MD Lifts 2025 EBITDA Outlook After 44% YoY Adjusted EBITDA Growth—Hospital-Based Revenues Lead Recovery
Adjusted EBITDA Surges 44.98% on Robust Hospital-Based and Neonatology Performance
Pediatrix Medical Group (NYSE: MD) delivered a solid third quarter, raising its full-year 2025 Adjusted EBITDA outlook to a range of $270–$290 million. Q3 Adjusted EBITDA jumped 44.98% year-over-year to $87.32 million, handily outpacing the prior year’s $60.23 million. This growth came as hospital-based patient service revenues, especially in neonatology, gained momentum, and the company executed well on collections and expense discipline.
Revenue Mix and Volume: Same-Unit Growth Counters Practice Dispositions
While net revenue declined to $492.88 million from $511.16 million due to divestitures and practice sales, underlying trends were encouraging. Same-unit net revenue climbed 8.0% year-over-year in Q3, propelled by:
- 7.6% increase in same-unit reimbursement-related revenue, benefiting from stronger collections, higher patient acuity (notably in NICU), and a more favorable payor mix
- 0.4% uptick in same-unit patient service volumes overall
Neonatal intensive care unit (NICU) patient days—a core driver—grew 2.2% year-over-year in Q3. These gains helped counter revenue pressure from divestitures, illustrating the resilience of Pediatrix’s hospital-based segments.
| Segment | Q3 2025 YoY Change | Nine Months 2025 YoY Change |
|---|---|---|
| Hospital-Based Patient Services | +0.7% | +2.0% |
| Office-Based Patient Services | -0.6% | +0.9% |
| NICU Patient Days | +2.2% | +3.4% |
Cost Management and Operating Leverage Boost Margins
Operating expense control played a key role in the EBITDA jump. Practice salaries and benefits dropped 8.92% from a year ago due to the impact of business divestitures, with savings outweighing modest increases in incentive-based clinical compensation. General and administrative expenses saw a slight increase to $60.79 million, primarily from incentive compensation tied to financial results.
Transformation and restructuring expenses dropped by $12.61 million, and interest costs fell modestly to $8.94 million, further supporting bottom-line expansion. Q3 net income soared to $71.71 million ($0.84/share), more than tripling from $19.44 million ($0.23/share) last year.
| Q3 2025 ($M) | Q3 2024 ($M) | Change | |
|---|---|---|---|
| Net Revenue | 492.88 | 511.16 | -3.58% |
| Adjusted EBITDA | 87.32 | 60.23 | +44.98% |
| Net Income | 71.71 | 19.44 | +268.83% |
Liquidity Strengthens, Leverage Remains in Check
MD finished Q3 with cash and equivalents of $340.06 million—up 48% year-to-date—helped by $138.1 million in cash from operating activities. The company maintains $602.5 million in debt (primarily 5.375% Senior Notes and a Term A Loan), with no borrowings under its $450 million revolver. Shareholder equity rose to $890.67 million.
Full-Year 2025 Adjusted EBITDA Outlook Raised
With favorable trends in collections, patient acuity, and payor mix, management boosted its 2025 Adjusted EBITDA outlook to $270–$290 million (previous range not specified here, but represents an increase from prior guidance). The table below outlines the updated reconciliation for year-end Adjusted EBITDA targets:
| 2025 Guidance ($M) | Low End | High End |
|---|---|---|
| Net Income | 155.90 | 170.50 |
| Adjusted EBITDA | 270.00 | 290.00 |
Key Takeaways for Investors: Resilient Core, Leaner Cost Base, Upgraded Outlook
Pediatrix’s quarter points to solid underlying demand for hospital-based and neonatology services, with efficiency gains boosting profitability. Improved cash flows and liquidity strengthen the balance sheet, while the upgraded 2025 EBITDA target signals growing management confidence despite sector uncertainty. With strong results across both earnings and operations, investors may want to monitor MD as it executes on its strategic priorities in the evolving healthcare landscape.
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