Good day, and welcome to the Surgery Partners, Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Dave Doherty, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining Surgery Partners Second Quarter 2025 Earnings Call. I am joined today by Eric Evans, our CEO. During this call, we will make forward-looking statements. There are risk factors that could cause future results to be materially different from these statements that are described in this morning's press release and the reports we file with the SEC, each of which are available on our corporate website. The company does not undertake any duty to update these forward-looking statements. In addition, we reference certain financial measures that are non-GAAP, which we believe can be useful in evaluating our performance. We reconcile these measures to the most applicable GAAP measure in this morning's press release. With that, I will turn the call over to Eric. Eric?

Thank you, Dave. Good morning, and thank you all for joining us today. My opening comments will briefly highlight our second quarter results and the consistency in delivering on our long-term growth algorithm. Then I will provide additional color on the strong business execution underpinning each of our 3 growth pillars: Organic Growth, Margin Improvement and Deploying Capital for M&A. I will also provide some initial reflections on our business coming out of the recent conclusion of our strategic review process. Finally, I will share our views on how our business is positioned in the current regulatory environment as well as our outlook for the remainder of the year. We are pleased to report Surgery Partners second quarter net revenue of $826 million and adjusted EBITDA of $129 million, both in line with our expectations. Our colleagues and physician partners continue to deliver on our mission to enhance patient quality of life through partnership. And the strong results we shared this morning are a testament to their unwavering dedication and tireless efforts. We are deeply grateful for their commitment and proud of their achievements. Compared to the prior year second quarter, adjusted EBITDA grew 9% and net revenue grew just under 8.5% with contributions from each pillar of our long-term growth algorithm. Our growth in 2025 is attributed to continued strong organic results, including same-facility revenue growth of over 5%. Same-facility revenue growth was comprised of 3.4% surgical case growth and 1.6% rate growth. These components of our same-facility revenue growth are consistent with the expectations that we shared on our prior earnings call. We continue to expect the full year 2025 same- facility growth to be near the high end of our growth algorithm target of 6% with balanced growth between volume and rate as the year progresses. Dave…

Thanks, Eric. Starting with the top line, we performed nearly 173,000 surgical cases in our consolidated facilities in the second quarter, 3.8% higher than 2024. These cases spanned across all our specialties with higher relative growth in gastrointestinal and MSK procedures, including continued growth in orthopedic cases. This case growth drove our second quarter revenue to $826 million, 8.4% higher than the second quarter of 2024. Our same-facility total revenue increased 5.1% for the second quarter, consistent with our growth algorithm target of 4% to 6% and in line with our expectations for the quarter. In the quarter, same-facility case growth was 3.4% and rate growth was 1.6%. Adjusted EBITDA was $129 million for the second quarter, giving us a margin of 15.6%, 10 basis points higher than the prior year. We ended the quarter with $250 million in cash. When combined with the available revolver capacity, we have $645 million in total liquidity. We reported operating cash flows of $81 million in the second quarter of 2025, distributed $54 million to our physician partners and incurred $10 million in maintenance- related capital expenditures. We are seeing incremental improvements in the cash conversion of our revenue with the metric of days sales outstanding decreasing 3 days from the first quarter, which is critical to convert the company's growing earnings. There were no unusual matters that affected operating cash flows in the quarter other than the change in interest rates on our corporate debt portfolio, which I will address shortly. We remain pleased with the disciplined management of our capital deployed for maintenance-related purchases. Moving to the balance sheet. We have $2.2 billion in outstanding corporate debt with no maturity dates until 2030. The effective interest rate on our corporate debt was approximately 7.4% in the quarter, approximately 140 basis points…

[Operator Instructions] Our first question comes from Brian Tanquilut with Jefferies.

Maybe just your comment on the pace of acquisitions and the fact that you have a good pipeline there. How should we be thinking about maybe the cadence going forward for that for this year? Or should we think about any residual that's not deployed out of your typical goal for this year getting carried over the next year as we think about modeling that?

