Ardent Health Partners, LLC Q1 FY2026 earnings call

First, covered first quarter results with strong cost management, navigating transient challenges like weather and flu season. Second, provided update on impact program to improve margins, performance, agility, and care transformation, including precision staffing initiatives, supply cost efficiencies, and progress on $55 million savings target. Third, shared updates on key 2026 focus areas such as outpatient growth with opening of urgent care centers, ASCs, freestanding EDs, and use of AI and digital tools for care transformation and operating efficiency.

Revenue increased 7% and adjusted EBITDA grew 26% in the first quarter. Adjusted admissions increased 2%, and total surgery growth was 1.2% year over year. Labor management was strong, with salaries, wages, and benefits expense per AA reduced by 1.4% and supply expense per AA growth at 1.7%. Revenue contribution details: Revenue from various payers with Medicare showing strength, Medicaid essentially flat, and exchanges having some growth. Adjusted EBITDA margin expanded 110 basis points to 7.7%, pre-NCI adjusted EBITDA margin expanded 100 basis points to 11.5%.

Maintained full-year financial guidance, including revenue and adjusted EBITDA. First quarter results provide increased visibility and confidence towards 2026 financial targets. Q2 and Q3 expected to be more comparable seasonally with ramping of impact programs. Supplemental program timing dynamics are not expected to be dramatic. EBITDA progression expected to see a small step up from Q1 excluding the one-time investment gain benefit.

Healthcare environment remains dynamic with external factors outside control. Potential exchange disruption and macroeconomic conditions could dampen consumer sentiment. Payer denial trends and professional fees are industry headwinds that need to be managed. Medical malpractice insurance premium has seen a step up, particularly in New Mexico, with uncertainty around future relief.

Includes multiple exchanges: Q from Jason Kasurla on EBITDA progression seasonality, A from Alfred; Q from Matthew Gilmore on contract labor initiatives, A from Marty; Q from Scott Fidel on M&A JV discussions, A from Marty; Q from Anne Hines on ACA guidance and professional fees, A from Alfred and Marty; Q from Kevin Fishback on guidance reaffirmation, A from Marty; Q from Benjamin Rossi on AI impact and MedMal, A from Marty and Alfred; Q from Craig Hedenbach on AI tangible impact, A from Marty; Q from Whit Mayo on ambulatory strategy and MedMal, A from Marty; Q from Ben Hendrix on impact program and DSO, A from Alfred; Q from Raj Kumar on per member profitability and OPEX, A from Marty