Pediatrix Medical Group Reports Fourth Quarter Results

Rhea-AI Summary

Pediatrix Medical Group (NYSE: MD) reported strong Q4 2024 results with net revenue of $502.4 million, up from $496.4 million in the prior year. The company achieved net income of $30.5 million, or $0.36 per share, compared to a net loss of $124.3 million in Q4 2023. Adjusted EPS reached $0.51, up from $0.32 year-over-year.

Same-unit revenue grew 8.7%, driven by a 5.9% increase in net reimbursement-related factors and 2.8% growth in patient volume. The company completed its portfolio restructuring, exiting office-based practices and primary/urgent care service lines that generated approximately $200 million in 2023 revenue. Adjusted EBITDA increased to $68.7 million from $50.8 million in the prior year.

The company's financial position strengthened with cash and cash equivalents of $229.9 million, up from $73.3 million at the end of 2023. For 2025, Pediatrix projects Adjusted EBITDA between $215-235 million.

Positive

• Net revenue increased to $502.4M from $496.4M year-over-year
• Strong same-unit revenue growth of 8.7%
• Adjusted EPS improved to $0.51 from $0.32 year-over-year
• Cash position strengthened to $229.9M from $73.3M
• Q4 cash from operations increased to $134.8M from $73.0M
• Adjusted EBITDA grew to $68.7M from $50.8M

Negative

• Full-year 2024 net loss of $99.1M ($1.19 per share)
• General and administrative expenses increased to $63.6M from $53.1M
• Transformational and restructuring expenses of $23.6M in Q4
• Total debt outstanding of $616M

Insights

Financial Analyst

Pediatrix's Q4 2024 results demonstrate a successful execution of its strategic transformation, marked by both operational and financial improvements. The 8.7% same-unit revenue growth, driven by a 5.9% increase in reimbursement-related factors and 2.8% in patient volume, signals robust underlying business fundamentals.

The 200 basis point improvement in commercial payor mix is particularly significant, as commercial insurance typically offers higher reimbursement rates than government payors. This shift, combined with improved contract administrative fees, suggests enhanced revenue quality and negotiating power with payors.

The company's financial position has strengthened considerably, with cash reserves tripling to $229.9 million and strong Q4 operating cash flow of $134.8 million. The debt structure appears manageable, with $616 million in total debt and no draws on the $450 million revolving credit facility, providing ample liquidity for future operations.

The completion of portfolio restructuring, which involved divesting approximately $200 million in annual revenue from office-based practices and primary/urgent care services, represents a strategic pivot toward higher-margin hospital-based services. The expected $30 million improvement in Adjusted EBITDA suggests this restructuring will enhance operational efficiency and profitability.

The preliminary 2025 Adjusted EBITDA guidance of $215-235 million indicates management's confidence in maintaining the momentum of operational improvements, though investors should monitor the execution of the streamlined business model and its impact on growth trajectory.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Pediatrix Medical Group, Inc. (NYSE: MD), a leading provider of physician services, today reported earnings of $0.36 per share for the three months ended December 31, 2024. On a non-GAAP basis, Pediatrix reported Adjusted EPS of $0.51.

For the 2024 fourth quarter, Pediatrix reported the following results:

• Net revenue of $502 million;
• Net income of $30 million; and
• Adjusted EBITDA of $69 million.

“Our strong fourth quarter results reflect continued top-line outperformance versus our expectations, the completion of our portfolio restructuring, and the related overhead expense reductions,” said Mark S. Ordan, Chief Executive Officer of Pediatrix Medical Group. “I am honored and excited to reassume the role of Chief Executive Officer, and I am committed to furthering the Company’s strategic focus on supporting clinical excellence, strengthening our hospital and health system relationships, and optimizing our operating efficiency. We believe this focus, supported by our financial strength, will benefit all of our stakeholders.”

