catch-up payment from Florida. Federal regulators (CMS) approved Florida's "directed payment program" during the quarter. This is a state arrangement that routes extra Medicaid money to hospitals through Medicaid managed-care plans. Because the approval covers October 1, 2024 through June 30, 2026, HCA booked $1.372 billion of extra revenue and $829 million of related extra "other operating expenses" all in this one quarter. About $980 million of that revenue and $557 million of those expenses relate to periods before 2026.
Patients losing their insurance. The enhanced federal premium subsidies for Affordable Care Act exchange plans expired at the end of 2025, and administrative rule changes also hit exchange enrollment. HCA estimates the resulting shift toward uninsured patients cut pre-tax income by about $400 million in the quarter, including about $75 million that corrected its earlier estimate for Q1.
HCA put the net benefit from Medicaid supplemental programs at about $400 million for the quarter, roughly the same size as the exchange hit. Diluted EPS rose 11.6% to $7.62, much faster than net income, because buybacks cut the diluted share count by 7.9% (from 241.9 million to 222.8 million).
HCA previewed these results and cut its full-year profit guidance on July 14, ten days before the full release.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$20,230M
$18,605M
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Diluted EPS, as adjusted (excl. facility sale gains/losses)
$7.59
$6.84
+11.0%
Operating margin (pre-tax income + interest, ÷ revenue; our calc)
15.3%
16.0%
-0.7 pts
Adjusted EBITDA
$4,027M
$3,849M
+4.6%
Adjusted EBITDA margin
19.9%
20.7%
-0.8 pts
Same-facility admissions
575,979
561,953
+2.5%
Same-facility equivalent admissions
1,035,610
1,008,144
+2.7%
Same-facility revenue per equivalent admission
$19,391
$18,226
+6.4%
Uninsured share of admissions
8%
7%
+1 pt
Cash from operations
$2,335M
$4,210M
-44.5%
HCA does not report an operating income line. The operating margin above is our calculation: income before taxes plus interest expense, divided by revenue. Adjusted EBITDA is HCA's own non-GAAP profit measure: earnings before interest, taxes, depreciation and amortization, excluding gains or losses on selling facilities.
Takeaway: The 8.7% revenue growth and 11.6% EPS growth mostly reflect a back-dated Florida Medicaid payment and share buybacks. The loss of exchange coverage is a recurring cost. The Florida catch-up is not. Pre-tax income rose just $79 million, from $2,415M to $2,494M. By our arithmetic, the pre-2026 slice of the Florida program alone added about $423 million pre-tax ($980M revenue minus $557M expense), so without it pre-tax income would have been below last year's. Management has already lowered its 2026 profit range.
Volumes: more patients, fewer surgeries
Equivalent admissions is the hospital industry's way of counting total patient volume. It takes inpatient admissions and scales them up to account for outpatient work. "Same-facility" means only hospitals HCA owned in both periods, so acquisitions and sales don't distort the comparison.
Same-facility admissions rose 2.5%, equivalent admissions 2.7%, and emergency room visits 3.6%.
Surgeries, which are among a hospital's most profitable services, went the other way. Same-facility inpatient surgeries fell 2.3% and outpatient surgeries fell 3.4%. HCA calls this a "service mix shift primarily related to a decline in surgical volume." It says the impact was smaller than the payer-mix hit.
Same-facility revenue per equivalent admission (the average revenue per unit of patient volume) rose 6.4%. The 10-Q says this increase "was impacted by the incremental revenue from the Florida directed payment program." So the Florida catch-up inflates it, and it does not show underlying pricing on its own. Same-facility inpatient revenue per admission jumped 15.4% for the same reason.
Payer mix: the exchange subsidy expiry in the numbers
Payer mix is the split of patients by who pays: Medicare, Medicaid, commercial insurers, or nobody. It matters because commercial insurers pay hospitals far more than government programs, and uninsured patients often pay little or nothing.
Same-facility uninsured admissions rose 23.4% from a year earlier, up from a 15.5% rise in Q1. HCA attributes this to "the expiration of the EPTCs [enhanced premium tax credits] at the end of 2025 and administrative reforms," as well as fewer uninsured patients being converted onto Medicaid. It adds that Q2 also reflects people who kept exchange coverage in Q1 but then dropped it.
Uninsured patients made up 8% of admissions, up from 7%. Managed care and insurers fell from 32% to 31%.
Revenue from managed care and insurers fell 1.2%, from $9,124M to $9,013M, even though total volume grew.
Uncompensated care (charity care, uninsured discounts and expected bad debt) rose to $15.076 billion at gross charges, from $11.625 billion. HCA estimates what that care cost it to deliver at $1.445 billion, up from $1.116 billion (+29%).
