Shares of Surgery Partners, Inc. (NASDAQ:SGRY) plunged over 7% in pre-market trading on Monday after the outpatient surgery facility operator reported mixed third-quarter results. While the company's revenue grew at a robust pace, its profitability missed expectations due to higher costs, disappointing investors.

For the third quarter of 2024, Surgery Partners posted revenue of $770.4 million, a 14.3% increase from the prior-year period. This topped analysts' estimates slightly. However, adjusted earnings per share came in at $0.19, missing the consensus forecast of $0.25 by a wide margin.

The revenue growth was driven by a 3.7% increase in same-facility surgical cases and a 0.5% rise in revenue per case. Surgery Partners benefited from the ongoing migration of surgical procedures to the optimal outpatient setting from more costly hospital venues. The company also expanded its network through strategic acquisitions, further bolstering its top-line performance.

Despite the robust revenue growth, Surgery Partners' profitability was impacted by higher costs related to supplies, professional and medical fees, and transaction and integration expenses from recent acquisitions. However, the company noted that its adjusted EBITDA margin expanded by 100 basis points to 16.7%, reflecting operating leverage.

Looking ahead, Surgery Partners reaffirmed its full-year 2024 guidance, projecting revenue and adjusted EBITDA to surpass $3.075 billion and $508 million, respectively. The company remains optimistic about capitalizing on the industry-wide shift toward outpatient surgery facilities, supported by its recent acquisitions and de novo facility openings.