Yes, Brian, it's a great question. We've been really consistent on M&A. And obviously, we started out there at least $200 million, and we still believe that we can execute to that. Clearly, the pace has been a little slower. You a little faster. It's always a little bit difficult to predict the timing of that. And we obviously aren't going to rush deals just to meet the guidance target. So we're going to find the best deals possible. I do think as you think about M&A, that can certainly slide forward or backward any given year from a timing perspective. You can imagine during the strategic process during the first half of the year, there were a lot of things happening and could have some delays associated with that. So we look at the pipeline, it's very, very strong. We're excited about it. We continue to believe that $200 million is the right target every year. And as you know many years, we found more than that. It really just comes down to timing, but couldn't be more pleased with the amount of opportunities that remain out there for us.

Appreciate that. And then, Eric, you talked a little bit about ramping up your de novo pace. So maybe I'm just curious what that looks like in terms of how the economics ramp for de novos and what that does to the margins of the business going forward as you do more of these?

Yes. No, appreciate the question. Yes, we're excited about de novos being a new lever of growth for us. Obviously, it takes bit of time to get the full kind of run rate going there. We've talked about having at any given time, double digits in development, and we continue to execute to that. Excited about those economics. I'll maybe let Dave will kind of walk you through kind of the timing of how that happens, but we do see it as an important part of our growth lever -- our growth opportunity.

Yes. De novos are a very exciting part of the company's growth. And we've started to lay this ground work a couple of years ago as we started to kind of make these statements out there. And just a reminder, Brian, probably from the moment that you sign the papers with your physician partners, it's up to 18 months to get the facility open. Within the first 12 months or so, you're getting all of the appropriate approvals from CMS and from commercial carriers and bringing that business in. And within the first 18 months after ownership, you're probably at run rate. So you say from the beginning to the end of 3 years to get the full run rate. And as we -- as I think Eric talked about in his remarks earlier, we've opened up quite a few this past year, and they're starting to turn profitable. So you can see the way they come through our P&L. We show a little bit of this in our press release exhibits. A majority of these right now are unconsolidated. So we have a minority ownership position in those de novos, not all of them, but for the most part, they are in unconsolidated position. So the economics for us come through partly as management fee revenue, which is included as other revenue in our P&L. And the other part would come through equity earnings of affiliates. So you can see those 2 components. Again, we break those details out in the tables in our press release.

And Brian, I'll just add, one thing we really like about these, they tend to be higher acuity, so these are very focused on orthopedics and maybe occasionally cardiology. So we like the fact that these are kind of purpose-built higher acuity facilities. Also, it gives us a chance in all these cases to negotiate initial rates with payers based on the fact that this stuff is usually coming out of hospitals, right? So we have a real opportunity to start these facilities off kind of getting a better portion of that value from the get-go.

Our next question comes from Matthew Gillmor with KeyBanc Capital Markets.

This is Zach on for Matt. So as your team looks to optimize the portfolio, are there any service lines that you see as less core? Or any color on the areas of growth that you guys are targeting through this optimization?

Yes. Great question. I mean, look, we -- as we think about trying to maximize long-term value for our shareholders, we will and are evaluating those opportunities where there's a particular facility or market that can accelerate the reduction in leverage and increase our cash flow conversion. right? So we think there are opportunities to do that. We're actively exploring those. They could include sales or just expanded partnerships with local health systems to bring greater scale to some markets. Again, as we think about our growth algorithm and our plans, regardless of portfolio optimization, show that we can self-fund our growth over the foreseeable future. But we also understand and think there are opportunities to even accelerate that further, and we're going to be working on those in the coming months, and we'll continue to update the investors.

Great. And then just in terms of leverage, with that optimization, is there a target that you guys have in mind?

