Acadia Healthcare Co., Inc. Q1 FY2025 earnings call

• Chris Hunter noted first quarter revenue and EBITDA were in line with expectations. - Added 378 new beds in Q1, including 90 to existing facilities and 288 from two new facilities. - Added 7 new comprehensive treatment centers, extending market reach to 170 CTCs across 33 states. - Emphasized commitment to quality and safety, with facilities licensed, accredited, and regular inspections; used data for care quality monitoring. - Labor efforts positively impacting recruitment and retention, with premium pay declining sequentially and year-over-year. - Engaged on policy landscape, highlighting importance of supplemental payment programs for Medicaid populations.

First quarter revenue was $770.5 million, just above the midpoint of the outlook range of $765 million to $775 million. Adjusted EBITDA was $134.2 million, near the high end of the outlook range of $130 million to $235 million. Same facility patient days grew 2.2% in the first quarter, including an unfavorable leap year impact of roughly 110 basis points. Revenue contribution details by product segment weren't explicitly broken down in the transcript.

• Reaffirmed full-year revenue and adjusted EBITDA guidance ranges. - Expect to add 801,000 total beds in 2025, and 608-800 beds annually from 2026-2028. - Medicaid supplemental payments expected flat to up $15 million in 2025, inclusive of new Tennessee program once approved. - Startup losses expected $50 million to $55 million for 2025, with ~$15 million in Q2. - Anticipate beginning to comp over headwind from underperforming facilities in Q4 2025.

• Uncertainty in construction timing, licensing, and ramping of new beds. - Policy changes, including potential Medicaid work requirements that could impact patient access. - Legal expenses related to ongoing DOJ and SEC investigations.

Q: How to think about the progression of EBITDA with seasonality and various factors?

A: Heather Dixon explained factors like supplemental payment timing, bed additions, underperforming facilities, and rate moderation impact EBITDA progression.

Q: Thoughts on Medicaid and commercial rates?

A: Chris Hunter said good discussions with payer partners, outlook assumed low single-digit same facility revenue per day growth with conservatism on rates.

Q: Demand environment for behavioral health?

A: Chris Hunter stated consistent increasing demand across lines of business due to focus on higher acuity patients and quality commitment.

Q: Favorability in first quarter performance?

A: Heather Dixon mentioned favorable labor trends and startup losses being a couple million dollars better than expectations.

Q: Return target for new facilities?

A: Heather Dixon said they use return on invested capital, apply disciplined approach, and have checkpoints for projects.

Q: CTC revenues and pricing?

A: Chris Hunter said CTC revenue grew 3.6% year over year, with no specific pricing issues noted.

Q: Impact of Tennessee DPP and cash flow?

A: Heather Dixon discussed Tennessee DPP timing impact and CapEx related cash flow factors.

Q: Specialty revenue decline?

A: Heather Dixon said it's driven by facility closures.

Q: Underperforming facilities update?

A: Chris Hunter said underperforming facilities performed in line with expectations, with plan to comp over headwind in Q4 2025