pediatrix(MD) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Pediatrix Medical Group reports strong Q2 2025 results, exceeding forecasts and raising full-year Adjusted EBITDA outlook Q2 2025 Performance Overview Pediatrix Medical Group reported strong second-quarter results for 2025, exceeding forecasts with a net income of $39 million and Adjusted EBITDA of $73 million | Metric | Q2 2025 | | :----- | :------ | | Net Revenue | $469 million | | Net Income | $39 million | | Adjusted EBITDA | $73 million | | Diluted EPS | $0.46 | | Adjusted EPS | $0.53 | CEO Commentary CEO Mark S. Ordan highlighted that strong neonatology patient volumes, stable payor mix, and careful operations management contributed to exceeding Q2 forecasts, leading to an upward revision of the full-year 2025 Adjusted EBITDA outlook - Operating results exceeded forecast due to strong neonatology patient volumes, stable payor mix, and careful operations management[2] - Full year 2025 Adjusted EBITDA outlook raised from a range of $220 million to $240 million to a range of $245 million to $255 million[2] Operating Results This section details Pediatrix Medical Group's financial performance for the three and six months ended June 30, 2025, highlighting revenue drivers, expense changes, and profitability metrics Three Months Ended June 30, 2025 For Q2 2025, net revenue decreased year-over-year primarily due to practice dispositions, but same-unit net revenue grew by 6.4%, driven by higher patient acuity, improved collections, increased administrative fees, and patient volume | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Net Revenue | $468.8 | $504.3 | -$35.5 | | Practice salaries and benefits | $323.5 | $357.8 | -$34.3 | | General and administrative expenses | $55.7 | $56.6 | -$0.9 | | Transformational & restructuring expenses | $3.8 | $13.6 | -$9.8 | | Depreciation and amortization | $5.3 | $8.8 | -$3.5 | | Interest expense | $9.1 | $10.3 | -$1.2 | | Net Income (Loss) | $39.3 | -$153.0 | +$192.3 | | Adjusted EBITDA | $73.2 | $57.9 | +$15.3 | | Diluted EPS | $0.46 | -$1.84 | +$2.30 | | Adjusted EPS | $0.53 | $0.34 | +$0.19 | - Net revenue decrease primarily due to non-same unit activity (practice dispositions), partially offset by 6.4% growth in same-unit net revenue[2][4] - Same-unit revenue growth driven by: 3.5% from net reimbursement-related factors (higher patient acuity, improved collections, increased administrative fees) and 2.9% from patient volume[5][6] | Same-Unit Volume Statistics (YoY % Change) | Three Months Ended June 30, 2025 | | :---------------------------------------- | :------------------------------- | | Hospital-based patient services | 3.9% | | Office-based patient services | 1.9% | | Neonatal intensive care unit (NICU) days | 6.0% | - Practice salaries and benefits decreased due to practice disposition activity, partially offset by increases in same-unit clinical compensation costs[6] - General and administrative expenses declined due to net staffing reductions and decreases in professional services and legal fees, partially offset by incentive compensation increases[7] - Transformational and restructuring related expenses significantly decreased from $13.6 million in Q2 2024 to $3.8 million in Q2 2025[8] - Prior year (Q2 2024) included a non-cash impairment loss of $182.0 million related to goodwill and long-lived assets, and losses on disposal of businesses of $10.9 million[9] Six Months Ended June 30, 2025 For the first half of 2025, Pediatrix reported a net income of $60.0 million, a significant turnaround from a net loss in the prior year, with Adjusted EBITDA also seeing substantial growth | Metric | H1 2025 (Millions) | H1 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Net Revenue | $927.2 | $999.4 | -$72.2 | | Net Income (Loss) | $60.0 | -$149.0 | +$209.0 | | Adjusted EBITDA | $122.4 | $95.1 | +$27.3 | | Diluted EPS | $0.70 | -$1.79 | +$2.49 | | Adjusted EPS | $0.87 | $0.54 | +$0.33 | Financial Position & Cash Flow This section provides an overview of Pediatrix Medical Group's financial health, including cash position, accounts