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Acadia Healthcare Company, Inc. (ACHC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line and non-GAAP results: revenue $869.23M (+9.2% YoY) and Adjusted EPS $0.83, both above consensus; Adjusted EBITDA was $201.85M (+7.6% YoY), with margin at 23.2% .
  • Strong same-facility performance (revenue +9.5%, revenue per patient day +7.5%) was partly offset by softer Medicaid volumes in acute care and $14.2M of startup losses from new facilities .
  • Guidance updated: revenue $3.30–$3.35B, Adjusted EBITDA $675–$700M, Adjusted EPS $2.45–$2.65; expansion capex dialed down and bed additions raised (950–1,000), reflecting accelerated openings and intent to moderate spend while preserving growth .
  • Near-term stock catalysts: upside from recurring Tennessee supplemental payments ($10–$11M per quarter in H2), potential acceleration of FCF via capex pauses, and narrative on managed Medicaid utilization pressure vs strong commercial/Medicare growth .

What Went Well and What Went Wrong

What Went Well

  • Same-facility revenue growth +9.5% YoY driven by 7.5% revenue per patient day increase and 1.8% patient days; same-facility Adjusted EBITDA +14.1% YoY .
  • Management secured approval of Tennessee Medicaid directed payment program, recognizing $51.8M favorable pre-tax benefit in Q2 (including prior period catch-up) and guiding to a recurring $10–$11M per quarter benefit in H2 .
  • Technology and quality investments: EMR adoption, 24/7 patient monitoring, wearable staff safety devices, and an integrated quality dashboard with 50+ KPIs; “We believe Acadia has led the industry in adopting the latest technology and evidence-based practices” (CEO) .

What Went Wrong

  • Acute care Medicaid volumes were below expectations due to evolving utilization management by managed Medicaid plans; admissions friction and authorization challenges cited by management .
  • Elevated “transaction, legal and other costs” ($64.4M), primarily government investigations ($53.5M) weighed on GAAP results; management expects investigation costs to decline in H2 .
  • Underperforming facilities remained a headwind: ~80 bps drag on same-facility patient day growth in Q2 and ~$3M worse EBITDA vs prior expectations at one site; company continues portfolio actions and targeted outreach to referral sources .

Financial Results

Headline Financials vs Prior Quarters

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$774.24 $770.51 $869.23
Diluted EPS (GAAP, $)$0.35 $0.09 $0.33
Adjusted EPS (Non-GAAP, $)$0.64 $0.40 $0.83
Adjusted EBITDA ($USD Millions)$153.10 $134.20 $201.85
Adjusted EBITDA Margin (%)19.8% 17.4% 23.2%

Actuals vs S&P Global Consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$841.00*$869.23 +$28.23; +3.4%
Primary EPS ($)$0.707*$0.83 +$0.12; +17%
# of Estimates (EPS / Revenue)13* / 13*——

Values marked with * retrieved from S&P Global.

Key Operating KPIs (Same-Facility)

KPIQ4 2024Q1 2025Q2 2025
Revenue Growth YoY (%)4.7% 2.1% 9.5%
Patient Days Growth YoY (%)3.2% 2.2% 1.8%
Revenue per Patient Day Growth YoY (%)1.4% -0.2% 7.5%
Revenue per Patient Day ($)$999 $994 $1,078
Patient Days (#)765,763 763,958 789,619

Capacity & CTC Footprint

MetricQ4 2024Q1 2025Q2 2025
Newly Licensed Beds Added (Quarter)577 378 101
CTCs (Count)163 170 174

Guidance Changes

MetricPeriodPrevious Guidance (Feb/May 2025)Current Guidance (Aug 2025)Change
RevenueFY 2025$3.3–$3.4B $3.3–$3.35B Lowered top end
Adjusted EBITDAFY 2025$675–$725M $675–$700M Lowered top end
Adjusted EPSFY 2025$2.50–$2.80 $2.45–$2.65 Lowered
Interest ExpenseFY 2025$130–$140M $130–$140M Maintained
Tax RateFY 202525–26% 25–26% Maintained
D&A ExpenseFY 2025$175–$185M $185–$195M Raised
Stock CompFY 2025$45–$50M $40–$45M Lowered
Operating Cash FlowsFY 2025$460–$510M $460–$485M Narrowed lower
Expansion CapexFY 2025$525–$575M $495–$535M Reduced
Maintenance & IT CapexFY 2025$105–$115M $105–$115M Maintained
Total Bed AdditionsFY 2025800–1,000 950–1,000 Raised midpoint

