Acadia Healthcare Co., Inc. Q4 FY2024 earnings call

• Chris Hunter highlighted solid financial and operating results for Q4 2024, with total revenue growth and same facility patient days growth. He discussed the growth strategy progress, including completing 1,300 beds in 2024, opening joint venture hospitals, and focus on patient-centered initiatives like technology investments (EMR, patient monitoring, wearable devices, quality dashboard). - Heather Dixon provided financial details, noting revenue growth, adjusted EBITDA, reserves for professional and general liability claims, startup losses related to new facilities, portfolio management, and outlook for 2025 financials.

For the fourth quarter, total revenue increased 4.2% over the prior year's fourth quarter to $774 million. Full-year revenue was over $3.1 billion, a 7.7% increase over 2023. Same facility patient days grew 3.2% in the fourth quarter. Excluding underperforming facilities, same facility growth would have been above 5%. Adjusted EBITDA for the fourth quarter of 2024 was $153.1 million, with an adjusted EBITDA margin of 19.8%. On a same facility basis, adjusted EBITDA was $196.4 million and margin was 25.7% in Q4 2024.

2025 full-year guidance: Revenue expected to be in the range of $3.3 billion to $3.4 billion, adjusted EBITDA $675 to $725 million, adjusted earnings per share $2.50 to $2.80, operating cash flows $460 million to $510 million, capital spending $630 to $690 million. First quarter 2025 guidance: Revenue in the range of $765 to $775 million, adjusted EBITDA ~$130 million. Long-term outlook anticipates inflection in earnings growth in 2026, with EBITDA growth of 8% to 10% and revenue growth of 7% to 9%, and free cash flow generation by 2026.

• Increase in professional liability expense related to industry trends. - Startup losses from newly constructed facilities. - Underperforming facilities contributing to EBITDA headwinds. - Uncertainty in timing and magnitude of supplemental payments. - Industry-wide factors affecting costs and reimbursements.

Q: Whit Mayo asked about CapEx decline and first quarter guide.

A: Heather Dixon discussed refinancing, CapEx decline moderating over 2025 and 2026, startup losses tapering, and supplemental payment timing.

Q: Brian Tanquilut inquired about bed growth, margin, and underperforming facilities.

A: Heather Dixon talked about long-term growth outlook, margin assumptions, and efforts to turn around underperforming facilities.

Q: John Ransom asked about de novo beds and returns.

A: Chris Hunter and Heather Dixon addressed focus on de novo facilities, profitability expectations, and strong business performance.

Q: Matthew Gillmor asked about actions to improve underperforming facilities.

A: Chris Hunter detailed comprehensive reviews including competitive landscape, programming, business development, admissions, leadership, technology, and physical plant.

Q: Scott Fidel inquired about share buybacks and leverage.

A: Chris Hunter and Heather Dixon discussed share repurchase authorization, deleveraging through EBITDA growth, and natural deleveraging over time.

Q: Andrew Mok asked about state-directed payments and revenue per patient day.

A: Heather Dixon provided details on total gross supplemental payments, prudence in guidance, and moderation in core rate or CTC revenue.