Pediatrix Medical Q3 Earnings Beat Estimates on Declining Expenses

Pediatrix Medical Group, Inc. MD reported third-quarter 2025 adjusted earnings per share (EPS) of 67 cents, which surpassed the Zacks Consensus Estimate by 45.7%. The bottom line surged 52.3% year over year.

Net revenues tumbled 3.6% year over year to $492.9 million. Nevertheless, the top line beat the consensus mark by 1.8%.

The quarterly results were aided by higher collection activity, improved patient acuity and a favorable payor mix, 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 Group, Inc. Price, Consensus and EPS Surprise

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

MD’s Q3 Update

Same-unit revenues advanced 8% year over year, which beat our growth estimate of 3.4%. Same-unit revenues, attributable to patient volume, rose 0.4% year over year in the quarter under review.

Same-unit revenues from net reimbursement-related factors grew 7.6% 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 2.1%.

Total operating expenses of $424.8 million decreased 11% year over year and came lower than our estimate of $425.1 million. The year-over-year decline resulted from lower practice salaries and benefits, practice supplies and other operating expenses, and transformational and restructuring-related costs.

Practice salaries and benefits of Pediatrix Medical came in at $332.3 million, which fell 8.9% year over year due to the impact of practice dispositions. Interest expenses decreased 11.7% year over year to $8.9 million, lower than our estimate of $9.3 million.

Net income totaled $71.7 million compared with the prior-year quarter’s figure of $19.4 million. Adjusted EBITDA rose 45% year over year to $87.3 million, which surpassed our estimate of $59.9 million.

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

Pediatrix Medical exited the third quarter with cash and cash equivalents of $340.1 million, which rose 47.9% from the 2024-end level. There were no outstanding borrowings on its revolving credit facility at the quarter-end.

Total assets of $2.2 billion rose 2.2% from the figure at 2024-end.

Total debt, including finance leases, net, amounted to $602.5 million, down 2.5% from the figure as of Dec. 31, 2024.

Total shareholders’ equity of $890.7 million improved 16.4% from the 2024-end level.

MD generated net cash from operations of $157 million in the first nine months of 2025 compared with $73.6 million in the prior-year comparable period.

Share Repurchase Update for MD

Pediatrix Medical bought back common shares for $20.9 million in the first nine months of 2025. It had a leftover capacity of $229.1 million under its $250 million repurchase program (approved in August 2025) as of Sept. 30, 2025.

MD’s 2025 View

Management now projects adjusted EBITDA within $270-$290 million, up from the prior view of $245-$255 million.

Net income is estimated to be between $155.90 million and $170.50 million for 2025, higher than the earlier guidance of $126.02-$133.32 million.

Interest expenses are currently forecasted at $36.16 million for 2025. Income tax expenses are expected to be in the range of $57.61-$63.01 million.

Depreciation and amortization expenses are now estimated to be $22.51 million. Transformational and restructuring-related expenses are expected to be $18.72 million at present.

MD’s Zacks Rank & Key Picks

MD currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Medical space are McKesson Corporation MCK, Universal Health Services, Inc. UHS and Veracyte, Inc. VCYT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for McKesson’s current-year earnings of $38.05 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. McKesson beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 1.5%. The consensus estimate for current-year revenues is pegged at $409.2 billion, suggesting 14% year-over-year growth.

The Zacks Consensus Estimate for Universal Health’s current-year earnings of $21.49 per share has witnessed three upward revisions in the past seven days against no movement in the opposite direction. Universal Health beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.2%. The consensus estimate for current-year revenues is pegged at $17.4 billion, suggesting 9.7% year-over-year growth.

The Zacks Consensus Estimate for Veracyte’s current-year earnings of $1.42 per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Veracyte beat earnings estimates in each of the trailing four quarters, with an average surprise being 45.1%. The consensus estimate for current-year revenues is pegged at $501 million, suggesting 12.4% year-over-year growth.

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