Assumptions now include: same-facility volume growth 2–3%, low-single-digit revenue per patient day growth, startup losses $60–$65M (up $10M on accelerated openings), net Medicaid supplementals +$30–$40M with $10–$11M/quarter recurring TN in H2 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Technology & Quality (EMR, monitoring, safety devices; 50+ KPI dashboard)Emphasized heavy tech/quality investment and KPI dashboard roll-out Reinforced adoption and quality reviews; labor benefit Highlighted leadership in tech, evidence-based care, and payer discussions on value-based care Improving/expanding
Medicaid Policy & SupplementalsGross state-directed payments < $200M in 2024 (net ~2/3) Expected TN program later in 2025; supplementals flat to up $15M for year OBBBA law viewed manageable; TN approved with $51.8M benefit in Q2; recurring $10–$11M/quarter in H2 Supportive but lumpy; clearer recurring tailwind
Acute Medicaid VolumesUnderperforming facilities and referral issues; ~2% drag contemplated Headwinds persisted; ~90 bps drag on SF patient day growth Softer acute Medicaid volumes; authorization friction; ~80 bps drag; expected to comp by Q4 Deteriorated in Q2; stabilizing into Q4
Start-up Losses & Bed RampQ4 start-up losses $11.2M; 577 beds added Q1 start-up losses ~$16M; 378 beds; 800–1,000 beds FY target Q2 start-up losses $14.2M; 101 beds; 950–1,000 beds FY, ramp supports EBITDA/FCF in 2026 Elevated in H1; declining H2/H26
Legal/Investigations SpendTransaction/legal costs $29.6M (Q4), reserve increase Transaction/legal $31.1M (Q1) Transaction/legal $64.4M; government investigations $53.5M; expected to decline H2 High in H1; easing expected
Capital Allocation/FCF2026 FCF positive targeted; revolver upsized to $1B Reaffirmed FCF path by end-2026 Paused two facilities (~$100M capex saved); opportunity to accelerate FCF and lower start-up costs More conservative; FCF acceleration potential
CFO TransitionN/AN/ACFO stepping down Aug 15; Interim CFO appointed Leadership transition; finance continuity

Management Commentary

  • “Revenue for the second quarter increased 9.2%… Adjusted EBITDA improved 7.6%… we remain focused on strengthening our capabilities and leveraging technology to drive greater efficiencies in care delivery” (CEO) .
  • “Adjusted EBITDA… 23.2%… Same facility revenue grew 9.5%… We recognized a favorable pre-tax benefit of $51.8 million [Tennessee]… startup losses were $14.2 million” (CFO) .
  • “We… believe the provisions of the [OBBBA] bill are manageable… with carve outs… extended timeline… We expect… gross revenue of approximately $230,000,000 from existing state Medicaid supplemental programs [FY25]” (CEO) .
  • “We have the opportunity to take a pause on some of our expansion capital spending… identified two facilities… that will save us over $100,000,000 in CapEx” (CEO) .

Q&A Highlights

  • Acute Medicaid volumes: Managed Medicaid utilization pressures and authorization friction cited; commercial and Medicare volumes stronger; referrals being reengaged locally .
  • Start-up losses: +$10M vs prior plan due to faster bed openings (pull-forward from 2026), implying lower 2026 start-up losses .
  • Free cash flow: Potentially accelerate path via capex moderation; two projects paused, ~$100M capex saved, reducing start-up cost drag and unlocking EBITDA .
  • Investigations costs: ~$54M in Q2 legal spend; no settlements included; expected to decline H2 .
  • Underperforming facilities: ~80 bps drag on SF volumes in Q2; guidance assumes ~$20M EBITDA headwind 2025; one site worsened by ~$3M; turn-around timing uncertain .

Estimates Context

  • Q2 2025 beat: Revenue $869.23M vs $841.00M consensus (+3.4%); EPS $0.83 vs $0.707 (+17%), driven by strong same-facility pricing and TN supplemental benefit, partially offset by softer Medicaid volumes and start-up losses .
  • Prior quarters: Q1 2025 slight beats (EPS $0.40 vs $0.357; revenue $770.51M vs $769.84M); Q4 2024 misses (EPS $0.64 vs $0.715; revenue $774.24M vs $778.98M), impacted by reserve increases and closures .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Pricing power and same-facility execution offset Medicaid volume softness; recurring TN directed payments should provide H2 tailwind ($10–$11M per quarter) .
  • Non-GAAP performance momentum: Adjusted EBITDA margin expanded to 23.2% in Q2; management reaffirmed second-half seasonal strength and supplemental payment cadence .
  • Capex discipline emerging: project pauses (~$100M savings) and reduced 2025 expansion capex indicate a more balanced growth/FCF approach—potential near-term multiple support .
  • Legal/investigation overhang remains but costs expected to decline in H2; monitor any updates and potential settlements; GAAP results will remain volatile due to “transaction, legal and other costs” .
  • Underperforming facilities are a contained but real headwind (~$20M EBITDA 2025); comp tailwind expected from Q4 as laps begin; watch local referral progress .
  • Capacity growth intact: 950–1,000 beds in 2025, with ramp dynamics underpinning 2026 EBITDA and FCF inflection; start-up losses to ease as bed additions moderate .
  • Leadership transition (CFO) appears orderly with internal interim; no disagreement cited; monitor continuity in finance execution .