Ardent Health NYSE: ARDT executives said the company entered 2026 with “operational momentum” after reporting first-quarter results that benefited from cost controls and margin expansion, even as volumes faced temporary pressure from severe winter weather and a lighter respiratory season.
On the company’s first-quarter 2026 earnings call, President and CEO Marty Bonick said revenue rose 7% year over year and Adjusted EBITDA grew 26%, highlighting what he described as the “resiliency of our operating model and disciplined execution amidst a challenging backdrop.” Chief Financial Officer Alfred Lumsdaine added that Adjusted EBITDA increased to $124 million with margin expanding 110 basis points to 7.7%.
First-quarter results and volume trends
Lumsdaine reported first-quarter revenue of $1.6 billion, up 7% from the prior year. He said the company recorded a $10.9 million pre-tax gain in other operating expenses tied to an increase in the carrying value of an investment option in a privately held company. Excluding that benefit, he said Adjusted EBITDA growth was 15%.
On volumes, Lumsdaine said admissions decreased 1.1% year over year, while adjusted admissions increased 2.0%, which he noted was at the midpoint of the company’s full-year guidance range of 1.5% to 2.5%. Total surgeries grew 1.2%, driven primarily by outpatient surgery growth of 1.7%.
Bonick said weather disruptions and a light flu season reduced admissions and altered typical seasonality, but the company moved quickly to reschedule surgeries and “adjust labor to align with volume.” He also pointed to the company’s “Capacity IQ” approach—focused on matching investments, talent deployment, and asset utilization—as supporting improved surgical growth compared with 2025.
Asked about how volumes progressed through the quarter, Bonick said January was impacted by weather-related softness, with some rebound in February and “normal spring break activity” in March into early April. He said the company exited the quarter “consistent within the range of expectations” for volume.
Margin expansion driven by labor and supply initiatives
Management repeatedly emphasized cost discipline as a key driver of performance. Bonick said strong cost management—particularly in salaries, wages and benefits (SWB) and supplies—helped deliver 110 basis points of Adjusted EBITDA margin expansion.
Bonick said the company reduced SWB expense per adjusted admission by 1.4% in the quarter, and supply expense per adjusted admission rose 1.7%, which he characterized as modest. Lumsdaine added that, as a percentage of revenue, SWB improved 260 basis points year over year, and supply expense improved 50 basis points.
The company highlighted progress reducing contract labor. Bonick said contract labor expense was reduced by more than 40% to $15 million in the first quarter. Lumsdaine said contract labor as a percentage of SWB improved to 2.2% in the quarter, compared with 3.8% a year earlier and 2.6% in the fourth quarter of 2025.
In response to a question about how much further contract labor can fall, Bonick said the company is now “in line with where we were pre-pandemic” and suggested it may be stabilizing near current levels. He attributed improvements to renegotiated agency contracts, system-wide utilization reviews, and “Precision Staffing” efforts focused on speed to hire, scheduling, premium pay, and overtime.
IMPACT Program savings and operational workstreams
Bonick said Ardent remains on track to deliver $55 million in savings in 2026 through its IMPACT Program, which he described as focused on “margins, performance, agility, and care transformation.” He said the improvements that began in the fourth quarter of 2025 continued to appear in first-quarter results, and emphasized that the initiatives are intended to be “repeatable operating improvements” rather than one-time actions.
On supply chain, Bonick said initiatives include improved rebates on physician preference items through single- or dual-source vendor models, as well as renegotiated cardiovascular and med-surg distribution contracts that are beginning to generate savings. He told analysts the company expects those initiatives to continue ramping as the year progresses.
Lumsdaine also said revenue integrity is a workstream within IMPACT, including denials and collections, but noted those efforts can have a longer timeline to yield results than cost initiatives. He said the company finished 2025 with a “significant step down” in days sales outstanding (DSO) and has largely maintained that performance, adding that “in that mid-40-day range is where we think we should be.”
Payer mix, exchanges, denials, and professional fees
Executives said two previously discussed headwinds—payer denials and professional fees—were tracking in line with expectations early in the year. Bonick said payer denial trends were stable compared with the fourth quarter, and the company continues to work with Ensemble on denial management and recoveries.
