Acadia Healthcare Q1 Earnings Call Highlights

Key Points

• Acadia beat Q1 guidance with revenue of $828.8M (+7.6% YoY) and Adjusted EBITDA of $144.2M (+7.5% YoY)$580–$615M Adjusted EBITDA and $1.35–$1.60 adjusted EPS while keeping revenue guidance unchanged.
• Management is executing an acute service‑line reorganization and leadership changes to boost referrals and execution, while expanding capacity (added 82 beds in Q1 and targeting 400–600 beds in 2026 with new JVs) and cutting capital investment by more than $300M vs. 2025 (2026 capex guide $255–$280M).
• Near‑term headwinds include a 6.5% decline in specialty revenue from lost NY referrals to Pennsylvania facilities and closures, slowed CTC growth from winter weather, rising bad debts/denials and startup losses (now expected $47–$51M for 2026), with net leverage ~3.9x pushing temporarily to ~4.4–4.5x in Q2; potential regulatory supplemental payments could add about $22M of EBITDA if approved.

Acadia Healthcare NASDAQ: ACHC reported first-quarter 2026 results that management said came in at the high end of its revenue outlook and above the top end of its Adjusted EBITDA and earnings guidance, driven primarily by growth in its acute inpatient psychiatric business and continued demand across behavioral health services.

First-quarter results top guidance as acute volumes rise

Chief Executive Officer Debbie Osteen said the company’s first-quarter performance marked “a good start to 2026,” citing revenue at the high end of guidance and results that exceeded expectations for Adjusted EBITDA and EPS. Osteen said revenue growth was led by acute inpatient psychiatric facilities, where the company posted 14% growth versus the prior year and increased inpatient volumes by 6.2%.

Chief Financial Officer Todd Young reported revenue of $828.8 million, up 7.6% year-over-year. Same-facility revenue increased 7.3%, driven by a 5.6% increase in revenue per patient day and a 1.6% increase in patient days. Young said the acute and residential treatment center (RTC) businesses grew 14.2% and 6.3%, respectively, and noted that acute results benefited from supplemental payments from Ohio and Tennessee that were not present in the prior-year quarter.

Adjusted EBITDA was $144.2 million, up 7.5% year-over-year and $7.2 million above the high end of the company’s quarterly guidance, according to Young. He said the quarter included a $3.7 million weather-related impact to Adjusted EBITDA, consistent with guidance provided in February, and featured better-than-planned cost efficiencies at both corporate and facility levels. Young also cited a $3.2 million benefit related to employee benefit costs that he said is expected to reverse in the back half of 2026.

Specialty headwinds persist in Pennsylvania; CTC growth slowed by weather

Young said Acadia’s specialty facilities faced ongoing challenges in Pennsylvania stemming from New York’s decision not to provide care for its residents in Acadia’s Pennsylvania facilities. He said specialty facility revenue declined 6.5% year-over-year, driven by those issues as well as the closure of specialty facilities in 2025, which he said created “nearly a 6% headwind to growth.”

Osteen told analysts the company is working to backfill lost specialty volume by strengthening referral sources in surrounding states and within Pennsylvania. She cited outreach efforts in New Jersey and Maryland, along with increased Pennsylvania referral sources, and said the company is also “in conversation” with New York about potentially reopening referrals, though she cautioned it remains a process.

In Comprehensive Treatment Centers (CTC), Young said revenue grew 2.5% year-over-year but slowed sequentially from the fourth quarter due to severe winter weather that forced some centers to close. Osteen said demand remained strong across the continuum, even as weather affected near-term volumes in that segment.

Operational changes: acute restructuring, leadership moves, and referral focus

Osteen said that since returning as CEO, she has spent her first months “listening to our teams, assessing operations, and getting close to the drivers of quality and performance.” She described multiple leadership changes and a reorganization within the acute service line intended to improve execution and oversight.

Osteen said the acute reorganization included:

• Reducing the number of facilities and geography within each division to increase focus and oversight.
• Creating a new operating group for acute facilities focused on joint venture (JV) hospitals and recently opened facilities.
• Hiring a new experienced leader to focus on JV relationships and strengthening referral networks.

She said the company has conducted in-depth reviews of facilities opened since 2023 and developed facility-specific action plans to expand access to care, emphasizing ramping occupancy, aligning with JV partners, and tailoring service-line development and licensing timelines to each market. In response to a question about underperforming de novo facilities, Osteen said plans are “tailored to the partner, but also to the market and to the facility.”

Osteen also highlighted ongoing work to rebuild a “culture of urgency” around access to care and to deepen referral relationships. When asked about referral network enhancements, she pointed to the importance of access and outcomes transparency, saying the company is focused on avoiding barriers for referral partners and sharing outcomes as data becomes available. She cited patient satisfaction and measures of improved condition at discharge as key metrics, along with payer-focused readmission measures.