Texas and Florida hospitals (103 of the 190) produced 58% of admissions and 55% of revenue, and accounted for 73% of uninsured admissions.
Medicaid revenue nearly doubled, from $1,440M to $2,789M. That is almost entirely the Florida program, not more Medicaid patients: Medicaid's share of admissions stayed at 4%.
Costs
Per-unit cost measures, which the Florida revenue doesn't distort, show tight control. Salaries and benefits per equivalent admission fell 0.7%, while same-facility pay per full-time-equivalent employee rose 2.5%. Supply cost per equivalent admission fell 1.0%, with pharmacy down 5.0% on lower use of certain drugs. Other operating expenses jumped from 20.4% to 24.9% of revenue. The 10-Q attributes the increase "primarily" to "growth in Medicaid state directed and supplemental payment program expenses and professional fees." That includes the $829M of Florida-program expense booked this quarter.
Interest expense rose to $599M from $568M. Average debt climbed to $49.2 billion from $44.5 billion, while the average interest rate fell to 4.9% from 5.1%.
Cash flow and balance sheet
Operating cash flow fell 44.5% to $2.335 billion. The 10-Q gives two reasons. First, $1.413 billion of unfavorable working-capital swings, mainly higher accounts receivable from the Medicaid supplemental programs (booked as revenue, not yet collected). Second, $594 million more in income taxes paid, because a 2025 IRS deferral for Tennessee-based taxpayers had pushed last year's estimated payments into Q4 2025. Accounts receivable rose to $12.28 billion at June 30, from $10.87 billion at year-end.
HCA still spent $2.064 billion buying back 4.752 million shares in the quarter and $1.231 billion on capital projects. Total debt reached $49.718 billion, up from $46.492 billion at December 31. Stockholders' equity attributable to HCA stays negative at -$6.64 billion, because buybacks over the years have exceeded retained earnings. The board declared a $0.78 quarterly dividend.
Medicaid policy: a tailwind now, a headwind from 2028
The 10-Q explains how the 2025 Federal Budget Act (FBA) changes the rules behind this quarter's Florida windfall:
Under the FBA, state directed payments will be capped relative to Medicare rates instead of average commercial rates, which are higher. Some arrangements whose applications went in before July 4, 2025 are temporarily grandfathered. HCA says certain of its states have received approval to pay up to the average commercial rate "before the step down begins in 2028." It says further approvals "could result in the recognition of additional revenues, which may be significant," but it cannot predict their timing.
From rating periods starting on or after January 1, 2028, grandfathered arrangements phase down toward the new caps.
CMS issued a final rule in February 2026, and a further proposed rule in July 2026, limiting the provider taxes states use to fund their share of Medicaid. HCA says this "could increase state budgetary pressures, reduce federal Medicaid funding, and negatively affect reimbursement rates and coverage."
Guidance and outlook
HCA revised its 2026 guidance on July 14 and reaffirmed it on July 24:
2026 guidance
Previous (Jan 27)
Revised (Jul 14)
Revenue
$76.5B – $80.0B
$77.0B – $79.5B
Net income attributable to HCA
$6.495B – $7.035B
$6.300B – $6.700B
Adjusted EBITDA
$15.55B – $16.45B
$15.40B – $16.10B
Diluted EPS
$29.10 – $31.50
$28.70 – $30.50
The underlying assumptions changed a lot. HCA now expects the exchange-related payer-mix hit to cost $1.0–1.2 billion of pre-tax income in 2026, up from $600–900 million in April. It now expects Medicaid supplemental programs to be a $300–500 million net benefit, compared with the $50–250 million drag it assumed in April. Capital spending guidance stays at $5.0–5.5 billion. The guidance excludes the effect of future state directed-payment approvals.
Our read: Guidance fell even though a large Medicaid gain was added to it. That means the underlying business is weaker than HCA planned in January: uninsured volumes are growing faster than expected, and surgery, the most profitable service line, is shrinking. First-half net income was $3.319 billion. The revised full-year range implies roughly $3.0–3.4 billion in the second half, without the one-time Florida catch-up that boosted Q2. Things to watch in Q3:
whether same-facility uninsured admissions keep growing faster than Q2's 23.4%
whether surgical volumes recover
whether the Medicaid-program receivables turn into cash, which would bring operating cash flow back toward last year's level
Sources: HCA's Q2 2026 Form 10-Q (linked below) and its July 14 and July 24, 2026 earnings releases (Form 8-K, Exhibit 99.1), which supply the guidance tables and adjusted figures.