Operating Results– Three Months Ended December 31, 2024

Pediatrix’s net revenue for the three months ended December 31, 2024 was $502.4 million, compared to $496.4 million for the prior-year period. This increase reflected growth in same-unit revenue of 8.7 percent, partially offset by the impact of non-same unit activity, primarily practice dispositions.

Same-unit revenue from net reimbursement-related factors increased by 5.9 percent for the 2024 fourth quarter as compared to the prior-year period. This increase primarily reflects improved payor mix and modest improvements in hospital contract administrative fees. The percentage of services reimbursed by commercial and other non-government payors increased by approximately 200 basis points compared to the prior year period.

Same-unit revenue attributable to patient volume increased by 2.8 percent for the 2024 fourth quarter as compared to the prior-year period. Shown below are year-over-year percentage changes in certain same-unit volume statistics for the three months and year ended December 31, 2024. (Note: figures in the below table reflect contributions only to net patient service revenue and exclude other contributions to total same-unit revenue, including contract and administrative fees.)

		Three Months Ended December 31, 2024		Year Ended December 31, 2024
Hospital-based patient services		2.6%		1.9%
Office-based patient services		6.4%		4.0%
Neonatology services (within hospital-based services):
Neonatal intensive care unit (NICU) days		2.8%		1.3%

For the 2024 fourth quarter, practice salaries and benefits expense was $349.0 million, compared to $363.6 million for the prior-year period. This comparison primarily reflects the impact of practice disposition activity, partially offset by increases in same-unit clinical compensation costs, including incentive compensation based on practice results.

For the 2024 fourth quarter, general and administrative expenses were $63.6 million, as compared to $53.1 million for the prior-year period. This comparison primarily reflects higher incentive compensation based on financial results.

For 2024 fourth quarter, transformational and restructuring related expenses totaled $23.6 million. These expenses related primarily to practice dispositions, revenue cycle management transition activities and position eliminations.

Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization, transformational and restructuring related expenses, adjustments to goodwill impairment and loss on disposal of businesses, was $68.7 million for the 2024 fourth quarter, compared to $50.8 million for the prior-year period.

Depreciation and amortization expense was $6.9 million for the fourth quarter of 2024, compared to $9.1 million for the prior-year period. This comparison was primarily related to a decrease in depreciation expense related to non-same unit activity, primarily practice dispositions.

Interest expense was $9.7 million for the fourth quarter of 2024, compared to $10.1 million for the fourth quarter of 2023.

Pediatrix generated net income of $30.5 million, or $0.36 per diluted share, for the 2024 fourth quarter, based on a weighted average 85.2 million shares outstanding. This compares with a net loss of $124.3 million, or $1.50 per diluted share, for the 2023 fourth quarter, based on a weighted average 82.7 million shares outstanding.

For the fourth quarter of 2024, Pediatrix reported Adjusted EPS of $0.51, compared to $0.32 for the fourth quarter of 2023. For these periods, Adjusted EPS is defined as diluted income per common and common equivalent share excluding non-cash amortization expense, stock-based compensation expense, transformational and restructuring related expenses, loss on disposal of businesses, tax effects and related adjustments to goodwill impairment and discrete tax events.

Operating Results – Year Ended December 31, 2024

For the year ended December 31, 2024, Pediatrix generated revenue of $2.01 billion, compared to $1.99 billion for the prior-year period. Pediatrix generated a net loss of $99.1 million, or $1.19 per share, for the year ended December 31, 2024, based on a weighted average 83.3 million shares outstanding, which compares to a net loss of $60.4 million, or $0.73 per share, based on a weighted average 82.2 million shares outstanding for prior year. Adjusted EBITDA for the year ended December 31, 2024 was $224.0 million, compared to $200.4 million for the prior year. For the year ended December 31, 2024, Pediatrix reported Adjusted EPS of $1.51, compared to $1.26 in the same period of 2023.

Financial Position and Cash Flow – Continuing Operations

Pediatrix had cash and cash equivalents of $229.9 million at December 31, 2024, compared to $73.3 million at December 31, 2023, and net accounts receivable at December 31, 2024 were $260.0 million.

