Acadia Healthcare's Q4 2024 Earnings: A Mixed Bag of Growth and Challenges

Acadia Healthcare Company, Inc. (ACHC) reported its fourth quarter and full-year 2024 earnings on February 27, 2025, providing insights into the company's financial performance and strategic initiatives. The company's earnings report highlighted both growth and challenges, as well as its plans for the future.



Key Financial Highlights:

* Revenue totaled $774.2 million, up 4.2% year-over-year (YoY).
* Same facility revenue increased 4.7% YoY, driven by a 3.2% increase in patient days and a 1.4% increase in revenue per patient day.
* Net income attributable to Acadia totaled $32.6 million, or $0.35 per diluted share, down from $57.7 million, or $0.63 per diluted share, in the fourth quarter of 2023.
* Adjusted income attributable to Acadia totaled $59.2 million, or $0.64 per diluted share, compared to $78.3 million, or $0.87 per diluted share, in the fourth quarter of 2023.
* Adjusted EBITDA totaled $153.1 million, including a $14.3 million professional liability reserve adjustment and a $5.0 million impact related to the closure of one facility.

Strategic Investments and Growth:

* Acadia added 577 newly licensed beds during the fourth quarter, including 233 beds to existing facilities and 344 licensed beds from newly constructed facilities.
* The company added one new comprehensive treatment center (CTC), extending its market reach to 163 CTCs across 33 states, treating over 72,000 patients daily.
* Acadia commenced operations at three new facilities, including a joint venture hospital in partnership with Intermountain Health in Denver, Colorado, as well as two de novo facilities in Madison, Wisconsin and Indio, California.
* The company completed construction on approximately 1,100 beds in the fourth quarter, bringing the full-year total to approximately 1,300 newly constructed beds.



Challenges and Risks:

* Acadia incurred $11.2 million in startup losses related to new facilities in the fourth quarter, which will pressure near-term margins.
* The company expects startup losses to total $50-55 million for the full year 2025, which will impact near-term profitability.
* Acadia's decision to close one facility during the fourth quarter had a $5.0 million impact on its Adjusted EBITDA, highlighting the potential risks associated with facility closures.
* The company's aggressive bed expansion strategy may present staffing and regulatory challenges, as well as potential conflicts of interest with joint venture partners.

Future Outlook:

* Acadia announced a new $300 million share repurchase authorization, signaling management's confidence in the company's financial position and business outlook.
* The company established financial guidance for 2025, including revenue of $3.3 to $3.4 billion, Adjusted EBITDA of $675 to $725 million, and adjusted earnings per diluted share of $2.50 to $2.80.
* Acadia's long-term bed addition target of 600-800 annually appears sustainable, given its operational infrastructure and market demand, but execution will depend on successfully navigating healthcare staffing challenges and regulatory environments that vary by state.

In conclusion, Acadia Healthcare's Q4 2024 earnings report highlights the company's aggressive bed expansion strategy, which has driven revenue growth and market penetration. However, the company faces near-term challenges related to startup losses and facility closure impacts. Acadia's long-term outlook remains positive, with the company well-positioned to capture growing demand for behavioral healthcare services. Investors should monitor the company's progress in managing its expansion strategy and addressing the challenges it faces in the coming quarters.