Pediatrix Medical Group, Inc. reported fourth‑quarter 2025 results that showed net revenue of $493.8 million, a 1.8% decline year‑over‑year driven by the divestiture of non‑hospital‑based practices. Same‑unit revenue grew 4.0%, powered by a 6.7% increase in net reimbursement and higher patient acuity in its hospital‑based neonatology services.
GAAP earnings per share were $0.40 and adjusted earnings per share were $0.50. Consensus estimates for adjusted EPS were $0.53 or $0.56, so the company missed expectations by $0.03–$0.06. The miss was largely attributable to higher variable practice incentive compensation that offset the same‑unit revenue growth, as noted by CEO Mark S. Ordan.
Operating income reached $68.1 million, and the adjusted operating margin expanded to 13.8% from 6.6% in the prior year. The margin lift reflects improved collections, a favorable shift in pay‑or mix, and higher administrative fees from hospital partners, but the company also highlighted that the increase in variable incentive compensation partially offset the revenue gains.
For 2026, Pediatrix raised its preliminary adjusted EBITDA outlook to $280 million–$300 million, up from the $215 million–$235 million range previously guided. The company also reported a strong cash position of $375 million at year‑end, underscoring its balance‑sheet flexibility as it continues to focus on high‑margin hospital‑based services.
"Our fourth quarter operating results were in line with our revised upward expectations and reflected solid same‑unit revenue growth, partially offset by an increase in variable practice incentive compensation," said CEO Mark S. Ordan. "Our performance in the fourth quarter caps a terrific year, and while facing healthcare industry headwinds, we are doing all we can to have another strong year at Pediatrix and to position ourselves for a strong future." Ordan added that the company expects 2026 results to be in the $280 million–$300 million range, which is 5% above 2025, and that it has no reason to think any of those assumptions will change for 2026.
Investors reacted negatively to the earnings release, with the primary driver being the adjusted EPS miss. The company’s revenue beat expectations, but the shortfall in earnings, combined with the headwinds of a tough competitive environment and declining patient volumes, tempered the market’s response. The company’s strategic pivot to divest non‑hospital practices and focus on hospital‑based neonatology services is viewed as a long‑term growth lever, while the raised EBITDA guidance signals management confidence in the trajectory of its core operations.
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