No, our leverage target continues to be in the 3s. We should be at or close to the forge of upper 3s at the end of this year and continue to kind of go down as we go forward. So our current target remains at 3, but we'll get there faster with some of these optimization opportunities that may sit in front of us. And that will definitely be one of our key considerations as we look to those opportunities.

Yes. And to your service line question, the only thing I would reiterate is, look, there's a lot of great tailwinds in the ASC space. We're going to really be focused on growing faster. And so clearly, that will be where we focus our efforts service line wise.

Our next question comes from Sarah James with Cantor Fitzgerald.

I understand it's early to slide for the company what a removal of inpatient-only list could look like. But is there any way you can give us some examples and some color of maybe what revenue per case would look like on things not currently on your list that may be able to happen in your facilities or even for the surgeons that are credentialed with you now, how much of their time and their book has to be done outside of your facilities that could potentially be done in your facilities in the future?

Yes, Sarah, thanks for the question. I would just say I'd start by saying we're really pleased that CMS is leaning in on supporting ASC growth. They see the opportunity for cost savings. They see the opportunity for efficiency, and they're leaving that choice to the physician. So high level, as I said in my opening comments, putting this decision back in the hands of the physician to make the right choice for where a patient goes and removing obstacles for any of our physicians to bring their whole book of business is incredibly powerful. We saw that when the total joints were brought on. It was -- we always had done commercial, but we got more commercial after they removed that because they could do their Medicare cases along with that. So there's a lot of power in just simplifying where a physician doesn't have to stop and think about, okay, can I do this in the ASC or not? They can make that choice. So I think that's -- number one, we just say that's powerful. As far as the initial list, it's -- these are higher acuity procedures, so certainly would be higher revenue in general than the population. But right now, we're doing a limited number of commercial patients in those procedures. Again, when you allow Medicare and commercial, there should be some opportunity. But right now, the end is pretty small. What I would say with all of these things, as you remove the inpatient-only list, there are technology changes and there are safety changes that have happened over time that allow more and more things to be done safely in our facilities. And we see that as a really nice tailwind going forward. And we think that list only expands over time. And so if you take away the inpatient-only list and you can leave it to the physician, there's a lot of things that can be done safely with a great service in a way more effective and efficient way in our space in the coming years. And we think CMS leaning in is the absolute right answer.

Our next question comes from Whit Mayo with Leerink Partners.

Yes. My first question, just on the recruiting efforts. Have you made any changes in any of the specialties that you're focused on? I don't think so. But maybe also how much of the same-store case growth do you think you can attribute to those efforts in the last 2 years?

Yes. So first of all, no change in our approach there. We're really pleased with our strong start of recruiting this year. We remain optimistic that we're going to be in that 500 to 600 new recruits kind of number. And as you know, we've talked about many times, the power of our recruitment efforts are kind of that it's a multiyear return on that. So if you look at our -- for example, our doctors we recruited in the first half of '24. In the first half of '25, they brought 68% more cases and 121% more revenue. So it's a compounding effect, continues to be a big part of our growth algorithm. We have not changed the specialties we focus on. Certainly, there's a real focus on orthopedics, but all of our key service lines are there. And we're opportunistic. I mean every market has different service line opportunities that make sense for a given facility and what capacity they have available. As far as what percentage of our same-store growth, I don't think we've ever kind of covered that or released that publicly, but it's obviously meaningful to how we organically grow the business to add new docs, add new service lines, add new capabilities at all times for our facilities.

Yes. And just as a reminder, I don't know you know this, but the recruiting is both strategic to reposition the company and take advantage of these tailwinds and operational to make sure that the facilities are kind of appropriately cared for as doctors retire out of the system. So the goal for us here on recruiting is to be net positive after all of kind of the natural life cycle of the ASC.

Great. And then maybe my follow-up, just any changes with payer behavior, specifically MA plans? And really the corollary to this is just on revenue cycle and an update as to where you are in that initiative and standardization across the facilities?

