Pediatrix Medical Group, Inc. Q1 FY2025 earnings call

• First quarter results exceeded expectations with same-unit revenue growth over 6%. Adjusted EBITDA was significantly above expectations.
• Raised full-year 2025 adjusted EBITDA outlook from $215M-$235M to $220M-$240M.
• Focus on reinvigorating relationships with hospital and health system partners, recently contracting to acquire several NICU, MFM, and OB hospitals.
• Active engagement in recruiting, onboarding, development, and retention of clinicians to be the employer of choice.
• Effectiveness of 2024 portfolio management activities and commitment to creating value for shareholders.

Consolidated revenue decreased by over 7% due to non-same-unit activity (-$63M), but same-unit revenue grew over 6%. Same-unit pricing was up over 4.6%. Adjusted EBITDA was just over $49 million. The same-unit revenue growth included strong volumes in hospital-based services (NICU days up 2%) and modest growth in maternal-fetal medicine, with favorable pay remits. Practice-level operating expenses reflected cost management initiatives, though incentive compensation increased.

• Raised full-year 2025 adjusted EBITDA outlook from $215M-$235M to $220M-$240M due to first quarter exceeding expectations.
• Guidance remains conservative due to ongoing uncertainty in healthcare and the economy.
• Comps for the remainder of 2025 remain materially in line with original 2025 expectations.

• Uncertainty in healthcare and the broader economy impacting operating results.
• Hospitals may choose to bring services in-house instead of partnering with Pediatrix.

Q: Thoughts on updated guidance, comparing to initial expectations and seasonality.

A: Initial guidance was conservative due to uncertainty. First quarter exceeded expectations, but guidance remains conservative due to ongoing uncertainty. No different seasonality expected.

Q: Hospital contracted subsidies, their trend.

A: Subsidies are part of normal business partnership, no notable change in trend.

Q: Collections, DSOs.

A: DSOs are around 48 days, no concerns about collections in certain buckets, with DSOs flat and at a level making sense for the business.

Q: Hospital contract wins, portfolio divestitures, acquisitions.

A: Focus on being best partner with hospitals, comfortable with current portfolio, sees opportunities in acquisition market due to favorable environment.

Q: Investments and other income.

A: Driven by interest income from cash in balance sheet, expected to remain favorable.