Acadia Healthcare Navigates a Challenging Quarter as Legal and Impairment Costs Overshadow Revenue Growth
Acadia Healthcare Co Inc (NASDAQ:ACHC), a leading provider of behavioral healthcare services, reported financial results for the fourth quarter and full year ended December 31, 2025. The earnings release paints a complex picture of underlying operational growth weighed down by significant one-time charges, leading to a stark divergence between reported GAAP results and adjusted performance metrics.
Earnings and Revenue Versus Estimates
For the critical fourth quarter, the company's top-line performance modestly exceeded analyst expectations, while adjusted profitability came in slightly above consensus.
- Q4 2025 Revenue: Reported at $821.5 million, representing a 6.1% year-over-year increase. This figure surpassed the analyst estimate of approximately $816.1 million.
- Q4 2025 Adjusted EPS: Came in at $0.07 per diluted share. This exceeded the consensus estimate of $0.0592, though it marks a steep 89% decline from the $0.64 per share reported in the prior-year period.
The market's initial reaction appeared to balance these beats against a cautious outlook. In pre-market trading following the release, the stock showed a gain of approximately 8%. This positive move suggests investors may be looking past the severe charges detailed in the report and focusing on the revenue outperformance and maintained guidance.
A Quarter of Significant Charges
The headline GAAP numbers were severely impacted by large, non-cash and legal-related expenses, creating a dramatic contrast with the adjusted figures.
- Reported Net Loss: The company posted a net loss attributable to Acadia of $1.18 billion, or $(13.02) per diluted share, compared to net income of $32.6 million a year ago.
- Primary Drivers of Loss:
- A $996.2 million non-cash goodwill impairment charge.
- A $52.7 million adjustment to increase reserves for professional and general liability (PLGL) costs.
- $147.5 million in legal settlements expense, primarily related to the settlement of 2019 securities litigation.
These items underscore the ongoing legal and operational challenges the company has faced. Excluding these and other adjustments, the company's key profitability metric, Adjusted EBITDA, was $99.8 million for the quarter, down 35% from the prior year but at the upper end of its implied guidance range.
Operational Highlights and Segment Performance
Beneath the significant charges, the quarter showed signs of core operational progress, particularly in volume growth and capacity expansion.
- Same-Facility Revenue: Increased 4.4%, driven by a 3.1% rise in patient days and a 1.3% increase in revenue per patient day.
- Segment Breakdown:
- Acute Inpatient Psychiatric Facilities: Revenue grew 10% to $451 million, fueled by a 6% volume increase from expanded capacity.
- Specialty Treatment Facilities: Revenue declined 4% to $136 million, primarily due to facility closures.
- Comprehensive Treatment Centers (CTC): Revenue rose 5% to $144 million.
- Capacity Expansion: The company added 181 newly licensed beds during the quarter, bringing the full-year total to 1,089 new beds.
2026 Financial Guidance and Analyst Comparison
Looking ahead, Acadia provided its financial outlook for 2026, which anticipates continued headwinds but projects a year of stabilization and modest growth. The guidance appears to be set conservatively relative to existing analyst forecasts.
- Full-Year 2026 Guidance:
- Revenue: $3.37 to $3.45 billion.
- Adjusted EBITDA: $575 to $610 million.
- Adjusted EPS: $1.30 to $1.55.
- Comparison to Analyst Estimates:
- The company's revenue guidance midpoint of $3.41 billion is slightly below the current analyst consensus estimate of $3.474 billion.
- The Adjusted EPS guidance midpoint of $1.425 is significantly below the analyst consensus estimate of $1.78.
The guidance incorporates several known challenges, including a projected $25-$30 million negative impact from a change in New York Medicaid policy regarding out-of-state care and a decrease in certain Medicaid supplemental payments. CEO Debbie Osteen emphasized her priorities of bringing "steady leadership" and "reinforcing operational discipline" to position the company for long-term success.
Conclusion
Acadia Healthcare's fourth quarter was a tale of two stories. Operationally, the company demonstrated resilient revenue growth and continued expansion of its treatment capacity. However, this was overwhelmingly overshadowed in the financial statements by a massive goodwill impairment and elevated legal and liability costs. The market's tentative positive reaction post-earnings suggests a focus on the revenue beat and the company's maintained, albeit conservative, forward guidance. Investors will now watch closely for the execution of the new leadership's turnaround plan and the company's ability to navigate the regulatory and cost pressures outlined for 2026.
For a detailed look at future quarterly estimates and historical earnings performance for Acadia Healthcare, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend the purchase or sale of any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