Yes. I appreciate you bringing that up. Last year, we did talk about some of the payer pressures that we saw in certain markets related to pre-authorization and medical necessity requirements, which were not an excuse for us. It was just something that we had to keep pace with as we were addressing the standardization of our rev cycle across the entire enterprise. As we turned into the new year, and you may recall this from our first quarter call, we felt we got in front of that. And now we're just knee-deep in the appropriate pacing of our rev cycle changes. So about in the middle of our 3-year journey right now in that approach. You could see that coming through. I talked a little bit about that in our DSO improvement, sequential improvement of 3 days this quarter. So we are seeing the team kind of staying really closely aligned with commercial carriers and making sure that we're doing the right things on the front end and chasing claims on the back end if there are any issues that come through with payments.

Yes, Whit, I would just add that payers appreciate, obviously, our value position. And to the extent that we can remove obstacles together, we're having those conversations because ultimately, in almost all markets, we're driving dramatic savings for them. So I think that's one where we're going to continue to work on both sides of it, getting better on the revenue cycle, which Dave is absolutely driving and then also having conversations about how do you take advantage of our position by removing obstacles.

Our next question comes from Benjamin Rossi with JPMorgan.

Just as a follow-up to your comments on the potential inpatient-only list phase out. So just thinking about the total addressable market here, I think you've previously described your all-in market at about $150 billion with maybe $60 billion of that encompassing these inpatient surgical cases that are capable of being shifted to the outpatient setting. Is that still a reasonable ballpark when thinking about the total market of cases that could open up here to the outpatient setting? And if so, is there any way to think about how much of that market, the 270-plus new procedures set to come up in 2026 would represent?

Yes. So let me start at a high level. It's still the right way to think about the market size. We certainly believe -- I mean, it's a combination of things. So let's just start with orthopedics as an example. It's still a very heavily acute care hospital HOPD provided service. So you think about total knees, total hips, while much of it has moved -- the majority has moved to the outpatient setting, much of it is still done in the traditional acute care HOPD setting. And so it's like 3.5 to 1, I think, is roughly the statistic. You still see a ton of movement. So there's the market share that still sits in the wrong side of care, which is pretty massive out of that 150, right? So we've got this just natural work we have to do to continue to move the patient to the right side of care for the right price at the right outcome, right? So that's a big part of it. And then the other part of it, are these new things that can come into our setting of care. Now I would say in these initial couple of hundred, I don't want to say that there's a huge volume. I think, again, they remove obstacles when it comes to being able to bring a doctor's full book of business. But over the longer term, higher acuity orthopedics, higher acuity spine, cardiovascular, there are a bunch of service lines that can still come out. And then within that $150 billion, too, there's a fair amount of business that are tied into some core service lines that you think about all the time, general surgery, OB/GYN, urology that are still in hospitals due to a piece of technology. Again, those are things that we're going to solve over time. So I think there's a lot of ways to break it up, but I wouldn't over-index on these couple of hundred procedures being like a huge, massive movement. I think it's just part of the general trend that's happening with technology. And as you start to remove that inpatient-only list, I do think you're going to see that there's a bunch of stuff that physicians are going to be more comfortable bringing to our site of care for all the reasons you can imagine, more efficient, patient has a great experience, great quality outcomes, very focused factory like, and we're excited about that. But it's -- I wouldn't over-index to just this list because I think that is premature.

Got it. Appreciate the color there. I guess just following up here. For your robotics investments, you've been mentioning the increased investments here over the past several quarters. How would you characterize the benefit here in terms of maybe rates and volumes? Is it fair to say that you're getting more on the rate side here and presumably higher acuity case mix focus? Or do you also see some improved volume throughput from some of your docs?

