Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ardent Health Partners Inc (NYSE:ARDT) reported a robust 19% year-over-year revenue growth in Q4 2024.
• The company achieved a significant 200% growth in adjusted EBITDA for the fourth quarter.
• Ardent Health Partners Inc (NYSE:ARDT) successfully completed its IPO, strengthening its financial position for future growth.
• The acquisition of 27 new urgent care centers in Oklahoma and New Mexico is expected to increase patient volumes.
• The New Mexico State Directed Payment program approval added $94 million in revenue and $65 million in EBITDA for the second half of 2024.

Negative Points

• There is ongoing pressure from hospital-based physician subsidies, which are expected to grow above inflation rates.
• The company faces industry headwinds, including elevated payer denials and subsidy pressures.
• Potential legislative changes in healthcare funding could impact future financial performance.
• The cybersecurity incident in Q4 2023 affected year-over-year comparisons, creating an 'easy comp' for Q4 2024.
• The timing of CMS approval for the 2025 New Mexico DPP program could affect quarterly earnings recognition.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with GBTG.

Q: Can you clarify the impact of the New Mexico DPP program on your quarterly earnings? A: (Alfred Lumsday, CFO) Yes, the $65 million is the year-over-year increase attributable to New Mexico. When considering quarterly amounts, it's reasonable to think about that total quantum divided by four.

Q: Your volume growth seems robust compared to peers. Can you elaborate on this trend? A: (Marty Bonnik, CEO) Our volume growth is consistent across our markets, not isolated to any single area. We continue to see strong demand and operational efficiencies that allow us to handle more transfers and service more patients.

Q: How are physician expenses trending, and what are the drivers for margin improvement over the next few years? A: (Marty Bonnik, CEO) Physician subsidies have moderated but are still slightly above inflation. We are renegotiating contracts to manage this. (Alfred Lumsday, CFO) Margin improvements will come from labor and supply chain initiatives, overhead leverage, and technology enhancements.

Q: Can you update us on your JV pipeline and how legislative changes might impact it? A: (Marty Bonnik, CEO) Our JV and acquisition pipeline is strong, with ongoing conversations. Legislative changes could pressure academic institutions, potentially benefiting our expansion opportunities, but there's still uncertainty.

Q: What is your outlook on the New Mexico DPP program's durability? A: (Marty Bonnik, CEO) We see these programs as durable and necessary for defraying costs not covered by Medicaid. Historically, once approved, these programs have been consistently re-approved.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.