Pediatrix Raises 2026 Adjusted EBITDA Floor After Slowdown

The Tip Desk · October 31, 2026 · 3 min read

Third-quarter net revenue was $501.4 million, up 1.7% from a year earlier, as same-unit growth cooled and Adjusted EBITDA slipped to $85.5 million.

Pediatrix Medical Group, Inc. (MD), a provider of physician services for women, babies and children, reported net revenue of $501.4 million for the three months ended September 30, 2026, up 1.7% from a year earlier. That year-over-year pace slowed from the 4.0% increase to $487.8 million in the second quarter.

Net income was $47.0 million, or $0.59 a share, compared with $71.7 million, or $0.84 a share, a year earlier. Adjusted EPS was $0.72. The year-ago GAAP result included a $20.9 million net gain on investments in divested businesses that did not recur.

Chief Executive Officer Mark S. Ordan said results were driven by volume and pricing performing ahead of the company’s expectations.

Same-unit revenue rose 0.6%, a slower clip than the 1.9% same-unit increase in the second quarter. Net reimbursement-related same-unit revenue rose 0.3%, down from a 4.0% increase in the prior quarter. The company said the reimbursement lift reflected a favorable shift in payor mix, higher administrative fees from hospital partners and higher patient acuity, primarily in neonatology, partially offset by the benefit from strong cash-collection improvement in the year-ago period. Commercial and other non-government payors accounted for a mix that was 70 basis points higher than a year earlier.

Same-unit revenue attributable to patient volume turned positive at 0.3% after a 2.1% decline in the second quarter. Office-based patient services volume rose 2.9% year over year. Hospital-based patient services volume fell 0.3%. Neonatal intensive care unit days declined 0.1%.

Non-same-unit activity contributed 1.1% of the revenue increase, which the company attributed to recent acquisitions, partially offset by practice dispositions.

Adjusted EBITDA was $85.5 million, compared with $87.3 million a year earlier. The company said the decrease was primarily due to higher expenses as compared with revenue growth at existing units, partially offset by net favorable impacts from recent acquisitions. In the second quarter, Adjusted EBITDA had been $76.4 million, with the company citing net favorable acquisition impacts and weaker same-unit results.

Practice salaries and benefits expense was $341.5 million, up from $332.3 million a year earlier, which the company said primarily reflected higher clinical salaries at existing units, partially offset by lower benefits expense. General and administrative expenses were $62.7 million. Transformational and restructuring related expenses were $6.1 million, down from $8.5 million in the second quarter; the company said the costs were primarily related to position eliminations and revenue-cycle management transition activities.

Interest expense was $8.1 million, down from $8.9 million a year earlier, which the company said reflected modestly lower interest rates and borrowings. Depreciation and amortization was $6.2 million.

Cash from continuing operations in the third quarter was $117.7 million. The company used $83.0 million to fund share repurchases and $4.4 million for capital expenditures. Cash and cash equivalents were $311.9 million at September 30, 2026. Total debt was $578 million, consisting of $400 million of 5.375% senior notes due 2030 and $178 million under its Term A loan, with no outstanding borrowings on its $450 million revolving credit line.

Pediatrix anticipates full-year 2026 Adjusted EBITDA of $290 million to $300 million, a higher floor than the $280 million to $300 million range it reaffirmed in a July update.