For the fourth quarter of 2024, Pediatrix generated cash from continuing operations of $134.8 million, compared to $73.0 million during the fourth quarter of 2023. During the fourth quarter of 2024, the Company used $3.4 million to fund capital expenditures.

At December 31, 2024, Pediatrix had total debt outstanding of $616 million, consisting of its $400 million in 5.375% Senior Notes due 2030 and $216 million in borrowings under its Term A Loan. At December 31, 2024, the Company had no outstanding borrowings under its $450 million revolving line of credit.

Portfolio Management Update

As previously disclosed, during the second quarter of 2024, Pediatrix formalized its practice portfolio management plans, resulting in a decision to exit almost all of its affiliated office-based practices and its primary and urgent care service line.

The Company completed these plans on or prior to December 31, 2024. In aggregate, the office-based practices that the Company exited and the primary and urgent care clinics that have been divested contributed net revenue of approximately $200 million in 2023. As previously disclosed, Pediatrix expects that the annualized favorable impact to Adjusted EBITDA resulting from its portfolio management plans to be approximately $30 million, based on 2023 financial information. A portion of this expected favorable impact was realized during 2024.

Preliminary 2025 Outlook

On a preliminary basis, Pediatrix anticipates that its 2025 Adjusted EBITDA, as defined above, will be in a range of $215 million to $235 million.

Non-GAAP Measures

A reconciliation of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three months and year ended December 31, 2024 and 2023 is provided in the financial tables of this press release.

Earnings Conference Call

Pediatrix will host an investor conference call to discuss the quarterly results at 9 a.m., ET today. The conference call Webcast may be accessed from the Company’s Website, www.pediatrix.com. A replay of the conference call will also be available at www.pediatrix.com.

ABOUT PEDIATRIX MEDICAL GROUP

Pediatrix® Medical Group, Inc. (NYSE:MD) is a leading provider of physician services. Pediatrix-affiliated clinicians are committed to providing coordinated, compassionate and clinically excellent services to women, babies and children across the continuum of care, both in hospital settings and office-based practices. Specialties include obstetrics, maternal-fetal medicine and neonatology complemented by multiple pediatric subspecialties. The group’s high-quality, evidence-based care is bolstered by significant investments in research, education, quality-improvement and safety initiatives. The physician-led company was founded in 1979 as a single neonatology practice and today provides its highly specialized and often critical care services through approximately 4,400 affiliated physicians and other clinicians. To learn more about Pediatrix, visit www.pediatrix.com or follow us on Facebook, Instagram, LinkedIn and the Pediatrix blog. Investment information can be found at www.pediatrix.com/investors.

Certain statements and information in this press release may be deemed to contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may include, but are not limited to, statements relating to the Company’s objectives, plans and strategies, and all statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by the Company’s management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this press release are made as of the date hereof, and the Company undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments, and business decisions to differ materially from forward-looking statements are described in the Company’s most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, including the sections entitled “Risk Factors”, as well the Company’s current reports on Form 8-K, filed with the Securities and Exchange Commission, and include the impact of the Company’s practice portfolio management plans and whether the Company is able to achieve the expected favorable impact to Adjusted EBITDA therefrom; the impact of the Company’s termination of its then third-party revenue cycle management provider and transition to a hybrid revenue cycle management model with one or more new third-party service providers, including any transition costs associated therewith; the impact of surprise billing legislation; the effects of economic conditions on the Company’s business; the effects of the Affordable Care Act and potential healthcare reform; the Company’s relationships with government-sponsored or funded healthcare programs, including Medicare and Medicaid, and with managed care organizations and commercial health insurance payors; the Company’s ability to comply with the terms of its debt financing arrangements; the impact of management transitions; the timing and contribution of future acquisitions or organic growth initiatives; the effects of share repurchases; and the effects of the Company’s transformation initiatives, including its reorientation on, and growth strategy for, its hospital based and maternal fetal businesses.

