Acadia Healthcare Co., Inc. Q1 FY2026 earnings call

• Debbie Osteen discussed returning as CEO, listening to teams, and assessing operations. Focus on operational execution, people, and clear decision-making. Made leadership changes in acute service line, reorganized divisions, and created new operating group for acute facilities. Engaged with teams to reinforce priorities and rebuild culture. Evaluated facilities opened since 2023 and gave them action plans. Opened JV facility in Greater Boston and has upcoming facility openings. Focused on efficiency with technology, data tools, and process improvements. Staff retention improved for eighth consecutive quarter. Measured care through enhanced outcomes tracking. - Todd Young reviewed financial results, noting revenue growth driven by acute and RTC, CTC impact from weather. Adjusted EBITDA details, balance sheet position, CapEx plans, and development activity of adding and closing beds.

Revenue was $828.8 million, up 7.6% from Q1 2025. Same facility revenue grew 7.3% due to 5.6% revenue per patient day increase and 1.6% patient days increase. Acute and RTC businesses grew 14.2% and 6.3% respectively. CTC revenue grew 2.5% but was impacted by severe winter weather. Adjusted EBITDA was $144.2 million, $7.2 million above Q1 guidance. Acute facilities performed strongly, including outperformance from new facilities opened since 2023. Losses from startup facilities were $12 million, $2 million better than forecast. Closed facilities had $3 million in net operating costs.

• Q2 revenue expected $835 - $850 million, adjusted EBITDA $142 - $152 million, adjusted EPS $0.30 - $0.40. - Full-year revenue guidance unchanged at $3.37 - $3.45 billion. - Adjusted EBITDA range raised to $580 - $615 million from $575 - $610 million, adjusted EPS range to $1.35 - $1.60 from $1.30 - $1.55. - 12-month rolling adjusted EBITDA expected $559 - $569 million, net leverage at end of Q2 ~4.4 - 4.5 times, expected to end year 3.9 - 4.2 times. - Certain approved supplemental payment programs could add at least $22 million in EBITDA, possibly more based on Florida's plan.

• Bad debts and denials worse than expected in Q1, with ongoing efforts to improve revenue cycle management and collections. - Weather impacted CTC revenue in Q1. - Specialty facility challenges in Pennsylvania with volume losses and closures creating headwinds. - Regulatory and approval risks for supplemental payment programs not yet approved.

Q: Whit Mayo asked about correction plans for underperforming de novos and payer denials.

A: Action plans focus on ramping occupancy, access with partners, and service line timelines. Bad debts and denials worse, with efforts in revenue cycle management, documentation, appealing denials, and consulting.

Q: Matthew Gilmore asked about seasonality and Medicaid supplementals.

A: Slight increase in supplementals in back half, ramping facilities contributing, and cost efficiencies providing benefits.

Q: Pito Chickering asked about bad debts, denials, and length of stay.

A: Length of stay change is math exercise due to specialty bed decrease and acute bed increase.

Q: Ben Hendricks asked about acute operational restructure and referral efforts.

A: Referral sources critical, each service line has communication teams, and outcome data helps.

Q: Brian asked about leadership changes and G&A.

A: Changes made to corporate overhead and operations structure to speed up decision-making and improve performance.

Q: Ryan Langston asked about bad debt and documentation.

A: Documentation improvement ongoing, using tools and AI in revenue cycle management.

Q: John Ransom asked about specialty referrals and quality metrics.

A: Specialty performance strong, commercial payer mix up, quality metrics include patient satisfaction, improved condition, and readmission.

Q: Joanna Jaguk asked about labor and AI.

A: Labor retention improved, and AI used for prediction of care and in EMR systems.

Q: Andrew Malk asked about same-store admissions and startup losses.

A: Admissions driven by new acute beds and ramping facilities, startup losses expected to diminish with progress