Business

Ardent Health Reports Fourth Quarter 2024 Results

BRENTWOOD, Tenn., February 26, 2025--Ardent Health Partners, Inc. (NYSE: ARDT) ("Ardent Health" or the "Company"), a leading provider of healthcare in growing mid-sized urban communities across the U.S., today announced results for the fourth quarter and year ended December 31, 2024.

Ardent Health, Inc.February 26, 202522
Ardent Health Reports Fourth Quarter 2024 Results

About this update from Ardent Health, Inc.

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(NYSE: ARDT) ("Ardent Health" or the "Company"), a leading provider of healthcare in growing mid-sized urban communities across the U.S., today announced results for the fourth quarter and year ended December 31, 2024.","length":321,"tagName":"p"},{"type":"text","content":" Fourth Quarter 2024 Operating and Financial Summary ","length":51,"tagName":"p"},{"type":"text","content":" All comparisons are versus the same prior year period. See the footnotes to the Operating Statistics table of this press release for definitions of the metrics below and a full list of key operating metrics. 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"For the full-year 2024, we grew revenue 10%, increased Adjusted EBITDA 58%, and expanded Adjusted EBITDA margins 260 basis points. Importantly, we achieved a key milestone when the New Mexico state directed payment program was retroactively approved in November 2024 for the period covering the second half of 2024."","length":562,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":""In connection with the retroactive approval of the New Mexico state directed payment program, we recorded revenue of $94 million and Adjusted EBITDA of $65 million in the fourth quarter," continued Bonick. "Combined with our solid operational performance for the quarter, this resulted in 2024 revenue and Adjusted EBITDA well above our guidance ranges. Excluding that benefit, which was not included in previous guidance, Ardent Health delivered financial and operating performance that was consistent or favorable to our 2024 guidance."","length":559,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":""Today, we are providing 2025 guidance that, at the midpoint, includes strong revenue and Adjusted EBITDA growth of 6% and 19%, respectively, and 100 basis points of Adjusted EBITDA margin expansion," said Bonick.","length":223,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":""We enter 2025 with strong momentum and see encouraging operating environment tailwinds with early indications that volume growth will remain durable this year," added Bonick. "Among our 2025 strategic priorities, we are enhancing supply chain efficiencies, advancing service line optimization initiatives, and taking steps to execute on ambulatory growth as evidenced by our recently announced acquisition of 18 urgent care clinics. Additionally, as we assess organic and inorganic growth opportunities, we are operating from a position of balance sheet strength with over $550 million of cash and a lease-adjusted net leverage ratio of 2.9 times as of December 31, 2024."","length":693,"tagName":"p","attribs":{}}]}],"tagName":"ul","bulletedList":true,"length":2037,"olType":false}]}]}],"length":2127},{"type":"text","content":" Financial Performance Summary ","length":29,"tagName":"p"},{"type":"text","content":"The Company’s fourth quarter 2024 financial results were favorably impacted by recognition of the New Mexico state directed payment program, which was retroactively approved by the Centers for Medicare & Medicaid Services in November 2024 for the period covering the second half of 2024. Additionally, year-over-year comparisons are impacted by a cybersecurity incident (the "Cybersecurity Incident"), which negatively impacted the fourth quarter of 2023.","length":469,"tagName":"p"},{"type":"readMore"},{"type":"text","content":"For the fourth quarter of 2024:","length":31,"tagName":"p"},{"type":"list","items":[{"val":[{"type":"text","content":"Total revenue grew 19.3% year-over-year to $1,606 million. 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The Company does not forecast the impact of items such as, but not limited to, losses (gains) on sales of facilities, losses on retirement of debt, legal claim costs (benefits) and impairments of long-lived assets. 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A webcast of the conference call will be available in the Investor Relations section of the Company’s corporate website at https://ir.ardenthealth.com . 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Through its subsidiaries, Ardent Health delivers care through a system of 30 acute care hospitals and more than 280 sites of care with over 1,800 affiliated providers across six states. For more information, please visit www.ardenthealth.com .","length":521,"tagName":"p"},{"type":"text","content":" Supplemental Non-GAAP Information ","length":33,"tagName":"p"},{"type":"text","content":"We have included certain non-GAAP financial measures in this press release, including Adjusted EBITDA and Adjusted EBITDAR. We define these terms as follows:","length":157,"tagName":"p"},{"type":"list","items":[{"val":[{"type":"text","content":" Adjusted EBITDA. Adjusted EBITDA is defined as net income plus (i) income tax expense (benefit), (ii) interest expense and (iii) depreciation and amortization expense (or EBITDA), as adjusted to deduct noncontrolling interest earnings, and excludes the effects of losses on the extinguishment and modification of debt; other non-operating losses (gains); Cybersecurity Incident