Ardent Health Partners Reports Strong Q1 Growth

Ardent Health Partners, Inc. ((ARDT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Ardent Health Partners, Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company reported strong admissions growth, increased revenue, operational cost improvements, and a credit rating upgrade. However, they also faced increased payer claim denials, a decline in outpatient surgeries, and the impact of transferring oncology services. Despite these hurdles, Ardent remains optimistic about its strategic growth initiatives.

Strong Admissions Growth

Admissions at Ardent Health Partners grew by 7.6%, driven by robust underlying growth and a heightened flu season. Inpatient surgeries also saw a growth of 3.4%, contributing to the company’s positive performance in the first quarter.

Revenue and EBITDA Increase

The first quarter saw a 4% increase in revenue, reaching $1.5 billion. Adjusted EBITDA also grew by 2.5% to $98 million, showcasing the company’s ability to enhance its financial performance despite market challenges.

Operational Cost Improvements

Ardent Health Partners reported a decline in supply costs as a percentage of revenue by 60 basis points year-over-year. The company expects further margin improvements of 100 to 200 basis points over the next three to four years, indicating a focus on operational efficiency.

Credit Rating Upgrade

S&P upgraded Ardent Health’s credit rating to B+ from B, reflecting the company’s improved net leverage and cash flow profile. This upgrade is a positive sign of the company’s financial health and stability.

Successful Integration of NextCare Clinics

The integration of 18 NextCare urgent care clinics is expected to generate additional downstream volumes in the Tulsa and Albuquerque markets, contributing to the company’s strategic growth initiatives.

Payer Claim Denials Increase

Ardent Health Partners experienced a notable increase in payer claim denials compared to the first quarter of 2024, creating a year-over-year headwind. This challenge highlights the ongoing complexities in the healthcare reimbursement landscape.

Outpatient Surgery Decline

Despite strong growth in inpatient surgeries, outpatient surgeries declined by 2.3%. This decline presents a challenge for the company as it seeks to balance its surgical service offerings.

Impact of Oncology Service Transfer

The strategic transfer of certain oncology and infusion services tempered revenue growth by approximately 70 basis points. This decision reflects the company’s strategic realignment efforts, albeit with some short-term revenue impact.

Uncertain Tariff Impact

Ardent Health Partners is facing potential future impacts from tariffs, with an estimated 2025 EBITDA impact of no more than a mid-single-digit million-dollar amount. This uncertainty adds a layer of complexity to the company’s financial outlook.

Forward-Looking Guidance

During the first quarter of 2025, Ardent Health Partners reported strong financial and operational performance, aligning with its full-year outlook. Admissions increased by 7.6%, and adjusted admissions grew by 2.7%. Inpatient surgeries saw a growth of 3.4%, and first-quarter revenue rose by 4% to $1.5 billion. The company ended the quarter with $495 million in cash and a lease-adjusted net leverage ratio of 3 times, reaffirming its full-year 2025 financial guidance.

In summary, Ardent Health Partners, Inc. demonstrated a solid performance in its recent earnings call, with strong admissions growth and revenue increases. Despite challenges such as increased payer claim denials and outpatient surgery declines, the company remains optimistic about its strategic initiatives and financial outlook for 2025.