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01/10 19:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: solid financial performance with revenue and EBITDA near the high end of guidance, but concerns over Medicaid issues and startup losses. Management's optimistic guidance is tempered by underperforming facilities and increased startup costs. The Q&A highlights potential risks, such as Medicaid challenges and unclear responses on strategic measures. However, the outlook for Q4 is positive with expected volume growth. The neutral sentiment reflects balanced positive and negative factors, with no clear catalyst for significant stock movement.
Total Revenue $869.2 million, up 9.2% year-over-year. The increase was attributed to solid top-line growth.
Adjusted EBITDA $201.8 million, a 7.5% increase year-over-year. This reflects an adjusted EBITDA margin of 23.2%.
Same-Facility Revenue Grew 9.5% year-over-year, driven by a 7.5% increase in revenue per patient day and 1.8% growth in patient days.
Tennessee Supplemental Payment Program Benefit $51.8 million recognized in the quarter, compared to $8.6 million in the second quarter of 2024. This includes $28.5 million related to fiscal year 2024, $11 million for Q1 2025, and $12.3 million for Q2 2025.
Start-Up Losses $14.2 million related to recently opened facilities, compared to $4.6 million in the second quarter of 2024. The increase was due to new facility construction running ahead of schedule.
Cash and Cash Equivalents $131.4 million as of June 30, 2025.
Available Credit $828 million available under the $1 billion revolving credit facility.
New Beds Added: Added 101 beds to existing facilities in Q2, totaling 191 beds for the first half of 2025. Including 288 beds from newly constructed facilities, a total of 479 beds have been added in 2025.
New Facilities: Completed construction of three new facilities in partnership with joint venture partners, including a second facility with Geisinger in Danville, Pennsylvania. Two additional facilities are scheduled to open later this year.
Comprehensive Treatment Centers (CTCs): Added four new CTCs for opioid use disorder, extending the market reach to 174 CTCs across 33 states. A total of 11 CTCs have been added in 2025.
Tennessee Directed Payment Program: State of Tennessee approved a new Directed Payment Program, emphasizing the importance of behavioral health services in community well-being.
Medicaid Volumes: Medicaid volumes in acute care hospitals slightly declined year-over-year in Q2, while commercial and Medicare volumes increased by 9% and 8%, respectively.
Revenue Growth: Total revenue of $869.2 million in Q2 2025, up 9.2% year-over-year. Adjusted EBITDA was $201.8 million, a 7.5% increase.
Quality Initiatives: Implemented advanced technology and analytics, including real-time quality dashboards and 24/7 patient monitoring devices, to enhance patient safety and care quality.
Labor Trends: Favorable labor trends in 2025 due to centralized recruitment, retention, and employee engagement initiatives.
Behavioral Health Partnerships: Strengthened partnerships with healthcare providers to integrate behavioral health into broader systems, aiming to improve mental and physical health outcomes.
Technology Investments: Invested in technology to support quality improvement, accountability, and value-based care negotiations.
Medicaid Supplemental Payments: Potential reduction in Medicaid supplemental payments starting in fiscal 2028 could impact revenue. Although some revenue loss may be offset by reduced provider taxes, this remains a financial risk.
Underperforming Facilities: A handful of facilities continue to underperform, with one facility showing further deterioration due to strong local market pressures. This could impact overall operational performance.
Acute Care Volumes: Volumes in acute care business came in below expectations, with pockets of weakness in certain markets with higher Medicaid exposure. This could affect revenue and operational efficiency.
Start-Up Costs: Higher-than-expected start-up losses of $14.2 million in Q2 2025, compared to $4.6 million in Q2 2024, due to new facility construction running ahead of schedule. This increases financial strain.
Labor Market Pressures: Although labor trends are improving, maintaining talent in a competitive labor market remains a challenge, potentially impacting operational efficiency and costs.
Volume Growth Expectations: Lower-than-expected same-facility volume growth for 2025, now projected at 2%-3% compared to earlier expectations of low to mid-single digits. This could impact revenue projections.
Revenue Expectations: For the full year 2025, Acadia expects gross revenue of approximately $230 million from existing state Medicaid supplemental programs. Additionally, the company has updated its adjusted EBITDA range for the full year to $675 million to $700 million, reflecting lower expected volume growth and higher start-up costs, partially offset by an increase in anticipated supplemental payments.
Volume Growth: Same-facility volume growth is now expected in the range of 2% to 3% for the full year 2025, compared to the prior expectation of low to mid-single digits.
Bed Additions: Acadia now expects to add between 950 and 1,000 total beds in 2025, compared to the previously expected range of 800 to 1,000 beds.
Medicaid Supplemental Payments: Net Medicaid supplemental payments are expected to increase by $30 million to $40 million in 2025 compared to the prior year, including a $40 million to $45 million recurring benefit from the recently approved Tennessee program.
Start-Up Losses: Start-up losses are expected to be approximately $60 million to $65 million for the full year 2025, reflecting a $10 million increase relative to prior guidance due to new facility construction running ahead of schedule.
Seasonality in Adjusted EBITDA: For modeling purposes, Q3 adjusted EBITDA is expected to be modestly above Q4, in line with typical seasonality.
The selected topic was not discussed during the call.
The earnings call presents mixed signals: strong revenue growth and positive Medicaid supplemental payments are offset by challenges with Medicaid payer dynamics and increased startup losses. The Q&A reveals cautious optimism for future growth but lacks clarity on critical financial metrics. Despite a reduction in CapEx indicating capital efficiency, the lack of specific guidance and payer challenges temper the outlook, suggesting a neutral stock price movement.
The earnings call reveals mixed signals: solid financial performance with revenue and EBITDA near the high end of guidance, but concerns over Medicaid issues and startup losses. Management's optimistic guidance is tempered by underperforming facilities and increased startup costs. The Q&A highlights potential risks, such as Medicaid challenges and unclear responses on strategic measures. However, the outlook for Q4 is positive with expected volume growth. The neutral sentiment reflects balanced positive and negative factors, with no clear catalyst for significant stock movement.
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