Ardent Health NYSE: ARDT management said the company exited 2025 with improving operating momentum after implementing initiatives to address industry pressures that intensified earlier in the year. On its fourth-quarter and full-year 2025 earnings call, executives pointed to stabilization in payer-denial-related rate pressure and professional fees, early benefits from the company’s IMPACT operating model transformation program, and stronger-than-expected cash flow generation.
Fourth-quarter results cap a record 2025
President and CEO Marty Bonick said Ardent’s fourth-quarter performance reflected “positive developments and encouraging signs of progress” following actions the company committed to on its third-quarter call. He noted that 2025 marked the company’s “highest-ever revenue, EBITDA, and operating cash flow.”
For the full year, Bonick said revenue grew 6% to $6.3 billion, within the company’s 2025 guidance range. The company reported admissions growth of 5.3% and adjusted admissions growth of 2.3% for 2025. CFO Alfred Lumsdaine added that adjusted EBITDA increased 9% to $545 million, with margin expanding 20 basis points to 8.6%, and that pre-noncontrolling interest adjusted EBITDAR margin also expanded 20 basis points to 12.7%.
In the fourth quarter, Lumsdaine said revenue was $1.61 billion, essentially flat year-over-year, and “in line with our expectations.” He attributed the comparison partly to two quarters of prior-year financial benefit related to the New Mexico DPP program, and said that adjusting for this item, year-over-year revenue growth would have been about 3%. Fourth-quarter admissions increased 1.5%, adjusted admissions grew 2%, and surgeries were essentially flat. Adjusted EBITDA in the quarter was $134 million, which Lumsdaine said was 2% above the company’s implied guidance midpoint.
IMPACT program drives labor and efficiency gains
Management highlighted progress in Ardent’s IMPACT program, which Bonick described as a multi-year operating model transformation focused on margin improvement, performance, agility, and care transformation. The company previously targeted $40 million of annualized savings expected to ramp in the fourth quarter of 2025 and reach a run rate entering 2026; Bonick said the company is on track and is raising the expected contribution to about $55 million.
Bonick emphasized labor-related improvements as an early area of impact:
- Fourth-quarter salary, wages and benefits expense declined 0.4% year-over-year, which he called an inflection from 4% growth during the first three quarters of 2025.
- Salary, wages and benefits per adjusted admission declined 2% in the fourth quarter.
- Contract labor expense fell 26% to $17 million in the quarter, representing 2.6% of salary, wages and benefits—its lowest level since 2019.
Bonick said Ardent reduced agency labor FTEs by about 175 in the last four months of 2025 through a renegotiated contract, improved rates, lower utilization, faster hiring, and real-time management tools. He also cited operating room performance improvements, including first-case on-time starts rising by more than 10 percentage points in the fourth quarter versus the third quarter.
Technology and virtual care initiatives expand
Bonick underscored technology deployment as a core part of Ardent’s transformation strategy, citing the company’s “single instance of Epic” as a differentiator supporting efficiency and standardized workflows. He said Ardent is seeing benefits in coding accuracy, labor efficiency, throughput, and quality, including top quartile sepsis performance.
He also outlined several technology-driven initiatives discussed on the call, including:
- A partnership with hellocare.ai to expand AI-assisted virtual care enterprise-wide to more than 2,000 patient rooms by year-end, intended to improve safety, efficiency, and clinical talent utilization.
- AI-enabled scribe technology that Bonick said reduces physician documentation time by 35%, with providers using it in about 85% of patient visits.
- Medical wearables for continuous vital sign monitoring, which Bonick said reduced mortality by up to 15% and shortened length of stay by about one-third of a day in markets where implemented.
On a question about length of stay trends, Bonick said length of stay is influenced by both acuity and in-hospital efficiency. He said Ardent has seen “very good performance” in geometric mean length of stay and that technology investments are helping, while noting there is still opportunity to improve.
Industry headwinds: payer denials and professional fees stabilize
Bonick said two pressure points from the third quarter—payer denials and professional fees—showed more favorable fourth-quarter signals. Payer denials in the fourth quarter were “generally consistent” with the third quarter, with some incremental improvement aided by the company’s partnership with Ensemble and a focus on denial integrity and consistent use of contractual tools.
Professional fees also moderated, with growth decelerating to 8% in the fourth quarter from 11% in the third quarter, which Bonick attributed to strategic recontracting and vendor transitions. In Q&A, management said professional fee growth for full-year 2025 was in the “roughly nine high single-digit range,” and the company is assuming a similar high-single-digit increase in 2026, not modeling meaningful improvement.
2026 guidance reflects savings and exchange disruption risk
Ardent issued 2026 guidance for revenue of $6.4 billion to $6.7 billion (3.6% growth at the midpoint) and adjusted EBITDA of $485 million to $535 million. The company also expects adjusted admissions growth of 1.5% to 2.5%, which Lumsdaine said contemplates expected exchange disruption tied to expiration of enhanced subsidies.
In explaining the EBITDA outlook, Lumsdaine said the company’s “jumping off base” for 2026 is about $475 million, reflecting about $50 million from annualization of 2025 headwinds tied primarily to elevated professional fees and rate pressure from payer denials, plus roughly $20 million from restoration of short-term incentive compensation. From that base, management expects core earnings growth of about 4% at the midpoint and estimates IMPACT will contribute about $55 million in 2026, creating a year-over-year tailwind of roughly $50 million since Ardent recognized about $5 million of IMPACT savings in 2025.
Management estimated an exchange-related headwind of about $35 million. Bonick said the guidance posture was intended to be prudent given broader uncertainties, and Lumsdaine added that the outlook excludes any potential benefit from the Rural Health Fund.
In Q&A, Bonick said the company is planning for exchange enrollment to decline about 20%, assuming 10% to 15% shift to employer-sponsored coverage with the remainder moving to self-pay, and assuming utilization about 30% lower for that cohort. Lumsdaine also said the exchange exposure ended 2025 at 6% of admissions and 7% of revenue, slightly below industry average. He added that the headwind to adjusted admissions from exchange disenrollment would be “upwards of 50 basis points.”
Management reiterated expectations for a return to adjusted EBITDA growth in 2027 as the company laps the annualization of 2025’s accelerated headwinds and as IMPACT savings build through 2026. Executives also discussed capital deployment in outpatient settings, with Bonick citing planned openings in 2026 including a new obstetric emergency department in Oklahoma, five urgent care sites, a hospital-based ASC, another HOPD ASC, and a freestanding emergency department in Texas.
On cash flow, Lumsdaine said 2025 operating cash flow rose to $471 million, up nearly 50% year-over-year, and free cash flow net of noncontrolling interest distributions was $170 million, supported by improved collections and lower AR days. He cautioned that the timing of the last payroll cycle in 2026 would create about a $50 million year-over-year cash flow headwind, but otherwise said cash flows should be consistent with guidance.
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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