Bed additions, new JV facilities, and reduced capital spending

Management emphasized recent and planned capacity growth. Osteen said Acadia operates 275 facilities serving more than 84,000 patients daily and has added more than 2,500 beds over the last three years through new facilities and expansions. In the first quarter of 2026, the company added 82 beds and said it remains on track to add 400 to 600 beds during the year.

Osteen said Acadia opened a JV facility with Tufts Medicine in Greater Boston in early February, with 24 beds open currently and the ability to serve 144 patients once fully licensed. She said the company expects to open two facilities in partnership with Premier Health during the second quarter, as well as a 144-bed JV facility with Orlando Health and a 96-bed facility with Methodist Jennie Edmundson in Iowa.

Young said that during the first quarter, Acadia also closed 251 beds, primarily related to two leased facilities in Pennsylvania and two other facilities announced in 2025. He added that the company collected $16 million in cash from the sale of three closed facilities.

On spending, Osteen said Acadia is “reducing our capital investment by over $300 million compared to 2025,” while finalizing investments in new JV facilities and adding beds to existing hospitals. Young reiterated the company’s full-year 2026 capital expenditures expectation of $255 million to $280 million, with lower spending anticipated in the second half as three new JV facilities open in the first half.

Guidance raised for Adjusted EBITDA and EPS; Q2 outlook provided

Young said Acadia is raising full-year guidance for Adjusted EBITDA and Adjusted EPS following the first-quarter outperformance, while leaving revenue guidance unchanged. The company’s 2026 revenue outlook remains $3.37 billion to $3.45 billion. Adjusted EBITDA guidance was increased to $580 million to $615 million from $575 million to $610 million, and Adjusted EPS guidance was increased to $1.35 to $1.60 from $1.30 to $1.55.

Acadia also provided second-quarter guidance, which Young said was unusual for the company but intended to offer clarity given “substantial out-of-period supplemental payments” received from Tennessee in the second quarter of 2025. For Q2 2026, Acadia expects:

• Revenue of $835 million to $850 million
• Adjusted EBITDA of $142 million to $152 million
• Adjusted EPS of $0.30 to $0.40

Young said the company expects improved mitigation of specialty headwinds in Pennsylvania, but that benefit is expected to be offset by “modestly higher than expected levels of bad debts and denials.” Addressing payer behavior, Young said bad debts and denials appeared to stabilize in Q4 but “continued to get a little bit worse in Q1” than expected and that the issue is “more broad-based” rather than tied to one payer type.

Osteen said Acadia is evaluating processes and documentation practices, appealing denials, and using tools to improve compliance and visibility. She also said the company brought back Larry Herod on a temporary consulting basis to assess improvements in this area. In a separate discussion, Osteen said the company is in early stages of incorporating AI into revenue cycle management to analyze data and explore process streamlining.

Young also addressed startup facility losses, reporting $12 million in Q1, $2 million better than forecast, and said the company now expects $47 million to $51 million for the full year. He said startup losses are expected to be about $15 million in Q2, which he described as likely the high end from a quarterly perspective, with improvement in the back half of the year.

On leverage, Young said Acadia ended the quarter with $158 million in cash and cash equivalents and about $565 million available under its $1 billion revolving credit facility. Net leverage stood at about 3.9x Adjusted EBITDA as of March 31, 2026, but he said leverage is expected to rise temporarily to about 4.4x to 4.5x at the end of Q2 due to the rolling 12-month EBITDA comparison affected by the prior-year Tennessee supplemental payments. He said the company still expects to end 2026 within the 3.9x to 4.2x range previously discussed.

Young said Acadia’s guidance does not include any unapproved supplemental payment programs, though he added that certain programs under regulatory review “could add at least $22 million in incremental EBITDA” if approved in 2026, and that based on “the latest insights regarding Florida’s plan,” the $22 million estimate “may be conservative.”

In closing remarks, Osteen thanked Young “for his contributions to Acadia” and said she wished him well in his next chapter. She reiterated that Acadia’s 2026 priorities center on consistent execution to improve financial and operating performance, while maintaining its focus on quality care.

About Acadia Healthcare NASDAQ: ACHC

Acadia Healthcare Company, Inc NASDAQ: ACHC is a publicly traded provider of behavioral healthcare services headquartered in Franklin, Tennessee. Founded in 2005, the company has grown through organic expansion and strategic acquisitions to establish itself as a leading specialist in mental health and addiction treatment across the United States.

Acadia operates a diversified network of inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and intensive outpatient programs.

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