Lumsdaine said collections have remained “quite strong” through the end of last year and into the first quarter, and he did not see pronounced changes in the interaction among denials, underpayments, and bad debt. In response to a question on commercial demand, he said core commercial excluding exchange was “a little bit weaker” year over year, while exchange volumes were up 1% to 2%.
On exchange-related profitability, Lumsdaine said the company’s financial experience in the quarter was “relatively consistent” with its previously discussed $35 million Adjusted EBITDA headwind assumption, and that it had reserved for exposure tied to potential disenrollments and premium non-payment clawbacks after quarter-end. He also noted a shift in exchange enrollment “out of the silver into bronze” of roughly 12%, which he said carries higher co-pays and deductibles and can reduce revenue and EBITDA throughput even if admissions rise.
On Medicare and Medicaid, Lumsdaine said the company saw strength in Medicare volumes in the quarter, particularly Medicare Advantage versus traditional fee-for-service, and that Medicare as a percentage of revenue was up year over year. He said Medicaid was “essentially flat down just a hair,” which he attributed largely to redetermination activity. Bonick added that on an admissions basis, both Medicare and Medicaid were “a little bit down,” which he linked in part to the lighter respiratory season.
Professional fees increased as a percentage of revenue by 100 basis points year over year, according to Lumsdaine, and rose 2.4% sequentially. Management said the increase was in line with expectations. Lumsdaine told analysts he would expect year-over-year growth in professional fees to moderate into a “single digits, high single digit” range as comparisons ease in the back half of the year.
On managed care contracting, Bonick said the company is “substantially contracted,” stating it is about 89% contracted for 2026, with headline rate trends similar to last year. He said the company is focused on strengthening contract terms around denials and underpayments, adding that denials remain “too high across the industry.”
Outpatient expansion, AI initiatives, balance sheet, and outlook
Bonick said Ardent continues to prioritize outpatient growth, including opening four urgent care centers in the first quarter across Texas, New Mexico, and Idaho. For the remainder of 2026, he said the company expects to open two ambulatory surgery centers, one freestanding emergency department, and one urgent care facility, which management expects to drive incremental volume once ramped.
The company also discussed AI and digital tools as part of care transformation efforts. Bonick cited a February partnership with hellocare.ai to implement an AI-assisted virtual care platform across more than 2,000 patient rooms, with deployment underway and completion expected by year-end. He said virtual patient monitoring, including virtual sitting, is already live and is intended to strengthen patient safety while improving the efficiency of clinical resource deployment.
Lumsdaine said Ardent ended the quarter with $610 million in total cash, $1.1 billion in total debt, and total available liquidity of $0.9 billion. Net leverage was 1.0 times and lease-adjusted net leverage was 2.6 times, improving from 3.0 times at the end of the first quarter of 2025. Cash used in operating activities was $60 million, which Lumsdaine noted reflects typical first-quarter seasonality and year-end accrual payments, and compares with $25 million used in the prior-year quarter that benefited from insurance proceeds related to a 2023 cybersecurity incident. Capital expenditures were $28 million, with expectations to ramp through the year.
Despite the strong start and increased visibility toward IMPACT savings, Lumsdaine said the company maintained its full-year guidance, calling it “prudent and appropriate” given it is still early in the year. In response to an analyst question, he added that as a matter of practice the company does not change guidance after one quarter.
Looking ahead, Lumsdaine said the company remains mindful of potential exchange disruption and macroeconomic conditions that could affect consumer sentiment. Bonick reiterated that management’s focus remains on controllable levers—cost discipline, operational execution, and capital allocation—while continuing to evaluate joint venture and acquisition opportunities in a “conservative and prudent” manner.
About Ardent Health NYSE: ARDT
Ardent Health, listed on the New York Stock Exchange under the ticker ARDT, is a healthcare delivery company focused on acquiring, developing and managing acute care hospitals and complementary outpatient facilities across the United States. The company's integrated platform encompasses both inpatient and outpatient services, designed to provide end-to-end care solutions and address the full continuum of patient needs.
Through its network, Ardent Health operates general hospitals, emergency departments, ambulatory surgery centers, urgent care clinics, rehabilitation and post-acute care facilities.
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