Pediatrix Medical Group, Inc. Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) (Unaudited)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2024				2023				2024				2023
Net revenue		$	502,364			$	496,443			$	2,012,919			$	1,994,640
Operating expenses:
Practice salaries and benefits			348,993				363,604				1,440,827				1,448,275
Practice supplies and other operating expenses			24,845				31,672				117,748				124,800
General and administrative expenses			63,553				53,064				238,437				227,542
Depreciation and amortization			6,873				9,062				32,226				36,171
Transformational and restructuring related expenses			23,641				2,219				64,260				2,219
Goodwill impairment			(3,599	)			148,312				150,644				148,312
Long-lived asset impairments			—				—				27,791				—
(Gain) loss on disposal of businesses			(1,233	)			—				9,699				—
Total operating expenses			463,073				607,933				2,081,632				1,987,319
Income (loss) from operations			39,291				(111,490	)			(68,713	)			7,321
Investment and other income			2,830				2,242				5,771				4,338
Interest expense			(9,710	)			(10,081	)			(40,743	)			(42,075	)
Impairment of strategic investment			—				(20,000	)			—				(20,000	)
Equity in earnings of unconsolidated affiliate			917				479				2,344				2,057
Total non-operating expenses			(5,963	)			(27,360	)			(32,628	)			(55,680	)
Income (loss) before income taxes			33,328				(138,850	)			(101,341	)			(48,359	)
Income tax (provision) benefit			(2,848	)			14,563				2,272				(12,049	)
Net income (loss)		$	30,480			$	(124,287	)		$	(99,069	)		$	(60,408	)
Other comprehensive income (loss), net of tax
Unrealized holding (loss) gain on investments, net of tax of $282, $427, $374 and $527			(862	)			1,303				1,143				1,521
Total comprehensive income (loss)		$	29,618			$	(122,984	)		$	(97,926	)		$	(58,887	)
Per common and common equivalent share data (diluted):
Net income (loss):		$	0.36			$	(1.50	)		$	(1.19	)		$	(0.73	)
Weighted average common shares			85,160				82,660				83,330				82,201

Pediatrix Medical Group, Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) (Unaudited)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2024				2023				2024				2023
Net income (loss)		$	30,480			$	(124,287	)		$	(99,069	)		$	(60,408	)
Interest expense			9,710				10,081				40,743				42,075
Income tax provision (benefit)			2,848				(14,563	)			(2,272	)			12,049
Depreciation and amortization expense			6,873				9,062				32,226				36,171
Transformational and restructuring related expenses			23,641				2,219				64,260				2,219
Impairment losses			(3,599	)			168,312				178,435				168,312
(Gain) loss on disposal of businesses			(1,233	)			—				9,699				—
Adjusted EBITDA		$	68,720			$	50,824			$	224,022			$	200,418

Pediatrix Medical Group, Inc. Reconciliation of Diluted Net Income (Loss) per Share to Adjusted Income per Diluted Share (“Adjusted EPS”) (in thousands, except per share data) (Unaudited)
		Three Months Ended December 31,
		2024								2023
Weighted average diluted shares outstanding			85,160								82,660
Net income (loss) and diluted net income (loss) per share		$	30,480			$	0.36			$	(124,287	)		$	(1.50	)
Adjustments (1):
Amortization (net of tax of $531 and $502)			1,594				0.02				1,510				0.02
Stock-based compensation (net of tax of $601 and $756)			1,804				0.02				2,268				0.03
Transformational and restructuring expenses (net of tax of $5,910 and $555)			17,731				0.21				1,664				0.02
Impairment losses (net of tax of $ - and $42,078)			(6,659	)			(0.08	)			126,234				1.53
Gain on disposal of businesses (net of tax of $308)			(925	)			(0.01	)			—				—
Net impact from discrete tax events			(544	)			(0.01	)			18,841				0.22
Adjusted income and diluted EPS		$	43,481			$	0.51			$	26,230			$	0.32

(1)

A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the three months ended December 31, 2024 and 2023, other than impairment losses for the three months ended December 31, 2024. The impairment losses reflect tax effects and related adjustments to goodwill impairment recognized in the second quarter of 2024.