expenses (recoveries); certain legal matters and related costs; restructuring, exit and acquisition-related costs; expenses incurred in connection with the implementation of Epic Systems ("Epic"), our integrated health information technology system; equity-based compensation expense; and loss (income) from disposed operations. Adjusted EBITDA is a non-GAAP performance measure used by our management and external users of our financial statements, such as investors, analysts, lenders, rating agencies and other interested parties, to evaluate companies in our industry. Adjusted EBITDA is a performance measure that is not defined under GAAP and is presented in this press release because our management considers it an important analytical indicator that is commonly used within the healthcare industry to evaluate financial performance and allocate resources. Further, our management believes that Adjusted EBITDA is a useful financial metric to assess our operating performance from period to period by excluding certain material non-cash items and unusual or non-recurring items that we do not expect to continue in the future and certain other adjustments we believe are not reflective of our ongoing operations and our performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. While we believe this is a useful supplemental performance measure for investors and other users of our financial information, you should not consider Adjusted EBITDA in isolation or as a substitute for net income or any other items calculated in accordance with GAAP. Adjusted EBITDA has inherent material limitations as a performance measure, because it adds back certain expenses to net income, resulting in those expenses not being taken into account in the performance measure. We have borrowed money, so interest expense is a necessary element of our costs. Because we have material capital and intangible assets, depreciation and amortization expense are necessary elements of our costs. Likewise, the payment of taxes is a necessary element of our operations. Because Adjusted EBITDA excludes these and other items, it has material limitations as a measure of our performance. ","length":2682,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":" Adjusted EBITDAR . Adjusted EBITDAR is defined as Adjusted EBITDA further adjusted to add back rent expense payable to REITs, which consists of rent expense pursuant to the master lease agreement (the "Ventas Master Lease") with Ventas, Inc. ("Ventas"), lease agreements associated with the MOB Transactions (defined below) and a lease arrangement with Medical Properties Trust, Inc. ("MPT") for the Hackensack Meridian Mountainside Medical Center. Adjusted EBITDAR is a commonly used non-GAAP valuation measure used by our management, research analysts, investors and other interested parties to evaluate and compare the enterprise value of different companies in our industry. Adjusted EBITDAR excludes: (1) certain material noncash items and unusual or non-recurring items that we do not expect to continue in the future; (2) certain other adjustments that do not impact our enterprise value; and (3) rent expense payable to our REITs. We operate 30 acute care hospitals, 12 of which we lease from two REITs, Ventas and MPT, pursuant to long-term lease agreements. Additionally, during 2022, we completed the sale of 18 medical office buildings to Ventas in exchange for $204.0 million and concurrently entered into agreements to lease the real estate back from Ventas over a 12-year initial term with eight options to renew for additional five-year terms (the "MOB Transactions"). Our management views the long-term lease agreements with Ventas and MPT, as well as the MOB Transactions, as more like financing arrangements than true operating leases, with the rent payable to such REITs being similar to interest expense. As a result, our capital structure is different than many of our competitors, especially those whose real estate portfolio is predominately owned and not leased. Excluding the rent payable to such REITs allows investors to compare our enterprise value to those of other healthcare companies without regard to differences in capital structures, leasing arrangements and geographic markets, which can vary significantly among companies. Our management also uses Adjusted EBITDAR as one measure in determining the value of prospective acquisitions or divestitures. Finally, financial covenants in certain of our lease agreements, including the Ventas Master Lease, use Adjusted EBITDAR as a measure of compliance. Adjusted EBITDAR does not reflect our cash requirements for leasing commitments. As such, our presentation of Adjusted EBITDAR should not be construed as a performance or liquidity measure. Because not all companies use identical calculations, our presentation of Adjusted EBITDAR may not be comparable to other similarly titled measures of other companies. While we believe this is a useful supplemental valuation measure for investors and other users of our financial information, you should not consider Adjusted EBITDAR in isolation or as a substitute for net income or any other items calculated in accordance with GAAP. Adjusted EBITDAR has inherent material limitations as a valuation measure, because it adds back certain expenses to net income, resulting in those expenses not being taken into account in the valuation measure. The payment of taxes and rent is a necessary element of our valuation. Because Adjusted EBITDAR excludes these and other items, it has material limitations as a measure of our valuation.","length":3401,"tagName":"p","attribs":{}}]}],"tagName":"ul","bulletedList":true,"length":6083,"olType":false},{"type":"text","content":" Forward-Looking Statements ","length":26,"tagName":"p"},{"type":"text","content":"This press release contains "forward-looking statements" as that term is defined in the U.S. federal securities laws. These forward-looking statements include, but are not limited to, statements other than statements of historical facts, including, among others, statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate and other similar matters. