Pediatrix Medical Group — Q3 2026 Earnings Summary

Financial Performance:

• Net revenue for the three months ended September 30, 2026, was $501.4 million, a 1.7% increase from $492.9 million in the prior-year period.
• Net income for the quarter was $47.0 million ($0.59 per diluted share), down from $71.7 million ($0.84 per diluted share) in the prior-year period.
• Adjusted EBITDA for the quarter was $85.5 million, a decrease from $87.3 million in the prior-year period.
• For the nine months ended September 30, 2026, revenue was $1.47 billion compared to $1.42 billion in the prior year.
• Net income for the nine months ended September 30, 2026, was $116.4 million ($1.43 per share), compared to $131.7 million ($1.54 per share) in the prior year.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $220.1 million, up from $209.7 million in the prior year.
• Adjusted EPS for the quarter was $0.72, compared to $0.67 in the prior year; for the nine months, Adjusted EPS was $1.78, compared to $1.54 in the prior year.
• Practice salaries and benefits expense increased to $341.5 million from $332.3 million in the prior-year quarter.
• General and administrative expenses increased to $62.7 million from $60.8 million in the prior-year quarter.
• Depreciation and amortization expense was $6.2 million, up from $5.6 million in the prior-year quarter.
• Interest expense was $8.1 million, down from $8.9 million in the prior-year quarter.
• Net gain on investments in divested businesses was $0 in the current quarter, compared to $20.9 million in the prior-year quarter.
• Cash and cash equivalents were $311.9 million at September 30, 2026, down from $375.2 million at December 31, 2025.
• Net accounts receivable were $231.8 million at September 30, 2026.
• Total debt outstanding was $578 million, consisting of $400 million in 5.375% Senior Notes due 2030 and $178 million in Term A Loan borrowings.
• Cash from continuing operations was $117.7 million for the quarter, down from $138.1 million in the prior-year quarter.
• The company used $83.0 million for share repurchases and $4.4 million for capital expenditures during the quarter.

Guidance and Future Outlook:

• Pediatrix anticipates full-year 2026 Adjusted EBITDA to be in the range of $290 million to $300 million.

Business Segments and Product Lines:

• Non-same unit activity revenue grew 1.1%, driven by recent acquisitions and partially offset by practice dispositions.
• Same-unit revenue grew 0.6%, with reimbursement-related factors increasing 0.3% and patient volume increasing 0.3%.
• The percentage of services reimbursed by commercial and other non-government payors increased by 70 basis points year-over-year.
• Hospital-based patient services volume decreased 0.3% for the quarter and 1.2% for the nine-month period.
• Office-based patient services volume increased 2.9% for the quarter but decreased 0.6% for the nine-month period.
• Neonatal intensive care unit (NICU) days decreased 0.1% for the quarter and 1.1% for the nine-month period.
• Revenue growth in same-unit reimbursement factors was driven by a favorable shift in payor mix, increased administrative fees from hospital partners, and higher patient acuity, primarily in neonatology.

Market and Competitive Landscape:

• The company noted a favorable shift in payor mix toward commercial and non-government payors.
• Management highlighted the company's position as a leading provider of physician services with sector-leading care quality.

Risks and Challenges:

• Risks include the impact of economic conditions, inflationary pressures, and potential healthcare reform legislation.
• Risks involve shifts in payor mix, state budgetary constraints, and uncertainty over Medicaid.
• Risks include the impact of surprise billing legislation and the transition to a hybrid revenue cycle management model.
• Risks include the timing and contribution of future acquisitions, the ability to comply with debt financing arrangements, and the success of transformation initiatives.

Management Commentary and Tone:

• CEO Mark S. Ordan stated the company was pleased with results driven by volume and pricing performing ahead of expectations.
• Management indicated a continued focus on operating efficiency, high-value opportunities in adjacent businesses, and sector-leading care quality.

Other Key Points:

• Weighted average shares outstanding decreased to 79.7 million in the quarter from 85.6 million in the prior-year period, primarily due to share repurchases.
• The company has no outstanding borrowings under its $450 million revolving line of credit as of September 30, 2026.
• Investment and other income was $5.9 million for both the current and prior-year quarters.
• The company hosts an investor conference call to discuss quarterly results.