Yes. So great question. So robotics for us is it's an enabler, right? So we have a lot of -- and what we found early on when I first came here is, we had a lot of physicians who might be partners in our facilities who weren't bringing their highest acuity procedures just due to piece of technology. And we've worked really hard to address those things, understand why they would split business. Bring the technology that's appropriate into our setting to allow them to come, certainly does bring higher acuity cases. It also creates a ton of value for the health system because, again, several joints where they're often coming from hospitals, especially where there's technology involved. And so we're driving dramatic savings while giving the physician more control over their schedule and letting them be an owner in growing that business. So we have a lot of levers there that we think over time continue to be powerful. And as I mentioned earlier, there's a bunch of those joints that still remain in that HOPD setting where we believe we can create value for both the physician and the health system.

Our next question comes from Joanna Gajuk with Bank of America.

I guess a couple of follow-ups on your comments about the portfolio optimization. So you said something about partnerships with systems. Are you referring to maybe selling stake in your assets to a hospital system? Is that how we should think about it?

Yes. So good -- great question. I mean I do think there's going to be opportunities where the best natural owner or the best natural partnership for a particular market may not be us alone, right? And so we're open to those ideas. Again, with the caveat, we're going to be very thoughtful on where can we use opportunities to accelerate our leverage reduction, accelerate our free cash flow growth to get closer, faster to self-fund our growth, right? So yes, the answer is yes on that. We'll be selective on those things. But in some markets, that very well might be the right answer for us and the health system.

Right. And to that point also on the flip side, when you said you have, I guess, some plans already maybe in motion or partially in motion or you kind of reviewed some of these plans. But as part of this optimization strategy, are you also considering divesting some of your surgical hospitals or this is across the board?

Yes. I mean we're going to look at the whole portfolio. So I'm certainly not going to talk about individual assets or things we would sell. But I would say you should expect that across the portfolio, we're going to look at where those opportunities arise, and I'm sure some of that could be in the surgical hospital setting.

Okay. And then my question. On your same-store revenues, right, so you're tracking around 5% in the first half of the year. And I want to say last time you talked about 6% for the year. So I don't know whether I missed it. Did you say that you're still on track? And I guess, how do you want to -- how do you expect to get to that number? In second half, I assume Q4 is the busiest quarter, so maybe that's the answer there.

Yes. Great question. Look, we are pleased with our growth expectations or growth through the first part of the year. It's just right on our expectations. And you're correct, we do expect that number to be at the upper end of our range of 4% to 6% by the end of the year. That's based on a lot of things, a lot of growth initiatives, things we have in the pipeline, timing of de novos. There's a whole bunch of things that go into that. But by the end of the year, we expect to have balanced growth, volume and rate that's at the upper end of our 4% to 6%. And we haven't changed that at all. We still have good visibility to how we're going to get there.

We have our next question from Andrew Mok with Barclays.

It looks like other operating expenses and professional fees were each up $10 million year-over-year and also up sequentially. Can you help us understand what drove the increase and why there's so much variability on the other OpEx line that is typically more fixed in nature?

Yes, happy to, Andrew. I don't know if I agree that other is always going to be a relatively fixed cost because other by its nature includes a number of miscellaneous items. So I think that would be included in there would be things like provider taxes, other fees that are incurred, and they do fluctuate from time to time. But the annual cost for 2024, if you were to try to anchor on something is how we look at that. So from quarter-to-quarter, you may experience some of those pressure points related to things I just mentioned. But 2024, I think, is an appropriate run rate for that. On the professional fees, professional medical fees, yes, there is an increase of $10 million on a hard cost basis. But on a relative to revenue basis, you're only up 30 basis points, so 12.1% to 12.4%. So just as a reminder, so professional medical fees includes costs for our medical directors, medical service contracts, marketing, legal accounting, vendor collections, laundry linen, medical waste, other things like that. The increase, if you were to focus on it, I don't focus too hard on that because I'm not alarmed by 30 basis points, but that increase is directly correlated to the 7 surgical facilities we acquired in 2024. Several of them were supported by physician practices that employ some physicians and clinicians, and those costs would be reflected in that pro fee line.