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "could," "would," "will," "may," "can," "continue," "potential," "should" and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risk factors and other cautionary statements described under the heading "Risk Factors" included in this Annual Report. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated include, among others: (1) changes in government healthcare programs, including Medicare and Medicaid could have an adverse effect on our revenues and business; (2) reduction in the reimbursement rates paid by commercial payors, our inability to retain and negotiate favorable contracts with private third-party payors, or an increasing volume of uninsured or underinsured patients; (3) security threats, catastrophic events and other disruptions affecting our, our service providers’ or our JV partners’ information technology and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely affect our financial condition; (4) the highly competitive nature of the healthcare industry and continued industry trends towards clinical transparency and value-based purchasing may impact our competitive position; (5) inability to recruit and retain quality physicians, as well as increasing cost to contract with hospital-based physicians; (6) changes to physician utilization practices and treatment methodologies and other factors outside our control that impact demand for medical services and may reduce our revenues and ability to grow profitability; (7) continued industry trends toward value-based purchasing, third party payor consolidation and care coordination among healthcare providers; (8) inability to successfully complete acquisitions or strategic joint ventures ("JVs") or inability to realize all of the anticipated benefits; (9) liabilities because of professional liability and other claims brought against our hospitals, physician practices, outpatient facilities or other business operations; (10) exposure to certain risks and uncertainties by the JVs through which we conduct a significant portion of our operations, including anticipated synergies, of past acquisitions and the risk that transactions may not receive necessary government clearances; (11) failure to obtain drugs and medical supplies at favorable prices or sufficient volumes; (12) operational, legal and financial risks associated with outsourcing functions to third parties; (13) our facilities are heavily concentrated in Texas and Oklahoma, which makes us sensitive to regulatory, economic and competitive conditions and changes in those states; (14) negative impact of severe weather, climate change, and other factors beyond our control, which could restrict patient access to care or cause one or more facilities to close temporarily or permanently; (15) risks related to the Ventas Master Lease and its restrictions and limitations on our business; (16) the impact of our significant indebtedness; (17) the impact of a deterioration of public health conditions associated with a future pandemic, epidemic or outbreak of infectious disease; (18) our failure to comply with complex laws and regulations applicable to the healthcare industry or to adjust our operations in response to changing laws and regulations; (19) the impact of governmental claims or governmental investigations, payor audits and litigation brought against our hospitals, physician practices, outpatient facilities or other business operations; (20) actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements; (21) inability to or delay in building, acquiring, selling, renovating or expanding our healthcare facilities; (22) failure to comply with federal and state laws relating to Medicare and Medicaid enrollment, permit, licensing and accreditation requirements; (23) effects of current and future health reform initiatives, including any that may be undertaken by a new administration, and legal and regulatory restrictions on our hospitals that have physician owners; (24) inability to continually enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment; (25) our status as a controlled company; (26) conflicts of interest between our controlling stockholder and other holders of our common stock; and (27) other risk factors described in our filings with the Securities and Exchange Commission.","length":5743,"tagName":"p"},{"type":"text","content":"Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this press release. Except as otherwise required by law, we do not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events. All references to "Company," "Ardent Health," "we," "our" and "us" as used throughout this release refer to Ardent Health Partners, Inc. and its affiliates, unless stated otherwise or indicated by context.","length":773,"tagName":"p"},{"type":"table","headerItems":[],"items":[{"val":[{"colspan":"14","rowspan":"1","style":"padding-left:0.0px;text-align:center;list-style-position:inside;","val":[{"type":"text","content":" Ardent Health Partners, Inc. 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