Pediatrix Medical's Q2 Earnings Beat on Strong Patient Volumes

Shares of Pediatrix Medical Group, Inc. MD have gained 12.1% since it reported second-quarter 2025 results on Aug. 5. The quarterly results were aided by higher patient volumes, improved patient acuity and favorable collections, along with a sharp decline in operating expenses. However, the upside was partly offset by a drop in net revenues resulting from the adverse impact of practice dispositions. 

Pediatrix Medical reported second-quarter 2025 adjusted earnings per share (EPS) of 53 cents, which outpaced the Zacks Consensus Estimate by 26.2%. The bottom line surged 55.9% year over year. 

Net revenues tumbled 7% year over year to $468.8 million. Nevertheless, the top line beat the consensus mark by 0.4%.

Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise

Pediatrix Medical Group, Inc. price-consensus-eps-surprise-chart | Pediatrix Medical Group, Inc. Quote

MD’s Q2 Update

Same-unit revenues advanced 6.4% year over year, which came higher than our growth estimate of 1.1%. Same-unit revenues, attributable to patient volume, rose 2.9% year over year in the quarter under review. 

Same-unit revenues from net reimbursement-related factors grew 3.5% year over year on the back of improved patient acuity in its hospital-based practices, favorable collection activity and higher administrative fees from hospital partners. The metric beat our growth estimate of 0.3%. 

Total operating expenses of $409 million decreased 38.2% year over year and came lower than our estimate of $414.9 million. The year-over-year decline resulted from lower practice salaries and benefits, practice supplies and other operating expenses, general and administrative expenses, and transformational and restructuring-related costs.

Practice salaries and benefits of Pediatrix Medical came in at $323.5 million, which fell 9.6% year over year due to the impact of practice dispositions. Interest expenses decreased 11.4% year over year to $9.1 million, lower than our estimate of $9.5 million. 

Net income totaled $39.3 million against the prior-year quarter’s loss of $153 million. Adjusted EBITDA rose 26.6% year over year to $73.2 million, which surpassed our estimate of $59.4 million.

MD’s Financial Update (as of June 30, 2025)

Pediatrix Medical exited the second quarter with cash and cash equivalents of $224.7 million, which slipped 2.3% from the 2024-end level. There were no outstanding borrowings on its revolving credit facility at the quarter-end.

Total assets of $2.1 billion dipped 2.4% from the figure at 2024-end.  

Total debt, including finance leases, net, amounted to $607.5 million, down 1.6% from the figure as of Dec. 31, 2024.  

Total shareholders’ equity of $833.8 million improved 9% from the 2024-end level. 

MD generated net cash from operations of $19.7 million in the first half of 2025 against $18.3 million of net cash used in operations in the prior-year comparable period.

Share Repurchase Update for MD

Pediatrix Medical bought back common shares for $1.8 million in the first half of 2025. It had a leftover capacity of $1.1 million under its $500 million repurchase program (approved in August 2018) as of June 30, 2025.

MD’s 2025 View Revised

Management now projects adjusted EBITDA within $245-$255 million, up from the prior view of $220-$240 million. 

Net income is estimated to be between $126.02 million and $133.32 million for 2025, higher than the earlier guidance of $106.21-$120.81 million. 

Interest expenses are currently forecasted at $36.7 million for 2025. Income tax expenses are expected to be in the range of $46.61-$49.31 million.

Depreciation and amortization expenses are now estimated to be $22.9 million. Transformational and restructuring-related expenses are expected to $12.8 million at present.

MD’s Zacks Rank

Pediatrix Medical currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported second-quarter 2025 results so far, the bottom-line results of Tenet Healthcare Corporation THC, HCA Healthcare, Inc. HCA and Edwards Lifesciences Corporation EW beat the respective Zacks Consensus Estimate.

Tenet Healthcare reported second-quarter 2025 adjusted EPS of $4.02, which surpassed the Zacks Consensus Estimate by 41.6%. The bottom line soared 74% year over year.  Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 2.4%. Adjusted net income of $369 million climbed 63.3% year over year in the quarter under review. Adjusted EBITDA improved 18.6% year over year to $1.1 billion. 

The Hospital Operations and Services segment recorded net operating revenues of $4 billion, which inched up 0.9% year over year. Adjusted EBITDA climbed 25.1% year over year to $623 million. Adjusted EBITDA margin of 15.6% improved 300 bps year over year. The Ambulatory Care segment’s net operating revenues rose 11.3% year over year to $1.3 billion. Adjusted EBITDA was $498 million, which advanced 11.4% year over year. 

HCA Healthcare’s second-quarter 2025 adjusted EPS of $6.84 surpassed the Zacks Consensus Estimate by 10.5%. The bottom line improved 24.4% year over year. Revenues were $18.6 billion, which advanced 6.4% year over year. The top line beat the consensus mark by 0.7%. Same-facility equivalent admissions grew 1.7% year over year in the second quarter, while same-facility admissions increased 1.8% year over year. 

Same-facility revenue per equivalent admission advanced 4% year over year. Same-facility inpatient surgeries dipped 0.3% year over year. Same-facility outpatient surgeries slipped 0.6% year over year. Additionally, same-facility emergency room visits inched up 1.3% year over year in the quarter under review.  Adjusted EBITDA improved 8.4% year over year to $3.8 billion, which beat our estimate of $3.6 billion. HCA Healthcare operated 191 hospitals and roughly 2,500 ambulatory sites of care across 20 states and the United Kingdom as of June 30, 2025.

Edwards Lifesciences reported second-quarter 2025 adjusted EPS of 67 cents, which surpassed the Zacks Consensus Estimate by 8.1%. The figure increased 8.1% from the year-ago quarter’s level. Sales totaled $1.53 billion, up 11.7% year over year. The metric surpassed the Zacks Consensus Estimate by 2.7%. Global sales in the Transcatheter Aortic Valve Replacement product group amounted to $1.10 billion, up 8.9% year over year or 7.8% at constant currency (CER).  

In Transcatheter Mitral and Tricuspid Therapies, sales totaled $134.5 million, up 61.9% from the prior-year figure on a reported basis (up 57.1% at CER). The Surgical Structural Heart segment delivered sales of $267 million, up 7.7% from the year-ago level on a reported basis and 6.8% at CER. The gross profit was $1.19 billion, up 8.6% year over year. The gross margin contracted 236 bps to 77.5% due to a 25% increase in the cost of sales. The operating margin contracted 62 bps to 26.7%.

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