Pediatrix Medical Group, Inc. (NYSE:MD) shares surged 10.4% on Monday after the physician services provider reported third-quarter results that comfortably exceeded Wall Street estimates, boosted by robust collection activity and an increase in patient acuity levels.
The company posted adjusted earnings per share of $0.67, outperforming the consensus estimate of $0.47 by 20 cents. Revenue totaled $493 million, above analyst expectations of $475.88 million.
Same-unit revenue rose 8.0% year over year, supported by a 7.6% increase in reimbursement-related factors.
“Our operating results for the third quarter exceeded our expectations and were driven by a combination of reimbursement-related factors, including strong collection activity, higher patient acuity and slightly favorable payor mix, as well as operational consistency,” said Mark S. Ordan, Chief Executive Officer of Pediatrix Medical Group.
Adjusted EBITDA climbed to $87.3 million, up sharply from $60.2 million in the same quarter last year. The improvement reflected strong same-unit performance and practice disposition benefits.
While total revenue declined 3.6% year over year to $492.9 million from $511.2 million, largely due to practice dispositions, same-unit patient service volumes rose 0.4%, with neonatal intensive care unit days up 2.2% compared to the prior year.
Following the strong results, Pediatrix raised its full-year 2025 adjusted EBITDA guidance to a range of $270 million to $290 million.
The company ended the quarter with a solid balance sheet, holding $340.1 million in cash and cash equivalents, up from $229.9 million at the end of 2024. Operating cash flow also improved significantly, reaching $138.1 million, compared to $95.7 million in the same period last year.