Oct 29, 2026 earnings call — Strong quarter and narrowed full-year outlook
Narrowed full-year adjusted EBITDA outlook to $290 million to $300 million.
Revenue $0.5B (est $0.5B) · EPS $0.72 (est $0.65)
Key quotes
"Our annual meeting of all of our practice medical directors 2 weeks ago had basically one agenda item, care quality."
"And as far as the RCM, the lapping, we did start talking about that we would expect in the back half of the year to start seeing that lapping. It did impact the quarter by a little over 100 basis points."
"We continue to work on expanding our telehealth services as well as select opportunities in the OB hospitalist field."
Analyst Q&A 5
What drove pricing this quarter
Q (Matthew Mardula · William Blair): He asked for a breakdown of this quarter's pricing drivers and how much RCM (revenue cycle) lapping affected results. He also asked whether the pricing benefits are sustainable next quarter and how big the IDR impact is or could be going forward.
A: Pricing was led by payer mix, then hospital administrative fees, then acuity. Payer mix explained about 40% of the positive pricing impact, hospital admin fees about 25%, and acuity about 15%. RCM lapping reduced the quarter by a little over 100 basis points; management says RCM is currently steady but they seek further automation. On IDR, the business is overwhelmingly in network so they cannot quantify a material IDR impact and do not expect changes from the rule updates to hurt them.
"For the payer mix impact, that was probably -- if you look at the positive impact for the pricing, it was about 40%." — Kasandra Rossi (CFO)
How much is out-of-network and capital uses
Q (Albert Rice · UBS): He asked what percentage of revenues is out-of-network and whether the Q4 EBITDA guidance assumes any nonrecurring items. He also asked what types of acquisitions would interest the company and the pace of share buybacks.
A: They said out-of-network has typically been less than 5% of the business. The updated guidance is meant to give flexibility; there is nothing special or nonrecurring baked into it. They would consider larger, strategic acquisitions adjoining their current women's and children's business given a strong balance sheet, and buybacks remain opportunistic.
"We have typically been out of network of less than 5% of our business." — Mark Ordan (CEO)
Small dispositions, wages, and coding changes
Q (Jack Slevin · Jefferies): He asked what the small disposition activity was and how the company is managing wage inflation. He also asked whether proposed coding unbundling next year is likely to be a positive or negative for the business in 2027.
A: The disposition activity was just carryover from 2024 and is reflected as net of acquisitions and dispositions. Clinical salaries have been kept in the 3% to 3.5% range over the last couple of years, not the mid- to high-single digits seen earlier. On coding changes, management said it's too early to handicap outcomes until rules are finalized in November; there could be opportunities depending on the final rules but it's not yet clear and not a material part of their business.
"So, handicapping it before it all comes out, I don't think is going to be particularly helpful." — Mark Ordan (CEO)
Outlook for 2027 and payer mix
Q (Benjamin Mayo · Leerink Partners): He asked for any early headwinds or tailwinds for 2027 and whether payer mix (exchange enrollment) might slip next year. He also asked what the lower technology expenses mentioned referred to.
A: Management would not discuss 2027 now because budgeting is ongoing. They said they have not seen an exchange-related payer mix headwind so far and continue to monitor for any changes. The lower technology expenses were lower SaaS costs rolling out of the P&L.
"Just some of the SaaS costs that we had just rolling out of the P&L." — Kasandra Rossi (CFO)
Hospital subsidies for NICU practices
Q (Pito Chickering · Deutsche Bank): He asked what share of NICU practices receive hospital subsidies today, how that changed over the last year, and whether subsidy coverage can keep growing (what "inning" they are in).
A: They said it's not half — substantially less than half — and there has not been much change year-to-year. Management emphasized they work closely with hospital partners and must continually demonstrate efficient, high-value care so hospitals see benefit in subsidizing their NICUs. They also said they have not published a specific subsidy percentage and declined to give a precise ballpark.
"And we think that along with taking care of the patient, it's very important that they know that we do things very efficiently so that they're better off with us running that NICU than if they did it themselves." — Mark Ordan (CEO)