Acadia Healthcare 2025 Q1 Earnings EPS Falls Sharply Amidst Modest Revenue Growth
Tuesday, May 13, 2025 2:27 am ET
57min read Acadia Healthcare (ACHC) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Acadia Healthcare's financial performance in the first quarter of 2025 fell short of expectations, with revenue of $770.5 million, slightly below the anticipated $785.27 million. The company reaffirmed its full-year guidance, projecting revenue between $3.3 billion and $3.4 billion, and adjusted earnings per diluted share ranging from $2.50 to $2.80, which is consistent with prior forecasts. This cautious outlook reflects the company's strategic focus on bed expansion and maintaining its market position in the behavioral healthcare sector.
Revenue
Acadia Healthcare's revenue for the first quarter of 2025 increased marginally by 0.3% year-over-year, reaching $770.5 million. Within its revenue segments, the Commercial division generated $192.75 million, while Medicare and Medicaid contributed $114.75 million and $430.81 million, respectively. Self-Pay revenue amounted to $18.16 million, and the 'Other' category added $14.02 million to the total. This diverse revenue stream underscores Acadia's broad service offerings in the healthcare sector.
Earnings/Net Income
In Q1 2025, Acadia Healthcare saw a significant decline in earnings per share (EPS), which fell 89.3% to $0.09, compared to $0.84 in the previous year. The company's net income also dropped sharply by 88.5%, down to $9.06 million from $78.77 million in Q1 2024. This substantial decrease in EPS reflects challenging market conditions and operational hurdles.
Price Action
The stock price of Acadia Healthcare increased by 4.28% during the latest trading day and rose 13.28% over the past week. However, it experienced an 11.20% decline month-to-date, indicating volatile market reactions to the company's financial performance and overall market trends.
Post-Earnings Price Action Review
The strategy of purchasing Acadia Healthcare (ACHC) shares subsequent to a rise in revenue on earnings report dates and holding them for 30 days has historically underperformed over the past five years. This approach resulted in a substantial negative return of -59.64%, starkly contrasting with the benchmark return of 95.08%. The excess return was a disappointing -154.71%, with a compound annual growth rate (CAGR) of -16.68%, highlighting considerable financial losses. Furthermore, this strategy exhibited a high maximum drawdown of -87.37%, illustrating significant volatility, and a negative Sharpe ratio of -0.27, indicating unfavorable risk-adjusted returns. Overall, this strategy has proven to yield poor performance, suggesting that investors need to carefully evaluate the potential risks and returns before considering similar approaches.
CEO Commentary
Chris Hunter, CEO of Acadia Healthcare, expressed satisfaction with the Q1 results, stating that revenue and Adjusted EBITDA were aligned with expectations, with the latter at the high end of their outlook. He emphasized that 2025 is set to be the largest bed expansion year in the company's history, following record additions in 2024. Hunter reiterated Acadia's dedication to expanding access to specialized care for underserved populations and praised the efforts of employees and clinicians in delivering quality care. He conveyed optimism about the opportunities ahead in 2025.
Guidance
Acadia Healthcare reaffirmed its full-year 2025 guidance, projecting revenue between $3.3 billion and $3.4 billion. The company expects adjusted earnings per diluted share ranging from $2.50 to $2.80, with capital expenditures of $525 million to $575 million for expansion and $105 million to $115 million for maintenance and IT. Additionally, Acadia anticipates a total bed addition of 800 to 1,000 beds, reflecting ongoing investments to enhance capacity and service delivery.
Additional News
During the first quarter of 2025, Acadia Healthcare made significant strides in its growth strategy by adding 378 newly licensed beds, including 90 beds to existing facilities and 288 beds from newly constructed facilities. The company also expanded its market reach by launching seven new comprehensive treatment centers (CTCs), bringing the total to 170 CTCs across 33 states, serving approximately 74,000 patients daily. In further strategic developments, Acadia commenced operations at new facilities in North Port, Florida, and a joint venture hospital with Henry Ford Health in West Bloomfield, Michigan. Additionally, Acadia announced a share repurchase program authorized for up to $300 million, repurchasing 1,602,688 shares for $47.3 million during Q1 2025.
Revenue
Acadia Healthcare's revenue for the first quarter of 2025 increased marginally by 0.3% year-over-year, reaching $770.5 million. Within its revenue segments, the Commercial division generated $192.75 million, while Medicare and Medicaid contributed $114.75 million and $430.81 million, respectively. Self-Pay revenue amounted to $18.16 million, and the 'Other' category added $14.02 million to the total. This diverse revenue stream underscores Acadia's broad service offerings in the healthcare sector.
Earnings/Net Income
In Q1 2025, Acadia Healthcare saw a significant decline in earnings per share (EPS), which fell 89.3% to $0.09, compared to $0.84 in the previous year. The company's net income also dropped sharply by 88.5%, down to $9.06 million from $78.77 million in Q1 2024. This substantial decrease in EPS reflects challenging market conditions and operational hurdles.
Price Action
The stock price of Acadia Healthcare increased by 4.28% during the latest trading day and rose 13.28% over the past week. However, it experienced an 11.20% decline month-to-date, indicating volatile market reactions to the company's financial performance and overall market trends.
Post-Earnings Price Action Review
The strategy of purchasing Acadia Healthcare (ACHC) shares subsequent to a rise in revenue on earnings report dates and holding them for 30 days has historically underperformed over the past five years. This approach resulted in a substantial negative return of -59.64%, starkly contrasting with the benchmark return of 95.08%. The excess return was a disappointing -154.71%, with a compound annual growth rate (CAGR) of -16.68%, highlighting considerable financial losses. Furthermore, this strategy exhibited a high maximum drawdown of -87.37%, illustrating significant volatility, and a negative Sharpe ratio of -0.27, indicating unfavorable risk-adjusted returns. Overall, this strategy has proven to yield poor performance, suggesting that investors need to carefully evaluate the potential risks and returns before considering similar approaches.
CEO Commentary
Chris Hunter, CEO of Acadia Healthcare, expressed satisfaction with the Q1 results, stating that revenue and Adjusted EBITDA were aligned with expectations, with the latter at the high end of their outlook. He emphasized that 2025 is set to be the largest bed expansion year in the company's history, following record additions in 2024. Hunter reiterated Acadia's dedication to expanding access to specialized care for underserved populations and praised the efforts of employees and clinicians in delivering quality care. He conveyed optimism about the opportunities ahead in 2025.
Guidance
Acadia Healthcare reaffirmed its full-year 2025 guidance, projecting revenue between $3.3 billion and $3.4 billion. The company expects adjusted earnings per diluted share ranging from $2.50 to $2.80, with capital expenditures of $525 million to $575 million for expansion and $105 million to $115 million for maintenance and IT. Additionally, Acadia anticipates a total bed addition of 800 to 1,000 beds, reflecting ongoing investments to enhance capacity and service delivery.
Additional News
During the first quarter of 2025, Acadia Healthcare made significant strides in its growth strategy by adding 378 newly licensed beds, including 90 beds to existing facilities and 288 beds from newly constructed facilities. The company also expanded its market reach by launching seven new comprehensive treatment centers (CTCs), bringing the total to 170 CTCs across 33 states, serving approximately 74,000 patients daily. In further strategic developments, Acadia commenced operations at new facilities in North Port, Florida, and a joint venture hospital with Henry Ford Health in West Bloomfield, Michigan. Additionally, Acadia announced a share repurchase program authorized for up to $300 million, repurchasing 1,602,688 shares for $47.3 million during Q1 2025.
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