		Twelve Months Ended December 31,
		2024								2023
Weighted average diluted shares outstanding			83,330								82,201
Net (loss) income and diluted net (loss) income per share		$	(99,069	)		$	(1.19	)		$	(60,408	)		$	(0.73	)
Adjustments (1):
Amortization (net of tax of $2,373 and $2,010)			7,120				0.09				6,032				0.07
Stock-based compensation (net of tax of $2,473 and $3,081)			7,420				0.09				9,242				0.11
Transformational and restructuring related expenses (net of tax of $16,065 and $555)			48,195				0.58				1,664				0.02
Impairment losses (net of tax of $31,633 and $42,078)			146,802				1.76				126,234				1.54
Loss on disposal of businesses (net of tax of $2,425)			7,274				0.09				—				—
Net impact from discrete tax events			7,912				0.09				20,825				0.25
Adjusted income and diluted EPS		$	125,654			$	1.51			$	103,589			$	1.26

(1)	A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the twelve months ended December 31, 2024 and 2023, other than for impairment losses for the year ended December 31, 2024, due to a portion of the expenses being non-deductible.

Pediatrix Medical Group, Inc. Balance Sheet Highlights (in thousands) (Unaudited)
		As of December 31, 2024				As of December 31, 2023
Assets:
Cash and cash equivalents		$	229,940			$	73,258
Investments			118,566				104,485
Accounts receivable, net			259,990				272,313
Other current assets			31,111				33,398
Intangible assets, net			11,595				21,240
Operating and finance lease right-of-use assets			39,267				70,294
Goodwill, other assets, property and equipment			1,462,231				1,644,822
Total assets		$	2,152,700			$	2,219,810
Liabilities and shareholders' equity:
Accounts payable and accrued expenses		$	398,690			$	350,798
Total debt, including finance leases, net			617,664				633,334
Operating lease liabilities			44,649				68,314
Other liabilities			326,759				318,303
Total liabilities			1,387,762				1,370,749
Total shareholders' equity			764,938				849,061
Total liabilities and shareholders' equity		$	2,152,700			$	2,219,810

Pediatrix Medical Group, Inc. Reconciliation of Net Income to Forward-Looking Adjusted EBITDA (in thousands) (Unaudited)
		Year Ended December 31, 2025
Net Income		$	98,310			$	112,910
Interest expense			37,860				37,860
Income tax expense			36,400				41,800
Depreciation and amortization expense			27,530				27,530
Transformational and restructuring related expenses			14,900				14,900
Adjusted EBITDA		$	215,000			$	235,000

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250220684360/en/

Charles Lynch

Senior Vice President, Finance and Strategy

954-384-0175, x 5692

charles.lynch@pediatrix.com

Source: Pediatrix Medical Group, Inc.

FAQ

What was Pediatrix Medical Group's (MD) Q4 2024 earnings per share?

Pediatrix Medical Group reported earnings of $0.36 per share for Q4 2024, with Adjusted EPS of $0.51.

How much revenue did Pediatrix (MD) generate in Q4 2024?

Pediatrix generated net revenue of $502.4 million in Q4 2024, compared to $496.4 million in the prior-year period.

What is Pediatrix's (MD) projected Adjusted EBITDA for 2025?

Pediatrix anticipates 2025 Adjusted EBITDA to be in the range of $215 million to $235 million.

How much cash did Pediatrix (MD) have at the end of 2024?

Pediatrix had cash and cash equivalents of $229.9 million at December 31, 2024.

What was Pediatrix's (MD) same-unit revenue growth in Q4 2024?

Pediatrix's same-unit revenue grew by 8.7% in Q4 2024, including 5.9% from reimbursement-related factors and 2.8% from patient volume.