Ardent Health’s third-quarter results encompassed “two contrasting realities” in which the for-profit system logged solid volume and revenue growth but was forced to diminish its full-year earnings guidance due to “persistent industrywide cost pressures, particularly those around professional fees and payer denials that have proven more durable than anticipated,” CEO Marty Bonick told analysts Thursday.
The system, which owns or jointly operates 30 acute care hospitals and about 280 care sites, announced late Wednesday it brought in $1.58 billion in total revenue for the quarter, an 8.8% increase over the prior year.
Its admissions, adjusted admissions and net patient service revenue per adjusted admission also grew by 5.8%, 2.9% and 5.8%, respectively, compared to 2024’s third quarter. This was on the higher end of the company’s 2025 volumes guidance, executives said.
On the other hand, Ardent logged a net loss of $23 million for the quarter while a $143 million adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell below the company’s projections (despite beating last year’s adjusted EBITDA by 46.3%).
Executives attributed the shortfall to an 11% increase in professional fee expense growth, above the projected upper-single digit range, and reignited pushback from payers on claims denials after such activity had “largely stabilized through the first half of 2025.” On the latter, final denials during the quarter were 8% higher than what Ardent had seen during the first half of the year.
These factors led the company to adjust its full-year guidance. Specifically, while the total revenue range of $6.2 billion to $6.45 billion was reaffirmed, adjusted EBITDA was lowered to $530 million to $555 million (from $575 million to $615 million). The revenue guidance reflects a 6% year-over-year increase at the midpoint, while the adjusted EBITDA guidance is a 9% increase at the midpoint.
“Our updated outlook prudently assumes these industry headwinds observed in the third quarter will persist at elevated levels in the fourth quarter,” Bonick said during Thursday morning’s earnings call. “While these dynamics are industry-wide, we are taking decisive action to mitigate their impact and strengthen our performance.”
Ardent’s response plan involves an immediate focus on vendor contract renegotiations, “particularly in anesthesia to introduce more flexible cost structures that better align with patient volumes, helping to eliminate excess fixed costs in our business,” Bonick said. Also on the table are “targeted staffing adjustments,” including layoffs, already underway and expected to ramp up next year. Some agency labor contracts have also been amended to lower base rates and reduce premium pay.
“These three actions will phase in during the fourth quarter and reach full run rate benefit in early 2026, generating an expected annual benefit of more than $40 million,” Bonick said while also outlining long-term investments in precision staffing, faster worker onboarding and vendor consolidation.
Ardent’s quarter also included a pair of 10-figure nonrecurring reductions: a $43 million revenue reduction tied to the system’s transition to the Kodiak RCA revenue cycle platform and a $54 million increase to Ardent’s general liability reserves primarily related to “the emergence of adverse prior period claim developments with respect to recent settlements and ongoing litigation arising from a limited set of claims between 2019 and 2022 in New Mexico for a single provider who the Company no longer employs.” Both nonrecurring items were not factored into the 2025 guidance change.
Bonick sought to temper the earnings miss by reinforcing Ardent’s “strong and durable demand environment. Our markets continue to grow 2x to 3x faster than the national average, supported by demographic tailwinds and rising care complexity, structural trends that reinforce our long-term growth thesis.”
Still, Ardent's stock price had dropped by about a third as of Thursday afternoon.