Pediatrix Medical Q4 Earnings Miss Estimates Despite Declining Costs

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

MD’s Full-Year 2025 Update

Pediatrix Medical reported net revenues of $1.9 billion, a decline of 4.9% year over year, in line with the Zacks Consensus Estimate. The company posted adjusted EPS of $2.04, up 35.1% year over year. This metric missed the Zacks Consensus Estimate of $2.07.

Full-year adjusted EBITDA was $275.6 million, increasing 23% year over year. Total operating expenses declined 18.1% to $1.7 billion.

MD’s Q4 Update

Same-unit revenues increased 4% year over year in the fourth quarter of 2025, missing both our growth estimate and the Zacks Consensus Estimate of 6.8%. Same-unit revenues from patient service volumes declined 2.7% compared with the prior-year period.

Same-unit revenues from net reimbursement-related factors grew 6.7% year over year, driven by improved patient acuity in hospital-based practices, favorable collection activity, payor mix and higher administrative fees from hospital partners. This metric exceeded both the Zacks Consensus Estimate and our model estimate of 5.4%.

Total operating expenses were $445 million, down 3.9% year over year, but higher than our estimate of $415.4 million. The year-over-year decline was primarily due to lower supplies and other operating expenses, and decreased transformational and restructuring-related costs.

Practice salaries and benefits totaled $348 million, declining 0.3% year over year, mainly due to the impact of practice dispositions. Interest expense decreased 10% year over year to $8.7 million, coming in below our estimate of $9 million, due to lower interest rates and average outstanding borrowings.

Adjusted EBITDA declined 4.2% year over year to $65.8 million due to increased same-unit expenses.

MD’s Financial Update (as of Dec. 31, 2025)

Pediatrix Medical exited the fourth quarter with cash and cash equivalents of $375.2 million, up from $229.9 million at Dec. 31, 2024. There were no outstanding borrowings on its revolving credit facility at the quarter-end.

Total assets of $2.25 billion increased from $2.15 billion at the end of 2024.

Total debt, including finance leases, net amounted to $597.3 million, which fell from $617.7 million at the 2024-end level.

Total shareholders’ equity of $865.9 million improved from $764.9 million at the 2024-end level.

For the fourth quarter of 2025, Pediatrix Medical generated $11.46 million in cash from operating activities related to continuing operations, lower than $134.8 million a year ago.

MD’s Share Repurchase Update

During 2025, the company repurchased 4.1 million shares for $83.8 million. As of Dec. 31, 2025, $166.2 million remained available in the buyback program.

MD’s 2026 View

Management projects adjusted EBITDA within $280-$300 million for 2026.

Net income is estimated to be between $155.1 million and $169.7 million for 2026. Interest expenses are currently forecasted at $34 million. Income tax expenses are expected to be in the range of $57.4-62.8 million.

Depreciation and amortization expenses are now estimated to be $24.3 million. Transformational and restructuring-related expenses are anticipated to be at $9.2 million.

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.

How Did Other Healthcare Stocks Perform?

Here are some stocks in the broader Medical space that have also reported earnings for the December quarter: HCA Healthcare, Inc. HCA, The Ensign Group, Inc. ENSG and Tenet Healthcare Corporation THC.

HCA Healthcare reported fourth-quarter 2025 adjusted EPS of $8.01, which outpaced the Zacks Consensus Estimate by 8.8% on the back of strong admissions. Modest gains in emergency room visits and a rise in revenue per equivalent admission also supported performance. The upside was partly offset by HCA Healthcare’s elevated operating expenses.

The Ensign Group reported fourth-quarter 2025 adjusted EPS of $1.82, which beat the Zacks Consensus Estimate by 4% on the back of improved occupancy rates, higher patient days and stronger skilled services performance. The positives were partly offset by higher expenses. The bottom line increased 19.5% year over year. ENSG’s revenues rose 20.2% year over year to $1.36 billion but marginally missed the Zacks Consensus Estimate by 0.5%.

Tenet Healthcare reported fourth-quarter 2025 adjusted EPS of $4.70, which surpassed the Zacks Consensus Estimate by 15.2%. The bottom line increased 36.6% year over year. Tenet’s net operating revenues advanced 8.9% year over year to $5.53 billion. The top line beat the consensus mark by 1.4% on the back of higher same-facility revenues, a favorable payer mix and improved acuity. The upside was partly offset by rising operating costs, particularly supply expenses.