receivable, debt levels, and cash flow from operations Financial Position and Cash Flow Highlights Pediatrix maintained a strong cash position with $224.7 million in cash and cash equivalents at June 30, 2025, generated significantly more cash from continuing operations, and reduced its total debt | Metric | As of June 30, 2025 (Millions) | As of Dec 31, 2024 (Millions) | | :-------------------------------- | :----------------------------- | :---------------------------- | | Cash and cash equivalents | $224.7 | $229.9 | | Net accounts receivable | $239.0 | $259.99 | | Total debt outstanding | $606.0 | $617.664 (Total debt, including finance leases, net) | | Cash from continuing operations (Q2) | $138.1 | $109.3 | | Capital expenditures (Q2) | $4.5 | N/A | - Total debt outstanding at June 30, 2025, was $606 million, consisting of $400 million in 5.375% Senior Notes due 2030 and $206 million in borrowings under its Term A Loan. The Company had no outstanding borrowings under its $450 million revolving line of credit[16] Updated 2025 Outlook This section presents Pediatrix Medical Group's revised financial projections for the full year 2025, specifically regarding Adjusted EBITDA 2025 Adjusted EBITDA Outlook Due to strong second-quarter performance, Pediatrix has raised its full-year 2025 Adjusted EBITDA outlook - Full year 2025 Adjusted EBITDA outlook raised from a range of $220 million to $240 million to a new range of $245 million to $255 million[2][18] | Metric | Original 2025 Outlook (Millions) | Updated 2025 Outlook (Millions) | | :---------------- | :------------------------------- | :------------------------------ | | Adjusted EBITDA | $220 - $240 | $245 - $255 | Company Overview This section provides a brief description of Pediatrix Medical Group, its core services, and its operational scope within the healthcare industry Company Description and Services Pediatrix Medical Group is a leading provider of physician services, offering coordinated, compassionate, and clinically excellent care to women, babies, and children, specializing in various subspecialties through approximately 4,400 affiliated clinicians - Pediatrix Medical Group (NYSE: MD) is a leading provider of physician services, focusing on women, babies, and children[21] - Specialties include obstetrics, maternal-fetal medicine, neonatology, and multiple pediatric subspecialties[21] - Provides services through approximately 4,400 affiliated physicians and other clinicians in hospital and office-based practices[21] - Founded in 1979 as a single neonatology practice, emphasizing high-quality, evidence-based care supported by investments in research, education, quality-improvement, and safety initiatives[21] Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements, emphasizing factors that could cause actual results to differ materially from projections Disclaimer and Risk Factors This section serves as a disclaimer, indicating that the press release contains forward-looking statements subject to risks and uncertainties, advising readers that actual results may differ materially from projections due to various factors detailed in SEC filings - Press release contains forward-looking statements, which are not guarantees of future performance and are subject to risks and uncertainties[22] - Important factors that could cause actual results to differ include: impact of practice portfolio management, revenue cycle management transition, surprise billing legislation, economic conditions, healthcare reform, relationships with payors, debt compliance, management transitions, and transformation initiatives[22][23] Financial Tables & Reconciliations This section provides detailed financial statements and reconciliations, including consolidated statements of income, Adjusted EBITDA, Adjusted EPS, balance sheet highlights, and forward-looking Adjusted EBITDA Consolidated Statements of Income and Comprehensive Income This table presents the unaudited consolidated statements of income and comprehensive income for the three and six months ended June 30, 2025, and 2024, detailing net