Great. And then I heard you talk about the interest expense impacting cash flow in the quarter. Can you talk through some of the other working capital items and considerations for the balance of the year?

Yes. I think, the big driver for the year is going to be that interest cost piece of it is we have to lapse the expiration of our interest rate swap. So remember that interest rate swap did close out in the first quarter, replaced with a cap that puts us at 5%, which means we're floating from where we were before. Where we were before was basically that SOFR rate was capped at 2.2%. So it's created some pressure, obviously, on that interest rate. That will still be there in the third and the fourth quarter of this year. Those are the 2 big items -- the one item really that I would call out as a headwind for us. Of course, the underlying growth of the organization is coming through that cash flow from operations line item. You can see it when you adjust out for that $23 million, I think, pressure point that we've called out for interest costs. So that should continue to benefit us as we go throughout the year and assuming that we continue to eke out the benefits of our working capital efforts, which includes the biggest one being revenue cycle, but includes all aspects, capital management, so capital expenditure deployment, control processes and accounts payable and really just making sure cash out and cash in are hedged as much as possible. So no major headwinds other than the interest cost, Andrew.

The next question comes from Tao Qiu with Macquarie.

In terms of the same-store case volume trend, I think your strength is still in contrast with the outpatient performance from some of the hospital peers. Could you remind us what other contributing factors there? Is it geography, portfolio, case mix or anything else you would point to?

Tao, I appreciate the question. Look, we obviously can't comment on our peers. I would say that this growth has been pretty consistent for us. We focus on lots of levers to drive that. As we talked about earlier, we have a robust recruitment engine. We do a lot of things to add new service lines. And so we're constantly focused on that. Clearly, right now, it does seem differentiated from the peers. But we think about this, and we talk about this in our core growth algorithm, 2% to 3% is where we expect this market to be on kind of just a normal organic basis. And we continue to be within that or above that. And so our key there is just continue to execute. We feel good about our growth. And again, it's based on a lot of things, but it's across all service lines with particular strength in GI and MSK. So I can't comment on the others, but it's been pretty consistent for us as far as how we approach it and how we expect to execute on it.

Got it. And second question, what percentage of your volume comes from the health exchange? I mean, given the potential decline in exchange membership next year, what is your view on the potential impact on Surgery Partners?

Yes, interesting question. I would say a lot of that volume appears to go -- from the health exchange appears to go through the ER. When you look at the kind of acute care world, we have relatively limited exposure to health exchange. It's not a big portion of our business, immaterial really to the core business because it's such an elective business. Our business is not typically coming through an ER or coming through other avenues like that. And so our core doctors don't see a ton of exchange business. We don't have a ton of exposure to it. It's a place where probably, maybe we'd like to pick up market share over time. But in this case, it's not an exposure for us going forward.

Our next question is from A.J. Rice with UBS.

If I heard the comments, prepared remarks right, it sounds like Dave was saying you're more comfortable in the lower half of your $10 million guidance range for EBITDA. And it sounded like that was primarily because of the pace of acquisitions and development this year. I know your algorithm is to have 4% to 6% EBITDA growth on an ongoing basis from deals, but I wouldn't have thought that the deals in year contribute that much to earnings growth. Can you maybe flesh out what you're thinking in that comment a little more?

Yes, happy to, A.J. And your conclusion is right. Let me see if I give you data points that can support your reasoning. The reason why we're kind of steering a little bit towards that lower half is because of the pace of M&A. So when we provide initial guidance at the beginning of the year, as we do every year, we assume that 4% to 6% comes from deploying $200 million on capital -- on M&A rather, at consistent historical multiples, so around 8x. And if you -- and you assume on midyear convention, that's going to contribute around $12.5 million or so of earnings. That's how the math would imply if you were to use that. And again, timing is the risk that you have there. We're not going to move things around just to hit an earnings target, we're going to do it when it makes sense. We maintain a pipeline that can support that $200 million statement on an ongoing basis. But the fact of the matter is we've only done $66 million as we sit here today. So that does put us behind that pace of $200 million at a midyear convention. We still have line of sight to $200 million. But when that comes through naturally, at this point, it's -- the math won't support you getting to that initial assumption. So you have to lower that point. It's a timing issue. There will be some pressure on that earnings contribution in the year, but not earnings on a long-term basis.

