Pediatrix Medical Group reported higher revenue but lower net income for the third quarter of 2026, while adjusted earnings per share rose from a year earlier. Revenue growth reflected acquisitions and modest increases in same-unit business; higher expenses weighed on adjusted EBITDA.
The physician-services company posted net income of $47.0 million, or $0.59 per diluted share, and adjusted earnings of $0.72 per share.
Key details
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Revenue increased 1.7% to $501.4 million, from $492.9 million a year earlier. Activity at recently acquired practices, net of practice dispositions, contributed 1.1 percentage points of growth; same-unit revenue rose 0.6%.
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Same-unit growth was modest across both patient activity and reimbursement. Patient volume contributed 0.3% growth, as did reimbursement-related factors. The latter reflected a more favorable payer mix, higher administrative fees from hospital partners and greater patient acuity, partly offset by a strong improvement in cash collections in the prior-year quarter. Commercial and other non-government payors made up a 70-basis-point larger share of services than a year earlier.
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Volume trends varied by service line. In the quarter, office-based patient services volume increased 2.9% year over year, while hospital-based services declined 0.3%; neonatal intensive care unit days were down 0.1%. For the first nine months of 2026, hospital-based services were down 1.2%, office-based services down 0.6% and NICU days down 1.1%.
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Adjusted EBITDA was $85.5 million, compared with $87.3 million a year earlier. Pediatrix attributed the decline mainly to expenses rising faster than revenue at existing units, partly offset by favorable contributions from recent acquisitions.
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Practice salaries and benefits rose to $341.5 million from $332.3 million, primarily because of higher clinical salaries, partly offset by lower benefits expense. General and administrative expenses increased to $62.7 million from $60.8 million, reflecting higher incentive compensation, partly offset by lower information-technology costs. Transformational and restructuring expenses were $6.1 million, little changed from $6.0 million; both periods included costs related mainly to job reductions and revenue-cycle management transition activities.
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Net income fell from $71.7 million a year earlier, when Pediatrix recorded a $20.9 million gain on investments in divested businesses. That prior-year gain contributed to the lower reported comparison. Adjusted earnings per share, which excludes the gain along with certain other items, increased to $0.72 from $0.67.
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The diluted share count declined to 79.7 million from 85.6 million. Pediatrix said share repurchases were the main reason, partly offset by restricted-stock issuances. The company also reported lower quarterly interest expense, at $8.1 million versus $8.9 million, citing modestly lower interest rates and borrowings.
The results show revenue growth alongside pressure on adjusted EBITDA from costs at existing practices. Reported net income was also affected by the prior-year gain, while the lower share count helped support per-share comparisons.