Acadia Healthcare Company (ACHC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $816 million, up 8.7% year-over-year, driven by strong patient day and rate growth, with net income at $68.1 million compared to a prior year net loss due to a legal settlement.

• Adjusted EBITDA grew 10.5% to $194.3 million, with margin expansion to 23.8% and adjusted income per diluted share at $0.91, excluding provider relief funds.

• The company operated 260 facilities with approximately 11,300 beds in 38 states and Puerto Rico as of September 30, 2024, and made significant progress on bed growth targets.

• Management remains focused on growth through facility expansions, joint ventures, de novo facilities, and acquisitions, with 15 new beds and five new CTCs added in Q3.

• Company addressed recent negative media coverage and ongoing federal investigations, emphasizing compliance and quality standards.

Financial highlights

• Q3 2024 revenue was $815.6 million, up 8.7% year-over-year, with same facility revenue up 8.6%, patient days up 4.7%, and revenue per patient day up 3.6%.

• Adjusted EBITDA margin increased by 40 basis points to 23.8%, and same facility adjusted EBITDA margin rose 100 basis points to 29.7%.

• Net income for Q3 2024 was $68.1 million ($0.74 per diluted share), and adjusted income per diluted share was $0.91.

• Cash and cash equivalents stood at $82.1 million, with $321.5 million available under the credit facility; net leverage ratio was approximately 2.5x.

• Salaries, wages, and benefits were 52.5% of Q3 2024 revenue, with wage inflation below 5% for the year.

Outlook and guidance

• 2024 revenue guidance updated to $3.15–$3.165 billion, adjusted EBITDA to $725–$735 million, and adjusted EPS to $3.35–$3.45.

• Q4 guidance reflects lower expected same facility volume growth (3–4% year-over-year), 2–3 percentage points below prior expectations due to media-related headwinds.

• Revenue guidance reduced by $20–$30 million and EBITDA by $10–$15 million for Q4, with no material cost reductions planned as the headwind is viewed as temporary.

• Expansion capex for 2024 projected at $550–$595 million, with approximately 1,200 new beds to be completed (1,000 licensed by year-end).

• Guidance reflects closure of two facilities in Q3, removing $17 million revenue and $1 million EBITDA for the second half.