Okay. And as mentioned earlier, your volumes have been stronger in the first half than a lot of the peers that report outpatient surgery volumes and your rates have been more modest. I think there were some transactions, maybe a Texas deal or something that was having some impact on that. I wonder, when you say more balanced in the back half of the year, do you think that's just going to somewhat reverse in Q3, Q4? Do you think it will reverse enough that you'll end up balance for the whole year? Give us a little bit of flavor for how you expect volumes versus rates to trend in the back half of the year?

Yes. Thanks, A.J. I appreciate the question. And there's always some timing of transactions, you're right, transactions when de novos come in all affect this number. We've talked a lot about on these calls, like quarter-to-quarter, that same-store metric moves around a lot. They can move around for a lot of things. If you look over the year, we've been really accurate at kind of forecasting where we're going. So your question is right in direction, but it won't be quite that extreme. We still expect case growth in the second half of the year. But at the end of the year, when you think about that roughly 6%, we expect it to kind of be balanced between the 2, 3% and 3%, somewhere in that range. And so we still expect to have nice positive case growth in the second half of the year, but it will be moderated in how it contributes and still within our algorithm of 2% to 3%.

Our last question comes from Ben Hendrix with RBC.

Just wondering if you can expand a little bit on your commentary in your prepared remarks about the learnings and insights you gained from the conclusion of your strategic review and how it's forming the broader strategy going forward? Is there any takeaways from the strategic review that's changing your view of whether it be geographic footprint, ASC versus short-stay mix, partnership strategies or other facets of the business management going forward that's changing or expanding, contracting otherwise?

Ben, I appreciate the question. Good way to wrap up. I mean, I think in my comments, I reiterated the key takeaways, but maybe I'll just quickly state them again and make sure that I add any clarifying comments I can. So first of all, going through this process, the one thing that as we looked at all the data, as we looked at where we're going, part of why we're still a public company is that the data is really, really clear on the opportunity in our space. So you think about health care services today, we've kind of talked about how different we are relative to regulatory risk because really, everything happening to us is neutral to a tailwind. We think about the size of the marketplace. We think about our value proposition, which is supported by the government and payers. Again, I go back to this fundamental thing. There's very few places in health care services where the physician, the patient and the payer all have a strong preference for your side of care, and you've got a great position to be in. So we reaffirm kind of our excitement about where this business can go and how fast it can grow and how important it can be for the health system. So that was a big take away from us. As we talked about, I do think that while we will naturally delever and increase cash flow, I do think there's opportunities to accelerate that. And we've reiterated that in the portfolio optimization. I think that is something we're going to be focused on, and we'll come back to you on. As far as changes in how we think about other things, look, health system partnerships, we've done a few of those over the last few years. I do think we're open under the circumstances that it can help us accelerate where we want to go to those partnerships. And perhaps maybe we'll be more open to that than historical, but I mean I don't think it's a huge change. We've already been directionally heading that way for a while. And again, in many markets, that can be the right answer. Your other question around surgical hospitals, look, I would say that they're going to be part of this portfolio. We still -- surgical hospitals play an amazing role for us as a company, and many of them are just -- they give us the opportunity to be focused factories in our core service lines, right? And they are very much matched with an ASC portfolio around them. With that said, we certainly are focused on the core ASC service lines that have the biggest part of that TAM. And so as we think through this, when we can accelerate free cash flow, when we can delever and when we can find a place where it allows us more flexibility in self-funding our go forward on those ASC investments, we'll do that.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.