revenue, operating expenses, income/loss from operations, non-operating items, and net income/loss per share | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net revenue | $468,844 | $504,296 | $927,203 | $999,397 | | Total operating expenses | $408,977 | $662,019 | $835,235 | $1,141,228 | | Income (loss) from operations | $59,867 | $(157,723) | $91,968 | $(141,831) | | Net income (loss) | $39,260 | $(153,025) | $59,997 | $(148,990) | | Diluted Net income (loss) per share | $0.46 | $(1.84) | $0.70 | $(1.79) | | Weighted average common shares | 85,529 | 83,332 | 85,517 | 83,074 | Reconciliation of Net Income (Loss) to Adjusted EBITDA This table provides a reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, highlighting adjustments for interest, taxes, depreciation, amortization, transformational expenses, impairment losses, and loss on disposal of businesses | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net income (loss) | $39,260 | $(153,025) | $59,997 | $(148,990) | | Interest expense | $9,130 | $10,308 | $18,284 | $20,907 | | Income tax provision (benefit) | $15,709 | $(14,703) | $23,062 | $(10,914) | | Depreciation and amortization expense | $5,313 | $8,791 | $10,645 | $19,099 | | Transformational and restructuring related expenses | $3,834 | $13,579 | $10,439 | $22,059 | | Impairment losses | — | $182,034 | — | $182,034 | | Loss on disposal of businesses | — | $10,873 | — | $10,873 | | Adjusted EBITDA | $73,246 | $57,857 | $122,427 | $95,068 | Reconciliation of Diluted Net Income (Loss) per Share to Adjusted EPS This table reconciles GAAP diluted net income (loss) per share to non-GAAP Adjusted EPS for the three and six months ended June 30, 2025, and 2024, detailing adjustments for amortization, stock-based compensation, transformational expenses, impairment losses, loss on disposal of businesses, and discrete tax events | Metric (per share data) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Diluted net income (loss) per share | $0.46 | $(1.84) | $0.70 | $(1.79) | | Amortization (net of tax) | $0.01 | $0.02 | $0.03 | $0.05 | | Stock-based compensation (net of tax) | $0.02 | $0.02 | $0.04 | $0.04 | | Transformational and restructuring expenses (net of tax) | $0.03 | $0.12 | $0.09 | $0.20 | | Impairment losses (net of tax) | — | $1.92 | — | $1.92 | | Loss on disposal of businesses (net of tax) | — | $0.10 | — | $0.10 | | Net impact from discrete tax events | $0.01 | — | $0.01 | $0.02 | | Adjusted EPS | $0.53 | $0.34 | $0.87 | $0.54 | Balance Sheet Highlights This table provides key balance sheet figures as of June 30, 2025, and December 31, 2024, including assets like cash, investments, and accounts receivable, and liabilities such as accounts payable and total debt, along with total shareholders' equity | Metric (in thousands) | As of June 30, 2025 | As of Dec 31, 2024 | | :-------------------------------- | :------------------ | :----------------- | | Cash and cash equivalents | $224,732 | $229,940 | | Accounts receivable, net | $238,992 | $259,990 | | Total assets | $2,102,100 | $2,152,700 | | Accounts payable and accrued expenses | $303,360 | $398,690 | | Total debt, including finance leases, net | $607,548 | $617,664 | | Total liabilities | $1,268,347 | $1,387,762 | | Total shareholders' equity | $833,753 | $764,938 | Reconciliation of Net Income to Forward-Looking Adjusted EBITDA This table provides a reconciliation of projected net income to the forward-looking Adjusted EBITDA range for the year ended December 31, 2025, outlining the adjustments for interest expense, income tax provision, depreciation and amortization, and transformational and restructuring related expenses | Metric (in thousands) | Year Ended Dec 31, 2025 (Low) | Year Ended Dec 31, 2025 (High) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Net income | $126,020 | $133,320 | | Interest expense | $36,700 | $36,700 | | Income tax provision | $46,610 | $49,310 | | Depreciation and amortization expense | $22,870 | $22,870 | | Transformational and restructuring related expenses | $12,800 | $12,800 | | Adjusted EBITDA | $245,000 | $255,000 |