Ardent Health reported a solid first-quarter performance and told investors it plans to move forward its existing and new market growth strategy.
The for-profit, which went public last summer, reported 4% year-over-year revenue growth to $1.5 billion and $41 million of net income ($0.29 per diluted share). Adjusted EBITDA grew 2.5% to $98 million, admissions jumped 7.6% and net patient service revenue per adjusted admission rose 1.2% from the prior year.
The numbers reflect several of the trends shared by other for-profit systems during recent weeks’ earnings calls—a heightened flu season that increased admissions but slightly increased costs and trimmed acuity, pushback and payment delays from commercial payers in line with the third and fourth quarters of 2024, and delays in state-directed payments (in Ardent’s case, New Mexico’s Delivery System and Provider Payment program) that the company does not believe signals a shut-off valve from Washington.
On tariffs, Chief Financial Officer Alfred Lumsdaine echoed the other systems by highlighting Ardent’s use of a group purchasing organization and the fixed pricing contracts already in place for most of its supplies through the end of the year.
“Recognizing that the tariff outlook is fluid, we estimate the 2025 EBITDA impact is no more than a mid-single digit million dollar amount based on the current tariffs in place,” he said.
Together, the performance has Ardent “firmly on track” to hit its full-year 2025 guidance, which it reaffirmed. As of Wednesday afternoon, the company’s stock is trading more than 8% over opening since the numbers were released.
Though executives said they expect to see margin and efficiency improvements as they, for instance, adjust service lines and tackle the supply chain, executives’ main pitch to investors was the company’s strong positioning for continued growth.
“We continue to sharpen our focus on market share growth, taking a disciplined approach to evaluating opportunities in both the ambulatory space as well as acute care hospitals,” President and CEO Marty Bonick said after a recap of Ardent’s performance. “With leverage of three times and ample cash [$495 million], we will continue to assess opportunities to execute on this strategy.”
Part of that strategy involves a personnel update. Chief Operating Officer Dave Caspers joined the company March 31 with a resume of strategic growth at Walmart Health, Banner Health and Target’s retail healthcare business. The company is also “in the final stages” of bringing on a chief development officer “to support our focus on M&A activities,” Bonick said.
Some of those purchases are already in the rear view, with Bonick telling investors that the company is “pleased” with its integration of 18 urgent care clinics, acquired at the top of the year, and expects them to drive more downstream volumes in the Tulsa and Albuquerque markets.
“Consistent with our focus on high growth midsize urban markets, we expect to continue to strategically expand ambulatory access points to meet consumer demand and drive growth,” he said.
Reiterating earlier comments, executives said they are also still on the lookout for hospital deals that could provide an entry into new markets. Such candidates are on the rise amid the fluid regulatory environment, Bonick said, and the company has heard increased interest from academic and nonprofit systems eyeing Ardent’s joint venture model.
“Since going public, our visibility has taken a new stage and we’ve got more inbound calls coming from academic partners in particular that have taken note of the model that we have, and have a desire to grow inside of their respective regions, but may not have the balance sheet or the integrating operating experience to expand into new regions,” he said. “… So I’ll say the conversations in the pipeline are growing, which is the reason that we’re focusing on bringing in a dedicated chief development officer into the company, to be able to capitalize on those opportunities.”
Bonick acknowledged that some recent hospital purchases have had high price tags, but characterized them as “one-off strategic acquisitions for certain existing systems in a given geography.” Ardent believes that valuations for a potential deal going forward would be more in line with historical trends, he said. Any deals the company considers will “have to be something that we see as accretive to the company in the near term—call it the first 24 months.”
“We are focusing on a mix of hospital acquisitions that would be both complementary to our existing markets, or state footprints we’re in, as well as new,” he said in response to a follow-up question. “… We’ve been hopeful that we will see some type of a transaction, whether that’s a tuck-in or a new market, still in this calendar year.”
Ardent reported $6 billion in total revenue and $210.3 million of net income attributable to the company across 2024. It operates 30 acute care hospitals and more than 280 sites of care across eight markets, with 18 of those hospitals part of a joint venture partnership with major nonprofit systems or academic medical centers.
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