Pediatrix Medical Group Q2 Earnings Call Highlights

Key Points

• Pediatrix reported Q2 adjusted EBITDA of $76 million and reaffirmed its full-year outlook of $280 million to $300 million. Revenue rose 4%, supported by acquisitions, stronger revenue-cycle collections, favorable payer mix and higher patient acuity despite lower service volumes.
• Patient-service volumes declined 2%, including a 3% drop in NICU days, while management expects full-year volumes to be flat to slightly down. Operating cash flow fell to $126 million, but leverage remained low at just over one times projected EBITDA.
• Pediatrix repurchased nearly 2 million shares during the quarter and plans to continue buybacks while evaluating acquisitions, partnerships and joint ventures in women’s and children’s healthcare. The company also plans to expand tele-hybrid care beyond maternal-fetal medicine into additional pediatric specialties.

Pediatrix Medical Group NYSE: MD reported second-quarter 2026 adjusted EBITDA of $76 million and reaffirmed its full-year adjusted EBITDA outlook of $280 million to $300 million, as stronger revenue-cycle-management collections, payer mix and patient acuity offset lower patient-service volumes.

Chief Executive Officer Mark Ordan said quarterly results were in line with the company’s expectations. Same-unit revenue benefited from collections performance and continued increases in acuity, particularly in neonatology, while neonatal intensive care unit days declined 3%.

“While we did see modestly lower volumes, primarily in neonatology,” Ordan said, “our overall results for the quarter were in line with our expectations.”

Revenue Growth Driven by Pricing and Acquisitions

Chief Financial Officer Kasandra Rossi said consolidated revenue increased 4% from the prior-year period. Growth was driven by non-same-unit activity, primarily recent acquisitions, as well as 2% same-unit revenue growth.

Same-unit pricing rose 4%, supported primarily by revenue-cycle-management, or RCM, cash collections. Favorable payer mix and increased patient acuity were also contributors. Rossi said those three factors accounted for about 95% of the quarter’s pricing improvement, with RCM collections the largest contributor and payer mix a close second.

Payer mix improved by 135 basis points from the second quarter of 2025 and by 120 basis points from the first quarter of 2026. Ordan said the company has not experienced the insurance-coverage pressure reported by some other healthcare companies, though he said Pediatrix does not consider itself immune to potential future changes.

He said the company believes pregnancy may support insurance retention because coverage has greater relative value for expectant patients. “There has been absolutely no sign of a change to date at Pediatrix,” Ordan said.

Same-unit patient-service volumes declined 2%, driven by hospital-based services and primarily neonatology. Management characterized the comparison with the prior-year quarter as difficult and said it expects full-year volumes to be flat to slightly down. Ordan added that the quarterly volume change was generally consistent with historical seasonal patterns.

Margins, Cash Flow and Balance Sheet

Practice-level salaries, wages and benefits expenses increased year over year, reflecting higher salary and malpractice expense. Rossi said salary increases have remained within a relatively tight range and that the company expects salary growth of roughly 3% to 3.5%, compared with historical mid-single-digit increases.

General and administrative expense increased year over year, primarily due to executive transition-related compensation costs. Rossi said the company expects 2026 G&A expense to be in the $230 million to $240 million range, likely toward the higher end, and described much of the transition-related increase as “one-time-ish.” She said the second quarter in particular included an increase in those costs.

The company reported other non-operating expense of $2.9 million, down from $4.9 million a year earlier, reflecting lower interest expense from modestly lower rates and borrowings, as well as higher interest income from larger cash balances.

Pediatrix generated $126 million in operating cash flow during the second quarter, compared with $138 million in the prior-year quarter. Rossi attributed the decline to changes in cash flow from accounts payable and accrued expenses and accounts receivable.

At June 30, the company had $289 million in cash and $584 million in total debt. Net debt was just over $295 million, and leverage stood at just above one times the midpoint of the company’s 2026 adjusted EBITDA outlook, according to management. Accounts receivable days sales outstanding were 42.5 days, largely unchanged from the end of the first quarter and year-end 2025, but down by nearly four days from a year earlier because of improved collections at existing units.

Capital Allocation and Growth Plans

During the quarter, Pediatrix repurchased just under 2 million shares. Since August 2025, the company has bought back 7 million shares, reducing shares outstanding to 81 million from 87 million at the end of the second quarter of 2025.

Ordan said the company intends to continue repurchasing shares unless it identifies opportunities that make stronger operating and financial sense. He said Pediatrix is actively evaluating growth opportunities in women’s and children’s healthcare, including potential joint ventures and partnerships with outside capital investors for larger opportunities.

Management said all prior dispositions are now complete. Ordan said the company sees acquisition opportunities at what it views as fair pricing and is seeking transactions that fit strategically within women’s and children’s medicine.

Tele-Hybrid Care Expansion

Ordan also highlighted Pediatrix’s plans to expand tele-hybrid services, combining telemedicine with in-person clinical care. The company has more than 170 maternal-fetal medicine physicians and provides services across more than 360 NICUs in 32 states, according to Ordan.

He said the company believes telemedicine is most effective when it is linked to physical patient visits, particularly in areas with limited access to specialty care. Pediatrix sees potential applications beyond maternal-fetal medicine, including retinopathy, neurology, infectious disease and neonatology.

For the second half of 2026, Rossi said adjusted EBITDA is expected to be relatively evenly distributed between the third and fourth quarters. While the company expects the benefit from RCM collection improvements to begin dissipating in the second half, management said it expects patient acuity to remain a positive contributor to pricing.

About Pediatrix Medical Group (NYSE:MD)

Pediatrix Medical Group, Inc NYSE: MD is a national physician-led medical group specializing in high-acuity newborn, maternal-fetal and pediatric subspecialty care. Headquartered in Sunrise, Florida, the company delivers clinical services through hospital-based physician staffing, advanced practitioner support and telemedicine programs. Its core specialties include neonatology, maternal-fetal medicine, pediatric cardiology, pediatric critical care, pediatric emergency medicine and anesthesiology.

Founded in 1979 and formerly known as MEDNAX, the company rebranded as Pediatrix Medical Group in 2022 to align its corporate identity with its primary clinical offerings.

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